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https://www.courtlistener.com/api/rest/v3/opinions/4558384/ | Fourth Court of Appeals
San Antonio, Texas
JUDGMENT
No. 04-19-00369-CV
IN THE INTEREST OF N.N.M.
From the 365th Judicial District Court, Dimmit County, Texas
Trial Court No. 17-01-13061-DCVAJA
Honorable Amado J. Abascal, III, Judge Presiding
BEFORE JUSTICE MARTINEZ, JUSTICE ALVAREZ, AND JUSTICE RODRIGUEZ
In accordance with this court’s opinion of this date, the trial court’s order terminating
appellant’s parental rights is MODIFIED as follows:
It is ORDERED that the finding pursuant to section 161.001(b)(1)(D) is deleted.
As modified, the trial court’s order terminating appellant’s parental rights is AFFIRMED.
It is ORDERED that no costs are assessed against appellant in this appeal.
SIGNED August 19, 2020.
_____________________________
Liza A. Rodriguez, Justice | 01-03-2023 | 08-25-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/1644959/ | 259 Minn. 565 (1961)
108 N.W. (2d) 309
STATE EX REL. ROBERT L. FERRARIO
v.
DOUGLAS C. RIGG.
No. 38,167.
Supreme Court of Minnesota.
March 24, 1961.
Robert L. Ferrario, pro se, for appellant.
Walter F. Mondale, Attorney General, and Charles E. Houston, Solicitor General, for respondent, warden of Minnesota State Prison.
PER CURIAM.
On June 13, 1960, the Honorable Carl W. Gustafson, Judge of the District Court of Washington County, denied petitioner's petition for a writ of habeas corpus. An appeal was taken to this court. Thereafter, on August 30, 1960, petitioner was discharged from the state penitentiary on parole. Respondent now moves this court that the appeal be dismissed.
The case is governed by State ex rel. Koalska v. Rigg, 247 Minn. 149, 76 N.W. (2d) 504. Petitioner, by his agreement, having accepted his liberty, subject to supervision of the parole authorities, is no longer restrained of his liberty to such an extent that habeas corpus will lie.
The motion to dismiss is granted.
MR. JUSTICE OTIS, not having been a member of the court at the time of submission, took no part in the consideration or decision of this case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2466578/ | 251 P.3d 112 (2011)
WELLS FARGO FINANCIAL KANSAS, INC.
v.
TEMMEL.
No. 104102.
Court of Appeals of Kansas.
April 29, 2011.
Decision Without Published Opinion
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558847/ | 644 F.Supp. 1473 (1986)
Michael LIPPUS and Marcia Lippus, Plaintiffs,
v.
DAHLGREN MANUFACTURING COMPANY, Royal Zenith Corporation, Veb Polygraph Druckmaschinenwerk Planeta, Defendants.
ROYAL ZENITH CORP. and Dahlgren Manufacturing Company, Third Party Plaintiffs,
v.
UNITECAHNA AUSSENHANDELSGESELLSCHAFT MBH, Volkssigener Aussenhandelsbetrieb Polygraph Export-Import Company, and Four Seasons Printing Company, Inc., Third Party Defendants.
No. CV 84-1713.
United States District Court, E.D. New York.
September 26, 1986.
*1474 Pester, Goldberg & Schiff, Carle Place, N.Y., for plaintiffs.
*1475 Botein, Hays & Sklar, New York City, for defendants Planeta, Unitechna & Polygraph.
Conway, Farrell, O'Connor, Cutrin & Kelly, P.C., New York City, for Royal Zenith.
MEMORANDUM AND ORDER
WEXLER, District Judge.
Plaintiff spouses Michael and Marcia Lippus commenced this products liability action against the Dahlgren Manufacturing Company ("Dahlgren"), Royal Zenith Corporation ("Zenith"), and VEB Polygraph Druckmaschienenwerk Planeta ("Planeta"), in New York State Supreme Court for an injury sustained by Michael Lippus in the course of his employment. Planeta, an instrumentality of the German Democratic Republic ("GDR"), removed the action to this Court under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602-11. Zenith and Dahlgren have asserted cross-claims against each other and Planeta. Zenith commenced a third party action against Four Seasons Printing Company, Inc. ("Four Seasons"), Unitechna Aussenhandelsgesellschaft m.b.H. ("Unitechna"), and Volkseingener Aussenhandelsbetrieb Polygraph Export-Import Company ("Polygraph"). On consent and by Order of Magistrate Jordan, Dahlgren joined in this third party action. Four Seasons cross-claimed against its two co-third party defendants and asserted counterclaims against Zenith and Dahlgren. Planeta, Polygraph and Unitechna (collectively the "GDR Defendants") have not asserted any cross-claims, counterclaims, or third party claims. Discovery in the case is virtually complete and the matter has been scheduled for a non-jury trial. Before the Court at this time are Planeta's motions to dismiss plaintiffs' Complaint for insufficiency of process, Rule 12(b)(4), Fed.R.Civ.P., and the GDR Defendants' joint motion to dismiss or stay Zenith's cross-claims pending arbitration or litigation in the GDR. The Court will turn first to Planeta's motion to dismiss plaintiffs' Complaint for insufficiency of process.
I.
The following facts are relevant to the service of process issue. On May 13, 1983, plaintiffs delivered a copy of the Summons and Complaint to a Mr. Horst Streichan in the commercial section of the GDR embassy in New York City. In an affidavit, counsel for Planeta states that Streichan has no connection with Planeta, but is an employee of Unitechna. Altman Affidavit, ¶ 5. Three weeks later, plaintiffs served another copy of the Summons and Complaint at the GDR's New York embassy on a person named Ms. Dachmar. Planeta's attorney also states that upon information and belief no one by the name of Ms. Dachmar is employed at the GDR embassy. Altman Affidavit, ¶ 5. It appears, however, that the person served may have been Dagmar Kuehnelt, Mr. Streichan's secretary. Neither Streichan nor Kuehnelt are apparently authorized to accept service on behalf of Planeta. Defendant's counsel also affirms that Planeta has no office in the United States, is not authorized to do business in New York, and has no officer, managing or general agent authorized to receive service of process in the United States. Rand Affidavit, ¶ 2. On August 3, 1983, plaintiff served a copy of the Summons and Complaint on the New York Secretary of State pursuant to N.Y.Bus. Corp.L. § 307, and re-served the Secretary of State on November 7, 1983, who confirmed service in a letter dated December 9, 1983.
In March 1984, plaintiffs' counsel received a short letter from a Dieter Peh, who is a First Secretary in the Commercial Section of the GDR's New York embassy. In pertinent part, the correspondence stated that:
Today we got your Third Party Summons dated August 22, 1983. Please notice that the POLYGRAPH-Export-Import foreign trade enterprise is located in the German Democratic Republik, 1080 Berlin, Friederichstrasse 61.
If you want to send something to this enterprise, please send it to the above mentioned address.
*1476 Although it is uncontested that Zenith attempted to join Polygraph to the action as a third-party defendant in a Summons dated August 22, 1983, there is no indication that the Lippuses have asserted a claim against Polygraph, who is sued here as a third party defendant. Nevertheless, on March 12, 1984, plaintiffs' counsel attempted to re-serve Planeta by sending a copy of the Summons and Complaint against Planeta to the GDR at the Berlin address mentioned in Peh's letter. The papers were not addressed and dispatched by the clerk of the court but were merely sent certified mail and without a German translation. On April 5, 1984, plaintiffs' counsel again sent an untranslated copy of the Summons and Complaint, this time by registered mail return receipt requested, to Planeta at another address in the GDR and also to Polygraph in Berlin with instructions to forward the documents to their lawyers in the United States. Planeta's attorney states that in April 1984, he received from Planeta a copy of plaintiffs' April 5 Summons and Complaint. Rand Affidavit, ¶ 3. Shortly thereafter, Planeta removed the action to this Court.
Planeta argues that the Complaint should be dismissed because plaintiffs have failed to comply with the service provisions of the Foreign Sovereign Immunities Act, 28 U.S.C. § 1608(b) ("FSIA").[1] It is conceded that under the FSIA proper service must be made upon Planeta in accordance with either the first clause of subsection (b)(2) (by delivery of the Summons and Complaint in English to an agent or officer in the United States), or by clause (B) of subsection (b)(3) (by having the clerk of the court mail a copy of the Summons and Complaint return receipt requested together with a German translation, to Planeta's offices in the GDR). It is beyond doubt that § 1608 is the exclusive means of service under the FSIA. 1976 U.S.Code Cong. & Ad.News 6604, 6622. Planeta contends that plaintiffs have not complied with the service provisions of the FSIA, either under subsection (b)(2) or (b)(3)(B).
Though styled as a motion to dismiss for lack of personal jurisdiction, Rule 12(b)(2) or insufficiency of process, Rule 12(b)(4), Planeta's motion to dismiss for failure to comply with subsection (b)(2) can also be classified as a motion under Rule 12(b)(5) to dismiss for insufficiency of service of process. C. Wright & A. Miller, Federal Practice & Procedure: Civil § 1353. In any event, Planeta contends that the service of process at the commercial section of the GDR embassy in New York is inadequate under subsection (b)(2) because Planeta has no agents or officers in the United States authorized to accept process.
Plaintiffs do not dispute these facts, but argue that service on the Secretary of State, pursuant to N.Y.Bus.Corp.L. § 307 (McKinney 1986), qualifies as valid service upon "any other agent authorized by appointment or by law to receive service of process in the United States." 28 U.S.C. § 1608(b)(2). The issue is one of first impression. Although there is no indication from either the plain language of the statute *1477 or the legislative history that Congress intended for substituted service under state law to fall within the provisions of the FSIA, see 1976 U.S.Code Cong. & Ad.News 6624, the only other court to have been confronted with a similar question held that service on the Virginia Secretary of the Commonwealth pursuant to the Virginia long-arm statute could "conceivably" be proper under the FSIA. See Unidyne Corporation v. Aerolineas Argentinas, 590 F.Supp. 391 (E.D.Va.1984).
In Unidyne, an American corporation commenced an action for breach of contract against Aerolineas Argentinas, which is an instrumentality of the sovereign nation of Argentina. Service was effected by mailing a copy of the Summons and Complaint to the Virginia Secretary of the Commonwealth, who acknowledged service and forwarded the court documents to Aerolineas' office in New York. 590 F.Supp. at 395. In granting the motion to dismiss for lack of personal jurisdiction under 28 U.S.C. § 1330(b), the Unidyne court apparently assumed without discussion that the service of a foreign sovereign in accordance with the state was proper under subsection (b)(2) but found that Aerolineas was beyond the reach of the Virginia long-arm statute. Therefore, despite receipt of service, Aerolineas was not subject to personal jurisdiction under federal law.
With all due respect, this Court disagrees with the analysis employed in Unidyne. Federal law fully pre-empts the states in the area of foreign relations even though the FSIA represents a more limited view of foreign sovereign immunity. When federal law pre-empts state law, reference to local law is simply not germane. The federal court is the only forum in which either the GDR or Planeta can be sued and § 1608 is the exclusive method of service of process. Absent a clear indication from Congress that the FSIA incorporates state law by reference, this Court is unwilling to allow an arm of a foreign government to be subject to personal jurisdiction under state law. Moreover, upon close examination, the legislative history appears to reject an implicit incorporation of state law by reference. The statute does not explicitly rule out service under state law, but the legislative history states specifically that § 1608 was meant to fill a void in state and federal law. H.R.Rep. No. 94-1487, 94th Cong., 2d Sess. 23 (1976), reprinted in 1976 U.S.Code Cong. & Ad. News 6622. To allow service under state law would vitiate the clear intent of Congress to reserve to federal law the exclusive method for service of process.
In addition, incorporating the service provisions under state law would make the statute confusing, unwieldy, and ineffective. Use of state service does not appear to coincide with the objective of the FSIA's service provisions, namely, the creation of a single statute calculated to ensure that the foreign governmental entity has notice of the suit. Allowing the law of the states to satisfy service under § 1608(b)(2) would mean that the concise and limited procedures spelled out in § 1608 would be supplemented by the multitude of non-uniform methods of service for each of the fifty states. In effect, the exception would swallow the rule. This construction of the statutory language could not have been the intent of Congress and the Court therefore holds that service on the Secretary of State under state law is improper under § 1608.
Assuming, however, that this reasoning is incorrect, there are independent grounds to invalidate service under § 307. First, Planeta is a commercial entity of a foreign sovereign and as such, can hardly be deemed a "foreign corporation" as that term is defined under New York's corporation law. See N.Y.Bus.Corp.L. § 102(a)(7). Second, it appears that plaintiffs failed to comply with the service provisions of § 307. The Court concludes therefore that attempted service under § 307 is not valid service under the FSIA.
Planeta also contends that service did not comply with subsection (b)(3)(B) because: (1) service was not dispatched by the clerk of the court and; (2) a German translation did not accompany service. Once again, *1478 plaintiffs do not contest these deficiencies under subsection (b)(3)(B) but argue that under the holding in Banco Metropolitano v. Desarrollo de Autopistas y Carreteras de Guatemala, 616 F.Supp. 301 (S.D.N.Y. 1985), Deh's March 5, 1984 letter to plaintiffs' counsel constituted a "request" "by an authority of a foreign state or political subdivision...." under 28 U.S.C. § 1608(b)(3)(A). Plaintiffs contend that Deh's letter takes this case outside the statutory requirements and that the service by mail in the GDR in mid-March and early April conformed to this "request."
In Banco Metropolitano a Guatemalan bank commenced an action in New York state court to recover payment on promissory notes guaranteed by the monetary authority of Guatemala. Service was attempted initially when plaintiff bank delivered process in English at defendants' office in Guatemala, at which time plaintiffs were allegedly advised to serve process at Guatemala's New York consulate, which they did the following day. Defendant then moved to dismiss, disputing that it had ever advised service in New York. In denying defendant's motion to dismiss, Judge Sweet held that defendants had apparently "requested" that service be made in a particular manner and service of process in English in New York, pursuant to this "request", though not in technical compliance with subsection (b)(3)'s requirement that a translation accompany process, appeared to constitute substantial compliance with the statute. Judge Sweet did not hold conclusively that service was valid, but merely that plaintiff had made a prima facie showing that jurisdiction existed. Until such time as an evidentiary hearing could be held to resolve contested factual allegations, that court held that the motion to dismiss would be denied. 616 F.Supp. at 304. "Given the nature of the issues presented and the problems intended to be addressed by the FSIA, strict enforcement of its technicalities here would be inappropriate." Id.
The case at bar is factually and legally distinguishable from Banco Metropolitano. Peh's letter, though sent to plaintiffs' counsel, can hardly be deemed a "request" of the Lippuses because Peh's letter referred to Zenith's third party Complaint against Polygraph and not to plaintiffs' action against Planeta. Although it is not clear why Peh sent the letter to plaintiffs' counsel, the letter had nothing to do with plaintiffs' claim. Copies of the Summons and Complaint were mailed by plaintiffs to Polygraph, but as best the Court can determine, plaintiffs have not sued Polygraph. To the extent that Peh's letter could be deemed a "request" under subsection (b)(2), it was, at best, a request of Zenith, not plaintiffs. In addition, even if Deh's letter could be termed a "request" of all litigants to serve process on Polygraph in Berlin, it still would not be a request from Planeta, because it would appear that Deh is without authority to issue such a request on behalf of Planeta. In any event, the Lippuses have not asserted a claim against Polygraph.
Moreover, despite the clear wording of the statute, none of the documents mailed to the GDR was accompanied by a German translation. It is no answer that Peh's letter did not require a translation because under (b)(3), a party cannot waive the translation requirement. § 1608(b)(3). The wording of subsection (b)(3) makes it clear that an official translation must accompany the Summons and Complaint whenever service is attempted under (b)(3), regardless of which of these three methods under (b)(3) is employed. In addition, there are sound reasons for requiring that the opening volley of court documents be translated. Subsection (b)(3) is the service of last resort under the FSIA. In the event that service cannot be made under (b)(1) or (b)(2), Congress clearly wanted to insure that a foreign government would be apprised of the pendency of the lawsuit because (b)(3) requires specifically that the service be "reasonably calculated to give actual notice...." Comprehension of court documents from a foreign land is aided if they are accompanied by a translation in the defendant's language, especially *1479 if there may not be ready access to translators or interpreters. § 1608(b)(3) is therefore designed so that upon receipt of a Summons and Complaint in their own country, non-English-speaking governments will not be handicapped by a language barrier in their inability to respond to a distant lawsuit. See cf. § 1608(b)(2) (service of process on the officer or agent of a foreign sovereign in the United States need not be accompanied by a translation). Despite some liberality of interpretation by the courts with respect to § 1608, e.g., Harris Corporation v. National Iranian Radio and Television, 691 F.2d 1344, 1352 n. 16 (11th Cir.1982), none of the exigiencies meriting a liberal interpretation is present here. New England Merchants National Bank v. Iran Power Generation and Transmission Company, 495 F.Supp. 73 (S.D.N.Y.1980) (allowing modified service on Iranian defendants during a revolutionary period).
Although the Court cannot understand why plaintiffs never complied with the plain language of subsection (b)(3), allowing them to perfect service at this time ensures compliance with the words and spirit of the FSIA and allows the lawsuit to go forward. It is uncontested that Planeta and its New York attorneys have long had actual notice of the lawsuit by way of the March 12, 1984 mailing. Planeta has participated in the lawsuit through counsel, discovery is complete, and the matter has been placed on the trial calendar. Furthermore, service defects appear readily curable and despite the protestations of Planeta's counsel, there is little tangible prejudice to Planeta. Rule 4(h), Fed.R.Civ.P.; C. Wright & A. Miller § 1131.
Accordingly, Planeta's motion to dismiss plaintiffs' Complaint for insufficiency of process is denied at this time. Plaintiffs shall effect proper service on Planeta under (b)(3) within thirty (30) days of this Order.
II.
Third Party Defendants Unitechna and Polygraph have also moved to dismiss Zenith's third party Complaint because of defective service and the GDR Defendants have moved jointly to stay Zenith's cross-claim pending arbitration by the Chamber of Foreign Trade or litigation in the Courts of the GDR.
A.
Before turning to the merits of the arguments, it would be helpful to address the impact of this motion on jurisdiction over the claims of co-defendants and the continuing subject matter jurisdiction of the Court as it has been brought to the Court's attention in a letter from Dahlgren's counsel. Initially, in the event that Zenith's third-party Complaint against Unitechna and Polygraph is dismissed for insufficiency of service of process, in accordance with an Order promulgated by Magistrate Jordan at an October 23, 1984 pre-trial conference, Dahlgren's third party Complaint must also be dismissed for the same reason. In a letter to the Court, Dahlgren states that it has no position on the motion, although by the terms of the Magistrate's Order, the fortunes of Dahlgren's third party Complaint will rise or fall with the success or failure of Zenith's attempts to commence a third party action against Unitechna and Polygraph.
Dahlgren's letter deals primarily with the lack of subject-matter jurisdiction should Planeta's motions be granted. Despite Dahlgren's concern, so long as any of the GDR Defendants are subject to liability, the Court will retain subject-matter jurisdiction over the case. This is true even if the Court grants any renewed motion by Planeta to dismiss plaintiffs' Complaint for insufficiency of service of process because the Court retains subject-matter jurisdiction over the cross-claims against Planeta as an action against a foreign sovereign under the FSIA. Moreover, although it would be premature for Planeta to have challenged service of the cross-claims, see C. Wright, A. Miller & M. Kane, § 1433 n. 47.1 (1986 Pocket Part), it is within the Court's discretion to allow Dahlgren and Zenith to re-serve the cross-claims against *1480 Planeta or allow them to join Planeta as a third party defendant. Rule 4(h), Fed.R. Civ.P. Furthermore, even if the Court also grants the motion to stay Zenith's cross-claims against the GDR Defendants pending arbitration or litigation, this will not deprive the Court of subject-matter jurisdiction; first, because Dahlgren's cross-claim will still be litigated in this Court and, second, because a stay does not deprive the Court of jurisdiction. Therefore, contrary to the suggestion of Dahlgren's counsel, a disposition of the instant motions in favor of the GDR Defendants will not deprive the Court of subject-matter jurisdiction. The Court expresses no opinion, however, on the propriety of exercising ancillary or pendent party jurisdiction over the remaining state law claims between non-diverse parties. Aldinger v. Howard, 427 U.S. 1, 18, 96 S.Ct. 2413, 2422, 49 L.Ed.2d 276 (1976).
B.
Unitechna and Polygraph contend that Zenith's third party Complaint should be dismissed against them because of improper service of process. Rule 12(b)(2), (4), Fed.R.Civ.P. It is uncontested that the only service by Zenith upon either Polygraph or Unitechna was made on March 5, 1984 when the Summons and third party Complaint was served personally at the GDR embassy in New York upon a Mr. John Smith who allegedly held himself out to be a managing agent or officer Unitechna. In an affidavit attached to defendants' moving papers, counsel states that "neither Unitechna nor Polygraph has an office in the United States; neither is authorized to do business in New York; and neither has an officer, managing or general agent authorized to receive service of process in the United States." Rand Affidavit, ¶ 4. Defendants' counsel admits that a wholly owned subsidiary of Polygraph entitled Unitechna Export-Import ("Export-Import"), a New York corporation, maintains offices at the GDR embassy but counsel states that Export-Import has no connection to the instant case, does not employ anyone by the name of John Smith, and no one at Export-Import can recall receiving a third-party Summons. Id.
Zenith's response is that valid service was made on Export-Import and that this constituted proper service on all GDR Defendants because, as commercial entities of a foreign government, they are all alter egos of each other and inextricably bound together. Zenith also contends that if service was defective, dismissal at this advanced stage of the litigation would be inequitable and Zenith should be permitted to re-serve.
Turning to the validity of service on Polygraph and Unitechna, it is apparent that Zenith has established a prima facie case for valid process, but that the issue cannot be resolved in the absence of a preliminary hearing. The affidavit of Zenith's process server states that service was made at the GDR embassy upon a John Smith who held himself out as authorized to accept service of process. In direct contradiction, counsel for the GDR Defendants states that there is no John Smith and no one in the United States can accept process on behalf of any of the GDR Defendants. Accordingly, a decision on the motion to dismiss the third party Complaint for insufficiency of service of process is reserved pending a hearing. Banco Metropolitano, 616 F.Supp. at 304.
C.
The GDR Defendants have also moved to stay adjudication of Zenith's cross-claim and third party Complaint pending litigation or arbitration in the GDR. They point to section 18(3) of a September 1977 agreement between Royal Zenith and Unitechna, which states that:
All differences arising out of or in connection with this Contract will be decided at option of the plaintiff by the Court of Arbitration to the Chamber of Foreign Trade or by the competent regular lawcourt *1481 at the main residence of the defendant.[2]
Unitechna argues that under the Federal Arbitration Act, 9 U.S.C. § 3, and international treaties, Zenith must arbitrate its claim with Unitechna or litigate it in the GDR.[3] Unitechna also contends that a stay is not discretionary with the district court, and that the arbitration clause as agreed to by Zenith is broad enough to encompass cross-claims and third party claims for contribution and indemnity. Polygraph argues that, as a successor in interest to Unitechna, Zenith's claims against Polygraph should also be stayed. Finally, Planeta argues that claims against it should likewise be stayed because under agency law or principles of third-party beneficiaries, it enjoys the benefits of the arbitration provision.
As best as they can be gleaned from its papers, Zenith appears to argue that the language of the arbitration clause only applies to differences arising out of the contract between Unitechna and Zenith and not to cross-claims for contribution or indemnity deriving from the injury to Michael Lippus. This argument is without merit. Third party claims fall within the language of broadly-phrased arbitration provisions. S.A. Mineracao da Trinclade-Samitri v. Utah International, Inc., 745 F.2d 190, 194 (2d Cir.1984); Acevado Maldonado v. PPG Industries, 514 F.2d 614, 616 (1st Cir.1975). The language of section 18(3) is broad enough to cover a third party claim by Zenith against Unitechna.
Zenith argues next that this Court should stay arbitration until it is determined whether any of the GDR Defendants would face liability because Zenith would not pursue its cross-claims against the GDR Defendants for contribution or indemnity if either another defendant is found wholly liable or there is a verdict in favor of all defendants. Despite the appeal of this argument, this Court lacks the discretion to stay arbitration, even if a stay would avoid inconsistent verdicts or piecemeal adjudication. 9 U.S.C. § 3; Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed. 765 (1983); Tai Ping Insurance Company, Ltd. v. M/V Warschau, 731 F.2d 1141 (5th Cir.1984) (questioning Petroleum Helicopters, Inc. v. Boeing-Vertol, Co., 606 F.2d 114 (5th Cir.1979)).
Zenith also argues that the cross-claim against Planeta should not be stayed because Planeta was not a party to the arbitration agreement and is not a successor in interest to or united in interest with either Unitechna or Polygraph. Planeta responds it is entitled to invoke the arbitration clause because Unitechna and Polygraph, as foreign trade enterprises, are little more than Planeta's agents and, under GDR law, Planeta "is obliged to cooperate in arbitration or judicial proceedings which involve claims asserted by or against a partner outside the GDR." Memorandum In Support of Motion to Stay, 16-17. The answer to this question first requires an examination of the relationship between the GDR Defendants.
In September, 1977, Unitechna and Zenith entered into a standard form printed agreement making Zenith Unitechna's exclusive distributor in the United States. Pursuant to the terms of this agreement, Zenith has the sole selling rights in the United States of the products, spare parts, *1482 and accessories of five separate GDR manufacturers, one of which was Planeta. For its labors Zenith would receive a commission on sales in the United States. In April, 1980, pursuant to the distributorship agreement, Unitechna sold to Zenith the machine involved in this lawsuit. Planeta was not a party to that sale. In August, 1980, Polygraph was created by an official governmental act of the GDR, and, pursuant to an agreement among Unitechna, Polygraph, and Zenith, Polygraph succeeded to the business of Unitechna. Planeta has no authority to sell its products directly to Zenith. It must first sell them to Unitechna (later Polygraph), who would in turn sell them to Zenith for export to the United States. Rand Affidavit, ¶ 9. In their distributorship agreement with Zenith, Unitechna and Polygraph signed in their own capacities and not on behalf of or as an agent for Planeta or any other GDR manufacturers whose products they exported.
Under the Federal Arbitration Act, "federal law applies to all questions of interpretation, construction, validity, revocability, and enforceability [of arbitration agreements]." Coenen v. R.W. Pressprich & Co., 453 F.2d 1209, 1211 (2d Cir.), cert. denied, 406 U.S. 949, 92 S.Ct. 2045, 32 L.Ed.2d 337 (1972); Beromun Aktiengesellschaft v. Societa Industriale Agricola "Tresse", 471 F.Supp. 1163, 1169 (S.D.N.Y. 1979); In re Ferrara S.p.A., 441 F.Supp. 778, 780 n. 2 (S.D.N.Y.1977), aff'd without opinion, 580 F.2d 1044 (2d Cir.1978). The applicable body of federal law consists of generally accepted principles of contract law. Fisser v. International Bank, 282 F.2d 231 (2d Cir.1960); Ferrara, 441 F.Supp. at 780. In this Circuit, "ordinary principles of contract and agency determine which parties are bound by an agreement to arbitrate." McAllister Brothers, Inc. v. A & S Transportation Co., 621 F.2d 519, 524 (2d Cir.1980); Wren Distributors, Inc. v. Phone-Mate, Inc., 600 F.Supp. 1576, 1580 (E.D.N.Y.1985); Farkar Co. v. R.A. Hanson Disc., Ltd., 441 F.Supp. 841, 845 (S.D. N.Y.1977), modified on other grounds, 583 F.2d 68 (2d Cir.), aff'd on rehearing, 604 F.2d 1 (2d Cir.1978). Determining the substance of "ordinary contract principles" is in itself no simple threshold task given the complexities attendant to choice of law questions, Farkar, 441 F.Supp. at 845, and the international dimension of this lawsuit.
Applying these principles to the instant case, it is beyond doubt that Unitechna, as a party to the agreement, and Polygraph, as a successor in interest to Unitechna, may enforce the arbitration clause. Interocean Shipping Company v. National Shipping and Trading Company, 523 F.2d 527, 539 (2d Cir.1975), cert. denied, 423 U.S. 1054, 96 S.Ct. 785, 46 L.Ed.2d 643 (1976); Fisser, 282 F.2d at 233 (parties can become contractually bound absent their signatures). With respect to Planeta, however, it is apparent that there is no contractual relationship between Planeta and Polygraph and the exporter is not acting as an agent for the manufacturer. The printed form agreement between Unitechna and Zenith is signed by an official of Unitechna on behalf of that entity. Planeta is only mentioned once, in a typed appendix, as one of five GDR manufacturers whose products Unitechna will sell to Zenith. In short, there is no evidence that Polygraph is an agent for Planeta. "Further, absent findings of fraud or bad faith, a corporation ... is entitled to a presumption of separateness from a sister corporation ... even if both are owned and controlled by the same individuals." American Renaissance Lines, Inc. v. Saxis Steamship Co., 502 F.2d 674, 677 (2d Cir. 1974). Although both Polygraph and Planeta are wholly-owned instrumentalities of the GDR, that does not rebut the presumption that they are separate entities, incapable of acting for and on behalf of one another. An examination of the agreement between Unitechna and Zenith does not reveal any of the essential elements of an agency relationship, i.e., that Polygraph may alter legal relations between Planeta and another, that Polygraph acts as a fiduciary, or Planeta controls Polygraph. See Restatement of Agency 2d §§ 12-14 (1958). Therefore, the Court concludes that Planeta lacks the right to invoke the arbitration *1483 clause on behalf of itself to stay Zenith's cross-claims.
D.
The final issue to be discussed is whether the entire action should be stayed pending resolution of the arbitration proceeding. Although this Court must stay the adjudication of arbitrable claims pending arbitration, 9 U.S.C. § 3, this is not the case with non-arbitrable claims. Wren Distributors, 600 F.Supp. at 1581. This Court's power to proceed "is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. North American Co., 299 U.S. 248, 254, 57 S.Ct. 163, 166, 81 L.Ed. 153 (1957). There are, however, many considerations pertinent to a resolution of this issue. See Landis, 299 U.S. at 254-55, 57 S.Ct. at 166; Nederlandse Erts-Tankersmaatschappij v. Isbrandtsen Company, 339 F.2d 440 (2d Cir.1964).
As the circumstances presently appear, a stay is not warranted. A trial on the merits of plaintiffs' claim may result in a finding of no derivative liability on the single claim to be arbitrated, thus rendering the arbitration moot. Furthermore, the arbitration proceeding will not settle any of the underlying fact questions here; at best it will establish the extent of any derivative liability between Zenith and Polygraph. Moreover, arbitration is unlikely to result in a speedier resolution of the case. Quite the opposite, a stay of these proceedings to permit arbitration between Zenith and Polygraph and Unitechna will likely result in a lengthy delay to a cause that is already over two years old. All pre-trial proceedings are complete and this case would have gone to trial but for the instant motions. Nevertheless, there may be facts bearing on the issue of a stay that have not been brought before the Court and, in this light, Dahlgren's suggestion of a pre-trial conference is well taken. Therefore, the motion to stay the non-arbitrable claims pending arbitration is denied at this time.
III.
Planeta's motion to dismiss plaintiffs' Complaint for insufficiency of process is denied at this time. Plaintiffs' are allowed thirty (30) days to re-serve Planeta or their Complaint will be dismissed for insufficiency of process. Decision on the motion by Unitechna and Polygraph to dismiss Zenith's third party Complaint for insufficiency of service of process is reserved pending a preliminary hearing. The motion by Unitechna and Polygraph to stay the third party Complaint pending arbitration is granted. Planeta's motion to stay cross-claims is denied. The parties are directed to appear before the Court for a status conference on October 16, 1986 at 9 a.m.
SO ORDERED.
NOTES
[1] § 1608(b) provides that:
(b) Service in the courts of the United States and of the States shall be made upon an agency or instrumentality of a foreign state:
(1) by delivery of a copy of the summons and complaint in accordance with any special arrangement for service between the plaintiff and the agency or instrumentality; or
(2) if no special arrangement exists, by delivery of a copy of the summons and complaint either to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process in the United States; or in accordance with an applicable international convention on service of judicial documents; or
(3) if service cannot be made under paragraphs (1) or (2), and if reasonably calculated to give actual notice, by delivery of a copy of the summons and complaint, together with a translation of each into the official language of the foreign state
(A) as directed by an authority of the foreign state or political subdivision in response to a letter rogatory or request or
(B) by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the agency or instrumentality to be served, or
(C) as directed by order of the court consistent with the law of the place where service is to be made.
[2] Similar language requiring arbitration or litigation is found in other agreements between the parties. See GDR Defendants' Exhibits 2, 4.
[3] It is undisputed and beyond contention that the arbitration clause falls under the provisions of both federal and international law. 9 U.S.C. § 3 states that:
If any suit ... be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court ..., upon being satisfied that the issue involved in such suit ... is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement....
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958, 21 U.S.T. 2517, T.I. A.S. No. 6697, U.N.T.S. (codified at 9 U.S.C. § 201 note), to which the United States and the GDR are parties, also requires arbitration here. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558782/ | 22 So.3d 89 (2009)
BLESS
v.
STATE.
No. 5D09-2725.
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/1558794/ | 644 F.Supp. 757 (1986)
Quentin MEADOWS, Petitioner,
v.
Robert H. KUHLMANN, Superintendent, Sullivan Correctional Facility, Fallsbury, New York; Robert Abrams, Attorney General of New York; and Denis Dillon, District Attorney of Nassau County, Respondents.
No. 85 CV 4515.
United States District Court, E.D. New York.
September 19, 1986.
*758 Spiros A. Tsimbinos, Kew Gardens, N.Y., for petitioner.
Denis Dillon, Dist. Atty., Mineola, N.Y. by Bruce E. Whitney, Denise Parillo, Asst. Dist. Attys., for respondents.
MEMORANDUM AND ORDER
PLATT, District Judge.
Petitioner, Quentin Meadows, was convicted after a jury trial in New York State Supreme Court, Nassau County, of two counts of Robbery in the First Degree. On March 5, 1982, petitioner was sentenced as a second violent felony offender to two indeterminate terms of ten to twenty years imprisonment to be served concurrently with one another and consecutively to any other sentence previously imposed. His conviction was affirmed without an opinion by the Appellate Division, Second Department, on June 4, 1984. The New York Court of Appeals affirmed in an opinion reported at 64 N.Y.2d 956. The United States Supreme Court denied a petition for certiorari on October 10, 1985. Petitioner is before this Court on an application for a writ of habeas corpus.
In this application two grounds are raised by the petitioner in seeking the writ:
(1) A lineup viewing by a key witness was conducted in the absence of counsel several months after counsel had appeared in the matter.
(2) The petitioner was improperly impeached by the use of an alleged admission taken in violation of his right to counsel.
I. Factual Background
During the evening of October 21, 1980, John Taylor was working as an attendant at a BP gas station located in Nassau County. Also working at the station was Paul Cufalo. Taylor's cousin, James Alviti, came to the station by bicycle, for a visit, around 9:15 p.m. Petitioner arrived at the station soon after and displayed the butt of a gun to Taylor and Alviti. He ordered them into a back room where Cufalo was already present and made the three men crouch on the floor. Petitioner took cash from Taylor and Alviti and then left. A short time later Taylor called the police and described the robbery. When the police responded, Taylor, Alviti and Cufalo gave descriptions of the petitioner.
The next day, Taylor and Alviti went to police headquarters to view slides and photographs in an attempt to identify the robber. They immediately recognized petitioner *759 on one of the sixteen slides and on one picture.
A week later, on October 29, 1980, Taylor was again at work at the BP station. Vincent Rizzuto was also on duty at the station. At about 9:15 that evening, while servicing a car, Taylor recognized petitioner walking into the station's office. Taylor asked a customer to call for help and followed petitioner into the office. Petitioner addressed Taylor by his first name and, at gunpoint, ordered Taylor and Rizzuto into a back room. Petitioner took cash from Taylor and Rizzuto and left. Taylor called the police. He told them that he had been robbed again by the same person who had robbed him the week before. Detective Byron C. Bartlett arrived at the scene. He showed Taylor and Rizzuto the same photographic array that had been used the week before. Both men identified petitioner's picture.
A felony complaint was filed and an arrest warrant for petitioner was obtained on November 7, 1980 from Judge Myron Steinberg. On November 20, 1980, detectives of the Nassau County Police Department apprehended petitioner at his home in Hollis, Queens. Petitioner was read his Miranda warnings and taken to the Robbery Squad Room of the Nassau County Police Department. While in custody, that day, petitioner made an oral statement to Detective Thomas P. Howell in which he admitted committing the two gas station robberies.
An indictment against petitioner was filed on January 26, 1981. At his arraignment on March 25, 1981, petitioner was represented by James Horan, Esq., who filed an appearance as retained counsel. Mr. Horan requested and was given a two-month adjournment to prepare for trial and make motions. During those two months, the trial court unsuccessfully attempted to communicate orally with Mr. Horan on numerous occasions to notify him to attend a conference on petitioner's case. Minutes of Hearing at 456.
A motion was filed by the State requesting a pretrial lineup. The motion was never answered and Mr. Horan made no appearance with respect to it. Judge Harrington granted the motion and sent Mr. Horan a copy of the order. Minutes of Hearing at 456. On the date of the lineup, May 19, 1981, Detective Byron C. Bartlett telephoned Mr. Horan's office several times but was not able to speak to him directly. Minutes of Hearing at 333-35. The lineup was held in the absence of Mr. Horan and petitioner was identified by Vincent Rizzuto. None of the other victims viewed the May 19th lineup.
At petitioner's trial Taylor, Rizzuto and Alviti made in-court identifications. Rizzuto also testified about his identification of petitioner at the May 19th lineup. By a prior ruling the prosecution had been barred from using petitioner's admission in its case-in-chief because it was obtained from the petitioner in violation of his right to counsel as set forth in People v. Samuels, 49 N.Y.2d 218, 424 N.Y.S.2d 892, 400 N.E.2d 1344 (1980). However, the prosecutor was permitted to use the statement for impeachment purposes if petitioner took the stand. Petitioner did testify and the prosecution introduced his prior statement through the rebuttal testimony of Detective Howell. Subsequently, the jury returned a verdict of guilty.
II. The Lineup Challenge
Petitioner argues that the May 19th lineup conducted without counsel violated his Sixth Amendment rights. He questions the admissibility of the lineup and the incourt identifications by Rizzuto and claims that such error is not harmless. He further argues that it would be improper to presume that petitioner waived his right to counsel by his attorney's failure to appear. Petitioner argues that he should not "be punished for what his attorney or any attorney neglected to do." Petitioner's Memorandum of Law in Support of Petition for Writ at 6 (hereinafter "Petitioner's Memorandum").
In Gilbert v. State of California, 388 U.S. 263, 273-74, 87 S.Ct. 1951, 1957, 18 L.Ed.2d 1178 (1967), the Supreme Court established a per se rule which excludes *760 the admission of pretrial, post-indictment lineups conducted without counsel. At first glance it would appear that this rule should have been applied to Rizzuto's lineup identification and he should have been precluded from testifying about it. However, in Gilbert the lineup in question was conducted without notice to the defendant's counsel, a situation the opposite of what transpired in petitioner's case. It would seem, therefore, that the strict rule of Gilbert does not apply to this case. Petitioner himself suggests that "this Court has the unique opportunity to determine the important issue of whether a defendant can be denied his constitutional right of counsel by the failure of counsel to appear at a lineup after having been notified and requested to do so." Petitioner's Memorandum at 7.
The State court judge, Raymond Harrington, who presided over petitioner's pretrial hearing, strongly resolved this issue against petitioner:
[I]t is worthy of observation that Mr. Horan [petitioner's original counsel] has not appeared during the course of this hearing to offer any testimony indicating that he did not have any notice of the proposed lineup or sought any adjournment of the same.... Counsel cannot ignore his obligation to the defendant and thereby frustrate every effort to have this matter proceed in an orderly fashion. To find otherwise would give counsel license to merely ignore motions, directives of this Court and have it all inure to the benefit of his client. That obviously cannot be sanctioned and it is not sanctioned.
Minutes of Hearing at 456-57.
Judge Harrington's remarks make a good deal of sense. To rule in petitioner's favor on the facts of this case would greatly impair the administration of justice and in the long run cause harm to other defendants. The Supreme Court's rulings in Gilbert and other cases involving identification issues, such as United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967), were meant to encourage counseled lineups in order to insure proper identifications. If this Court were to allow the exclusion of lineups based on the recalcitrance of counsel, law enforcement authorities might be forced to use other, more suggestive procedures, resulting in more miscarriages of justice.
Even assuming, arguendo, that it was improper to admit Rizzuto's testimony regarding the pretrial lineup, any error that occurred was clearly harmless under Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967). To begin, Rizzuto's in-court identification of petitioner is admissible despite the uncounseled lineup so long as it has an independent origin not tainted by the impermissible lineup identification. United States v. Wade, 388 U.S. at 239-41, 87 S.Ct. at 1938-40. Rizzuto had substantial opportunity to view petitioner, gave the police an accurate description of the petitioner and identified him from a photo array immediately after the crime. There can be no doubt that Rizzuto had an independent basis for making an in-court identification of petitioner.
Petitioner has not challenged the lineup procedure itself but only argues that the lack of counsel taints it. There is no suggestion by petitioner that either the lineup or in-court identification was the result of suggestiveness which created a substantial likelihood of misidentification. Neil v. Biggers, 409 U.S. 188, 198, 93 S.Ct. 375, 381-82, 34 L.Ed.2d 401 (1972). The Court is convinced that under all the circumstances, Rizzuto's in-court identification was sufficiently reliable and therefore not excludable. See Manson v. Brathwaite, 432 U.S. 98, 106-07, 97 S.Ct. 2243, 2249, 53 L.Ed.2d 140 (1977).
Rizzuto's in-court identification, when coupled with the eyewitness identifications of Alviti and Taylor, is especially reliable and presents an overwhelming amount of evidence. Whatever harm occurred by admitting testimony of Rizzuto's pretrial identification was small. The Court has no doubt that the jury's decision would have been the same.
*761 III. Admission of Petitioner's Statement
At petitioner's pretrial hearing the prosecutor conceded that, although there was no evidence of coercion, petitioner's statement to Detective Howell could not be used in the People's case-in-chief because it was taken after the defendant was arrested pursuant to a warrant. Minutes of Hearing at 243. The New York Court of Appeals held in People v. Samuels, 49 N.Y.2d 218, 424 N.Y.S.2d 892, 400 N.E.2d 1344 (1980), that a criminal action in New York commences with the filing of an accusatory instrument which includes the felony complaint that precedes an arrest warrant. At this point a defendant's right to counsel attaches and New York Courts have held that a defendant may not waive his right to counsel outside the presence of counsel. See, e.g., People v. Grimaldi, 52 N.Y.2d 611, 616, 439 N.Y.S.2d 833, 422 N.E.2d 493 (1981). However, the prosecution was, under the authority of Harris v. New York, 401 U.S. 222, 91 S.Ct. 643, 28 L.Ed.2d 1 (1971), permitted to use the statement to impeach the petitioner after he testified.
Petitioner argues that the admission of the statement for purposes of impeachment was improper under the holding of the Second Circuit in United States v. Brown, 699 F.2d 585 (2d Cir.1983). In Brown the Court held that a statement taken in violation of a defendant's Sixth Amendment right to counsel could not be used for impeachment purposes even if the strictures of Miranda had been complied with.
Respondents argue that Brown does not apply to this case. The contention is made that the New York Court of Appeals in Samuels, supra, created a right to counsel that is unique to New York, based on local statutes. Respondents claim that the federal right to counsel was not violated. They posit that petitioner's statements were not admissible in the prosecution's case-in-chief because "they were obtained in violation of the more restrictive New York State Right [sic] to counsel which had attached simply because a felony complaint had already been filed." Respondents' Memorandum of Law at 12.
Brown is, of course, only concerned with a violation of a defendant's right to counsel under the Sixth Amendment of the United States Constitution. Although Brown involved a federal prosecution, it does not by its terms limit itself to those cases but would also apply to State defendants whose Sixth Amendment rights have been violated by the improper admission of statements for impeachment purposes. However, the Court in Brown did limit its holding to those "statement[s] taken from an indicted defendant in violation of his Sixth Amendment rights. It does not extend to statements taken under other circumstances, such as when the statement is obtained before indictment and prior to the attachment of a constitutional right to counsel." Brown, 699 F.2d at 590 (emphasis in original).
In determining whether a State defendant has been subjected to an improperly admitted statement under Brown, a court must first determine: when the right to counsel attached; whether the statement was obtained after the right attached; and whether there had been a valid waiver of that right. For purposes of the Sixth Amendment the right to counsel attaches with the initiation of judicial proceedings, "whether by way of formal charge, preliminary hearing, indictment, information, or arraignment." Brewer v. Williams, 430 U.S. 387, 398, 97 S.Ct. 1232, 1239, 51 L.Ed.2d 424 (1977) (quoting Kirby v. Illinois, 406 U.S. 682, 689, 92 S.Ct. 1877, 1882, 32 L.Ed.2d 411 (1972)).
A federal court must look to State law to determine whether adversary proceedings have begun. Although the respondents are correct in that a State may create a more expansive right to counsel than that required by the United States Constitution, it is the unique qualities of State proceedings that will determine whether the right to counsel has attached in a Sixth Amendment sense. Thus, in Hamilton v. Alabama, 368 U.S. 52, 82 S.Ct. 157, 7 L.Ed.2d 114 (1961), the Supreme Court held that in Alabama an arraignment was a critical proceeding requiring *762 counsel because under Alabama law certain motions not made at that time are waived.
In the present case, at the time the statements were taken from petitioner a felony complaint had been filed and an arrest warrant had been issued by a State judge. The authority of the Second Circuit as to whether this is sufficient to constitute the initiation of adversary proceedings for purposes of the Sixth Amendment is not entirely clear. In United States ex rel. Robinson v. Zelker, 468 F.2d 159 (2d Cir.1972), cert. denied, 411 U.S. 939, 93 S.Ct. 1892, 36 L.Ed.2d 401 (1973), the Court interpreted Section 144 of the New York Code of Criminal Procedure, which has since been repealed and replaced by a similar statute. The Robinson Court held that the filing of a complaint and the issuance of an arrest warrant by a State court judge was the beginning of adversary proceedings within the meaning of Kirby v. Illinois, supra, and the defendant had a right to counsel. Robinson, 468 F.2d at 163.
The holding of Robinson was thrown into doubt by the decision of the Second Circuit in United States v. Duvall, 537 F.2d 15 (2d Cir.), cert. denied, 426 U.S. 950, 96 S.Ct. 3173, 49 L.Ed.2d 1188 (1976). The Duvall Court held that the filing of a complaint and the issuance of an arrest warrant by a United States Magistrate was not the beginning of adversary proceedings and no Sixth Amendment right to counsel attached at that point. The Court noted:
[T]o hold that the accrual of the right to counsel is accelerated by use of the warrant procedure would tend to discourage this whereas the policy should be to encourage it.
Duvall, 537 F.2d at 22.
The Second Circuit discussed this problem again in O'Hagan v. Soto, 725 F.2d 878 (2d Cir.1984). In Soto the Court noted that Section 144 of the New York Code of Criminal Procedure in Robinson had been replaced by § 100.05 of the New York Criminal Procedure Law, which provides that a criminal action is commenced when an accusatory instrument is filed in a criminal court. The Soto Court mentioned that: "Arguably the charging document underlying the warrant on which [the plaintiff] was arrested sufficed to trigger Sixth Amendment protection, but the matter is clouded by our decision in United States v. Duvall." Soto, 725 F.2d at 879. The Court then expressly refused to resolve the conflict between Robinson and Duvall.
Faced with this ambiguity as to applicable precedent, the Court is of the opinion that Duvall is controlling in this matter. To hold that the right to counsel attached upon the issuance of an arrest warrant would, as the Duvall Court noted, result in the undesirable result of a disincentive to utilize arrest warrants. The application of the right to counsel at early stages of the prosecution was in part a reaction to overzealous police activity. See, e.g., Massiah v. United States, 377 U.S. 201, 84 S.Ct. 1199, 12 L.Ed.2d 246 (1964) (use of radio transmitter by federal agents to obtain admissions of defendant after indictment). It would seem incongruous to discourage police from obtaining arrest warrants in the name of the Sixth Amendment.[1]
In the present case the Court holds that the Sixth Amendment right to counsel did not attach to the petitioner at the time he made the incriminating statements because adversary judicial proceedings had not begun. There being no right to counsel, the holding of Brown does not apply to this case and thus the statements were properly admitted for impeachment purposes. Of course, having held that petitioner's right to counsel had not attached, the Court need not reach the issue of whether petitioner made a valid waiver of his right to counsel.
*763 IV. Conclusion
Having found both of petitioner's grounds for a writ of habeas corpus to be without merit, the petition must be and hereby is dismissed.
SO ORDERED.
NOTES
[1] Stranger results, of course, have been obtained over the years but it does not seem to us to be necessary to add another one in this case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919661/ | 225 N.J. Super. 100 (1988)
541 A.2d 1092
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
HAROLD CROUCH, A/K/A ASKIA ABDUSSALAAM, DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Submitted February 29, 1988.
Decided May 16, 1988.
*102 Before Judges O'BRIEN, HAVEY and STERN.
Appellant filed a pro se brief.
W. Cary Edwards, Attorney General of New Jersey, attorney for respondent (Jessica S. Oppenheim, Deputy Attorney General, of counsel and on the brief).
The opinion of the court was delivered by O'BRIEN, J.A.D.
This case involves the "unmerging" prior to resentencing of two convictions which had been merged before imposition of the original sentence. Defendant appeals from separate consecutive sentences imposed upon him on resentencing for convictions of robbery (N.J.S.A. 2C:15-1a(1)) and aggravated assault (N.J.S.A. 2C:12-1b(1)). The two convictions had been merged prior to his original sentence, but were "unmerged" prior to resentencing, which had been ordered upon the vacation of his original sentence as illegal, on defendant's petition for post-conviction relief. We affirm.
On February 4, 1981, defendant and another man approached Rita Anderson who is blind in one eye, her husband Olaf Anderson, age 70, who has only one leg, and their mentally retarded child as they were walking to a rescue mission for a meal. Defendant asked Olaf where he and his friend could get something to eat. In response Olaf invited them to accompany his family to the rescue mission. After walking three-quarters of a block defendant suddenly grabbed Rita around the neck from behind, pressed a sharp object into her side and started choking her. He then grabbed at her handbag. In the process *103 he threw her to the ground. As a result, she hit her head on a building, fell and suffered a fractured clavicle.
The grand jury returned a two-count indictment, charging in the first count that defendant "did, in the course of committing a theft, inflict bodily injury upon Mary Rita Anderson contrary to the provisions of N.J.S. 2C:15-1a(1)...." [Emphasis supplied.] This charges a second degree robbery. The second count charged that defendant "did commit an aggravated assault upon Mary Rita Anderson by knowingly causing serious bodily injury to said Mary Rita Anderson contrary to the provisions of N.J.S. 2C:12-1(b)(1)...." [Emphasis supplied.] This discrepancy in the indictment as to the extent of the bodily injury inflicted caused the problem.
Defendant was convicted on both counts and was sentenced on July 10, 1981. The presentence report contained this statement on the first page:
FINAL CHARGES:
COUNT ONE. ROBBERY WITH BODILY INJURY, IN VIOLATION N.J.S. 2C:15-1(A)1, FIRST DEGREE.
COUNT TWO. AGGRAVATED ASSAULT IN VIOLATION N.J.S. 2C:12-1(B)(1), SECOND DEGREE.
Prior to sentencing the judge inquired of defendant and his counsel as follows:
THE COURT: Thank you. Are there any additions or corrections you would seek to make to the presentence report?
MR. SACHS: No, Your Honor. Pardon me. I have gone over this with Mr. Crouch, read it out to him aloud, and we have gone over it and there are no additions or corrections.
THE COURT: Mr. Crouch, are there any additions or corrections which you would like to make to the presentence report?
THE DEFENDANT: No.
The sentencing judge prefaced his sentence as follows:
THE COURT: Thank you. I have before me for sentence the defendant Harold Leon Crouch under Indictment 793-80-J. Count number one is the offense of robbery with serious bodily injury contrary to 2C:15-1, an offense of the first degree. Count number two is an aggravated assault, and under the circumstances the facts which make this a first degree robbery are also the facts which constitute the aggravated assault, that is, the infliction of serious bodily *104 injury, and thus I would hold and do determine that Count two merges with Count one for the purpose of this particular sentence.[1] [Footnote supplied.]
The judge then imposed a sentence of 20 years with a ten-year period of parole ineligibility consecutive to any parole violation. He also imposed a $500 penalty payable to the Violent Crimes Compensation Board. The judge fully recited the reasons for the sentence imposed. In the judgment, after reciting the sentence, appears the language, "The 2nd count merges." At sentencing neither defendant nor his attorney disagreed with the judge's statement that the robbery conviction was a first degree crime because of the serious bodily injury inflicted.[2]
We affirmed defendant's conviction on November 12, 1982. We found no merit to defendant's contention that the sentence imposed was manifestly excessive. Although defendant also claimed on the appeal that the verdict was against the weight of the evidence and that the aggravated assault had not been proven, he did not allege any error in the judgment of conviction that he had been convicted and sentenced for a first degree robbery. Defendant's petition for certification was denied by the Supreme Court on February 2, 1983. His motion for reconsideration of sentence was denied on April 19, 1983, and a petition for writ of habeas corpus was dismissed without prejudice by the United States District Court on August 23, 1985.
Defendant then moved for post-conviction relief. In his memorandum in support of that petition, he contended that he was charged with second degree robbery in the first count of the indictment since the allegation was that in the course of committing *105 a theft he inflicted bodily injury, not serious bodily injury. Although in that memorandum he noted that he was also charged with aggravated assault, which he recognized as a second degree offense, he did not specifically observe that the language of the second count of the indictment charged that he caused "serious bodily injury." The judge who heard the petition for post-conviction relief concluded that the sentence imposed was illegal and directed that defendant be resentenced[3] and referred the matter to the original sentencing judge for that purpose.
At the resentencing hearing on May 9, 1986 the judge "unmerged" the aggravated assault and sentenced defendant for the robbery to a ten-year term with a five-year period of parole ineligibility, and on the conviction for aggravated assault imposed a consecutive ten-year term with a five-year period of parole ineligibility. Thus the aggregate sentence imposed upon defendant was the same as that originally imposed.
On this appeal, defendant advances the following legal arguments:
POINT I INCREASE IN AGGRAVATED ASSAULT SENTENCE AFTER APPEAL HAD CONCLUDED VIOLATED BOTH STATE AND FEDERAL DOUBLE JEOPARDY CLAUSE.
POINT II THE TRIAL JUDGE ERRED IN IMPOSING CONSECUTIVE SENTENCES FOR PARTS OF A SINGLE OFFENSE.
POINT III DEFENDANT'S SENTENCE SHOULD BE VACATED AS THE SENTENCE WAS IMPOSED CONTRARY TO THE MANDATORY SENTENCING GUIDELINES.
Defendant was convicted of two offenses, robbery and aggravated assault. In finding defendant guilty of aggravated assault the jury was required to find that defendant attempted to cause or caused serious bodily injury to the victim as they were charged by the trial judge. Had the indictment alleged that in *106 the course of committing the theft defendant inflicted serious bodily injury upon the victim, the robbery would have been a first degree crime under N.J.S.A. 2C:15-1b based upon the jury's verdict that the victim suffered serious bodily injury. Under those circumstances, the second degree aggravated assault would properly merge into the first degree robbery as the sentencing judge did. Although the error was not discovered by anyone at the time of sentencing, through the appellate process and on application for habeas corpus, it was finally discovered on defendant's motion for post-conviction relief. Thus, defendant could not have had an expectation of finality in the sentence imposed for the robbery since he contended on his motion for post-conviction relief that the sentence was illegal. See State v. Rodriguez, 97 N.J. 263 (1984). However, defendant argues that he received a sentence of "zero" years on his conviction for aggravated assault and that sentence was not appealed nor alleged to be illegal in the petition for post-conviction relief. We disagree.
Defendant's argument is based upon a faulty premise. The aggregate sentence imposed upon him for robbery specifically included the conviction for aggravated assault by the merger and therefore was appropriately unmerged when it was discovered that the indictment charged second and not first degree robbery. Thus, even though the jury found the victim had suffered serious bodily injury, defendant was not charged in the robbery count of the indictment with causing that serious bodily injury, and thus could only be convicted and sentenced for second degree robbery. However, he still stood convicted of aggravated assault upon which the jury found the victim sustained serious bodily injury. Under these circumstances, the trial judge correctly concluded at resentencing that, pursuant to N.J.S.A. 2C:1-8a, the aggravated assault did not merge into the robbery. To convict defendant of second degree robbery it was only necessary for the jury to find that he inflicted bodily injury in the course of committing the theft, whereas for second degree aggravated assault it was necessary to prove *107 that he attempted to cause or did cause serious bodily injury as the trial judge charged the jury. It is evident that the trial judge clearly understood the interplay between the grading provisions for robbery and the proofs necessary for aggravated assault. The error resulted from the language of the indictment which precluded defendant from being convicted of first degree robbery.
The Constitution does not prevent correction of inadvertent errors in sentencing. State v. Matlack, 49 N.J. 491, 502 cert. den. 389 U.S. 1009, 88 S.Ct. 572, 19 L.Ed.2d 606 (1967). In Bozza v. United States, 330 U.S. 160, 67 S.Ct. 645, 91 L.Ed. 818 (1947), the Supreme Court of the United States said:
This Court has rejected the `doctrine that a prisoner, whose guilt is established, by a regular verdict, is to escape punishment altogether, because the court committed an error in passing the sentence. Re Bonner, supra (151 U.S. [242], at 260, 38 L.Ed. [149, at] 153, 14 S.Ct. 323 [, at 327]). The Constitution does not require that sentencing should be a game in which a wrong move by the judge means immunity for the prisoner. See King v. United States, 69 App.D.C. 10, 98 F.2d 291, 296. In this case the Court `only set aside what it had no authority to do and substitute[d] directions required by the law to be done upon the conviction of the offender.' Re Bonner, supra, [151 U.S.] at 260 [, 14 S.Ct. at 327]. It did not twice put petitioner in jeopardy for the same offense.
[330 U.S. at 166-167, 67 S.Ct. at 649, 91 L.Ed. at 822.]
This is precisely what Judge Connor did in resentencing defendant. The sentence imposed for the robbery as a first degree offense was based upon a "wrong move" by the judge in determining that the jury's finding of serious bodily injury elevated the robbery to first degree and in merging the second degree aggravated assault therein. Once it was ascertained that the robbery conviction, because of the charge in the indictment, could only be second degree involving only bodily injury, the trial judge was required as a matter of law to unmerge the aggravated assault conviction based upon serious bodily injury which had been improperly merged. Defendant was then in the same position he had been in prior to the original sentencing, standing before the court convicted of two offenses and facing sentence.
*108 The circumstances here are analogous to those in State v. Rodriguez, supra, where the court said:
... when, as in this case, defendant's underlying convictions are interdependent, justifying merger, the appellate court, vacating one of these sentences on the vacated conviction, can also in its sound discretion vacate the sentence on the remaining conviction when the sentences as imposed were themselves interrelated.
[97 N.J. at 275-276.]
As in Rodriguez, when defendant petitioned for post-conviction relief contending that the sentence imposed upon him for robbery, into which the aggravated assault conviction had been merged for purposes of sentencing, was illegal, he could have no legitimate expectation of finality with respect to his original sentence for aggravated assault. As the court said in Rodriguez, supra:
Indeed, defendant's appeal grounded on merger presupposed that the two offenses constituted a whole, evidencing an expectation that an appropriate sentence could be imposed for the whole not to exceed the sentence imposed for the parts. Consequently, he may be resentenced without offending constitutional principles of double jeopardy, notwithstanding his initial commencement of the sentencing term, providing that any new sentence is in accordance with the substantive punishment standards under the Code and not in excess of the sentence originally imposed.
[97 N.J. at 277.]
We see this case as a parallel of that proposition. Historically, the pronouncement of sentence has never carried the finality that attaches to an acquittal. United States v. DiFrancesco, 449 U.S. 117, 134, 101 S.Ct. 426, 66 L.Ed.2d 328, 344 (1980). The Supreme Court emphasized the vigor of the doctrine that no rule of finality applies to the pronouncement of a sentence, whether that sentence is challenged after retrial or appeal. Id. at 135-136, 101 S.Ct. at 436-437, 66 L.Ed.2d at 344-345.
Defendant could have no expectation of finality even though he had begun service of the original sentence imposed on the merged offenses which he attacked in his petition for post-conviction relief. Thus, correction of that sentence by unmerging the two offenses which were improperly merged, and the imposition of new sentences which in the aggregate are not in excess of the original sentence imposed, do not offend principles *109 of double jeopardy. See State v. Ryan, 86 N.J. 1, cert. den. 454 U.S. 880, 102 S.Ct. 363, 70 L.Ed.2d 190 (1981).
We have also examined the sentences imposed in light of the principles of State v. Yarbough, 100 N.J. 627 (1985), cert. den. 475 U.S. 1014, 106 S.Ct. 1193, 89 L.Ed.2d 308 (1986), concerning the imposition of consecutive terms, and conclude they are consistent with the reasoning in that case. Beyond the question of merger, under the facts in this case defendant committed two separate crimes, first by inflicting bodily injury in the course of committing the theft when he stole the victim's pocketbook, followed by the infliction of serious bodily injury when he threw the victim against the wall and down to the ground fracturing her clavicle. As noted in Yarbough, there can be no free crimes. Id. 100 N.J. at 643. We conclude defendant was properly resentenced.
Relying on State v. Battle, 209 N.J. Super. 255 (App. Div.), certif. den. 105 N.J. 560 (1986), defendant also contends the aggravated assault conviction should merge into the robbery conviction notwithstanding the added element of serious bodily injury. We agree that the facts in State v. Battle are not unlike the facts in this case in that it arose out of a sidewalk purse snatching, where the victim was thrown to the ground. There, however, the victim sustained bruises and other soft-tissue injuries. In that case, we concluded there were no facts adduced at the trial which could have warranted a finding by the jury that defendant, beyond a reasonable doubt, was guilty of an attempt to cause his victim serious bodily harm. His intent was not to cause serious injury, but to obtain her purse as quickly and with as little resistance as possible. The Battle court noted that defendant physically assaulted the victim in snatching her purse, but that the assault was neither a separate offense nor a lesser included offense of a separate crime of aggravated assault. Rather, it was a constituent element of the second degree robbery of which defendant was convicted. As we said: "Since the simple assault *110 was therefore a necessary element of this robbery, it merged into the robbery and defendant cannot be separately convicted of it." Id. at 259. In Battle, we clearly noted:
The underlying problem here, as we see it, lies in the erroneous concept of the indictment. N.J.S.A. 2C:15-1(b) provides that if, during the course of committing a theft, the actor inflicts or attempts to inflict serious bodily injury on a victim, the robbery is a crime of the first degree. In effect, then, what the Legislature has clearly done in respect of the relationship between N.J.S.A. 2C:12-1 and 2C:15-1 is to designate a theft attended by a simple assault, as defined by N.J.S.A. 2C:12-1(a), as a second degree robbery and a theft attended by an aggravated assault as defined by N.J.S.A. 2C:12-1(b) as first degree robbery. In each case the respective assault is an element of the robbery. [Id. at 260.]
On the facts in Battle, the defendant was entitled to an acquittal of the aggravated assault charge. In this case, on the facts, defendant was properly convicted of the aggravated assault charge on a finding that he caused serious bodily injury to the victim. Accordingly, that conviction did not merge into the second degree robbery which only required a finding that he inflicted bodily injury.
Defendant was properly resentenced. Affirmed.
NOTES
[1] See State v. Mirault, 92 N.J. 492 (1983).
[2] The judge was in error. Defendant had been charged with and convicted of second degree robbery. In his charge, consistent with the indictment, the trial judge instructed the jury that the robbery charge required a finding that defendant inflicted bodily injury. However, in his charge on aggravated assault, the judge instructed the jury that in order to find defendant guilty of that offense they had to find that defendant caused serious bodily injury to the victim.
[3] Although defendant argues on this appeal that the post-conviction relief application was only directed to the first count charging armed robbery, we note that the judge concluded, "The court is satisfied that the sentencing of Mr. Crouch was an illegal sentence" without limiting that comment to the sentence imposed on the first count for robbery. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919664/ | 541 A.2d 149 (1988)
Carroll M. DERRICKSON, Appellant,
v.
Lloyd DERRICKSON, Appellee.
No. 86-1010.
District of Columbia Court of Appeals.
Argued November 17, 1987.
Decided April 29, 1988.
*150 John W. Karr, with whom William G. McLain, Washington, D.C., was on the brief, for appellant.
Daniel G. Grove, with whom Carol A. Joffe and David Kovach, Washington, D.C., were on the brief, for appellee.
Before MACK, TERRY and ROGERS, Associate Judges.
MACK, Associate Judge:
On June 24, 1986, the Superior Court granted appellee's motion to disqualify Mark Sandground, Esquire, from appearing as counsel for appellant (appellee's ex-wife) in domestic relations litigation pending before that court. The court found that, because appellee had previously consulted Sandground, an attorney-client relationship had existed between the two, that there was a substantial relationship between the litigation before the court and the prior consultation, and that disqualification was thus appropriate under the Canons of Ethics. The court certified its order for interlocutory appeal and this appeal followed. We reverse and remand for further proceedings.
I.
In December, 1985, Mrs. Carroll Derrickson, through her newly-retained counsel, Mark Sandground, Esquire, filed a motion to increase the alimony and support payments she received from her ex-spouse, Lloyd Derrickson. Although the Derricksons had for some nine years been engaged in litigation stemming from the dissolution of their marriage, this marked the first appearance of Sandground.
Lloyd Derrickson responded with a motion to disqualify counsel. Mr. Derrickson alleged that approximately eight years earlier he had consulted with Sandground regarding the possible appeal of the Judgment of Absolute Divorce. According to his affidavit, the meeting lasted for approximately an hour and dealt generally with facts and issues in the divorce proceeding. At the conclusion of this meeting, Mr. Derrickson decided not to retain Sandground. Mr. Derrickson, at the hearing on the disqualification motion, admitted that he had "no memory of exactly what was discussed."[1]
In opposing the motion to disqualify, Sandground stated by affidavit that he never entered into an attorney-client relationship with Mr. Derrickson, never received any confidential information and had no recollection of the events of the alleged meeting. Sandground was emphatic: "I have absolutely no memory of ever meeting Lloyd Derrickson.... I have searched through our file records and there isn't a single notation concerning Lloyd Derrickson." Sandground continued: "I never became Mr. Derrickson's counsel; I never entered into an attorney-client relationship with him; I never received any compensation from him; I never received any confidential information from him; nor any confidential communication of any kind whatsoever."
*151 For her part, Mrs. Derrickson, by affidavit, stated the importance to her of having Sandground serve as her attorney: "I believe that it is important that I have confidence in the lawyer I select, and that I have the right to be represented by the attorney that I myself choose. I chose Mr. Sandground because I believe him to be a lawyer who will aggressively move ahead in my matrimonial litigation to seek my lawful objectives."
After oral argument on the motion, the trial court granted the motion to disqualify and accordingly struck the appearance of Sandground as counsel for Mrs. Derrickson.[2] The issue now presented to this court is whether the trial court abused its discretion in disqualifying appellant's attorney.
II.
This court has not often had the opportunity to discuss the circumstances in which disqualification of counsel is appropriate. When the opportunity has arisen, most often the circumstances have involved the possible conflict of interest of a former government attorney engaged in private practice. In Brown v. District of Columbia Board of Zoning Adjustment, 486 A.2d 37 (D.C.1984) (en banc), for example, this court affirmed the Zoning Adjustment Board's decision that two former government attorneys and their law firm should not be disqualified from representation in a matter which was currently pending before the Board. The court noted that the concern in such cases was that counsel might have received "confidential information from [a] former client that could be used against it in the subsequent representation." Id. at 42. This court adopted the rule developed in T.C. Theatre Corp. v. Warner Brothers Pictures, Inc., 113 F. Supp. 265, 268 (S.D.N.Y.1953): "Where any substantial relationship can be shown between the subject matter of a former representation and that of a subsequent adverse representation, the latter will be prohibited." 486 A.2d at 42.[3]
In a footnote frequently cited and ultimately embraced by both counsel in the instant case, this court in Brown (quoting T.C. Theatre, supra, 113 F.Supp. at 268-69) explained the operation of the rule. "`[T]he former client need show no more than that the matters embraced within the pending suit wherein his former attorney appears on behalf of his adversary are substantially related to the matters or cause of action wherein the attorney previously represented him, the former client.'" 486 A.2d at 42 n. 5. This court continued, "`[i]n order to grant a disqualification motion, a court should not require proof that an attorney actually had access to or received privileged information while representing the client in a prior case.'" 486 A.2d at 42 n. 5 (quoting Government of India v. Cook Industries, Inc., 569 F.2d 737, 740 (2d Cir.1978)). Rather, "when a party seeking disqualification carries its burden of persuading the factfinder that two matters, handled by the same counsel, are substantially related, there is an irrebuttable presumption[[4]] that counsel received *152 information during the first representation that is relevant to the second." 486 A.2d at 42 n. 5 (emphasis added).
It is apparent from this court's explanation of the rule that two showings by the party seeking disqualification are required. First, the party must show that an attorney-client relationship formerly existed; the rule speaks in terms of "former client" and "former attorney." Second, the party must show that the current litigation is substantially related to the prior representation.[5] If these two showings are made, then the party seeking disqualification need not show that confidential information was actually transmitted to the attorney or that the attorney to be disqualified has recall of that information. Similarly, even if the attorney to be disqualified shows that he did not have access to or does not recall confidential information, this will not defeat the presumption which has been created. The problem arises here, however, not in connection with the second showing, but with the first.
III.
It is true of course that disqualification of an attorney is a matter which rests within the sound discretion of the trial court and will not be overturned absent a showing of abuse. O'Neil v. Bergan, 452 A.2d 337, 344 (D.C.1982); see also Mondello v. Mondello, 118 A.D.2d 549, 499 N.Y.S.2d 9 (1986). Moreover, there is authority for the proposition that in "`a disqualification situation, any doubt is to be resolved in favor of disqualification.'" 118 A.D.2d at 550, 499 N.Y.S.2d at 10 (citation omitted).[6] Notwithstanding this, we conclude that the trial court, on the basis of the information before it, erred in disqualifying appellant's counsel.
It is useful first to set out in some detail the trial court's findings[7] or more accurately the lack of findings, as to the first showingi.e., the existence of an attorney-client relationship:
[T]he nature of whether or not an attorney represents a client in the context in which matters must be held in confidence extends beyond mere payment of a fee.... [T]he circumstances surrounding the consultation provides some information about or the proper focus for whether or not an attorney-client relationship was established.... The plaintiff consulted with Mr. Sandground for approximately one hour for the purpose of discussing the recourse which should be taken as the result of a decision rendered by a judge of this Court including whether or not the decision was appropriate and whether or not an appeal should be taken and various strategies underlying that and other matters.... [T]his discussion was a two way discussion and although no fee was subsequently paid, in this Court's view, the circumstances provide a sufficient background to require some adherence to the Canons of Ethics....
While the trial court is surely correct that the existence of an attorney-client relationship should not turn upon whether a fee has been paid, the trial court erred in concluding "that the circumstances provide *153 a sufficient background" to warrant disqualification. In point of fact, the trial court never specifically states that an attorney-client relationship was formed as a result of the consultation between appellee and Mr. Sandground. Rather, the trial court simply expresses its concern that the circumstances require adherence to the canons applicable to the attorney-client relationship; thus the finding is akin to one that states that disqualification is required to avoid the appearance of impropriety. We are troubled, however, that the brief consultation in the circumstances here, without more, could form the legal basis for an attorney-client relationship leading to an irrefutable presumption that the attorney consulted has received privileged information.
Our concern can be explicated through a comparison of two Massachusetts cases. In Mailer v. Mailer, 390 Mass. 371, 455 N.E.2d 1211 (1983), the appellate court affirmed the trial court's decision not to disqualify counsel. While there were no findings of fact by the trial court, the appellate court noted that the information allegedly transmitted in the initial consultation was of public record, that a lengthy interval of five years had passed since the time of the initial consultation, and that while the "fact that the wife had not paid a fee did not negate conclusively that relationship," it was worthy of note.
By contrast, counsel was disqualified in DeLoury v. DeLoury, 22 Mass.App. 611, 495 N.E.2d 888 (1986). The court concluded that, in contrast to Mailer, an attorney-client relationship existed. The court pointed out that in addition to the initial consultation the party seeking disqualification had requested the attorney in question to do legal work and that the wife had communicated information "of an intimate character." DeLoury, supra, 22 Mass. App. at 614-15, 495 N.E.2d at 890.
In the instant case, we are not convinced that a sufficient showing has been made to establish the existence of an attorney-client relationship. This case is closer to Mailer than DeLoury. Mr. Derrickson at no time considered Mr. Sandground to be his attorney and Mr. Sandground did not consider himself to be Mr. Derrickson's attorney. The alleged initial consultation was brief and Mr. Derrickson did not request Mr. Sandground to do any legal work for him. A lengthy interval (over eight years) has passed since the alleged initial consultation. And while the fact that no fee was paid does not negate the existence of an attorney-client relationship, it does add support to our conclusion.
As appellee correctly points out, citing In re Lieber, 442 A.2d 153 (D.C.1982), neither a formal agreement nor the payment of fees is necessary to create an attorney-client relationship. As Lieber makes clear, however, the existence of the relationship is a question of fact and is to be predicated on the circumstances of each case.
Lieber involved a disciplinary proceeding against an attorney who was assigned by the Superior Court to assist a criminal defendant but failed to fulfill his responsibility. On appeal from disciplinary proceedings, Lieber attempted to argue that no attorney-client relationship existed. Judge Nebeker, writing for a unanimous court, concluded that an attorney-client relationship had been formed. Judge Nebeker noted that the prisoner considered Lieber to be his attorney, and that Lieber placed his name on the roster of attorneys available for court appointment, and was formally appointed by the court. Under the circumstances, no one could refute that Lieber, for disciplinary purposes, was the prisoner's attorney.
Appellee is also most certainly correct when he points out that "the fiduciary relationship existing between lawyer and client and the proper functioning of the legal system require the preservation by the lawyer of confidences and secrets of one who has ... sought to employ him." D.C. CODE OF PROFESSIONAL RESPONSIBILITY EC 4-1 (1980). But this proves too little. The issue is whether an attorney-client relationship formerly existed and thus whether one is entitled to the benefits of an irrefutable presumption that confidences and secrets have been transmitted. Certainly, even if an attorney-client relationship did not exist, *154 a party has a right to expect that a lawyer whom he sought to employ will protect confidences and secrets imparted. But if an attorney-client relationship did not exist, the party will have to show that confidences and secrets were actually imparted. The party will not gain the benefit of an irrefutable presumption to disqualify counsel.
While appellee may not rely on Brown's irrefutable presumption, appellee is still free to demonstrate to the trial court that actual confidences and secrets damaging to appellee in the pending action were imparted to Mr. Sandground. Of course, Mr. Sandground is also free to rebut such allegations and the ultimate resolution of this issue is within the sound discretion of the trial court.
Accordingly, the decision below is reversed and the matter remanded to the trial court for further proceedings consistent with this opinion.
Reversed & remanded.
NOTES
[1] Mr. Derrickson, in seeking disqualification, did not identify any specific confidential information allegedly conveyed in the initial consultation. Rather, he argued only that given the initial consultation, there was created an irrefutable presumption that Sandground had received such information.
[2] Subsequent to the filing of this appeal, the Office of Bar Counsel dismissed a complaint filed by Mr. Derrickson against Sandground, finding no grounds to conclude that there had been "a violation of the attorney's responsibility to warrant the institution of formal disciplinary proceedings."
[3] This rule has been applied in every federal circuit and in most state courts as well. For a discussion of attorney disqualification in federal court litigation, see Silverstein, Attorney Disqualification: A Confusing Body of Law in Need of Organization, 30 VILL.L.REV. 463 (1985).
[4] A presumption is an inference about a fact which has not been proven, from the existence of another fact which has been proven. See 4 J. WIGMORE, EVIDENCE § 1356(a) (Chadbourn rev. 1970). The proven fact may be called the "basic fact"; the inferred fact may be called the "presumed fact." For example, here the presumed fact is that confidential information was transmitted between the attorney to be disqualified and the party seeking disqualification. The basic facts are that an attorney-client relationship formerly existed between the two and that the pending litigation is "substantially related" to the former representation. Normally a presumption is rebuttable by the presentation of contrary evidence. With irrefutable presumptions, however, once the basic fact is proven, the presumed fact is accepted as true regardless of any evidence to the contrary.
[5] In Brown the court had no reason to discuss the first part of this test. It was apparent that an attorney-client relationship existed since the attorneys facing disqualification "had served as counsel for the District of Columbia in two earlier transactions allegedly related to [the one at issue]." 486 A.2d at 40. The focus of the court was accordingly on whether the transactions were "substantially related."
[6] Disqualification of an attorney is a serious step. Disqualification may severely affect the monetary interest and the reputation of an attorney. Moreover, disqualification negates a client's right to freely choose his counsel. See Government of India v. Cook Industries, Inc., 569 F.2d 737, 739 (2d Cir.1978) ("there is a particularly trenchant reason for requiring a high standard of proof on the part of one who seeks to disqualify his former counsel, for in disqualification matters [courts] must be solicitous of a client's right freely to choose his counsel").
For this reason, trial courts take a cautious approach in disqualifying counsel. See id. at 739-40. The trial court here was obviously concerned about the gravity of disqualification in that it certified its decision for interlocutory appeal.
[7] No written findings were made. Oral findings were made by Judge Wagner on June 24, 1986. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919674/ | 246 Pa. Super. 1 (1977)
369 A.2d 780
COMMONWEALTH of Pennsylvania
v.
William PAPE, Jr., Appellant.
Superior Court of Pennsylvania.
Submitted November 17, 1975.
Decided February 18, 1977.
*3 Francis C. Sichko, Washington, for appellant.
Robert N. Clarke, Assistant District Attorney, Washington, Jess D. Costa, District Attorney, Bentleyville, for appellee.
Before WATKINS, President Judge, and JACOBS, HOFFMAN, CERCONE, PRICE, VAN der VOORT and SPAETH, JJ.
*4 SPAETH, Judge:
On this direct appeal appellant raises a substantial issue regarding the competency of his trial counsel.[1] We therefore remand for an evidentiary hearing to determine whether appellant was denied his Sixth Amendment right to effective assistance of counsel at his trial.
Appellant was convicted by a jury on two counts of involuntary manslaughter. The charges arose out of the crash of an automobile on May 24, 1974, in Washington, Pennsylvania, in which two young passengers were killed. The crash ended a long night of drinking and marijuana smoking by appellant and other occupants of the automobile. Although appellant testified that one of the other survivors of the crash was driving, the Commonwealth introduced a substantial amount of evidence that appellant was the driver, and that he was driving recklessly. The Commonwealth's evidence included the testimony of the two surviving passengers and a witness who saw the automobile just before the crash. The Commonwealth also introduced an admission by appellant that he was the driver. The admission was made to a police officer while appellant was at a local hospital being treated for injuries he sustained in the crash. While appellant was being treated he gave permission for a blood sample to be taken from him. The result of a test of that blood sample, that appellant's blood contained.11 percent alcohol, was also introduced in evidence by the Commonwealth.
Appellant's argument is that his trial counsel was ineffective because he made no motion to suppress either appellant's admission or the results of the blood test. Appellant contends that this evidence should have been suppressed because he did not voluntarily and intelligently *5 waive his Fourth Amendment right to decline to give a blood sample, cf. Schmerber v. California, 384 U.S. 757, 86 S. Ct. 1826, 16 L. Ed. 2d 908 (1966), and his Fifth Amendment right to remain silent. Johnson v. Zerbst, 304 U.S. 458, 58 S. Ct. 1019, 82 L. Ed. 1461 (1938). He points to several facts in the record that he says would have supported suppression of the evidence had the proper motions been made.[2] These facts are as follows. At the time appellant was apprehended by the police officer he had somehow made his way from the scene of the crash to his home. He was found lying on a couch covered with blood and suffering from head injuries. The officer informed him of his Miranda rights at that time. Appellant's admission and his permission for a blood sample to be taken from him were given at the hospital, in unfamiliar surroundings, and separated in time and place from his Miranda warnings.
The test to be applied by this court in reviewing the constitutional sufficiency of trial counsel's assistance is stated in Commonwealth ex rel. Washington v. Maroney, 427 Pa. 599, 604-605, 235 A.2d 349, 352-353 (1967):
. . . counsel's assistance is deemed constitutionally effective once we are able to conclude that the particular course chosen by counsel had some reasonable basis designed to effectuate his client's interest. The test is not whether other alternatives were more reasonable, employing a hindsight evaluation of the record. Although weigh the alternatives we must, the balance tips in favor of a finding of effective assistance as soon as it is determined that trial counsel's decisions had any reasonable basis.
(footnote omitted)
*6 Accordingly, it is not for us to decide whether counsel should have followed one course of trial strategy over another, if both were reasonable. Moreover, we will not fault trial counsel for failure to make every conceivable motion, before, during and after trial. Commonwealth v. Hill, 231 Pa.Super. 371, 331 A.2d 777 (1974). There may be a reasonable basis for counsel's failure to make a particular motion. If we find a reasonable basis, our inquiry will cease and we will find constitutionally effective assistance.
Here, however, the record does not disclose a reasonable basis for trial counsel's failure to move for suppression of appellant's admission and the results of the blood test. The admission effectively rebutted appellant's defense that he was only a passenger, and the results of the blood test were strong evidence that appellant was driving under the influence of alcohol, and corroborated the testimony that he was driving recklessly. Nor can we say that motions to suppress the evidence would not have been effective. Proof of appellant's physical and mental state at the time he made the admission and gave permission to have the blood sample taken from him might have shown that he did not voluntarily and intelligently waive his Fourth and Fifth Amendment rights. This is not to say that counsel's action could not have been reasonable; counsel may have had a reasonable basis for not filing any motions to suppress, which simply does not appear in the record.
In these circumstances the proper remedy is to vacate the sentence and remand for an evidentiary hearing on the issue of trial counsel's effectiveness. Commonwealth v. Turner, 469 Pa. 319, 365 A.2d 847 (1976); Commonwealth v. Twiggs, 460 Pa. 105, 331 A.2d 440 (1975). If the lower court finds that appellant was deprived of effective assistance of counsel, the court should grant appellant a new trial. If the court finds that counsel did *7 provide appellant constitutionally sufficient assistance, the sentence should be reinstated.
Appellant raises two other issues on this appeal. He argues that evidence that he had been charged with driving without a valid license was so prejudicial that the lower court should have granted him a new trial, instead of simply striking the evidence. He also argues that he should have been informed by the court, on the record, that he had a right to a non-jury trial, just as he was informed of his right to a jury trial. We do not reach the merits of either of these issues. Neither has been properly preserved through post-trial motions, nor is the failure to preserve them advanced as ground for the alleged ineffectiveness of trial counsel. They are therefore waived. Commonwealth v. Clair, 458 Pa. 418, 326 A.2d 272 (1974).
Appellant's sentence is vacated and the case remanded for proceedings consistent with this opinion.
PRICE, J., concurs in the result.
WATKINS, President Judge, and VAN der VOORT, J., dissent.
NOTES
[1] As appellant's present counsel did not represent him at the time of his trial, the issue of trial counsel's ineffectiveness is properly before us. Commonwealth v. Dancer, 460 Pa. 95, 331 A.2d 435 (1975).
[2] We do not express an opinion on the truth of these alleged facts, nor can we, since no suppression hearing was held, and, therefore, no findings of fact were made. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566101/ | 592 S.W.2d 423 (1979)
Joe Allen PETTY, Appellant,
v.
James L. PETTY, and wife, Marva L. Petty, Appellees.
No. 20153.
Court of Civil Appeals of Texas, Dallas.
December 26, 1979.
*424 Christopher W. Mims, Everett, HeLal & Sharpe, Dallas, for appellant.
Richard A. Beacom, Jr., Greenville, for appellee.
Sandra Hale Adams, Advocacy, Inc., Austin, for amicus curiae.
Before AKIN, ROBERTSON and HUMPHREYS, JJ.
ROBERTSON, Justice.
This is an appeal by Joe Allen Petty, a mentally retarded adult, from the appointment under the Limited Guardianship Act, Tex.Prob.Code Ann. §§ 130A-130O (Vernon Supp.1978-1979), of his parents as guardians over him and his estate, with limited and specific powers. Appellant contends *425 that the trial court lacked personal jurisdiction because he was not personally served, that his waiver of right to counsel was not knowing and voluntary, that the trial court should not have proceeded without a proper examination report, and that venue was not proper in Hunt County. We conclude that appellant was not properly served with notice of the guardianship hearing and consequently, the court lacked personal jurisdiction over appellant. Accordingly, we reverse and remand to the trial court.
Appellant has been living at the Denton State School since 1965. Recently, personnel from the school advised appellees to apply for limited guardianship of appellant, which they did on March 20, 1979, service being made on personnel of the Denton State School on March 22, 1979. Appellant did not receive this process until after the hearing at which limited guardianship was granted. Appellant appeared at the hearing without counsel, accompanied by his parents and their counsel. After the hearing and upon discovering exactly what had occurred, appellant contacted his present counsel and this appeal followed.
The Limited Guardianship Act is a recent addition to the Texas Probate Code. The language of section 130A is instructive for the application and interpretation of the Act by Texas courts.
Limited guardianship for mentally retarded persons shall be utilized only as necessary to promote and protect the well-being of the individual, shall be designed to encourage the development of maximum self-reliance and independence in the individual, and shall be ordered only to the extent necessitated by the individual's actual mental and adaptive limitations. A mentally retarded person for whom a limited guardian has been appointed shall not be presumed to be incompetent and shall retain all legal and civil rights and powers except those which have by court order been designated as legal disabilities by virtue of having been specifically granted to the limited guardian.
Id. § 130A. We conclude from this that the provisions of the Limited Guardianship Act are to be construed to protect the rights of the mentally retarded person.
A question which is pertinent to this appeal and arises in several guises throughout the parties' briefs is whether an individual for whom a limited guardianship is sought may waive any of his rights as provided by this Act or otherwise. Appellee points out that section 130A contains the statement that "[a] mentally retarded person for whom a limited guardian has been appointed shall not be presumed to be incompetent...," and therefore, he should be competent to waive any right. We conclude, however, that this sentence does not bear on the question of waiver. The legislature, in enacting this Act, undertook to provide a means for protecting a mentally retarded individual in those areas which the individual could not adequately protect himself, but to provide maximum freedom and independence in all other areas. Thus, no presumption of incompetence is to follow a grant of limited guardianship. Indeed, if a subject individual is found to be totally incompetent, the court must dismiss the application for limited guardianship, as full guardianship is then the appropriate remedy. Tex.Prob.Code Ann. § 130H (Vernon Supp.1978-1979). These provisions protecting the subject individual after a determination of limited guardianship would be useless, however, if no protection was provided for the individual prior to the court's determination. See generally Tex.Rev.Civ. Stat.Ann. art. 5547-300, § 13 (Vernon Supp. 1978-1979). For example, if it ultimately is determined that the individual is able to understand what it means to have legal representation, then the court may determine that no limited guardianship is required for that purpose, and the individual may obtain or waive counsel thereafter as any other person. On the other hand, the court ultimately may determine that this is an area for which a limited guardian should be appointed. In such a case, what is to be the effect of a prior waiver of right to counsel? Must there be another proceeding in which waiver of those rights will not be *426 allowed? Such a procedure would be ridiculous and untenable.
We recognize that a difference exists between the proceedings under this Act and a proceeding to declare an individual totally incompetent. Tex.Rev.Civ.Stat.Ann. arts. 5547-40. to -57. (Vernon 1958 & Supp. 1978-1979). In the latter instance, the individual may be totally deprived of his rights to control and manage his property, and thus, appointment of an attorney ad litem is provided by statute. Id. art. 5547-43. Until the hearing under the Limited Guardianship Act is completed, the only result which is assured is that all of the subject individual's rights will not be removed. See Tex. Prob.Code Ann. § 130H (Vernon Supp.1978-1979). Which rights will be removed and the extent of such action is unknown. Thus, the potential deprivation of rights is nearly equivalent to that in a full guardianship proceeding, and the subject individual should be provided with protections commensurate with such potential deprivation. Therefore, when an action is brought under this Act, the subject individual of that action may not waive any right before consulting with an attorney. Because one of the rights that may not be waived absent counsel is the right "to be represented by counsel," we hold that, absent retained counsel, the court must appoint an attorney for a subject individual prior to the limited guardianship hearing. See also Brunetti, The Right to Counsel, Waiver Thereof, and Effective Assistance of Counsel in Civil Commitment Proceedings, 29 S.W.L.J. 684 (1975).
Section 130E(c) in pertinent part reads as follows:
The alleged mentally retarded person and his parents, if the parents can be found within this state, or the conservator or any person having control of the care and welfare of the alleged mentally retarded person shall be personally served with citation to appear and answer the application for the appointment of a limited guardian.
We construe this sentence as requiring personal service on the alleged mentally retarded person in all cases. Additionally, as a second step, personal service shall be made on one of the interested parties thereafter listed in that sentence. Here, the trial court found in its findings of fact and conclusions of law that service was made on the Denton State School and that such service was legally adequate to comply with the above quoted section of the Probate Code. While such service complied with the second step of this section, no personal service was made on appellant and thus, proper and complete service, sufficient to invoke the court's jurisdiction, was not made.
Appellee argues, however, that when the alleged mentally retarded person appears at the hearing, he waives any defect in service of process. Tex.R.Civ.P. 120. Nonetheless, an appearance can only be construed as a waiver of personal service if it is knowing and voluntary. Alvarez v. Alvarez, 476 S.W.2d 353, 355 (Tex.Civ.App. Corpus Christi 1972, no writ); Olton State Bank v. Howell, 105 S.W.2d 287, 288 (Tex.Civ.App.Amarillo 1937, no writ). Because of the protections that must be afforded an individual who is the subject of an action under this Act, we hold that a court may find such a knowing and voluntary appearance only after the alleged mentally retarded person has consulted with his attorney. Tex.Prob.Code Ann. § 130G (Vernon Supp.1978-1979). Since appellant had no attorney until after this hearing was held, he could not have knowingly and voluntarily appeared and waived service of citation. This contention, therefore, comes within our holding that the alleged mentally retarded individual may not waive any right until he has consulted with his attorney. Consequently, the trial court was without personal jurisdiction over appellant for lack of personal service, or a knowing and voluntary waiver. See Texas Alcoholic Beverage Commission v. Wilson, 573 S.W.2d 832, 835 (Tex.Civ.App.Beaumont 1978, writ ref'd n. r. e.). As a result, we must reverse the trial court's order and remand for a new trial.
A question which the parties raise and which is likely to arise again on remand, *427 and which we therefore address in the interest of judicial economy is what "reside" means as used in the venue provision of this Act. Section 130N of the Probate Code provides that "[a] proceeding for the appointment of a limited guardian of a mentally retarded person shall begin in the county where the mentally retarded person resides or where his principal estate is situated." Appellees rely on the portion of this section providing for venue where the mentally retarded person resides. Residence, as used in venue statutes, is not limited to only one place. In Snyder v. Pitts, 150 Tex. 407, 241 S.W.2d 136 (1951), the Texas Supreme Court announced the elements necessary to establish a second residence away from a domicile as follows:
1. A fixed place of abode within the possession of the defendant;
2. occupied or intended to be occupied consistently over a substantial period of time; and
3. which is permanent rather than temporary.
Id. at 415, 241 S.W.2d at 140. The presence of these elements, however, will establish residence for purposes of venue regardless of whether a party has previously established where his domicile is. No indication exists in the Limited Guardianship Act that this general rule is inapplicable, and, therefore, we hold that a trial court must determine that these three elements exist before finding that venue is established under this provision of section 130N.
We conclude that the legislative intent to afford protection to a mentally retarded person prior to any determination of a need for limited guardianship is manifestly clear. In order to assure that the legislature's objectives are not thwarted, the Act must be construed to insure that a subject individual is thoroughly apprised of all his rights and the consequences of any action he may take or fail to take. We hold, therefore, that retention or appointment of an attorney for a subject individual is required prior to a hearing under the Limited Guardianship Act, and that consultation with that attorney is an essential prerequisite to waiver by the subject individual of any of his rights, including the provisions of the Act.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558801/ | 644 F.Supp. 738 (1986)
Pat CANTERINO, et al., Plaintiffs,
and
United States of America, Plaintiff-Intervenor,
v.
George WILSON, et al., Defendants.
Civ. A. No. 80-0545-L(J).
United States District Court, W.D. Kentucky, Louisville Division.
September 15, 1986.
*739 Leslie W. Abramson, University of Louisville School of Law, Louisville, Ky., Alvin J. Bronstein, ACLU Nat. Prison Project, Washington, D.C., Eleanor F. Martin, David A. Friedman, Legal Aid Soc., Inc., Louisville, Ky., for plaintiffs.
Barbara W. Jones, Gen. Counsel, Linda G. Cooper, David A. Sexton, Corrections Cabinet, Frankfort, Ky., for Wilson, Kassulke & Chandler.
J. Gary Bale, Office of Legal Services, Dept. of Educ., Frankfort, Ky., for Barber.
Joseph Whittle, U.S. Atty., Wm. Bradford Reynolds, Asst. Atty. Gen., V. Colleen Miller, Special Litigation Counsel, U.S. Dept. of Justice, Civil Rights Div., Washington, D.C., for the U.S.
MEMORANDUM
JOHNSTONE, Chief Judge.
This case is before the court on defendants' motion to alter or amend this court's July 26, 1982 and February 10, 1983 orders concerning the access to the courts issue.
Plaintiffs, inmates at the Kentucky Correctional Institution for Women (KCIW), instituted this action in 1981 for relief concerning conditions of their confinement, disparate treatment of men and women incarcerated in Kentucky prisons, and denial of vocational training and educational opportunities. This motion is limited to the issue of access to the courts.
After a four-week trial, this court held that a substantial disparity existed between legal resources available to females at KCIW and those provided to male inmates under § 8 of the Consent Decree in Kendrick v. Bland, 541 F.Supp. 21 (W.D.Ky. 1981). Canterino v. Wilson, 546 F.Supp. 174 (W.D.Ky.1982). Specifically, this court found that females at KCIW only recently were provided minimal access to adequate legal resources, and also lacked any history of self-help in the legal field. Therefore, this court ordered defendants to supply KCIW law library facilities equivalent to those provided to male prisoners at Kentucky State Reformatory (KSR) and Kentucky State Penitentiary (KSP), substantially increase the amount of non-program time the library is open, and provide the equivalent of a half-time attorney to assist inmates in all areas of demonstrated need. The court held these minimal steps necessary to comply with the equal protection clause and with Bounds v. Smith, 430 U.S. 817, 97 S.Ct. 1491, 52 L.Ed.2d 572 (1977). 546 F.Supp. at 216.
Following that decision, defendants moved for supplemental relief with respect to the court's attorney assistance requirement for the female inmates. Canterino v. Wilson, 562 F.Supp. 106 (W.D.Ky.1983). In reiterating its earlier decision, this court noted that defendants failed to meet their burden of showing that legal needs of prisoners were served by the existing programs, and ordered defendants to formulate a plan which "must in some way provide for identification of either paid or volunteer attorneys or paralegal advisors within the meaning of Bounds...." 562 F.Supp. at 112.
This court also noted that although the law library was complying with earlier established standards as a source of legal information, (Canterino, 546 F.Supp. at 216), the physical conditions of and access to the library were inadequate. In addition, this court found that the training provided to inmate legal aides was insufficient because it was limited to legal research and did not teach the type of research and writing skills necessary to prepare legal briefs in civil matters. Canterino, 562 F.Supp. at 110.
In conclusion, this court again noted that its decision was based on the disparity of access provided to female and male inmates:
*740 Historically, women inmates have not gained the experience of their male counterparts in providing legal assistance to other inmates as "writ-writers" or "jail-house lawyers" because of the unavailability for many years of sufficient legal resources.... The actions pending before this Court reflect the absence of effective inmate writ-writers at KCIW in comparison to the State's male institutions.... The services of an attorney is justified, not because there is or is not a similar program offered at the men's prisons, but because, unlike the male population generally, the women do not have a history of self-help in the legal field; the evidence tends to show that until recently they have had little access to adequate legal resources.
562 F.Supp. at 112.
Defendants now state that they will not implement the attorney assistance program voluntarily, but only upon order of the court. Although this court construes its decision in 1983 as such an order, it has reviewed the renewed arguments of both sides with respect to this matter. Defendants argue that a half-time attorney will "do the work for the inmates and not take on the role of a teacher," and propose, instead, an expansion of the Office of Public Advocacy legal training program. Defendants also cite two recent court decisions as construing Bounds in support of their position, Lindquist v. Idaho State Board of Corrections, 776 F.2d 851 (9th Cir.1985), and Hooks v. Wainwright, 775 F.2d 1433 (11th Cir.1985).
In Lindquist, the court held that Bounds does not require a state to provide inmates with both access to a competent law library and legal assistance. The court noted that several experienced writ-writers were present within the Idaho prison system, and that the system provided videotape training courses for inmate law clerks. 776 F.2d at 856-7. Similarly, in Hooks, the court reversed a Florida district court which ordered that state's prison system to provide legal services, after noting the inadequacies of the law library system. The appellate court stated that district courts which interpret Bounds as mandating legal assistance are in error, and that if inmates are not constitutionally entitled to the assistance of counsel in 42 U.S.C. § 1983 cases [see Hardwick v. Ault, 517 F.2d 295, 298 (5th Cir.1975)], no rational basis exists on which to mandate counsel for prisoners considering, filing or pursuing such claims. 775 F.2d at 1498. [In support of denial of a motion for rehearing en banc, the court stated that the earlier opinion was an interlocutory appeal on the legal assistance issue alone, and that no decision had been made concerning the adequacy of the law library. Two dissenting judges stated that the earlier opinion misinterpreted Bounds and failed to recognize that its issue was more narrow, given the alleged law library inadequacies. Hooks v. Wainwright, 781 F.2d 1550, 1551 (11th Cir.1986)] This court agrees with the dissenting judges, and declines to follow the above cases for reasons which follow.
In Bounds, the Supreme Court reaffirmed the existence of a constitutional right to meaningful access to the courts, which requires states to provide inmates with adequate law libraries or adequate assistance from legally-trained persons. 97 S.Ct. at 1498. In so holding, the court noted that although some states have established a combination of both, a legal access program does not require any of the particular elements named, but rather, must be evaluated as a whole to ascertain compliance with constitutional standards. 97 S.Ct. at 1499-1500. On remand, the district court later held that, absent proof of an adequate law library or inmate para-legal training program, the state was required to submit a plan for providing some form of legal assistance. Smith v. Bounds, 610 F.Supp. 597, 606 (D.C.N.C. 1985).
This court finds its earlier decisions consistent with Bounds and distinguishable from Lindquist and Hooks. In ordering the state to provide a plan for inmate legal assistance, this court relied, not only on *741 Bounds, but on the Fourteenth Amendment equal protection guarantee. Thus, this court held that in order to provide meaningful access to the courts to the female inmates at KCIW, the state should provide the same opportunities accorded to male inmates at the other prisons. In order to provide equal opportunities in this situation, inmate legal assistance is necessary, since the past unavailability of legal resources has prevented females from gaining legal assistance experience comparable to that of the male writ-writers.
This decision is consistent with Bounds, in that this court has determined that the existing law library facilities alone are not sufficient to provide meaningful access. Although the state's substitute proposal of additional legal training such as that found in Lindquist is a workable idea for the future, that proposal alone is insufficient to establish equality of access among the female and male inmate populations.
Plaintiffs propose that a half-time attorney be hired on a short-term basis (ie: 18 months) in order to evaluate the program's effectiveness. This court agrees with this proposal and further suggests, in order to alleviate defendants' concerns, that the program include inmate training and assistance.
An appropriate order shall accompany this memorandum.
ORDER
In accordance with the memorandum opinion this date entered,
IT IS ORDERED:
1. Defendants' motions to alter and amend this court's earlier decisions rendered July 26, 1982 and February 10, 1983 are DENIED;
2. In accordance with those opinions, defendants shall hire a half-time attorney for an initial eighteen-month period to assist and train the female inmates in all areas of demonstrated legal need. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1646800/ | 9 So.3d 590 (2007)
CHRISTOPHER LENARD PUGH
v.
STATE.
No. CR-06-1306.
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/1558836/ | 644 F.Supp.2d 978 (2009)
Ronald P. SLOUGH, Plaintiff,
v.
Hon James A. TELB, et al., Defendant.
Case No. 3:06 CV 2592.
United States District Court, N.D. Ohio, Western Division.
August 14, 2009.
*983 Bruce C. French, Lima, OH, for Plaintiff.
Andrew K. Ranazzi, John A. Borell, Sr., Office of the Prosecuting Attorney, Toledo, OH, for Defendants.
MEMORANDUM OPINION
KATZ, District Judge.
This matter is before the Court on Defendants' motion for judgment on the pleadings. (Doc. 48). Plaintiff has filed an opposition (Doc. 49), and Defendants have filed a reply (Doc. 52).
As discussed herein, Defendants' motion is granted in part and denied in part. (Doc. 48). Plaintiff may proceed with Count I against Defendant Telb in his official capacity and against the following Defendants in their individual capacities: Defendants Luna, Rogers, McBroom, Walentowski, and Grzechowiak, for unreasonably seizing Plaintiff's property; and Defendants Luna, Ellis, and Telb for wrongfully interfering with Plaintiff's family relationships. All other claims alleged in Count I are dismissed with prejudice. Counts II-VII are dismissed with prejudice. Defendants Atkinson and Perry, *984 and Defendant Board of Lucas County Commissioners are dismissed as parties.
I. BACKGROUND
In a motion for judgment on the pleadings, the Court treats as true all of Plaintiff's allegations not inconsistent with the final judicial findings of fact from prior, related litigation. See, Stychno v. Ohio Edison, 806 F.Supp. 663, 666 (N.D.Ohio 1992). This background, therefore, is not a final adjudication of the facts, but a restatement of Plaintiff's allegations. Plaintiff alleges as follows:
Plaintiff Ron Slough was hired in 1994 as Deputy Sheriff in the Lucas County Sheriff's Office ("LCSO"), Lucas County, Ohio. Plaintiff served in this capacity until his termination in 2004. Defendant Telb is the Sheriff of LCSO. Defendant Board of Commissioners of Lucas County, Ohio is the legislative and executive branch of Lucas County. All other named Defendants are officers and employees of LCSO.
In July, 2004, LCSO was informed of allegations of domestic violence, spousal and child abuse in Plaintiff's home. These allegations of domestic violence were made by Defendant Robert Ellis, a deputy sheriff at LCSO. Defendant Ellis alleged that he had personal knowledge by his witnessing of domestic violence on five separate occasions. Plaintiff alleges that Defendant Ellis's statements consist of falsehoods, fabrications, and exaggerations.[1]
On or about July 13, 2004, Defendant Andrea Luna, a sergeant at LCSO, contacted Mrs. Slough and asked to meet with Mrs. Slough in person. They met the next day, July 14, at Mrs. Slough's place of employment, and went to a fast food restaurant where they proceeded to discuss the allegations of domestic violence. Luna stated that she knew Plaintiff was having several sexual affairs, and that Plaintiff had made advances towards her. Luna told Mrs. Slough that an anonymous tipster (later learned to be Defendant Ellis) had alleged incidents of domestic violence. Luna told Mrs. Slough that if Mrs. Slough did not cooperate Plaintiff would lose his job and the Children Services Bureau would get involved, possibly taking Mrs. Slough's children. Mrs. Slough began to "cooperate" and wrote a statement against Plaintiff. At several points Luna would grab Mrs. Slough's statement and demand changes or exaggerations. Mrs. Slough wrote the statement as directed by Luna.
*985 On that same day, July 14, 2004, Plaintiff was ordered to a meeting with Defendant Jon Roger and other non-defendants, all of whom had supervisory authority over Plaintiff. At this meeting, Plaintiff was informed of a complaint lodged alleging domestic violence. Plaintiff voluntarily cooperated with the investigation. Plaintiff was ordered not to have any contact with his family while the investigation was underway, to speak with a counselor at the Employee Assistance Program ("EAP"), and to surrender all of his personal weapons. Plaintiff agreed to the first two terms, but not the third. Plaintiff informed those present that his weapons were locked in a vault in Plaintiff's home. Plaintiff agreed to turn over his keys to the vault so that he would not have access to the weapons during the investigation. Plaintiff was clear and explicit in his instruction that none of his personal property was to leave his home.
The following day, July 15, 2004, Luna called Mrs. Slough to inform her that she needed further information from Mrs. Slough. Luna also informed Mrs. Slough that Luna and several other officers were going to remove all weapons from the Slough residence. When Mrs. Slough received the phone call, at approximately 9:00 a.m., the other officers were already at the door. Defendants Roger, McBroom, Luna, Walentowski, and Grzechowiak, without a warrant, entered the Slough residence, removed all of Plaintiff's weapons, and took Mrs. Slough to the family court to get Mrs. Slough to file domestic violence charges and file for a civil protective order. When Mrs. Slough refused to file either action, Luna contacted the Children Services Bureau.
On July 19, 2004, Plaintiff met with Defendant Roger. Plaintiff was reinstated to duty, reissued his duty weapon, and informed that he could return home. Plaintiff was informed that LCSO had determined there were no domestic violence issues they needed to be concerned with, but that they were concerned with the number of weapons that were in the residence. Defendant Roger told Plaintiff they were going to keep the weapons just to make sure that there were no domestic problems (although Defendant Atkinson later informed Mrs. Slough that Defendant Telb had wanted to keep the weapons to see if Plaintiff and Mrs. Slough were going to get divorced). In August 2004, after a two week investigation, Children Services Bureau found no evidence of domestic violence, a finding that was also independently reached by EAP in September 2004.
Plaintiff attempted several times to recover his weapons from Defendants Roger and Telb. Plaintiff made over two dozen calls, sent two letters, and an official request to have his seized property returned. Plaintiff filed for replevin in state court on October 17, 2004. On November 22, 2004, the state court ordered all of Plaintiff's weapons returned, with the exception of two guns and two magazines: a semiautomatic rifle with a 75 round drum magazine, and a 9 mm semiautomatic pistol with a 50 round box magazine. Defendant Roger testified that the items not returned were then being analyzed by ATF as possibly violating federal weapons laws. Plaintiff claims that there is no record that ATF ever had those weapons in their possession.
The next day, November 23, 2004, Plaintiff was indicted with two counts of unlawful possession of dangerous ordnance pursuant to Ohio Revised Code §§ 2923.17(A) and 2923.17(D). The indictment was subsequently dismissed as the chief evidence against Plaintiff were the weapons themselves, gathered in an unwarranted search and seizure.
Also on November 23, 2004, Defendant McBroom filed a memo recommending *986 that Plaintiff be terminated. That same day, Plaintiff received notice that he was to appear in front of Defendant Ken Perry, Chief Deputy Sheriff of LCSO, on November 30. After the meeting with Defendant Perry, Plaintiff was terminated from his employment for violation of LCSO Employee Rules # 1, Law Violations, and # 7, Conduct Unbecoming an Employee. Plaintiff appealed the decision regarding his termination. The State Personnel Review Board, the Court of Common Pleas, and the Court of Appeals of the Ohio Sixth District all concluded that Plaintiff had been rightfully terminated, despite the fact that Plaintiff had never been convicted of a crime. Slough v. Lucas County Sheriff, 174 Ohio App.3d 488, 882 N.E.2d 952 (Ohio App.2008). Specifically, the Common Pleas Court concluded that "Slough did have in his possession certain weapons and/or ordnance which were illegal for him to possess because they were functioning and capable of firing more than 31 rounds in succession without reloading. . . . [T]his fact supported a finding that Slough conducted himself in a manner unbecoming an officer." Id. at 492, 882 N.E.2d 952.
Plaintiff filed this complaint for damages and injunctive relief on October 25, 2006. (Doc. 1). Proceedings in this action were stayed pending the resolution of Plaintiff's state court appeals. (Doc. 15). Plaintiff's second amended complaint was filed on March 6, 2009. (Doc. 37). Defendants filed the instant motion for judgment on the pleadings on May 20, 2009. (Doc. 48). Plaintiff filed his opposition on June 4, 2009. (Doc. 49). Defendants replied on June 23, 2009. (Doc. 52).
II. STANDARD OF REVIEW
A motion for judgment on the pleadings pursuant to Fed.R.Civ.P. Rule 12(c) may be granted under the same circumstances as a motion for failure to state a claim under Rule 12(b)(6). United Food & Commer. Workers Local 1099 v. City of Sidney, 364 F.3d 738, 746 (6th Cir.2004).
Fed.R.Civ.P. 12(b)(6) provides for dismissal of a lawsuit for "failure to state a claim upon which relief can be granted." Courts must accept as true all of the factual allegations contained in the complaint when ruling on a motion to dismiss. Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007); Thurman v. Pfizer, Inc., 484 F.3d 855, 859 (6th Cir.2007). To survive a motion to dismiss under Rule 12(b)(6), "even though a complaint need not contain `detailed' factual allegations, its `factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true.'" Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir.2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1969, 167 L.Ed.2d 929 (2007)). Conclusory allegations or legal conclusions masquerading as factual allegations will not suffice. Twombly, 127 S.Ct. at 1965 (stating that the complaint must contain something more than "a formulaic recitation of the elements of a cause of action"). A complaint must state sufficient facts to, when accepted as true, state a claim "that is plausible on its face." Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (explaining that the plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully" and requires the complaint to allow the court to draw the reasonable inference that the defendant is liable for the alleged misconduct).
In conjunction with this standard, the Court is cognizant that Fed.R.Civ.P. 8(a)(2) "requires only `a short and plain statement of the claim showing that the pleader is entitled to relief.' Specific facts are not necessary; the statement need *987 only `give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007) (citing Twombly, 550 U.S. at 596, 127 S.Ct. 1955); see also Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291, 295-96 (6th Cir.2008). The Court "may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein." Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir.2008).
III. DISCUSSION
A. Count IDeprivation of Rights
Plaintiff asserts civil rights deprivations in violation of 42 U.S.C. § 1983. (Doc. 37 at ¶¶ 40a-49). Specifically, Plaintiff asserts claims against Defendants, in both official and individual capacities, for wrongful entry into Plaintiff's home, wrongful seizure of Plaintiff's property, wrongful termination, wrongful initiation of criminal actions, and for preventing Plaintiff from returning to his home or having contact with his children. (Id.). Defendants argue that Plaintiff has failed to allege an official policy of civil rights deprivations to allow claims against Defendants in their official capacities. (Doc. 48 at 11-12). Defendants further argue that Defendants' actions were objectively reasonable and Defendants are thus shielded from suit by qualified immunity. (Id. at 12-15).
42 U.S.C. § 1983 provides a cause of action for deprivations of federal statutory or constitutional rights by persons acting under color of state law. Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981) (overruled on other grounds by Daniels v. Williams, 474 U.S. 327, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986)). Where the defendants are state or local police officers acting as police officers, they are presumed to be acting "under color" of state law, even where their actions violate or are unauthorized by state law. Monroe v. Pape, 365 U.S. 167, 180, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961) (overruled on other grounds by, Monell v. Dep't of Soc. Services of City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978)); see also U.S. v. Classic, 313 U.S. 299, 326, 61 S.Ct. 1031, 85 L.Ed. 1368 (1941) ("Misuse of power, possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law, is action taken `under color of state law."). In the instant case, it is clear that the Defendant police officers were acting as police officers under the color of state law.
1. Official Capacity Claims
A claim against a municipal official in his official capacity is considered a claim against the entity itself. Kentucky v. Graham, 473 U.S. 159, 166, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985); Brandon v. Holt, 469 U.S. 464, 471-72, 105 S.Ct. 873, 83 L.Ed.2d 878 (1985); Monell v. Dep't of Soc. Servs., 436 U.S. 658, 690 n. 55, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). Because there is no respondeat superior liability under § 1983, to establish an official capacity claim a plaintiff must show that the enforcement of the official entity's policy or custom caused the violation of the plaintiff's federal or constitutional right. Hafer v. Melo, 502 U.S. 21, 25, 112 S.Ct. 358, 116 L.Ed.2d 301 (1991); Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 109 S.Ct. 2702, 105 L.Ed.2d 598 (1989).
Official capacity liability may be based on a single decision of a person with "final policymaking authority." City of St. Louis v. Praprotnik, 485 U.S. 112, 123, 108 S.Ct. *988 915, 99 L.Ed.2d 107 (1988); see also Pembaur v. City of Cincinnati, 475 U.S. 469, 481-83, 106 S.Ct. 1292, 89 L.Ed.2d 452 (1986). Plaintiff asserts that the actions taken against him were pursuant to the customs and within the command structure of the Lucas County Sheriff's Office. (Doc. 37 at ¶ 42). Defendant Telb, the county sheriff, is the ultimate policymaker within the Lucas County Sheriff's Office. (Doc. 37 at ¶ 4; Doc. 48 at 10 (citing Ohio Rev.Code Ann. Chapter 311)). Plaintiff alleges that Defendant Telb personally made decisions in violation of Plaintiff's civil rights. (Doc. 37 at ¶¶ 27-29). At this juncture, these allegations clear the initial "official policy" hurdle for official capacity claims against Defendant Telb, but not for any other defendant. Plaintiff has sufficiently alleged claims against Defendant Telb in his official capacity in all cases where Plaintiff has sufficiently alleged an actual deprivation of a federal or constitutional right. The following claims against Defendant Telb in his official capacity must survive this motion for judgment on the pleadings: (1) wrongful search and seizure of Plaintiff's property; and (2) interference with Plaintiff's family relationships. See Parts III.A.2.b and III.A.2.e, infra.
2. Individual Capacity Claims Qualified Immunity
Defendants assert the affirmative defense of qualified immunity with respect to all of Plaintiff's § 1983 claims. (Doc. 48 at 12-15). Qualified immunity is an immunity from suit, not merely a defense to liability. Pearson v. Callahan, ___ U.S. ___, 129 S.Ct. 808, 815, 172 L.Ed.2d 565 (2009) (citing Mitchell v. Forsyth, 472 U.S. 511, 526, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985)). To determine whether a defendant is entitled to qualified immunity, the Court looks to the function performed by the actor, not the identity of the actor. Kalina v. Fletcher, 522 U.S. 118, 127, 118 S.Ct. 502, 139 L.Ed.2d 471 (1997); Buckley v. Fitzsimmons, 509 U.S. 259, 269, 113 S.Ct. 2606, 125 L.Ed.2d 209 (1993); Higgason v. Stephens, 288 F.3d 868, 877-78 (6th Cir.2002); Holloway v. Brush, 220 F.3d 767, 774 (6th Cir.2000) (en banc).
Qualified immunity protects public officials from suit for civil damages so long as their conduct "does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982); Humphrey v. Mabry, 482 F.3d 840, 846 (6th Cir.2007); Silberstein v. City of Dayton, 440 F.3d 306, 311 (6th Cir. 2006). It is no longer necessary to first determine whether a constitutional right was violated before determining whether that right was clearly established, although such an approach may be utilized in the Court's discretion in light of the circumstances of the individual case. Pearson, 129 S.Ct. at 818 (overturning the rigid two-part test in Saucier v. Katz, 533 U.S. 194, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001)). The plaintiff has the burden of showing that a right is clearly established. Barrett v. Steubenville City Schs., 388 F.3d 967, 970 (6th Cir.2004); Toms, 338 F.3d at 525. The defendants have the burden of establishing that their actions were objectively reasonable. Tucker v. City of Richmond, Ky., 388 F.3d 216, 220 (6th Cir.2004).
A defendant is only entitled to qualified immunity if her actions were objectively reasonable; the subjective good faith of the defendant is irrelevant. Wilson v. Layne, 526 U.S. 603, 614, 119 S.Ct. 1692, 143 L.Ed.2d 818 (1999); Harlow v. Fitzgerald, 457 U.S. 800, 818-19, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982); Barton v. Norrod, 106 F.3d 1289, 1293 (6th Cir. 1997). "The contours of the right must be sufficiently clear that a reasonable official would understand that what he is doing *989 violates that right." Ciminillo v. Streicher, 434 F.3d 461, 468 (6th Cir.2006). Immunity will attach "if offic[ials] of reasonable competence could disagree" on whether the conduct violated plaintiff's rights. Malley v. Briggs, 475 U.S. 335, 341, 106 S.Ct. 1092, 89 L.Ed.2d 271 (1986); accord Gean v. Hattaway, 330 F.3d 758, 767 (6th Cir.2003); Watkins v. City of Southfield, 221 F.3d 883, 889 (6th Cir. 2000). If "their decision is reasonable, [but] mistaken," immunity will attach. Hunter v. Bryant, 502 U.S. 224, 229, 112 S.Ct. 534, 116 L.Ed.2d 589 (1991); Toms v. Taft, 338 F.3d 519, 524 (6th Cir.2003); Pray v. Sandusky, 49 F.3d 1154, 1158 (6th Cir.1995). Qualified immunity protects "all but the plainly incompetent or those who knowingly violate the law." Hunter, 502 U.S. at 229, 112 S.Ct. 534 (quoting Malley, 475 U.S. at 341, 106 S.Ct. 1092); accord Bouggess v. Mattingly, 482 F.3d 886, 894 (6th Cir.2007); Toms, 338 F.3d at 524.
To be a violation of a "clearly established right," the exact conduct at issue need not have been previously held illegal; it is enough that the right be sufficiently established so as to put a reasonable official on notice that his actions are a violation of that right. See Hope v. Pelzer, 536 U.S. 730, 739-40, 122 S.Ct. 2508, 153 L.Ed.2d 666 (2002); Sample v. Bailey, 409 F.3d 689, 699 (6th Cir.2005) ("Officials can still be on notice that their conduct violates clearly established law even in novel circumstances."); Scicluna v. Wells, 345 F.3d 441, 446 (6th Cir.2003); Bell v. Johnson, 308 F.3d 594, 602 (6th Cir.2002).
As an analysis of qualified immunity defense is highly particularized, the Court will analyze each type of claim made by Plaintiff in turn. The Court will analyze Defendants' qualified immunity with respect to the following claims, in the order alleged in Plaintiff's second amended complaint (Doc. 37, ¶¶ 43-47):(1) wrongful entry into Plaintiff's home; (2) wrongful seizure of Plaintiff's property; (3) wrongful termination; (4) wrongful initiation of criminal actions; (5) wrongful interference with Plaintiff's family interactions.
a. Wrongful Entry into Plaintiff's Home
It is clearly established that a "warrantless search [or entry] by the police is invalid unless it falls within one of the narrow well-delineated exceptions to the warrant requirement." Flippo v. West Virginia, 528 U.S. 11, 13, 120 S.Ct. 7, 145 L.Ed.2d 16 (1999). Such an exception is found when consent to enter and search is given by a co-occupant if that person has joint access and control over the premises for most purposes. United States v. Matlock, 415 U.S. 164, 94 S.Ct. 988, 39 L.Ed.2d 242 (1974). An exception is also found where the police reasonably believe the person providing consent has authority to do so. Illinois v. Rodriguez, 497 U.S. 177, 110 S.Ct. 2793, 111 L.Ed.2d 148 (1990). This right and exception have been so clearly established that an objectively reasonable officer would know that warrantless entry is prohibited without the consent of one with authority over the premises.
When Defendants Rogers, McBroom, Luna, Walentowski and Grzechowiak entered Plaintiff's residence, Plaintiff's wife, Julie Slough, was present and Plaintiff was not. (Doc. 37 at ¶¶ 24-25). Mrs. Slough had actual authority to admit the police into her home. If Mrs. Slough gave consent to the entry, Plaintiff's claim for wrongful entry fails. There is no indication that Mrs. Slough objected to the police entry into her home. (See, Doc. 37 and attached Aff. of Julie Slough). Plaintiff does not allege or deny that Mrs. Slough refused her consent to the officers' entry. Defendants argue that they reasonably believed Mrs. Slough gave consent *990 (Doc. 52 at 4), and Plaintiff does not rebut this assertion. No clearly established constitutional right was violated by Defendants entry into Plaintiff's home. Defendants are entitled to qualified immunity in entering Plaintiff's home.
b. Wrongful Seizure of Plaintiff's Property
Plaintiff claims that Defendants wrongfully seized Plaintiff's property. (Doc. 37 ¶ 44). Defendants argue that Plaintiff voluntarily gave up control of the weapons when he delivered to Defendants the key to the safe. Additionally, Defendants argue that the weapons were seized out of "concern for the safety of the persons in the home after an informal interview with [Plaintiff] and his wife over domestic issues." (Doc. 48 at 15 (quoting Slough v. Lucas County Sheriff, 174 Ohio App.3d 488, 882 N.E.2d 952, 2008 Ohio 243 at ¶ 8)). Defendants assert that, while hindsight would indicate the need for a warrant before seizing Plaintiff's property, at the time of the seizure the Defendants were acting to protect potential victims and believed they were doing so at the request of Plaintiff's wife. However, Plaintiff's allegations, if proved, establish the violation of a clearly established constitutional right, such that a reasonable officer would have known their conduct violated that right.
"The Fourth Amendment guarantees `the right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures.'" Whren v. United States, 517 U.S. 806, 809, 116 S.Ct. 1769, 135 L.Ed.2d 89 (1996). A warrantless search and seizure is presumed to be unreasonable, and "invalid unless it falls within one of the narrow well-delineated exceptions to the warrant requirement." Flippo v. West Virginia, 528 U.S. 11, 13, 120 S.Ct. 7, 145 L.Ed.2d 16 (1999).
A warrantless search and seizure does not violate constitutional rights where the individual has voluntarily consented to the search. Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973). A warrantless entry and search may be justified on the basis of "exigent circumstances" if the officers can demonstrate: (1) a need for immediate action that would have been defeated if the officers had taken time to secure a warrant; (2) a sufficiently important governmental interest being served by the warrantless search; and (3) that weighing the governmental interest against the individual's interest in the privacy of his home, the individual's conduct somehow diminished that right. United States v. Rohrig, 98 F.3d 1506, 1518 (6th Cir.1996). Exigent circumstances fall under one of four general categories: (1) hot pursuit of a fleeing felon; (2) imminent destruction of evidence; (3) prevention of a suspect's escape; and (4) a risk of danger to the police or others. United States v. Johnson, 22 F.3d 674, 680 (6th Cir.1994). To justify a warrantless search and seizure based on exigent circumstances where the safety of others is in jeopardy, the threat must be "immediate." O'Brien v. City of Grand Rapids, 23 F.3d 990, 997 (6th Cir.1994) ("critical incident" involving barricaded gunman did not justify search of suspect's home where threat to officers not immediate, rifle was not pointed at anyone nor were there verbal threats to use the gun).
Defendants assertions of Plaintiff's voluntary relinquishment of access are ill-founded. Plaintiff did not consent to a search or seizure of his gun safe. When Plaintiff delivered the keys to Defendants, he made explicit that it was his intent to prevent himself access to the weapons, not to give such access to the Defendants. Plaintiff did not voluntarily *991 grant permission to the police officers to search his safe or seize his property.
Additionally, the Defendants cannot claim the exception of exigent circumstances. The Defendants' assertions of concern for the Plaintiff's family are unreasonable. When Plaintiff gave up his own access to the weapons, there ceased to be any possibility that Plaintiff might use the weapons to harm his family. Any concerns the police may have had for the potential victims with regard to the weapons should have been allayed at that time. There were no exigent circumstances to justify a warrantless search and seizure of Plaintiff's weapons safe, and a reasonable officer would have known that such a course of action violated Plaintiff's clearly established constitutional rights.
At this juncture, Plaintiff has alleged enough to establish that Defendants' search and seizure of Plaintiff's weapons safe was, on its face, unreasonable, and a violation of Plaintiff's Fourth Amendment right to be secure in his possessions. Defendants Roger, McBroom, Luna, Walentowski, and Grzechowiak cannot claim qualified immunity with respect to the search and seizure of Plaintiff's weapons collection.
c. Wrongful Termination
Plaintiff claims that the termination of his employment, without being convicted of a crime, was a violation of his constitutional or federal statutory rights. (Doc. 37 at ¶ 45). Defendants argue that Plaintiff was lawfully terminated from his employment, despite the wrongful search and seizure of Plaintiff's property. (Doc. 48 at 16). Defendants base their argument on a prior case, litigated in state court, regarding Plaintiff's termination. Slough v. Lucas County Sheriff, 174 Ohio App.3d 488, 882 N.E.2d 952 (2008). The state appellate court found that Plaintiff had been correctly terminated from his employment on the basis of "conduct unbecoming an officer," and that the unreasonable search exclusionary rule is inapplicable to administrative hearings and civil actions. Id. Plaintiff counters that his termination, based as it was on evidence obtained during an unconstitutional search and seizure, was itself unconstitutional. (Doc. 49 at 6-7).
Plaintiff's claims of constitutional violations in the termination of his employment are without merit. It is true that all criminal charges against Plaintiff for possession of illegal weapons were dropped due to the exclusion of evidence obtained in a warrantless search. However, Plaintiff was not terminated for commission of a felony, which Plaintiff had not been convicted of in criminal court. Plaintiff was terminated for "conduct unbecoming an employee." The state appellate court found this to be a sufficient, independent basis for termination, regardless of how such unbecoming conduct was discovered. Slough, 882 N.E.2d at 958-60. The constitutional injury occurred when Plaintiff's weapons were seized, not when he was terminated for having illegal weapons, conduct unbecoming an employee of the Sheriff's Office. As there was no violation of Plaintiff's constitutional or federal statutory rights in terminating Plaintiff's employment, Plaintiff's claims regarding termination must be dismissed.
Plaintiff's alternative argument, that the unconstitutional search and seizure was the proximate cause of Plaintiff's termination, does not hold water. The proximate cause of Plaintiff's termination was Plaintiff's possession of unlawful ordnance, not the means by which Defendants made their discovery of that ordnance. See, id. Plaintiff would still have been terminated had the discovery been made through constitutional means, and, vice versa, Plaintiff would not have been terminated due to the unconstitutional seizure had Plaintiff not *992 had any unlawful ordnance in his collection. Plaintiff's alleged injury, termination from his job, was not proximately caused by Defendants' violations of Plaintiff's rights.
d. Wrongful Initiation of Criminal Actions
Plaintiff claims violations of § 1983 for wrongful pursuit and initiation of criminal actions against Plaintiff. (Doc. 37 at ¶ 46). The Sixth Circuit recognizes a § 1983 claim for malicious prosecution, but its contours are uncertain. Fox v. DeSoto, 489 F.3d 227, 237 (6th Cir.2007). It is certain, however, that a § 1983 claim for malicious prosecution fails when there was probable cause to prosecute. Id. Though the evidence obtained in the unconstitutional search and seizure was rightly excluded from consideration at the criminal proceeding, the Defendants did, in fact, find in Plaintiff's collection weapons with magazines capable of holding more rounds than is lawful. At the very least, probable cause to prosecute existed when that discovery was made. As Defendants had probable cause to initiate criminal proceedings, even though the evidence was later excluded as constitutionally defective, Defendants did not violate Plaintiff's constitutional rights in initiating criminal proceedings.
e. Wrongful interference with Plaintiff's Family Relations
Plaintiff claims that Defendants violated his federal and constitutional rights by wrongfully preventing him from returning to his home or having contact with his children. (Doc. 37 at ¶ 47). Defendants argue that Defendants had a duty to investigate Plaintiff's alleged wrongdoing, see Leach v. Shelby County Sheriff, 891 F.2d 1241, 1248 (6th Cir.1989), and that these actions were taken in the course of that investigation, and thus render Defendants immune from suit.
The freedom of family relationships is a liberty interest protected by the Constitution. See, e.g., Santosky v. Kramer, 455 U.S. 745, 102 S.Ct. 1388, 71 L.Ed.2d 599 (1982) (due process requires clear and convincing evidence to irrevocably sever the rights of natural parents to associate with their children); Moore v. City of East Cleveland, Ohio, 431 U.S. 494, 97 S.Ct. 1932, 52 L.Ed.2d 531 (1977) (statute limiting family members that can live together violates due process); Stanley v. Illinois, 405 U.S. 645, 92 S.Ct. 1208, 31 L.Ed.2d 551 (1972) (due process requires hearing on fitness of unwed natural father before children taken from him after death of natural mother); Meyer v. Nebraska, 262 U.S. 390, 399-400, 43 S.Ct. 625, 67 L.Ed. 1042 (1923) (family relationships are included in "liberty" interest protected by Fourteenth Amendment).
That freedom of intimate association is protected as "a fundamental element of personal liberty" is a matter of clearly established constitutional law. Roberts v. United States Jaycees, 468 U.S. 609, 618, 104 S.Ct. 3244, 82 L.Ed.2d 462 (1984); see also Williams v. Pollard, 44 F.3d 433, 434-35 (6th Cir.1995) (citing Hooks v. Hooks, 771 F.2d 935, 941 (6th Cir.1985)). Though this freedom is not without limitation, qualified immunity is predicated on the objective reasonableness of the defendants' actions with respect to that freedom in light of all of the circumstances. Williams, 44 F.3d at 435.
It is true that, once allegations of domestic violence and child abuse have been made, the Defendants had a duty to investigate. See Leach, 891 F.2d at 1248. Requiring Plaintiff to refrain from seeing his children for an unspecified time period, while the investigation was ongoing, is objectively *993 reasonable in light of allegations of child abuse and domestic violence. Most of the Defendants involved are thus shielded from suit by qualified immunity.
However, Plaintiff's allegations go beyond the simple requirement to refrain from contacting his children or returning home while the investigation was pending. Plaintiff alleges that the investigation was initiated through a series of false accusations on the part of Defendant Ellis, and coercive tactics on the part of Defendant Luna to elicit false testimony from Plaintiff's wife. Plaintiff's allegations of falsification of evidence are supported by the affidavit of Julie Slough, Plaintiff's wife, who states that she was pressured by Defendant Luna to "[inflate] disagreements I had with my husband." (Aff. of Julie Slough at ¶ 12). Such actions on the part of Defendants Ellis and Luna are not objectively reasonable by any interpretation.
Additionally, Defendant Telb allegedly refused to return Plaintiff's weapons collection, including those lawful for Plaintiff to possess, "to see if Julie and Plaintiff were going to get a divorce." (Doc. 37 at ¶ 26). This alleged behavior and intent are objectively unreasonable infringements on Plaintiff's liberty interest of family association.
Defendants Ellis, Luna, and Telb are not protected by qualified immunity and are subject to liability in their individual capacities for the violations of Plaintiff's right to family and intimate association. All other defendants involved, who prevented Plaintiff from seeing his family in the course of the investigation, are entitled to qualified immunity and are shielded from individual liability.
3. Damages
Defendants argue that Plaintiff's § 1983 claims must be dismissed as Plaintiff has not alleged any actual injury. (Doc. 48 at 15-16). Defendants assertions are only applicable to the question of special compensatory damages. Defendants fail to take into consideration the myriad options for relief available to plaintiffs in § 1983 suits.
Relief may take many forms. Compensatory damages may be awarded for specific monetary losses such as lost wages, lost earning capacity, medical expenses, as well as for injuries not quantifiable such as pain and suffering, emotional distress, and so on. Memphis Cmty. Sch. Dist. v. Stachura, 477 U.S. 299, 307, 106 S.Ct. 2537, 91 L.Ed.2d 249 (1986) ("Compensatory damages may include not only out-of-pocket loss and other monetary harms, but also such injuries as `impairment of reputation, personal humiliation, and mental anguish and suffering.'"). Nominal damages may be awarded even in the absence of proven actual injury. Memphis Cmty. Sch. Dist. v. Stachura, 477 U.S. 299, 308 n. 11, 106 S.Ct. 2537, 91 L.Ed.2d 249 (1986) ("[N]ominal damages, and not damages based on some undefinable `value' of infringed rights, are the appropriate means of `vindicating' rights whose deprivation has not caused actual, provable injury."); Carey v. Piphus, 435 U.S. 247, 266-67, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978); Sutton v. Board of Education, 958 F.2d 1339, 1352 (6th Cir.1992). Punitive damages may be awarded against an official in her individual capacity where that official acted with malicious intent or callous disregard of a plaintiff's constitutional rights. Smith v. Wade, 461 U.S. 30, 103 S.Ct. 1625, 75 L.Ed.2d 632 (1983). Punitive damages are not dependant on an award of compensatory damages, and thus may be awarded even in the absence of actual injury. Walker v. Bain, 257 F.3d 660 (6th Cir.2001), cert. denied, 535 U.S. 1095, 122 S.Ct. 2291, 152 L.Ed.2d 1050 (2002). The question of punitive damages is a question for the jury if there is "sufficient evidence of conduct by the defendant *994. . . which, if believed by the jury, would support a finding of callous indifference to the plaintiff's [constitutional] rights." Burkhart v. Randles, 764 F.2d 1196, 1202 (6th Cir.1985). Finally, the whole panoply of equitable relief is available to § 1983 plaintiffs. 42 U.S.C. § 1983 (authorizing relief in a "suit at equity").
Compensatory damages are dependent on an actual injury. Frontier Ins. Co. v. Blaty, 454 F.3d 590, 603 (6th Cir.2006). Defendants are correct in their assertion that the abstract value of a constitutional right is not a sufficient basis for awarding compensatory damages. Turner v. Bolden, 8 Fed.Appx. 453, 455 (6th Cir. 2001). Defendants are correct in their claim that an indictment is not a compensable injury. Schilling v. White, 58 F.3d 1081, 1086 (6th Cir.1995). Defendants are also correct in stating that Plaintiff cannot recover lost wages for the justified termination of Plaintiff's employment. However, lost wages and indictment are not the only injuries Plaintiff has alleged. Plaintiff alleges the actual injury of having his property seized. Plaintiff alleges the actual injury of impaired relationship with his family. Plaintiff alleges the actual injury of humiliation and loss of reputation. The value of these injuries are questions for the finder of fact and inappropriate for adjudication at this stage. Compensatory damages would be appropriate for these injuries if proven.
If no actual injury can be sufficiently proven on the evidence that arises, Plaintiff may still recover nominal damages. Nominal damages, though not of great monetary value, are a formal recognition that Plaintiff has been wronged.
Punitive damages may be awarded against Defendants in their personal capacity if Plaintiff can show that Defendants exhibited malicious intent or callous disregard of Plaintiff's rights. Plaintiff has alleged that Defendant Ellis deliberately fabricated domestic violence and child abuse claims against Plaintiff. Plaintiff has also alleged that Defendant Luna manipulated Plaintiff's wife into believing Plaintiff was unfaithful, coerced Plaintiff's wife into severely exaggerating disagreements the couple had, and threatened Plaintiff's wife with the loss of her children should she not cooperate. Plaintiff has certainly made sufficient allegations which, if proven, could support a finding of malicious intent on the part of Defendants Ellis and Luna. Punitive damages might be appropriate should these allegations be proven. There is insufficient evidence as yet to make a finding of malicious intent or callous disregard on the part of the other named defendants, though such evidence may very well appear during the discovery process.
Plaintiff has also asked for equitable relief. Reinstatement of Plaintiff's employment is not appropriate where Plaintiff's termination was justified. But Plaintiff has also asked for the issuance of a press release on the judgment of this Court. Such a press release would be beneficial to Plaintiff to help restore his reputation and repair his bruised ego. Whether such a remedy is appropriate depends on the appropriateness of damages. If Plaintiff's injuries can be repaired through compensatory and other damages, such an injunction would likely not be appropriate. However, the issue of appropriate relief need not be decided at this stage.
Plaintiff has asked for numerous remedies appropriate to his claims. Defendants argument that the § 1983 claims must be dismissed for want of alleged actual injury is legally unsound and factually untrue. Plaintiff may seek compensatory damages for the actual injuries of seizure of his property, loss of liberty in family relationships, and for humiliation, loss of reputation, *995 and mental distress caused by the violations of Plaintiff's constitutional rights. Plaintiff may seek nominal damages in recognition of his rights violated. Plaintiff may seek punitive damages against at least Defendants Ellis and Luna, and likely against the other Defendants in their individual capacities. Plaintiff may also seek the equitable relief of a press release. Plaintiff's claims will not be dismissed for want of an "actual injury."
4. 42 U.S.C. § 1983 ClaimsSummary
Plaintiff has sufficiently alleged official capacity § 1983 claims against Defendant Telb, Lucas County Sheriff, in the following two areas: (1) wrongful search and seizure of Plaintiff's property; and (2) interference with Plaintiff's family relationships.
Plaintiff has sufficiently stated personal capacity § 1983 claims, for which the following Defendants are not entitled to qualified immunity in following two areas: (1) wrongful search and seizure of Plaintiff's weapons collection, as against Defendants Roger, McBroom, Luna, Walentowski, and Grzechowiak; and, (2) wrongful interference with Plaintiff's family relationships, as against Defendants Ellis, Luna, and Telb. With the exceptions enumerated in this paragraph, Defendants are shielded from suit in their individual capacities by qualified immunity.
B. Count IINegligent Training and Supervising
Plaintiff asserts a claim for negligent training and supervising based on 42 U.S.C. § 1986. (Doc. 37 at ¶¶ 50-61) against some of the Defendants. Those Defendants argue that Plaintiff's § 1986 claim is barred because it is predicated on the violation of § 1985, under which section Plaintiff has failed to state a claim on which relief can be granted. (Doc. 48 at 19).
Section 1986 provides a cause of action against persons "who, having knowledge that any of the wrongs conspired to be done, and mentioned in [§ 1985], are about to be committed, and having power to prevent or aid in preventing the commission of the same, neglects or refuses to do so, if such wrongful act be committed." 42 U.S.C. § 1986. A § 1986 claim is derivative of, and predicated on the violation of, § 1985; as such, a § 1986 violation cannot be established unless a § 1985 violation has first been established. Bartell v. Lohiser, 215 F.3d 550, 560 (6th Cir.2000); Smith v. Thornburg, 136 F.3d 1070, 1078 (6th Cir.1998).
Plaintiff cannot establish a violation of 42 U.S.C. § 1986, as Plaintiff has failed to sufficiently state a claim for violation of 42 U.S.C. § 1985. See Part III.C, infra. Plaintiff's Count II, negligent training and supervising, is dismissed with prejudice.
C. Count IIIConspiracy to Interfere with Civil Rights
Plaintiff asserts a claim for conspiracy to interfere with civil rights under 42 U.S.C. § 1985. Defendants argue that Plaintiff does not allege any of the required elements of a conspiracy or class-based motivation to deprive Plaintiff of any civil rights as required by § 1985. (Doc. 48 at 17). Defendants also argue that Plaintiff's conspiracy claims are barred by the intracorporate doctrine. (Id. at 18). Plaintiff replies that the conspiracy claims should be allowed to go forward because of the alleged involvement of unnamed ATF agents in the conspiracy. (Doc. 49 at 9).
Four causes of action arise under 42 U.S.C. § 1985. Section 1985(1) creates a cause of action for conspiracies to interfere with federal officers in the performance of their duties. The first clause of § 1983(2) creates a cause of action for conspiracy to influence parties, witnesses, or jurors in *996 federal court proceedings. The second clause of § 1985(2) creates a cause of action for conspiracy to interfere with due process in state courts with the intent to deprive a person of his equal protection rights. Section 1985(3) creates a cause of action for conspiracy to deprive "either directly or indirectly, any person . . . of the equal protection of the laws, or of equal privileges and immunities under the laws." Additionally, to prevail in a claim under the second clause of § 1985(2) or under § 1985(3), a plaintiff must show "some racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirators' action." Kush v. Rutledge, 460 U.S. 719, 726, 103 S.Ct. 1483, 75 L.Ed.2d 413 (1983) (quoting Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 29 L.Ed.2d 338 (1971)); see also Collyer v. Darling, 98 F.3d 211, 233 (6th Cir.1996).
Plaintiff has not stated a sufficient claim under 42 U.S.C. § 1985. Plaintiff's claims clearly do not fall under § 1985(1) or § 1985(2). Plaintiff has not sufficiently stated a claim under § 1985(3) because he does not allege any class based animus motivating the alleged conspirators' actions. There is no need to address Defendants contention that a conspiracy claim is barred by the intracorporate doctrine, because the Court finds Plaintiff has failed to allege a required element of a § 1985(3) claim.
Count III, conspiracy to interfere with civil rights, is dismissed.
D. Count IVDefamation
Plaintiff asserts the state tort claim of defamation. (Doc. 37 at ¶¶ 66-70). The statute of limitations for a defamation action in Ohio is one year. Ohio Rev.Code § 2305.11(A). Under Ohio law, the statute of limitations begins to run on the date the defamatory remarks are spoken or published, not on the date a Plaintiff learns of the remarks. Lewis v. Del. County JVSD, 161 Ohio App.3d 71, 829 N.E.2d 697 (2005); Glass v. Glass, 2003 Ohio App. LEXIS 3995 (2003); Lyons v. Farmers Ins. Group of Companies, 67 Ohio App.3d 448, 587 N.E.2d 362 (1990); Rainey v. Shaffer, 8 Ohio App.3d 262, 456 N.E.2d 1328 (1983).
The original complaint was filed on October 25, 2006. (Doc. 1). Every allegation of spoken or written remarks about the Plaintiff were uttered prior to October 25, 2005. (Id.). Plaintiff's argument that perhaps the state courts would be amenable to the introduction of a discovery rule under these facts is impertinent. (See Doc. 49 at 9). The Court will not speculate about what the state courts might or might not decide on an issue of state law, especially as precedent on this point of law is so very clear. Count IV is dismissed as barred by the statute of limitations.
E. Count VConversion and Intermeddling
Plaintiff asserts the state law claim of conversion and intermeddling[2] based on allegations that Defendants wrongfully seized, and subsequently refused to relinquish, Plaintiff's weapons collection. (Doc. 37 at ¶¶ 71-78). Defendants argue that the seizure of the weapons was not wrongful because the weapons were seized in the context of a domestic violence investigation, because Plaintiff voluntarily gave up control of the weapons, and because the Defendants believed that they were removing the weapons at the request of Plaintiff's wife. (Doc. 48 at 21-23). Additionally, Defendants argue that Plaintiff has not *997 suffered any damages as Defendants, after court order for replevin, have returned to Plaintiff all but two weapons with magazines which were kept under investigation and subsequently found to be unlawful. (Id. at 23). No damage to the weapons returned is alleged. Defendants argue that the lack of physical damages relieves Defendants from liability for conversion. (Id.).
Under Ohio law, a conversion is any exercise of dominion or control wrongfully exerted over the personal property of another in denial of or under a claim inconsistent with the owner's rights. Allan Nott Ents, Inc. v. Nicholas Starr Auto, L.L.C., 110 Ohio St.3d 112, 851 N.E.2d 479 (2006); Toma v. Corrigan, 92 Ohio St.3d 589, 752 N.E.2d 281 (2001); Kraft Constr. Co. v. Cuyahoga Cty. Bd. of Commrs., 128 Ohio App.3d 33, 713 N.E.2d 1075 (1998); Cruz v. South Dayton Urological Associates, Inc., 121 Ohio App.3d 655, 700 N.E.2d 675 (1997).
However, Plaintiff has already prevailed in a suit against Defendants for replevin in state court. (Doc. 37 at ¶¶ 29, 32; Ex. E). Replevin, as a statutory remedy, is preferable to the common law remedy of conversion. Ohio Rev.Code Chapter 2737. The successful party in a replevin action has the option of taking the property in specie or recovering the monetary value of the property at the time of dispossession. Ohio Rev.Code §§ 2737.10, 2737.11. If the property is of a nature that it cannot be returned, the claim may continue as a claim for conversion. Ohio Rev.Code § 2737.14.
The successful party in a replevin action does not recover both the property in specie and the value of the property, but only one or the other. In this case, Plaintiff elected to receive back the wrongfully taken property. (Doc. 37 at ¶¶ 32, 74). Plaintiff cannot now make a claim of conversion for property which has been returned, in like condition as they were when taken. The remedies of replevin and conversion are mutually exclusive. Plaintiff has no claim of conversion where the property at issue has been returned subsequent to a judgment for replevin.
A careful reading of the complaint shows that Plaintiff is not claiming conversion of the two weapons which are still not in his possession. (Doc. 37 at ¶¶ 71-78). Even were Plaintiff to claim conversion damages for the items not returned to Plaintiff, it is not clear from the complaint whether Plaintiff had a right to possess such items in the first place. The two weapons with magazines were held subject to an investigation into the legality of the weapons. (Doc. 37 at ¶¶ 31-32). Though Plaintiff disputes who had possession of the weapons during the investigation, it is clear that criminal charges were brought against Plaintiff predicated on those weapons. (Doc. 37 at ¶ 33). It is true that Plaintiff was never convicted of possession of illegal weapons. Ronald Slough v. Lucas County Sheriff, 174 Ohio App.3d 488, 882 N.E.2d 952 at ¶ 3. This does not mean, however, that the weapons were in fact lawful to possess. Id. at ¶ 9. The common pleas court found that the weapons were in fact unlawful, Id., and Plaintiff does not allege otherwise. As Plaintiff had no right of possession in the two weapons retained by the Sheriff's Department, Plaintiff has no claim of conversion respecting those items.
Plaintiff's Count V, for conversion and intermeddling is dismissed.
F. Count VIMalicious Prosecution
Plaintiff asserts the state tort claim of malicious prosecution. (Doc. 37 at ¶¶ 79-80). The statute of limitations for a malicious prosecution action in Ohio is one year, which begins to run on the date of journalization of a judgment in favor of the now-plaintiff. Ohio Rev.Code *998 § 2305.11(A); Levering v. National Bank, 87 Ohio St. 117, 100 N.E. 322 (1912); Ricketts v. Hahn, 72 Ohio App. 478, 53 N.E.2d 202 (1943).
The dismissal of criminal charges against Plaintiff was journalized June 20, 2005. (Doc. 48 at 24 n. 12). Plaintiff filed his original complaint more than one year later on October 25, 2006. (Doc. 1). Count VI is dismissed as barred by the statute of limitations.
G. Count VII14th Amendment Violation by way of 2nd Amendment
Plaintiff asserts a claim of Second Amendment violation in seizing Plaintiff's weapons collection, and Fourteenth Amendment violation in acting on that seizure to terminate Plaintiff's employment. (Doc. 37 at ¶¶ 81-83).
42 U.S.C. § 1983 is the exclusive vehicle by which a plaintiff can seek redress for alleged Constitutional violations unless another remedy is provided by statute. Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 735, 109 S.Ct. 2702, 105 L.Ed.2d 598 (1989). The Court therefore treats this count as a separate § 1983 claim.
The Second Amendment confers an individual right to bear arms. District of Columbia v. Heller, ___ U.S. ___, 128 S.Ct. 2783, 2799 and 2816-17, 171 L.Ed.2d 637 (2008). However, the United States Supreme Court has never held that the Second Amendment is enforceable against the states by incorporation into the Due Process Clause of the Fourteenth Amendment. Heller at 2813 n. 23; see generally, 1 Martin A. Schwartz, Section 1983 Litigation: Claims and Defenses § 3.03[B][5][e] (4th ed.2008 cumulative supplement). Courts in other circuits have held that Second Amendment rights are not enforceable against the states under § 1983. E.g. Edwards v. City of Goldsboro, 178 F.3d 231 (4th Cir.1999); Love v. Pepersack, 47 F.3d 120 (4th Cir.1995), cert. denied, 516 U.S. 813, 116 S.Ct. 64, 133 L.Ed.2d 27 (1995); Nollet v. Justices of Trial Court, 83 F.Supp.2d 204, 214 (D.Mass.2000), aff'd, 248 F.3d 1127 (1st Cir.2000). But cf., Parker v. District of Columbia, 478 F.3d 370 (D.C.Cir., 2007) (holding that the Second Amendment is enforceable in § 1983 against the District of Columbia), cert. denied, ___ U.S. ___, 128 S.Ct. 2994, 171 L.Ed.2d 910 (2008). As the weight of authority holds that the individual right to bear arms may not be enforceable against the states, the constitutional right to do so is anything but clearly established. Defendants, in their individual capacities, are entitled to immunity from suit for damages.
Plaintiff argues that the Defendants are still subject to suit for injunctive relief. It is not clear what form of injunctive relief could be requested, as Defendants have already returned all of Plaintiff's weapons that are lawful for him to possess. There is no further injunctive relief the Court could grant.
As Petitioner's claim of wrongful termination in reliance on the seized weapons has been dealt with supra, Part III.A.2.c, the Court need not address this aspect of Plaintiff's claim.
Count VII is dismissed with prejudice.
H. Dismissal of Extra Defendants
Plaintiff has failed to allege sufficient claims with respect to Defendants Atkinson and Perry, and Defendant Board of Lucas County Commissioners. These Defendants are dismissed as parties in this action.
1. Defendant Lt. Atkinson
Plaintiff names Lt. Atkinson as a defendant, but only refers to Lt. Atkinson once as a witness to another defendant's statement. (Doc. 31 at ¶¶ 5, 26). Plaintiff does not allege any facts to indicate that Lt. *999 Atkinson was personally or officially involved in any of the alleged violations of Plaintiff's Constitutional rights. The Court, sua sponte, dismisses Lt. Atkinson as a defendant in this case.
2. Defendant Ken Perry
Plaintiff names Ken Perry as a defendant. Ken Perry is alleged to have presided at the meeting where Plaintiff was terminated. Ken Perry is not alleged to have participated in any of the other conduct for which rights violations are claimed. As Plaintiff's federal and constitutional rights were not violated by the termination, see Part III.A.2.C, supra, the Court dismisses Ken Perry as a Defendant.
3. Defendant Board of Lucas County Commissioners
Defendants argue that the § 1983 claims against the Lucas County Board of Commissioners are without merit, as the Board of Commissioners has no statutory authority to direct or supervise the actions of the employees of the County Sheriff's Department. (Doc. 48 at 9-10). Plaintiff replies that Defendant Telb has claimed that the ultimate policymaker in the Sheriff's department is not the Sheriff, but that he is subject to the Board of Commissioners. (Doc. 49 at 7).
A board of county commissioners has only the authority expressly conferred by statute or necessarily implied by statute. Rees v. Olmsted, 135 F. 296, 299 (6th Cir.1905); State ex rel. Shriver v. Board of Commissioners, 148 Ohio St. 277, 74 N.E.2d 248 (1947); State ex rel. A. Bentley & Sons Co. v. Pierce, 96 Ohio St. 44, 117 N.E. 6 (1917). Powers explicitly granted to the board are to be strictly construed. Commissioners v. Andrews, 18 Ohio St. 49 (1868); Treadwell v. Commissioners, 11 Ohio St. 183 (1860).
Ohio law does not, expressly or impliedly, grant to a county board of commissioners supervisory powers over the activities of the county sheriff's department. This authority lies exclusively with the county sheriff. Ohio Rev.Code Ann. Chapter 311. Therefore, a board of county commissioners has no liability for the actions of such employees absent a showing that the board assumed supervisory or policymaking control over the sheriff's department in violation of statute. See Ridgeway v. Union County Commissioners, 775 F.Supp. 1105, 1109-10 (S.D.Ohio 1991).
Plaintiff has made no allegations of supervisory control or policymaking by the Board that directly led to the Constitutional violations alleged in the second amended complaint. (See Doc. 37). As the Defendant Board had no duty to Plaintiff to regulate the internal activities of the Sheriff's Department, Plaintiff has not stated a claim for relief against Defendant Board. Plaintiff's claims against Defendant Board are dismissed with prejudice pursuant to Rule 12(c).
IV. CONCLUSION
Thus, and in sum, Defendants motion for judgment on the pleadings is hereby granted in part and denied in part. (Doc. 48). Counts II-VII are dismissed with prejudice. Litigation with respect to Count I will proceed as to the following claims: (1) unreasonable seizure of Plaintiff's property as against Defendant Telb in his official capacity, and Defendants Luna, Roger, McBroom, Walentowski, and Grzechowiak in their individual capacities; (2) wrongful interference with Plaintiff's family relationships as against Defendant Telb in his official capacity, and Defendants Luna and Ellis in their individual capacities. All other claims alleged in conjunction with Count I are dismissed with prejudice. Defendants Atkinson and Perry, and Defendant Board are dismissed as parties to this action.
IT IS SO ORDERED.
*1000 JUDGMENT ENTRY
For the reasons stated in the Memorandum Opinion filed contemporaneously with this entry, IT IS HEREBY ORDERED, ADJUDGED and DECREED that Defendants motion for judgment on the pleadings is granted as to Count I with regard to (1) Plaintiff's official capacity claims with regard to all Defendants with the exception of Defendant Telb; (2) wrongful entry into Plaintiff's home; (3) wrongful termination; and (4) wrongful initiation of criminal actions, and denied with regard to claims for: (1) unreasonable seizure of Plaintiff's property as against Defendant Telb in his official capacity, and Defendants Luna, Roger, McBroom, Walentowski, and Grzechowiak in their individual capacities; and (2) wrongful interference with Plaintiff's family relationships as against Defendants Telb in his official capacity, and Defendants Luna and Ellis in their individual capacities.
Defendants' motion is granted as to Counts II-VII.
NOTES
[1] Defendant Ellis claimed to have seen Plaintiff, while drunk, place a loaded gun on a table during a party at Plaintiff's house. Plaintiff claims that on the night of the alleged party, Plaintiff and his family were in the state of Michigan with friends. Defendant Ellis claimed that Plaintiff's wife, Julie Slough, told Ellis about a specific incident of domestic violence in which Plaintiff held Mrs. Slough down and poured beer over her head. Plaintiff claims that not only did no such incident ever occur, but that Mrs. Slough had never made any such statement. Ellis claimed to have observed Mrs. Slough unable to bowl, and that Mrs. Slough told Ellis that Plaintiff had beaten Mrs. Slough. Plaintiff claims that Mrs. Slough accidentally burnt her leg on a motorcycle exhaust pipe and that Mrs. Slough had further injured her leg helping on a repair job. Ellis claimed to have overheard Plaintiff yelling in a rage on a cell phone call to Mrs. Slough while Ellis and Mrs. Slough were attending a music concert with a group. Plaintiff claims that he was yelling to make himself heard over the loud music. Ellis claimed that Plaintiff bragged to Ellis about locking his 9 year old daughter in the "pigsty" basement as punishment, forcing her to eat her meals there and go to the bathroom in a bucket. Plaintiff claims that, although he did ground his daughter to the basement playground, it is a comfortable, finished basement, not a pigsty. Plaintiff claims that Mrs. Slough did tell Ellis that she thought Plaintiff was having an affair, but had never indicated that she was the victim of domestic violence. According to Plaintiff, all of Ellis's allegations are false.
[2] Intermeddling is not recognized as an independent cause of action under Ohio or Federal law. The Court treats Plaintiff's claim for "conversion and intermeddling" as a claim for conversion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558877/ | 22 So.3d 81 (2009)
JARQUIN
v.
DEPARTMENT OF REVENUE EX REL. RUIZ-RAMIREZ.
No. 2D09-358.
District Court of Appeal of Florida, Second District.
November 13, 2009.
Decision without published opinion Appeal dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558893/ | 22 So.3d 740 (2009)
John C. PERRYS, Petitioner,
v.
STATE of Florida, Respondent.
No. 1D09-5194.
District Court of Appeal of Florida, First District.
November 13, 2009.
Steven Wisotsky, Miami, for Petitioner.
Bill McCollum, Attorney General, and Michael T. Kennett, Assistant Attorney General, Tallahassee, for Respondent.
PER CURIAM.
John C. Perrys petitions this court for a writ of habeas corpus, contending that his continued pretrial detention under the unique facts of this case contravenes controlling statute and rule, and violates his rights under the state and federal constitutions. Although we do not find he is entitled to immediate release, we grant relief in part and hold that petitioner is entitled to notice and opportunity to be heard in the trial court.
Perrys was charged with armed burglary with assault/battery, aggravated battery, and criminal mischief. Pretrial detention was originally ordered but on *741 March 23, 2009, the circuit court granted a request for pretrial release. A monetary bond was required, a GPS monitor would be attached to the petitioner, and he would be confined to his parents' home in Dade County. While in Dade County, he would be supervised by the Pretrial Services Office (PTS) in that jurisdiction. On May 6, 2009, counsel for petitioner moved to modify the conditions of pretrial release because officials in Dade County had informed counsel that a defendant who was not charged in that county could not be supervised by the PTS there. Thirteen days later, counsel emailed the presiding judge and informed him that the factual premise of the motion to modify was incorrect and that, in fact, Dade County PTS could supervise the petitioner. That same day the motion to modify conditions of pretrial release was denied and pretrial release was revoked.
Petitioner argues, and we agree, that he was entitled to notice and opportunity to be heard before the trial court revoked the pretrial release that had previously been ordered, even if such release had never been effectuated. Although State v. Paul, 783 So.2d 1042 (Fla.2001) is factually distinguishable from the instant case because there the defendant had been released and committed a violation, we find that the reasoning of Paul requires the result we reach. If a new hearing must be held to determine what conditions, if any, will permit pretrial release after a violation, a defendant such as petitioner, who discovers that compliance with a term of his release may be impossible, is entitled to no less.
Upon consideration of the above, we grant the petition, quash the order which denied petitioner's motion to modify pretrial release, and direct that further proceedings on the motion to modify be conducted in the lower tribunal.
PETITION GRANTED.
HAWKES, C.J., BARFIELD and CLARK, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558898/ | 644 F.Supp.2d 78 (2009)
Khalid Abdullah Mishal AL MUTAIRI, et al., Petitioners,
v.
UNITED STATES, et al., Respondents.
Civil. Action No. 02-828 (CKK).
United States District Court, District of Columbia.
July 29, 2009.
*81 David J. Cynamon, Matthew J. Maclean, Osman Ahmad Handoo, Pillsbury Winthrop Shaw Pittman LLP, Washington, DC, for Petitioners.
Nayef N.N.B.J. Al Mutairi, pro se.
Abdulaziz Sayer Owain Al Shammari, pro se.
Abdullah Saleh Ali Al Ajmi, pro se.
Mesfer Saleh Ali Al Ajmi, pro se.
Mohammed Funaitel Al Dihani, pro se.
Mubara F.S.M. Al Daihani, pro se.
Adil Zamil Abdull Mohssin Al Zamil, pro se.
Walid Z.A. Al Zamel, pro se.
Nasser Nijer Naser Al Mutairi, pro se.
Saad Madai Saad Hawash Al-Azmi, pro se.
Hamad Madai Saad, pro se.
Alexander Kenneth Haas, Daniel M. Barish Norman Christopher Hardee, Paul Edward Ahern, Sean W. O'Donnell, Jr., Andrew I. Warden, August Edward Flentje, David Hugh White, Julia A. Berman, Kathryn Celia Mason, Kristina Ann Wolfe, Patrick D. Davis, Sarah Maloney, Timothy Burke Walthall, Terry Marcus Henry, U.S. Department of Justice, Brian David Boyle, O'Melveny & Myers, LLP, John P. Lohrer, Robert D. Okun, United States Attorney's Office, Washington, DC, for Respondents.
CLASSIFIED MEMORANDUM OPINION
COLLEEN KOLLAR-KOTELLY, District Judge.
Petitioner Khalid Abdullah Mishal Al Mutairi ("Al Mutairi") has been detained by the United States Government at the Guantanamo Bay Naval Base in Cuba since 2002. He has not been charged criminally and no charges have been referred against him to a military commission. The Government justifies his detention based on the authority granted to President Barack H. Obama by the Authorization for the Use of Military Force, Pub.L. No. 107-40, § 2(a), 115 Stat. 224, 224 (2001) ("AUMF"), which authorizes the use of force against certain terrorist nations, organizations, and persons. Al Mutairi believes he is unlawfully detained and has filed a petition for a writ of habeas corpus.
This civil proceeding requires the Court to determine whether or not Al Mutairi's detention is lawful. In connection with this inquiry, the Court has considered the factual evidence in the record, the extensive legal briefing submitted by the parties, and the arguments presented during a two-day Merits Hearing held on July 6-7, 2009.[1] Based on the foregoing, the *82 Court finds that the Government has at best shown that some of Al Mutairi's conduct was consistent with persons who may have become a part of al Qaida or an associated force of al Qaida, but there is nothing in the record beyond speculation that Al Mutairi did, in fact, train with or otherwise become a part of either or both of those organizations. While Al Mutairi's described travels within Afghanistan lack credibility, the Government has not supplanted Al Mutairi's version of his travels with sufficiently credible and reliable evidence to meet its burden of persuasion by a preponderance of the evidence. Accordingly, the Court shall GRANT Al Mutairi's petition for habeas corpus.
I. BACKGROUND
A. Procedural History
Petitioner filed his petition for habeas corpus on May 1, 2002, making this case the oldest of the pending Guantanamo Bay habeas cases. After several years of litigation, this case was stayed pending resolution of whether the Court had jurisdiction to hear Al Mutairi's petition. On June 12, 2008, the United States Supreme Court issued its decision in Boumediene v. Bush, clarifying that this Court had jurisdiction to consider the petition and advising this and the other judges in this District that "[t]he detainees are entitled to [] prompt habeas corpus hearing[s]." 553 U.S. ___, 128 S.Ct. 2229, 2275, 171 L.Ed.2d 41 (2008).
Following the Boumediene decision, this and most of the other judges in this District agreed to consolidate their Guantanamo Bay habeas cases before former Chief Judge Thomas F. Hogan for issuance of an initial case management order that would expeditiously move these cases toward resolution. Judge Hogan issued a Case Management Order on November 6, 2008, which he amended on December 16, 2008, and which the Court adopted in this case on December 22, 2008. The Court has relied on the Amended Case Management Order as the backdrop for its subsequent Scheduling Orders in this case.[2]
The Government filed an Amended Factual Return on September 18, 2008, and pursuant to the schedule set by the Court, Al Mutairi filed a Traverse on March 30, 2009. The parties engaged in extensive discovery and motions practice in the interim. Petitioner filed a Motion for Additional Discovery on January 26, 2009, which the Court granted-in-part and denied-in-part on February 12, 2009, after a hearing on February 11, 2009. Petitioner filed a Motion to Produce a Declassified Factual Return on January 9, 2009, which the Government produced on February 6, 2009. The Court also required the Government to provide Al Mutairi with certain discovery from the Guantanamo Bay Joint Task Force database. Additionally, the parties filed six pre-hearing motions, most of which sought rulings concerning the admissibility of particular evidence. By Order dated June 16, 2009, the Court granted the parties' motions to rely on hearsay evidence at Al Mutairi's Merits Hearing, but held their other evidentiary *83 motions in abeyance.[3]
To narrow the disputed issues presented at the Merits Hearing and to focus the parties on the specific documents underpinning their respective arguments, the Court ordered the Government to file a Statement of Facts on which they intended to rely at the Merits Hearing (which narrowed the allegations presented in the Amended Factual Return), and instructed both parties to submit Witness and Exhibit Lists. The Court advised the parties that it would likely exclude from consideration any evidence at the Merits Hearing that had not been identified in the Witness and Exhibits Lists by June 29, 2009 (one week prior to the scheduled Merits Hearing).[4] The parties timely submitted these materials and the Court held a two-day Merits Hearing on July 6-7, 2009.
B. Evidentiary Approach
As stated above, the Court granted the parties' motions to rely on hearsay evidence in this proceeding. The plurality in Hamdi v. Rumsfeld specifically acknowledged that "[h]earsay ... may need to be accepted as the most reliable available evidence from the Government." 542 U.S. 507, 534, 124 S.Ct. 2633, 159 L.Ed.2d 578 (2004). The Court finds that allowing the use of hearsay by both parties balances the need to prevent the substantial diversion of military and intelligence resources during a time of hostilities, while at the same providing Al Mutairi with a meaningful opportunity to contest the basis of his detention. The Court is fully capable of considering whether a piece of evidence (whether hearsay or not) is reliable, and it shall make such determinations in the context of the evidence and arguments presented during the Merits Hearing including any arguments the parties have made concerning the unreliability of hearsay evidence. Cf. Parhat v. Gates, 532 F.3d 834, 849 (D.C.Cir.2008) (explaining, in the context of the Detainee Treatment Act, that the Court was "not suggest[ing] that hearsay evidence is never reliableonly that it must be presented in the form, or with sufficient additional information, that permits [the finder of fact] to assess its reliability") (emphasis in original).
For similar reasons, the Court shall deny the Government's motion to have its evidence admitted with a presumption of accuracy and authenticity. Relying in part on the Supreme Court's statement in Hamdi v. Rumsfeld that "the Constitution would not be offended by a presumption in favor of the Government's evidence, so long as that presumption remained a rebuttable one and fair opportunity for rebuttal were provided," 542 U.S. at 534, 124 S.Ct. 2633, the Government argues that a presumption as to its evidence is both appropriate and necessary. The Court disagrees. One of the central functions of the Court in this case is "to evaluate the raw evidence" proffered by the Government and to determine whether it is "sufficiently reliable and sufficiently probative to demonstrate the truth of the asserted proposition with the requisite degree of clarity." Parhat, 532 F.3d at 847. Simply assuming the Government's evidence is accurate and authentic does not aid that inquiry. Cf. Ahmed v. Obama, 613 F.Supp.2d 51, 55 (D.D.C.2009) (rejecting a presumption of *84 accuracy for the Government's evidence and holding that "the accuracy of much of the factual material contained in [the Government's] exhibits is hotly contested for a host of different reasons ...").
The Court also finds that there are significant reasons why the Government's proffered evidence may not be accurate or authentic. Some of the evidence advanced by the Government has been "buried under the rubble of war," Hamdi, 542 U.S. at 532, 124 S.Ct. 2633, in circumstances that have not allowed the Government to ascertain its chain of custody, nor in many instances even to produce information about the origins of the evidence. Other evidence is based on so-called "unfinished" intelligence, information that has not been subject to each of the five steps in the intelligence cycle (planning, collection, processing, analysis and production, and dissemination). Based on the Government's own declarations, its raw intelligence has not been fully analyzed for its "reliability, validity, and relevance" in the context of other intelligence where "judgments about its collective meaning are made." Gov't's Ex. 1 at 5 (Decl. of[redacted]) Still other evidence is based on multiple layers of hearsay (which inherently raises questions about reliability), or is based on reports of interrogations (often conducted through a translator) where translation or transcription mistakes may occur. In this case, for example, the Government believed for over three years that Al Mutairi manned an anti-aircraft weapon in Afghanistan based on a typographical error in an interrogation report. See Al Mutairi Classified Traverse at 27-28 (explaining that the Government's initial Factual Return filed on December 17, 2004, identified Al Mutairi as having manned an anti-aircraft weapon because an interrogation report mistakenly identified the individual as ISN 213 (Al Mutairi's identifier) instead of ISN [redacted] (the individual who was accused of manning the weapon)). Accordingly, the Court shall not accord a presumption of accuracy or authenticity to the Government's evidence, but shall consider the accuracy or authenticity of the evidence in the context of the entire record and the arguments raised by the parties.
Finally, the Court shall use the same approach to consider Al Mutairi's pre-hearing evidentiary motions that sought to exclude particular pieces of evidence prior to the Merits Hearing based on their alleged lack of authenticity, reliability, or relevance. Rather than exclude evidence from consideration ex ante by examining it in a vacuum, the Court concludes that the better approach is to make such determinations after considering all of the evidence in the record and hearing the parties' arguments related thereto. The Court believes this approach is particularly useful where, as here, a document viewed in isolation may appear to be irrelevant, but when considered in the context of the other evidence in the record its importance may become clear. Accordingly, the Court's consideration of the evidence proffered by the parties shall encompass inquiries into authenticity, reliability, and relevance. Cf. Parhat, 532 F.3d at 847 (describing the Court's inquiry into whether evidence is "`sufficiently reliable and sufficiently probative to demonstrate the truth of the asserted proposition with the requisite degree of certainty'") (quoting Concrete Pipe & Prods., Inc. v. Constr. Laborers Pension Trust, 508 U.S. 602, 622, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993)).
C. Standard of Detention
As Judge Reggie B. Walton accurately observed in a thoughtful opinion considering the Government's detention authority, "the state of the law regarding the scope *85 of the President's authority to detain petitioners remains unsettled," Gherebi v. Obama, 609 F.Supp.2d 43, 45 (D.D.C.2009), even though habeas petitions by individuals such as Al Mutairi have been pending for over seven years. Guidance in this area is limited because the Supreme Court acknowledged but did not clarify the uncertain "permissible bounds" of the Government's detention authority, see Hamdi, 542 U.S. at 552 n. 1, 124 S.Ct. 2633, and the D.C. Circuit has not had occasion to address the issue. Fortunately, several judges in this District have considered the scope of the Government's detention authority and have issued well-reasoned opinions on the subject. See, e.g., Gherebi, 609 F.Supp.2d at 43; Hamlily v. Obama, 616 F.Supp.2d 63, 66 (D.D.C.2009); Mattan v. Obama, 618 F.Supp.2d 24, 25 (D.D.C.2009).
Taking advantage of these prior decisions, the Court shall adopt the reasoning set forth in Judge John D. Bates's decision in Hamlily v. Obama, and shall partially adopt the Government's proposed definition of its detention authority.[5] The Court agrees that the President has the authority to detain individuals who are "part of the Taliban, al Qaida, or associated enemy forces, but rejects the Government's definition insofar as it asserts the authority to detain individuals who only "substantially supported" enemy forces or who have "directly supported hostilities" in aid of enemy forces. While evidence of such support is undoubtedly probative of whether an individual is part of an enemy force, it may not by itself provide the grounds for detention. Accord Mattan, 618 F.Supp.2d at 26. Accordingly, the Court shall consider whether Al Mutairi is lawfully detained in the context of the following standard:
The President has the authority to detain persons that the President determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, and persons who harbored those responsible for those attacks. The President also has the authority to detain persons who were part of the Taliban or al-Qaida forces or associated forces that are engaged in hostilities against the United States or its coalition partners, including any person who has committed a belligerent act in aid of such enemy armed forces.[6]
D. Burden of Persuasion
Pursuant to the Amended Case Management Order that the Court adopted in this case on December 22, 2008, *86 the Government bears the burden of proving by a preponderance of the evidence that Al Mutairi is lawfully detained. See In re Guantanamo Bay Detainee Litig., Misc. No. 08-442, CMO § II.A, 2008 WL 4858241 (Nov. 6, 2008) ("[t]he government bears the burden of proving by a preponderance of the evidence that the petitioner's detention is lawful") (citing Boumediene, 128 S.Ct. at 2271) ("[T]he extent of the showing required of the government in these cases is a matter to be determined."). Accordingly, Al Mutairi need not prove his innocence. The Government must come forward with evidence demonstrating by a preponderance of the evidence that he is lawfully detained, and if the Government fails to meet this burden, the Court must grant his petition for habeas corpus.
II. DISCUSSION
The Government advances two theories justifying Al Mutairi's detention: (1) Al Mutairi trained with and became a part of the al-Wafa al-Igatha al-Islamia ("al Wafa") organization, which the Government argues is an associated force of al Qaida; and (2) Al Mutairi trained with and joined the forces of al Qaida. The Court's discussion of the evidence presented at the Merits Hearing with respect to both theories shall proceed in four steps. First, the Court shall describe Al Mutairi's version of events leading up to his detention. Second, the Court shall identify several of the reasons why Al Mutairi's version of events is not credible. Third, the Court shall describe the Government's evidence as it relates to Al Mutairi's alleged activities in Afghanistan. Fourth, the Court shall explain why the Government has not demonstrated by a preponderance of the evidence that Al Mutairi trained with and became part of al Wafa, or trained with and joined the forces of al Qaida.
A. Al Mutairi's Version of Events
Al Mutairi did not submit a declaration or affidavit describing his version of what occurred during his travels in Afghanistan. Rather, his counsel relied on certain of his statements in the record to piece together his version of events. Accordingly, the following description is based on the evidence in the record that was presented by Al Mutairi's counsel at the Merits Hearing as setting forth Al Mutairi's version of events.[7]
Al Mutairi was born in Kuwait City, Kuwait, in 1975. Gov't's Ex. 10 at 1 (4/8/2002 Interrogation of Al Mutairi). Within days of the September 11, 2001 attacks on the United States by al Qaida terrorists, Al Mutairi made one-way travel arrangements to visit Afghanistan (he characterizes the timing as a "coincidence"). Id. at 3. On September 21 or 22, 2001, Al Mutairi left Kuwait with $15,000 in United States currency on a flight to Mashhad, Iran. Id. at 4. Al Mutairi then took a taxi from Mashhad to Taibat, Iran. Id. [redacted]
Al Mutairi explained that he had originally met [redacted] in Kuwait in 1999, when he had hired [redacted] as a carpenter to build a small room for him. Gov't Ex. 10 at 3. Al Mutairi told [redacted] that he planned to build a mosque in Afghanistan at some point, and they stayed in touch over the next few years. Id. In the spring of 2001, Al Mutairi called [redacted] and told him that he wanted to build the mosque they had previously discussed, and it was decided that [redacted] would build it on piece of land in the village of Namruz, *87 Afghanistan, where [redacted] was living. Id. The $15,000 that Al Mutairi carried with him was the amount he anticipated spending on having the mosque built. Id. Al Mutairi explained that he "had not planned to remain long in Afghanistan, just long enough to give [redacted] the money he needed to get the project started.... [H]e left the return date of the flight open because he did not know how long it would take to conclude his business in Afghanistan." Id. at 4.
Once Al Mutairi met [redacted] at the Afghanistan border, they took a taxi to Namruz and stayed at Faheem's house for one night (September 22 or 23, 2001). Id. at 4. [redacted] told Al Mutairi that building a mosque would cost only $9,000, so Al Mutairi was left with an unexpected surplus of $6,000. Id. [redacted] Gov't Ex. 13 at 4 (1/17/07 Interrogation of Al Mutairi). [redacted] then suggested that he and Al Mutairi travel to Kabul to visit an al Wafa office where Al Mutairi could donate some of his remaining funds for al Wafa's charitable projects. See Gov't Ex. 10 at 4.
The next day (September 23 or 24, 2001), Al Mutairi and [redacted] left for Kabul. Id. The trip took two days to complete by taxi (which resulted in their arrival around September 25 or 26, 2001). Id. at 4. Upon arrival, they immediately made their way to the al Wafa Kabul office. Id. After meeting with an al Wafa representative, Al Mutairi agreed to donate $1,000 to assist with the building of a school. Id. After leaving this office, [redacted] took Al Mutairi to a village about an hour outside of Kabul, where Al Mutairi stayed at the home of one of [redacted] friends whose name Al Mutairi cannot remember. Id. at 5. [redacted] Id. at 5; [redacted]. Al Mutairi also gave $2,000 to [redacted] friend to purchase food and clothing for refugees. Gov't Ex. 10 at 5.
After these four days, Al Mutairi attempted to go home by crossing the border into Pakistan, but the border was sealed. Id. Al Mutairi then stayed at the home of [redacted] friend for an additional three weeks (until around October 21, 2001). Id. After hearing that there was fighting in Kabul, he decided to leave with [redacted] friend for a village near Khowst. Id. At some point before he left Kabul, Al Mutairi's bag was stolen, which contained most of his remaining funds and his passport. Gov't's Ex. 10 at 5.
Al Mutairi and [redacted] arrived at a village near Khowst and stayed at a house belonging to a friend of [redacted] friend, whose name Al Mutairi does not remember. Id. After one month (around November 21, 2001), Al Mutairi paid a guide to take him across the border into Pakistan, a journey that took approximately three days. Id. Al Mutairi was apprehended by Pakistani guards and transferred into American custody shortly thereafter. Id. at 5-6.
B. The Implausibility of Al Mutairi's Version of Events
Having reviewed all of the evidence in the record and listened to counsel's arguments during the Merits Hearing, the Court concludes that Al Mutairi's version of events is implausible and, in some respects, directly contracted by other evidence in the record.
The first problem with Al Mutairi's version of events is that his chronology creates a "missing" month. During the Merits Hearing, the Court requested information concerning when Al Mutairi was apprehended by [redacted] a guard and when he was transferred from [redacted] custody into United States custody. The Government produced an "intake form" that was completed when Al Mutairi was transferred into United *88 States custody. See Gov't's Ex. 47 at 1 (1/3/02 Intake Form). The form indicates that Al Mutairi was apprehended approximately 10-12 days prior to January 3, 2002, which would have been around December 23, 2001. [redacted]
Contrary to Al Mutairi's version of events, the evidence strongly suggests that he remained in or around Kabul approximately one month longer than his version allows (thus accounting for the "missing" month). In particular, among the information provided on the intake form is Al Mutairi's earliest explanation of his travels in Afghanistan. [redacted]" See Gov't's Ex. 47 at 2. The same explanation is contained in the [redacted] If Al Mutairi arrived in Kabul on September 25 or 26 and stayed six weeks, he would have left Kabul in mid-November (and not in October as he had stated). The Court takes judicial notice that Ramadan started in mid-November 2001, which is consistent with Al Mutairi leaving Kabul in mid-November. [redacted] In addition to undermining Al Mutairi's version of events and his reasons for leaving Kabul, this timing is significant. Kabul fell to the Northern Alliance forces in Afghanistan on November 13, 2001, and the fact that Al Mutairi stayed in that area until Kabul fell is probative of what Al Mutairi may have been doing in that area.
A second problem with Al Mutairi's story is that the evidence in the record reveals that Al Mutairi gave [redacted] different versions about what happened to his passport. [redacted] [redacted] In a third version, Al Mutairi stated that "[h]e assumed the have his passport or that they returned it to the government of [redacted]" See Gov't's Ex. 13 at 4 (1/17/07 interrogation of Al Mutairi). As the Court shall discuss in greater detail below, Al Mutairi's non-possession of his passport and failure to account for how it was lost, is probative of what Al Mutairi may have been doing during his travels in Afghanistan.
Finally, the Court notes numerous other inconsistencies and conspicuously unexplained events by Al Mutairi. First, neither counsel for Al Mutairi nor the Government has been able to identify a village called Namruz in Afghanistan (although it is the name of a province in Afghanistan), and Al Mutairi himself was not forthcoming as to its supposed location. See Gov't Ex. 13 (1/17/07 Interrogation of Al Mutairi) ("When asked how one could get [to Namruz], ISN 213 [Al Mutairi] replied that if you hailed a taxi and asked them to take you to Namr[uz], they would simply drive you there."). Second, if Al Mutairi "had not planned to remain long in Afghanistan, just long enough to give [redacted] the money he needed to get the project started," Gov't Ex. 10 at 4, then it makes no sense that he would take a two-day journey to Kabul one day after arriving in the location where the mosque was to be built. Third, the notion that Al Mutairi would have to personally make the two-day journey to Kabul to make a $1,000 donation to al Wafa is implausible because Al Mutairi supposedly gave [redacted] $2,000 as charity for refugees, and then gave another $2,000 to [redacted] friend (whose name he does not know) for other refugees. Thus, Al Mutairi was quite willing to make charitable donations through third-parties and not in person. Fourth, Al Mutairi has given inconsistent statements regarding when he gave [redacted] the $9,000 for the construction of the mosque. Although he stated that he gave the $9,000 to [redacted] in Namruz in a January 7, 2007 interrogation, see Gov't's Ex. 13 at 3, [redacted] When asked by an interrogator why he would wait until Kabul to give [redacted] the money for the mosque to be built in Namruz, Al Mutairi could not answer the question. Pet'r's Ex. *89 2 (3/12/03 Interrogation of Al Mutairi). Fifth, Al Mutairi's memory conspicuously fades during the most relevant points of his story. Once reaching Kabul, Al Mutairi is unable to identify the person in whose home he stayed for approximately one month, and he was unable to identify its location with any degree of specificity. See Gov't's Ex. 10 at 5. His statements about his location near Khowst are similarly vague, indicating only that he stayed at the home of a friend of [redacted] friend, whose name he does not recall. Id. Based on these identified inconsistences, implausibilities, and in some respects, impossibilities, the Court does not credit Al Mutairi's version of events that occurred while he was in Afghanistan.
Notwithstanding the Court's conclusions with respect to Al Mutairi's version of events, the Court's inquiry is far from complete. Because Al Mutairi has no burden to prove his innocence, the Court must now assess the Government's evidence to determine whether it has demonstrated by a preponderance of the evidence that during the time for which Al Mutairi cannot account, he trained with or became a part of al Wafa (according to the Government, an associated force of al Qaida), or al Qaida itself.
C. The Government's Evidence
The Government offers six areas of evidence in support of Al Mutairi's detention: (1) the timing and path of his travel; (2) the loss of his passport and his related inability to account for its loss; (3) his contacts with al Wafa; (4) [redacted] (5) [redacted] and (6) allegations of earlier experiences with extremist activity. The Court shall separately address each of these areas of evidence.
1. Al Mutairi's Travel Path and Timing
[redacted] As stated above, Al Mutairi admitted that he traveled through Mashhad, Iran, as part of his journey to Afghanistan. See Gov't's Ex. 10 at 4.
The Government also introduced undisputed evidence that, as the Taliban regime fell, Taliban and al Qaida fighters fled south en route to the Tora Bora mountains along the Afghanistan-Pakistan border. See Gov't's Ex. 5 (8/29/08 Decl. of [redacted] As stated above, the evidence in the record indicates that Al Mutairi waited until after Kabul fell to Northern Alliance forces on November 13, 2001, before fleeing South to a village near Khowst, along the Afghanistan-Pakistan border. See Section LB, supra (discussing the chronology of Al Mutairi's travels).
While the path and timing of Al Mutairi's travels are not direct evidence that he became a part of al Wafa or al Qaida, the Court agrees with the Government that this evidence is consistent with someone who may have joined either of those two organizations. Accordingly, the Court finds that this evidence is probative and shall consider it in the context of the Government's other record evidence.
2. Al Mutairi's Passport
The Government introduced undisputed evidence that al Qaida followed a standard operating procedure for those entering al Qaida and Taliban-associated guesthouses. See Gov't's Ex. 56A at 3 (Decl. of [redacted] According to these procedures, prior to attending a training camp, trainees surrendered their passports, identification, money, or other travel documents. Id. These items were often placed in a box and labeled with a number or kunya[8] for the *90 trainees. Id. These procedures allowed administrators to exert control over trainees and prevent them from easily leaving. Id. As a consequence, "[m]any detainees were captured without passports or other identification." Gov't's Ex. 5 at 3(Dec. of [redacted]
As set forth above, Al Mutairi was apprehended without his passport, and he has offered [redacted] different versions of how it was lost. While the loss of his passport is not direct evidence that Al Mutairi became a part of al Wafa or al Qaida, the Court agrees with the Government that Al Mutairi's non-possession of his passport and his inability to explain how it was lost are consistent with someone who may have surrendered his passport in anticipation of attending training at an al Qaida camp. Accordingly, the Court finds that this evidence is probative and shall consider it in the context of the Government's other record evidence.
3. Al Mutairi's Contacts with al Wafa
The parties introduced evidence that al Wafa operated simultaneously as both a charitable organization and a front for al Qaida. See Gov't's Ex. 6 at 1 (8/29/08 Decl. of [redacted] Stipulations of Fact ¶ 3 ("Al-Wafa engaged in some legitimate charitable activities"). The Government also introduced undisputed evidence that the two individuals located at the al Wafa Kabul office whom Al Mutairi acknowledged meeting or otherwise seeing had contacts with al Qaida. Id. at 2. Nevertheless, the Government did not seriously advance the theory at the Merits Hearing that Al Mutairi's $1,000 donation to al Wafa made Al Mutairi "part of that organization, nor did the Government introduce any evidence indicating that Al Mutairi believed al Wafa was anything other than a charitable organization.[9] Instead, the Government argued that, with the assistance of his al Wafa contacts, Al Mutairi decided to enter an al Wafa training camp located in [redacted] outside of Kabul.
The Government's allegation is supported by one reference, in a portion of one sentence, in one interrogation report of [redacted] Gov't's Ex. 6 at 2 (describing [redacted] background); [redacted] stated that:
he went to visit [redacted] and [redacted] who were attending the camp. [H]e further explained that this visit took place after September 11, 2001 and before the U.S. air strikes began.
[redacted][10] There are three problems with the Government's reliance on this allegation. [redacted] This lack of contextual support is especially problematic because the Government did not introduce any evidence corroborating Al Mutairi's alleged attendance at this al Wafa camp.
The second problem with this allegation is based on the way it is written in the interrogation report. It is entirely unclear whether [redacted] identified Al Mutairi by his ISN number, and if so, equally *91 unclear how he would know it. In some instances, an interrogation report will include the actual name used by the detainee to identify another individual, and then include a [redacted] See, e.g., Gov't's Ex. 51 at 2(11/26/04 Interrogation of [redacted]. While this procedure is certainly not required, it allows the Court to consider how the individual was actually identified as part of its inquiry into the reliability of the identification. For present purposes, the Court finds that there is insufficient information included with [redacted] allegation to properly assess whether [redacted] accurately and intentionally identified Al Mutairi as one of the two people he visited at this camp.
A third problem with this allegation is that some of statements in the interrogation reports proffered by the Government lack credibility. For example, in [redacted] November 1, 2005 interrogation, he states that he "did not know if [redacted] had another role other than providing the money for the [alleged al Wafa] camp." Gov't's Ex. 41 at 1 (11/1/05 Interrogation of [redacted]. In a November 26, 2004 interrogation, however, [redacted] explained how [redacted] See Gov't's Ex. 51 at 2 (11/26/04 Interrogation of [redacted]. In another interrogation, [redacted] statements [redacted][11]
For all of these reasons, the Court finds that [redacted] identification of Al Mutairi at an alleged al Wafa training camp is neither reliable nor credible, and it shall not be considered probative of any issue related to whether or not Al Mutairi is lawfully detained.[12]
One final point about this allegation is warranted. At the Merits Hearing, the Court requested an interrogation report that was referenced in the evidence but was not produced by the Government until requested by the Court. [redacted]. This information helps to explain why the Government referred to the alleged camp as "nascent" throughout the hearing, but also underscores how speculative Al Mutairi's role at this camp would have been, even had the Government produced evidence of his attendance (which the Court expressly concludes it has not produced).
4. Lists of "Captured Fighters"
The Government introduced [redacted] documents into evidence purporting to list the names and contact information for captured al Qaida fighters. See Gov't's Exs. 19, 20, 22, 32, 33, [redacted] Two of the documents were published on the internet or in newspapers (and therefore were publicly available), and [redacted]
Although the appearance of Al Mutairi's name on these lists would appear to be highly probative, Al Mutairi submitted persuasive evidence concerning the origins of these lists that substantially reduces their probative value. Specifically, Al Mutairi's counsel argued at the Merits Hearing that these lists were originally assembled by a [redacted] guard who collected the contact information of Al Mutairi and *92 other individuals while they were incarcerated in a [redacted] prison to alert their families of their whereabouts. This argument is supported by multiple independent sources (including Al Mutairi) whose statements are not rebutted by the Government.
For example, Al Mutairi submitted the declaration of [redacted] who was a prisoner in Guantanamo Bay from 2001 to 2006. [redacted] explained that he and Al Mutairi gave their contact information to a [redacted] guard in 2001:
After my initial capture in late 2001, I was taken to a [redacted] prison in [redacted] I was detained there for about three weeks with ... Al Mutairi. We did not know what was going to happen to us, and we wanted our families to know where we were. A [redacted] officer came into our cells and told us that he would take our names and our families' phone numbers ... and publish them so that our families could learn where we were ... [Al Mutairi] [and] myself, and all of the other prisoners gave our names and families' contact information to the officer Later, I learned from people who were captured and joined us in prison that our contact information and photographs had been posted on the internet and appeared in the news in Kuwait as supposed lists of Al Qaeda fighters.
Pet'r's Ex. 6 ¶ 4 (Feb. 2009 Decl. of [redacted], [redacted], another Guantanamo detainee, provided a similar explanation:
At one stage there was a kind guard who did speak Arabic. He told me that I was going to be turned over to the U.S. for a bounty that would be paid to the [redacted] He was the one who took my name ... [and] telephone number for my relatives, and my photograph, and promised to put it on the internet so my family might find out what was happening to me.
Pet'r's Ex. 7 at 18 (12/2/08 Decl. of [redacted].
The information supplied by [redacted] is further corroborated by [redacted] who described his receipt of a list of prisoners prior to his detention at Guantanamo Bay:
One of the other people staying at the flat received a list of names, addresses, and telephone numbers of people who were detained in a [redacted] prison in [redacted] .... I was the only Kuwaiti in the flat, and I recognized several of the names as being Kuwait names.... I decided to call their families and let them know what had happened to their family members.
Pet'r's Ex. 8 ¶¶ 4-5 (2/22/09 [redacted] Decl.). Although the Court has questioned some of [redacted]'s statements above, [redacted]'s description of the list he obtained is corroborated by [redacted] the father of one of the petitioners in this case, who explained that he received a phone call from [redacted] advising him of his son's location:
In late 2001, 1 received a call from a [redacted] in Pakistan named [redacted] as well as calls from several other people, who told me that [my son] had been arrested by [redacted] the authorities and was in prison in [redacted] but that his name and home phone number were on a list that was being circulated among the Arab community in [redacted] so that families of prisoners could be contacted.
Pet'r's Ex. 9 ¶ 7 (2/22/09 Decl. of [redacted]
Al Mutairi's testimony during an Administrative Review Board Proceeding in 2005 further corroborates this evidence. See Pet'r's Ex. 16 at 4 (5/10/05 Al Mutairi Testimony). Al Mutairi testified that during his detention he gave his information *93 to "a Pakistani soldier [who] took ... the names of the Detainees," and also "gave [his] number to one of the detainees to contact his family [so that] his family would contact the Kuwaiti authorities about his detainment." Id. This testimony is not only plausible given the statements by other individuals set forth above, but it is particularly credible given that Al Mutairi's name and family contact information was discovered on a list held by another detaineejust as Al Mutairi described. [redacted]
[redacted]
For its part, the Government does not dispute Al Mutairi's evidence concerning the origins of these list. Instead [redacted], the Government argues that the origin of the lists is irrelevant because regardless of the initial purpose, the information was collected and maintained by individuals associated with al Qaida, thereby making the lists al Qaida records. During the Merits Hearing, the Government offered the following arguments encapsulating its position:
[redacted] is a leader of al-Qaeda. He's welcome and free to receive information from any number of sources, but once he takes that information and begins to use it [as] his own, he makes it an al-Qaeda record he or his associates make it an al-Qaeda record of a different sort.
* * *
Accurate or not, whatever was going on in the Pakistani prison at the time that petitioner's counsel is able to offer declarations about, can't be shown to have any impact on the purpose and the use [redacted]
* * *
Petitioners aren't controlling what happens with this information. They might have given it to someone with some hope in mind, but we're not relying on the fact that Mr. Al Mutairi gave his phone number to somebody to prove that al-Qaeda kept a record of him as a fighter. [redacted]
[redacted]
The Court does not find the Government's arguments persuasive in the context of the evidence in this case because Al Mutairi's name and contact information do not change [redacted] Instead, the same publicly available information that originated from Al Mutairi himself [redacted] Two inferences are therefore possible. On the one hand, the appearance of Al Mutairi's information on these lists may be taken to mean that an individual affiliated with al Qaida is purposefully tracking him because Al Mutairi has connections to al Qaida. On the other hand, the appearance of Al Mutairi's name could be the result of an individual affiliated with al Qaida having [redacted] Al Mutairi's information along with other names from publicly available sources, not knowing whether Al Mutairi had any al Qaida connections. On this recordparticularly where, as here, there is a lack of evidence supporting any connection between Al Mutairi and al Qaidathere is simply no way for the Court to decide which is more likely to be the case.[13] Accordingly, the Court does not view these lists as probative of whether Al Mutairi is lawfully detained.
5. Passport Lists
[redacted]
*94 [redacted][15]
The Government's evidence suffers from three deficiencies that significantly reduce its probative value. The first deficiency is that [redacted] lists do not indicate when they were written, so there is no way to corroborate the Government's speculation that Al Mutairi surrendered his passport [redacted] Al Mutairi had already been taken into custody by Pakistani authorities, and it therefore directly undermines the Government's theory that Al Mutairi surrendered his passport to individuals associated with al Qaida [redacted]
[redacted] Although the names appear similar, Al Mutairi's counsel explained that [redacted] means "brother" or "crusader," an argument that the Government did not dispute. Neither party provided any evidence as to the meaning of [redacted] and neither party was able to provide the Court with any other evidence on this issue. On this record, the Court cannot determine one way or the other whether the names are sufficiently similar to support the Government's argument that Al Mutairi likely surrendered the passport himself, or whether they are different names such that someone other than Al Mutairi could have surrendered the passport to individuals associated with al Qaida.[16]
The third deficiency is the lack of corroborating evidence supporting these passport lists. In addition to the fact that none of the lists contain any reference to the alleged camp attended by Al Mutairi in [redacted] the Government did not provide evidence that any of the other individuals named on the lists attended that training camp. The lack of corroborating information further undermines the Government's theory that Al Mutairi surrendered his passport [redacted]
Based on the foregoing, the Court finds that these passport lists provide little probative value in connection with the Court's inquiry into whether Al Mutairi is lawfully detained.
6. Other Allegations
During the Merits Hearing, the Government raised two other allegations against Al Mutairi, both of which the Court concludes are not credible.
First, the Government argues that Al Mutairi fought with Osama bin Laden in Afghanistan in 1991 based on the following passage from his interrogation report:
[redacted]
[redacted]
The assertion that Al Mutairi was fighting with Osama bin Laden in Afghanistan in 1991 is not credible. First, there is no evidence in the record corroborating Al Mutairi's statement about fighting in Afghanistan in 1991. Second, the Court takes judicial notice that Iraq invaded Kuwait in 1990 and the Persian Gulf War continued into 1991, when Al Mutairi would have been 16 years old, Al Mutairi's brother became a prisoner of war, and his father was an officer in the Kuwaiti Ministry of the Interior. See Pet'r's Ex. 4 ¶¶ 1-2. The Court does not view the Government's argument as plausible that Al Mutairi would leave Kuwait (and his family) *95 while the country was under siege to travel to Afghanistan at 16 years old to fight against (presumably) forces associated with the Soviet Union.[17] Third, the passage on which the Government relies clearly indicates that Al Mutairi was agitated and that he appears to have been goaded into making these statements by the linguist in the interrogation room. The evidence in the record suggests that it was not uncommon for Al Mutairi to react in this way while agitated, as he subsequently claimed during another interrogation that he was Osama bin Laden:
ISN 213 was uncooperative. He stated that he wished to be called Osama bin Laden ... ISN 213 stated he was an enemy of America because Americans had told him so. Americans had cursed his parents. Prior to the war, he'd had no problem with Americans. But due to the situation at Guantanamo Bay, Cuba, and his detention, America had made him their enemy ... He stated that with all this legal process being so useless, he might as well be Osama bin Ladin, since he was never going to be freed from U.S. custody.
Gov't's Ex. 13 at 1. The Government does not rely on Al Mutairi's "admission" that he is actually Osama bin Laden to support his detention, and the Court finds that its reliance on his alleged fighting in Afghanistan in 1991 is similarly implausible and unsupported by the record.
The second allegation made by the Government against Al Mutairi is that he attended a meeting in Pakistan of Lashkar-e-Tayyiba ("LeT"), a designated terrorist organization with ties to al Qaida. See Gov't's Ex. 30 at 1 (4/8/08 Department of State Foreign Terrorist Organization List); Gov't's Ex. 5 at 2 (8/29/08 Decl. of [redacted] The Government's sole support for this allegation is one interrogation report associated with someone named [redacted]
[redacted] stated another detainee, whom he knows as [redacted] ISN 213, is a Kuwait with ties to LeT. LeT holds an annual meeting in Punjab, Pakistan, which [redacted] attended. [redacted] also had a point of contact at the LeT headquarters in Lahore, Pakistan. (Note: [redacted] is identified as Khalid Abdullah Mijsh'ad Thamir Al-Mutayri, ISN [213].).
Gov't's Ex. 11 at 1-2 (6/24/03 Interrogation of [redacted] The Government's reliance on this allegation is flawed for several reasons.
The most significant problem with this allegation is that the Government produced no information about [redacted] or this allegation beyond the submission of this one interrogation report. Thus, there is no evidence in the record explaining how [redacted] knew Al Mutairi's identity. Also left unexplained is a description of when this meeting occurred, or when Al Mutairi would have even traveled to Pakistan. Further, the Government did not declassify [redacted] name so that Al Mutairi's counsel could ascertain whether Al Mutairi knew [redacted] or otherwise had any information about him. This dearth of corroborating evidence supporting [redacted] allegation is problematic because the Court must "have an opportunity to assess *96 the reliability of the record evidence" which is "not simply a theoretical exercise." Parhat, 532 F.3d at 848.
A second problem concerns the allegation itself. In his statement, [redacted] identifies someone named [redacted]' a name that is then attributed to Al Mutairi. The Government identified no other evidence in the record where Al Mutairi was known by the name [redacted] nor is there any explication as to how the Government decided [redacted] was Al Mutairi. Although the Government identified various portions of the interrogation report during the Merits Hearing that, according to the Government, demonstrate its reliability, the interrogator did not confirm Al Mutairi's identity with [redacted]such as showing him a photograph of Al Mutairi. Based on the wholesale lack of corroborating evidence in the record and the single obscure reference to Al Mutairi as [redacted] the Court does not view [redacted] allegation as reliable or credible.
D. Evidence Summary
In summary, the Court has credited the Government's evidence that (1) Al Mutairi's path of travel into Afghanistan was consistent with the route used by al Wafa to smuggle individuals into Afghanistan to engage in jihad; (2) that Al Mutairi's travel from Kabul to a village near Khowst was consistent (in time and place) with the route of Taliban and al Qaida fighters fleeing toward the Tora Bora mountains along the Afghanistan-Pakistan border, and (3) Al Mutairi's non-possession of his passport is consistent with an individual who has undergone al Qaida's standard operating procedures that require trainees to surrender their passports prior to beginning their training. The Court has also found minimally probative on this record the appearance of Al Mutairi's name and reference to his passport [redacted] Taking this evidence as a whole, the Government has at best shown that some of Al Mutairi's conduct is consistent with persons who may have become a part of al Wafa or al Qaida, but there is nothing in the record beyond speculation that Al Mutairi did, in fact, train or otherwise become a part of one or more of those organizations, where he would have done so, and with which organization. While Al Mutairi's described peregrinations within Afghanistan lack credibility, the Government has not filled in these blanks nor supplanted Al Mutairi's version of his travels and activities with sufficiently credible and reliable evidence to meet its burden by a preponderance of the evidence. Accordingly, the Court shall grant Al Mutairi's petition for habeas corpus.[18]
III. CONCLUSION
Because the Government has not met its burden by a preponderance of the evidence, the Court shall GRANT Al Mutairi's petition for habeas corpus. The Court shall issue an Order requiring the Government to take all necessary and appropriate steps to facilitate Al Mutairi's release forthwith.
NOTES
[1] The parties did not present any live testimony at the Merits Hearing. The Court also notes that the Government submitted an unredacted, classified document as Exhibit 58 at the Merits Hearing. The Government subsequently withdrew this exhibit and filed a substitute document. See Gov't's Notice at 1 (July 27, 2009). Accordingly, the Court has only considered the Government's substitute document in reaching its decision on the merits in this case.
[2] The Court extends its gratitude to Judge Hogan for his considerable investment of time and energy to produce the Case Management Order.
[3] Al Mutairi also filed a Motion for Sanctions against the Government for failing to timely disclose exculpatory evidence. The Court does not find that sanctions are warranted on the present record.
[4] The Court noted two exceptions for (1) documents offered for rebuttal purposes, and (2) exculpatory documents, as to which the Government has a continuing obligation to disclose.
[5] The Government's proposed definition for its detention authority is found in the Memorandum that it submitted in this case on March 13, 2009. According to the Government,
[t]he President has the authority to detain persons that the President determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, and persons who harbored those responsible for those attacks. The President also has the authority to detain persons who were part of, or substantially supported, Taliban or al-Qaida forces or associated forces that are engaged in hostilities against the United States or its coalition partners, including any person who has committed a belligerent act, or has directly supported hostilities, in aid of such enemy armed forces.
[6] Al Mutairi submitted a response to the Government's proposed detention standard seeking to have the Court limit the types of organizations that may be considered an "associated force" or "enemy armed force." See Pet'r's Resp. at 2-11. The Court declines to engage in a hypothetical inquiry concerning the types of organizations that may or may not fall within this definition, but shall instead examine the facts of each case and shall further define these terms in context if appropriate and necessary.
[7] For this reason, the Court shall cite directly to the evidence in the record. Additionally, the Court shall place dates in parenthesis throughout this section, which are the dates the Court derives based on Al Mutairi's statements.
[8] "Kunyas" are assumed names or pseudonyms that are part of traditional Arabic names, but are also used by insurgents, radicals, and terrorists to conceal their true identities. See Gov't's Ex. 8 at 2(9/19/08 Decl. of [redacted]
[9] The Government did make an unsupported assertion that all of Al Mutairi's money ended up at "al Wafa-controlled locations," but never defined what could be considered an "al Wafa-controlled location" and never presented actual evidence showing that any money beyond Al Mutairi's $1,000 donation was actually received by al Wafa. [redacted]
[10] During the Merits Hearing, the Government confirmed that [redacted] by referencing "airstrikes," was referring to October 7, 2001, the date the United States commenced its operations Afghanistan. See Merits Hearing Transcript at 144 (Jul. 6, 2009).
[11] Al Mutairi submitted a declaration by [redacted] wherein he states, among other things, that he did not know Al Mutairi or the other petitioners in this case prior to his detention at Guantanamo Bay. See Pet'r Ex. 8 ¶¶ 5, 13 (2/22/09 Decl. of [redacted]). The Court affords this statement no weight because, as demonstrated by the Government at the Merits Hearing, his statement is contradicted by the evidence in the record relating to at least one of the other petitioners.
[12] To be clear, the Court is not holding that [redacted] cannot be considered a reliable witness relating to other matters; indeed, some of the information he provided in his interrogation reports is sufficiently corroborated in the record to be considered reliable. Rather, the Court is finding in this case that [redacted]s allegation concerning Al Mutairi is not reliable or credible.
[13] To be clear, the Court is not holding that these lists are not probative in all cases. If a detainee's name or other information appears on a private but not publicly-available list, or even if there were sufficient information in the record to support links to al Qaida, these lists might carry persuasive value.
[redacted]
[15] During the Merits Hearing, the Government speculated that "written" might mean "updated" or "saved last." The Government submitted no evidence to this effect, and Court has no basis to credit this argument.
[16] During the Merits Hearing, Al Mutairi's counsel advanced the theory that the person who allegedly stole Al Mutairi's passport in Kabul likely gave it to other individuals who may have been associated with al Qaida. This argument is based solely on speculation and is not credited by the Court.
[17] Al Mutairi's counsel argued at the Merits Hearing that Al Mutairi would have been a sophomore in High School in 1991, but relies on an interrogation report containing dates given by Al Mutairi that are ambiguous on this point. See Gov't's Ex. 10 at 1-2. Al Mutairi's brother also submitted a declaration explaining that Al Mutairi was in high school in 1991, but the Court declines to credit his statement because it fails to clarify the ambiguity that was created by Al Mutairi's own statements in the interrogation report. See Pet'r's Ex. 4 ¶ 2 (2/22/09 Decl. of T. al Mutairi).
[18] Because the Court has found insufficient evidence in the record supporting the Government's theory that Al Mutairi became a part of al Wafa, the Court does not reach Al Mutairi's alternative argument that al Wafa is not an organization that, by definition, could constitute an "associated force" pursuant to the standard of detention adopted by the Court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558915/ | 22 So.3d 964 (2009)
ASP ENTERPRISES, INC.
v.
Kevin J. GUILLORY, Terry Guillory, Eunice M. Langhauser, and Parish National Bank.
No. 2008-CA-2235.
Court of Appeal of Louisiana, First Circuit.
September 11, 2009.
Rehearing Denied October 16, 2009.
*966 Claude F. Reynaud, Jr., Stephen F. Chiccarelli, Jeanne C. Comeaux, Eric B. Landry, Baton Rouge, Louisiana, for Plaintiff/Appellant, ASP Enterprises, Inc.
Roy E. Blossman, Robert S. Stassi, Lucas T. Regnier, New Orleans, Louisiana, for Defendant/Appellee, Parish National Bank.
David J. Boneno, Baton Rouge, Louisiana, for Amicus Curiae Louisiana Bankers Association.
Before KUHN, GUIDRY, and GAIDRY, JJ.
GAIDRY, J.
A close corporation that was the victim of alleged forgery and theft by a former employee appeals a summary judgment dismissing its claims against the bank at which it maintained its checking account. For the following reasons, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
ASP Enterprises, Inc. (ASP), doing business as Action Screen Printers, is a corporation primarily engaged in the business of silk screen printing in Covington, Louisiana. At the times relevant to this matter, its president and sole stockholder was Sidney Guillot, and its secretary-treasurer was his wife, Blanch Guillot. ASP's business premises were situated on the same property on which the Guillots' family residence was located.
ASP maintained a checking account at Parish National Bank (the Bank) in Covington. Mr. and Mrs. Guillot were the *967 authorized signatories for the checking account.
Around 1989, ASP hired Terry Guillory as a commission salesman. Sometime around 1993 or 1994, Mr. Guillot began to experience multiple health problems that by 1996 prevented him from working in his business on a daily basis. Terry Guillory gradually assumed various managerial duties due to the frequent absences of Mr. and Mrs. Guillot, eventually assuming full control of the business's financial affairs and daily operations. At some point around that time, apparently due to cash flow problems and overdrafts of its checking account, the business adopted the policy of issuing money orders to pay its creditors rather than issuing checks drawn on its demand deposit accounts.
According to ASP, Terry Guillory began to embezzle money from ASP through a number of methods, including forging Mrs. Guillot's name on checks drawn on ASP's checking account (the forged ASP checks) for cash or to purchase money orders, and indorsing and cashing third-party customer checks payable to ASP (the third-party checks). According to ASP, Terry Guillory also created fictitious payee invoices, including some for a fictitious entity named "Goodbee Screen Printers," billing ASP customers for jobs actually performed by ASP, cashing checks payable to the fictitious payees, and retaining the proceeds. Many, if not all, of the ASP and third-party checks were cashed or processed at the Goodbee Quick Stop (Goodbee), a convenience store co-owned by Kevin Guillory, Terry Guillory's brother, and Eunice Langhauser, the Guillorys' mother. Goodbee also maintained a checking account at the Bank, from which Goodbee obtained large sums of cash for use in its check-cashing business operations. Terry Guillory had no account at the Bank.
In the summer of 2003, Terry Guillory left his employment with ASP after a verbal altercation with the Guillots' son, Ryan Guillot, who had begun working at ASP a year or more prior to that time. According to an affidavit of Sidney Guillot, in July 2003 he discovered that a supposedly unpaid invoice to a customer had in fact been paid by check, but that the check had been cashed at Goodbee and then deposited in Goodbee's account at the Bank. Mr. Guillot made further inquiries and determined that other third-party checks had been similarly handled, and that Mrs. Guillot's signature had been forged on many ASP checks.
On December 15, 2003, ASP filed a petition for damages, naming as defendants Terry Guillory, Kevin J. Guillory, Eunice M. Langhauser, and the Bank. ASP alleged that after Mr. Guillot became ill and Mrs. Guillot attempted to conduct the business, Terry Guillory "seized the opportunity to expand his apparent control of the business operations." (Emphasis added.) ASP also alleged that in doing so, Terry Guillory "eventually took it upon himself to purchase materials, contract with customers, create and invoice customers for work performed, accept payments for work performed, and sundry other functions." (Emphasis added.) ASP alleged that Kevin Guillory, as Terry Guillory's brother and as Goodbee's manager, was aware that Terry Guillory was converting ASP's assets for his personal use. ASP further alleged that both Goodbee and the Bank knew or should have known of Terry Guillory's alleged embezzlement.
The Bank answered ASP's petition, denying its liability and asserting a cross-claim against the other defendants for indemnity. Terry Guillory answered the petition and cross-claim, denying his liability, and in turn asserted a reconventional demand *968 against ASP and a third-party demand against Sidney Guillot, claiming unpaid wages and breach of a contract to convey an ownership interest in ASP.
On July 24, 2006, ASP filed a supplemental and amended petition, reiterating the allegations of its original petition, but adding allegations and asserting causes of action against all defendants under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961, et seq. and for conversion under Louisiana law, against Terry Guillory for breach of fiduciary duty, and against the Bank for negligence under Louisiana law.
On January 7, 2008, the Bank filed two motions for partial summary judgment. One motion addressed ASP's claims against the Bank governed by the Louisiana Uniform Commercial Code (UCC), La. R.S. 10:1-101, et seq. (the UCC motion). The other addressed ASP's claims against the Bank under RICO (the RICO motion).
The Trial Court's Action
The Bank's motions for partial summary judgment were heard by the trial court on February 25, 2008. On March 11, 2008, the trial court issued its combined "Reasons for Judgment and Judgment," granting both the UCC motion and the RICO motion.[1] However, the judgment did not contain decretal language dismissing the UCC and RICO claims against the Bank, dismissing the Bank as a defendant, or designating either partial summary judgment as final and appealable under La. C.C.P. art. 1915(B). In its reasons for judgment, the trial court noted with regard to the checks drawn on ASP's account that the Bank was "under no duty to furnish copies of the checks with the bank statements," and that Mr. Guillot offered no evidence in his affidavit of the date he requested copies of the checks that he claimed the Bank supposedly delayed in producing to him. As to the third-party checks payable to ASP, the trial court found that "[n]o affidavits or other evidence was presented by [ASP] which questioned the [B]ank's operating procedures and there was no evidence that the Bank had notice that Terry Guillory was forging or wrongly [sic] endorsing company checks."
On April 28, 2008, the Bank filed a "Motion for Clarification and Motion to Designate Judgment as Final," seeking clarification of the decretal effect and finality of the judgment of March 11, 2008, granting the Bank's UCC motion and RICO motion. On May 30, 2008, the trial court signed a judgment denying the former motions. Thereafter, the Bank filed a new motion for summary judgment, expressly seeking the dismissal of all of ASP's claims against the Bank.[2] The Bank's new motion for summary judgment was heard on June 30, 2008, and was granted by judgment signed on July 11, 2008, dismissing with prejudice all claims of ASP against the Bank.[3]
*969 ASP now appeals. An amicus curiae brief has also been submitted by the Louisiana Bankers Association.
ASSIGNMENTS OF ERROR AND ISSUES ON APPEAL
ASP contends that the trial court committed error in the following described respects:
1. The trial court erred in assuming or finding that [the Bank], as depository bank, was a holder, under La. R.S. 10:1-201(21), or a holder-in-due-course under La. R.S. 10:3-302(1) and (2), of the checks at issue;
2. The trial court erred in granting [the Bank], as a mere transferee, any rights against ASP greater than its transferor had under La. R.S. 10:3-201(b);
3. If [the Bank] only succeeds to the rights of a criminal co-conspirator, the trial court erred in allowing [the Bank] to benefit from the safe harbor protections of negotiable instrument laws such as . . . comparative negligence, prescription, burden-shifting and statutory presumptions.
4. The trial court committed reversible error when it found that no evidence existed that [the Bank] had any notice that Terry Guillory, an employee of ASP [,] was forging or wrongfully endorsing company checks.
5. The trial court committed reversible error when it found that [the Bank] observed reasonable commercial standards as the depositary and drawer bank.
6. The trial court committed reversible error when it concluded that no evidence existed to support ASP's claim that [the Bank] failed to maintain or apply its bank account oversight and maintenance procedures in a commercially reasonable manner.
7. The trial court committed reversible error when it failed to distinguish and analyze the different factual methods employed by Terry Guillory to embezzle from ASP.
8. The trial court committed reversible error when it failed to apply the applicable [UCC] provisions to each of the distinct methods of embezzlement. . . and how each method, under La. R.S. 10:3-101, et seq., invoked different statutory liability and, in turn, different statutory presumptions and defenses.
9. The trial court committed reversible error when it concluded that because ASP failed to supervise its financial affairs by entrusting the majority of day-to-day management . . . to its employee, Terry Guillory, the risk of loss caused by his fraudulent endorsements should be exclusively borne by ASP.
10. The trial court erred in granting. . . summary judgment as to the issue of prescription.
11. The trial court erred in declining to apply the doctrine of contra non valentem.
12. The trial court erred in granting [the Bank's] [m]otion for [s]ummary [j]udgment and exception of prescription, as to the [UCC] claims.
[13.] The trial court erred in granting [the Bank's] [m]otion for [s]ummary [j]udgment as to all remaining claims.
In addition to the issues inherent in the foregoing assignments of error, ASP raises the following legal issues for our review:
[1.] Should this Court reexamine its ruling in Peak Performance Physical Therapy & Fitness, LLC v. Hibernia Corp., [07-2206 (La.App. 1st Cir.6/6/08), *970 992 So.2d 527, writ denied, 08-1478 (La.10/3/08), 992 So.2d 1018], that in applying the prescriptive period of La. R.S. 10:3-420(f) (conversion of funds) the principle of contra non valentem should only apply if there is "fraudulent concealment" by the depository or drawer bank?
[2.] Did the trial court err in concluding that the causes of action under the [UCC] supplant all additional claims and causes of action which ASP may have against [the Bank]?
The Bank frames the issues before us in terms of the defenses it raised to the claims for the third-party checks under La. R.S. 10:3-405(b) and La. R.S. 10:3-420(f). As to the forged ASP checks, the Bank frames the issues in terms of its defenses under La. R.S. 10:4-406(d)(2), 4-406(f), and 4-111.
Finally, both the Bank and the amicus curiae urge us to reaffirm the relevant holding in Peak Performance, supra, which strictly limited application of contra non valentem.
STANDARD OF REVIEW: SUMMARY JUDGMENT
This matter comes to us on appeal from a summary judgment, effectively dismissing a defendant from the action. It is therefore subject to de novo review as to whether summary judgment was appropriate. Motorola, Inc. v. Associated Indem. Corp., 02-0716, p. 5 (La.App. 1st Cir.6/25/04), 878 So.2d 824, 828, writs denied, 04-2314, 04-2323, 04-2326, 04-2327 (La.11/19/04), 888 So.2d 207, 211, 212. In undertaking our de novo review, we employ the same standards applicable to the trial court's determination of the issues. Peak Performance Physical Therapy & Fitness, LLC v. Hibernia Corp., 07-2206, p. 5 (La.App. 1st Cir.6/6/08), 992 So.2d 527, 530, writ denied, 08-1478 (La.10/3/08), 992 So.2d 1018.
The summary judgment procedure is expressly favored in the law, and is designed to secure the just, speedy, and inexpensive determination of nondomestic civil actions. La. C.C.P. art. 966(A)(2). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, admissions, and affidavits in the record show that there is no genuine issue as to material fact, and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B). Louisiana Code of Civil Procedure article 967(A) provides that "[s]upporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein."
The mover has the burden of proof that he is entitled to summary judgment. See La. C.C.P. art. 966(C)(2). If the mover will not bear the burden of proof at trial on the subject matter of the motion, he need only demonstrate the absence of factual support for one or more essential elements of his opponent's claim, action, or defense. See La. C.C.P. art. 966(C)(2). If the moving party points out that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense, then the nonmoving party must produce factual support sufficient to satisfy his evidentiary burden at trial. See La. C.C.P. art. 966(C)(2). If the mover has put forth supporting proof through affidavits or otherwise, the adverse party may not rest on the mere allegations or denials of his pleading, but his response, by affidavits or otherwise, must set forth specific facts showing that there is a genuine issue for trial. La. C.C.P. art. 967(B).
*971 DISCUSSION
Holder in Due Course Status
ASP's first three designated assignments of error present the question of the Bank's alleged status as a mere "transferee" under La. R.S. 10:3-203, as opposed to status as a "holder in due course" under La. R.S. 10:3-301, et seq., and La. R.S. 10:4-205. As correctly emphasized by the Bank and the amicus curiae, the issues and arguments relating to "holder in due course" status were never raised or submitted to the trial court for determination. Our jurisprudence has a longstanding general rule that issues not submitted to the trial court for decision will not be considered for the first time on appeal. Judson v. Davis, 04-1699, p. 23 (La.App. 1st Cir.6/29/05), 916 So.2d 1106, 1121, writ denied, 05-1998 (La.2/10/06), 924 So.2d 167. See also Rule 1-3, Uniform Rules of Louisiana Courts of Appeal.
In its reply brief, ASP implicitly acknowledges that the issues relating to "holder in due course" status were not addressed at the trial court level. Nevertheless, it urges us to review these issues under Rule 1-3's exception that authorizes review of issues not submitted to the trial court if "the interest of justice clearly requires" such review. After considering the nature of the issues and ASP's related arguments, we conclude that such review is inappropriate and pretermit consideration of ASP's first three assignments of error.[4]
The Checks at Issue
The record of this matter contains photocopies of a large number of third-party checks payable to ASP, checks written on ASP's checking account at the Bank, and money orders cashed at Goodbee. However, many of those documents were simply attached as in globo exhibits to various memoranda of the parties, without verification by affidavit, deposition, admissions, or answers to interrogatories.
A party may not utilize unsworn and unverified documents as summary judgment evidence. Sanders v. J. Ray McDermott, Inc., 03-0064 p. 4 (La.App. 1st Cir.11/7/03), 867 So.2d 771, 775. A document which is not an affidavit or sworn to in any way, or which is not certified or attached to an affidavit, is not of sufficient evidentiary quality to be given weight in determining whether there are remaining genuine issues of material fact. Id.; Robertson v. Northshore Reg'l Med. Center, 97-2068, pp. 5-6 (La.App. 1st Cir.9/25/98), 723 So.2d 460, 464. Likewise, an unsworn, uncertified document simply attached to a memorandum may not properly be considered by the court in determining a motion for summary judgment. State v. Exxon Corp., 95-2501, pp. 7-8 (La.App. 1st Cir.6/28/96), 676 So.2d 783, 787.
*972 After careful review of the record, as well as the parties' briefs, it appears undisputed that the checks at issue form part of a set of documents Bates-stamped A0001 through A0310, identified by ASP in its answers to interrogatories as the checks forming the basis of its claims. The third-party checks are contained in that portion of documents numbered A0001 through A0187 (although some ASP checks are also contained therein), and ASP's checks that were allegedly forged (with the exception of those mentioned above) are contained in the remaining documents numbered A0188 through A310.
The Third-Party Checks
Louisiana Revised Statutes 10:3-420 provides, in pertinent part:
(a) An instrument is converted when
. . .
(iii) it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.
. . .
(f) Any action for conversion . . . prescribes in one year.
Terry Guillory's alleged actions relating to the third-party checks payable to ASP and the third-party checks payable to fictitious payees clearly constituted conversions under La. R.S. 10:3-420(a)(iii).[5] If ASP's allegations as to the Bank's actions are accepted as true, then those actions in accepting the deposits of the misappropriated checks and thereby making payment to Goodbee would also constitute conversions within the meaning of the statute. See Peak Performance, 07-2206 at p. 7, 992 So.2d at 531, and Med Data Serv. Bureau, L.L.C. v. Bank of La. in New Orleans, 03-2754, pp. 9-10 (La.App. 1st Cir.12/20/04), 898 So.2d 482, 488-89.
The Bank established a prima facie case of prescription of all claims for conversion based upon the third-party checks deposited prior to December 15, 2002, a year prior to filing of suit. See Quality Gas Products, 03-1859 at pp. 5-6, 885 So.2d at 1182, and Metro Elec. & Maint, Inc. v. Bank One Corp., 05-1045, pp. 4-8 (La.App. 3rd Cir.3/1/06), 924 So.2d 446, 449-51. The Bank having established a prima facie case of prescription as to the checks cashed at Goodbee and deposited over a year prior to suit being filed, the burden of proof that those claims were not prescribed shifted to ASP. As the party asserting the benefit of contra non valentem, ASP bore the burden of proof of its requisite elements and applicability. See Black v. Whitney Nat'l Bank, 618 So.2d 509, 516 (La.App. 4th Cir.), writ denied, 623 So.2d 1308 (La.1993).
At this point, it is appropriate that we address ASP's last assignment of error, as its determination bears upon the nature of *973 ASP's cause of action for conversion and the applicability of the general doctrine of contra non valentem relating to that cause of action. This assignment of error addresses the issue of whether ASP may properly assert causes of action against the Bank under Louisiana law, independent of the UCC, for conversion and negligence. In other words, ASP contends that the trial court erred in implicitly concluding that any such non-UCC causes of actions were supplanted or displaced by the UCC provisions addressing such theories of recovery. See La. R.S. 10:1-103(b).[6] The resolution of this issue directly affects whether ASP may invoke the doctrine of contra non valentem to defeat the Bank's defense of prescription relating to ASP's reimbursement claim based upon the third-party checks.
In Peak Performance, although we did not expressly invoke the "displacement" concept embodied in La. R.S. 10:l-103(b), we implicitly rejected the plaintiffs theory of recovery that the defendant bank "passively allowed" the embezzlement by the plaintiffs employee of third-party checks payable to the plaintiff. Instead, we correctly recognized its cause of action as one for conversion under La. R.S. 10:3-420. Peak Performance, 07-2206 at p. 7, 992 So.2d at 531. We emphasized in that opinion that "Louisiana follows the model of the [UCC] in characterizing the nature of the conversion action. . . ." Id., 07-2206 at p. 10, 992 So.2d at 532. Citing Pargas, Inc. v. Estate of Taylor, 416 So.2d 1358, 1364-65 (La.App. 3rd Cir.1982), we observed that "UCC provisions should be construed so that rights and liabilities of the parties, absent serious factual dispute, are ascertainable without resort to expensive and delaying litigation over each item that might be paid on an unauthorized signature or endorsement, thereby facilitating commercial transactions." Id., 07-2206 at p. 11, 992 So.2d at 533.
Nationwide, in cases involving check fraud, "a large number of courts refuse to allow any general common law claims, conversion claims, or negligence actions when not expressly authorized by the U.C.C." A. Brooke Overby, Check Fraud in the Courts After the Revisions to U.C.C. Articles 3 and 4, 57 Ala. L.Rev. 351, 391-92 (2005). (Footnotes omitted.) Any uncertainty as to the viability of such non-UCC actions "significantly raises the cost of litigation, generates unpredictable results, and can reduce incentives for corporate officers to supervise and control their employees." Id. at 397. Such uncertainty would be contrary to the UCC's goals of simplicity, clarity, and uniformity. See La. R.S. 10:l-103(a).
Given the foregoing considerations, we conclude that ASP's claims for conversion and negligence grounded in general Louisiana law outside the ambit of the UCC are displaced by the UCC. The trial court did not err in dismissing such claims in its final summary judgment based upon the pleadings and other documents properly before us in the record. However, we choose to limit our holding adopting the displacement concept of La. R.S. 10:1-103(b) to the facts of this case. In summary, any claim of ASP for conversion of third-party checks falls strictly within the purview of La. R.S. 10:3-420.
In Peak Performance, we were "squarely confronted with the threshold issue of *974 whether the doctrine [of contra non valentem] has application to the issue of prescription under La. R.S. 10:3-420(f)." Id., 07-2206 at p. 8, 992 So.2d at 532. We thoroughly examined the statutory background, the prior Louisiana jurisprudence, and relevant jurisprudence of other jurisdictions. We ultimately held that "the equitable doctrine of contra on valentem cannot be applied to suspend prescription of a cause of action for the conversion of a negotiable instrument under La. R.S. 10:3-420(f), except in the event of fraudulent concealment by the defendant asserting prescription, a limited application of the third category of contra non valentem." Id., 07-2206 at p. 11, 992 So.2d at 533. The customer in Peak Performance neither alleged nor presented evidence tending to establish any fraudulent concealment on the bank's part. It therefore failed to meet its burden of proof of suspension of prescription under the narrow contra non valentem exception.
ASP urges us to reconsider our holding in Peak Performance. We decline. The policy considerations of certainty and uniformity upon which we based our holding in Peak Performance have not changed, nor has ASP convincingly put forth any opposing considerations warranting change or modification of the holding.
In its petition and its brief on appeal, ASP does not identify the third-party checks at issue with any particularity as to date. However, as previously noted, it appears undisputed that the third-party checks at issue were identified by ASP in its answers to interrogatories as forming part of the group Bates-numbered for identification as "A0001" through "A0187." We have reviewed those documents, and it is apparent that only a portion of them actually constitute third-party checks payable to ASP. The majority of those were deposited or posted prior to December 15, 2002. As such, any causes of action relating to those checks are prescribed on their face.
Given the foregoing, the narrow issue before us with regard to the third-party checks deposited prior to December 15, 2002 is whether there is genuine issue of material fact relating to any fraudulent concealment by the Bank relating to those checks, entitling ASP to invoke the narrow contra non valentem exception of Peak Performance to defeat summary judgment.
In his affidavit, Mr. Guillot claimed that he first discovered in July 2003 that Terry Guillory had converted a third-party check for $2,500.00 payable to ASP by cashing it at Goodbee, which in turn stamped its endorsement and deposited the check into its account at the Bank. According to Mr. Guillot, within two days he discovered that approximately $16,000.00 in third-party checks payable to ASP had been cashed at Goodbee and deposited into Goodbee's account. After that discovery, Mr. Guillot "began pressing [the] Bank for information concerning not only checks drawn to [ASP] that had been deposited by [Goodbee] but [ASP's] own checks as well." At that point, according to Mr. Guillot, "the [B]ank kept stalling [his] inquiries." He attested that he had previously been told that copies of ASP's own cancelled checks were not included on its bank statements. He claimed in his affidavit that "the reason the [B]ank did not give [ASP its] checks" was "apparently to conceal the scheme."
Considering the affidavit of Mr. Guillot, the only suggestion of "fraudulent concealment" on the Bank's part relates to its alleged failure to provide copies of ASP's cancelled checks and its alleged "stalling" in producing them during some indeterminate period after July 2003. Mr. Guillot's conclusory statements in that regard are *975 insufficient to give rise to any inference of fraud or fraudulent concealment. As previously noted, allegations of time are material in factual allegations, and evidence of the time period of any fraudulent concealment by the Bank is a crucial element of ASP's burden of proof that the limited contra non valentem exception may be applicable. We agree with the Bank that ASP did not offer competent proof of any such "fraudulent concealment" by the Bank prior to the time that suit was filed. The trial court did not err in refusing to apply the limited doctrine of contra non valentem as articulated in Peak Performance. Accordingly, all claims of ASP relating to conversion of third-party checks prior to December 15, 2002 are prescribed under La. R.S. 10:3-420(f). This result applies even with regard to those checks cashed by Terry Guillory and deposited by Goodbee without any endorsements. See, e.g., Metro Elec. & Maint., Inc. v. Bank One Corp., 05-1045, pp. 6-7 (La.App. 3rd Cir.3/1/06), 924 So.2d 446, 450-51.
As to the small remainder of the identified third-party checks deposited on or after December 15, 2002, we conclude, as did the trial court, that ASP's claims related to such checks are precluded by virtue of La. R.S. 10:3-405(b), which provides:
For the purpose of determining the rights and liabilities of a person who, in good faith, pays an instrument or takes it for value or for collection, if an employer entrusted an employee with responsibility with respect to the instrument and the employee or a person acting in concert with the employee makes a fraudulent indorsement of the instrument, the indorsement is effective as the indorsement of the person to whom the instrument is payable if it is made in the name of that person. If the person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from the fraud, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.
(Emphasis added.)
Louisiana Revised Statutes 10:3-405(a)(3) provides:
"Responsibility" with respect to instruments means authority (i) to sign or indorse instruments on behalf of the employer, (ii) to process instruments received by the employer for bookkeeping purposes, for deposit to an account, or for other disposition, (iii) to prepare or process instruments for issue in the name of the employer, (iv) to supply information determining the names or addresses of payees of instruments to be issued in the name of the employer, (v) to control the disposition of instruments to be issued in the name of the employer, or (vi) to act otherwise with respect to instruments in a responsible capacity. "Responsibility" does not include authority that merely allows an employee to have access to instruments or blank or incomplete instrument forms that are being stored or transported or are part of incoming or outgoing mail, or similar access.[7]
(Emphasis added.)
Despite the Guillots' insistence that Terry Guillory was not an authorized signatory *976 for ASP's checks, the uncontradicted evidence shows that he had the apparent or implied authority to handle virtually all aspects of ASP's financial affairs while he was "running the business" in the Guillots' absence, and that while doing so he also had the "apparent control" or authority to manage and negotiate its financial instruments. In his deposition, Terry Guillory testified that he occasionally had to sign ASP checks under Mrs. Guillot's name, due to the Guillots' absence, that the Guillots were made aware of such actions, and that they ratified them after being so advised. In fact, the Guillots' own affidavits strongly suggest that Terry Guillory must have had either the actual or implied authority to endorse checks and to issue ASP checks for the purchase of money orders in order to be able to "run the business" and to "fully [control] all of the financial affairs of the business." Even if genuine issue might exist as to the extent of Terry Guillory's express or formal authority to sign or endorse checks for ASP, it is undisputed that ASP and the Guillots delegated broad and almost unlimited managerial and financial responsibility to him, plainly extending beyond mere access to business checks or business mail, and falling within the statutory definition of "responsibility."
In his affidavit filed in the record, Mr. Guillot described Terry Guillory as "like a son to [him]," and stated that he "deeply trusted" him prior to the discovery of his alleged misappropriation of ASP's funds. He confirmed that after his illnesses essentially disabled him, "Terry [Guillory] started trying to take control of the business and ran the day-to-day operations." Mr. Guillot explained that Terry Guillory "may have been the only one at [ASP they] thought near capable of doing so." He explained that although Mrs. Guillot "made an attempt to run the business" after he became disabled from doing so, she had previously performed "only minor tasks and errands for the business from time to time," and "had no idea how to manage a business or any of its affairs."
In her affidavit, Mrs. Guillot stated that she was employed by ASP, but confirmed that "[w]hile he was running [ASP], [Terry Guillory] fully controlled all of the financial affairs of the business." She confirmed her trust in Terry Guillory during her husband's illnesses, and further verified that Terry Guillory "basically took it upon himself to start running the business" and that she "had no reason to doubt his efforts to do so [and] anything to keep [her] husband's business afloat." Mrs. Guillot explained that Terry Guillory "handled all the mail of the business, including the monthly bank statements from [the Bank] and checks received from customers." She claimed, however, that she "never authorized him to sign [her] name on anything and his name was not on the signature cards at the [B]ank for [ASP.]" Although Mrs. Guillot held the position of secretary-treasurer for the business, she admitted in her affidavit that she "had no clue as to how to run any business or to handle any of the financial matters related to it."
After careful review of the record, we further note that ASP has never disputed or controverted the fact that the "money order policy" was an authorized business practice of ASP. Although it is unclear who with ASP instituted that practice, it is undisputed that Terry Guillory had the full authority, while acting as ASP's de facto manager, to handle the financial transactions necessary to keep the business operating.[8] Based upon the allegations of *977 ASP's petition, as amended, and the evidence, it is undisputed that the "money order policy" was known to and accepted by the Guillots during the time period it was in place.
ASP contends on appeal that "it is questionable as to whether the [B]ank followed its own procedures in honoring the checks and whether those procedures comply with reasonable banking standards." However, ASP does not point to specific factual circumstances upon which a conclusion that genuine issue of material fact exists on those points. The record shows that ASP did not offer any competent proof relating to the Bank's alleged failure to comply with its internal procedures, nor any proof of failure to comply with reasonable banking standards under the circumstances. See Cable Cast Magazine v. Premier Bank, Nat'l Ass'n, 98-0676, pp. 6-7 (La. App. 1st Cir.4/1/99), 729 So.2d 1165, 1168-69.
The mere fact that a forgery of a signature on a check is not detected does not prove that a bank's signature verification procedures are not in accordance with reasonable commercial standards of the banking industry. See Gulf States Section, PGA, Inc. v. Whitney Nat'l Bank of New Orleans, 96-0844, p. 9 (La.App. 4th Cir.2/12/97), 689 So.2d 638, 643. Here, ASP failed to offer competent proof that the Bank's practices failed to comport with ordinary care, or the "observance of reasonable commercial standards, prevailing in the area in which the person is located, with respect to the business in which the person is engaged." See La. R.S. 10:3-103(a)(7). The statutory definition of "ordinary care" suggests that "adherence to local business standards and practices can be equated with the exercise of ordinary care, even if those practices are not necessarily in the customer's interest." Overby, supra at 379. The excerpts from the deposition testimony of the Bank employees offered by ASP simply do not demonstrate a deviation from either the Bank's own procedures or local banking standards and practices.
The Forged ASP Checks
A person is not liable on a negotiable instrument unless that person or his agent or representative signed it. La. R.S. 10:3-401; Prestridge v. Bank of Jena, 05-545, p. 3 (La.App. 3rd Cir.3/8/06), 924 So.2d 1266, 1270, writ denied, 06-0836 (La.6/2/06), 929 So.2d 1261. Thus, the general rule is that when a bank pays on a forged check, it is liable for the amount of the check, plus legal interest from the date of judicial demand. See Marx v. Whitney Nat'l Bank, 97-3213, p. 4 (La.7/8/98), 713 So.2d 1142, 1145; Peak Performance, 07-2206 at p. 12, 992 So.2d at 533. However, there are several statutory exceptions to the general rule, and the Bank has raised them as defenses to ASP's claims relating to the ASP forged checks.
Louisiana Revised Statutes 10:4-406 provides:
(a) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer reasonably to identify the items paid. The statement of account provides sufficient information if the item is described by item number, amount, and date of payment.
*978 (b) If the items are not returned to the customer, the person retaining the items shall either retain the items or, if the items are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of seven years after receipt of the items. A customer may request an item from the bank that paid the item, and that bank must provide in a reasonable time either the item or, if the item has been destroyed or is not otherwise obtainable, a legible copy of the item.
(c) If a bank sends or makes available a statement of account or items pursuant to Subsection (a), the customer must exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item or because a purported signature by or on behalf of the customer was not authorized. If, based on the statement or items provided, the customer should reasonably have discovered the unauthorized payment, the customer must promptly notify the bank of the relevant facts.
(d) If the bank proves that the customer failed, with respect to an item, to comply with the duties imposed on the customer by Subsection (c), the customer is precluded from asserting against the bank:
(1) the customer's unauthorized signature or any alteration on the item, if the bank also proves that it suffered a loss by reason of the failure; and
(2) the customer's unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank if the payment was made before the bank received notice from the customer of the unauthorized signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding thirty days, in which to examine the item or statement of account and notify the bank.
(e) If Subsection (d) applies and the customer proves that the bank failed to exercise ordinary care in paying the item and that the failure substantially contributed to loss, the loss is allocated between the customer precluded and the bank asserting the preclusion according to the extent to which the failure of the customer to comply with Subsection (c) and the failure of the bank to exercise ordinary care contributed to the loss. If the customer proves that the bank did not pay the item in good faith, the preclusion under Subsection (d) does not apply.
(f) Without regard to care or lack of care of either the customer or the bank, a customer who does not within one year after the statement or items are made available to the customer (Subsection (a)) discover and report the customer's unauthorized signature on or any alteration on the item is precluded from asserting against the bank the unauthorized signature or alteration. If there is a preclusion under this Subsection, the payor bank may not recover for breach of warranty under R.S. 10:4-208 with respect to the unauthorized signature or alteration to which the preclusion applies.
(Emphasis added.)
In its written reasons for judgment, the trial court observed that under the foregoing provision, "[t]he [B]ank is under no duty to furnish copies of the checks with the bank statements." This is a correct statement of the law. See La. R.S. 10:4-406, Revised Uniform Commercial Code Comment, (1). As noted by one commentator:
*979 A bank is not required to send the original checks back with the statement, a practice known as truncation. . . . Rather, the statutory requirement is that a bank "shall either return or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer reasonably to identify the items paid." [Citation omitted.] Describing an item by item number, amount, and date of payment is sufficient to meet this test.
Overby, supra at 372 n. 136.
In her deposition, Mrs. Guillot testified that with regard to ASP's monthly bank statements, it was the practice from 1996 through 2003 to simply place each statement into an envelope corresponding to its month and to mail or deliver the statements to the bookkeepers maintaining the business accounting records. She admitted that after Mr. Guillot became ill, she received the bank statements, but she "never looked at them," nor did Mr. Guillot ever review them.
The affidavit of Michael Nunmaker was also filed in the record on behalf of ASP. Mr. Nunmaker attested that he "tried to assist [Mr. Guillot] as best [he] could in the Summer of 2003 when he discovered that Terry Guillory had been stealing from the business[.]" He recalled asking the Guillots for copies of ASP's bank statements, and reviewed them, noting that the statements did not include copies of the cancelled checks. According to Mr. Nunmaker, the envelope for the most recent statement available had not yet been opened, and upon opening it he observed that it did not include copies of cancelled checks. He added that Mrs. Guillot "told me that [the] Bank had not given [ASP] its cancelled checks for quite some time despite their repeated requests for the checks." As our review is de novo, we must disregard the hearsay statement of Mrs. Guillot as not within the personal knowledge of Mr. Nunmaker, the affiant.
Louisiana Revised Statutes 10:4-406(d)(2) embodies the defense known generally as the "same wrongdoer" rule. This rule "imposes on the customer the risk of loss on all subsequent forgeries by the same wrongdoer after the customer had a reasonable time to detect an initial forgery if the bank has honored subsequent forgeries prior to notice." Marx, 97-3213 at p. 6, 713 So.2d at 1146. In Marx, the supreme court found that because the plaintiff did not review and notify the defendant bank of the initial forgeries appearing in a bank statement within thirty days of receipt of that statement, he was "precluded from asserting against the bank all subsequent forgeries by the same unauthorized signatory." Id., 97-3213 at p. 7, 713 So.2d at 1147.
It is undisputed that ASP did not notify the Bank within thirty days of the first ASP forged check appearing on its bank statement in 1997. It is likewise undisputed that the claimed forgeries were all made by the same alleged wrongdoer, Terry Guillory. Once the Bank established the foregoing facts, it was incumbent upon ASP to come forward with competent evidence that the Bank failed to exercise ordinary care in honoring the checks. As previously observed, the evidence in the record relating to the Bank's practices falls short in that regard. Accordingly, we conclude that all of ASP's claims relating to the forged ASP checks are barred by application of the "same wrongdoer" rule. See Peak v. Tuscaloosa Commerce Bank, 96-1258, pp. 9-10 (La. App. 1st Cir.12/29/97), 707 So.2d 59, 64-5, and Prestridge, 05-545 at pp. 13-19, 924 So.2d at 1275-79.
In addition to the "same wrongdoer" rule, the Bank has asserted that La. *980 R.S. 10:4-406(f) precludes ASP's claims relating to the forged ASP checks. That provision provides that after a year from the date a statement is provided to the customer, all claims relating to unauthorized signatures or alterations on items in the statement are barred, regardless of the absence of exercise of ordinary care on the part of either the customer or the bank.
The deposition testimony of Mrs. Guillot and Terry Guillory in the record confirms that ASP retained a number of successive bookkeepers over the period of time at issue, to whom the monthly bank statements were delivered for review and balancing, yet ASP inexplicably failed to notify the Bank of any discrepancies relating to the items reported on its bank statements until 2003 at the earliest, when suit was filed and ASP made general allegations of those discrepancies. Even then, there is no evidence in the record that ASP ever identified the items in question with any particularity until its answers to interrogatories were served in 2007. General notice to the bank that a theft or forgery has, or might have, occurred is not sufficient notice for purposes of La. R.S. 10:4-406(f). Rather, specific notice of the particular items at issue is required. Overby, supra at 401. See also First Place Computers, Inc. v. Sec. Nat'l Bank of Omaha, 251 Neb. 485, 558 N.W.2d 57, 59-61 (1997). By 2007, ASP's claims against the Bank for the forged ASP checks were long stale under both La. R.S. 10:4-406(d)(2) and La. R.S. 10:4-406(f).[9]
As noted by one authority:
In the most extreme cases of customer negligence, it is proper as a matter of policy that the law requires customers to bear the loss. . . . [T]he most significant defense that impacts customers' ability to raise claims is section 4-406, the bank statement defense. Timely review of one's bank statements is becoming a threshold for asserting bank liability under the [UCC], a threshold that is difficult for a substantial number of customers to meet. Unless a customer reviews their bank statement within thirty days of the bank's sending it, significant losses in a continuing fraud ultimately may be borne by the customer through the "same wrongdoer" rule. Should a customer fail to review a statement within a one-year perioda seemingly not uncommon event given the recent cases that involve exactly such a failurethat failure will lead to the customer bearing the complete loss. Given the relatively low cost of performing such a review, the current judicial trend toward imposing those losses on these most negligent customers, where the basic requirements of the bank statement defense have not been met, is appropriate. In these cases, the customer is clearly in the best position to protect against many losses through the timely and adequate review of their statements.
Consider companies which delegate both the payment and review functions to one party. This creates an environment facilitating a successful long term fraud, and in fact, in some instances, it is almost a requirement for a successful corporate theft. . . . While requiring statement review involves some costs to businesses, particularly small businesses, this basic requirement is a significant measure which advances the effort to reduce the overall incidence of fraud. [Footnotes omitted.]
*981 Overby, supra at 388-89. The unfortunate circumstances of the present action fit squarely within the case scenario described above.
In summary, we conclude that none of ASP's assignments of error have merit. Summary judgment was appropriately rendered.
DECREE
The summary judgment of the trial court dismissing with prejudice the causes of action and claims of the plaintiff-appellant, ASP Enterprises, Inc., against the defendant-appellee, Parish National Bank, is affirmed. All costs of this appeal are assessed to the plaintiff-appellant.
AFFIRMED.
NOTES
[1] Parenthetically, we note that it is technically improper to incorporate written reasons for judgment in the judgment itself. See La. C.C.P. art. 1918. Such action does not, however, serve to invalidate the judgment. Country Club of La. Prop. Owners Ass'n n. Dornier, 96-0898, p. 13 (La.App. 1st Cir.2/14/97), 691 So.2d 142, 149.
[2] The filing of this motion for summary judgment was suggested by the trial court at the hearing of the prior motion for clarification on May 29, 2008. According to the transcript of the hearing, the trial court suggested that the filing of the new motion for summary judgment was necessary to address ASP's contentions that it had viable claims for conversion and negligence under non-UCC Louisiana law.
[3] ASP has not appealed that portion of the judgment of the June 11, 2008 judgment that reaffirmed the prior granting of the RICO motion and the final dismissal of the RICO claims against the Bank. Thus, the RICO claims are not before us.
[4] ASP argues that the Bank must prove its status as a "holder in due course" in order to be entitled to assert the benefit of any "safe harbor," prescription, and other defenses to ASP's claims. Acknowledging that there are no Louisiana cases supporting that position, ASP has cited the case of First State Bank & Trust Co. of Edinburg v. George, 519 S.W.2d 198 (Tex.App.1974). The cited case, however, involved the different factual situation in which the plaintiff bank sought to enforce dishonored checks for which it had given credit against the checks' drawers. In order to defeat the drawers' personal defenses relating to the checks, it was necessary for the plaintiff bank seeking to enforce the checks to invoke the status of a "holder in due course." The Bank in the present case is not seeking to enforce payment as a depository bank. Accordingly, the cited case does not support ASP's position. We agree with the Bank and amicus curiae that "holder in due course" status is irrelevant to the issues presented by ASP's causes of action.
[5] ASP contends that La. R.S. 10:3-404 governs its claims relating to third-party checks (rather than ASP checks) payable to "Goodbee Screen Printers" and other alleged fictitious payees created by Terry Guillory. The Bank emphasizes that it never raised any "fictitious payee" defense relating to any checks issued or drawn on ASP's account. Based upon our review of the language of La. R.S. 10:3-404, particularly paragraphs (b) and (d), and the related UCC Comment, we conclude that the statute's provisions have no application to the proceeds of any third-party checks to which ASP claims it was rightfully entitled. Rather, the statute would only have relevance if ASP claimed that Terry Guillory issued ASP checks to fictitious payees. While ASP might have a claim for conversion under general Louisiana law against Terry Guillory for diversion of sums actually owed to ASP by the third parties issuing the checks, any conversion claim against the Bank must fall strictly within La. R.S. 10:3-420.
[6] This statute provides: "Unless displaced by the particular provisions of this Title, the other laws of Louisiana supplement its provisions." (Emphasis added.) During the time period at issue in this matter, the present language of La. R.S. 10:1-103(b) constituted the entire text of former La. R.S. 10-1:103. The present version of La. R.S. 10:1-103 was enacted by Acts 2006, No. 533, § 1.
[7] This language tracks that of the UCC in other states. "Responsibility with respect to instruments is very broadly defined to cover most acts in a responsible capacity regarding instruments. . . ." A. Brooke Overby, Check Fraud in the Courts After the Revisions to U.C.C. Articles 3 and 4, 57 Ala. L.Rev. 351, 375 (2005).
[8] In his deposition filed in the record, Terry Guillory testified that the "money order policy" was not formally instituted by anyone on behalf of ASP, but evolved through necessity, due to a problem with ASP's checks to vendors being dishonored ("bouncing"). This testimony was not refuted by the Guillots or any other witness for ASP.
[9] Because we find that ASP's claims relating to the forged ASP checks are clearly barred under La. R.S. 10:4-406(d)(2) and 10:4-406(f), it is unnecessary for us to address the Bank's additional defense of three-year prescription under La. R.S. 10:4-111. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558925/ | 22 So.3d 538 (2009)
BOWEN
v.
STATE.
No. SC09-2024.
Supreme Court of Florida.
November 5, 2009.
Decision Without Published Opinion Vol. dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558980/ | 644 F.Supp. 707 (1986)
Pamela DAVIDSON, Personal Representative of the Estate of Clarence Davidson, Plaintiff,
v.
JOHN DEERE & COMPANY, Defendant.
No. S85-496.
United States District Court, N.D. Indiana, South Bend Division.
September 12, 1986.
*708 John D. Ulmer, Goshen, Ind., Robert H. Darling, Southfield, Mich., for plaintiff.
Robert F. Parker, Hammond, Ind., for defendant.
MEMORANDUM and ORDER
MILLER, District Judge.
I. Introduction; Jurisdiction
This matter is before the court on defendant John Deere & Company's (hereinafter "Deere") motion for summary judgment, filed on March 13, 1986 together with a supporting memorandum of law and several affidavits. On April 16, 1986, Deere filed a memorandum of supplemental authority. Plaintiff Pamela Davidson, as Personal Representative of the Estate of Clarence Davidson, filed a memorandum of law in opposition to Deere's motion for summary judgment on May 23, 1986.[1] Deere filed a memorandum of law in reply, together with an affidavit, on June 16, 1986. Ms. Davidson filed a memorandum of law in response to Deere's reply on June 23, 1986. The court heard oral arguments on Deere's motion for summary judgment on June 24, 1986. Deere filed a memorandum of supplemental authority on July 24, 1986. The court will now address Deere's motion for summary judgment.
Plaintiff Pamela Davidson, Personal Representative of the Estate of Clarence Davidson, filed this complaint in four counts: Count I is based upon a claimed violation of Indiana's products liability act, IND.CODE 33-1-1.5-1 et seq.; Count II is based upon implied warranty; Count III is based upon express warranty; and Count IV is based upon negligence, and is governed by Indiana's Comparative Fault Act, IND.CODE 34-4-33-1 et seq.
Ms. Davidson asserts that this court is vested with subject matter jurisdiction to hear her action pursuant to 28 U.S.C. section 1332, based upon diversity of citizenship of the parties and an amount in controversy in excess of $10,000.00. Her complaint, however, does not allege the state of Deere's incorporation. This appears to constitute only a technical pleading error in pleading, and Deere does not contest jurisdiction. The parties cannot create subject matter jurisdiction by consent, however, and the court accordingly directs the parties to submit proof of Deere's state of incorporation within fifteen (15) days of the entry of this order.
II. Factual Background
The record now before the court on Deere's motion for summary judgment consists of plaintiff's answers to interrogatories, depositions of various construction workers and Deere employees, several affidavits, portions of a report by an investigator for Indiana's OSHA, and a copy of the operator's manual for Deere's JD-125 skid-loader.
This action arose from a tragic incident on March 5, 1985 during the construction of a building in South Bend, Indiana. The plaintiff's decedent, Clarence Davidson, was then employed as a general supervisor for Arco Construction Company. Mr. Davidson needed to level the ground in an excavation before constructing a subfloor; he intended to use Arco's Deere JD-125 skid-loader for that purpose. The skidloader *709 is a four-wheeled vehicle with a bucket on the front which is designed to be used for grading ground. Mr. Davidson rigged the loader with cables and lowered it into the excavation using a crane. In the process of lowering the skid-loader into the excavation, a metal plate protecting the loader's foot controls became bent.
At this point, details are sketchy as no one was working with Mr. Davidson on the project to witness the events that next occurred. There is evidence that the bucket of the skid-loader was in a "down" position when the loader was first set down in the excavation. Sometime later, a worker noticed Mr. Davidson descending into the excavation with a wrench. The bucket was then elevated to a height of five feet, a position which is not totally elevated. A while later, Mr. Davidson was seen retrieving a second wrench. Mr. Davidson was thereafter found dead, under the bucket of the skid-loader which had descended upon him, delivering a fatal blow; next to his body lay the bent metal plate. A worker turned on the skid-loader, the motor of which had not been running, so that Mr. Davidson's body could be retrieved.
The parties now surmise that Mr. Davidson was attempting to remove the bent plate when the hydraulic system engaged to the left foot pedal and released the bucket into free fall onto Mr. Davidson. The skid-loader was not running at the time the accident occurred. The skid-loader was equipped with safety locks which could be manually engaged when the bucket was fully elevated; however, the parties believe that the locks were not engaged when the accident occurred as the bucket was not believed to be fully elevated and the locks, as well as the entire hydraulic bucket mechanism, worked perfectly when tested after the accident. Deere had posted warnings on the front of the skid-loader and in the owner's manual (which Mr. Davidson carried in his truck) to warn against working beneath the bucket if the locks were not engaged. The owner's manual included no directions for rigging the loader to a crane.[2]
As noted above, Ms. Davidson's complaint asserts claims founded upon strict liability, implied warranty, express warranty, and negligence.
Deere answers in denial and raises several affirmative defenses. Deere claims that Ms. Davidson's products liability claim must fail for the following reasons: the danger was open and obvious; Mr. Davidson misused the product; Mr. Davidson made material alterations and modifications to the product; Deere used the state-of-the-art in design, manufacture, inspection and warnings; and Mr. Davidson incurred the risk. Deere claims that the implied warranty claim is duplicative of the strict liability claim, and thus must fail. Deere contends that the express warranty claim must fail for want of privity of contract. Deere contends that the negligence claim must fail for two reason: (1) Mr. Davidson's negligence was a greater cause of the accident than any negligence of Deere's, and (2) Deere's negligence (if any) was not the proximate cause of the accident.
III. Summary Judgment Standard
Summary judgment is governed by Rule 56 of the Federal Rules of Civil Procedure. Summary judgment is to be entered as to all or part of a complaint when the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any, establish that (1) no genuine issue as to any material fact exists, and (2) the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, ___ U.S. ___, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., ___ U.S. ___, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita *710 Electronic Industries Co., Inc. v. Zenith Radio Corp., ___ U.S. ___, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Bartman v. Allis-Chalmers Co., 799 F.2d 311 (7th Cir., 1986). In determining whether any issue of material fact is in genuine dispute, the court must view all reasonable inferences from the record before it in the light most favorable to the non-moving party. Matsushita Electronic Industries Co., 106 S.Ct. at 1357-58; United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d (1962); Bartman v. Allis Chalmers Co., at 312; Rodeo v. Gillman, 787 F.2d 1175 (7th Cir.1986). While the non-moving party need not try its case by documents at the summary judgment stage, it must, if the moving party carries its initial burden, bring forth sufficient evidence beyond the pleadings (based on facts as would be admissible at trial) to demonstrate to the court that a genuine issue of fact as to a material element exists to warrant further fact finding. Fed.R.Civ.P. 56(e); Celotex Corp. v. Catrett, 106 S.Ct. at 2553.
The standard for granting summary judgment mirrors the standard for granting a directed verdict under Fed.R.Civ.P. 50(a), with the distinction being that the latter judgment is based on the evidence heard at trial and the former on documentation. Anderson v. Liberty Lobby, Inc., 106 S.Ct. at 2511; Celotex Corp. v. Catrett, 106 S.Ct. at 2553. The district court's function in reviewing a motion for summary judgment is not to weigh evidence to determine the truth of the matter, but only to determine if there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 106 S.Ct. at 2511. A district court should not enter summary judgment unless there is no evidence upon which a jury could properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed. Id.
IV. Applicable Law
Federal courts sitting in diversity must apply the substantive law of the state in which the court sits as if it were a state court. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). As a corollary of the Erie doctrine, a federal court applies the conflict of law rules of the state in which it sits. Day and Zimmermann v. Challoner, 423 U.S. 3, 96 S.Ct. 167, 46 L.Ed.2d 3 (1975); Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Indiana courts follow the conflict of law doctrine of lex loci delecti in tort actions. Snow v. Bayne, 449 N.E.2d 296 (Ind.App.1983); Vera Cruz v. Chesapeake & Ohio R.R. Co., 192 F.Supp. 958 (N.D.Ind. 1961). The injury giving rise to this action occurred in South Bend, Indiana; a state court in Indiana applying the doctrine of lex loci delecti would apply Indiana law. Thus, Indiana's substantive law governs this action.
V. Merits of Deere's Motion for Summary Judgment
Ms. Davidson's complaint alleges three categories of claims: products liability, warranty, and negligence. This court will address each category of claim individually.
A. Products Liability
In her products liability claim, Ms. Davidson contends that the Deere skid-loader was defective in four respects: (1) Deere provided no instruction on how to lower the machine into an excavation; (2) the skid-loader's lift-arm locks would operate only when the lift-arms and bucket were fully raised; (3) Deere provided no warning that the bucket could descend even when the engine was off; and (4) the skid-loader's controls did not lock when the engine was shut-off.
Deere responds with a series of arguments and defenses upon which it grounds its summary judgment motion. Deere maintains that the failure to instruct on lowering the skid-loader into an excavation was not the proximate cause of Mr. Davidson's death. Deere concedes that the result might differ had the skid-loader fallen from the crane as it was being moved, but disputes that the failure to warn can be *711 deemed the proximate cause of Mr. Davidson's injuries suffered as he attempted to repair damage to the machine in the face of clear warnings against the method and position he used. Deere further argues that its failure to provide lift-arm stops at any position below full height cannot be deemed the proximate cause of Mr. Davidson's death because nothing in the record before the court indicates that the lift-arms on the skid-loader in question could not be fully raised and then locked.
Deere vehemently disputes the proposition that its warnings were inadequate as to the danger posed by the lift-arms and bucket when the engine is shut off. Deere notes that the instruction manual (which, according to the deposition testimony before the court, Mr. Davidson kept in his truck) and a decal located on the front of the skid-loader in such a position that Mr. Davidson had to have seen it as he worked on the metal plate, both warned not to stand under the lift-arms and bucket unless the lift-arm locks were engaged. Deere further notes that these warnings directed that no servicing of the skid-loader should be attempted without engaging the lift-arm locks, and also directed that the engine should be turned off whenever the skid-loader was serviced. Deere deems inescapable the conclusion that these warnings adequately informed all who read them that the danger posed by raised but unlocked lift-arms remained even after the skid-loader's engine was shut off.
Deere does not concede that the failure to lock the controls when the engine is shut off constituted a "defect", but argues that any such defect, like the other defects alleged by the plaintiff, was "open and obvious". Deere maintains that it is not a reasonable inference that an experienced construction worker who has read the instruction manual would be unaware of the risk of the lift-arms and bucket falling absent the use of the lift-arm locks, even when the engine is shut off.
Deere also asserts three statutory defenses set forth in Indiana's products liability act: misuse, incurred risk, and modification. This equipment, Deere maintains, was never meant to be serviced without locking the lift-arms; in attempting such servicing, Mr. Davidson misused the product. Deere concedes that the defense of incurred risk requires a subjective analysis of what Mr. Davidson knew, but contends that, in light of the warnings, no one could have been unaware of the risk, and, accordingly, Mr. Davidson must have known of the risk. Finally, Deere maintains that Mr. Davidson's removal of the metal plate constituted a modification such as to give rise to a defense to a products liability action. Mr. Davidson was killed by virtue by his inadvertent activating of the foot petal from the outside; the metal plate that he removed was intended to prevent access to the foot controls from the outside. Accordingly, Deere concludes, the removal of the metal plate constituted a modification of its product, causing the injury.
In support of its theories, Deere presents the court with a theory of what happened in the excavation. Deere maintains that the damage to the metal plate did not interfere with the bucket's up-and-down movement. Deere relies upon the affidavit of Bryan Clark, who asserted that if sufficient foot pressure could be put upon the foot control to cause the lift-arms to raise the bucket up five feet, as plainly occurred in the excavation, continuing the same foot pressure would allow the lift-arms to proceed to the top, where they could be locked. Deere maintains that in the face of this affidavit, the Indiana OSHA report's assumption that Mr. Davidson must have been attempting to remove the plate because of difficulty in operating the bucket cannot support a reasonable inference that the bucket could not be fully raised. Deere suggests that while the damage to the metal plate did not effect the raising or lowering of the bucket, it would have impaired the ability to grade with the bucket. It is for this reason, Deere suggests, that Mr. Davidson felt it necessary to detach the metal plate. Deere further proposes that in light of Mr. Davidson's extensive use of and familiarity with the JD-125 and its operating manual, Mr. Davidson must have *712 known that the bucket could be lowered through the foot controls even with the engine off, and that he fully appreciated the risks associated with working below the bucket without engaging the lift-arm locks.
The court, however, does not find Deere's scenario conclusive. In the present action, there are generally undisputed facts from which many inferences can be drawn. Some of the inferences are favorable to Deere, and some to Ms. Davidson. As this court must view all inferences in the light most favorable to the non-moving party (here, Ms. Davidson), the court cannot draw the inferences Deere argues. That Mr. Davidson misunderstood the warning and believed that the bucket would not move when the engine was off, and accordingly believed the locks to be unnecessary, is an inference as reasonable as the inferences argued by Deere. That the bucket could have been fully elevated to where the locks could be engaged is not conclusively shown by the affidavit of Mr. Clark, who, as Ms. Davidson correctly points out, has an interest in this litigation as one of Deere's design engineers.
The Supreme Court's recent decision in Celotex Corp. v. Catrett, ___ U.S. ___, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), has caused the court concern over the sufficiency of Ms. Davidson's opposition to Deere's motion. In Celotex Corp., the Court held that, when the nonmoving party would carry the burden of proof on a disputed element at trial, the non-moving party must make an affirmative showing of the disputed element on a summary judgment contest. The non-moving party need not supply new documentation, however. The non-moving party's showing can be made on the basis of documents that are already part of the record. Id. at 2558.
When no eye-witnesses exist and neither side can demonstrate what actually occurred by anything other than circumstantial evidence, Indiana law does not warrant a directed verdict simply because the plaintiff could not prove an element of her case with direct evidence. In the present action, Ms. Davidson has submitted, by way of reasonable inferences from the documents upon which Deere relies, that sufficient evidence from which a jury could return a verdict in its favor. The burden of proof as to the defenses lies with Deere. There is authority in Indiana law for the type of showing Ms. Davidson attempts to make. In Hoffman v. E.W. Bliss Co., 448 N.E.2d 277, 285 (Ind.1983), the plaintiff had no direct evidence that his injury was caused by a "double trip" or an uninitiated spontaneous cycle of a metal punch press, but his circumstantial evidence was sufficient to create a triable issue despite the defendant's evidence tending to show that the plaintiff must have triggered the press' action. A plaintiff who produced evidence to support an inference that a baseball pitching machine had been activated by a slight vibration saw his verdict upheld in Dudley Sports Co. v. Schmitt, 151 Ind. App. 217, 279 N.E.2d 266 (1972). See also Corbin v. Coleco Industries, Inc., 748 F.2d 411 (7th Cir.1984) (plaintiff's knowledge of danger held to be genuine issue, precluding summary judgment for defendant on failure to warn claim, applying Indiana law).
The Supreme Court's holding in Celotex, by shifting the focus from the movant's showing to the non-movant's showing of evidence sufficient to preclude a directed verdict, has rendered this issue much closer than it otherwise would have been. Nonetheless, Ms. Davidson has submitted, by way of reasonable inferences from the materials before the court, evidence from which a jury could return a verdict in its favor. The burden of proof as to the defenses lies with Deere. On this basis, Deere's motion for summary judgment as to the products liability claim will be denied.
B. Warranty Claims (Counts II and III)
Ms. Davidson agrees that Count II should be stricken from the complaint in light of a recent decision of the Indiana Court of Appeals that holds that a claim of breach of a implied warranty under the *713 uniform code duplicates a strict liability/products liability claim. Thiele v. Faygo Beverage Co., 489 N.E.2d 562 (Ind.App. 1986). Thiele, read together with Corbin v. Coleco Industries, Inc., 748 F.2d at 415-16, leads this court to conclude that Counts I and II of the complaint are duplicitous. This court will dismiss Count II on this basis.
Deere moves for summary judgment as to Count III (express warranty pursuant to IND.CODE 26-1-2-313) on the basis that this cause of action sounds in contract, and that there is no privity between Mr. Davidson and his employer, Arco Construction Co., the purchaser of the skid-loader. Ms. Davidson responds by arguing that there is privity of contract between a buyer and his employees.
Ms. Davidson's argument finds no support in Indiana law. IND.CODE 26-1-2-318 provides:
A seller's warranty whether express or implied extends to any natural person who is in the family or household of his buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section.
This section would not include Mr. Davidson as a third party beneficiary of any express warranty from Deere to Arco Construction Co. Privity has not been abrogated as a requirement in contract actions for breach of warranty. Lane v. Barringer, 407 N.E.2d 1173 (Ind.App.1980). The Indiana legislature chose among the alternative forms of the Uniform Commercial Code in this matter, and any change in that rule is for the state's legislators to make. See, Corbin v. Coleco Industries, Inc., 748 F.2d at 413-415; Hixon v. Sherman-Williams Co., 671 F.2d 1005 (7th Cir.1982).
On this basis, Deere's motion for summary judgment as to Counts II and III will be granted.
C. Negligence (Count IV)
Deere contends that the negligence count should be dismissed for two reasons: (1) the fault attributable to Mr. Davidson exceeds any fault attributable to Deere; and (2) Mr. Davidson's negligence is so substantial that any fault on the part of Deere could not have been the proximate cause of the accident.
The same considerations control this argument as were applicable to the products liability claim. This court is unwilling to find on the record before it that no genuine dispute as to a material fact exists. On this basis, Deere's motion for summary judgment will be denied as it pertains to Count IV of the complaint.
VI. Conclusion and Order
The court, therefore, ORDERS that the defendant's motion for summary judgment is GRANTED IN PART and DENIED IN PART. COUNTS II and III of the complaint are now ORDERED DISMISSED. SO ORDERED.
NOTES
[1] Plaintiff's opposition memorandum was timely filed as the court had granted plaintiff an extension of time within which to file a response by order of March 21, 1986.
[2] Ms. Davidson asserts that she will produce an expert witness at trial who will testify that the skid-loader was defective in design as it did not carry the state of the art safety equipment. As Ms. Davidson has failed to document the substance of that testimony in response to Deere's motion for summary judgment, the court cannot consider such expert testimony on summary judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919677/ | 117 N.H. 57 (1977)
EDWARD NICHOLS
v.
RAYMOND HELGEMOE, WARDEN NEW HAMPSHIRE STATE PRISON STATE OF NEW HAMPSHIRE
v.
EDWARD NICHOLS
Nos. 7518 & 7519.
Supreme Court of New Hampshire.
January 31, 1977.
*58 Edward Nichols, pro se.
David H. Souter, attorney general, and Richard B. Michaud, of Concord (Mr. Michaud orally) for the state.
Stebbins & Bradley and Daniel J. Connolly of Hanover (Mr. Connolly orally) for defendant Edward Nichols.
BOIS, J.
In these appeals Edward Nichols seeks relief from his conviction for first-degree manslaughter. The first appeal involves a petition for writ of habeas corpus alleging the unconstitutionality of the provisions of RSA 651:45 III, inserted by Laws 1973, chapter 370:37, as amended by Laws 1975, chapter 244:1, regarding parole eligibility requirements. The second involves defendant Nichols' motion to set aside verdict and sentence and raises questions as to the plea proceedings, the charge to the jury, the sentence and the effectiveness of defendant's counsel. After hearing, the motion to set aside verdict and sentence was denied by the Court (Johnson, J.), and defendant's exceptions reserved and transferred. Questions raised by the habeas corpus petition were also reserved and transferred without ruling.
The victim of the homicide for which Edward Nichols was prosecuted was an elderly woman who was found in bed in her apartment, strangled to death. Evidence also indicated she might have been raped. The defendant was an acquaintance who, by his own admission to police authorities, had been visting with her *59 near the time of her death. He has always maintained that he never attacked the victim and that when he left the apartment she was in good health.
The defendant was indicted on charges of first-degree murder and first-degree murder while perpetrating rape (RSA 585:1, since repealed) and a jury trial resulted in a finding of guilt only as to the lesser-included offense of first-degree manslaughter. The substantial evidence supporting the conviction was circumstantial in nature.
The prosecution, in addition to the defendant's proximity to the crime, produced evidence that a pair of the defendant's pants was bloodstained and bore fibers matching those of the victim's bathrobe, and that after but not before the homicide defendant's face had certain scratch marks. Defendant also had made certain inculpatory remarks to his friends.
[1, 2] Defendant's initial contention is that the court should have informed him of the lesser-included offense of manslaughter at the time of his arraignment and not guilty plea. It is well established that a guilty plea constitutes a waiver of numerous constitutional rights and thus cannot be effectively entered without an intelligent understanding of the offense charged. Boykin v. Alabama, 395 U.S. 238 (1969). A plea of not guilty preserves all of the accused's rights. Defendant offers no authority for the proposition that a court must instruct as to the nature of the offense when a not guilty plea is entered, and we have found none. Moreover, at the hearing on the motion defendant's trial counsel testified to his clear recollection of pretrial discussions with the defendant as to lesser-included offenses. The defendant therefore can claim no prejudice from the alleged deficiencies at his plea proceeding.
[3] The next contention relates to sentencing. RSA 625:2 II provides that in any prosecution for an offense committed prior to the effective date of the new criminal Code "the court may, with the consent of the defendant, impose sentence under ... [the] code." The defendant argues that solely upon his election he is entitled to be sentenced under the more lenient Code provisions. The wording of the statute makes clear, however, that sentencing under the Code is in the discretion of the court. Our cases reject defendant's argument. State v. McMillan, 116 N.H. 126, 352 A.2d 702 (1976); State v. McMillan, 115 N.H. 268, 339 A.2d 21 (1975).
*60 [4] The defendant proposes that his sentence to a term of imprisonment of from twenty-five to thirty years, constituted an abuse of discretion in light of the fifteen-year maximum term authorized by the Code. RSA 651:2 II(a). The sentencing here took place prior to the effective date of the Code. The legislature clearly contemplated that pre-Code offenders could be subject to punishment under pre-Code law, and the punishment imposed, which may well have reflected the brutal nature of the homicide, was within the then existing statutory limit. State v. McMillan, 116 N.H. 126, 352 A.2d 702 (1976); State v. Belanger, 114 N.H. 616, 619, 325 A.2d 789, 791 (1974).
The defendant next argues that the trial court should have instructed the jury on second-degree manslaughter. RSA 585:9 then defined it as "[e]very killing of one human being by the act, procurement, or culpable negligence of another, which is not murder, nor excusable nor justifiable homicide, nor manslaughter of the first degree...." First-degree manslaughter, on the other hand, then encompassed manslaughter "not ... murder, nor excusable nor justifiable homicide ... perpetrated with a design to effect death...." RSA 585:8.
[5] No request for such an instruction was made to the court. However, even had such a request been made, it would have been properly refused. An instruction as to a lesser-included offense is proper only when a conviction as to the lesser offense would be compatible with the evidence at trial. State v. O'Brien, 114 N.H. 233, 317 A.2d 783 (1974). The evidence showed strangulation of the victim and the defendant attempted to prove that he had no involvement whatsoever in the circumstances of the homicide. There was no rational basis upon which the jury could conclude that the defendant had both perpetrated the homicide and yet not been guilty of at least first-degree manslaughter. See Sparf and Hansen v. United States, 156 U.S. 51 (1895); United States v. Klugman, 506 F.2d 1378 (8th Cir. 1974); State v. O'Brien supra.
Defendant's final contention is that he was not rendered the effective assistance of counsel. There are several claims of ineffective assistance but the defendant principally relies on the allegedly deficient efforts of his counsel with respect to the evidentiary use of his bloodstained pants.
There is no dispute that the torn pants found in defendant's possession after the crime belonged to him. The defendant advanced *61 two arguments by which he hoped to diminish their evidentiary relevance. One was that the stains were the innocent result of a fight between him and his girlfriend several months prior to the murder during which the defendant, wearing the pants, had received a particularly bloody gash on his head. The second was that the defendant, frustrated with the deteriorating condition of the pants, had torn them severely several days prior to the murder, making them unwearable. The girlfriend was a prosecution witness and her beneficial testimony in support of both of these alleged incidents was elicited on cross-examination. Defendant complains that there was an additional corroborative witness to each of these incidents, and that counsel failed to present this additional testimony.
At the hearing below, counsel testified that, while aware of these additional witnesses, he deliberately chose not to present their testimony. His reasons were threefold: First, the substance of the beneficial testimony had already been elicited from a prosecution witness, a factor helpful to credibility; second, the additional witnesses were friends of the defendant, and their credibility doubtful; third, there was a risk that one of the witnesses might have been forced to testify to a certain incident damaging to the defendant.
[6] It may be that the judgment of counsel was not the best course. We do not, however, sit to second-guess the tactical, informed decisions of counsel. Heath v. Vitek, 115 N.H. 200, 337 A.2d 345 (1975); State v. Fleury, 111 N.H. 294, 282 A.2d 873 (1971); Petition of Graham, 106 N.H. 545, 215 A.2d 697 (1965). It is clear from the record that the defendant was afforded able representation. Counsel achieved some measure of success, inasmuch as the state secured a conviction only on the lesser-included offense of first-degree manslaughter. In the petition for habeas corpus, the defendant contends that legislative changes in parole eligibility requirements have operated as ex post facto laws or bills of attainder. The pertinent changes are as follows: In June 1975, the legislature enacted an "Act Relative to Uniformity of Parole Eligibility Requirements for Prisoners Sentenced Prior to the Effective Date of the Criminal Code," providing generally that a pre-Code prisoner's minimum term for the purpose of determining parole eligibility would be the shorter of either his actual minimum sentence or the longest minimum sentence which could *62 have been imposed for a class A felony under the Code. Laws 1975, 244:1. Before the effective date of this statutory change (September 2, 1975), the provision was amended by RSA 651:45 (Supp. 1975) (Laws 1975, 506:1) providing an identical rule of law but excepting from its operation prisoners guilty of certain classes of pre-Code homicide, including first-degree manslaughter (the defendant's offense).
[7] Defendant argues that the latter enactment is unconstitutional because it takes away a benefit conferred by the prior enactment. This argument is devoid of any factual merit because the prior enactment was amended before its effective date, and thus never conferred any benefit. Kennelly v. Lowery, 64 Cal. App. 2d 903, 149 P.2d 476 (1944); see 2A J. Sutherland, Statutes and Statutory Construction § 33.07 (4th ed. C. Sands 1973). The defendant's eligibility for parole has remained unchanged and he has no cause for complaint. Breest v. Helgemoe, 117 N.H. 40, 369 A.2d 612 (1977).
Petition denied; exceptions overruled.
DOUGLAS, J., did not sit; the others concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559038/ | 20 So. 3d 848 (2009)
CITY OF LAKE WORTH
v.
CARSILLO.
No. SC09-27.
Supreme Court of Florida.
September 29, 2009.
Decision Without Published Opinion Review denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2396405/ | 707 S.E.2d 239 (2011)
STATE of North Carolina
v.
Clyde Milton BOYD.
No. 90P11.
Supreme Court of North Carolina.
April 7, 2011.
C. Scott Holmes, for Boyd, Clyde Milton.
D. Joseph Tanoury, Assistant Attorney General, for State of North Carolina.
Peter S. Gilchrist, III, District Attorney, for State.
*240 ORDER
Upon consideration of the petition filed on the 8th of March 2011 by Defendant in this matter for discretionary review of the decision of the North Carolina Court of Appeals pursuant to G.S. 7A-31, the following order was entered and is hereby certified to the North Carolina Court of Appeals:
"Denied by order of the Court in conference, this the 7th of April 2011." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558985/ | 644 F.Supp. 868 (1986)
R.D. SMITH & COMPANY, INC., Randall D. Smith, Sega Associates, L.P., and Randall D. Smith as trustee of the R.D. Smith & Company, Inc. Retirement Plan, Plaintiffs,
v.
PREWAY INC., James W. Egan, Wallace H. Dunbar, Francis G. Walker, Tom S. Ellis, Richard E. Johnson, D. Barry Reardon, Lawrence H. Boling, Harold E. Clark, Jr., and William Thomas, Jr., Defendants.
No. 86-C-641-C.
United States District Court, W.D. Wisconsin.
September 26, 1986.
*869 Donald K. Schott and Jeffrey B. Bartell, Quarles & Brady, Madison, Wis., for plaintiffs.
Richard Ninneman, Whyte & Hirschboeck, Milwaukee, Wis., for defendants.
ORDER
CRABB, Chief Judge.
This diversity action is before the court on the plaintiffs' motion for a preliminary injunction of both an offer made by defendant Preway, Inc. to exchange non-convertible debentures for new notes and a shareholder rights plan (referred to by plaintiffs as a "poison pill plan") adopted by Preway. Plaintiffs contend that the directors of Preway breached their fiduciary duties to the company's shareholders by adopting the debenture exchange plan and the shareholder rights plan, and that the shareholder rights plan violates the Wisconsin Business Corporation Law, Wis.Stat. § 180.12. After a hearing on September 16, 1986, I denied the plaintiffs' motion for a preliminary injunction as it related to the exchange plan and reserved judgment on the motion for a preliminary injunction as it related to the shareholder rights plan. This order relates only to the motion to enjoin the shareholder rights plan. From the uncontested proposed findings of fact submitted by plaintiffs and from additional materials submitted by the parties, I make the following findings of fact, solely for the purpose of deciding this motion.
FACTS
Plaintiff R.D. Smith & Company is a broker-dealer registered with the Securities and Exchange Commission, and is a corporation organized under New York law and doing business in New York City. Plaintiff SEGA Associates, L.P., is a New Jersey limited partnership engaged in the investment business and having its principal executive offices in Morristown, New Jersey.[1] Plaintiff Randall D. Smith is a resident of New Jersey. Smith is the sole shareholder and Chairman of R.D. Smith & Company, and is a general partner of SEGA Associates. Smith is also a participant in and the sole trustee of the R.D. Smith & Company Retirement Plan, which is the retirement plan for employees of R.D. Smith & Company and is a trust governed by the laws of the state of New York and subject to the Employee Retirement Income Security Act of 1974.
Defendant Preway, Inc. is a corporation organized under Wisconsin law with its principal place of business in Wisconsin Rapids, Wisconsin. Defendant Egan is a director of Preway and its Chairman of the Board and Chief Executive Officer. Defendant Ellis is a director of Preway and its Secretary and Treasurer. The other individual defendants are all members of Preway's Board of Directors. The individual defendants are all citizens of states other than New York and New Jersey.
Preway's common stock is publicly held, is traded on the over-the-counter market, and is regularly quoted on NASDAQ. All *870 four of the plaintiffs own stock in Preway. Plaintiff R.D. Smith & Company owns 1,073,979 shares of Preway common stock, all purchased prior to August 13, 1986. Plaintiff SEGA Associates owns 35,000 shares of Preway common stock, all purchased on or about June 13, 1986. Plaintiff Randall D. Smith, as trustee of the R.D. Smith & Company Retirement Plan, owns 15,000 shares of Preway common stock, all purchased on or about June 13, 1986. Finally, plaintiff Randall D. Smith has shared voting power over and may be deemed the beneficial owner of the common stock owned directly by R.D. Smith & Company, SEGA Associates, and the Retirement Plan.
At the annual shareholders' meeting on June 3, 1986, Preway's management proposed amendments to its Articles of Incorporation to authorize an increase in the number of authorized shares of common stock from 10 million to 40 million shares, and a simultaneous reduction in the par value of each share of common stock from $.50 to $.10. In recommending these amendments to the shareholders, management stated that it was running short of authorized shares and needed additional shares in order to continue Preway's policy of making debenture payments in the form of shares of common stock, and in order "to have additional shares available for possible acquisitions, employee benefit and incentive plans and other general corporate purposes." These amendments were passed. As of June 30, 1986, the amount of common stock outstanding totalled 7.2 million shares.
On or about July 8, 1986, plaintiffs and others filed a schedule 13G statement with the Securities and Exchange Commission. A copy of the schedule was also delivered to Preway. The schedule disclosed that the filing group collectively owned 924,479 shares of common stock, which constituted approximately 15% of the 5,860,478 shares of Preway outstanding as of March 31, 1986. At the time of the filing of the schedule 13G, Randall Smith and James Rubin, an analyst then employed by R.D. Smith & Company, both telephoned defendant Egan on behalf of R.D. Smith & Co. to inform Egan that plaintiffs had no intention of influencing the control of Preway. Smith suggested a meeting with Egan, who promised to call and fix a date when he returned from a previously scheduled trip. However, between the filing of the schedule 13G and August 13, Smith did not hear again from Egan, although Smith telephoned Egan repeatedly to schedule the meeting they had discussed. Egan never returned Smith's calls.
Together with certain additional purchases made between July 8, 1986, and August 1, 1986, plaintiffs now own 1,123,979 shares of Preway common stock. This represents an investment of over $1,871,000 and constitutes the largest holding of common stock of Preway. No other person or entity beneficially owns 5% or more of Preway's common stock. All executive officers and directors as a group beneficially own an aggregate of 310,000 shares, or 4.2% of the common stock outstanding, as of July 31, 1986.
On learning of plaintiffs' filing of the schedule 13G, Egan contacted James Schneider of Drexel Burnham Lambert Incorporated, Preway's financial advisor. Schneider suggested that Egan consult with others at Drexel and with the law firm of Skadden, Arps, Slate, Meagher & Flom. By July 24, Drexel had produced a "term sheet" outlining the proposed debenture exchange and Skadden had assembled materials on a shareholder rights plan which, Skadden suggested, "could easily be adapted to fit the Preway situation." The debenture exchange and the shareholder rights plan were adopted by the Preway Board of Directors after meetings on August 7 and 13, 1986.
The shareholder rights plan is intended to make it difficult to acquire control of Preway. The plan consists of a dividend of one right for each outstanding share of stock. Each right entitles the holder to purchase one share of common stock at a *871 fixed exercise price.[2] The rights exist for ten years unless redeemed earlier by the company.
Initially the rights are transferred with the common stock. They do not become exercisable until ten days after the occurrence of a preliminary "triggering event." Preliminary triggering events are defined as either the announcement that a person or group (an "acquiring person") has acquired beneficial ownership of 25% or more of Preway's voting stock, or the commencement of a tender offer for 30% or more of the voting stock. The rights are then exercisable, unless the company decides to redeem them, which it can do at a price of $.05 per right at any time up to twenty days after the announcement of the triggering event.
It becomes more attractive to exercise these rights upon the occurrence of a secondary triggering event that brings into action the "flip-in" or "flip-over" provisions of the plan. The flip-in provision is triggered if (1) Preway is the surviving entity in a merger with a 25% or more shareholder, (2) a person becomes the beneficial owner of more than 30% of the voting shares, (3) a 25% or more shareholder engages in a "self dealing transaction" with the company as defined in the rights agreement, or (4) a 25% shareholder's ownership interest is increased by more than 1%. Upon the occurrence of one of these events, the rights of all shareholders except the 25% shareholder flip-in to an entitlement to purchase common stock of the company with a value equal to twice the exercise price of the right. The rights of the 25% shareholder become null and void. The desired effect of the flip-in provision is to dilute the voting rights and equity of the 25% shareholder.
The flip-over provision is triggered if Preway is acquired by or merged into another company, or if 50% of Preway's assets or earning power are sold while there is a 25% shareholder. Each right then flips over into a right to purchase shares of the acquiring company equal to twice the exercise price of the right.
OPINION
In order to prevail on a motion for a preliminary injunction, the moving party must establish as a threshold matter that there is no adequate remedy at law, that there is a danger of irreparable harm, and that there is some likelihood of success on the merits. Lawson Products, Inc. v. Avnet, Inc., 782 F.2d 1429, 1433 (7th Cir. 1986). Once the movant has satisfied these threshold inquiries, "the district court must somehow balance the nature and degree of the plaintiff's injury, the likelihood of prevailing at trial, the possible injury to the defendant if the injunction is granted, and the wild card that is the `public interest.'" Ibid. The Court of Appeals for the Seventh Circuit has held that this balancing requires the district court to "compare the irreparable harm to the plaintiff if the injunction is denied, weighted by the likelihood that the denial would be erroneous because the plaintiff will prevail in the plenary trial, with the irreparable harm to the defendant if the injunction is granted, weighted by the likelihood that the grant would be erroneous because the defendant, not the plaintiff, will prevail in the trial." Dynamics Corp. of America v. CTS Corp., 794 F.2d 250, 252 (7th Cir.1986).
1. Irreparable harm
Plaintiffs contend that they will be irreparably harmed in two main ways if an injunction of the shareholder rights plan is denied. First, they contend that since the announcement of the exchange offer and the rights plan, the value of shares of Preway common stock has dropped considerably. Second, they contend that the rights plan will prevent them from attempting *872 to influence Preway management either through alliance with other Preway shareholders or through acquisition of additional shares of Preway stock.
Even if I assume for purposes of deciding this motion that Preway stock has declined in value because of the adoption of the shareholder rights plan, damages of this type would not require a preliminary injunction of the rights plan. It would be easy to calculate a decline in the value of a known number of shares of a publicly held corporation, traded in the over-the-counter market. Where damages can be measured, equitable relief is not required. Tele-Controls, Inc. v. Ford Indus., 388 F.2d 48, 50 (7th Cir.1967). In Roland Machinery Co. v. Dresser Industries, 749 F.2d 380, 386 (7th Cir.1984), the court of appeals noted some circumstances in which a damages remedy may not be appropriate, but none of these is present here. The damages would not be difficult to calculate; the plaintiffs are not likely to go out of business while waiting for this case to be decided (indeed, they do not seem to have had any difficulty financing this lawsuit); and finally, although Preway's financial condition has been shaky in the recent past, there is no reason to think that the defendants would be unable to pay a judgment against them. Accordingly, a decline in the value of Preway shares does not require an injunction against the shareholder rights plan.
The second source of irreparable injury mentioned by the plaintiffs is that the rights plan will prevent them from attempting to influence Preway management to save their investment. However, I am not able to make a finding as to exactly what actions plaintiffs wish to take that are hampered by the rights plan. In their brief, plaintiffs suggest that they may wish either to combine with other shareholders or to acquire additional shares of Preway, and in support of this have submitted a copy of a schedule 13D filed with the Securities and Exchange Commission on August 29, 1986 (Plaintiffs' exhibit no. 22). In the schedule 13D plaintiffs state that the reporting parties wish to influence Preway's Board of Directors and management, and describe their intentions as follows:
The Reporting Persons do not presently intend to acquire additional Common Shares or to seek to acquire control of the Issuer or, except as set forth above, to influence control of the Issuer. However, the Reporting Persons intend continuously to review their investment in the Issuer, the Issuer's operations, assets, financial condition and prospects and management and depending upon the outcome of the litigation described above, the actions of the Issuer, the results of such continuing review, and other factors considered relevant by the Reporting Persons, one or more of the Reporting Persons may ultimately determine to acquire additional Common Shares or to seek to acquire a majority of the Common Shares or the entire equity interest in the Issuer by means of a tender offer, merger or other business combination or to acquire control of the Issuer through the solicitation of proxies or otherwise. Accordingly, the Reporting Persons expressly reserve the right to take such courses of action or any thereof should they determine to do so in the future.
Plaintiffs' exhibit 22, pp. 10-11. I find this statement of plaintiffs' future intentions regarding Preway ambiguous as to whether plaintiffs intend to try to influence Preway.[3]
On the present record I am unable to determine whether the plaintiffs intend to take action to influence Preway. Plaintiffs themselves do not seem to have determined with any certainty what they want to do. I conclude that plaintiffs have not shown that they will be irreparably harmed if the *873 shareholder rights plan deters them from taking steps to influence Preway.
2. Likelihood of success on the merits
The irreparable harm to the plaintiffs if a preliminary injunction is denied must be weighted by the likelihood that the denial would be erroneous because the plaintiffs would prevail in the plenary trial. Dynamics Corp., 794 F.2d at 252. Accordingly, I must consider whether plaintiffs are likely to prevail on the merits of their arguments that the shareholder rights plan violates Wisconsin law and that the plan was adopted in violation of the fiduciary duty owed by the individual defendants to Preway's shareholders.
Plaintiffs' claim that the shareholder rights plan violates Wisconsin law rests on the anti-discrimination provision of Wis. Stat. § 180.12(3). This statute provides in pertinent part that "All shares of the same class shall be identical ..."[4] Plaintiffs argue that the rights plan discriminates among shareholders in three distinct ways. First, plaintiffs argue that the plan discriminates between a shareholder or shareholders who come to constitute an "acquiring person" and other shareholders. This discrimination occurs when the flip-in provision of the rights plan is triggered and all shareholders except the acquiring person may exercise their rights to purchase additional shares. In contrast, the acquiring person loses his or her right to purchase additional shares. Second, the plan discriminates against acquiring persons by paying shareholders a "dividend" consisting of special rights that the acquiring persons is not able to exercise. Finally, the plan discriminates among different shareholders who may make tender offers because in any given situation the Preway board of directors can decide whether to redeem the shareholders' purchase rights.
Plaintiffs rely mainly on Amalgamated Sugar v. NL Industries, 644 F.Supp. 1229, (S.D.N.Y.1986), in which the district court granted a preliminary injunction of a shareholder rights plan based upon New Jersey corporations law. I find Amalgamated Sugar helpful authority; the rights plan at issue in that case is similar to Preway's, and New Jersey law is similar to Wisconsin's. Defendants point to the fact that the district court did not follow a number of Delaware decisions, but in my view, the court adequately distinguished those cases based on the provisions of the rights plan before it. Defendants argue also that Wisconsin law differs from New Jersey's, in that Wis. Stat. § 180.25(9) expresses a Wisconsin legislative decision to allow discrimination among shareholders of the same class of the sort held impermissible in Amalgamated Sugar. I disagree, for reasons I will discuss more fully later in this opinion. Finally, the defendants attempt to distinguish Amalgamated Sugar factually because the rights plan in that case had already been triggered, while the plan here has not been and is not in imminent risk of being triggered. I agree that this is an important distinction, but one that goes to the lack of irreparable harm shown by the plaintiffs here, rather than to the issue of the legality of the rights plan under Wisconsin law.
The rights plan in Amalgamated Sugar contained provisions substantially similar to those of Preway's plan. It was enjoined mainly because of a flip-in provision which, like the flip-in provision of Preway's plan, had the effect of diluting an acquiring person's equity and voting rights upon the occurrence of two triggering events. The district court held the rights plan, and the flip-in provision in particular, ultra vires as a matter of New Jersey Business Corporation law.
The New Jersey law on which the district court relied, section 14A: 7-1 and 7-2 of the New Jersey Business Corporation Act, *874 permits differences in voting rights between classes or series of stock, but does not allow discrimination among shareholders of the same class and series. Thus, it is similar to Wis.Stat. § 180.12. The defendants in Amalgamated Sugar, like defendants here, argued that they were authorized to issue the discriminatory rights because of statutes authorizing corporations to issue rights to purchase shares of stock from the corporation.[5] I find this argument no more persuasive than did the district judge in Amalgamated Sugar, who stated:
I do not accept such a broad reading of 14A:7-7. Such a reading would allow the boards of directors of corporations to circumvent the provisions of 14A:7-1 [the anti-discrimination provision]. It is axiomatic that one cannot read a statute to accomplish an end that is impermissible under another section of the statute.
644 F.Supp. at 1236. In addition to holding that the flip-in provision effected a discrimination among shareholders, the district judge expressed concern that issuance of the rights in the form of a dividend was a separate source of unlawful discrimination against a 20% or more shareholder. This concern applies as well to the Preway plan.
Defendants make a number of additional arguments why the Preway rights plan is valid under Wisconsin law. First, they argue that a rights plan substantially similar to the Preway plan was held valid under Wisconsin law in APL Corp. v. Johnson Controls, No. 85 Civ. 990, slip op. (E.D. N.Y. March 25, 1985). However, I am not convinced that APL is helpful authority. In APL, the district court did not describe the Johnson Controls rights plan in sufficient detail to allow a determination whether it was similar to Preway's plan. In particular, it is not clear whether the rights plan in APL had the same discriminatory effect that the Preway plan has. Also, it appears that the district court looked at Wisconsin law only to determine whether a merger agreement was valid, not to determine whether the rights plan was valid. The challenge to the validity of the rights plan was made under "basic principles of state corporation law," rather than specifically under Wisconsin law. Even if the district court was construing Wisconsin law in denying the motion for a preliminary injunction of the rights plan, the court's reasoning on this point is set forth in a brief and conclusory fashion, and I find it less persuasive than the carefully reasoned opinion in Amalgamated Sugar.
Defendants argue next that the Wisconsin legislature has recently indicated its support of corporate methods like rights plans intended to prevent unfair and abusive takeover tactics by enacting Wis.Stat. § 180.25(9). § 180.25(9)(a) provides that under some circumstances the voting power of a 20% or more shareholder can be limited to 10% of the voting power of his or her shares.[6] I do not find in § 180.25(9) a *875 broad statement in favor of discrimination among shareholders as an anti-takeover policy. Defendants make no reference in their brief to subsection (b) of § 180.25(9), which provides a number of exceptions to (9)(a), some of which may be applicable in this case. It is not necessary to construe § 180.25(9), since at present I need only to estimate the likelihood that plaintiffs will succeed on the merits of their claim. However, even if I were to decide that § 180.25(9) applies to the plaintiffs in this case, it is not clear that it would authorize the Preway rights plan, which goes beyond § 180.25(9) by eliminating entirely the rights of an acquiring person granted under the plan. Therefore, I conclude that § 180.25(9) does not appreciably lessen plaintiffs' likelihood of success on the merits.
Defendants' remaining arguments concerning the legality of the rights plan under § 180.12 are not persuasive. Defendants argue that § 180.12 is addressed to authorized restrictions on stock and does not extend to the issuance of rights. Since one right is to be issued for each outstanding share of stock, to be exercised by the holder of that share of stock (provided he or she is not an acquiring person), the rights are intimately connected with the equality (or lack of equality) among the shareholders. The defendants argue also that the rights plan creates discrimination among shareholders rather than shares of stock, and that § 180.12 is aimed only at discrimination among shares of stock. I have difficulty following this argument, and even more difficulty imagining that the legislature would have limited its concern to the treatment of stock rather than the treatment of shareholders.
I conclude that plaintiffs have a good chance of succeeding on the merits of their claim that Preway's rights plan violates the Wisconsin Business Corporation Law.
In addition to attacking the legality of the rights plan under Wis.Stat. § 180.12(3), plaintiffs argue that adoption of the plan by Preway's board of directors was a breach of the fiduciary duties owed by the board to the company's shareholders. This issue requires examination of the process by which the directors adopted the rights plan. For purposes of deciding this motion, I assume that plaintiffs will be able to prove at trial the following facts that they allege as a basis for the claim.
Plaintiffs contend that the defendants had no reason to believe that the plaintiffs' investment in Preway posed a threat to control of the company. Plaintiffs allege that they wished to avoid taking Preway management by surprise and having their intentions misconstrued as being hostile, and that therefore Randall Smith and Jim Rubin of R.D. Smith & Company each telephoned defendant Egan to assure him that the plaintiffs did not intend to seek control of Preway. Instead of being reassured, Egan immediately contacted Drexel and *876 Skadden and began planning to take defensive measure, including the formulation of the rights plan.
Plaintiffs also challenge the adequacy of the Preway board's consideration of the rights plan. Plaintiffs allege that the directors were first informed by Egan that the rights plan would be discussed at their August 7th meeting by a letter of July 29th. Representatives of Drexel and Skadden were present at the August 7th meeting to explain the rights plan to the board. Plaintiffs allege that the rights plan was presented to the directors as a finished product, rather than as one alternative for them to consider in deciding how to deal with the perceived threat. Plaintiffs allege that consideration of the rights plan was spread over two meetings (August 7th and 13th) only as a sham, "to bolster a claim of business judgment for any subsequent litigation." Plaintiffs characterize the separate August 13th meeting of the independent directors as "a ceremonial 5-10 minute meeting ... held to avoid the `perception' `that the directors were taking this action in a self serving manner,'" after which the directors voted for adoption of the rights plan.
Wisconsin courts do not seem to have considered the standard of care by which the actions of a board of directors adopting a shareholder rights plan shall be judged. However, I have guidance from recent decisions of the United States District Court for the Northern District of Illinois and the Court of Appeals for the Seventh Circuit in Dynamics Corp. of America v. CTS Corp., and in particular the district court's opinion of May 3, 1986, reported in Fed.Sec.L.Rep. (CCH) ¶ 92,743 [Available on WESTLAW, DCTU database], and the Seventh Circuit opinion of May 28, 1986, reported at 794 F.2d 250. Dynamics arose under Indiana law, but was decided based on principles of Delaware law since "... Indiana takes its cues in matters of corporation law from the Delaware courts, which are more experienced in such matters since such a large fraction of major corporations is incorporated in Delaware and such a small fraction in Indiana." 794 F.2d at 253. Given the lack of Wisconsin law on point, seeking guidance from the decisions of other jurisdictions is also appropriate here.
Dynamics is particularly helpful authority because it involves two different rights plans. The first rights plan was enjoined preliminarily by the district court on April 17, 1986, the district court's injunction was upheld by the Court of Appeals for the Seventh Circuit in its May 28 decision. The Dynamics defendants then adopted another rights plan, using the district court's April 17 order as a guide. This second rights plan was upheld in the district court's May 3rd order denying the plaintiff's motion for a preliminary injunction of the second plan. Taken together, the opinions in Dynamics help delineate the essential factors of a permissible rights plan.
In Dynamics the district court summarized the legal standard governing a corporate board of directors which adopts defensive mechanisms in response to a takeover threat as follows:
... the directors are under an initial burden to show that they exercised good faith and reasonable investigation in determining whether a danger to corporate policy exists, and to show that the defensive mechanism was reasonable in relation to the threat posed. Once the directors satisfy this burden, however, their actions are entitled to the presumptions of the business judgment rule, and a shareholder who challenges their actions must show that the primary purpose of the defensive mechanism was entrenchment.
Fed.Sec.L.Rep. at 93,618. The district court found that the second rights plan adopted by the defendants in Dynamics satisfied the standard of good faith and reasonable investigation. The district court found particularly important certain of the steps defendants took after the initial order enjoining the first rights plan. The directors appointed a special committee of outside directors to analyze the situation in order to minimize the conflict of interest inherent in a board of directors' adoption of *877 defensive measures. This committee obtained separate counsel.[7] The board required further investment and legal advice before taking any firm actions. The directors studied the district court's earlier decision carefully in an attempt to avoid constructing a plan that would interfere with an ongoing proxy context and partial tender offer. The special committee concluded that shareholders other than the plaintiff would be likely to maximize the value of their shares if the company was sold and if the minority shareholders were protected by a carefully tailored rights plan. Finally, the rights plan did not insulate management from all hostile offers, since the rights issued under the plan expressly expired upon tender of a sufficiently high offer. Based on these facts, the district court denied the motion to enjoin the second rights plan.
The defendants in this case have not made as good a showing of good faith and reasonable investigation. It may be that a special committee of the outside directors of Preway with separate counsel is not essential, since seven of the nine Preway directors are outside directors. But it is necessary that the board have considered carefully the threat that they were faced with and the appropriate response. If plaintiffs are able to prove their allegations that the board's consideration of alternatives was merely perfunctory, this would mean that defendants did not meet their duty of good faith and reasonable investigation.
The defendants also have the burden of showing that the rights plan was a reasonable response in relation to the threat posed. This means that they must show not only that they had a reasonable basis for perceiving a threat to the company's shareholders, but also that the plan they adopted was a reasonable response to that threat. Plaintiffs have argued that the defendants' only basis for perceiving a threat was the telephone calls from Smith and Rubin stating that they were not going to try to take control of the company. Defendants argue that they had reason to believe that Preway's common stock was substantially undervalued in the market, and that consequently the company was vulnerable to corporate raiders. Defendants contend that after plaintiffs filed their schedule 13G Preway began to seek defensive strategies, and that it was explained to the directors at their August 7 meeting that plaintiffs' block of Preway stock posed a threat to Preway shareholders regardless of plaintiffs' intentions because the block could be sold to someone who was interested in attempting to gain control of Preway. I am not able to determine on this record whether the directors had a reasonable basis for perceiving a threat to Preway.
It is not clear to me at this point how restrictive the Preway rights plan is of actions that might be taken to influence the management or to take over the company. This issue is important, because it is clear that a rights plan cannot be so restrictive as to preclude any possibility of a hostile takeover. 794 F.2d at 259. At the September 16 hearing on the motion for a preliminary injunction, counsel discussed the question whether the Preway rights plan would be triggered by a group of shareholders whose aggregate holdings were 25% or more of the outstanding shares getting together for proxy purposes, and they have expanded on that discussion in correspondence received since then. Plaintiffs contend that such an event would trigger the rights plan. Defendants contend that it would not. Since it appears that reasonable people can differ about whether the Preway plan would be triggered by shareholders organizing together for a proxy contest, it seems possible that the plan could deter all such contests and that it may therefore be overbroad.
Since it is not clear that defendants have met the standard of good faith and reasonable *878 investigation in adopting the rights plan, or that the plan was a reasonable response to the threat, I find that plaintiffs have a good chance of succeeding on their claim that the directors violated their fiduciary duties to the shareholders.
I conclude that plaintiffs are likely to succeed on both of their claims relating to the shareholder rights plan. However, since plaintiffs have not shown that they will suffer irreparable harm if their motion for an injunction of the rights plan is denied, the plaintiffs' side of the scale does not weigh heavily. Against the plaintiffs' side I must balance the irreparable harm to the defendants if the injunction is granted, weighted by the likelihood that the grant would be erroneous because the defendants will prevail at trial.
The defendants argue that the balance of hardships tips in their favor because of "the significance of the protection afforded Preway stockholders by the Rights Plan." This argument is inconsistent with the defendants' argument that plaintiffs have not shown irreparable harm if the injunction is denied because neither plaintiffs nor any other known person intends to try to take control of Preway. If in fact as defendants state "there is no acquirer to be deterred," then the protection of the rights plan is unnecessary and a preliminary injunction of it would not harm defendants irreparably. Since I have found that plaintiffs are likely to prevail on the merits of their arguments, this factor does not add any weight to defendants' side.
Although plaintiffs may ultimately succeed on the merits, the lack of any irreparable harm to them if their motion for a preliminary injunction is denied convinces me that equitable relief at this stage is unnecessary.
ORDER
IT IS ORDERED that plaintiffs' motion for a preliminary injunction of the Preway shareholder rights plan is DENIED.
NOTES
[1] For purposes of diversity jurisdiction, partnerships are citizens of the states where their partners reside. Stockman v. LaCroix, 790 F.2d 584, 587 (7th Cir.1986). At present all that I know about the residences of the partners of SEGA is that one general partner, Randall D. Smith, is a New Jersey resident. During a discussion of this question at the hearing, no one suggested that the partnership had any partners who were not residents of New Jersey or New York. For purposes of this motion I will assume that diversity is complete, but reserve the issue for future determination.
[2] The fixed exercise price is $6.75 per share, which is about 3 times the market price of Preway stock at the time the plan was adopted. The plaintiffs argue that the price was set high so that no rational shareholder would exercise his or her rights on the first triggering event. The defendants contend that the price was intended to approximate the perceived long term value of Preway.
[3] In their brief, defendants state that Randall Smith testified at his deposition on September 9, 1986 that he has no present intention of effecting a change of control or influencing control over Preway. Although defendants cite to specific pages of Smith's deposition, they have not provided me with copies of these pages.
[4] Wis.Stat. § 180.12(3) goes on to provide, "... except as to the following relative rights and preferences, as to which there may be variations between different series ...". However, since Preway has only one class of common stock, not divided into series, this part of the statute is not applicable.
[5] The defendants in Amalgamated Sugar argued that section 14A:7-7 of the New Jersey Business Corporation Law, which authorizes corporations to issue rights to purchase shares of stock from the corporation "for such consideration, and upon such terms and conditions as may be fixed by the board," permitted them to issue such rights with discriminatory conditions. Similarly, the Preway defendants argue that Wis.Stat. § 180.55, which also authorizes corporations to issue rights to purchase shares of stock from the corporation, authorizes them to issue the rights in question here.
[6] In pertinent part, Wis.Stat. § 180.25(a) provides:
(9)(a) Unless otherwise provided in the articles of incorporation of an issuing public corporation and except as provided in par. (b) or as restored under par. (d), the voting power of shares of an issuing public corporation held by any person, including shares issuable upon conversion of convertible securities or upon exercise of options or warrants, in excess of 20% of the voting power in the election of directors shall be limited to 10% of the full voting power of those shares. In this subsection, "person" includes 2 or more individuals or persons acting as a group for the purpose of acquiring or holding securities of an issuing public corporation, but does not include a bank, broker, nominee, trustee or other person that acquires or holds shares in the ordinary course of business for others in good faith and not for the purpose of avoiding this subsection unless the person may exercise or direct the exercise of votes with respect to the shares at a meeting of shareholders without further instruction from another.
(b) Shares of an issuing public corporation held, acquired or to be acquired in any of the following circumstances are excluded from the application of this subsection:
1. Shares acquired before April 22, 1986.
2. Shares acquired under an agreement entered into before April 22, 1986.
3. Shares acquired by a donee under an inter vivos gift not made to avoid this subsection or by a distributee as defined in s. 851.07.
4. Shares acquired under a collateral pledge or security agreement, or similar instrument, not created to avoid this subsection.
5. Shares acquired under s. 180.62, 180.63, 180.68 or 180.685 if the issuing public corporation is a party to the merger or consolidation.
6. Shares acquired from the issuing public corporation.
7. Shares acquired under an agreement entered into at a time when the issuing public corporation was not an issuing public corporation.
8. Shares acquired of the capital stock of a state bank or trust company if the acquisition is subject to a shareholder vote under s. 180.04(6).
9. Shares acquired in a transaction incident to which the shareholders of the issuing public corporation have voted under par. (d) to approve the person's resolution delivered under par. (c) to restore the full voting power of all of that person's shares.
[7] I note that the outside directors' committee had as counsel the firm of Skadden, Arps, Slate, Meagher & Flom. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558987/ | 644 F.Supp. 1116 (1986)
Genevieve MINOR, Plaintiff,
v.
Otis R. BOWEN, Secretary of Health and Human Services, Defendant.[1]
No. CIV-84-1242E.
United States District Court, W.D. New York.
October 8, 1986.
*1117 William W. Berry, Buffalo, N.Y., for plaintiff.
*1118 Roger P. Williams, U.S. Atty., Buffalo, N.Y., for defendant.
MEMORANDUM and ORDER
ELFVIN, District Judge.
The plaintiff originally brought this action before the Court pursuant to 42 U.S.C. § 405(g) and 42 U.S.C. § 1395ff(b) seeking judicial review of a final decision of the Secretary of the Department of Health and Human Services ("the Secretary") denying Medicare Hospital Insurance benefits on behalf of her husband, who now is deceased. The defendant, upon information that the cassette tape of the plaintiff's hearing before the Administrative Law Judge could not be located, moved to remand the case to the Secretary, pursuant to sections 205(g) and 1631(c)(3) of the Social Security Act, 42 U.S.C. § 405(g) and § 1383(c)(3). The purpose of the remand was to enable the Secretary to conduct a de novo hearing to reconstruct the record for judicial review. The plaintiff filed a crossmotion for denial of the motion to remand or, in the alternative, for the imposition of conditions on the remand. Those conditions were, first, that the new hearing be held within thirty (30) days and, second, that the defendant pay the Medicare benefits at issue pending the final determination of the appeal. This Court remanded the case to the Secretary for a de novo hearing with the condition that the new hearing be held within thirty (30) days from the entry of the order of remand.
The plaintiff now brings this motion for the award of attorney's fees and costs. Relief has been requested for three items: (1) $400 for attorney's fees for the rehearing; (2) $200 for the cost of acquiring a second physician's report, necessary for the rehearing; and (3) $300 for attorney's fees for the preparation and hearing on the cross-motion opposing the remand.
The plaintiff requests the first two items be awarded as a sanction against the defendant for losing the tape of the administrative hearing. While this Court may deplore the carelessness or inefficiency of the Secretary in this matter there is no basis in law for the remedy requested. These expenses were incurred in connection with the rehearing conducted by the administrative body. The Equal Access to Justice Act ("the EAJA"), 28 U.S.C. § 2412(d), provides neither for the awarding of compensation for legal services performed at the administrative level nor for the imposition of sanctions in the event of administrative error. The case law cannot support this attempt to impose sanctions on the Department of Health and Human Services in this instance. For example, there has been no breach of the requirements of the Federal Rules of Civil Procedure that would justify the imposition of sanctions against the defendant. See Morton v. Heckler, 586 F.Supp. 110, 113 (W.D.N.Y. 1984).
The Secretary bears the procedural burden to provide the transcript of the administrative record as part of the answer. 42 U.S.C. § 405(g). In this case, the Secretary, upon notice of the missing tape, moved to remand to the administrative body so that the record could be reconstructed and his procedural burden met. This response was reasonable and was executed in timely fashion. There has been no failure to comply with court procedures or court orders. There is, therefore, no basis on which to impose sanctions. See Giampaoli v. Califano, 628 F.2d 1190 (9th Cir. 1980).
The plaintiff's third request is for $300 for attorney's fees incurred in the preparation for and appearance at the hearing in this Court opposing the motion for remand. The plaintiff requests this relief pursuant to the EAJA which provides, in its relevant part, 28 U.S.C. § 2412(d)(1)(A):
"Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United *1119 States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust."
The designation of one as a "prevailing party" is not limited to the "victor after entry of a final judgment following a full trial on the merits." 1980 U.S.Code Cong. & Ad.News 4953, 4990. However, in this circuit it is held that one is not a prevailing party unless there has been some favorable determination on the merits. McGill v. Secretary of Health & Human Services, 712 F.2d 28 (2d Cir.1983), cert. denied, 465 U.S. 1068, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984). Though a party does not have to have been awarded the ultimate relief sought to be considered the "prevailing party", "fee awards are appropriate only where `a party * * * has established his entitlement to some relief on the merits of his claims.'" Id. at 31, (quoting from Hanrahan v. Hampton, 446 U.S. 754, 756-757, 100 S.Ct. 1987, 1988-1989, 64 L.Ed.2d 670 (1980) (per curiam)).
In the instant case, the plaintiff was seeking an award of Medicare benefits. No determination on the merits of this claim was made by this Court when the remand was ordered or thereafter pursuant to the remand. The issuance of the remand was solely for the purpose of reconstructing the administrative record. The imposition of the plaintiff's requested condition upon the remand that the de novo hearing be held within thirty (30) days cannot be construed as a "determination on the merits" or even as an "interim order which was central to the case." See Parker v. Matthews, 411 F.Supp. 1059 (D.D.C.1976). Therefore, the plaintiff cannot be considered a "prevailing party" and the request for attorney's fees must fail.
For the foregoing reasons, plaintiff's motion for attorney's fees and costs is hereby ORDERED denied without prejudice.
NOTES
[1] The designation of the defendant has been changed pursuant to 28 U.S.C. § 25(d). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559005/ | 644 F.Supp. 1033 (1986)
Joanne BIMBO, Plaintiff,
v.
BURDETTE TOMLIN MEMORIAL HOSPITAL, Defendant.
Civ. A. No. 83-0793.
United States District Court, D. New Jersey.
October 2, 1986.
*1034 Schwartz & Fioretti by Stacey L. Schwartz, Cherry Hill, N.J. and Kohn, Savett, Marion & Graf, P.C. by David H. Weinstein, William Lytton, Philadelphia, Pa., for plaintiff.
Horn, Kaplan, Goldberg, Gorny & Daniels, P.C. by William M. Honan, Atlantic City, N.J., and Valore, McAllister, Westmoreland, Gould, Vesper & Schwartz by Nina Chase, Northfield, N.J., for defendant.
COHEN, Senior District Judge:
Plaintiff, Joanne Bimbo, a registered nurse, instituted this civil rights action pursuant to Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e et seq, alleging retaliatory treatment by her former employer, Burdette Tomlin Memorial Hospital, Cape May Court House, New Jersey, ("BTMH" or "the Hospital") for her opposition to practices she perceived to be unlawful discrimination. In addition, plaintiff asserts pendant state law claims, alleging breach of contract and wrongful discharge.[1] She seeks compensatory damages, back pay, and reinstatement.
*1035 The record in the case was supplemented, by stipulation of counsel, see transcript of July 31, 1986 at pp. 10-11, with the record of the nine-week jury trial in Nanavati v. Burdette Tomlin Memorial Hospital, et al, Civil Action Nos. 83-0794 & 84-1790 (hereinafter "Nanavati trial"), in which Ms. Bimbo testified on behalf of Dr. Suketu Nanavati. In lieu of specific findings of fact and conclusions of law, we issue this opinion pursuant to Federal Rule of Civil Procedure 52(a).
Plaintiff was employed by BTMH in its nursing department from July, 1972 until March 18, 1982. She served as Head Nurse of the hospital's intensive care unit ("ICU") for five years, from February 1, 1977 until February 18, 1982, at which time she was demoted from ICU Head Nurse to staff nurse. Plaintiff was informed, at the time of her demotion, that she could not serve as a staff nurse in the ICU but that she could do so in any other department in the Hospital. Immediately thereafter, plaintiff left BTMH on a previously-planned vacation. While on vacation, she tendered her resignation, informing Ms. Teresa Karter, BTMH's Directress of Nursing at that time, that she would not be returning to BTMH because her demotion made such a return untenable. Exhibit 5014.
On June 8, 1982, plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), alleging that she had been demoted in retaliation for her support of a minority physician, Dr. Suketu H. Nanavati. See plaintiff's Exhibit 6016. Dr. Nanavati, a board-certified cardiologist and a native of Ahmedabad, India, became a member of the BTMH Medical Staff in March, 1979. Shortly thereafter, a personal and professional feud erupted a feud ignited by Dr. Nanavati's reference to Dr. Sorenson, in the presence of the entire BTMH Medical Staff, as "inferiorily qualified"between Dr. Nanavati and Dr. Robert J. Sorenson, the Chief of Cardiology at BTMH.[2] At a fairly early stage in this feud, see transcript of Nanavati trial, May 22, 1986 at pp. 49-50, Dr. Sorenson orally accused plaintiff and other nurses present in the ICU of being "Indian lovers," an outburst for which he subsequently apologized to only one of the nurses, which apology, it may be assumed, was related to the other nurses. At some point thereafter, plaintiff, having received, apparently by virtue of her position as Head Nurse of the ICU, as did other Head Nurses and Departmental heads, copies of correspondence from various persons, including Dr. Sorenson, complaining about Dr. Nanavati, wrote a letter to Dr. Marvin Podolnick, the Chief of the hospital's Medical Staff. That letter, dated January 9, 1982 but which was apparently not actually mailed until approximately the third week of January, see transcript of Nanavati trial, May 22, 1982 at p. 56, reads as follows:
This letter is written in response to several letters I have received copies of over the past months. They concern an incident involving Dr. Suketu H. Nanavati and a Monitor Bed Unit staff member.
First, let me say that in 9 years of employment at Burdette Tomlin Hospital I've never found myself involved in something so unprofessional. Secondly, I don't feel I should have received copies of these letters frankly, it was none of my business. However, an issue does concern me very much it seems to me that emotions are taking precedent over our actual purpose, that is to provide the highest quality of patient care possible to the people of Cape May County.
The ICU staff recently held our monthly "staff" meeting where this issue was discussed. We discussed the main issue of the prior mentioned letters. The differences Dr. Nanavati may have with some of the MBU staff is again, frankly, none of our business. I must add a *1036 personal note here. I have known Dr. Nanavati since he came to Burdette Tomlin about 3 years ago. I have always felt I have an excellent working relationship with all members of the medical staff, here at Burdette. Dr. Nanavati has been no exception. Intensive care usually provides an environment of constant stress, emergencies, grief and grieving, and the need for a vast array of knowledge for quick problem solving for a staff member there. Dr. Nanavati has always been supportive of the ICU staff. He is always eager to teach and answer questions (sic) we may have regarding care of our patients.
In my opinion, his patients get the most optimum medical care. I have gone on ambulance runs with his critical patients to other institutions where his diagnosis and care of the patient while at Burdette was met with the highest regard by the physicians there. I nor any of my staff members in ICU have ever been chastised nor ridiculed by Dr. Nanavati. I feel this is important to write since there seems to be so much negativism about Dr. Nanavati lately.
I sincerely hope my feelings will be respected. May I add that the rest of my staff feels this way also.
Lastly, I sincerely hope a professional and healthy solution comes of all this for everyones' well-being.
Within a month of sending this letter, plaintiff was informed, at her annual performance evaluation, that she was being removed from her position as Head Nurse of ICU. See transcript of Nanavati trial, May 22, 1986 at pp. 59-67.
The reasons given to plaintiff for her demotion included: excessive lateness, failure to attend Head Nurse Workshops or tardiness in attendance, failure to expedite transfers of patients to and from the ICU, failure to attend staff scheduling workshops, and failure to timely submit nursing staff schedules. Plaintiff asserts, in her present action, that these reasons were merely a pretext for demoting her. She maintains that the true reason for the Hospital's decision to demote her was her support of Dr. Nanavati, as evidenced by her January 9, 1982 letter and her sustained cooperative working relationship with him. See plaintiff's reply summation at p. 4. She further contends that the decision to demote her, and the repercussions of that decision, amounted to a constructive discharge because such decision rendered working conditions at BTMH so intolerable that a reasonable employee would have been forced to resign. Such a discharge, plaintiff argues, was either in retaliation for her support of Dr. Nanavati, as a minority, in violation of Title VII of the 1964 Civil Rights Act, or for her support of Dr. Nanavati as a person against whom the Hospital was committing allegedly illegal or improper acts, in contravention of state law. Finally, plaintiff urges that the procedures employed in effectuating her demotion, irrespective of the true reasons therefor, ran afoul of an implied employment contract she held with the Hospital. We shall consider each of plaintiff's contentions in turn.
Retaliatory Treatment for Opposition to Unlawful Discrimination
Plaintiff's federal claim is one for protection against retaliation for opposition to unlawful discrimination, pursuant to § 704(a) of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-3(a). This statute provides, in pertinent part:
It shall be an unlawful employment practice for an employer to discriminate against any of his employees ... because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted or participated in any manner in an investigation, proceeding or hearing under this subchapter.
In order to prevail on an action pursuant to this section, the plaintiff must establish three elements. First, she must show that she engaged in some statutorily protected opposition to discrimination; second, that there was some adverse employment action; *1037 and finally, that there was a causal connection between her opposition and the adverse employment action. E.g., Grant v. Bethlehem Steel Corp., 622 F.2d 43, 46 (2d Cir.1980). See generally B. Schlei & P. Grossman, Employment Discrimination Law 533, 534 (2d ed. 1983). Because we find that there was no causal connection between plaintiff's opposition to whatever practices or actions she perceived as discriminatory and her demotion, we shall enter judgment in favor of the defendant, BTMH, on plaintiff's Title VII claim.[3]
The sole item of proof supporting plaintiff's allegation that her demotion was caused by her opposition to unlawful discrimination is the timing of the letter she wrote to Dr. Podolnick in relation to the date of her discharge. Although, of course, a preliminary inference of causation can be drawn from the fact that Ms. Bimbo's demotion occurred shortly after she sent the January 9 letter, this inference was unequivocally overcome in this case by the defendant's proof of a legitimate non-discriminatory reason for its action. The submitted proofs included highly credible testimony by both the former Directress of Nursing, who had actually made the decision to demote plaintiff, Ms. Karter, and the Associate Directress of Nursing at BTMH, Ms. Doris Baker. These witnesses testified, inter alia, that the reasons given to plaintiff for her demotion were in fact problems perceived well in advance of her letter to Dr. Podolnick and that numerous conversations with plaintiff were held over a considerable period of time apprising her of the perceived need for improvement with respect to these elements of her job performance. The evidence further showed that plaintiff was, in fact, late for work at least 104 times in the calendar year immediately preceding her demotion,[4] a figure greater than twice the number of times plaintiff had been late in previous years.
After careful consideration of all of the evidence, we are convinced that the Hospital's decision to demote plaintiff was based entirely on legitimate business reasons. The Hospital has demonstrated, as a factual matter, plaintiff's repeated failure to report to work on time, despite numerous attempts by the Hospital to accomodate the scheduling demands of plaintiff's personal concerns. Such a record of tardiness, particularly when displayed by the Head Nurse of an Intensive Care Unit which requires some overlap in nursing personnel in order to convey essential information regarding patient care, was understandably intolerable to the employer hospital. We find that there was no retaliatory motive on the part of the defendant in its demotion of plaintiff, and we find no causal connection *1038 between plaintiff's demotion and her actions with respect to Dr. Nanavati. Accordingly, we shall enter judgment in favor of the defendant, BTMH, on plaintiff's Title VII claim.
Wrongful Discharge
Plaintiff maintains that her demotion, which she argues amounted to a constructive discharge, was in violation of public policy as reflected in Title VII of the Civil Rights Act of 1964 and the Sherman Antitrust Act, 15 U.S.C. § 1 et seq. Accordingly, plaintiff urges, her demotion was a "wrongful discharge" entitling her to relief without regard to the existence, or lack thereof, of an employment contract.
In Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980), the New Jersey Supreme Court adopted a public policy exception to the common law rule known as the "at will doctrine." This doctrine provides that, in the absence of an employment contract, employers are free to terminate an employment relationship without cause. The Pierce court, balancing the interests of the employer, his employees, and the public, recognized a cause of action, in tort or contract or both, id. at 72, 417 A.2d 505, to provide a remedy for employees who are wrongfully discharged. The court held that an employee has such a cause of action when the discharge is contrary to a clear mandate of public policy. Id.
Accepting, arguendo, plaintiff's contentions that her demotion amounted to constructive discharge, we nonetheless do not find that plaintiff is entitled to prevail on her wrongful discharge claim. The evidence in this case simply does not support a finding that plaintiff's "discharge" was contrary to public policy.
Plaintiff urges this Court to find that her "discharge" was contrary to public policy because it was motivated by a desire to punish her for her support of Dr. Nanavati, against whom, she maintains, the Hospital was either discriminating or was committing an antitrust violation.[5] Assuming, without deciding, that some unlawful actions were taken by the Hospital against Dr. Nanavati, we are still without proof that such actions, or plaintiff's reactions thereto, were related, in any way, to plaintiff's "discharge." The evidence in this case clearly demonstrates that plaintiff was demoted for legitimate business reasons, and not by reason of some desire to penalize her. There is no evidence to support her claim that her demotion was, in any respect, violative of a public policy. There was no constructive discharge here. The Hospital had valid reasons for relieving her of her administrative duties. No problem was found with her ability as a nurse. Every opportunity was afforded her to continue her relationship with the Hospital as a staff nurse in any department of her choice. She was not discharged. She resigned. Accordingly, we shall enter judgment in favor of defendant, BTMH, on plaintiff's pendant wrongful discharge claim.
Breach of Contract
Plaintiff's final contention is that BTMH, by the manner in which it demoted her, materially breached its employment contract with her. In so arguing, plaintiff relies not on an individual written employment contract, but upon BTMH's "Personnel Policies and Administrative Practices" brochure, ("personnel policy manual"), Exhibit 6000, and recent New Jersey case law which recognizes the existence of a cause of action for breach of contract based upon implied promises in an employment manual.
The BTMH policy manual states, in pertinent part:
COUNSELLING AND PROGRESSIVE DISCIPLINE PROCEDURE
If an employee violates hospital policy that is not considered a cause for immediate *1039 dismissal, it is the procedure of the hospital to counsel that employee through the progressive discipline system as follows:
First Offense
The Department Head or Supervisor will discuss the policy infraction with the employee on a verbal basis.
Second Offense
Will be documented in writing, reviewed and acknowledged by the employee's signature on the employee counselling form. This will be filed in the personnel jacket.
Third Offense
Will be documented in writing, reviewed and acknowledged by the employee's signature on the employee counselling form. The third offense could result in probation; suspension; (both); or termination. A written warning will be removed and destroyed providing there were no other policy infractions within two years from the date of the warning.
Plaintiff, contending without rebuttal that she was not provided with any written documentation of her infraction of the Hospital's policy regarding excessive and repeated tardiness, prior to her demotion, urges that a material breach of these provisions occurred upon her demotion. This, she argues, constituted a breach of contract, entitling her to relief.
Plaintiff's contention that the policy manual constituted an employment contract rests upon an application of Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985), in which the New Jersey Supreme Court held that "absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against the employer even when the employment is for an indefinite term and would otherwise be terminable at will." Id. at 285-86, 491 A.2d 1257. Because we hold that the Woolley decision is not applicable to the case at bar,[6] we shall enter judgment in favor of defendant, BTMH, on plaintiff's breach of contract claim.
In its 1985 Woolley decision, the New Jersey Supreme Court held that the legal effect of the dissemination of a personnel policy manual by a company with a substantial number of employees should be determined by traditional contract doctrine. 99 N.J. 284, 289. In so holding, the Woolley Court, to the extent it went beyond ruling only that fundamental principles of basic fairness must be adhered to in employment relationships, id. at 309, 491 A.2d 1257, see also Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980), clearly broke new ground in New Jersey employment law. As such, the Woolley decision, in our opinion, should not be applied retroactively. E.G., Spiewak v. Rutherford Board of Education, 90 N.J. 63, 447 A.2d 140 (1982). To apply such a significant change in the law retroactively would be distinctly unfair to those effected thereby who had previously acted in reliance upon the prior state of the law. See, e.g., Buono v. Board of Trustees of Teachers Pension and Annuity Fund, 188 N.J. Super. 488, 457 A.2d 1214 (App.Div.1983).
In the present case, the operative facts giving rise to plaintiff's complaint her demotion in February of 1982 occurred more than three years before the New Jersey Supreme Court's decision in Woolley. Accordingly, in light of our holding that Woolley is not to be applied retroactively, *1040 plaintiff herein, in the absence of an individual employment contract, has no cause of action for breach of contract. We shall therefore enter judgment in favor of defendant BTMH on plaintiff's breach of contract claim.
NOTES
[1] Plaintiff's complaint was deemed amended to include the pendant breach of contract claim by a ruling of this Court. See slip op. of April 28, 1986 at p. 12.
[2] The precise nature of and reasons for this feud, and the legal ramifications thereof, are the subject of lawsuits between these doctors and the hospital. These actions, Civil Action Nos. 83-0794 & 84-1790, were consolidated and tried before a jury for nine weeks in the case previously referred to herein as the Nanavati trial.
[3] Our finding that no causal connection existed between plaintiff's demotion and her alleged opposition to discrimination obviates the need for rulings on two significant points of contention between the parties herein. The first of these issues is the question whether the practice opposed by the person aggrieved by the alleged § 704(a) violation must be in fact and in law a violation of Title VII. This issue arises in relation to the first element of plaintiff's case by virtue of the fact that the individual whom plaintiff asserts she was defending was held not to have a viable Title VII claim, as a matter of law. See Nanavati v. Burdette Tomlin Memorial Hospital, et al, C.A. Nos. 83-0794 & 84-1790 slip op. at 3-10 (D.N.J. June 23, 1986). The second issue, the question whether plaintiff's demotion amounted to a constructive discharge, bears upon the type of relief to which plaintiff might be entitled. The standard to be applied in determining whether an employer's acts of discrimination constitute a constructive discharge for Title VII purposes was recently discussed by the Third Circuit. In Goss v. Exxon Office Systems Co., 747 F.2d 885 (3d Cir.1984), the court held that no finding of specific intent by the employer to bring about a discharge was required to invoke the constructive discharge doctrine, but that a court "need merely find that the employer knowingly permitted conditions of discrimination in employment so intolerable that a reasonable person subject to them would resign." Id. at 888.
[4] This figure was based on BTMH's payroll policy regarding lateness, which provides for a 12-minute grace period a 12-minute time span after the commencement of an employee's scheduled shift before an employee is considered late. According to BTMH's "nursing policy" with respect to tardiness, which grants no grace period, plaintiff was late for work 171 times in 1981. See tr. of August 4, 1986 at pp. 66-68. The latter figure represents 67% of the total number of plaintiff's paid work days for that year. Id.
[5] The jury in the Nanavati case, Civil Action Nos. 83-0794 & 84-1790, found that the Hospital had not engaged in racial discrimination against Dr. Nanavati, but had participated in a contract, combination or conspiracy in restraint of interstate commerce which harmed him.
[6] If the Woolley decision were to be applied retroactively to the instant case, significant issues would be presented with respect to whether plaintiff, who was a managerial employee, and who was demoted from an administrative position rather than discharged from employment, would be entitled to the procedural safeguards set out in the manual. Moreover, a substantial question would arise regarding whether Woolley was intended to be limited to the factual situation where an employee receives no actual notice of poor job performance. In this case, the facts clearly illustrate that the purpose of the notice requirement to allow the employee the opportunity to improve performance was satisfied by the Hospital's repeated attempts to solve the problems with Ms. Bimbo's administrative failings. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559009/ | 22 So.3d 79 (2009)
ESTATE OF KERUOAC
v.
BLAKE.
No. 2D09-4173.
District Court of Appeal of Florida, Second District.
November 30, 2009.
Decision without published opinion Appeal dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558966/ | 22 So.3d 632 (2009)
STATE FARM FIRE AND CASUALTY COMPANY, Petitioner,
v.
Diana LEZCANO and Ricardo Diaz, Respondents.
No. 3D09-212.
District Court of Appeal of Florida, Third District.
October 14, 2009.
Rehearing and Rehearing En Banc Denied December 17, 2009.
Kirschbaum, Birnbaum, Lippman & Gregoire and Nancy W. Gregoire, Ft. Lauderdale; Roig Kasperovich Tutan & Woods and Fernando L. Roig, Deerfield Beach, for petitioner.
Lopez & Best and Virginia M. Best, for respondents.
Before RAMIREZ, C.J., LAGOA, and SALTER, JJ.
*633 LAGOA, Judge.
State Farm Fire and Casualty Company ("State Farm") seeks certiorari review of the circuit court appellate division's per curiam affirmance of two final summary judgments entered by the county court in favor of the respondents Diana Lezcano ("Lezcano") and Ricardo Diaz ("Diaz"). Because we conclude that State Farm was deprived of due process with respect to the entry of the Lezcano summary judgment, we grant the petition and quash the circuit court's order as to that case only. We deny the petition as to Diaz without further comment.
I. FACTUAL AND PROCEDURAL HISTORY
State Farm insured Lezcano and Diaz under the same auto insurance policy. As a result of a 2005 accident, Lezcano and Diaz received medical treatment at Figueroa Medical Center ("FMC"). State Farm admits that it received written notice of the loss and received all bills from October 13, 2005, through December 29, 2005.
On February 8, 2006, Lezcano and Diaz filed separate suits against State Farm, alleging that it breached the policy by failing to pay for the medical treatment each received at FMC. State Farm filed amended answers and affirmative defenses alleging that it paid the appropriate amounts under the policy, that the remainder claimed was not reasonable, that the medical services were not reasonable, related, or necessary, and that Lezcano's and Diaz's demand letters were invalid because they failed the include an assignment of benefits or revocation of those benefits.
Subsequently, Lezcano and Diaz each filed motions for summary judgments as to liability, reasonableness, relatedness and medical necessity. The county court conducted two hearings on Diaz's motion for summary judgment: the first on December 5, 2006, and the second on January 16, 2007. At the January 16th hearing, counsel for State Farm advised the trial court that the court was scheduled to conduct an identical hearing in the Lezcano case the next day, January 17, 2007. Counsel for Lezcano, however, responded that that hearing had been continued. As a result, both parties agree that the county court never conducted a hearing on Lezcano's motion for summary judgment.
On May 17, 2007, the county court entered an order granting Diaz's motion for summary judgment and also entered final judgment in favor of Diaz. A week later, the trial court entered an order granting Lezcano's motion for summary judgment and also entered final judgment in favor of Lezcano. Subsequently, State Farm appealed the final judgments to the circuit court's appellate division, and argued, among other things, that the county court deprived State Farm of due process when it entered the final judgment as to Lezcano without conducting the required hearing. The circuit court per curiam affirmed the final judgments, which were consolidated for appellate purposes. This petition followed.
II. ANALYSIS
As this Court explained in Williams v. Miami-Dade County, 969 So.2d 389, 392 (Fla. 3d DCA 2007), "[r]eview on second-level certiorari is extremely limited, as we are confined to determining whether the lower court provided due process and followed the correct law." See also Allstate Ins. Co. v. Kaklamanos, 843 So.2d 885 (Fla.2003). A lower tribunal provides due process if the complaining party was given notice and an opportunity to be heard. Id. Moreover, a circuit court's failure to follow the correct law must be "something more than a simple *634 legal error." Ivey v. Allstate Ins. Co., 774 So.2d 679, 682 (Fla.2000). Unless a ruling constitutes a violation of a principle of law which results in a miscarriage of justice, we must deny certiorari. Williams, 969 So.2d at 392.
Here, the county court granted Lezcano's motion for summary judgment without conducting a hearing on the motion. Florida Rule of Civil Procedure 1.510(c) contemplates a hearing on a summary judgment motion.[1] "The rule does not provide the trial court with discretion to decide whether `a hearing is required.'" Kozich v. Hartford Ins. Co. of Midwest, 609 So.2d 147, 148 (Fla. 4th DCA 1992). A trial court's failure to conduct a hearing prior to ruling on the motion for summary judgment constitutes a denial of the due process guarantee of notice and an opportunity to be heard. Id. ("An order granting summary judgment on liability determines a party's right to the relief requested and to deny either party a hearing must be construed as a denial of due process."); accord Greene v. Seigle, 745 So.2d 411 (Fla. 4th DCA 1999) (where trial court granted defendant's motion for summary judgment without a hearing or notice to plaintiff it violated Rule 1.510(c) and plaintiff's due process rights requiring reversal). A denial of the guarantee of due process represents a violation of a clearly established principle of law such that certiorari relief is warranted. See Casa Inv. Co. v. Nestor, 8 So.3d 1219 (Fla. 3d DCA 2009) (granting certiorari relief and quashing circuit court appellate division's affirmance of trial court's granting of ore tenus motion for summary judgment which was neither written or properly noticed).
Because State Farm was deprived of a hearing as required under Rule 1.510(c), we conclude that the circuit court appellate division departed from the essential requirements of the law and deprived State Farm of due process. Accordingly, as to Lezcano, we grant the petition for writ of certiorari, quash the circuit court's decision with directions to reverse the summary judgment entered in her favor, and to remand to the county court for further proceedings.[2]
Petition granted in part, denied in part.
NOTES
[1] Rule 1.510(c) states, in pertinent part:
(c) Motion and Proceedings Thereon. The motion shall state with particularity the grounds upon which it is based and the substantial matters of law to be argued and shall specifically identify any affidavits, answers to interrogatories, admissions, depositions, and other materials as would be admissible in evidence ("summary judgment evidence") on which the movant relies. The movant shall serve the motion at least 20 days before the time fixed for the hearing, and shall also serve at that time copies of any summary judgment evidence on which the movant relies that has not already been filed with the court. The adverse party shall identify, by notice mailed to the movant's attorney at least 5 days prior to the day of the hearing, or delivered no later than 5:00 p.m. 2 business days prior to the day of the hearing, any summary judgment evidence on which the adverse party relies. To the extent such summary judgment evidence has not already been filed with the court, the adverse party shall serve copies on the movant by mailing them at least 5 days prior to the day of the hearing, or by delivering them to the movant's attorney no later than 5:00 p.m. 2 business days prior to the day of hearing.
(emphasis added).
[2] This opinion does not preclude State Farm from addressing on remand the claims regarding reasonableness, relatedness, or necessity, as they pertain to Lezcano. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558977/ | 22 So.3d 745 (2009)
Connie Kaye LOWERY, Appellant,
v.
STATE of Florida, Appellee.
No. 2D08-5316.
District Court of Appeal of Florida, Second District.
November 18, 2009.
James Marion Moorman, Public Defender, and Pamela H. Izakowitz, Assistant Public Defender, Bartow, for Appellant.
Bill McCollum, Attorney General, Tallahassee, and Cerese Crawford Taylor, Assistant Attorney General, Tampa, for Appellee.
*746 VILLANTI, Judge.
Connie Kaye Lowery appeals her five-year sentence for possession of cocaine, arguing that it violated her negotiated plea agreement. We agree. Therefore, we reverse and remand with directions that the trial court sentence Lowery consistent with the plea agreement.
Lowery was charged with possession of cocaine, possession of cannabis, and possession of drug paraphernalia. On August 4, 2008, the court accepted Lowery's negotiated best interests guilty plea, which capped at eighteen months' imprisonment any sentence to be imposed for the cocaine charge.[1] At counsel's request, the court postponed sentencing until September 17, 2008, at 8:30 a.m. Lowery was present when the court set the date and time for sentencing. However, there is no record evidence that the court discussed with Lowery the potential consequences of her failure to timely appear at sentencing or that the plea agreement contained any provision indicating that the court would not honor the sentencing cap if Lowery failed to timely appear at sentencing.
As of 9:49 a.m. on the day of sentencing, Lowery was not in court, although her attorney indicated that he was waiting for her. The trial judge then, sua sponte, stated that he had warned Lowery about the consequences of her willful nonappearance at sentencing:
THE COURT: I was fairly clear with Miss Lowry [sic], as I am with every man or woman that enters a plea and asking [sic] for a deferred sentencing that, indeed, if there was some willful nonappearance at court . . . .
. . . .
In any event, clearly, Miss Lowry [sic] is not here at this point. I have no information as to whether or not her nonattendance is willful and yet certainly if there's some indication or evidence presented at some later date, I can always entertain a motion to resentence.
. . . .
THE COURT: Miss Lowry [sic] just it's just unfortunate. I did warn her, I did tell her, and I'm certain you did, [defense counsel], as you would with every client, and have for the last almost 14 years that you've practiced in front of this Court . . . in any event, having accepted Miss Lowry's [sic] plea I adjudicate her guilty. I sentence her to five years Florida state prison on Count I.
(Emphasis added.) The trial judge also stated that he had warned Lowery during a "frank discussion" that "this could result" and had "begged her to be here." Neither the plea hearing transcript nor the written plea agreement contains any such warnings or discussions with Lowery; it appears that the trial court was mistaken in its recollections of this particular case. Despite the lack of record evidence about these alleged discussions between the trial court and Lowery, Lowery's counsel agreed with the court's comments, responding, "I was here, I remember."
The trial court sentenced Lowery in absentia to the maximum possible sentence for the crime chargedfive years in prisonbased on its erroneous belief that Lowery had agreed to this consequence if she willfully failed to timely appear at sentencing. Yet, the court acknowledged that there was no evidence that Lowery's failure to appear was willful. Therefore, the court indicated that it would consider a *747 motion to modify sentence if there was evidence of exigent circumstances causing Lowery's nonappearance. Even though the court's sentence exceeded the agreed-upon cap, about which Lowery's counsel reminded the court at the sentencing hearing, counsel did not formally object to the harsher sentence and did not move to withdraw the plea. Instead, he immediately moved to withdraw from representing Lowery, and the court immediately granted his request.
At noon that same day, Lowery appeared in court, claiming that she had been waiting outside the courtroom since 8:25 a.m. A different assistant public defender indicated that she "did talk to [Lowery] before the break." The trial court simply responded: "[Defense counsel] was here; you weren't here, Ms. Lowry [sic]. Five years Florida State prison. Take her away." Despite its prior acknowledgement that it had no evidence that Lowery's nonappearance was willful and its previous commitment to reconsider her sentence if her nonappearance had been caused by exigent circumstances, the court took no evidence, refused to listen to Lowery, and made no findings regarding willfulness. As a result, Lowery now sits in prison serving the maximum sentence for possession of cocaine, a charge to which she entered a "best interests" plea. On appeal, she seeks to enforce the agreed-upon plea.
The State argues that this issue was not preserved for appellate review because Lowery did not file a motion to withdraw her plea. A defendant who enters a guilty or nolo contendere plea can appeal only under limited circumstances. See Fla. R.App. P. 9.140(b)(2)(A)(i)-(ii). One such circumstance is when the defendant has filed a timely motion to withdraw her plea based on a violation of the plea agreement. See Fla. R.App. P. 9.140(b)(2)(A)(ii)(b); Ruff v. State, 840 So.2d 1145, 1146-47 (Fla. 5th DCA 2003). However, even if the defendant fails to file a motion to withdraw the plea, the appellate court can consider a direct appeal such as Lowery's "where the record on its face establishes ineffective assistance of trial counsel." Smith v. State, 988 So.2d 1258, 1260 (Fla. 5th DCA 2008).
In Smith, the defendant entered a plea which included a sentence cap. 988 So.2d at 1259. As in this case, the court accepted Smith's plea but postponed sentencing. Id. at 1260. When Smith failed to appear at sentencing, the court imposed a sixty-month sentence. Id. Smith's counsel did not object to the harsher sentence. Id. On appeal, the Fifth District addressed whether it had jurisdiction to consider Smith's appeal where he had not filed a motion to withdraw the plea. It concluded that "in a circumstance like this, jurisdiction may still exist where the record on its face establishes ineffective assistance of trial counsel." Id. at 1260. Because Smith's trial counsel had not filed a motion to withdraw the plea despite the court's enhanced sentence, ineffectiveness was apparent on the face of the record. Id. The court concluded that "when an enhanced sentence for failure to appear in court at a later time is not part of the negotiated plea, a court must allow the defendant an opportunity to withdraw the plea before it imposes the more severe sentence." Id. at 1261. Because Smith was not given that opportunity, the court reversed and remanded to allow him to withdraw the plea or accept his sentence. Id.; see also Barber v. State, 901 So.2d 364, 364 (Fla. 5th DCA 2005) ("Because the agreed upon sentence was not conditioned on [defendant's] appearance at sentencing, and because the failure of [defendant's] trial counsel to seek relief in the trial court amounts to an inadequacy of *748 counsel on the face of the record, we are compelled to reverse.").
In Taylor v. State, 919 So.2d 669 (Fla. 2d DCA 2006), this court reached a similar conclusion, albeit under different facts. In Taylor, the defendant entered into a negotiated plea agreement which included three years' probation and capped his sentence at nine months in jail. Id. at 670. The court accepted Taylor's plea and postponed sentencing. Id. At the sentencing hearing, the defendant's newly appointed counsel incorrectly represented to the court that Taylor had entered "a straight up plea" rather than a negotiated plea. Id. at 671. As a result, the trial court imposed a five-year prison sentence, exceeding the agreed-upon cap. Id. Yet, Taylor's counsel did not bring the error to the trial court's attention. Id. When Taylor filed a direct appeal without filing a motion to withdraw the plea, this court held that it could consider the error on direct appeal because the record on its face reflected ineffective assistance of counsel. Id. at 670-71. Trial counsel had provided the trial court incorrect information about Taylor's plea agreement, and Taylor had "been obviously prejudiced by this ineffectiveness as he [was] currently in state prison instead of having already finished a nine-month county jail sentence." Id. at 671. We reversed and remanded to allow Taylor the opportunity to withdraw his plea. Id.
In this case, as in Taylor and Smith, we find ineffective assistance of counsel on the face of the record. The trial court accepted Lowery's negotiated plea, which included an eighteen-month cap on prison time. Although the trial court apparently believed that it had postponed Lowery's sentencing on the condition that the agreed-upon cap would not be honored if she failed to timely appear at sentencing,[2] this condition was not articulated as part of the plea. Thus, there was no agreement between the trial court and Lowery that the court could impose a greater-than-agreed-upon sentence if she failed to appear at sentencing. See Smith, 988 So.2d at 1261 (noting that the trial court accepted the plea without warning the defendant of the consequences of failure to appear at sentencing and without an agreement that it could impose a greater sentence if the defendant failed to appear for sentencing). As in Smith and Taylor, the ineffectiveness of Lowery's counsel is evident on the face of the record: he failed to formally object when the court imposed a harsher sentence, and he did not file a motion to withdraw the plea. Even though the trial court stated that it would entertain a motion to modify Lowery's sentence based on exigent circumstances, counsel withdrew from the case without even discussing with Lowery the possibility of filing such motion. Moreover, counsel actually agreed with the court's erroneous recollection of the plea bargain. Lowery was obviously prejudiced by this ineffectiveness, as she received the maximum prison sentence possible for the crime charged. Therefore, she is entitled to relief.
While we recognize that in Taylor and Smith the district courts reversed and remanded with directions that the defendants simply be given the opportunity to withdraw their pleas, remand for enforcement *749 of Lowery's agreed-upon plea is the appropriate remedy in this case. See, e.g., Ingmire v. State, 9 So.3d 1278, 1282 (Fla. 2d DCA 2009) (reversing and remanding case with directions that defendant be sentenced according to the plea agreement); Orange v. State, 983 So.2d 4, 6 (Fla. 3d DCA 2007) (ordering the trial court to sentence the defendant in accordance with plea agreement); Lee v. State, 471 So.2d 195, 195 (Fla. 4th DCA 1985) (remanding case for enforcement of plea agreement where record did not contain evidence of willful failure to appear at sentencing and the only evidence on the record indicated that defendant's failure to appear was accidental).
We further note that, even if we were to accept the trial court's statements that it had discussed with Lowery the perils of nonappearance at sentencing, our conclusion would be the same. The written plea and the plea hearing transcript clearly establish that no such discussion took place either before the plea was accepted or as part of Lowery's plea. That only leaves the possibility that such discussion took place after the court accepted Lowery's plea. However, merely advising Lowery after the plea agreement had been accepted that her sentence would be enhanced if she failed to appear at sentencing was insufficient to justify a sentence which exceeded the agreed-upon plea. See Smith, 988 So.2d at 1261.
Moreover, the trial court was required to make a factual determination as to whether Lowery's failure to appear at sentencing was willful. "`[W]here timely appearance for sentencing is made a condition of a plea agreement, a non-willful failure to appear will not vitiate the agreement and permit the trial court to impose some greater sentence.'" Robinson v. State, 946 So.2d 565, 567 (Fla. 2d DCA 2006) (quoting Johnson v. State, 501 So.2d 158, 160-61 (Fla. 3d DCA 1987)); see also Ingmire, 9 So.3d at 1281 (holding that defendant did not forfeit his right to agreed-upon sentence when evidence was insufficient to establish that he willfully failed to appear for sentencing). Here, the trial court did not give Lowery an opportunity to explain why she had failed to timely appear at sentencing, and it received no evidence and made no findings on the issue of willfulness. The record itself also contains no evidence of willful nonappearancethe only evidence of record is Lowery's unrefuted statement that she had been in the courthouse waiting since 8:25 a.m. the morning of sentencing. In the "absence of positive evidence to establish willfulness," reversal and remand with instructions that Lowery be sentenced according to the plea agreement accepted by the trial court is appropriate. See Ingmire, 9 So.3d. at 1282 (enforcing plea agreement terms where there was no evidence that defendant's failure to appear at sentencing was caused by anything other than human error). Cf. Garcia v. State, 10 So.3d 687, 689 (Fla. 2d DCA 2009) ("[I]f Mr. Garcia's failure to appear is found to be non-willful, he would be entitled to the bargained-for mitigation of his sentence."). Based upon the unusual circumstances of this case, we reverse the judgment and sentence with directions that the trial court resentence Lowery in accordance with the plea agreement.
Reversed and remanded with directions.
NORTHCUTT and LaROSE, JJ., Concur.
NOTES
[1] The other two charges were misdemeanors, each carrying a maximum penalty of 364 days in county jail.
[2] This type of understanding is commonly referred to as a "Quarterman agreement," for the supreme court decision which approved this practice. See Quarterman v. State, 527 So.2d 1380 (Fla.1988) (affirming enforcement of plea agreement which provided for the release of the defendant between entry of plea and sentencing but allowed an upward departure sentence if defendant failed to appear at sentencing); Smith v. State, 988 So.2d 1258, 1261 (Fla. 5th DCA 2008). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558988/ | 22 So.3d 1033 (2009)
Dorothy POLLOCK, et al., Plaintiffs-Appellees
v.
TALCO MIDSTREAM ASSETS, LTD., A subsidiary of Winchester Energy Company, Ltd., Defendant-Appellant.
No. 44,629-CA.
Court of Appeal of Louisiana, Second Circuit.
September 23, 2009.
*1034 Kevin W. Hammond, for Appellant.
Thomas A. Wilson, Jr., Bossier City, for Appellees.
Before BROWN, CARAWAY and MOORE, JJ.
CARAWAY, J.
Following a default judgment, defendant moved for a new trial on the ground that its failure to answer the suit resulted from communications with plaintiffs' counsel. The parties had exchanged communications in an effort to settle the matter after the filing of the petition. Ruling on the motion for new trial, the trial court found it procedurally improper as an attempt to annul the judgment for an "ill practice" under Article 2004 of the Code of Civil Procedure. The court determined that the plaintiffs could only raise their claims to set aside the judgment through the separate action of nullity. Defendant appealed the trial court's ruling, and for the following reasons, we reverse and remand the matter for a hearing on the motion for new trial.
Facts
An unsettled dispute between landowner, Dorothy B. Pollock ("Pollock"), and Talco Midstream Assets, Ltd. ("Talco") over a natural gas pipeline precipitated Pollock and her family members to file suit on April 19, 2007. Pollock sought damages for the cost of the removal of the pipeline, restoration of the surface, and other damages arising out of its installation. Upon notice of the suit, Talco's senior vice-president contacted Pollock's attorney to request *1035 an extension of time to file an answer and facilitate further negotiations and possibly settlement. In response, Talco received written assurances, in the form of two letters, dated May 2, 2007, and May 14, 2007, from Pollock's counsel, that no default judgment would be taken without first giving Talco a 10-day written notice of such action.
Months later on October 19, 2007, Pollock's counsel sent Talco's senior vice-president a letter advising: "This matter has not been resolved. Please file your answer at this time." Pollock contends that the October 19 letter was meant to be a termination of the previous extension of time afforded Talco. Conversely, Talco asserts that it believed counsel's letter to simply be an informal request to orchestrate a resolution, not a notice that Pollock was recommencing the previously instituted suit. Talco asserts that two of its representatives met with Pollock's counsel following the October 19 letter and that additional proposals were made. These allegations are disputed by Pollock. Talco also sent the following letter to Pollock's attorney on October 26, 2007, which it deemed an "answer" to the October 19 letter:
We do agree to come back and repair the water line one more time and reissue draft or a check for bonus as agreed between the landowner and Right-Of-Way agent. Please advise if this is acceptable.
On December 3, 2007, Pollock caused a preliminary default to be entered. On September 22, 2008, a default judgment was confirmed. On September 30, 2008, the judgment was rendered against Talco in the amount of $201,900.00, plus interest. On October 9, 2008, notice of judgment was served on Talco.
On October 15, 2008, Talco filed a motion for new trial based on the circumstances under which the default judgment was obtained. Talco argues that it never received the 10-day notice promised by Pollock's counsel and that the October 19, 2007, letter was insufficient to constitute such notice.
On December 28, 2008, the trial court, without hearing any testimony or reviewing the above mentioned letters, denied Talco's motion for new trial. The court observed that Talco's motion facially alleged an "ill practice" on the part of Pollock's counsel in obtaining the default judgment. Nevertheless, after a thorough review of the jurisprudence regarding annulment of judgments, the trial court reluctantly ruled that such an attack must be made in the separate action of nullity and not through a motion for new trial. The trial court stated:
And I have located that other Fourth Circuit Case, it's Gazebo v. City of New Orleans [97-2769 (La.App. 4th Cir.3/23/98), 710 So.2d 354] by Judge Plotkin with Judges Walser [sic] and Armstrong on the panel, a more recently [sic] 1998 case, and he points out that the Fourth Circuit has come full circle on the issue and while we personally would agree with the Fourth Circuit in the Gazebo case, that's of no moment.
The Louisiana Supreme Court and the Second Circuit have decided differently and we are bound by those cases so the motion for a new trial will be denied on that basis.
Talco has appealed the trial court's ruling denying the motion for new trial.
Discussion
Talco's assertion for nullity of the judgment in this case concerns the issue of its notice to proceed for answering the lawsuit, after the immediacy of the initial citation to appear and answer was dissipated by the subsequent communications *1036 and exchanges between the parties. This type of claim for nullity has been recognized in the jurisprudence as falling under the "fraud or ill practices" provision of Article 2004[1] of the Code of Civil Procedure (hereinafter the "Code"). In Kem Search, Inc. v. Sheffield, 434 So.2d 1067 (La.1983), our supreme court addressed a similar default judgment situation involving the exchange of communications between the plaintiff's counsel and the defendant before the defendant had answered the suit or otherwise made an appearance in the case. The issue was raised in an action of nullity after the default judgment had become final. The court observed that Article 2004 "is not limited to cases of actual fraud or intentional wrongdoing, but is sufficiently broad to encompass all situations wherein a judgment is rendered through some improper practice or procedure which operates, even innocently, to deprive the party cast in judgment of some legal right, and where the enforcement of the judgment would be unconscionable and inequitable." Id. at 1070. The court found that the defendant had been deprived of the legal right of notice through the miscommunications of the parties. Even though unintentional acts on the part of plaintiff's counsel had occurred, an "ill practice" concerning the notice to the defendant was recognized, resulting in the annulment of the default judgment.
Here, the substance of Talco's claim of "ill practice" or lack of notice was never reached by the trial court. Instead, the trial court's ruling dismissed outright Talco's motion for new trial to address the "ill practice," finding the motion procedurally improper under the jurisprudence for the assertion of the nullity of the default judgment. The court determined that the asserted grounds for nullity of the judgment must be raised in a separate action. While the trial court's ruling has support in certain jurisprudential pronouncements[2] stemming from an official comment under Article 2004, as reviewed below, the Code itself contains "no specific *1037 provision" regarding the manner for asserting the grounds for nullity set forth in Articles 2001, et seq. Official Comment (d), La. C.C.P. art. 2004.
The articles pertaining to annulment of judgments are in the chapter of the Code entitled the "Action of Nullity" which lists certain peremptory grounds for nullification under Article 2002[3] and a general category for annulment for "fraud or ill practices" under Article 2004. The Code distinguishes between the two categories concerning the time limits for the assertion of nullity. The peremptory grounds can be asserted at any time, while the annulment of a judgment obtained by fraud or ill practices must be sought within one year of the discovery of the fraud or ill practices. La. C.C.P. arts. 2002 and 2004.
There is no codal directive expressly requiring that the grounds for annulment of a judgment may only be asserted in the separate ordinary action called the action of nullity. While Articles 2002 and 2004 speak only in terms of bringing "an action to annul," the jurisprudence recognizes that the peremptory grounds for nullity of a judgment listed in Article 2002(A) may be asserted (i) through the motion for new trial[4] or appeal, directly in the same action in which the flawed judgment was rendered, State, Dep't of Social Services, Office of Family Support v. Pickins, 42,721 (La.App. 2d Cir.12/5/07), 972 So.2d 1225; Rando v. Rando, 31,366 (La.App. 2d Cir.12/9/98), 722 So.2d 1165, (ii) collaterally or indirectly, in another action, Miles v. Our Lady of the Lake Regional Medical Center, 01-2272 (La.App. 1st Cir.10/2/02), 836 So.2d 136; Taylor v. Hixson Autoplex of Alexandria, Inc., 00-1096 (La.App. 3d Cir.3/28/01), 781 So.2d 1282; Key v. Jones, 181 So. 631 (La.App. 2d Cir.1938), or (iii) in the separate action of nullity allowed by Articles 2001, et seq. Thus, for example, since the peremptory ground of the lack of service of citation may be asserted against a judgment at any time and in any stage of a proceeding, the judgment against the defendant in a default judgment setting can undoubtedly be assailed in a motion for new trial to set aside the default judgment for lack of citation.
The allowance for the assertion of nullity of a judgment for "fraud or ill practices" under Article 2004 is different. The official comment (d) to Article 2004 discusses attempts to assert a fraud or ill practice for nullification of a judgment in a collateral action, as follows:
No specific provision has been made regarding the manner of asserting the grounds of nullity in the above article. This was thought unnecessary in view of the established jurisprudence to the effect that such grounds must be asserted in a direct action and cannot be raised collaterally. Bruno v. Oviatt, 48 La. Ann. 471, 19 So. 464 (1896); Caldwell v. Caldwell, 164 La. 458, 114 So. 96 (1927).
*1038 The cases cited in the comment involved attacks on the integrity of judgments in subsequent actions in which the prior judgments were asserted. This is the common understanding of a collateral attack on a judgment, in that it occurs in an action other than the action in which the judgment was rendered. Salles v. Salles, 04-1449 (La.App. 1st Cir.12/2/05), 928 So.2d 1; Reeves v. Reeves, 209 So.2d 554 (La.App. 2d Cir.1968); Black's Law Dictionary 278 (8th ed.2004). Thus, the Fourth Circuit Court of Appeal was correct in its observation concerning the above comment to Article 2004, as noted in Zatzkis v. Zatzkis, 632 So.2d 307, 316 n. 5, (La.App. 4th Cir.1993), writs denied, 94-0157 (La.6/24/94), 640 So.2d 1340 and 94-0993 (La.6/24/94), 640 So.2d 1341:
The limitation envisioned by LSA-C.C.P. art. 2004 Comment (d) was one which prevents the nullity from being asserted in a totally unrelated proceeding, i.e., a collateral proceeding not a prohibition against raising it in the very same proceeding in which it was rendered, which is arguably the best place to raise it.
Of further significance, the Code itself envisions in the provisions regarding the motion for new trial that a specific "fraud" on the court may be proven through such motion so that the judgment just rendered in a jury action may be set aside. Article 1972 provides, in pertinent part, as follows:
A new trial shall be granted, upon contradictory motion of any party, in the following cases:
* * *
(3) When the jury was bribed or has behaved improperly so that impartial justice has not been done.
La. C.C.P. art. 1972(3).
Indeed, the best explanation to avoid any misconstruction of the disputed official comment of the redactors is by consideration of the entire framework of the Code. Before a judgment becomes final within the action in which it has arisen, all procedures to reverse, as opposed to nullify, that judgment remain viable to the parties and are not withdrawn by the Code's inclusion of the separate chapter for the action of nullity. In that sense, it is arguably a misnomer to say that a trial court "nullifies" its judgment by granting a motion for new trial. The judgment was never final; it is held in abeyance pending further action through the new trial procedure; and then it is reconsidered and decided anew by the trial court. Likewise, if the record on appeal of a case reveals on its face a flaw which would otherwise support the "action of nullity," the appellate court simply reverses the judgment that never became final preventing altogether the need for annulment through the "action of nullity" addressed in Articles 2001, et seq. With the chapter of the Code at issue before us dealing only with the "Action of Nullity," that action has no application during the pendency of any case before the resolution of that case through rendition of a final judgment. Before the finality of a judgment, the parties may utilize all other modes of procedure which the Code affords for an action, including the motion for new trial and appeal, to assert the flaws in the judgment and seek its modification or reversal.
Finally, we additionally find that judicial economy and the possibility of irreparable harm to the defendant require that the alleged grounds for nullification be considered through a motion for new trial. Assuming a judgment is tainted by fraud, or even by an unintentional act depriving the defendant of notice as alleged in this case, that judgment may well become exigible during the pendency of the ordinary delays *1039 for the action of nullity, leading to judicial action for the same claim in multiple settings and to the seizure of defendant's assets for satisfaction of the tainted judgment. If the defendant is alerted to the problem in time to file a motion for new trial and present the evidence of the "fraud or ill practice," judicial economy is realized and potential harm averted.
Conclusion
For the foregoing reasons, the judgment of the trial court is reversed and the case remanded for consideration of appellant's motion for new trial. Costs of appeal are assessed equally to the parties.
REVERSED AND REMANDED.
NOTES
[1] La. C.C.P. art. 2004. Annulment for vices of substance; peremption of action.
A. A final judgment obtained by fraud or ill practices may be annulled.
B. An action to annul a judgment on these grounds must be brought within one year of the discovery by the plaintiff in the nullity action of the fraud or ill practices.
C. The court may award reasonable attorney fees incurred by the prevailing party in an action to annul a judgment on these grounds.
[2] The trial court's ruling referred to statements made in various cases including Viso v. Favie, 502 So.2d 1130 (La.App. 4th Cir.1987), writ denied, 503 So.2d 465 (La.1987); State v. Minniefield, 467 So.2d 1198 (La.App. 2d Cir. 1985); and Nethken v. Nethken, 307 So.2d 563 (La.1975). For example, in Viso, the court stated "[t]o raise the issue of nullity under Article 2004 by a proceeding such as a motion for a new trial is objectionable in view of the Code of Procedure and case law." Those statements in the cited jurisprudence concerning this disputed procedural issue represent dicta, however, because none of those cases involved the dismissal on procedural grounds of a motion for new trial to set aside a judgment not yet final and just rendered in the action. Our research does not reveal any ruling in the jurisprudence denying the use of a motion for new trial to assert a ground for nullity in the judgment. To the contrary, this court reversed the trial court's substantive ruling which denied a motion for new trial after a default judgment in Campbell v. Select Car Co., 38,443 (La.App. 2d Cir.5/12/04), 874 So.2d 391. In that case, the trial court heard evidence on the motion for new trial concerning the alleged miscommunications between the parties before the filing of defendant's answer in city court. Neither party asserted a procedural impropriety with the motion for new trial. The motion for new trial asserting the nullification of the default judgment was denied by the trial court, but ultimately reversed by this court on the basis of an "ill practice" which denied defendant the proper notice to defend. See also, Cashback, Inc. v. Herring, 27,805 (La.App. 2d Cir.2/28/96), 669 So.2d 693.
[3] La. C.C.P. art. 2002. Annulment for vices of form; time for action.
A. A final judgment shall be annulled if it is rendered:
(1) Against an incompetent person not represented as required by law.
(2) Against a defendant who has not been served with process as required by law and who has not waived objection to jurisdiction, or against whom a valid judgment by default has not been taken.
(3) By a court which does not have jurisdiction over the subject matter of the suit.
B. Except as otherwise provided in Article 2003, an action to annul a judgment on the grounds listed in this Article may be brought at any time.
[4] Again, our research does not reveal any decision contesting the use of a motion for new trial to assert one of the peremptory grounds under Article 2002(A) to set aside the judgment which was just rendered in the case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558991/ | 22 So.3d 1241 (2009)
Darian DYE, Appellant,
v.
Frances DYE, Appellee.[1]
No. 2008-CA-00712-COA.
Court of Appeals of Mississippi.
December 1, 2009.
*1242 Richard Shane McLaughlin, Mechelle Nicole McLaughlin, attorneys for appellant.
Will R. Ford, New Albany, William L. Griffin Jr., Jackson, attorneys for appellee.
Before KING, C.J., IRVING and CARLTON, JJ.
IRVING, J., for the Court.
¶ 1. The Pontotoc County Chancery Court granted Darian and Frances Dye an irreconcilable differences divorce. The chancellor awarded Frances sole legal and physical custody of the parties' three minor children and divided the marital estate. Feeling aggrieved, Darian appeals and asserts that the chancellor erred by classifying his retirement account, as well as tractors and other equipment, as marital property, and that the chancellor abused his discretion by ordering Darian to provide Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance to Frances.[2]
¶ 2. We find merit to Darian's claim that the chancellor erred in the distribution of the marital estate. Therefore, we affirm in part and reverse and remand in part for further consideration consistent with this opinion.
FACTS
¶ 3. Darian and Frances were married on June 6, 1995, and one child was born to this union on July 22, 1998. Frances has two children from a previous marriage. The parties were living together as husband and wife in Pontotoc County on October 7, 2005, when Frances filed a complaint for divorce on the ground of habitual cruel and inhuman treatment. Darian filed an answer and counterclaim, wherein he asserted that he should be granted a divorce on the ground of habitual cruel and inhuman treatment.
¶ 4. Also, on October 7, 2005, Frances filed a motion for emergency relief with the chancery court, seeking, among other things, immediate temporary legal and physical custody of the children. In her motion, Frances asserted that she had *1243 "learned that [Darian] is accused of serious misconduct involving . . . one or more of the parties' minor children." The chancellor granted Frances's motion. On November 28, 2005, the chancery court, on its own motion, appointed a guardian ad litem. The record reflects that Darian was indicted for one charge of sexual battery and one charge of fondling one of the children. Following a jury trial, Darian was acquitted of both charges on April 14, 2007.
¶ 5. On July 12, 2006, the parties withdrew their fault-based grounds and consented to an irreconcilable differences divorce. They submitted issues upon which they could not agree to the chancery court for resolution. The divorce action proceeded to trial on July 12, 2006, and, after several continuances, concluded on December 14, 2007.
¶ 6. At the conclusion of the trial, the chancellor rendered a bench opinion. In his analysis of the Ferguson factors,[3] the chancellor found that both parties had dissipated marital assets in the following manner: Frances's cashing in of her IRA, which was valued at $25,000; Darian's sale of a 1995 GMC Jimmy; and Darian's cashing in of stock valued at $5,770. Thus, the chancellor concluded that Frances owed Darian $12,500 for his share of her IRA and that Darian owed Frances $2,885 for her share of the stock. The chancellor also ordered Darian to pay Frances $1,701.05 for his half of one of the children's medical bills. Then, the chancellor valued the marital estate and awarded $183,567 to Frances and $182,451.95 to Darian. After making the appropriate adjustments for the parties' dissipation of assets, including the GMC Jimmy and the unpaid medical bills by Darian, the amount of Frances's share was reduced by $5,413.95. Also, the chancellor awarded sole legal and physical custody of the children to Frances and ordered Darian to make monthly child support payments of $485.55.
¶ 7. On March 3, 2008, the chancellor issued a final judgment wherein he incorporated the findings made in his bench opinion. On March 14, 2008, Darian filed a motion to alter or amend the judgment pursuant to Rule 59 of the Mississippi Rules of Civil Procedure. Shortly thereafter, the chancery court issued an order, overruling Darian's motion. However, the chancery court clarified its final judgment as to the amount that Darian had to pay Frances as reimbursement for medical expenses.
¶ 8. Additional facts, as necessary, will be related during our analysis and discussion of the issues.
ANALYSIS AND DISCUSSION OF THE ISSUES
¶ 9. An appellate court "employs a limited standard of review for the division and distribution of property in a divorce proceeding." Phillips v. Phillips, 904 So.2d 999, 1001(¶ 8) (Miss.2004) (citing Reddell v. Reddell, 696 So.2d 287, 288 (Miss.1997)). The chancellor's findings of fact will not be disturbed "unless the chancellor was manifestly wrong, clearly erroneous, or an erroneous legal standard was applied." Id. (citing Owen v. Owen, 798 So.2d 394, 398(¶ 10) (Miss.2001)). Appellate courts "look to the chancellor's application of the Ferguson factors when reviewing questions of equitable distribution." Id. (citing Ferguson, 639 So.2d at 928).
1. Distribution of the Marital Estate
(a) Retirement Account
¶ 10. Darian asserts that the chancellor erred by factoring his Day-Brite retirement *1244 account, valued at $68,803, into the distribution of the marital estate. We note at the outset that the evidence as it relates to the amount, if any, that remains in Darian's retirement account is unclear. At trial, Darian testified that he had expended approximately $30,000 of the $68,803 in order to pay bills and other expenses. Thus, according to Darian's trial testimony, it appears that only $38,803 remains in the Day-Brite account. However, Darian argues on appeal that he was forced to expend his entire retirement account on legal representation to defend himself against the criminal charges brought against him. Specifically, Darian argues that defending the criminal charges was "financially devastating" to the point that he spent his life savings, including his retirement account, to pay legal expenses.
¶ 11. The chancellor awarded the entire Day-Brite account to Darian, which, according to the chancellor, was valued at $68,803. The chancellor did not discuss Darian's testimony that he had expended approximately $30,000 of the account. Because we are unable to conclude from the record whether Darian's retirement account was completely depleted or was reduced by only $30,000, we reverse and remand for the chancellor to make a determination of the amount, if any, that remains in the retirement account. Also, the chancellor should make a determination as to whether Darian's expenditures, which were made with money withdrawn from the account, were legitimate marital expenses that should not be charged against him.
¶ 12. Darian also argues that the chancellor erred in failing to find that the portion of the retirement account that he had accumulated prior to the marriage is his separate estate. The record clearly reflects that Darian became employed at Day-Brite in 1987 and worked there until 2000. Thus, Darian argues that since he and Frances did not marry until 1995, the portion of the retirement account that he had earned prior to his marriage is his separate property. Accordingly, Darian asserts that the chancellor erred in classifying his entire retirement account as marital property.
¶ 13. Darian directs our attention to Arthur v. Arthur, 691 So.2d 997 (Miss. 1997), as he contends that it supports his position. In Arthur, the chancellor awarded one-half of Jerry Arthur's retirement account to his former wife, Peggy, even though the retirement funds had been accumulating prior to their marriage. Id. at 1003. On appeal, our supreme court reversed the chancery court and held that "[a]ssets are not subject to distribution where it can be shown that such assets `are attributable to one of the parties' separate estates prior to the marriage or outside the marriage.'" Id. at 1002. In reaching its decision, the Arthur court opined:
Indeed, the retirement funds at issue not having been "acquired or accumulated during the marriage," they do not fall within Hemsley's definition of marital assets subject to equitable distribution. [Hemsley v. Hemsley,] 639 So.2d [909,] 915 [(Miss.1994)] (emphasis added). The evidence indicates instead that these funds are "attributable to one of the parties' separate estates prior to the marriage." Id. at 914 (emphasis added). Jerry's retirement funds which were accumulated prior to the parties' marriage are therefore clearly the type of assets this Court determined in Hemsley would not be subject to equitable distribution upon divorce. Peggy Arthur thus was not entitled to one-half of Jerry's pension funds accumulated prior to the marriage, nor to any portion of the interest thereon. There having been *1245 no evidence at trial as to what portion of the funds was accumulated prior to the marriage, we reverse this award and remand for a determination thereof.
Id. at 1003-04 (third emphasis added).
¶ 14. We reach the same conclusion as did the Arthur court. The chancellor erred in considering the entirety of Darian's retirement account as a part of the martial estate. Clearly, the portion of the retirement account that accumulated prior to the parties' marriage is Darian's separate property. On remand, the chancellor must determine the percentage of the retirement account that was accumulated prior to the marriage and deduct that amount from the total amount of the retirement account that had been accumulated at the time of the divorce. As previously noted, the chancellor must also determine whether any portion of the retirement account was improperly dissipated during the marriage, and if so, make the proper adjustments during the equitable redistribution of the marital estate.
(b) Equipment
¶ 15. Darian also asserts that the chancellor erred in classifying two Ford tractors, a bush-hog, and a finishing mower, with a total value of $30,000, as marital property. Darian points to his trial testimony that the equipment belonged to his father and that he simply insured it under his homeowners insurance policy because it was cost-effective to do so. Darian testified that he did not own any of the equipment. Therefore, Darian contends that the chancellor erred in finding that the equipment was marital property. He further asserts that, even if the chancellor did not err in considering the equipment to be marital property, the chancellor nevertheless erred in treating all of it as marital property because the evidence, as reflected by his testimony, is that he owned only a one-third interest in the equipment. We note that Darian's testimony was not the only evidence before the chancellor on this point. Frances also testified regarding the ownership of the equipment, although her testimony on the matter did not necessarily disprove Darian's assertion that the equipment was owned by his father, or at best, that he owned only a one-third interest in it. She testified as follows on direct examination:
Q. There's some testimony last time about two Ford tractors, a bush-hog, and a finishing mower, which you valued at $30,000.00. I believe Mr. Dye testified that y'all didn't own those; is that correct?
A. Yes, sir.
Q. Would you tell us the stories on those tractors and who you think owns them and why?
A. I believe they were owned by us. Darian indicated that his father had given them to us. They stayed on our property, and we insured them, and they were used for the upkeep of our property.
Q. And y'all provided the insurance on them?
A. Yes, sir.
¶ 16. Then, on cross-examination, Frances gave the following testimony:
Q. Mrs. Dye, I'm going to hand you a document. Do you recognize that document?
A. No.
Q. Is that not an application concerning a particular tractor that is titled in Don Dye & Sons' business?
A. It appears to be an invoice.
Q. And what is that invoice for?
A. It says okay. Used 3930 Ford tractor, perhaps, and a new bush-hog.
Q. And in whose name is it in?
*1246 A. Don Dye & Sons.
Q. And do you recognize this document, this Bill of Sale?
A. I've never seen it before. No.
Q. What does that document purport to be?
A. Let me read it, please. (Reviewing document.) It's a Bill of Sale.
Q. And it's a Bill of Sale for what?
A. A Ford 3930 tractor.
Q. And whose name is it in?
A. Don Dye.
Q. And that's not Darian Dye, is it?
A. No. It looks like it's a year after the invoice.
Q. Could it be two different tractors?
A. There's nothing to tell you what this represents specifically. He purchased a lot of tractors.
Q. Okay. The point being, Mrs. Dye, is most of those tractors if not all of those tractors that were on your premises out there were in the name of Don Dye & Sons; correct?
A. That's correct.
Q. So, at best, he owned a third interest in the tractor; correct?
A. If we're going that way with it, then he would own a third interest in all the tractors that were there.
Q. Well, how many tractors were there?
A. Six to eight.
Q. What were the names of them and what were the values of them?
A. There was four or five Fords. I think he still had the John Deere. He might have still had a Case tractor.
Q. Y'all had 31 acres total; correct?
A. That's correct.
Q. Is it not is it not unreasonable to you that you that you would need to own two tractors?
A. The reason being that I was told was that Darian kept one hooked up to a bush-hog and one hooked up to a finishing mower, and those two were never put out where the other tractors were being sold. Darian kept those behind his shop.
¶ 17. As reflected above, Frances conceded that Darian owned at least a one-third interest in the equipment that was kept on their property; however, as noted, Darian testified that he did not have an ownership interest in the equipment. "Where conflicting testimony is presented, expert and otherwise, the chancellor is required to make a judgment on the credibility of the witnesses in order to resolve the questions before the court." Broadhead v. Bonita Lakes Mall, Ltd., 702 So.2d 92, 101(¶ 32) (Miss.1997) (citing Doe v. Doe, 644 So.2d 1199, 1207 (Miss.1994)). The chancellor determined that the equipment was marital property and stated the following:
There are two tractors and a bush hog. There's testimony about this. Now, Darian testified that his father owned this equipment and it was cheaper for him to add to it on his homeowner's insurance rather than ensure [sic] it through the business. Francis [sic] valued this at $27,000 based on insurance coverage. She testified that Darian told her that his father gave it to them. They were used for the upkeep on their property. They provided insurance on it. The Court finds that really those are marital assets and that they did, in fact, exist.
In making his determination, the chancellor considered the evidence before him, i.e., the testimonies of Darian and Frances. We cannot say that, based on the evidence before him, the chancellor was manifestly *1247 wrong or clearly erroneous in finding that the equipment was marital property. We find no merit to this issue.
2. COBRA Health Insurance
¶ 18. Darian also argues that the chancellor erred in ordering him to provide COBRA health insurance for Frances. The chancellor ordered the following: "Darian shall provide Frances with COBRA health insurance coverage commencing on January 1, 2008, and continue said coverage for so long as allowed by law." In Ferguson, 639 So.2d at 936, our supreme court affirmed a chancellor's order that the husband provide COBRA insurance coverage to his wife "for as long as the law allowed." The court determined that pursuant to 29 U.S.C.S. § 1162(2)(A)(iv) (1993) and 29 U.S.C.S. § 1163(3) (1993) this period is thirty-six months. Id. Based on Ferguson, we cannot find that the chancellor erred in ordering Darian to provide COBRA insurance to Frances for thirty-six months. This issue lacks merit.
¶ 19. THE JUDGMENT OF THE PONTOTOC COUNTY CHANCERY COURT IS AFFIRMED IN PART AND REVERSED AND REMANDED IN PART FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. ALL COSTS OF THIS APPEAL ARE ASSESSED ONE-HALF TO THE APPELLANT AND ONE-HALF TO THE APPELLEE.
KING, C.J., LEE AND MYERS, P.JJ., GRIFFIS, BARNES, ISHEE, ROBERTS, CARLTON AND MAXWELL, JJ., CONCUR.
NOTES
[1] The appellee's name is spelled in the record as both Francis and Frances. We have determined that the correct spelling is Frances; thus, we use this spelling.
[2] Darian raises four issues; however, for the sake of clarity, we address as one issue the issues as they relate to the chancellor's classification of the marital property.
[3] In Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss. 1994), the Mississippi Supreme Court set forth factors that chancellors must consider when equitably dividing a marital estate. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558999/ | 22 So.3d 665 (2009)
Harold D. KEENE, Appellant,
v.
ZONING BOARD OF ADJUSTMENT, etc., et al., Appellees.
No. 5D07-3058.
District Court of Appeal of Florida, Fifth District.
October 30, 2009.
Rehearing Denied December 7, 2009.
Michael W. Woodward, of Keyser & Woodward, P.A., Interlachen, for Appellant.
Ronald D. Wilson, Florahome, Intervenor, pro se.
No Appearance for other Appellees.
ON MOTION FOR REHEARING
SAWAYA, J.
A majority of the judges constituting the original panel has decided to grant rehearing in this case. Accordingly, the original opinion rendered in this case is withdrawn and the following opinion is substituted in its place. The Motion for Rehearing En Banc is denied as moot.
We review a final judgment in favor of the Zoning Board of Adjustment of Putnam *666 County (the Zoning Board) and Ronald and Ossie Wilson (the Wilsons) rendered in the declaratory judgment suit filed by Harold Keene challenging the decision of the Zoning Board to grant the Wilsons a special use permit (SUP). The SUP allowed the Wilsons to conduct a horseback riding school on their land and to board and stable horses on their property to compete in a competitive horseback endurance trail ride on nearby property. We must determine whether the trial court erred in upholding the issuance of the SUP.
Factual and Procedural Background
Keene owns property adjoining the Wilsons' 11.25-acre tract of land. He is, to put it mildly, a disgruntled and annoyed neighbor of the Wilsons. The facts of the case will explain his state of agitation. Of the horseback riding school for children and the competitive endurance trail runs operated by the Wilsons for financial gain, it is the endurance trail runs that appear to have been the proverbial straw that broke the camel's back for Keene and other neighbors. Although the endurance runs occur only twice a year, they involve as many as 45 riders and at least that many horses (at times in the past, as many as 60 riders participated), up to 30 additional staff workers, and the arrival and parking of large motor homes pulling horse trailers. A mobile home is used for the judges to sleep in, and each participant is permitted to erect a temporary 12 × 12 foot enclosure to stable and board each horse for the weekend. Bullhorn announcements, loud music, and the need for temporary port-o-lets to accommodate the weekend visitors, who sleep in whatever accommodation they have brought, further aggravated Keene and increased his annoyance at the activities. While the dissent infers that Keene filed suit because of a dog fight between his dogs and dogs owned by the Wilsons, that is speculation at best. Moreover, Keene is not the only disgruntled and annoyed neighbor.
While workers and perhaps some judges arrive during the week, the event participants generally arrive on Friday to prepare for the Saturday departure from the Wilsons' land to nearby Etoniah Creek State Forest where the trail ride occurs. Entertainment, including hayrides and karaoke, is provided during the evenings. While Mrs. Wilson pleads ignorance to alcohol use, other than beer, by the participants, there was testimony of drunken hayrides. On Sunday, the event concludes and the participants leave. The Wilsons and Keene live on a narrow paved road with no shoulder; a curve, referred to by one witness as "Dead Man's Curve," is located between the Wilsons' driveway and Keene's driveway and has a 15-mile-per-hour speed limit. Off-duty deputies were hired to handle the traffic issues at the most recent endurance event.
The Putnam County Comprehensive Plan (hereinafter the Plan) designates the Wilsons' land as Rural Residential Future Land Use. After it was brought to the attention of zoning enforcement authorities that the Wilsons were conducting a riding school and boarding and stabling horses to compete in the endurance trail rides on nearby property, the Wilsons applied for a SUP. The staff report prepared for the Zoning Board classified the riding school and the horse boarding and stabling activities as both "commercial: agriculture-related uses" and as "rural recreational uses" and recommended approval of the SUP. Specifically, the report recommended that the SUP be issued with a cap of 45 riders in the endurance events with a twice per year limit on those events. Approval of the horseback riding school was recommended with a cap of six children at *667 any time. The Zoning Board issued the SUP as recommended.
Keene filed suit for declaratory relief against the Zoning Board, requesting a judgment declaring that the SUP was erroneously granted.[1] As the litigation progressed, the Zoning Board and the Wilsons came to realize that the uses approved in the staff report"rural recreational" and "commercial: agriculture-related" usescould not be used on property like the Wilsons' that is designated Rural Residential. Section A.1.9.3.A.4 of the Plan establishes the classes of uses allowed on property, like the Wilsons', that is designated "Rural Residential," and they are: limited agricultural uses; residential; neighborhood commercial; community facilities and services types 1 and 2; and activity-based and resource-based recreational uses. Putnam County, Fla., Comp. Plan § A.1.9.3.A.4. "Commercial: agriculture-related" uses are not listed and thus not allowed, and the Zoning Board candidly admitted that in the trial proceedings. Specifically, the Zoning Board admitted in its answer that the Plan did not allow "rural recreational" or "agriculture-related commercial use" in an area designated as Rural Residential. Despite the analysis in the report, the Zoning Board asserted that the Wilsons' proposed uses were "Limited Agricultural Uses," which are permitted in the Rural Residential Future Land Use category. Alternatively, the Zoning Board proposed that the uses could be considered "resource-based recreational" uses that are permitted by the Plan on land designated as Rural Residential. The Wilsons also contended that the uses were actually either limited agricultural, activity-based recreational, or resource-based recreational uses that may be permitted in the Rural Residential category.
Keene argued that even if the uses were labeled as "activity-based recreational" or "resource-based recreational" uses (even *668 though those categories were not identified in the staff report as the basis for its recommendation that the SUP be approved by the Zoning Board), the uses were still wrongly allowed by the Zoning Board. Keene further argued that the uses fell within the category "commercial: agriculture-related," which is not allowed on land designated as Rural Residential, even by issuance of a SUP.
The case eventually made its way to trial. The trial court concluded that the Wilsons' uses were "resource-based or activity-based recreational uses" and thus could properly be allowed, by issuance of a SUP, on the Wilsons' land. The final judgment gives no explanation for this conclusion and makes no findings of fact to support it. Moreover, the trial court made no findings that the proposed uses did not fall within the category of "commercial: agriculture-related" uses and did not make any findings that if it did, which category of use most closely fits the Wilsons' proposed uses. Therefore, the issue we must resolve is whether the horseback riding school and the boarding and stabling of horses on the Wilsons' property more closely fall in the category of activity-based or resource-based recreational uses, which are permissible, or whether they more closely fall in the category of "commercial: agriculture-related" uses, which are impermissible even after issuance of a SUP.
Analysis
In order to resolve this issue, we must apply the provisions of the Plan and the Putnam County Development Code (hereinafter the Development Code), which implements the Plan. Chapter 163, Florida Statutes, specifically requires that the "comprehensive plan set general guidelines and principles concerning its purposes and contents . . . ." § 163.3194(4)(b), Fla. Stat. (2007) (emphasis added). Therefore, chapter 163 further requires that comprehensive plans be implemented by the "adoption and enforcement" of local regulations or land development codes. § 163.3201, Fla. Stat. (2007) ("It is the intent of this act that the adoption and enforcement by a governing body of regulations for the development of land or the adoption and enforcement by a governing body of a land development code for an area shall be based on, be related to, and be a means of implementation for an adopted comprehensive plan as required by this act.") (emphasis added); § 163.3202(1), Fla. Stat. (2007) ("[E]ach county . . . shall adopt or amend and enforce land development regulations that are consistent with and implement their adopted comprehensive plan.") (emphasis added); see also Board of County Com'rs of Brevard County v. Snyder, 627 So.2d 469, 473 (Fla.1993) ("The local plan must be implemented through the adoption of land development regulations that are consistent with the plan.") (citing § 163.3202, Fla. Stat. (1991)). Section 163.3202, Florida Statutes, further provides:
Local land development regulations shall contain specific and detailed provisions necessary or desirable to implement the adopted comprehensive plan and shall as a minimum . . . [r]egulate the use of land and water for those land use categories included in the land use element. . . .
§ 163.3202(2)(b), Fla. Stat. (2007) (emphasis added).[2]
Hence, the Development Code was enacted to provide specific legislative standards that must be applied to the general *669 provisions of the Plan and enforced to regulate the various land use categories in the Plan. Specifically, the Development Code provides: "This Land Development Code is enacted pursuant to the requirements and authority of Section 163.3202, Florida Statutes. . . ." Dev. Code § 1.02. The Development Code further provides:
It is the intent of this Code . . . to implement the Putnam County Comprehensive Plan. Chapter 163, Florida Statutes, requires each local government to enact a single land development code which implements and is consistent with the local comprehensive plan, and which contains all land development regulations for the County. This Code is consistent with the Putnam County Comprehensive Plan and implements the Plan.
Dev. Code § 1.03.
Included in the Development Code is the standard contained in section 1.06(c), entitled "General Rules of Interpretation," that requires the "[m]ore specific provisions of this Code shall be followed in lieu of more general provisions that may be more lenient than or in conflict with the more specific provision." Section 2.02.01(b) of the Development Code further requires that "[w]here a proposed use could be said to fall within more than one category, the Director shall determine in which category the use most closely fits based on the description of the use category and the examples of uses in the category. A proposed use shall be placed in the most specific category in which it fits." Hence, when a use or activity falls into a category of permissive uses, but more closely falls into a category that is prohibited by the Plan, the latter trumps the former and the activity must be prohibited. This rule is specifically recognized and applied by the courts. See Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126 (Fla.2000); Stroemel v. Columbia County, 930 So.2d 742 (Fla. 1st DCA 2006); Saadeh v. Stanton Rowing Found., Inc., 912 So.2d 28 (Fla. 1st DCA 2005); Barry v. Garcia, 573 So.2d 932 (Fla. 3d DCA), review denied, 583 So.2d 1034 (Fla. 1991).
Keene argues that the proposed uses of the Wilsons' property more closely fall into the category of "commercial: agriculture-related" uses, which are prohibited. We agree. The Development Code category labeled "Commercial: Agriculture-Related" specifically and explicitly includes the stabling and boarding of horses and riding academies as examples of uses coming within that category:
a. This category includes commercial uses directly related to agricultural production.
b. Examples:
Stabling or Boarding of Farm Animals
Roadside Stand
Livestock Auction
Feed Store
Saw Mill (where wood is from trees grown on the site of the saw mill) Slaughterhouse (where animals to be slaughtered are pastured on the site of the slaughterhouse) Veterinary Facilities: Large Animal
Riding Academy
Airstrip for Crop Dusting
Dev. Code § 2.02.20 (emphasis added).
The record reveals that the only use of the Wilsons' property in conjunction with the trail rides is to board and stable the horses that participate in that event, which takes place in the nearby Etoniah Creek State Forest. Other than coming and going on the trail rides, the horses are being boarded and stabled on the Wilsons' land. We also note the testimony of Mrs. Wilson *670 who, when asked whether she had discussed with Putnam County the need for a SUP, testified that when she went in to obtain her occupational license, she informed them "about my possibly boarding horses, and the lessons I gave. . . ."
As for the horseback riding school, it clearly falls under the label of "Riding Academy." The materials filed by the Wilsons in conjunction with their application for the SUP include a Pre-Application for Development Review, which is a draft of their proposed development plan. In it, the Wilsons stated that the type of development was "non-residential" and described the uses as: "Riding Lessons, Competitive Trail Rides, Summer Horsemanship Program." They further described the non-residential uses as including "horseback riding & horsemanship lessons, summer horsemanship program to teach riding & horsemanship to children, two times yearly competitive trail rides. . . ." The Wilsons also filed with the application a flier that provided the summer horsemanship sessions would be held for six weeks and limited to six riders per week. The flier described activities for each weekly session as including "all areas of horsemanship, stable management and health, [and] riding English, Western and bareback."
These uses are clearly commercial uses. The flier concerning the riding academy provided that the cost would be $135 per week per rider. Therefore, for one week, the Wilsons will collect $810 per week, and for the six-week period, they will collect $4,860. Concerning the boarding and stabling of the horses in connection with the trail rides, the Wilsons submitted a form to be filled out by each individual participant requiring that various fees would be paid, including a $65 entry fee. For 45 riders, the total amount collected would be $2,925 per event. If two events are held each year, the Wilsons will collect a total of $5,850 each year. In total, the Wilsons will generate $10,710 in annual revenue. This is hardly incidental as the Wilsons contend. Moreover, the participants in the trail ride are also required to execute a release and hold harmless agreement to protect the Wilsons' commercial enterprise from liability. We note that the Wilsons admitted in the proceedings below that the SUP "allow[ed] for the operation of various commercial (paid) equestrian activities. . . ."
The dissent argues that use of the Wilsons' property as a riding academy or to board and stable horses does not mean that the property is being used for agricultural production. We reject this argument in light of the Development Code provisions defining "commercial: agriculture-related" uses to specifically include riding academies and boarding and stabling horses as examples of activities that directly relate to agricultural production. Dev. Code § 2.02.20. Moreover, section 2.02.01(a) of the Development Code expressly provides that "[a] Use Category defines the types of uses that fit within a given category and then lists examples of the uses that fit the definition." (Emphasis added). The Development Code further provides that when a use fits more than one category, it shall be determined "in which category the use most closely fits based on the description of the use category and the examples of uses in the category." Dev. Code § 2.02.01(b) (emphasis added). Hence, it is clear that property used as a riding academy and for the boarding and stabling of horses is property used for agricultural production under the pertinent Development Code provisions. In addition, the staff report issued by the Zoning Board specifically provided "APPLICATION: SUP-06-001 Wilson-Agriculture Based Business."
*671 We note that in the trial proceedings, the Wilsons admitted and specifically argued that the activities for which they sought the SUP are properly classified as "commercial: agriculture-related" uses. Specifically, their trial memorandum states, "The Wilsons contend that the proposed equestrian activities are closer in nature to commercial agricultural uses, than to the rural recreational uses Keene cites." The Wilsons then referred to "[t]he examples [which] specifically include `Stabling or Boarding of Farm Animals' and `Riding Academy.'" They obviously changed their tune when it became apparent that "commercial: agriculture-related" uses are not allowed on property, such as theirs, that is classified as Rural Residential, even with the issuance of a SUP.
Turning now to the use categories the Wilsons contend are appropriate, the Plan defines "Activity-Based Recreational Uses" as "recreational activities providing the participant user with a built court, field or structure for a specific activity or activities. Examples of activity-based uses include, but are not limited to, playgrounds, softball and baseball fields, basketball courts and recreation centers." Comp. Plan Definitions. Similarly, the Development Code defines "Recreation: Activity-Based" uses:
a. This category includes public recreational uses that primarily rely on facilities sports and other active recreational activities as the attraction.
b. Examples:
Ballparks and fields
Playgrounds
Boat Ramps
Public Docks/Boat Moorings
Putnam County, Fla., Dev. Code § 2.02.22.
Clearly this category of use requires a facility, such as a court, field, or structure affixed on the property, designed to be used for sports and recreation. There is absolutely no evidence in this record to show that there is anything resembling such a facility on the Wilsons' property. It is an 11.25-acre tract of land that is not designed for or intended to be used for anything remotely similar to a playground, softball or baseball field, basketball court, recreation center, boat ramp, or public mooring. Michelle Kennedy, who served on the staff of Putnam County Planning and Development Services and who prepared the staff report for the Zoning Board, testified that she inspected the Wilsons' property and had seen "fields, trees, the Applicant's home, and the barn."
Although the Comprehensive Plan does not define resource-based recreational activities, the Development Code's category of "Recreation: Resource-Based" defines this use:
a. This category includes public recreational uses that primarily rely on natural resources as the attraction.
b. Examples:
Public and Private Parks
Public and Semi-Private Beaches
Dev. Code § 2.02.21. There is no natural resource that is the basis of the attraction to the Wilsons' property remotely resembling a beach or park. It is nothing more than an 11-plus acre tract of property with a house and barn. Like the prior use category, it is difficult to see how the Wilsons' use of their property falls into this use category.[3]
*672 The dissent actually contends that the natural resource the Wilsons are relying on is "horseback riding in a rural setting." That is certainly not a natural resource recognized in the Plan and the Development Code. If that were the case, then all a person would need to qualify for a SUP under the resource-based and recreational-based category is a rural piece of property, a horse and saddle, and a horseback ride. This argument defies logic and common sense, and we totally reject it.
The dissent then argues that that the Wilsons' proposed uses are in the nature of a fish camp, a marina, or some sort of campground, which are allowed under section A.1.9.3.A.4(f) of the Plan. We disagree. The only part of section (f) that applies to this case is the provision that "[a]ctivity-based and resource-based recreational uses are permitted subject to compliance with standards provided in the land development code." Putnam County, Fla., Comp. Plan § A.1.9.3.A.4(f). The remainder of section (f) applies to "further" regulation of marinas, fish camps, and campgrounds to allow limitations of their scale "in the development review process"; requires that marinas and fish camps be adjacent to specifically named lakes and rivers; and requires that the density of any marina, fish camp, or campground not exceed "12 units or spaces per acre." Putnam County, Fla., Comp Plan § A.1.9.3.A.4(f). There is absolutely no evidence that the Wilsons' property can be used as a campground because it is not divided into units or spaces for that purpose and it cannot be used as a marina or fish camp because the property is not adjacent to any lake or river. Furthermore, to qualify for use as a campground, the property must encompass 20 acres or more; contain clearly defined campsites that abut on a street with each campsite containing a minimum of 1,500 square feet and a width of 30 feet; provide electrical outlets for the RV vehicles that park on the Wilsons' property; supply water to each campsite by piping and a cold water tap; contain the required sanitation facilities such as showers and restroom facilities; and provide a central sanitary sewer system. Dev. Code § 3.02.36. The Wilsons' property meets none of these requirements: it is nothing more than 11.25 acres with trees, fields, a house, and a barn.
Moreover, the dissent fails to mention that the Zoning Board only alternatively proposed that the uses may be categorized as resource-based recreational uses. More importantly, the Wilsons did not apply for a SUP based on intended uses of their property that are remotely similar to a fish camp, campground, or marina; the application for the SUP was never analyzed by the Zoning Board for approval based on use of the property as a fish camp, campground, or marina; a staff report was never issued for use of the property as a fish camp, campground, or marina; and a SUP was never issued authorizing the property to be used for those purposes. The testimony of Mrs. Kennedy explains why the Wilsons applied for a SUP and how they intended to use their property:
Q. So if I understand correctly, the Wilsons needed a Special Use Permit because the things they wanted to do were one or more of the things on that list you just read; correct?
A. Yes.
Q. And which things were those?
A. The riding academy and the endurance rides.
Q. Would the endurance rides fit under stabling or boarding of farm animals, was that the relationship there?
A. It would bethe endurance rides areit's a temporary storing of those animals while they are not riding.
*673 Q. The part of thethe part of the endurance rides that actually takes place on the Wilson property is, in fact, a temporary stabling or boarding of those horses; is it not?
A. Yes.
Q. Okay. So again, that is why the Wilsons had to apply for the Special Use Permit?
A. Yes.
. . . .
Q. So just to be clear, in your opinion, then, and what you put in your Staff Report both the competitive trail endurance rides, and the Summer horse camp riding academy were and are Commercial Agricultural-related uses; right?
A. Yes.
It is clear that the Wilsons applied for a SUP to allow the riders in the trail event to board and stable their horses in preparation for the trail ride on nearby property and to allow the riding students to participate in the week-long riding academy. The trail riders and students do not go there to fish, launch boats, or to recreate in a campground.
We conclude that the activities conducted on the Wilsons' property fit much more closely and specifically into the prohibited "commercial: agriculture-related" use category than into the activity-based or resource-based recreational use categories. This is not even a close call.
Finally, we agree with the dissent that this case will not rivet the attention of many. It is a unique case that is dependent upon application of obscure statutes contained in Putnam County's Comprehensive Plan and Development Code, and it will be of little interest or significance to anyone other than the parties who have participated in it. But that does not mean that we should be any less thorough in our review of this case or curtail legitimate criticism of the many erroneous assertions we see in the dissent.
Conclusion
To summarize what happened here, after the Wilsons applied for a SUP to conduct the riding academy and horse boarding and stabling activity on their property, the Zoning Board analyzed the staff report that properly placed those activities into the "commercial: agriculture-related" category and erroneously issued the SUP in violation of the provisions of the Plan and the Development Code that clearly prohibit such uses on property designated as Rural Residential. The Zoning Board realized the error after the suit was filed by Keene and proposed the alternative use categories of activity-based or resource-based recreational uses. Unfortunately, the trial court misapplied the law and incorrectly interpreted the pertinent portions of the Plan and the Development Code by failing to apply the rule that the proposed uses must be placed in the use category into which they most closely fit. We believe it is time to correct these errors. We do so by holding that issuance of the SUP ran afoul of the Plan and the Development Code, and the trial court erred as a matter of law in upholding it. Accordingly, the final judgment is reversed and the cause remanded with instructions to enter a declaratory judgment finding the SUP was improperly issued.
REVERSED and REMANDED with instructions.
PLEUS, JR., R., Senior Judge, concurs.
GRIFFIN, J., dissents, with opinion.
GRIFFIN, J., dissenting.
The author of a dissenting opinion always worries whether anyone will bother to read the dissent or care what it says. In a case such as this, where the majority opinion is as long as this one and contains *674 so much extraneous material, the worry is whether the reader will even find the dissent, much less have the energy to read it. It does not help that the issue in this case is whether Keene is entitled to a judgment under section 163.3215, Florida Statutes, that Putnam County's issuance of a special use permit to the Wilsons is inconsistent with the County's Comprehensive Plana topic not likely to rivet the attention of most readers. Nevertheless, I suggest to the half-dozen or so of you who are still reading that this case has elements of a pretty good human drama and is an excellent example of what can happen when (the majority of) an appellate court disagrees with a result in the trial court.
I am writing this dissent because I believe Mr. and Mrs. Wilson's rights to use their land according to the law has wrongly been taken, because Putnam County's interpretation of its own Comprehensive Plan and Land Development Code has wrongly been rejected, and because Judge LaRue's factual findings and legal conclusions have been wrongly ignored and his judgment in favor of the Wilsons wrongly reversed.
Mr. and Mrs. Wilson own 11.25 acres of land in Putnam County, occupied by their residence and horse ranch. Twice annually, they host a properly permitted[4] competitive trail and endurance ride into the adjacent Etoniah State Forest, using their property as the staging area. This is an activity sanctioned and judged by the South Eastern Distance Riders Association ["SEDRA"]. There is a $65 fee for participation. Participants arrive at the Wilsons' ranch on Friday in their campers or other recreational vehicles, bringing their horse and portable pen that hooks to their horse trailer. On Saturday, after camping overnight, the participants set off on horseback into the State Forest. They participate in a full day's ride through the Forest, again stay overnight in their campers or RV's and leave by Sunday. According to the Wilsons, this activity proceeded with Keene's cooperation until December 2005, when there was a fight between the Wilsons' dog and Keene's dog. Only then did it become an issue of state-wide land-use policy concern.
After it was determined that the County would require the Wilsons to get a Special Use Permit to continue the trail rides and for Mrs. Wilson to continue to give riding lessons to local children at their home, Putnam County conducted a contested hearing and site visits by staff and several County commissioners were made. The Special Use Permit was approved with conditions that limited the number of annual rides to two and the number of riding students to six.
Mr. Keene promptly filed suit pursuant to section 163.3215, Florida Statutes, challenging the Wilsons' Special Use Permit as a "Development Order"[5] that is inconsistent *675 with the County's Comprehensive Plan. After a multi-day non-jury trial involving some seventeen witnesses, including an "expert" land planner hired by Mr. Keene, Judge LaRue rejected Mr. Keene's claim that the Special Use Permit was not consistent with the Comprehensive Plan.
Section 163.3125 only applies to inconsistency with a county's Comprehensive Plan. Therefore, the issue in this case simply is whether the trial court erred by deciding that the Wilsons' proposed uses of their property (the trail rides and riding lessons) are consistent with Putnam County's Comprehensive Plan. In his cogent order, Judge LaRue not only found no inconsistency, he found that "the activities. . . are specifically authorized . . . as Activity-based and Resource-based within the meaning of the Comprehensive Plan. . . ." Here are Judge LaRue's conclusions:
1. The activities permitted under the SUP are consistent with, and meet all the requirements of, the goals, objectives and policies of the Future Land Use Element of the Putnam County Comprehensive Plan and of Section 12.12.03 of the County's Land Development Code.
2. The activities permitted under the SUP are specifically authorized as a special use in the Rural Residential future land use zoning classification of the Wilsons' parcel as Activity-based and Resource-based within the meaning of the Comprehensive Plan and the Land Development Code.
3. The location, scale and intensity of the activities are compatible with the overall character of the existing future development of the area and are consistent with the surrounding land in the area.
4. The activities do not materially adversely impact nor unduly restrict the enjoyment of permitted uses in the surrounding area or by neighbors.
5. The Staff report citing Rural Recreational use as being one of the uses allowed for the Wilsons' parcel under the Comprehensive Plan was in error, but the term was not specifically relied upon by the ZBOA.
6. The ZBOA heard evidence during its April 19, 2006 hearing on the Wilsons' application for the SUP and made its decision to issue the SUP based on many factors, including the uses sought under the SUP which were Activity-based and Resource-based within the meaning of the Comprehensive Plan.
7. The SUP could have been issued by the ZBOA without the incorrect reference in paragraph a. of the Staff Report as to the Wilsons' parcel allowing Rural Recreational uses under the Comprehensive Plan.
(Emphasis added). In order to verify the correctness of this judgment, we need only go to the Comprehensive Plan itself.
Under the Comprehensive Plan, the future land use classification for the Wilsons' property is designated "Rural Residential." The Rural Residential category, which is number 4 in the Comprehensive Plan, is described in seven paragraphs that *676 specify what it does and does not include, summarized as follows:
(a) Limited Agricultural Uses are permitted
(b) Residential Development is allowed with a maximum density of one dwelling per 5 acres or per one acre depending on various factors
(c) Neighborhood Commercial Uses allowed in a PUD zoning district
(d) No industrial use allowed
(e) Community facilities may be allowable
(f) Activity and Resource-based recreational uses are allowed
(g) Maximum Floor Area Ratios for residences are specified
(Emphasis added).
The section (f) category of "Activity-based" and "Resource-based" recreational uses expressly includes "marinas, fish camps, campgrounds and other camps," which the Plan says "may be limited . . . to mitigate impacts on the natural resources they utilize and to mitigate impacts on adjacent residential development."[6]
This provision in the Comprehensive Plan leaves no doubt that the Activity-Resource-Based category in Section 4(f) of the Comprehensive Plan is intended to allow uses in the nature of a campground or a fish camp or marina for the enjoyment of adjacent natural resources such as a lake, a river, a marsh, a forest, or trail. If the Wilsons' activities fit within this category of the Comprehensive Plan, then the trial judge was right and the majority is wrong. Clearly, the camping and staging of the trail ride into the adjacent State Forest fits the Resource-Based Comprehensive Plan category.
The majority's refusal to accept that the Wilsons' Special Use Permit is not inconsistent with the Comprehensive Plan is predicated on the contention that there is a category of land use in the County's Land Development Code that fits the Wilsons' use more specifically than Recreation-Resource Based and since that category is not a Rural Residential category, the use is inconsistent with the Comprehensive Plan. The County's Land Development Code does quite logically say that a proposed use should be placed into the category into which it most directly fits, for purposes of applying the Land Development Code, but that does not take the majority very far. First, the category they prefer is not more specifically applicable. More important, if a proposed land use is allowed under the Comprehensive Plan, it is not inconsistent with it.
The land use category in the County Land Development Code that the majority has settled on as being more specifically applicable to the Wilsons' proposed uses is called "CommercialAgriculture-Related." *677 Their position is this is the one and only slot into which the Wilsons' activities can fall.[7]
But it does not fit that category. The definition of this land use category in the code says it applies to "commercial uses directly related to agricultural production." (Emphasis added). The charging of a $65 fee for participation in a SEDRA trail ride does not make it a "commercial" use. It would seem instead to reinforce that it is a recreational use like any other "walk," or "run," or "ride" in which enthusiasts pay a fee for participation.[8] Moreover, there is no record evidence I can find that either the trail rides or the riding lessons have anything to do with "agricultural production."
The majority simply ignores the "agricultural production" component of the section it seeks to apply. Instead, the majority relies on the examples given in the code of activities that might fall into this "Commercial Agriculture-Related" category. The listed examples include the two that the majority has chosen to apply:
Stabling or Boarding of Farm Animals
Roadside Stand
Livestock Auction
Feed Store
Saw Mill (where wood is from trees grown on the site of the saw mill) Slaughterhouse (where animals to be slaughtered are pastured on the site of the slaughterhouse)
Veterinary Facilities: Large Animal
Riding Academy
Airstrip for Crop Dusting
(Emphasis added).
Obviously, the use of examples in the Land Development Code is meant to elucidate the Code's definition of the category, not the other way around. Inclusion of an example in this list does not mean that those uses are necessarily "commercial" or that they necessarily relate to "agricultural production." That is why they are called "examples"they may or may not apply. Clearly, not all "Stabling or Boarding of Farm Animals" is a commercial activity. Besides, "CommercialAgriculture-Related" suggests the operation of a business on the property as its principal use. What the Wilsons propose is an incidental fee-generating activity on rural residential property, not agriculturally-related activity on commercial property. The "Commercial Agriculture-Related" category is designed to specify where commercial activities related to agricultural production are allowed to be sited, i.e. you can't put a stable or a slaughterhouse in the local mall.
Even more to the point, the "Stabling or Boarding of Farm Animals" in a commercial category certainly implies, as a matter of common understanding, that the landowner is paid money to stable or board the farm animals of others. Here people come and camp overnight on the Wilsons' property with their own horse. How is that "stabling or boarding?" And how is it more like "stabling or boarding" than camping?
*678 The only argument the majority offers that the special permitted use constitutes the "Stabling or Boarding of Farm Animals" is that the participants in the trail rides keep their horses in their portable pens on the Wilsons' property when they are not actually out on the trail. That is about as oblique an example of "Stabling or Boarding of Farm Animals" as one could conjure up. Allowing the trail ride participants to keep their horses on the property overnight while they sleep alongside in their campers does not make this the "stabling or boarding of farm animals" any more than driving a race car onto the property would make the ranch a race track. Besides, the fee here is for the competitive trail ride, not for the "stabling or boarding of farm animals." If the majority is right, then the Wilsons could simply announce that the horses stay for free and eliminate the Comprehensive Plan issue.
Assuming that the majority can somehow surmount the obstacle that the category of "CommercialAgriculture-Related" only applies to "uses directly related to agricultural production" and the fact that the Wilsons' proposed activities have nothing to do with agricultural production, I will grant that the "Riding Academy" example is somewhat descriptive of Mrs. Wilson's riding lessons. But I don't think a residential property becomes a "Riding Academy" if a few children are given riding lessons there. "Riding Academy" implies a place of business open to the public to go and learn riding. It is a place where the owner can sell as many riding lessons to as many people as they can get through the door. It is a place where horses can be rented to ride and where equestrian goods and supplies are sold. That is not what the Wilsons are doing. Remember, section 163.3215 only does one thing. It provides a remedy if a county approves a development order that is inconsistent with the Comprehensive Plan. What the Wilsons are doing is engaging in an activity that relies on the attraction of natural resources and their facilities for active recreation, i.e., horseback riding in a rural setting. As the trial judge said, this is expressly allowed in the Comprehensive Plan. The only legitimate legal issue in this case is whether allowing riding lessons for six children at the Wilsons' home is not an Activity-Resource-Based use under the Comprehensive Plan. Whether it is similar to examples of possible commercial agricultural uses in the Land Development Code is irrelevant.
I do not suggest that it is improper to refer to the County's Land Development Code to understand the meaning of the terms within the Comprehensive Plan. On the contrary, I maintain that the Comprehensive Plan is the only document we should be interpreting and the way in which the County uses and interprets these terms is relevant. So, what does the County Land Development Code say about "Recreation-Resource-Based?" It says this category "includes public recreational uses that primarily rely on natural resources as the attraction." This perfectly describes the Wilsons' proposed use and is a description entirely consistent with the campgrounds, camps, marinas, and fish camps specifically identified in the Comprehensive Plan. In order to find inconsistency, the majority again has to bypass the definition and rely on the Code's "examples." The only two examples given in the Land Development Code are parks and beaches. So, says the majority, this can't be a Resource-Based Recreational use because it isn't a park or a beach. Just as the majority ignores that the Code defines the "Commercial-Agriculture-Based" land use category as "commercial uses directly related to agricultural production," it ignores that Recreation-Resource-Based includes recreational uses that rely on natural resources as the attraction. If the *679 majority is right that Recreation-Resource-Based means only a park or a beach, then campgrounds and fish camps would not qualify, and yet we know that they do because the Comprehensive Plan says so.
The majority accords no deference to the trial judge's detailed order, presumably because the only legitimate issue is the interpretation of the Comprehensive Plan. That is why most of the majority opinion is irrelevant, and its recitation of what it sees as the facts, colorful as they may be, do not matter because it is the trial judge's job to determine the facts. The trial court heard Keene and his friends and his expert and concluded that what the Wilsons were doing was Activity-Resource Based, that the location, scale and intensity of the activities were compatible with the surrounding areas and that there was no material or undue impact on the neighbors.[9]
Finally, there is a certain irony in the outcome of this appeal. Environmentalists and other organized opponents of large-scale developments, which section 163.3215 was actually intended to address, probably never imagined, in their wildest dreams, that a proposed Development Order, consistent on its face with a County's Comprehensive Plan, could be attacked as inconsistent by matching it with an example listed somewhere else in a county's development code.
I would affirm.
NOTES
[1] The dissent questions whether the SUP issued to the Wilsons is a development order under section 163.3215. This is not an issue raised by the parties in the instant proceedings. Even the Wilsons admitted in the trial proceedings that "the permit purports to be a development order. . . ." Nevertheless, the SUP issued in this case is clearly a development order. Section 163.3164(7), Florida Statutes, specifically defines "development order" as "any order granting, denying, or granting with conditions an application for a development permit." Section 163.3164(8) defines "development permit" as an official action having the effect of permitting the development. Section 163.3215(6) defines "development" as having the meaning in section 380.04, Florida Statutes, which defines "development" as "making any material change in the use or appearance of any structure or land. . . ." The Zoning Board admitted in the trial proceedings that the SUP was issued as a development order and the record reveals that the Wilsons applied for a development permit. They filed a Pre-Application for Development Review that specifically states:
Prior to filing for development plan review for Class II or Class III development projects, the owner or developer must submit a draft version of the plan of development for review by the Development Review Committee (DRC). . . . The purpose of the pre-application conference is for the owner or developer to introduce and describe the proposed development project.. . .
The application for development further requested that the owner or developer provide a "Project Description: (Please provide a conceptual site plan showing proposed improvements on the site. . . .)." The proposed uses and improvements the Wilsons included in their response stated that the project would be used to give riding and horsemanship lessons and trail rides twice yearly, that a mobile home would be used for restroom and kitchen facilities, and that additional handicapped facilities would be provided for the events. The Wilsons applied for a development permit for their proposed development project and received a development order.
[2] The land use element is a specific part of a comprehensive plan. See § 163.3177, Fla. Stat. (2007).
[3] The dissent states that the trail rides were permitted by the Florida Division of Forestry and sponsored by the South Eastern Distance Riders Association. These facts have absolutely nothing to do with whether the Wilsons were legally using their property to board and stable the horses that participate in the riding event that takes place on nearby property.
[4] The Florida Division of Forestry requires a permit to conduct the rides in the State Forest, which the Wilsons obtained.
[5] Apparently, in order to find the meaning of the term "development order," it is necessary to go to chapter 380, the legislation pertaining to "Land and Water Management." Section 380.031 defines a "Development Order" to be "any order granting, denying, or granting with conditions an application for a development permit." "Development Permit" is defined to include "any building permit, zoning permit, plat approval, or rezoning, certification, variance, or other action having the effect of permitting development as defined in this chapter." In order to ascertain what constitutes "development," it is necessary to examine the various provisions of section 380.04, entitled "Definition of Development." There is no category in section 380.04 suggesting that a special use permit like the one we have here pertains to development. The closest is section 380.04(1)(b), which identifies as "development:" "[a] change in the intensity of use of land, such as an increase in the number of dwelling units in a structure or on land or a material increase in the number of businesses, manufacturing establishments, offices, or dwelling units in a structure or on land." But this is not that. Allowing a total of four nights of camping connected to trail rides into the adjacent State Forest and riding lessons for up to six children is not "development" and the challenged permit is not a development order. If it is not a development order, Mr. Keene does not have a cause of action under section 163.3215. Section 163.3215 is not designed to cover every land use dispute in Florida.
[6] Here, verbatim is the Comprehensive Plan's authorization of Activity-Based and Resource-Based recreational uses for the Rural-Residential category:
f. Activity-Based and resource-based recreational uses are permitted subject to compliance with standards provided in the land development code. The location, scale and intensity of activity and resource-based recreational uses shall be compatible with the overall character of the existing and future development of the area. Certain resource-based recreational uses shall be further regulated as follows:
1. Marinas and fish camps will be permitted only adjacent to Georges Lake, Crescent Lake, Lake George and the St. Johns River and its major tributaries and are subject to compliance with detailed and specific standards of the land development regulations.
2. Marinas, fish camps, campgrounds and other camps may be limited in scale in the development review process to mitigate impacts on the natural resources they utilize and to mitigate impacts on adjacent residential development.
[7] The majority makes much of a County employee's so-called "admission" that a "Commercial Agricultural Related" use is not allowed in Rural Residential, but that is not the issue. Ms. Kennedy specifically testified that the Wilsons' uses are Activity-Resource-Based recreational uses. Besides, this employee's understanding, or lack thereof, may not have carried much weight with the trial judge since she is the staff person referred to in the first part of the majority opinion who initially and erroneously recommended approval of the permit as a "Rural Recreational" use.
[8] Unfortunately, the record is not well developed concerning this $65 fee. If it merely covers expenses, rather than generate a profit, to call this a "commercial" use becomes even more far-fetched.
[9] In this case, the County has no axe to grind in this dispute between neighbors. The County wrote these documents and lives and works with them every day. The fact that Putnam County agrees that the Wilsons' special uses are Activity-Resource-Based and not inconsistent with their Comprehensive Plan is not irrelevant. Putnam County made the policy decision in its Comprehensive Plan to allow activity/resource-based uses, including camping in rural residential areas, and has approved the Wilsons' use to be consistent with their Comprehensive Plan. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559002/ | 644 F.Supp. 769 (1986)
Harry B. FLYNN, Plaintiff,
v.
Daniel DYZWILEWSKI, Hon. George N. Leighton, Edward Hegerty, Michele Smith, Philip Turner, James DiNatale, Thomas Moore, and Edwin Meese, Attorney General of the United States, Defendants.
No. 85 C 8618.
United States District Court, N.D. Illinois, E.D.
September 19, 1986.
*770 Harry B. Flynn, pro se.
Gail Ginsberg, Asst. U.S. Atty., Chicago, Ill., for defendants Dyzwilewski, Leighton, Hegerty, Smith, Turner and Meese.
Michael D. Sher, Andrew G. Neal, Friedman & Koven, Chicago, Ill., for defendant Moore.
Heather M. Higgins, Thomas L. Browne, Hinshaw, Culbertson, Moelmann, Hoban & *771 Fuller, Chicago, Ill., for defendant DiNatale.
MEMORANDUM AND ORDER
MORAN, District Judge.
Plaintiff Harry Flynn was at one time an informer for the FBI. While in Cook County Jail in 1981, he apparently got wind of a plot by a fellow prisoner to have one of that prisoner's victims murdered in order to prevent the victim from testifying. He fed information on the plot to the FBI through defendant Daniel Dyzwilewski, an FBI agent. Later, however, Flynn feared that his role as an informer had been discovered. Since the prisoner about whom Flynn was passing information was a member of a gang well represented among those incarcerated in the Illinois prison system, Flynn began to fear for his personal safety. He made an arrangement with Dyzwilewski to plead guilty to a violation of 18 U.S.C. § 2314, interstate transportation of stolen goods, specifically of jewelry from a robbery in Ohio to the Chicago area. That took him out of state into federal custody. He served a few months of his four-year sentence at the Chicago Metropolitan Correctional Center (MCC) and was paroled.
Flynn's dissatisfaction with the bargain he had made did not erupt until late in 1983. Illinois authorities arrested him on charges of attempted murder. The upshot of the arrest was a revocation of his federal parole and a return to prison, this time to the federal penitentiary in Terre Haute, Indiana. Apparently Flynn regards that action as not part of the deal. His first step was to file a motion to vacate his sentence under 28 U.S.C. § 2255. He alleged that the crime of which he had been convicted was manufactured wholly for the purpose of getting him into federal custody. Agent Dyzwilewski countered that he had assured himself before the plea that ample grounds existed for believing Flynn guilty, including a description of the robber from the robbery victim in Ohio that closely matched Flynn's. Judge Leighton of this district, also a defendant in this suit, found after two days of evidentiary hearings that Flynn's plea was voluntary and that the evidence not only provided a factual basis for the charges against Flynn but also for his guilt. He denied the motion. United States v. Flynn, No. 84 C 8286 (N.D.Ill. Oct. 4, 1985). The Seventh Circuit affirmed. Flynn v. United States, 789 F.2d 919 (7th Cir.1986).
Undaunted, Flynn also filed this lawsuit, suing Judge Leighton, Agent Dyzwilewski, the director of the Chicago office of the FBI, the assistant United States attorneys who represented the Government in Flynn's conviction and Flynn's § 2255 motion, Flynn's lawyer for the § 2255 suit, his lawyer for the criminal proceeding (who testified at the § 2255 hearings), and, for good measure, Attorney General Meese. (He has since attempted to amend his complaint to include the assistant United States attorney who is representing the federal defendants in this suit.) Flynn, a white Irish male, complains, apparently in four counts (the complaint actually must be extracted from a 41-page "memorandum of law"), that all of these defendants conspired to deprive him of his civil rights in violation of 42 U.S.C. § 1985(3); that his two attorneys violated his sixth amendment rights, his attorney-client privilege, and his rights under the American Bar Association Code of Professional Responsibility; that all the defendants are liable to him under the Federal Tort Claims Act for negligently allowing him to be falsely imprisoned through a malicious prosecution; and that the defendants failed to prevent a conspiracy depriving him of his civil rights in violation of 42 U.S.C. § 1986. He seeks $6 million in compensatory damages, $4,500,000 in punitive damages, and $2,500,000 in costs.
The defendants have all moved to dismiss the action variously on grounds of immunity, failure to state a claim, collateral estoppel and improper service of process. Flynn requests appointment of counsel under 28 U.S.C. § 1915 and demands that this court recuse itself. Flynn has already gained some benefit from this suit. *772 According to a communication to this court from Flynn, an additional criminal charge was filed against him in the U.S. District Court for the Southern District of Indiana. Flynn in response alleged that the FBI was retaliating against him for bringing this lawsuit. Judge Brooks of the Terre Haute Division of that district ordered that Flynn be transferred back to the MCC. United States v. Flynn, No. TH 86-1-CR (S.D.Ind. Apr. 1, 1986). Flynn also was apparently released from the MCC on August 6th. The reasons for that release have not been communicated to this court.
DISCUSSION
I. Recusal
The obvious threshold question here is the recusal demand, since if this court should recuse itself, it should not rule on the remaining motions. Flynn alleges that this court is biased in favor of the FBI because (1) our name was added as a respondent to a mandamus petition Flynn filed with the Court of Appeals, putting this court on the same side of the "versus" as the FBI; (2) according to Flynn, Edward Hegarty, director of the Chicago office, referred to this court with the phrase, "He's one of our judges;" (3) this court has previously ruled against Flynn on discovery motions.
We note at the outset that Flynn cannot have made a motion for recusal under 28 U.S.C. § 144. That statute expressly requires that an affidavit, setting out the facts which give rise to the belief that bias exists, accompany the motion. The procedure must be strictly complied with. See, e.g., Danielson v. Winnfield Funeral Home of Jefferson, Inc., 634 F.Supp. 1110 (E.D.La.1986). Flynn has not filed such an affidavit. We therefore treat the question on our own motion under the more general provisions of 28 U.S.C. § 455.
Flynn's concern with our presence as a respondent to his petition is of course misplaced. A writ of mandamus runs against the court; therefore, the name of the judge must appear as a respondent. As to the alleged statement of defendant Hegarty, this court has of course no idea of the context in which it was made. Nevertheless, taking Flynn's allegations as true, which we must for purposes of a recusal motion, see United States v. Meester, 762 F.2d 867, 885 (11th Cir.), cert. denied, Sawyer v. United States, 474 U.S. ___, 106 S.Ct. 579, 88 L.Ed.2d 562 (1985), they still provide no ground for recusal.
Flynn presumably is arguing that we have a predisposition generally in favor of the FBI or law enforcement. A predisposition for or against a particular class of litigants, however, is not the kind of bias that requires disqualification. Only something which would go beyond that, indicating bias against a particular litigant or in a particular case and so making a fair judgment on the merits of that case questionable, is disqualifying bias. See, e.g., United States v. Dodge, 538 F.2d 770, 782 (8th Cir.1976), cert. denied, 429 U.S. 1099, 97 S.Ct. 1119, 51 L.Ed.2d 547 (1977) (allegation of bias against Indians generally and a particular Indian organization); Samuel v. University of Pittsburgh, 395 F.Supp. 1275, 1278-1279 (W.D.Pa.1975), vacated on other grounds, 538 F.2d 991 (3rd Cir.1976) (against class action suits and suits against charitable organizations); Chessman v. Teets, 239 F.2d 205, 216 (9th Cir.1956), vacated on other grounds, 354 U.S. 156, 77 S.Ct. 1127, 1 L.Ed.2d 1253 (1957) (against federal habeas corpus suits). The presumption is that the judge knows how to rise above his predispositions in order to render a fair decision on the facts and law of a particular case. Flynn is alleging no facts which would rebut that presumption. The same principle applies to prior rulings. See David v. Attorney General, 699 F.2d 411, 416-417 (7th Cir.), cert. denied, 464 U.S. 832, 104 S.Ct. 113, 78 L.Ed.2d 114 (1983). This court is not aware of anything which would suggest that it cannot decide this case fairly. There will be no recusal.
II. Dismissal of Improper and Immune Parties
We next address the motions to dismiss, since it would make no sense to appoint *773 counsel in one paragraph for a case which would be summarily dismissed in the next. See, e.g., Trinkle v. Bell Litho, Inc., 627 F.Supp. 764, 766 (N.D.Ill.1986). A similar claim in which a federal prisoner alleged a conspiracy and "frame-up" by judges, a United States attorney, and defense attorneys was decided on dismissal and summary judgment motions in People ex rel. Snead v. Kirkland, 462 F.Supp. 914 (E.D. Pa.1978). We will work our way through the layers of analysis required for the various defenses as follows: first, dismissal of persons not proper parties to the suit; second, dismissal of persons absolutely immune from damages; third, the question of whether any count of the complaint states a federal claim, without which we have no jurisdiction; fourth, remaining immunity and collateral estoppel questions. The result of this analysis will be that for one or another of these reasons, each part of Flynn's complaint must be dismissed, most parts for more than one reason. Cf. Snead, 462 F.Supp. at 923.
A. Improper Party
When a complaint fails to allege facts which would indicate the personal involvement of a governmental official in the injury complained of, that official must be dismissed as a party to the suit. Crowder v. Lash, 687 F.2d 996, 1005 (7th Cir. 1982). Flynn's complaint alleges nothing whatsoever about any conduct by Attorney General Meese in the incidents complained of. Accordingly, Attorney General Meese is dismissed from this suit. The same principle would appear to apply to Director Hegarty. However, giving the liberal construction which we must to a pro se complaint, see, e.g., Hossman v. Blunk, 784 F.2d 793 (7th Cir.1986), it is possible that Flynn is alleging the active involvement of Hegarty in the decision which led to Flynn's federal conviction. We therefore postpone briefly a ruling touching Hegarty.
B. Absolute Immunity
We are next obliged to consider applicable immunities since an official is entitled to a ruling on an immunity defense as soon as that question may be determined. Mitchell v. Forsyth, 472 U.S. 511, ___, 105 S.Ct. 2806, 2816, 86 L.Ed.2d 411 (1985). A judge is absolutely immune from liability for damages for acts performed in his or her judicial capacity whether the claim is a constitutional violation or a common law tort. Dennis v. Sparks, 449 U.S. 24, 27, 101 S.Ct. 183, 186, 66 L.Ed.2d 185 (1980). The only exception lies where the judge acted in the clear absence of all jurisdiction. Stump v. Sparkman, 435 U.S. 349, 357, 98 S.Ct. 1099, 1105, 55 L.Ed.2d 331 (1978). Judge Leighton had jurisdiction over the original guilty plea to the federal offense and also over the § 2255 motion. He is therefore immune.
Likewise, prosecutors are absolutely immune when carrying out prosecutorial functions. Cleavinger v. Saxner, 474 U.S. ___, ___, 106 S.Ct. 496, 500, 88 L.Ed.2d 507 (1985); Imbler v. Pachtman, 424 U.S. 409, 427, 96 S.Ct. 984, 993, 47 L.Ed.2d 128 (1976). The acts by the assistant U.S. attorneys of which Flynn complains were all prosecutorial acts. They are therefore also immune. Judge Leighton, Assistant U.S. Attorney Michele Smith and Assistant U.S. Attorney Philip Turner are all dismissed as parties to this suit.[1]
At this point, then, only the FBI agents and the two attorneys who at various times represented Flynn remain in the suit. We note that insofar as the claims against attorney James DiNatale stem from his testimony as a witness at Flynn's § 2255 hearing, he too is absolutely immune *774 from damages. Cleavinger, 474 U.S. at ___, 106 S.Ct. at 500; Briscoe v. LaHue, 460 U.S. 325, 335, 103 S.Ct. 1108, 1115, 75 L.Ed.2d 96 (1983). And since neither DiNatale nor Attorney Thomas Moore is a federal employee, insofar as Count 3 of Flynn's complaint, purportedly under the Federal Tort Claims Act (FTCA), is based on their conduct, those portions of the count must fail. The complaint thus trimmed would appear to consist of the following: claims against the two attorneys purportedly under the sixth amendment; claims against the FBI agents under the FTCA; and claims for a conspiracy and failure to prevent a conspiracy against all of these persons under §§ 1985(3) and 1986. The FBI agents assert immunity too, but they are absolutely immune only to common law torts arising out of their discretionary functions as agents, not to damage claims arising from a constitutional infringement. They have only qualified immunity to the latter. See Hall v. United States, 704 F.2d 246, 249 (6th Cir.), cert. denied, 464 U.S. 1002, 104 S.Ct. 508, 78 L.Ed.2d 698 (1983). We must therefore determine what kind of claims Flynn asserts before determining their immunity.
III. Lack of Any Claim Arising Under Federal Law
A. Against the Attorneys
We begin this stage of the analysis with a short excursion into constitutional law. The Constitution, with rare exceptions, protects individuals only against the acts of government, not against the acts of private persons. United Brotherhood of Carpenters & Joiners of America, Local 610, AFL-CIO v. Scott, 463 U.S. 825, 831, 103 S.Ct. 3352, 3357, 77 L.Ed.2d 1049 (1983); United States v. Guest, 383 U.S. 745, 755, 86 S.Ct. 1170, 1176, 16 L.Ed.2d 239 (1966). Flynn's attorneys did not represent the Government in the guilty plea or in the § 2255 hearing; indeed, they represented Flynn. Their conduct cannot be construed as actions of any government, state or federal. Therefore the sixth amendment does not provide Flynn with a cause of action.
As to any breach of the attorney-client privilege or of the ABA Code of Professional Responsibility, the question of whether or not such a breach would give Flynn an action for damages would be a matter of Illinois state law. The Constitution also sets up a division of labor between state and federal courts in our federal system. When a suit is not between citizens of different states, a federal court cannot hear a state law claim unless a viable federal law claim arises out of the same nucleus of operative facts, giving us subject matter jurisdiction. United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1983). Thus we can move no further on Flynn's claim against his attorneys unless a federal claim exists elsewhere in the complaint.[2] The next step, then, must be to see if Flynn has a federal claim.
B. Under the Conspiracy Statutes
He would have one if his allegations stated a § 1985(3) violation. However, they do not. Congress passed the relevant portion of that section to implement the thirteenth amendment, which prohibits slavery, one of the rare constitutional provisions that does reach the acts of private individuals. See Griffin v. Breckenridge, 403 U.S. 88, 105, 91 S.Ct. 1790, 1799, 29 L.Ed.2d 338 (1971). However, the other side of that coin is that the statute must be interpreted in light of the goals Congress *775 had in mind for it, goals related to the elimination of slavery. A conspiracy thwarts those goals, and thus violates the statute, only when it is motivated by a racially-based, or perhaps class-based, discriminatory animus. Id. at 102, 91 S.Ct. at 1798. See also Scott, 463 U.S. at 835-837, 103 S.Ct. at 3359-3361; Grimes v. Smith, 776 F.2d 1359, 1366 (7th Cir.1985). Flynn does not allege that the defendants conspired to put him in jail because he was white or because he was Irish. Flynn's complaint thus does not state a claim under § 1985(3).
Of course, since Flynn is a pro se plaintiff, we must read his complaint liberally. He may be trying to allege a violation of § 1985(2), which deals with certain types of obstruction of justice in state and federal courts. He could, for example, be maintaining that his trial in federal court, by snatching him from the Illinois court system, "had the purpose of ... defeating ... the due course of justice" in state courts. 42 U.S.C. § 1985(2). That reading, however, will not save the claim. Under that portion of the statute, only a conspiracy motivated by the same kind of discriminatory animus is actionable. Kush v. Rutledge, 460 U.S. 719, 722, 103 S.Ct. 1483, 1485, 75 L.Ed.2d 413 (1983). The first portion of § 1985(2) refers to federal courts and does not require such an animus, but by its own language it applies only to intimidation of witnesses or jurors. Id. at 723, 726, 103 S.Ct. at 1486, 1487. See also Snead, 462 F.Supp. at 921. Flynn does not allege any such intimidation. If there is no cause of action under § 1985, then automatically there is no § 1986 action either, since liability under that section is wholly dependent on a § 1985 violation. Grimes, 776 F.2d at 1363 n. 4; Williams v. St. Joseph Hospital, 629 F.2d 448, 452 (7th Cir.1980). Counts 1 and 4 of Flynn's complaint do not state a claim and must be dismissed.
C. Under the Federal Tort Claims Act
If Flynn has a federal claim, it must be found elsewhere. His complaint has a third count purportedly arising under the FTCA, 28 U.S.C.A. §§ 1346(b), 2671-2680. That count appears to contain a claim for false imprisonment, or perhaps malicious prosecution, at the hands of agents Hegarty and Dyzwilewski. That claim, however, is fatally flawed. The FTCA provides for suits against the United States for the negligent or wrongful acts of federal employees acting within the scope of their employment where the United States as the employer would be vicariously liable under state law. 28 U.S.C. § 1346(b). The Act, however, only provides for suit against the United States. It does not provide us with jurisdiction over a claim against a federal employee. Diminnie v. United States, 728 F.2d 301, 306 (6th Cir.), cert. denied, 469 U.S. 842, 105 S.Ct. 146, 83 L.Ed.2d 85 (1984). Thus, a tort claim ostensibly under the Act which names only federal employees as defendants and not the United States fails for lack of federal subject matter jurisdiction. Mars v. Hanberry, 752 F.2d 254, 256 (6th Cir.1985). Flynn's complaint does not name the United States as a party. We therefore have no jurisdiction over the claim.
Even if under the principle of liberal construction for pro se plaintiffs we could somehow interpolate the United States into the complaint, Flynn's claim still could not be salvaged. An FTCA claim begins with notice of the claim to the agency employing the alleged tortfeasor. 28 U.S.C. § 2675(a); Miller v. United States, 741 F.2d 148, 150 (7th Cir.1984). There is no indication here that Flynn ever presented any claim for damages to the FBI. Further, that notice must be given within two years of the time that the action accrued. 28 U.S.C. § 2401(b); Green v. United States, 765 F.2d 105, 107 (7th Cir. 1985). Flynn's action accrued at the latest when he was convicted in late 1982. The limitation provision seems particularly relevant here. Flynn expressed no dissatisfaction with his conviction at the time he was convicted, or while he was serving a portion of his sentence at the MCC, or later when he was on parole. His complaints began only after he was rearrested and his parole revoked. He had ample opportunity to make his claims for damages earlier but *776 did not. Flynn's Count 3 is barred for lack of notice and also time barred. It must be dismissed.
D. "Constitutional Torts"
Our duty to Flynn's pro se status requires that before we dismiss the complaint in its entirety, we examine it on our own to see if any other theories of recovery might provide the federal jurisdiction he now lacks. The overall thrust of the complaint appears to be tortious conduct by FBI agents and others which infringed Flynn's civil rights. That suggests a "constitutional tort" on the model of Bivens v. Six Unknown Named Federal Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). Deprivation of a constitutional right would, of course, provide federal subject matter jurisdiction. Flynn indeed has an interest in his liberty which is protected from overweening federal intrusion by the fifth amendment. The facts which Flynn recounts describe prosecution, conviction and incarceration in other words, a deprivation of liberty. It is possible, then, that Flynn seeks to recover through a Bivens action.
Nevertheless, a Bivens action will not lie on these facts either. The fifth amendment protects only against a deprivation of liberty by the federal government which is without due process of law. A deprivation of liberty of itself is not unconstitutional. If it was, no criminal could ever be imprisoned. Rather, the constitutionally-protected liberty interest is infringed by a deprivation without proper procedures. See, e.g., Daniels v. Williams, 474 U.S. ___, ___, 106 S.Ct. 662, 679, 88 L.Ed.2d 662 (1986) (Stevens, J., concurring); Toney-El v. Franzen, 777 F.2d 1224, 1227 (7th Cir. 1985), cert. denied, 476 U.S. ___, 106 S.Ct. 2909, 90 L.Ed.2d 994 (1986) (both cases construing identical clause in fourteenth amendment). If the FBI agents had seized Flynn, whisked him away to Terre Haute and locked him up for years, never bothering to bring anything about him before the courts, they would have violated his constitutional rights. Deprivation after an opportunity for a judicial hearing, however, does not infringe due process. See, e.g., Cleveland Board of Education v. Loudermill, 470 U.S. 532, 542-44, 105 S.Ct. 1487, 1494, 84 L.Ed.2d 494 (1985); Goldberg v. Kelly, 397 U.S. 254, 261, 90 S.Ct. 1011, 1016, 25 L.Ed.2d 287 (1970). Flynn has had not one but two such opportunities: first when he pled guilty, and again with his § 2255 hearing. Appropriate procedure was followed.[3]
We are left, then, with what amounts to a claim of malicious prosecution and/or false imprisonment against one, perhaps two, federal agents. A tort does not automatically become a constitutional matter simply because a government employee commits it. Daniels, 474 U.S. at ___ - ___, 106 S.Ct. at 665-666; United States v. Caceres, 440 U.S. 741, 755, 99 S.Ct. 1465, 1473, 59 L.Ed.2d 733 (1979); Carson v. Block, 790 F.2d 562, 565 (7th Cir.1986). Thus, a claim of malicious prosecution against a government employee, standing alone, is not a constitutional tort, Tarkowski v. County of Lake, 775 F.2d 173 (7th Cir.1985), and neither is a claim of false imprisonment. Baker v. McCollan, 443 U.S. 137, 99 S.Ct. 2689, 61 L.Ed.2d 433 (1979). Flynn's claims, if any, against the FBI agents are actually state law claims over which this court has no subject matter jurisdiction.
IV. Additional Problems
Further, if the complaint alleges only common law torts stemming from the *777 discretionary functions of these federal employees, then they are almost certainly immune from Flynn's claims for damages. See Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959); Carson, 790 F.2d at 564; Oyler v. National Guard Ass'n of the United States, 743 F.2d 545, 552-553 (7th Cir.1984). An actual decision on that subject would require determination of the exact scope of the duties of both agents. That determination would depend on facts not before the Court, but a conclusion of immunity seems quite likely.
And if by some chance the agents are not immune, Flynn's claims against them would still be barred. A prosecution is not malicious if there is probable cause for it, Terket v. Lund, 623 F.2d 29, 31 (7th Cir.1980), and an imprisonment is not false if the prisoner has been duly convicted of the offense. Here, not only was there probable cause for the prosecution, but Flynn was duly convicted, and the Seventh Circuit upheld that conviction against Flynn's § 2255 motion. As a matter of collateral estoppel, then, Flynn could not litigate those questions over again in a suit for damages. See Snead, 462 F.Supp. at 921. There is apparently a split in authority in this circuit on the preclusive effect of a guilty plea when it stands alone. Compare Rodriguez v. Schweiger, 796 F.2d 930, 933 (7th Cir.1986) (conclusive as to underlying facts) with Country Mutual Insurance Co. v. Duncan, 794 F.2d 1211, 1215 (7th Cir.1986) (not conclusive) (both applying Illinois law). However, in the instant case Flynn's guilty plea does not stand alone. There is no dispute about the preclusive effect of a civil action for collateral relief, such as federal habeas corpus or, as here, a § 2255 proceeding, on a subsequent civil rights suit. See Preiser v. Rodriguez, 411 U.S. 475, 497, 93 S.Ct. 1827, 1840, 36 L.Ed.2d 439 (1973); Warren v. McCall, 709 F.2d 1183, 1185 (7th Cir.1983). Cf. Sanders v. United States, 373 U.S. 1, 15-17, 83 S.Ct. 1068, 1077-1078, 10 L.Ed.2d 148 (1963) (preclusive effect of denial of § 2255 motion on subsequent § 2255 motions). Since Flynn's § 2255 motion involved questions identical to those he raises against the federal agents here, he cannot now try them afresh.
Having peeled off the layers of Flynn's complaint one by one, this Court finds nothing left which can be litigated in this court. Defendant Meese is not a proper party, defendants Leighton, Smith and Turner are immune, and defendant DiNatale is immune for his acts as a witness. None of the counts of Flynn's complaint state a federal claim, so this court has no jurisdiction. In addition, defendants Dyzwilewski and Hegarty are almost certainly immune to any damages for the common law tort claims against them which might remain in Flynn's complaint; moreover, Flynn is collaterally estopped from bringing those claims. Under those circumstances, appointment of counsel would be a futile act. Maclin v. Freake, 650 F.2d 885, 887 (7th Cir.1981). It is unnecessary to reach the question of service of process.
CONCLUSION
This court declines to recuse itself. Defendants' motions to dismiss plaintiff's complaint are all granted and the complaint is dismissed. Plaintiff's petition for appointment of counsel is denied.
NOTES
[1] Flynn's attempt to amend his complaint to include Assistant United States Attorney Gail Ginsberg, who represents the federal defendants here, as a defendant in his suit fails because it appears only as a postscript to a memorandum rather than as a motion. However, under the circumstances, we think prosecutorial immunity would extend as well to her acts on behalf of her colleagues and the other governmental defendants here, since those acts are part of her "official functions in the judicial process." Briscoe v. LaHue, 460 U.S. 325, 334, 103 S.Ct. 1108, 1115, 75 L.Ed.2d 96 (1983).
[2] We note in passing, however, that any state law claim Flynn might have, presumably for malpractice, does not look particularly promising. The attorney-client privilege is Flynn's to assert, and he did not assert it at the § 2255 hearing. See, e.g., United States v. King, 484 F.2d 924, 927 (10th Cir.1973), cert. denied, 416 U.S. 904, 94 S.Ct. 1607, 40 L.Ed.2d 108 (1974). The ABA Code of Professional Responsibility is only the law in a jurisdiction if that jurisdiction chooses to adopt it, and only on the terms in which it is adopted. Illinois has its own code, and that code does not of itself give a right of action to clients. Corti v. Fleisher, 93 Ill.App.3d 517, 532, 49 Ill.Dec. 74, 86, 417 N.E.2d 764, 776, (1st Dist.1981). Cf. Bickel v. Mackie, 447 F.Supp. 1376, 1383 (N.D.Iowa), aff'd mem., 590 F.2d 341 (8th Cir.1978).
[3] For essentially the same reason, one cannot find here a deprivation which "shocks the conscience," Rochin v. California, 342 U.S. 165, 172, 72 S.Ct. 205, 209, 96 L.Ed. 183 (1952), thus triggering a constitutional claim under the doctrine of substantive due process. See, e.g., Holland v. Breen, 623 F.Supp. 284, 288 (D.Mass. 1985). The allegations on their face are probably shocking enough: a conspiracy among anyone who had anything to do with either Flynn's guilty plea and conviction or his § 2255 hearing, including the judge, to put Flynn away on a "manufactured" crime. However, the Seventh Circuit reviewed the § 2255 hearing and held that the conviction should stand. Flynn's complaint does not include allegations that an entire panel of the Seventh Circuit was in on the conspiracy too. Without an improper conviction, the conscience is no longer shocked. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1644963/ | 40 So. 3d 768 (2010)
Samuel GONZALEZ, et al., Appellant,
v.
The STATE of Florida, Appellee.
No. 3D09-1557.
District Court of Appeal of Florida, Third District.
February 10, 2010.
Rehearing and Rehearing En Banc Denied August 17, 2010.
Alex Dehghani, for appellants.
Bill McCollum, Attorney General, and Heidi Milan Caballero, Assistant Attorney General, for appellee.
Before, RAMIREZ, C.J., CORTIÑAS, J., and SCHWARTZ, Senior Judge.
Affirmed. See Bermudez v. State, 603 So. 2d 657 (Fla. 3d DCA 1992). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559019/ | 20 So. 3d 913 (2009)
John J. CARROLL, Appellant,
v.
The STATE of Florida, Appellee.
No. 3D09-2137.
District Court of Appeal of Florida, Third District.
September 23, 2009.
Rehearing Denied November 9, 2009.
John J. Carroll, in proper person.
Bill McCollum, Attorney General, for appellee.
Before RAMIREZ, C.J., and COPE and GERSTEN, JJ.
COPE, J.
This is an appeal of an order denying the motion of defendant-appellant John J. Carroll to correct illegal sentence under Florida Rule of Criminal Procedure 3.800(a).[*] We affirm.
The defendant was convicted and sentenced in 1982 for third-degree murder, armed burglary, and armed robbery. This *914 court affirmed the convictions but directed that the sentence for armed robbery be reduced to the appropriate legal maximum of thirty years. Carroll v. State, 497 So. 2d 253, 266-67 (Fla. 3d DCA 1985) (en banc). The court also directed that the three-year mandatory minimum terms be changed from consecutive to concurrent. Id. at 267.
The defendant argues that the remand for correction of the sentencing order meant that the defendant should have been granted a new sentencing hearing. He contends that at such a hearing, he would have been allowed to elect to be sentenced under the sentencing guidelines. See Logan v. State, 921 So. 2d 556 (Fla.2005); Smith v. State, 537 So. 2d 982 (Fla.1989); Crowder v. State, 735 So. 2d 563 (Fla. 3d DCA 1999). The defendant's theory is that a sentence under the 1983 version of the guidelines, see Logan, 921 So.2d at 560, would result in a significantly lower sentencealthough this part of the defendant's argument would not hold true if there were grounds to impose a departure sentence.
The defendant acknowledges that he has made this argument in previous postconviction motions, and that relief has been denied. He argues, however, that the claim should be revisited under the manifest injustice exception to the res judicata doctrine recognized in State v. McBride, 848 So. 2d 287 (Fla.2003).
The defendant's argument fails at the threshold. This court's remand in the defendant's case was a remand for correction of his sentence by reducing his one-hundred year armed robbery sentence to the appropriate legal maximum of thirty years, and changing his mandatory minimum sentences from consecutive to concurrent. Since this court had issued specific directions about the sentence the defendant was to receive, this left the trial court with no discretion but to correct the sentences as directed. This court's earlier opinion called for correction of a portion of the defendant's sentence, and did not call for, or allow, a plenary resentencing hearing. That being so, there was no occasion for the defendant to elect to be sentenced under the sentencing guidelines. This defendant's circumstances differ from those in Logan, Smith, and Crowder.
We acknowledge that there is language in the trial court's order which erroneously applies some Florida Rule of Criminal Procedure 3.850 successiveness principles to this Rule 3.800(a) motion, whereas the relevant principles are found in McBride. Upon considering the appeal in light of McBride, we conclude that there is no manifest injustice and the trial court reached the correct result.
Affirmed.
NOTES
[*] The motion at issue here was docketed in the circuit court January 12, 2009, and was denied by an order dated April 9, 2009. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559015/ | 22 So. 3d 948 (2009)
Margaret Anne Coady LATIOLAIS
v.
TEACHERS' RETIREMENT SYSTEM OF LOUISIANA.
No. 2008 CA 1792.
Court of Appeal of Louisiana, First Circuit.
August 24, 2009.
*949 Harry P. Pastuszek, Jr., David S. Pittman, Linnette C. Goodly, Covington, Louisiana, for Plaintiff-Appellee, Margaret Anne Coady Latiolais.
John L. Stone, III, Baton Rouge, Louisiana, for Defendant-Appellant, Teachers' Retirement System of Louisiana.
Before: CARTER, C.J., WHIPPLE, KUHN, GUIDRY, and GAIDRY, JJ.
KUHN, J.
The Teachers' Retirement System of Louisiana (TRSL) appeals a summary judgment rendered in favor of a designated beneficiary, declaring that the beneficiary is entitled to Option 2 retirement benefit payments pursuant to La. R.S. 11:783 A(2), plus interest. We affirm in part, reverse in part, and remand.
I. PROCEDURAL AND FACTUAL BACKGROUND
On August 11, 2002, Mary Christina Coady, who worked in the St. Charles Parish School System and was a member of TRSL for over 25 years, completed an "Application for Service Retirement," wherein she indicated she was divorced, and specified January 22, 2003, as her effective retirement date. Section 4 of the TRSL form addressed "Retirement option beneficiary," and stated, in pertinent part, "You may designate one beneficiary below to receive a monthly survivor benefit in the event of your death." In this section of the form, Coady designated her sister, Margaret Anne Coady Latiolais, as her beneficiary and also provided her birth date and Social Security number. In filling out the application, Coady also struck *950 through Sections 2, 5, and 6 of the application form that referenced an "Initial Lump Sum Benefit." TRSL received Coady's application on August 28, 2002, and according to TRSL's records, it acknowledged receipt of the application by letter dated September 3, 2002.
Coady died on February 27, 2003, before TRSL had finalized her retirement application. TRSL updated its system to reflect her death, and notified Latiolais that because Coady had died more than thirty days after the effective date of retirement, but before TRSL had received her Affidavit of Retirement Option Election ("the retirement affidavit"), Latiolais would receive the Option 1 beneficiary benefit, i.e., a single life annuity in a one-time payment, which represented the present value of Coady's annuity at the time of her retirement.
On March 1, 2006, Latiolais filed a petition, seeking a declaratory judgment determining the applicability and scope of La. R.S. 11:783 A and H and a judgment in her favor ordering TRSL to pay her Option 2 benefits, a reduced retirement allowance paid throughout her life from the date of Coady's death, along with attorneys' fees, penalties, legal interest and costs. Latiolais's petition also set forth pertinent portions of a TRSL publication, dated July 2002, entitled "When It's Time to Retire," which is a guide to the TRSL retirement process that was mailed to TRSL members when they requested benefit estimates. The publication states as follows, in pertinent part:[1]
TRSL sends retirement affidavit
Once your application is processed, TRSL will send you an Affidavit of Retirement Option Election based upon the most current information available to TRSL. The affidavit will list the benefit amount for each of the retirement options.
Within 15 days, return notarized retirement affidavit
It is vitally important that this affidavit be completed, notarized, and returned to TRSL within 15 days of receipt. By selecting an option and returning the affidavit, you indicate under which option you wish to retire. This is a critical step in the retirement process.
Based on these provisions, Latiolais asserted that TRSL had a legal duty to provide the retirement affidavit form to Coady, but TRSL failed to do so. The petition further asserts that Coady died more than thirty days after her effective retirement date, and that Latiolais has demanded, but has been unjustly denied, Option 2 benefits by TRSL since Coady's death.
After TRSL answered the suit, Latiolais filed a motion for summary judgment, urging that based on TRSL's error, she had been denied the correct retirement allowances pursuant to Option 2. In support of her motion, Latiolais submitted her own affidavit, wherein she attested that she was "very close" to Coady, her sister, and she "spent considerable time with her during her final six months of life." Latiolais *951 further attested that both prior to and after Coady filed her application for retirement benefits, Latiolais "routinely participated in the review of mail received and sent by" her sister and she "routinely discussed business matters, including, but not limited to documents relating to" TRSL. Moreover, Latiolais stated that she was never informed by her sister that she had received the retirement affidavit from TRSL, and "[t]here was never [a retirement affidavit] received in the mail by [her sister] from [TRSL]." Latiolais stated that if a retirement affidavit had been sent to her sister, "via mail or otherwise, I would have known about it." Plaintiff also submitted excerpts of Carolyn Forbes's deposition testimony in support of the motion.
TRSL opposed Latiolais's motion for summary judgment, asserting that genuine issues as to material fact included whether: 1) Coady had ever elected Option 2 pursuant to La. R.S. 11:783 A(2); and 2) TRSL had mailed the retirement affidavit to Coady. In support of its position, TRSL submitted the entirety of Forbes's deposition testimony and the affidavit of Ronnie Mazie, which generally addressed TRSL's mailing operations.[2]
The deposition of Carolyn Forbes, TRSL's retirement benefits manager, established that she had reviewed Coady's certified file record maintained by TRSL, and it did not contain a copy of the retirement affidavit allegedly sent to Coady, a working copy of the retirement affidavit,[3] a cover letter, or any other proof that the retirement affidavit was actually mailed to Coady. She testified that TRSL did not keep a copy of the retirement affidavit in the member's file in late 2002 through early 2003, but their practice was to keep a copy of the supporting worksheet.
Forbes further testified that this supporting worksheet was in Coady's file record, and that according to TRSL's standard practices, a copy of the worksheet was generated along with the retirement *952 affidavit.[4] Forbes explained that during the time period in question, only a copy of the worksheet, and not a copy of the unexecuted retirement affidavit generated with the worksheet, was kept in the member's record. Based on TRSL's standard operating practices at that time and the specific file notations in Coady's file, Forbes testified that a retirement affidavit, also referred to as an estimated affidavit, was generated for Coady on September 3, 2002. Forbes testified that the existence of the worksheet in Coady's file supports TRSL's position that the affidavit was transmitted to Coady.
A hearing on Latiolais's motion was held, and the trial court granted summary judgment in her favor, consequently ordering TRSL to pay Latiolais Option 2 retirement benefits, effective February 27, 2003, plus interest on these payments. TRSL filed a motion for new trial, and on denial of its motion, it moved to suspensively appeal the summary judgment and the denial of its motion for new trial.
On appeal, TRSL alleges that the trial court erred in rendering judgment in Latiolais's favor in the following respects:
1. The trial court erred in granting [Latiolais's] motion for summary judgment even though [Latiolais] is not entitled to judgment as a matter of law.
2. Assuming [Latiolais] has a legal basis for her claim based on an alleged failure of [TRSL] to mail [a retirement affidavit] (which [TRSL] denies) the trial court erred in granting [Latiolais's] motion for summary judgment because a genuine issue of material fact exists.
3. The trial court erred in denying [TRSL's] Motion for New Trial where its Judgment signed on May 20, 2008, was clearly contrary to the law and the evidence.
4. The trial court erred in denying [TRSL's] Motion for New Trial where new evidence was presented in connection with that Motion.
5. The trial court erred in denying [TRSL's] Motion for New Trial by abusing its discretion under [La. C.C.P. art.] 1973.
II. ANALYSIS
A motion for summary judgment will be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B). Summary judgment is favored and shall be construed to secure the just, speedy, and inexpensive determination of every action. La. C.C.P. art. 966(A)(2).
The initial burden of proof remains with the movant. However, if the movant will not bear the burden of proof at trial, he need not negate all essential elements of the adverse party's claim, but he must point out that there is an absence of factual support for one or more elements essential to the claim. La. C.C.P. art. 966(C)(2). Once the movant has met his initial burden of proof, the burden shifts to the nonmoving party to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden at trial. Samaha v. Rau, 07-1726, p. 5 (La.2/26/08), 977 So. 2d 880, 883. The plaintiff may not rest on mere allegations or denials, but *953 must set forth specific facts that show that a genuine issue of material fact remains. If the plaintiff fails to meet this burden, there is no genuine issue of material fact, and the defendant is entitled to summary judgment as a matter of law. Berry v. Paul Revere Life Ins. Co., 08-0945, p. 3 (La.App. 1st Cir.7/9/09), 21 So. 3d 385. The supreme court has held that "[a] fact is material if it potentially insures or precludes recovery, affects a litigant's ultimate success, or determines the outcome of the legal dispute." Samaha v. Rau, 07-1726 at p. 6, 977 So.2d at 884 (quoting Hines v. Garrett, 04-0806, p. 1 (La.6/25/04), 876 So. 2d 764, 765).
Louisiana Revised Statutes 11:783 provides, in pertinent part:
A. (1) No optional election shall be effective when a retiree or participant in the Deferred Retirement Option Plan dies within thirty days after the effective date of retirement or the effective date of participation in the Deferred Retirement Option Plan, and such a retiree or participant in the Deferred Retirement Option Plan shall be considered as an active member at the time of death.
(2) Upon retirement or participation in the Deferred Retirement Option Plan any member may make an election which is irrevocable after the effective date of retirement or the effective date of participation in the Deferred Retirement Option Plan to receive his benefit in a retirement allowance payable throughout life, or he may make an election which is irrevocable after the effective date of retirement or the effective date of participation in the Deferred Retirement Option Plan to receive the actuarial equivalent of his retirement allowance in a reduced retirement allowance payable throughout life with the provisions that:
Option 1. If he dies before he has received in annuity payments the present value of his annuity as it was at the time of his retirement, the balance shall be paid to his succession or to any person he shall designate in a written instrument acknowledged and filed with the board of trustees.
Option 2. Upon his death, his reduced retirement allowance shall be continued throughout the life of and paid to a natural person he shall irrevocably designate in a written instrument acknowledged and filed with the board of trustees at the time the election is made; or
Option 2A. Upon his death, his reduced retirement allowance shall be continued throughout the life of and paid to a natural person he shall irrevocably designate in a written instrument acknowledged and filed with the board of trustees at the time the election is made, provided that if the designated beneficiary predeceases the retiree, the retiree's reduced benefit shall change to the maximum benefit effective on the first day of the next month following the death of the designated beneficiary.
Option 3. Upon his death, one-half of his reduced retirement allowance shall be continued throughout the life of and paid to a natural person he shall irrevocably designate in a written instrument acknowledged and filed with the board of trustees at the time the election is made; or
Option 3A. Upon his death, one-half of his reduced retirement allowance shall be continued throughout the life of and paid to a natural person he shall irrevocably designate in a written instrument acknowledged and filed with the board of trustees at the time the election is made, provided that if the designated beneficiary predeceases the retiree, the retiree's reduced benefit shall change to *954 the maximum benefit effective on the first day of the next month following the death of the designated beneficiary.
Option 4. Upon his death, some other benefit which shall not exceed the Option 2 benefit amount, designated by him at the time the election is made, shall be paid throughout the life of and to a natural person he shall irrevocably designate in a written instrument acknowledged and filed with the board of trustees at the time the election is made, provided such other benefit, together with the reduced retirement allowance shall be certified by the actuary to be of equivalent actuarial value to his retirement allowance, and approved by the board of trustees; or
Option 4A. Upon his death, some other benefit which shall not exceed the Option 2 benefit amount, designated by him at the time the election is made shall be paid throughout the life of and to a natural person he shall irrevocably designate in a written instrument acknowledged and filed with the board of trustees at the time the election is made, provided such other benefit, together with the reduced retirement allowance, shall be certified by the actuary to be of equivalent actuarial value to his retirement allowance, and approved by the board of trustees, provided that if the designated beneficiary predeceases the retiree, the retiree's reduced benefit shall change to the maximum benefit effective on the first day of the next month following the death of the designated beneficiary.
(3) Initial Lump-Sum Benefit, (a) If a member has not participated in the Deferred Retirement Option Plan provided by the provisions of this Chapter and has thirty years of creditable service, or is age fifty-five and has twenty-five years of creditable service, or is age sixty and has ten years of creditable service, and if the maximum benefit, Option 2, 2A, 3, 3A, 4, or 4A above is chosen, then a reduced retirement allowance plus an initial benefit shall be paid to the member. The accredited service referenced in this Paragraph shall not include unused accumulated sick leave and unused accumulated annual leave.
...
H. If a retiree or a participant in the Deferred Retirement Option Plan dies more than thirty days after the effective date of retirement or more than thirty days after his effective date of participation in the Deferred Retirement Option Plan, but before the retirement system has received his Affidavit of Retirement Plan Election and leaves a surviving spouse, he shall be retired under Option 2 of Subsection A of this Section as of his effective date of retirement and the surviving spouse shall be paid Option 2 beneficiary benefits; however, if he does not leave a surviving spouse but does leave an eligible surviving minor child or children, only the benefits provided under R.S. 11:762(C) shall be payable; and provided that if he does not leave a surviving spouse, he shall be retired under Option 1 of Subsection A of this Section as of his effective date of retirement and his latest named beneficiary including any beneficiary named on his retirement application received by the retirement system shall be paid the Option 1 beneficiary benefit.... (Emphasis added.)
In its first two assignments of error, TRSL urges that Latiolais has the burden of proving that Coady elected Option 2 pursuant to this statute, and otherwise, the option election is determined by La. R.S. 11:783 H. TRSL submits that the record contains no evidence establishing that *955 Coady elected Option 2 rather than the other options listed under La. R.S. 11:783 A(2), and thus, Latiolais is not entitled to judgment as a matter of law. Further, TRSL argues that the trial court erroneously granted summary judgment in favor of Latiolais because genuine issues of material fact exist concerning whether TRSL provided Coady with a retirement affidavit.
In her motion for summary judgment, Latiolais argues that TRSL did not send a retirement affidavit to Coady, which based on TRSL's rules and procedures, it was responsible for producing and providing. Due to its failure to provide the affidavit to Coady, Latiolais asserts that TRSL is precluded from denying Latiolais recovery of Option 2 benefits under the retirement plan.
Based on the pertinent dates involved, Coady died more than thirty days after the effective date of her retirement, and thus she was not considered an active member of TRSL upon her death based on the provisions of La. R.S. 11:783 A. The evidence presented establishes that Coady did not complete and return a retirement affidavit to TRSL, by which she would have exercised her right to select a specific option based on her specific member information. TRSL submits that Latiolais should be relegated to receiving an Option 1 payment because Coady did not complete the retirement affidavit. We find no merit in this argument.
Louisiana Revised Statutes 11:783 H imposes an implicit duty on TRSL to provide this retirement affidavit to a member who submits a retirement application.[5] According to Forbes's deposition testimony, the retirement affidavit provides member-specific information to the member who is making the selection, and this information is needed for her to be able to complete the retirement affidavit. Further, the retirement affidavit is not provided to a member before his or her application for retirement is made.[6] The selection of a retirement option is not to be made in a void, but should be made based on this information, which is made available by TRSL after a worksheet is prepared for the particular member.
Further, Forbes testified that the TRSL publication, entitled "When It's Time to Retire," was routinely sent to members who requested an estimate of their benefits, and in fact, it had been sent to Coady when she requested an estimate of her benefits in 2002. If Coady in fact received this publication, she would have been awaiting the receipt of her retirement affidavit, which would have been "based on the most current information available to TRSL," as stated in TRSL's publication. The evidence further demonstrates that TRSL took no action to notify Coady regarding the missing retirement affidavit between the effective date of her retirement and the date of her death.
TRSL urges that a genuine issue of material fact remains as to whether TRSL mailed the retirement affidavit to Coady. *956 Latiolais's affidavit, which addressed the fact that Coady never received a retirement affidavit from TRSL, effectively shifted the burden to TRSL to establish that it did in fact mail this affidavit to Coady. The deposition testimony submitted by TRSL in opposition to Latiolais's motion for summary judgment failed to establish that the retirement affidavit was in fact mailed to Coady or that Coady actually received the affidavit. The fact that TRSL prepared a worksheet, generated a retirement affidavit, or that its normal procedure was to do these things, does not establish that the affidavit was in fact mailed to Coady. Thus, because TRSL has failed to produce factual support sufficient to establish that it will be able to satisfy its evidentiary burden of proof at trial, i.e., that it actually mailed the retirement affidavit to Coady; there is no genuine issue of material fact as to this issue.
Accordingly, based on the particular facts of this case, i.e., that TRSL failed to establish that it mailed the retirement affidavit to Coady, and it failed to request a completed retirement affidavit from Coady after the effective date of her retirement, we conclude La. R.S. 11:783 H is inapplicable, and TRSL cannot refuse to pay a monthly survivor benefit based on the lack of the completed affidavit. Moreover, the evidence establishes that Coady, pursuant to her application for service retirement, expressed her specific intent that Latiolais would in fact receive a "monthly survivor benefit," according to the specific language included within the application and Coady's designation of Latiolais as her beneficiary.
TRSL also assigns as error the trial court's failure to grant its motion for new trial where it presented new evidence, i.e., Keith Kent's affidavit, in connection with that motion.[7] Louisiana Code of Civil Procedure article 1972(2) provides that a new trial shall be granted when the party has discovered, since the trial, evidence important to the cause, which he could not, with due diligence, have obtained before or during the trial. Although TRSL submitted Kent's affidavit, it provided no reason why the affidavit could not have been obtained before the trial court heard Latiolais' motion for summary judgment. Accordingly, we find no error in the trial court's denial of the motion on that ground.
Otherwise, TRSL submits that the trial court should have granted a new trial because the summary judgment in favor of Latiolais was contrary to the law and evidence. La. C.C.P. art. 1972(1). TRSL argues that Latiolais failed to establish that TRSL has an obligation to pay her an Option 2 benefit, and consequently Latiolais is not entitled to judgment as a matter of law. TRSL also urges that the trial court should have granted a new trial on discretionary grounds pursuant to La. C.C.P. art. 1973.
Based on the facts of this case where the retirement affidavit was not provided to Coady, and thus, there is no completed affidavit as referenced in La. R.S. 11:783 H, we conclude it is necessary to otherwise ascertain Coady's intent. We find, based on Coady's application for service retirement, that she intended that Latiolais would receive a "monthly survivor *957 benefit." Accordingly, the trial court properly declared that Latiolais was entitled to receive such a monthly benefit after Coady's death based on the provisions of La. R.S. 11:78 A(2). Further, when Coady filled out the application, she struck through Sections 2, 5, and 6 of the application, which referenced an "Initial Lump Sum Benefit." Thereby, we conclude that she also rejected such a benefit. However, the record does not contain sufficient information from which we can determine that Coady intended to elect Option 2 rather than the other options that would also provide a monthly survivor benefit, i.e., Options 2A, 3, 3A, 4, and 4A. See La. R.S. 11783 A; La. R.S. 11:701(3) and (28). In this respect, we find merit in TRSL's argument.
Latiolais's brief relates that Coady suffered from cancer that had been in full remission, and when it reappeared she knew it would produce a terminal situation. However, the record before us contains no evidence regarding her illness. Facts regarding the nature and severity of Coady's illness, when she learned of her illness, and its progression at the time of her application for retirement would be pertinent in determining Coady's intent. Accordingly, while we find that the record establishes that Latiolais is entitled to a "monthly survivor benefit," the record does not establish whether Coady intended to select Option 2 instead of Options 2A, 3, 3A, 4, or 4A. Thus, we reverse that portion of the trial court's judgment that declared that Latiolais was entitled to Option 2 retirement benefits, and we remand for further proceedings so that the trial court can make a determination regarding Coady's intent with respect to these particular options that will afford Latiolais a monthly survivor benefit.
III. CONCLUSION
For these reasons, we affirm the trial court's judgment insofar as it ordered TRSL to pay Latiolais a monthly survivor benefit pursuant to La. R.S. 11:783 A(2). We reverse that portion of the trial court's judgment that ordered TRSL to pay Latiolais Option 2 retirement benefits. We remand to the trial court for further proceedings in accordance with our instructions herein. Appeal costs in the amount of $1,826.50 are assessed against TRSL.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
GUIDRY, J., dissents and assigns reasons.
GAIDRY, J., concurs in part and dissents in part for the reasons assigned by GUIDRY, J.
GUIDRY, J., dissenting.
A motion for summary judgment should be granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B).
Both Latiolais and TRSL rely on circumstantial evidence[1] to support their opposing positions concerning whether a retirement affidavit was provided to Coady. Furthermore, the evidence, as presented, is conflicting. See Independent Fire Insurance Company v. Sunbeam Corporation, 99-2181, p. 18 (La.2/29/00), 755 So.2d *958 226, 236-237 (wherein the Court held that it could not conclude that the scintilla of circumstantial evidence presented by the party opposing the motion for summary judgment to support its position was insufficient to allow a reasonable juror to conclude that the opposing party's position was more likely than not true.)
A genuine issue is a triable issue. More precisely, an issue is genuine if reasonable persons could disagree. If on the state of the evidence, reasonable persons could reach only one conclusion, there is no need for a trial on that issue. In determining whether an issue is genuine, courts cannot consider the merits, make credibility determinations, evaluate testimony, or weigh evidence. Smith v. Our Lady of the Lake Hospital Inc., 93-2512, p. 27 (La.7/5/94), 639 So. 2d 730, 751; Dunaway v. Louisiana Wildlife and Fisheries Commission, 08-1494, p. 4 (La.App. 1st Cir.2/13/09), 6 So. 3d 228, 231-232.
In Cole v. Lavine, 595 So. 2d 398 (La. App. 3d Cir.1992), a similar factual issue was presented in an action in which the plaintiff alleged that because the insurer failed to provide the required statutory notice communicating its intent to renew, the insurer was precluded from asserting that the policy at issue was not in effect at the time of the accident sued upon. Like the TRSL in the matter before us, the insurer was unable to produce actual proof that it mailed the notice of intent to renew, but instead submitted computer records which showed that a notice of intent to renew the insureds' policy was generated by the computer on a certain date. In opposition to this evidence, the plaintiff submitted the affidavit of the administrator of the estate of the deceased insureds in which the administrator stated that he had searched the personal effects of the deceased insureds and found no offer to renew from the insured. The court held that because the evidence was conflicting as to whether the notice was sent, a genuine issue of material fact existed regarding the mailing of the notice and therefore summary judgment could not be granted. Cole, 595 So.2d at 400; Cf. Jacobs v. Louisiana Indemnity Insurance Company, 96-1203 (La.App. 3d Cir.3/12/97), 692 So. 2d 1182, writ denied, 97-0958 (La.5/16/97), 693 So. 2d 802 (where the court held that on a trial on the merits, the evidence presented by the insurer of its standard procedures for mailing of the notice was sufficient to prove that the notice was mailed and therefore the insurer was held to have complied with the statutory requirements of sending notice of cancellation, despite the failure to produce evidence of actual mailing and the insured's denial that he had received such notice).
As the circumstantial evidence submitted by Latiolais that Coady never received a retirement affidavit from TRSL (Latiolais's affidavit and excerpts of Forbes' deposition) conflicts in a material respect with the circumstantial evidence submitted by TRSL (Forbes's entire deposition and Mazie's affidavit), the majority, like the trial court, had to improperly weigh and evaluate the evidence presented to reach the conclusion that TRSL did not provide Coady with a retirement affidavit. As the fact of whether TRSL provided Coady with a retirement affidavit is highly disputed, a determination of this factual issue should be reserved for a trial on the merits, and to the extent the majority opinion affirms the trial court's resolution of this issue by summary judgment, I respectfully dissent.
NOTES
[1] This publication was produced by Carolyn Forbes, TRSL's retirement benefits manager, in response to a subpoena duces tecum, which she replied to in conjunction with her December 4, 2006 deposition. This publication was identified as an exhibit during Forbes's deposition, but it does not appear as an attachment to the deposition contained within our appellate record. The publication was otherwise filed into the record, however, as an exhibit in support of Latiolais's motion for summary judgment. Because both parties referenced the publication in their trial memoranda and in their appellate briefs and do not dispute its contents, we have considered the contents of the publication for purposes of this appeal.
[2] This affidavit states that Mazie: 1) held the position of an administrative program manager at TRSL; 2) his duties included overseeing TRSL's mail operations; and 3) was familiar with the process by which Affidavits of Retirement Option Election and other TRSL documents are mailed, with such documents being placed in an envelope and addressed by the retirement processor. The affidavit further sets forth that the envelope and its contents are placed in a collection box, and the following morning mail operations picks up the item and takes it to a meter, which is set for first class mail. After the correct postage is applied to the item, an Operation State Mail representative picks up the item and takes it to the Operation State Mail Office, where a postal carrier picks up the item between 3:00 and 3:30PM and takes it to the post office.
Latiolais filed a motion to strike Mazie's affidavit, challenging the affidavit as failing to meet the requirements of supporting affidavits, as mandated by La. C.C.P. art. 967, i.e., particularly that the affidavit was not based on personal knowledge. The record does not contain a ruling by the trial court on this motion. We do not agree, however, that the affidavit should be struck pursuant to the guidelines of La. C.C.P. art. 967, because it appears that the affidavit was based on Mazie's personal knowledge of TRSL mail operations. We find, however, that Mazie's affidavit is general in nature and does not establish that he had knowledge of TRSL's mail operations during the specific time period in question. Accordingly, due to this deficiency, we find Mazie's affidavit irrelevant to the issue of whether TRSL mailed the affidavit to Coady between the time she filed her application for service retirement in August 2002, and the time of her death in February 2003.
[3] Forbes explained that a working copy of the unexecuted affidavit was typically held at the analyst's desk until the notarized affidavit came into the office. Coady's file did not contain this working affidavit, and Forbes explained that because Coady's date of death occurred so quickly after she applied for retirement, TRSL probably destroyed the working affidavit when it started processing the claim as a death-benefit claim.
[4] Although Forbes produced the worksheet in response to a request for production of documents solicited in conjunction with her deposition, the worksheet does not appear in our record.
[5] TRSL's fiduciary duties include the duty to provide retirees sufficient information to make an informed decision in electing a retirement option. See La. R.S. 11:702; Honda v. Bd. of Trustees of the Employees' Retirement System of the State, 108 Hawai'i 212, 221, 118 P.3d 1155, 1164 (6/17/05); Ricks v. Missouri Local Gov't Employees' Retirement System, 981 S.W.2d 585, 592 (Mo.App.W.D.9/29/98).
[6] According to Forbes's deposition testimony, the retirement affidavit has never been made available to members in a publication as a form document because members must have member-specific information on the retirement affidavit for them to be able to complete it.
[7] Kent's affidavit set forth that: 1) he was the administrative manager for TRSL from September 14, 1998, to October 16, 2006; 2) his duties included overseeing TRSL's mail operations; and 3) he was familiar with the process by which Affidavits of Retirement Option Election and other TRSL documents were mailed during that time period. The affidavit further described the particular mailing process typically used by TRSL, which was the same procedure described by Mazie.
[1] Circumstantial or indirect evidence is evidence that, if believed, proves a fact and from that fact you may logically and reasonably conclude that another fact exists. Independent Fire Insurance Company v. Sunbeam Corporation, 99-2181, p. 18 n. 6 (La.2/29/00), 755 So. 2d 226, 236 n. 6. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/991542/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
KATHRYN J. OLDHAM,
Plaintiff-Appellant,
v.
No. 95-2985
SHIRLEY S. CHATER, COMMISSIONER OF
SOCIAL SECURITY,
Defendant-Appellee.
Appeal from the United States District Court
for the Middle District of North Carolina, at Greensboro.
Frank W. Bullock, Jr., Chief District Judge.
(CA-94-649-CV-2)
Submitted: February 13, 1997
Decided: February 27, 1997
Before WIDENER and HAMILTON, Circuit Judges, and
BUTZNER, Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Tomi W. Bryan, Lisa W. Bullard, TOMI BRYAN & ASSOCIATES,
Greensboro, North Carolina, for Appellant. Walter C. Holton, Jr.,
United States Attorney, Gill P. Beck, Assistant United States Attor-
ney, Arthur J. Fried, General Counsel, Randolph W. Gaines, Acting
Principal Deputy General Counsel, A. George Lowe, Acting Asso-
ciate General Counsel, Richard Fox, Office of the General Counsel,
SOCIAL SECURITY ADMINISTRATION, Baltimore, Maryland,
for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Kathryn Oldham appeals the decision of the district court adopting
the recommendation of the magistrate judge, granting summary judg-
ment to the Commissioner of Social Security, and upholding the
denial of Oldham's application for disability insurance benefits and
Supplemental Security Income. The Commissioner's decision deny-
ing benefits is based upon the finding that Oldham could perform her
past relevant work, and thus was not disabled under the Social Secur-
ity Act. Because we find that the Commissioner's decision is sup-
ported by substantial evidence, and that the correct law was applied,
we affirm.
Oldham filed her application for social security disability benefits
claiming disability since August 14, 1992, from the loss of her right
kidney, and mental disability from longstanding depression and a per-
sonality disorder. A hearing was held before an administrative law
judge (ALJ) on March 16, 1993. After a thorough review of the hear-
ing testimony by Oldham and her witness, a vocational expert called
by the ALJ, and the relevant medical evidence, the ALJ determined
that Oldham could perform her past relevant work, and that Oldham's
impairments were not disabling for purposes of the Social Security
Act.
Oldham's basic claim on appeal is that the ALJ's decision is not
supported by substantial evidence. She specifically claims that her
condition deteriorated significantly after she last worked in 1990. In
addition, Oldham claims that the ALJ: (1) should have found her dis-
2
abled pursuant to the provisions of Social Security Ruling (SSR) 85-
15; (2) made unsupported findings in a Psychiatric Review Technique
Form; (3) improperly relied on Cauthen v. Finch , 426 F.2d 891 (4th
Cir. 1970); and (4) failed to determine the credibility of witness Hank
Boschen.
The language of 42 U.S.C.A. § 405(g) (West Supp. 1996), requires
that this Court uphold the Commissioner's decision that a claimant is
not disabled so long as the correct law was applied and the decision
is supported by substantial evidence. Hays v. Sullivan, 907 F.2d 1453,
1456 (4th Cir. 1990). The Supreme Court has defined substantial evi-
dence as "`such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion.'" Richardson v. Perales, 402
U.S. 389, 401 (1971) (quoting Consolidated Edison Co. v. NLRB, 305
U.S. 197, 229 (1938)). Substantial evidence "consists of more than a
mere scintilla of evidence but may be somewhat less than a prepon-
derance. If there is evidence to justify a refusal to direct a verdict
were the case before a jury, then there is `substantial evidence.'" Hays
v. Sullivan, 907 F.2d at 1456 (quoting Laws v. Celebrezze, 368 F.2d
640, 642 (4th Cir. 1966)). This Court will not reweigh the evidence
or substitute its judgment for that of the ALJ. Hays, 907 F.2d at 1456.
After considering Oldham's claims on appeal and a review of the
record, we find that the ALJ properly evaluated the evidence in this
case, including Oldham's subjective complaints, and made appropri-
ate credibility and factual findings in accordance with relevant regula-
tory criteria and Fourth Circuit case law. In reaching this conclusion,
we specifically find that the ALJ properly followed the provisions of
SSR 85-15, that his findings in the Psychiatric Review Technique
Form at issue were supported by substantial evidence, that his reli-
ance on Cauthen v. Finch was proper, and that he properly consid-
ered all relevant evidence, including the testimony of witness Hank
Boschen.
While there was some evidence supporting Oldham's claim of dis-
ability, because the Commissioner applied the correct legal standards,
and the decision is supported by substantial evidence, we affirm the
district court's order upholding the Commissioner's denial of Old-
ham's application for social security disability benefits. We dispense
with oral argument because the facts and legal contentions are ade-
3
quately presented in the materials before the Court and argument
would not aid the decisional process.
AFFIRMED
4 | 01-03-2023 | 07-03-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/991557/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
HAYWOOD CLAYTON; SYLVIA
CLAYTON,
Plaintiffs-Appellants,
No. 96-1696
v.
RALEIGH FEDERAL SAVINGS BANK,
Defendant-Appellee.
Appeal from the United States District Court
for the Middle District of North Carolina, at Durham.
Paul Trevor Sharp, Magistrate Judge.
(CA-95-695-1)
Submitted: February 4, 1997
Decided: February 27, 1997
Before MURNAGHAN and ERVIN, Circuit Judges, and
BUTZNER, Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Quang Ngoc Nguyen, Hillsborough, North Carolina, for Appellants.
William C. Smith, Jr., David T. Pryzwansk, MANNING, FULTON
& SKINNER, P.A., Raleigh, North Carolina, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Haywood and Sylvia Clayton appeal from the magistrate judge's
order dismissing their amended complaint against Raleigh Federal
Savings Bank for failure to state a claim under Fed. R. Civ. P.
12(b)(6) and denying their motion to further amend their complaint.*
We affirm.
The Claytons borrowed $140,000 from Raleigh Federal in 1985 to
purchase their home in North Carolina. Although they defaulted in
1988, the Claytons have successfully prevented foreclosure by filing
bankruptcy seven times. In September 1995, the Claytons filed a com-
plaint against Raleigh Federal alleging a violation of 18 U.S.C.
§ 152(4) (1994). Immediately prior to the scheduled hearing on
Raleigh Federal's motion to dismiss the complaint, the Claytons filed
an amended complaint alleging additional claims under Section 10 of
the Real Estate Settlement and Procedures Act (RESPA), 12 U.S.C.
§ 2609 (1994). Approximately one month later, the Claytons filed a
motion to amend their complaint a second time, raising additional
claims under 12 U.S.C. § 2605(e), (f) (1994).
We agree with the magistrate judge that neither statute cited in the
amended complaint gives rise to a private cause of action. The first,
18 U.S.C. § 152(4), is a criminal statute dealing with filing a false
proof of claim in bankruptcy court. The second, 12 U.S.C. § 2609,
prohibits banks from requiring excessive tax and insurance escrow
deposits from mortgage borrowers. In neither case do we find a con-
gressional intent to create a private right of action. See Louisiana v.
Litton Mortg. Co., 50 F.3d 1298, 1301 (5th Cir. 1995) ("the weightiest
factor in determining whether a statute implies a private right of
_________________________________________________________________
*The parties consented to the jurisdiction of a magistrate judge pursu-
ant to 28 U.S.C. § 636(c) (1994).
2
action is whether Congress intended to create one") (citing
Transamerica Mortg. Advisors, Inc. v. Lewis, 444 U.S. 11, 15-16
(1979), and Touche Ross & Co. v. Redington, 442 U.S. 560, 568, 575
(1979)).
Finally, the magistrate judge did not abuse his discretion by deny-
ing the Claytons' motion to further amend their complaint, especially
given the timing of the motion. See Medigen of Kentucky, Inc. v. Pub-
lic Serv. Comm'n, 985 F.2d 164, 167-68 (4th Cir. 1993) (district
court's denial of leave to amend complaint is reviewed for abuse of
discretion); Fed. R. Civ. P. 15(a) (once a responsive pleading has
been served, a party may amend its complaint only by leave of court).
Accordingly, we affirm the magistrate judge's order. We dispense
with oral argument because the facts and legal contentions are ade-
quately presented in the materials before the court and argument
would not aid the decisional process.
AFFIRMED
3 | 01-03-2023 | 07-03-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559640/ | 796 F.Supp. 194 (1992)
Clarence NALLEY, Jr., et al.
v.
MAYOR AND CITY COUNCIL OF BALTIMORE, MARYLAND.
Civ. No. B-90-3072.
United States District Court, D. Maryland.
June 22, 1992.
Thomas A. Woodley, Washington, D.C., Joel A. Smith, Lutherville, Md., for plaintiff.
*195 Otho M. Thompson, James S. Ruckle, Jr., and Laurice D. Royal, Baltimore, Md., for defendant.
WALTER E. BLACK, Jr., Chief Judge.
Presently pending before the Court are Plaintiffs' Motion for Partial Summary Judgment (Paper 10) and defendant Mayor and City Council of Baltimore's Motion for Summary Judgment (Paper 25). These motions present the following issue: at what point must the City of Baltimore pay overtime compensation in a workweek to employees of the fire department's division of Emergency Medical Services (hereinafter "EMS personnel") after 40 hours or 53 hours? This issue is apparently one of first impression for a court in the Fourth Circuit.
I
The litigants in this action are locked into a contest over the proper construction of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"). In particular, the parties focus on the Act's overtime compensation provisions. Section 207(a) generally requires all employers to compensate their employees at one and one-half times their regular rate for all hours worked in excess of 40 in any given workweek.[1] This section applies to most state and local government employers.
Recognizing the special needs of government and the unusually long hours of some public safety employees, Congress made certain categories of employee exempt from the 40-hour overtime privilege. With special relevance to this suit, Congress specifically exempted employees in fire protection and law enforcement activities. That exemption, set forth in section 207(k), provides as follows:
(k) Employment by public agency engaged in fire protection or law enforcement activities
No public agency shall be deemed to have violated subsection (a) of this section with respect to the employment of any employee in fire protection activities or any employee in law enforcement activities (including security personnel in correctional institutions) if
(1) in a work period of 28 consecutive days the employee receives for tours of duty which in the aggregate exceed the lesser of (A) 216 hours, or (B) the average number of hours (as determined by the Secretary pursuant to section 6(c)(3) of the Fair Labor Standards Amendments of 1974) in tours of duty of employees engaged in such activities in work periods of 28 consecutive days in calendar year 1975; or
(2) in the case of such an employee to whom a work period of at least 7 but less than 28 days applies, in his work period the employee receives for tours of duty which in the aggregate exceed a number of hours which bears the same ratio to the number of consecutive days in his work period as 216 hours (or if lower, the number of hours referred to in clause (B) of paragraph (1)) bears to 28 days,
compensation at a rate not less than one and one-half times the regular rate at which he is employed.
(emphasis added). As construed by the Department of Labor ("DOL"), an employee involved in fire protection must work a minimum of 53 hours in a week to earn overtime pay, and an employee in law enforcement must work a minimum of 43 hours. 29 C.F.R. § 553.230.
Because of the humanitarian intent behind § 207(a), the courts have narrowly construed exemptions like § 207(k). Johnson v. City of Columbia, 949 F.2d 127, 129-30 (4th Cir.1991); Donovan v. Brown Equipment & Service Tools, Inc., 666 F.2d 148, 153 (5th Cir.1982). Indeed, exemptions *196 "ought to be applied only in those circumstances which plainly and unmistakably come within their terms and spirit." Donovan v. Bereuter's, Inc., 704 F.2d 1034, 1036 (8th Cir.1983). Thus, the burden is on defendant to show that it is entitled to exempt a certain classification of employee. Johnson, 949 F.2d at 130. Carlson v. City of Minneapolis, 925 F.2d 264, 265 (8th Cir.1991).
II
The City of Baltimore triggered this action by classifying over 100 EMS personnel as exempt because they are employed by the fire department and their work relates to the department's fire protection activities. The City does not assert here that plaintiffs fall within the law enforcement provisions of the statute. Instead, the City exclusively focuses on "fire protection activities" as defined by regulations promulgated by the DOL.
The City asserts that the Court can resolve this issue on the basis of 29 C.F.R. § 553.210, which states:
Fire protection activities
(a) As used in [section 207(k)] ... of the Act, the term "any employee ... in fire protection activities" refers to any employee (1) who is employed by an organized fire department or fire protection district; (2) who has been trained to the extent required by State statute or local ordinance; (3) who has legal authority and responsibility to engage in the prevention, control or extinguishment of a fire of any type; and (4) who performs activities which are required for, and directly concerned with, the prevention, control or extinguishment of fires, including such incidental nonfirefighting functions as housekeeping, equipment maintenance, lecturing, attending community fire drills and inspecting homes and schools for fire hazards.... The term would also include rescue and ambulance service personnel if such personnel form an integral part of the public agency's fire protection activities. See § 553.215.
....
(c) Not included in the term "employee in fire protection activities" are the so-called "civilian" employees of a fire department, fire district, or forestry service who engage in such support activities as those performed by dispatchers, alarm operators, apparatus and equipment repair and maintenance workers, camp cooks, clerks, stenographers, etc.
(emphasis added). In construing this section, the City implicitly rejects the application of the four enumerated factors of subsection (a) to EMS personnel. Instead, the City bases its case on the highlighted sentence, with its "integral part" language.
To clarify this term, the City focuses not on plaintiffs' participation in "fire protection activities" but on their close association with the fire department. The City does not define "integral part" by reference to § 553.215, a section which is cross-referenced, since it relates on its face to ambulance and rescue service employees who are not employed by a fire department.[2] In the event that the Court adopts § 553.215 as the applicable provision, the City argues in the alternative that its EMS personnel have been trained to rescue and have been regularly dispatched to accident scenes.
The City's interpretation of § 553.210(a) focuses on the plaintiffs' integration into the structure and activities of the fire department. Pursuant to this construction, the City contends that plaintiffs are similar to firefighters because they share the same *197 employer, the fire department. In addition, the City notes that plaintiffs are integrated into the department by a unified command structure, shared facilities, representation by the same union, the common purpose of assisting the community, and by use of the same color uniforms and patches. Finally, the City alludes to the frequent co-responses of firefighters and EMS personnel to medical and fire-related calls.
At the outset, plaintiffs assert that the Court should decide this issue by interpreting only the statutory language. They contend that Congress, in passing 29 U.S.C. § 207(k), explicitly chose to exempt firefighters and law enforcers, not EMS personnel. Nonetheless, plaintiffs do recognize that the Court has the responsibility to interpret administrative regulations that reasonably construe the statute and, accordingly, plaintiffs respond to the regulations cited by the City.
Confronting the language of § 553.210(a), plaintiffs first assert that they do not qualify as "rescue or ambulance service personnel." Plaintiffs also contend that their work is not integral to the activities of fire protection as required by the last two of the four enumerated factors set forth in § 553.210(a), namely, the prevention, control or extinguishment of fires. As an alternative, plaintiffs follow the direction of "See § 553.215," which essentially leads to two conditions for triggering an exemption for ambulance and rescue service employees: 1) they must have been trained to rescue, and 2) they must have been regularly dispatched to fires, crime scenes, riots, natural disasters, and other accidents.[3] Although the City does not rely on § 553.215 as previously set forth, plaintiffs assert that the City fails to satisfy either condition.
Even if plaintiffs are found to form an integral part of the fire department's fire protection activities, they claim non-exemption on the basis of 29 C.F.R. § 553.212, which provides in pertinent part:
(a) Employees engaged in fire protection ... activities as described in § 553.210 ... may also engage in some nonexempt work which is not performed as an incident to or in conjunction with their fire protection ... activities. For example, firefighters who work for forest conservation agencies may, during slack times, plant trees and perform other conservation activities unrelated to their firefighting duties. The performance of such nonexempt work will not defeat ... the section ... [207(k)] exemptions unless it exceeds 20 percent of the total hours worked by that employee during the workweek or applicable work period. A person who spends more than 20 percent of his/her working time in nonexempt activities is not considered to be an employee engaged in fire protection ... activities for purposes of this part.
Relying on this provision, plaintiffs uniformly represent that more than 99 percent of their work is unrelated to fire protection. On this basis alone, plaintiffs move the Court to grant their motion for partial summary judgment.
III
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, a motion for summary judgment is granted if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Lujan v. National Wildlife Federation, 497 U.S. 871, 110 S.Ct. 3177, 3186, 111 L.Ed.2d 695 (1990). Under the strict standard of the Fourth Circuit, summary judgment is proper only when the parties agree on both the facts and the inferences drawn from those facts. Morrison v. Nissan Co., Ltd., 601 F.2d 139, 141 (4th Cir.1979).
The Court must thus decide whether a reasonable jury could find in favor of the non-moving party, taking all factual inferences in the light most favorable to the non-movant. Helm v. Western Maryland Railway Co., 838 F.2d 729, 734 (4th Cir. 1988); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). It should be noted, however, that "the judge's function *198 is not himself to weigh the evidence and determine the truth of the matter." Anderson, 477 U.S. at 249, 106 S.Ct. at 2511; see Miller v. Leathers, 885 F.2d 151, 154 (4th Cir.1989), cert. denied, ___ U.S. ___, 111 S.Ct. 1018, 112 L.Ed.2d 1100 (1991). Instead, the Court must simply decide whether there is a genuine issue for trial.
IV
In order to determine which facts are material in this action, the Court must sift through the parties' conflicting legal theories and identify the applicable rule of law.
The Court finds that the statutory language does not expressly bring EMS personnel within the terms of an exemption. Indeed, Congress specifically exempted employees involved in fire protection and law enforcement activities, not those engaged in medical services generally. If Congress truly wished to expand the reach of its exemption, it could have used more general language, such as "emergency response activities."[4]
It is well settled that Congress, by expressly excluding certain categories from a statute's coverage, demonstrates an intent to include all others. See e.g., Andrus v. Glover Construction Co., 446 U.S. 608, 616-17, 100 S.Ct. 1905, 1910-11, 64 L.Ed.2d 548 (1980); Tennessee Valley Authority v. Hill, 437 U.S. 153, 184, 188, 98 S.Ct. 2279, 2296, 2298, 57 L.Ed.2d 117 (1978); Midland Telecasting Co. v. Midessa Television Co., 617 F.2d 1141, 1145 n. 7 (5th Cir.), cert. denied, 449 U.S. 954, 101 S.Ct. 361, 66 L.Ed.2d 219 (1980). This principle of inclusion is especially important in the context of FLSA, for which the courts have traditionally drawn narrow exemptions. See supra p. 195. Thus, this Court has serious reservations about reading § 207(k) expansively to exempt EMS personnel from the 40-hour overtime requirement. Nonetheless, the Court finds it appropriate to look to the DOL for guidance, provided the agency has reasonably construed the statute. See Donovan v. KFC National Management Co., 682 F.2d 603, 604 (6th Cir.1982). Such an approach is warranted by the acknowledged expertise of the DOL in dealing with labor issues.
In 29 C.F.R. § 553.210, the DOL has construed the term "any employee ... in fire protection activities" to refer to individuals who satisfy a four-prong test. In addition, "the term would also include rescue and ambulance service personnel if such personnel form an integral part of the public agency's fire protection activities. See § 553.215." Reading this last sentence, it might appear that the substance of an "integral part" test can be derived from the language of either § 553.210 or § 553.215. At the outset, the Court should indicate its reluctance to delve into and apply the complexities of § 553.215, a provision that neither party genuinely invokes. Moreover, the "See § 553.215" notation merely serves to refer the reader to a related regulation that applies to ambulance and rescue personnel of a public agency other than a fire department. Because plaintiffs are employed by the fire department, § 553.215 is inapplicable by its own terms.[5] The Court shall therefore focus its attention on the internal language of § 553.210.
In order to identify the substance of an "integral part" test within the contours of § 553.210, the Court can either rely on the four enumerated factors or develop a *199 separate and independent set of factors. Upon analysis, however, the Court concludes that a fire department's rescue and ambulance personnel must satisfy the four factors. In reaching this conclusion, the Court depends on a common sense interpretation of the regulatory language. For example, the drafters of the regulation chose to generally describe the term, "any employee ... in fire protection activities," as referring to anyone who fulfills the four factors. The drafters then noted that "the term would also include rescue and ambulance service personnel [who] form an integral part of ... fire protection activities." If the drafters truly wished to articulate a separate set of factors for ambulance personnel, they would not have opted for the word, "include." Because inclusion connotes similar treatment, the Court must apply the four factors to plaintiffs to determine whether they form an integral part of fire protection activities.
The City attempts to ignore these four factors and instead adopts a separate "integral part" test, which concentrates on the integration of EMS personnel into the fire department. The Court finds the City wrong on multiple grounds. First, the statutory and regulatory language expressly emphasizes an employee's activities not his or her mere employment by the fire department. In addition, numerous courts have emphasized the primacy of function over form. Carlson, 925 F.2d at 265; Reeves v. I.T. & T. Corp., 357 F.Supp. 295, 302-303 (W.D.La.1973), aff'd, 616 F.2d 1342, 1351 (5th Cir.1980), cert. denied, 449 U.S. 1077, 101 S.Ct. 857, 66 L.Ed.2d 800 (1981). Finally, the City's freewheeling interpretation has been rejected even by the DOL, which supports the view that the work of ambulance personnel must be substantially related to "fire protection activities." (Application of the Fair Labor Standards Act to Employees of State and Local Governments, 52 Fed.Reg. 2022 (1987)).
If plaintiffs in some manner satisfy these four factors, the City must further demonstrate under § 553.212 that plaintiffs spend 80 percent or more of their time performing work that is an incident to or in conjunction with fire protection activities. If the City fails, the plaintiffs are entitled to overtime compensation after working 40 hours in a week. In defining "fire protection activities," the Court finds most instructive the fourth factor of § 553.210 which refers to activities "which are required for, and directly concerned with, the prevention, control or extinguishment of fires."
The City makes the surprising contention that § 553.212 does not apply to EMS personnel. Not only is such an argument contrary to judicial authority, Spires v. Ben Hill County, 745 F.Supp. 690, 699 (M.D.Ga.1990); Horan v. King County Division of Emergency Medical Services, 740 F.Supp. 1471, 1479 (W.D.Wash.1990), but it ignores the structure and language of the regulations themselves. For example, § 553.212 expressly relates to employees engaged in fire protection activities as described in § 553.210. Moreover, the City glosses over the fact that former Secretary of Labor Elizabeth Dole has highlighted the importance of calculating the time an EMS employee devoted to fighting fires.[6] For all of these reasons, the Court cannot adopt the City's tenuous assertion.
V
Having identified the relevant legal standards, the Court is now prepared to apply the law to the facts. Upon reviewing the record, the Court recognizes that plaintiffs' jobs primarily involve the provision of medical services. An official job description defines a "paramedic" as one who "provides emergency treatment at the scene of an accident or illness and transports sick and injured persons to medical *200 facilities." (Declaration of Clarence Nalley, Jr., Exhibit 17). This general description is supported by the statements of Clarence Nalley (Nalley Declaration, para. 6) and Michael W. Jachelski, Jr., chief of paramedics (Jachelski Deposition, p. 15). As a part of these duties, plaintiffs are dispatched to fires whenever injuries are reported or likely to occur. (Nalley Declaration, para. 8).
Despite this overall emphasis on medical services, the critical question is whether plaintiffs form an "integral part" of fire protection activities as defined by the four factors of § 553.210. With respect to the first factor employment in an organized fire department, plaintiffs readily concede that the City has met its burden. (Plaintiffs' Motion for Partial Summary Judgment, p. 28 n. 14). As for the second, which requires training to the extent required by law,[7] the record reflects a disputed issue of fact. While Nalley indicates that "paramedics do not receive any training ... in connection with fire suppression" (Nalley Declaration, para. 10), the affidavit of Fire Chief Peter J. O'Connor lists numerous plaintiffs who have allegedly earned firefighting certification. (City's Motion for Summary Judgment, O'Connor Affidavit, paras. 14, 15).
The City has been less successful in satisfying or at least raising doubts about the third and fourth factors. For example, both Chief Jachelski and Henry Fowlkes, the administrator of the Medical Bureau, state that EMS personnel do not have the authority to engage in fighting fires. (Jachelski Deposition, p. 24), (Fowlkes Deposition, p. 17). Indeed, the City's Manual of Procedure strictly provides the following language about plaintiffs' "standby" activities:
Paramedics, when in service on the fire-ground, will not enter burning buildings or smoke laden or suspected contaminated areas. If injuries occur in the aforementioned areas, the injured will be removed to a safe location by firefighting personnel for treatment by paramedics.
(Nalley Declaration, Exhibit 3). As for the fourth factor, the City has failed to prove that any plaintiff performs duties that are "required for, and directly concerned with, the prevention, control or extinguishment of fires."
Due to these omissions of proof, and because the four factors are listed in the conjunctive, the Court concludes that plaintiffs do not form an integral part of fire protection activities. On this basis alone, therefore, plaintiffs deserve summary judgment. However, even assuming that every factor is satisfied, the City has fallen short of complying with the mandate of § 553.212 that plaintiffs spend 80 percent or more of their time performing work that is an incident to or in conjunction with fire protection activities. In fact, not one plaintiff meets this 80 percent test.
Michael Jachelski, the chief of paramedics for eleven years, stated in his deposition that EMS personnel committed less than 1 percent of their time to fighting fires in the fiscal year 1988-89. (Jachelski Deposition, pp. 120-22). The City has not contradicted this testimony. In addition, the EMS Annual Reports from 1989 and 1990 confirm that, at most, plaintiffs were involved in fire-related activities for 1.1 percent of their time. For example, fire protection represented only 1,076 out of 100,669 calls in 1989 and only 1,099 out of 100,451 calls in 1990.[8] (Nalley Declaration, Exhibits 22 & 23).
In light of this unrefuted evidence, the Court concludes that the City has failed to establish the requisite 80 percent needed to transform EMS personnel into firefighters. Therefore, in light of both §§ 553.212 and 553.210 and the Court's obligation to construe strictly any exceptions to customary overtime compensation, the Court denies *201 the City's motion for summary judgment and grants plaintiffs' motion for partial summary judgment.
NOTES
[1] Section 207(a) provides in pertinent part:
(1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.
[2] 29 C.F.R. § 553.215 provides:
(a) Ambulance and rescue service employees of a public agency other than a fire protection or law enforcement agency may be treated as employees engaged in fire protection or law enforcement activities of the type contemplated by [section 207(k) of the Act] ... if their services are substantially related to firefighting or law enforcement activities in that (1) the ambulance and rescue service employees have received training in the rescue of fire, crime, and accident victims or firefighters or law enforcement personnel injured in the performance of their respective [sic] duties, and (2) the ambulance and rescue service employees are regularly dispatched to fires, crime scenes, riots, natural disasters and accidents.
[3] See supra note 2.
[4] The legislative history of this statutory provision is scarce. The most substantive interpretation was made in 1974 by the ranking member of the House General Labor Subcommittee, who expressed the belief that ambulance and rescue personnel fall within the exemption. Because the remarks of a single legislator hardly control a determination of congressional intent, Chrysler Corp. v. Brown, 441 U.S. 281, 311, 99 S.Ct. 1705, 1722, 60 L.Ed.2d 208 (1979), this Court must generally treat the legislative history as inconclusive. For a full text of the legislator's remarks, see Horan v. King County Division of Emergency Medical Services, 740 F.Supp. 1471, 1476 n. 3 (W.D.Wash.1990).
[5] Accordingly, the two cases cited by defendant, Bond v. City of Jackson, 939 F.2d 285, 287 (5th Cir.1991), and O'Neal v. Barrow County Board of Commissioners, 743 F.Supp. 859, 862 (N.D.Ga. 1990), rely primarily on § 553.215 and are similarly inapposite.
[6] In a letter ruling of August 2, 1990, Secretary Dole held a county in violation of labor regulations for improperly including some emergency medical service (EMS) employees within the definition of fire protection. Specifically, her "investigation disclosed that the EMS employees did not spend the majority of their work time during each work period in EMS service related to firefighting activities." (emphasis added). Ltr.Rul. (Aug. 2, 1990), printed in Fair Labor Standards Handbook 289-90 (ed. Mar.1991).
[7] The Court concludes that the second factor, while failing to indicate the particular type of training required, can only refer logically to instruction in fire protection activities.
[8] These figures take into consideration not only the frequency of performing "standby" assistance on firegrounds but also paramedic responses to victims of burns and smoke inhalation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559058/ | 20 So. 3d 858 (2009)
KENNARD
v.
STATE.
No. 3D09-2331.
District Court of Appeal of Florida, Third District.
October 21, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559069/ | 644 F. Supp. 1327 (1986)
PRECISION TESTING LABORATORIES, LTD., a New York corporation, Asher Hiesiger, d/b/a Precision Testing Laboratories, Asher Hiesiger, and Arthur Ellis, Plaintiffs,
v.
KENYON CORPORATION OF AMERICA, a Colorado corporation, and Lawrence B. Kenyon, Defendants.
No. 84 Civ. 5424 (IBC).
United States District Court, S.D. New York.
August 26, 1986.
*1328 Scheffler, Karlinsky & Stein, New York City, for plaintiffs; Martin E. Karlinsky, of counsel.
O'Donnell, Fox, Gartner & Sobolewski, New York City, for defendants; Stuart F. Gartner, Kenneth A. Bloom, of counsel.
IRVING BEN COOPER, District Judge.
Plaintiffs, two individuals and a corporation engaged in the business of developing emissions systems for foreign automobiles, bring this action pursuant to 28 U.S.C. § 1332 for damages based on breach of an alleged joint venture agreement. They name as defendants an individual and a corporation wholly owned by him engaged in the same business. The case was tried to the Court on February 10 to February 14 and was bifurcated (the issue of liability to be determined first, damages reserved pending our decision thereon). At the conclusion of the trial decision was reserved. Post trial memoranda were filed on April 8, 1986.
FACTS
Plaintiffs Hiesiger and Ellis and defendant Kenyon are all involved in the "gray market" automobile business. Through the "gray market" luxury imported automobiles may be purchased by consumers at prices substantially below retail prices offered by dealers of the manufacturers.
Standards for vehicle pollution emissions are less stringent in Europe than they are here; (Tr. 27-38)[1] safety standards with respect to bumpers, door beams, headlights and door locks are different. (Tr. 36-37) Consequently, European manufacturers who export automobiles to the United States modify the cars in Europe with U.S. regulations. These modified automobiles are much more expensive than their European counterparts.
An alternative means of selling luxury foreign automobiles is to import the vehicles before they have been conformed to U.S. standards and then have them converted in the U.S. to satisfy Department of *1329 Transportation ("DOT") and Environmental Protection Agency ("EPA") regulations. It was discovered that through this latter method, the automobiles could be manufactured at much lower prices than automobiles that are converted in Europe and sold by dealers in this country. The process of importing these European vehicles, converting them in the U.S., and selling them here is what is known as the "gray market." (Tr. 13-14)
There are two procedures for bringing a foreign automobile into compliance with U.S. standards. The first involves modification of one particular vehicle. The process works as follows: The nonconforming vehicle is purchased in Europe and transported to the U.S. At the U.S. Customs Port of Entry, the importer of record declares that the vehicle will be brought into compliance with safety and emissions regulations within 120 days and fills out various forms. The vehicle is then released to the importer of record who brings it to a compliance center where safety and emissions modifications are performed. The next stop of the automobile is the emissions test laboratory; the results of the tests determine whether the vehicle returns to the compliance center for more work, or whether it can be made available for use or sale. The automobiles must pass a 50,000 mile standard. (Tr. 56)
At the same time as the automobile is following that path, massive paperwork is being processed by both the DOT and the EPA. Both of these organizations must review all the forms submitted to them, and the EPA further reviews the results obtained by the emissions test laboratory. The DOT and EPA then each reject the automobile for failing to meet their requirements or approve it; in the case of the latter, a release letter is sent to Customs which issues a notice of duty liquidation and admits the vehicle into commerce in the U.S. (Ex. 3; Tr. 25-35, 38-58) The average time period from when the vehicle is first purchased in Europe until it is admitted into commerce is six months. (Tr. 48-49)
The second method for bringing European automobiles into compliance with U.S. standards is called the Small Volume Manufacturers Certification Program. (Tr. 55) It was designed to benefit smaller European manufacturers who export less than 10,000 cars per year to the U.S. by lessening the onerous requirements for testing. Pursuant to the program, a manufacturer who imports less than 10,000 vehicles of one type per year for sale in this country and who agrees to abide by federal regulations and to pay certain taxes (Tr. 131) could have a prototype automobile tested by a 4,000 mile standard instead of a 50,000 mile standard. The emissions laboratory projects the emission levels of the car at 50,000 miles based on the emission levels at 4,000 miles. (Tr. 56-57) If the manufacturer has been designated a member of the Small Volume Manufacturers Program and if the prototype vehicle passes the 4,000 mile test, the manufacturer is empowered to modify nonconforming vehicles without the necessity of any further emissions tests; each individual vehicle need not be separately tested for emission levels. (Tr. 59) If the vehicle passes, the small volume manufacturer is granted a license to place his system on all similar nonconforming cars. (Tr. 133) In short, this method of conforming automobiles is much more efficient and economical.
Plaintiff Hiesiger is a New York attorney who has been working as a real estate investor since the 1950's. (Tr. 10-11) In 1982, he turned some of his efforts toward the business of importing foreign automobiles through the gray market. (Tr. 12) Early that year he invested $50,000 in purchasing five Porsche automobiles which were each individually modified and sold. (Tr. 15) In late 1982 and early 1983 he considered getting involved in a project to import the Volkswagen Beetle from Mexico. In connection with those plans, a prototype vehicle was brought to New York and arrangements were made for Hiesiger to meet the person in charge of the certification program, defendant Kenyon. (Tr. 67-68)
*1330 Kenyon, once a motor vehicle mechanic, formed defendant Kenyon Corporation of America ("KCA") sometime in 1981-82 (exact date unspecified) in order to conduct engineering and compliance work on European vehicles imported into the U.S. (Tr. 749) Beginning in 1982, Kenyon worked with an engineer named Claus Liphardt on developing an emissions control system that would replicate the work done by European manufacturers who import cars to this country. (Tr. 750-51) Although by March 1983 Kenyon had certified five vehicles through the one time pass procedure, KCA had not certified a vehicle pursuant to the Small Volume Manufacturers Program (Tr. 755); however, the company's application to be a member of that program had been granted in the spring of 1983. (Tr. 760)
The relationship between Kenyon and Liphardt is noteworthy. According to the deposition testimony of Liphardt, when he first met Kenyon the defendant was unsuccessfully using a very basic, undeveloped system in attempting to pass a certificate car. (Ex. 131 at 19-20) After reviewing Kenyon's problems, Liphardt designed a new and meritorious system which he shared with Kenyon. (Ex. 131 at 21-22) It is clear that Liphardt, not Kenyon, was solely responsible for that system and its engineering. (Ex. 131 at 23-24)
The first meeting between Hiesiger and Kenyon took place in March, April or May of 1983. (Tr. 70, 754) At that time Kenyon was performing engineering work for one Albert Mardikian pursuant to a Small Volume Manufacturers Certificate program. (Tr. 70-72, 757) Kenyon represented to Hiesiger that he and his engineer Liphardt had the capability to perform all work required for certification. (Tr. 72) Soon thereafter, Hiesiger ceased his involvement in the Volkswagen Beetle project. (Tr. 76)
The next meeting between Hiesiger and Kenyon, which occurred one to two months after the first, took place at Hiesiger's apartment at 31 West 11th Street in Manhattan. At trial, each party recalled different aspects of their conversation at that time. Kenyon remembered that Hiesiger stated he did not want to purchase KCA, though at an earlier time he had expressed such an interest, because the asking price of $30,000 was too high. (Tr. 759-60) He also recollected a general discussion pertaining to the "Bosch-Lambda" components (Tr. 761), an emissions technology which gives the engine in a car a great amount of power, low amount of emissions, and high mileage. (Tr. 116-17)
Hiesiger's memory of the meeting focused on the suggestion by Kenyon of a partnership between Hiesiger, Kenyon, Liphardt and Jerry Ellison, the chief laboratory technician of the Mardikian organization. (Tr. 85) Hiesiger had responded that he "would be very glad to see such an organization and would make every effort to bring Ellison on board if [Kenyon] would make an effort to bring Claus [Liphardt] on board." (Tr. 86)
Liphardt was not interested in getting involved in the suggested arrangement (Tr. 98), so, according to Hiesiger, Kenyon then suggested that he, Hiesiger and Ellison proceed to modify systems for three Porsche automobiles. Heisiger offered to pay for the vehicles, hire out work space in Amagansett, Long Island, pay for necessary parts, provide a testing facility in Pennsylvania, and pay for a $7,500 bond needed to import the vehicles (Tr. 99-100) All in all, in June or July 1983 (Tr. 106), Hiesiger paid $100,000 in purchasing the three Porsches in Kenyon's name. (Tr. 103-04) Of that money, $4,000 was paid directly to Kenyon to reimburse him for a deposit he had made on one of the automobiles. (Tr. 102) An additional $40,000-50,000 was expended between July and September 1983 (Tr. 106) to pay for technicians and for insurance and testing costs. (Tr. 106) Hiesiger testified that Kenyon came to the Long Island facility three or four times in August 1983 to work on the cars together with Ellison and several others. (Tr. 108) The vehicles were not successfully brought into conformity and the project was abandoned in September 1983. (Tr. 110)
*1331 Kenyon's memory of the events surrounding the Porsche episode diverges. According to Kenyon, in July 1983, three Porsches were ordered which were to be sold to Hiesiger. (Tr. 764-66) Although Kenyon did not perform any conversion work on those vehicles, Hiesiger paid him $5,000 for safety parts and for some technical consulting work with Ellison. (Tr. 767) Their dealings with respect to the Porsches, Kenyon testified, terminated in August 1983. (Tr. 768)
In September 1983 plaintiff Precision Testing Laboratories, Ltd. ("PTL") was incorporated with Hiesiger as the sole shareholder for the purpose of doing research and development in emissions systems, manufacturing conversion kits, and buying and selling foreign automobiles in need of compliance. (Tr. 323, 335-56; Ex. E) It was Hiesiger's testimony that in the same month PTL was formed, he and Kenyon again met. (Tr. 112) He stated that Kenyon then informed him that he had come into the possession of a vehicle built by Liphardt which had only failed a small part of the EPA test, and he had learned the secrets of the technology. (Tr. 124) At the conclusion of that meeting, Hiesiger agreed to and did arrange laboratory time at no cost to Kenyon (or to Hiesiger, who was allowed free time from the owner in consideration for past work performed by Hiesiger for the owner) (Tr. 135-36) to conform a Mercedes-Benz 500 series automobile purchased by Kenyon's mother. It is undisputed that Hiesiger also provided to Kenyon from September 1983 to July 13, 1984 the use of one of the 400 apartments he owned, located at 218 West 10th Street in Manhattan, rent free. (Tr. 120, 768) Hiesiger had used the apartment to house people associated with his various businesses. (Tr. 121) Hiesiger maintains that he could have received $600 per month to rent the apartment (Tr. 123); Kenyon testified that Hiesiger did not ask him to pay rent (Tr. 769), that he wanted a lease but Hiesiger would not provide one (Tr. 796-97), that he only lived there half of the time (Tr. 772), and that he paid rent on a second apartment in Gladstone, New Jersey where he resided the other half of the time. (Tr. 770-72; Ex. R, S)
According to Hiesiger, Kenyon's efforts on the Mercedes-Benz 500 did not meet with success; Kenyon reported that although he was achieving good results, they were insufficient to bring the car to certification level. (Tr. 134) It was at this time that plaintiff Ellis entered the picture.
Of the three individual parties involved in this lawsuit, we were most impressed with the testimony and demeanor of Ellis. We find him to be an honest, upright man, successful in his field, who was trying to work out an arrangement mutually beneficial to everyone concerned. Although he suffered a lapse of memory with respect to several significant items, on balance we credit his testimony as the most credible of the three.
Ellis is a 51 year old man who owns and operates Texas Coach Company (and three interrelated firms) in Houston, Texas where he converts foreign automobiles to U.S. standards and does research and development for nonconforming European automobiles. (Tr. 535-36) Before meeting either Hiesiger or Kenyon, Ellis had successfully created emission control systems for 25 cars using the individual modification and testing procedure. (Tr. 551) He had also produced two vehicles which were accepted as prototypes for the Small Volume Certification Program. (Tr. 556)
Hiesiger and Ellis first became acquainted in August 1983 when Hiesiger travelled to Texas Coach Co. in Houston to meet Ellis. (Tr. 114, 558) Hiesiger was impressed with the size and scope of the factory. (Tr. 114) In the course of their discussions during that visit, Hiesiger expressed considerable interest in the Small Volume Certification Program. (Tr. 115, 558) He was aware of the proliferation of cars being imported through the "gray market" and wanted to sublicense for a profit a certificate of conformity, if he could obtain one, to those whose cars needed to be passed. (Tr. 125) In the autumn of 1983, only a company called Village Imports *1332 had obtained such a certificate of conformity; they had accomplished it by the efforts of Arthur Ellis. (Tr. 129)
Sometime between September and November 1983, Hiesiger sent Ellis one of the three Porsches he had earlier imported in connection with his arrangement with Kenyon. Ellis certified the car pursuant to the one time pass option (not through a certificate of conformity) (Tr. 116, 559), for which Hiesiger paid Ellis $5,500. (Tr. 362, 559)
Thus, by the fall of 1983, Hiesiger was involved in one working relationship with Kenyon and in a separate working relationship with Ellis. Coincidentally, Ellis and Kenyon met each other for the first time at a Washington, D.C. EPA conference in November 1983 relating to "gray market" importing of foreign automobiles (Tr. 561, 774) where Ellis appeared as a representative for PTL. (Tr. 330-31) They sat in the same row on the airplane following the conference and discussed their respective involvement in the compliance industry. (Tr. 562)
During this time period, the professional relationship between Hiesiger and Ellis continued to develop. This was evidenced by Hiesiger's payment to Ellis of $10,000 for research in connection with compliance work. (Tr. 363) Kenyon, who was not then involved in any of the Hiesiger-Ellis affairs, was never advised of this transaction. (Tr. 364)
In the end of December 1983, a meeting was held at Hiesiger's apartment attended by all three parties.[2] (Tr. 139, 562, 777) After some preliminary discussions, they agreed to meet the next day. The testimony of Ellis and of Kenyon as to what took place at that second meeting support each other. Ellis stated:
Mr. Kenyon came and brought a satchel or bag of ... [e]mission control parts ... and started discussing what he had done.
He also said that he had his company listed as a [small volume] manufacturer but that he had not been able to produce a certificate, and that further he didn't know if he could, and that further that even if he did he didn't know if he could administer it.
I listened to him and began to make a decision as to whether I would work with him. I told him that and Mr. Hiesiger that my decision was that we would look further into it, that we would examine it closer. I invited him to come to Texas and bring the parts so that we could put them on the car, one of my cars, and do some preliminary testing, whereupon he agreed, and we decided that we would continue further on this study in Houston, Texas.
(Tr. 564)
Kenyon testified that:
I described the parts, I told them how they worked, and we talked generally about technology .... Mr. Ellis told me that he, too, was working on a 500 Mercedes, but not with these components, and he would be very interested to see how these components work.... He invited me down to Texas to show him the parts on a vehicle and demonstrate to him that, in fact, they would work.
(Tr. 779)
Kenyon further testified as to the detailed information he and Ellis exchanged that day. (Tr. 780-82)
Kenyon did not remember any verbal contribution by Hiesiger (Tr. 783); Ellis recalled that Hiesiger "encouraged [them] generally." (Tr. 566) Hiesiger remembered Kenyon's production of the bag of components (Tr. 141); a technical discussion between Ellis and Kenyon (Tr. 142); and an agreement for Kenyon to travel to Texas so as to enable Ellis to test Kenyon's components. (Tr. 144-45) Hiesiger further testified that the following discussion took place:
[Kenyon] said, "You know, looking at [Hiesiger] at this point, I wouldn't know what to do with a certificate of conformity *1333 if I had it. I need you fellows. You have business experience and expertise. Art [Ellis] has the technical expertise. I am essentially a promoter, a salesman. If you guys put this together, I will sell the hell out of this thing. I will sell kits all over the United States. The three of us together make one hell of a team. Let's do this together."
[Hiesiger] said to Larry, "I agree with you, I think that this makes even a better team than the one we thought about earlier of Jerry Ellison and you and me and Claus. Art has proven that he can get certificates. He has done it before. As for being a salesman, you are the worlds best salesman....
As for me, I do think I have some organizational business experience. I have an office, I have staff, we have people, we can lend our efforts, we can lend what money we can make available to it. I think this thing will work."
(Tr. 142-44)
We find it significant in the extreme that such a vital claimed conversation, going to the very heart of the formation of an alleged joint venture, was remembered by Hiesiger only. Not even the co-plaintiff, Ellis, expressed a memory of any such discussion. We find that although there might have been some allusion as to the three of them working together, no agreement was ever approached. To the contrary, the upshot of the meeting was that Ellis and Kenyon would get together without Hiesiger to exchange mutual information.
Hiesiger testified that on January 5, 1984, the parties met again; there is no indication of the outcome of that meeting. On the same date Hiesiger paid Ellis $20,000 to develop a system on a Mercedes-Benz 280 automobile. Once again, Kenyon was never advised of this transaction. (Tr. 364)
In mid-January 1984, Kenyon travelled to Houston with his components. (Tr. 567, 784) After installing them into a vehicle, it was brought to Automotive Research Testing Laboratory ("ARTL") for tests. (Tr. 570, 785) The results were satisfactory, and Kenyon and Ellis decided to go forward with further experiments on the new system. (Tr. 571) Before leaving Texas the next day, Kenyon and Ellis had a discussion relating to their future relationship. At trial, both testified that they had at that time expressed their joint desire to work together and to sell or convey 50 percent of the stock of KCA to Ellis. (Tr. 577, 787) Kenyon testified that he had insisted their agreement be subject to clearing by his attorneys and to a further meeting. He also stated that Hiesiger, as a friend, should be allowed to use any certificate obtained for an unspecified number of vehicles. (Tr. 787) Ellis, on the other hand, testified that Kenyon had not been interested in discussing the participation of Hiesiger. (Tr. 577)
After Kenyon returned to New York, Ellis continued experimenting with the system Kenyon had brought. There were a number of problems therein, many of which Ellis was able to rectify. (Tr. 578-79) For instance, one of the important components employed to regulate emissions is called a "catalytic converter." Although Kenyon had originally used a DeLorean converter, Ellis discovered a German one called the 317 Zeuna Starker which the parties used on the car that later passed certification. (Tr. 579-81) Another example concerns the air pump, a device that pumps air into the exhaust system, thereby diluting and burning away emissions. (Tr. 582-83) An air pump, however, is expensive and its mounting and proper operation are hard to insure. Consequently, before ever meeting Kenyon, Ellis had developed emission control systems that did not use an air pump; he discussed with Kenyon applying that technology to Kenyon's system. (Tr. 584) Indeed, the certification car did not have an air pump. A third series of discussions focused on a part called the "fuel block" which accumulates fuel. Although Kenyon was able to explain to Ellis the function of this component in a general way only, Ellis' research revealed its true inner workings. (Tr. 585-86) The fourth *1334 significant part which the two discussed was the "fuel pressure regulator" the re-engineering of which Ellis believed was the key to developing a successful car without an air pump. Ellis agreed to spend whatever time was necessary in developing the regulator, encouraged by words from Kenyon such as, "I know you can do it." Eventually, Ellis did re-engineer the fuel pressure regulator. (Tr. 587-88)
Sometime between the middle and end of January 1984, Hiesiger went to Houston to visit Ellis and to observe the progress being made as Ellis developed Kenyon's system. Ellis told Hiesiger that he needed financial help (Tr. 589-91); around January 20th, Hiesiger placed $100,000 on deposit in a bank account in the name of Ellis Compliance Corporation to enable Ellis to develop a certificate system using the Kenyon technology. (Tr. 146-47) This transaction was never reported to Kenyon. (Tr. 591) Hiesiger testified that the $100,000 that was advanced was in connection with the parties' project (which the three had never formally defined) but was not an obligation of the project. (Tr. 346-47)
On January 21, 1984, Ellis signed a letter agreement prepared by Hiesiger. (Ex. D) The letter stated:
January 21, 1984
Dear Asher
This is to confirm our understanding concerning dealings beginning in August 1983 to date.
You have paid to me $135,500 in furtherance of certain research projects dealing with the development of emissions control systems for various automobiles, including Porsche 930 Turbo, Mercedes 500 and others. Of this amount $5500 was paid for a system develped for a 930 Turbo delivered to you. The balance of $130,000 remains open. Until such time as proper value has been received for these sums paid, and additional agreements to be prepared by your tax counsel are signed by us, I pledge the following assets:
(1) The receivables of Texas Coach Company
(2) The parts inventory of Elco Parts Company
(3) The stock of Ellis Enterprises Int'l, Inc.
(4) My anticipated ½ interest in Kenyon Corporation
(5) My personal guarantee.
Sincerely,
Arthur L. Ellis
[signed]
Witness:
Catherine Hiesiger [wife of Asher Hiesiger]
[signed]
Accepted and Agreed to:
Asher Hiesiger
[signed]
Neither Hiesiger nor Ellis ever informed Kenyon that Ellis had pledged to Hiesiger the stock of Ellis Enterprises International or his potential one half interest in KCA. (Tr. 382)
During Hiesiger's visit in Houston, he and Ellis discussed the possibility of getting together with Kenyon in a joint effort to modify foreign automobiles with this new, developing technology. Ellis told Hiesiger that Kenyon had indicated a preference to work with Ellis alone, but Ellis assured Hiesiger that he would protect him and give Heisiger half of his participation. (Tr. 156, 592) Upon returning to New York, Hiesiger called Kenyon; Hiesiger testified that Kenyon denied any statement that he was working behind Hiesiger's back. (Tr. 159) Kenyon, on the other hand, testified that in their telephone conversation,
Mr. Hiesiger said that I was not grateful. He said that he was my Dutch uncle, or I was his Dutch uncle. He said how dare I not include him in any discussion with Mr. Ellis. He said that he owned me. He said he provided me a place to live. He asked me what he was supposed to get out of anything that happened between Mr. Ellis and myself.
I told him that he would get the use of the certificate for 15 to 25 cars. He told me that that was not enough and that he wanted to be part of anything that happened *1335 between Ellis and myself. I told him that it wasn't anything personal. I told him that I just didn't feel that he should be involved in this, that I provided much of the technology in the car and that we were basically going to be working together on the technology.
(Tr. 801)
On February 16, 1984, Hiesiger, Ellis and Kenyon had another meeting in Hiesiger's Manhattan apartment. The parties discussed Kenyon's dissatisfaction with including Hiesiger in any deal between Ellis and Kenyon. (Tr. 161, 792) Kenyon's expressed inclination seemed to have been rooted in the fear of losing his business to Hiesiger and Ellis. KCA, unlike any of the companies owned by Hiesiger or Ellis, had been designated a small volume manufacturer after almost a year of effort to obtain that status. (Tr. 164) Consequently, if the parties were to certify cars through that program, they would have had to operate through KCA. Kenyon testified that Hiesiger suggested each of them become a 33 percent owner of KCA. (Tr. 791) Kenyon remembered nothing further about the meeting. According to Hiesigerk, when Kenyon expressed that he was upset, stating that both Hiesiger and Ellis had independent businesses the shares of which were not being offered to Kenyon, Hiesiger and Ellis reassured him, suggesting that they would set him up in a business of importing and certifying the Gelaendewagen, a four-wheel jeep-type vehicle (Tr. 161-62); that they would buy excess inventory from Kenyon at a profit; that they would sell for Kenyon an automobile he owned that he had been unable to sell; and that they would pay him a consulting fee in connection with services to their firms. (Tr. 162) Hiesiger further testified that the parties did not discuss any shareholder arrangements at that meeting. (Tr. 397)
It was Ellis' testimony that the parties talked about paying the outstanding debts of KCA; that Ellis' parts company, Elco Parts Company, would supply conversion kits; and that the stock of KCA would be split such that Kenyon would own 50 percent and Hiesiger and Ellis would each own 25 percent. (Tr. 598-99) The parties decided to "sleep" on the matters discussed and to meet again the next day. (Tr. 163)
The all-important meeting was held on February 17, 1984, again at Hiesiger's New York City apartment. It is plaintiffs' contention that agreements previously made and acted upon were solidified at that time; defendants maintain that the discussions were not final and were subject to review by Kenyon's attorney, Kenneth A. Bloom, Esq.
We shall examine the evidence on each of the items taken up at the meeting on February 17, 1984. The first issue was the sale of KCA stock to Hiesiger and Ellis. Kenyon testified that he said, "if some sort of ... situation came about that I felt was right, ... Mr. Hiesiger could be involved." (Tr. 796) From his own notes written the night before and checked off during the meeting of the 17th, however (Ex. 19), it is clear that the discussion with respect to the sale of stock was not so limited. Kenyon's notes manifest his intent to sell Hiesiger and Ellis each 25 percent of the stock of KCA in consideration for $5,000 from each. (Ex. 19) The notes are corroborated by Ellis' testimony that "Mr. Kenyon ... decided that he would sell us for a token fee, each of us, the 25 percent of the stock for $5,000 each," (Tr. 601) and by Hiesiger's testimony that Kenyon said, "`How's about $5,000 apiece from you fellows to be paid to me, each of you for 25 percent of the stock, is that okay?' We said yes." (Tr. 166)
Whether Hiesiger and Ellis also agreed to assume the risks and liabilities of KCA is uncertain. Although Kenyon requested this (Ex. 19) and Hiesiger testified that the parties so agreed (Tr. 166,202), according to Kenyon Hiesiger said that was not "okay" (Tr. 796), and Ellis testified that the parties "talked about the liabilities that my companies had and the liabilities that Kenyon Corporation had, and decided clearly that those would be shared only by us and by us individually." (Tr. 601; Ex. N) In short, *1336 the parties did not seem to agree on this term of their discussion.
It was Kenyon's testimony that he expressed a desire to get a lease on the apartment owned by Hiesiger in which he was living, but Hiesiger would not agree to such an arrangement since the apartment was rent controlled and an agreement had been worked out with a Mr. Joe Ciliberto to the effect that if he ever needed a place to stay, he could return to it. (Tr. 796-97) However, Hiesiger said he would look for another apartment with a lease for Kenyon. (Tr. 796-97) Hiesiger did not deny this portion of the conversation; Ellis did not testify with respect to it.
The next item discussed by the parties was the use of components from Elco Parts Company. Kenyon testified that Ellis expressed the opinion that all parts in connection with their project should come from Elco a concept Kenyon did not like because he preferred to have KCA supply some of the parts. According to Kenyon, no agreement was reached on this issue. (Tr. 797) Ellis agreed that the parties talked about "my parts company supplying the parts." He did not say whether any agreement on that issue was reached. (Tr. 601) Hiesiger's testimony filled in the factual gap on this issue; he stated it was Ellis' suggestion that since he had a large factory and a number of employees, "it would be most economical for his parts company to do the parts work. Larry [Kenyon] finally agreed." Kenyon, however, according to Hiesiger, arranged to be a consultant to Elco for $5,000 due to his "good connections for parts." (Tr. 170) Indeed, Hiesiger's testimony is corroborated by Kenyon's notes which state, "LBK will receive $5000 parts finder fee from ELCO Parts. LBK will assist ELCO in initial procurement of M-B [Mercedes-Benz 500] `kit' parts." (Ex. 19)
Kenyon also asserted his desire to keep the land cruiser automobile he was driving. He further said that any profits made on the test vehicle they were using to obtain certification should go to his mother who had purchased the automobile. All agreed to these proposals. (Tr. 168, 199-200, 796-98) Hiesiger further testified that Kenyon wanted to sell a Volvo his mother had paid for and was driving which was registered in the name of KCA and use the money to buy a Mercedes which they would then convert. (Tr. 168) Once again, Hiesiger's memory was confirmed in the notes written by Kenyon which stated, "The Volvo Turbo (which in fact belongs to Eileen Linda Bruskin [Kenyon's mother]) will be taken on trade (and sold) against a new vehicle of Bruskin's choice to be sold to her at cost." (Ex. 19)
Ellis and Hiesiger both testified that Vicki Cheikes, Esq., who acted as counsel for Hiesiger on several projects, was present at part of the meeting to discuss a gas guzzler tax. (Tr. 165-66, 193-94, 601; Ex. N) Ellis also stated that he told the other two he would rely on them in organizing the details of their company. (Tr. 601-02)
Hiesiger testified that the parties discussed several additional points. One was the purchase by Texas Coach of inventory Kenyon had bought before Ellis' factory took over the compliance work at a price of cost plus 15 percent. Kenyon's notes also reflect this feature (Ex. 19), which apparently was agreed to. Another item discussed (seemingly without resolution) was Kenyon's keeping $40,000-50,000 in profits to reimburse him for loans he had made to the corporation. (Tr. 168) The breakdown of costs was detailed in Kenyon's notes. (Ex. 19) A third point of discussion, according to Hiesiger, was an understanding that all parties would generate capital, and any loans made would be repaid at prevailing interest rates. (Tr. 168) There was no corroborating evidence of this point. A fourth item, listed also in Kenyon's notes, was Kenyon's agreement to repay Hiesiger for the $7,500 bond he had put up when the three initial Porsches were imported. (Tr. 172; Ex. 19) A fifth item mentioned by Hiesiger was his promise to help Kenyon finance the Gelaendewagen project suggested the previous day and set up corporate headquarters in Colorado. (Tr. 172; *1337 Ex. N) Kenyon's notes on that topic state: "Asher Hiesiger agrees to arrange financing in LBK's M-B Gaendewagen [sic].... The Main office will be in Colorado LBK will be responsible expense account for that office All certification [unreadable] issue will go through that office." (Ex. 19; see also Tr. 605) The next topic the parties addressed was the "coast down" procedure, an essential test which had to be performed on a test car before submitting the package to the EPA for certification. The decision for Ellis to perform this test on a car other than the "mule" car they were otherwise using was apparently unopposed. (Tr. 198-99; Ex. 19) A seventh item concerned a man named Chuck Jencks who Kenyon had worked with on the Porsches. Kenyon requested that Jencks be compensated in some way, and the other two agreed. (Tr. 200; Ex. 19)
A final and significant item that all agree was discussed concerned solidifying the various terms that had been the subject of their meeting in a formal written document. Kenyon testified that he said he would have to discuss everything with his attorney, to which Hiesiger responded "that that was fine with him and he wanted it that way." (Tr. 796) At the conclusion of the meeting, Kenyon stated his desire to call his attorney. Ellis was opposed to getting involved in legal negotiations, but Kenyon stated, "that I had representation that Mr. Hiesiger was an attorney and I should have an attorney, and Mr. Hiesiger agreed." (Tr. 798)
Hiesiger had a different impression of the role of Kenyon's attorney. He testified that "We agreed that what we had agreed upon at that meeting would be translated into a more formal document by Mr. Bloom who represented Mr. Kenyon." (Tr. 181)
At the conclusion of the February 17th meeting, Kenyon called Mr. Bloom; Kenyon did not testify as to the contents of their conversation. However, it was Hiesiger's testimony that Kenyon revealed to Mr. Bloom that "we have straightened out the matters I have been talking with you about, we have come to certain agreements between the parties, we would like to get them down in more formal fashion as quickly as possible. We have decided to have you do this on behalf of all of us." (Tr. 190)
Following Kenyon's conversation with Bloom, Hiesiger got on the telephone with the attorney. Kenyon testified he heard Hiesiger say, "Yes, no problem, I want Larry to be happy with this." At the conclusion of the discussion between Hiesiger and Bloom, Kenyon stated that any agreement between the parties was to be in writing and subject to his attorney's review; according to Kenyon, Hiesiger agreed to this. (Tr. 799)
Hiesiger testified that he went over with Bloom the points the parties had agreed to. He said he was leaving for Europe on March 9th and that the parties desired "to put this in formal form as quickly as possible so that there would be no further possibility of misunderstanding between the parties." Hiesiger further called Bloom's attention to one possible problem he foresaw: If the stock were split 50-25-25, and if Ellis and Hiesiger adopted a position on an issue opposed to the position of Kenyon, a deadlock could result. Hiesiger suggested that one solution was an arbitration clause, but requested that Bloom's office "bend its efforts to some other method if you know it." Hiesiger testified that Bloom said he expected to have formal papers ready to be signed prior to Hiesiger's departure for Europe. (Tr. 191-92)
It was Bloom's deposition testimony he told Hiesiger "that any arrangement that was to occur between [the parties] would have to be in writing and approved by this firm." (Ex. 130 at 18)[3]
Subsequent to that telephone conversation, Kenyon gave Bloom a copy of the notes he had taken prior to and during the February 17th meeting so Bloom could begin *1338 to prepare drafts of an agreement between the parties. (Ex. 130 at 20, 53)
We find that the terms reached by the parties were intended to operate as a framework in which the parties would continue to deal, but were not intended as a final, binding agreement. This conclusion finds support in the very fact that Bloom, an attorney, was called in the presence of all three parties and requested to draft agreements; had the terms discussed been considered a binding agreement, there would have been no need to consult an attorney at that time for the express purpose of drafting a formal written contract. More significantly, during the telephone conversation with Bloom, he was specifically notified by Hiesiger of at least one potential and large problem in the parties' discussed arrangement: the deadlock situation. It was thus clear to all concerned that there were outstanding issues to be resolved before there would be any finality of agreement. Finally, we note that the parties did not have the same understanding as to all of the terms discussed for example, whether all would assume the risks and liabilities of each of their corporations. The terms of any alleged agreement not having been made clear, we find that the parties did not at the February 17th meeting intend to be bound by the terms and conditions of the points discussed.
Four days after the meeting in which, according to the position of the plaintiffs, a joint venture was solidified, Hiesiger filed a certificate of incorporation for a company called International Motors, Ltd. (Ex. E) The company was owned wholly by Hiesiger's wife, and its corporate purpose was, inter alia, "to own, operate, manage and to do everything normally associated with conducting the business of the import, sale, and lease of foreign cars." (Id.) On cross-examination, Hiesiger conceded that International Motors is a competitor of KCA. (Tr. 456-57)
Following the February 17th meeting, Ellis and Kenyon spoke over the telephone about moving the "mule" car ahead toward the testing stage. By the end of that month, the vehicle coast down test, which determines the amount of power of the automobile (Tr. 636), had been performed, paid for by Ellis. (Ex. 43) Ellis' technicians spent 93 hours preparing the car for this test. (Tr. 632) It was Kenyon's testimony that Ellis had agreed to prepare and pay for that test in exchange for examining the workings of Kenyon's system. (Tr. 836-38)
The automobile was then ready to be fully tested a stage that was to occur at the Automotive Testing Laboratory ("ATL") center in Ohio. (Tr. 606-07) An employee of Kenyon drove the car to ATL. (Tr. 808) Commencing at the outset of March, 1984 both Ellis and Kenyon spent periods of time there working on the vehicle. Ellis testified that he was actually present for five weeks, Monday through Friday, working up to 18 hours a day (Tr. 611), and that Kenyon was there a total of about three weeks. (Tr. 612) By April 13, 1984, according to Ellis, the car achieved certification levels. (Tr. 619)
In contrast, Kenyon testified that during the period of time the test car remained at ATL, Ellis was only present for three to five weeks. (Tr. 807) The deposition testimony of David Bodey, an employee at ATL, confirms the position (which we adopt) that Ellis was at ATL more frequently than Kenyon and did most of the physical labor on the car. (Ex. 132 at 48, 56)
Kenyon maintained that during his time at ATL he assisted Ellis, applied special lubricants, rebuilt the control pressure regulator, adjusted the carbon monoxide levels, adjusted the cold start plug, analyzed traces and procured parts. (Tr. 810-11) As for his own role, Ellis testified that he installed new injectors, performed cold starts, installed the fuel pressure regulator which he had built (Tr. 609-10); made daily adjustments; changed internal configurations; and rebuilt the exhaust system. (Tr. 618) In our opinion, and we so find, the intellectual power applied and resulting in the success of the conversion of the automobile was Ellis'. Although Kenyon procured the initial components, it was Ellis who, after weeks of adjusting and readjusting, *1339 put them together in a way that created a certification level vehicle. Kenyon, who had some expertise, secondary at best, assisted in the effort, but the evidence overwhelmingly convinces us that without Ellis, the automobile never would have achieved certification level.
KCA paid all of the bills sent by ATL in connection with the testing work (Ex. O, P), "because the certification effort was Kenyon Corporation's certification effort." (Tr. 500) Kenyon testified that he "told Mr. Ellis that I would pay the bills, that it was Kenyon Corporation's car, it was my money, and until there was some signed written agreement between all the parties, I didn't see any reason that Mr. Ellis should pay or Mr. Hiesiger or anybody else. It was my car." (Tr. 502)
At about the same time as the "mule" car was taken to ATL in Ohio, a meeting was held at Hiesiger's apartment (on March 1, 1984) attended by Heisiger, Kenyon and an employee of Texas Coach Company, Tom Duensing. (Tr. 209) At that time, Hiesiger wrote out a check drawn on the account of PTL to KCA in the amount of $15,055.41 for the purchase of emission parts Kenyon was selling to Texas Coach. (Tr. 211-12; Ex. 22) During the course of the March 1st meeting, Hiesiger expressed his failure to understand Bloom's delay in preparing the parties' agreement. Hiesiger testified that Kenyon told him Bloom was preparing six different documents, to which Hiesiger responded that it did not sound to him like Bloom was doing what was requested. (Tr. 215)
On March 1 or 2, 1984, Hiesiger called Bloom who informed him that the matter was beyond his ability to handle and he had referred it to a corporate partner in the law firm, Mr. Sobolewski. (Tr. 217) Hiesiger then spoke to Sobolewski who told him that he was working on the drafts and expected to have them for Hiesiger's review before the latter left for Europe. (Tr. 218)
No draft agreements were presented to any of the parties before Hiesiger's European departure on what was supposed to be a two week trip and turned into a two month trip. (Tr. 219) The stated purpose of the voyage was to find cars, parts and inspect European facilities where compliance work could be performed or to whom compliance kits could be sold. (Tr. 219) Hiesiger kept in touch with Ellis (but not Kenyon) while he was away by telephone and telex. Consequently, he knew of the progress made on the "mule" car as well as the failure of the attorneys to present a draft agreement. (Tr. 223-28) Indeed, when Ellis was at ATL with Kenyon, he asked about the draft agreement. He testified that Kenyon said there were some complications and Bloom was referring it to one of his partners. (Tr. 616-17)
In March and April, two checks were paid to the order of KCA and Lawrence Kenyon by Elco Parts Co. for the purchase of components. (Exs. 20, 21)
On April 13, 1984, the day the "mule" car achieved certification levels, Ellis called Kenyon to share the good news. Ellis recommended that Kenyon finish assembling the paperwork for EPA as soon as possible. (Tr. 636-37) The next week, the paperwork, i.e., the EPA application, was sent to Ellis. (Tr. 638; Ex. 42) At the end of the month, Kenyon went to ATL and performed some additional work on the "mule" car; he testified that it took him two weeks to complete the requisite jobs. (Tr. 813-15) Ellis agreed that the additional work was necessary for EPA documentation. (Tr. 710)
Around the end of April or beginning of May, Kenyon travelled to Houston and met with Ellis. In accordance with the parties' February 17 discussions, Ellis had sold the Porsche Kenyon had not been able to sell, and he paid Kenyon the proceeds at that time. (Tr. 642) During their meeting, Kenyon expressed his dissatisfaction with the partnership arrangement and again indicated his discomfort with Hiesiger. Ellis responded by saying, "we agreed 50-50. You can forget Mr. Hiesiger, let's continue on with our original agreement of 50-50, and Mr. Hiesiger is out. I'll take care of him myself." (Tr. 643)
Hiesiger returned from Europe on May 8, 1984. On May 10th, he met with Ellis in *1340 Houston. The two telephoned Kenyon. Hiesiger testified that Kenyon said he was being pressured for payment of a Gelaendewagen, but Hiesiger assured him he had taken care of the matter with the sales manager in Germany. (Tr. 230-31) Hiesiger then asked about the preparation of the draft agreements, to which Kenyon replied that he would check into their status. Kenyon later called back, saying he had spoken with his attorneys and there would be a meeting at their office on May 18, 1984. (Tr. 231)
In his testimony, Ellis reiterated the sum and substance of Hiesiger's statements, but added that Hiesiger spoke to Kenyon in "strong and loud and forceful tones." (Tr. 650) When Ellis thereafter spoke to Kenyon, Kenyon said, "`I don't have to take this kind of talk. I just don't have to take this kind of treatment.'" (Tr. 650) Ellis tried to reassure him and said, "we should get this matter straightened up as soon as possible." (Tr. 650)
On May 18, 1984, a meeting was held at the law firm of O'Donnell, Fox, Gartner & Sobolewski at 820 Second Avenue in Manhattan and attended by Hiesiger, Ellis, Kenyon, Bloom, Sobolewski, Vicki Cheikes, Esq., and Mrs. Ellis. (Tr. 233, 651, 817; Ex. 129 at 18, 130 at 42) At the outset of the meeting, Sobolewski handed out an agenda listing seven topics: financing: "(a) need $175,000, (b) loans on books LBK to be repaid"; ownership: "LK-51%, AH-24½%, AE-24½%"; directors: "(5) LK, AE, AH plus 2 to be elected by LK"; compensation for Kenyon: "salary plus percentage of gross revenue"; parts assembly and distribution; restriction on transfer of stock; and Kenyon as sole person to sign off on cars. (Ex. 23) Hiesiger told Sobolewski that this did not represent what the parties had agreed to in February. (Tr. 235) In strong and angry tones that Sobolewski characterized as a "tirade" (Ex. 129 at 18) and Bloom as a "tantrum" (Ex. 130 at 43) Hiesiger dissented to the idea of the stock being split 51-24½-24½ instead of 50-25-25 as had earlier been agreed and at giving Kenyon $175,000 in financing instead of $5,000 from Hiesiger and $5,000 from Ellis plus the sale of certain assets. (Tr. 236, 818-19)
Hiesiger testified that those present discussed Kenyon getting $60,000 from the sale of the Porsche and from the sale of KCA inventory. It appears that the question of additional financing was left open. (Tr. 246, 706) With respect to the sale of stock, Sobolewski stated that a 51-24½-24½ split would resolve the problem Hiesiger himself had earlier raised of control in a deadlock situation. Hiesiger suggested as more acceptable alternatives an arbitration clause or a buyout provision, and Ms. Cheikes offered to look for other arrangements an approach, according to Hiesiger, all agreed to. (Tr. 247, 821) No agreement was reached as to how much stock would be owned by the respective parties. (Tr. 706)
When the question of earnings was raised, Sobolewski said Kenyon should have a salary ($50,000 annually was suggested) plus a percentage of gross revenues since he would be running the day-to-day operation of the company. Hiesiger testified that the parties "had never said that somebody devoting full-time to the business couldn't be provided for by way of salary, and that that was certainly an open question, but that until now no provision had been made for anyone of us to receive a salary, and that beyond that we had provided for Larry to have a business of his own with the Gelaendewagen with Arthur's assistance and my assistance in Colorado." (Tr. 249) It appears there was no resolution of that issue.
Sobolewski suggested that there be five directors the three parties plus two others elected by Kenyon. Hiesiger would not yield since that solution "effectively ... gave control to Larry." (Tr. 249) The record indicates that this issue was not resolved. On the question of the role of Elco Parts Company in supplying the needed components, there was further disagreement; according to Hiesiger, Cheikes said "that certainly some effective way would have to be arrived at so that Elco Parts *1341 Company would be appropriately supplying and seeking to sell the kits ... in the situation.... But it was an area certainly where some protection had to be afforded to Kenyon Corporation vis-a-vis Elco Parts Corporation." (Tr. 250-51) Finally, the parties discussed without resolution the question of transferring stock. (Tr. 251)
Although many issues were clearly unresolved at the close of the meeting, Hiesiger and Ellis somehow believed they "still had the same deal." (Tr. 251) Hiesiger was looking forward to proceeding along equivalent lines to those originally mapped out.
The next morning Ellis was at Hiesiger's home and received a telephone call from Kenyon. Ellis testified that Kenyon wanted to come to an understanding with Ellis and work things out. Ellis agreed; he told Kenyon he "didn't think that [Kenyon] really needed attorneys such as these, they are just messing things up, and it is not my general practice. I am a man of my word ... and I told Mr. Kenyon that when I shook hands on it, that I would do what I said I would do and I expected him to do the same thing. Whereupon he said, `I agree with you, ... I will be back in touch with you....'" (Tr. 656-57, 823)
Hiesiger testified that on June 7, 1984, he received a telephone call from Ellis in which Ellis reported that Kenyon was disappointed with the May 18th meeting and had told Ellis, "let's proceed ahead, we have got a good thing going." (Tr. 280) Accordingly, Hiesiger and Ellis agreed to give Kenyon a check for $10,000 representing the $5,000 that each had said on February 17th they would pay for their 25 percent shares of KCA. Hiesiger asked Mr. Ciliberto, the rent-controlled tenant in the Manhattan apartment building where Kenyon was staying, to deliver the check to Kenyon or put it under his door. (Tr. 253) The $10,000 check (Ex. 36) was placed under Kenyon's door. (Tr. 253)
Soon thereafter, Kenyon called Ellis to tell him he had taken the "mule" car to the EPA and it had passed certification. (Tr. 660) He did not call Hiesiger to so inform him.
Kenyon received the $10,000 check but never attempted to cash or negotiate it. (Tr. 824) When Hiesiger learned from someone at ATL (Tr. 265) that Kenyon had obtained a certificate of conformity and had not notified him that he had taken the car to the EPA or that it had passed, he stopped payment on June 25, 1984 (Tr. 261) of the $10,000 check. (Tr. 256; Ex. 34)
On July 6, Hiesiger coincidentally ran into Kenyon on the street in Greenwich Village. (Tr. 267) In a very brief conversation, Kenyon informed Hiesiger that the "mule" car had passed certification. (Tr. 268, 822) Three days later, Hiesiger received a letter from Bloom returning the $10,000 check on the ground that "[t]here has clearly and unequivocally never been a meeting of the minds." (Ex. 35) Extremely angry, Hiesiger called Kenyon and Bloom and without restraint expressed his feelings. (Tr. 270-73) On July 30, 1984, Hiesiger commenced the instant lawsuit.
Subsequently, Ellis called Bloom "so that [Ellis] could try to bring [Ellis and Kenyon] back together ... I was not interested in being part of a lawsuit." (Tr. 670; Ex. 130 at 32-34) During that conversation, Ellis took the position that there had not been a deal between him, Hiesiger and Kenyon. (Tr. 672) According to Bloom who tape-recorded the conversation (Ex. 130 at 32), Ellis said "that there was no deal between Ellis, Hiesiger and Kenyon, and that in his mind there was only one agreement, and that was to be one with him and Larry Kenyon themselves without Mr. Hiesiger being involved ... that there was never a deal where there would be a 50-25-25 split of stock." (Id. at 33-34) The two unsuccessfully tried contacting each other further; Ellis thereafter became a party to the lawsuit. (Tr. 671)
It should also be noted that on about June 15, 1984, Hiesiger applied to EPA for Small Volume Manufacturer Certification designation for International Motors. (Tr. 254) In July 1984, International Motors received that designation. In December 1984, the company received a certificate of conformity through the efforts of Ellis for *1342 the Mercedes-Benz 500 for the model years 1984 and 1985. (Tr. 255) Since then until the present, International Motors has been carrying on business selling certification kits based on its certificate of conformity. (Tr. 255) Hiesiger pursued this course because he thought "that Larry saying everything is A-okay is a smoke screen. I still feel that having acted this way until now, something will happen to push us out of the deal, and what I would want to do is go after my own certificate in the event that that occurs." (Tr. 255-56)
On August 7, 1984, a certificate of conformity was issued by the EPA to KCA for four types of vehicles. (Ex. 9) A second certificate was issued on January 18, 1985. (Ex. 10)
DISCUSSION
Before addressing the substantive legal issues in this case, we note defendants' argument in their post-trial memorandum (citing no authority) that the complaint should be dismissed against Kenyon individually. We disagree. Plaintiffs assert valid causes of action, finding support in the trial record, against both defendants. Consequently, we decline to dismiss the complaint against Kenyon individually.
Intent to be Bound
Plaintiffs claim that defendants breached an oral joint venture agreement allegedly formed among the parties over the course of several meetings held during the winter of 1983-84 and solidified at a meeting held on February 17, 1984; they contend that the written agreements Bloom was requested to prepare were merely intended to memorialize their binding oral agreement. Defendants take the position that no oral joint venture agreement ever existed; that the meetings held among the parties were no more than negotiations that never materialized into an agreement; and that the agreements Bloom was requested to prepare were to serve only as a framework for further negotiations between the parties.
It is a well-settled rule of law that if parties intend not to be bound until a written contract is fully executed, there will be no binding agreement until that event takes place. Winston v. Mediafare Entertainment Corp., 777 F.2d 78, 80 (2d Cir. 1985); R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 74 (2d Cir.1984); Reprosystem, B.V. v. SCM Corp., 727 F.2d 257, 261 (2d Cir.1984), cert. denied, 469 U.S. 828, 105 S. Ct. 110, 83 L. Ed. 2d 54 (1984); V'Soske v. Barwick, 404 F.2d 495, 499 (2d Cir.1968), cert. denied, 394 U.S. 921, 89 S. Ct. 1197, 22 L. Ed. 2d 454 (1969); Jillcy Film Enterprises, Inc. v. Home Box Office, Inc., 593 F. Supp. 515, 519 (S.D.N.Y. 1984); Chromalloy American Corp. v. Universal Housing Systems of America, Inc., 495 F. Supp. 544, 550 (S.D.N.Y.1980), aff'd, 694 F.2d 289 (2d Cir.1982); Scheck v. Francis, 26 N.Y.2d 466, 469, 311 N.Y.S. 841, 843, 269 N.E.2d 493, 494 (1970). This is true even if the parties have orally agreed to all of the terms. R.G. Group, supra, at 74; Jillcy, supra, at 519; Chromalloy, supra, at 550; Schwartz v. Greenberg, 304 N.Y. 250, 254, 107 N.E.2d 65, 67 (1952).
The policy behind this rule is sound: a party should be free to negotiate candidly, secure in the knowledge that he will not be bound until the execution of a document all parties consider to be final. Winston, supra, at 80; R.G. Group, supra, at 75. It is for this reason that written contracts are the norm, not the exception especially with respect to complicated business deals. R.G. Group, supra, at 75. Indeed, Judge Friendly has stated that
most such potential contractors ... view the signed written instrument that is in prospect as `the contract,' not as a memorialization of an oral agreement previously reached.... [W]hen the parties have manifested an intention that their relations should be embodied in an elaborate signed contract, clear and convincing proof is required to show that they meant to be bound before the contract is signed and delivered.
International Telemeter Corp. v. Teleprompter Corp., 592 F.2d 49, 57-58 (2d Cir.1979) (Friendly, J., concurring).
*1343 Of course, individuals may be bound by an informal oral agreement if they so desire. R.G. Group, supra, at 74 (citing 1 A. Corbin, Contracts § 30 at 98 (1963) ). Thus, to determine if an oral agreement becomes legally binding, the intent of the parties is of central importance. Jillcy, supra, at 520 (citing Reprosystem, supra, at 261-62). In short, our initial inquiry is whether the parties intended a written document prepared at their request to be a mere memorialization of an already binding oral agreement, or whether they intended to be bound only upon execution of a formal, written instrument. See Winston, supra, at 80; R.G. Group, supra, at 74; V'Soske, supra, at 499.
Our determination rests upon a consideration of four factors: (1) reservation of right; (2) agreement on all terms; (3) complexity and magnitude of the contracts; and (4) partial performance. Winston, supra, at 80; R.G. Group, supra, at 75-76. Although "[N]o single factor is decisive," all four must be balanced to determine whether the parties intended to be bound prior to the formal execution of an agreement. R.G. Group, supra, at 75; see Winston, supra, at 80. We now proceed to examine each element seriatum.
The first factor is a party's reservation of his right to be bound only upon formal execution. Such a reservation may be express or implied from a party's words or actions, or from the language in any correspondence, etc. between the parties. See, e.g., Winston, supra, at 81 ("Although neither party expressly reserved [this] right ..., language in the correspondence does reveal such an intent."); R.G. Group, supra, at 76 (letter referring to negotiations "`designed to resolve outstanding issues and to reduce our agreement to writing'" evidenced reservation of right despite telephone conversation referring to an oral "handshake agreement"); ABC Trading Co., Ltd. v. Westinghouse Electric Supply Co., 382 F. Supp. 600, 602 (E.D.N.Y.1974) (letter stating "If your client finds this proposal agreeable in principle, we can proceed to reduce it to writing" constituted conclusive evidence of defendant's reservation of right); Chromalloy, supra, at 550 ("In both Scheck, supra, and Schwartz, supra, the existence of written contracts, in one case unsigned, in the other undelivered, was conclusive evidence of such an intent. [Similarly,] [i]n this case, a series of draft agreements were drawn up but never executed.")
In the instant case, defendants claim that they expressly reserved the right not to be bound until any agreement among the parties was put into writing and approved by their law firm (Tr. 787, 796; Ex. 130 at 18); plaintiffs, on the other hand, contend that the parties intended to be bound with or without any written agreement.
Kenyon testified that at the February 17, 1984 meeting, he told Hiesiger he would have to discuss everything with Bloom, his lawyer, since Hiesiger was an attorney and Kenyon felt his interests should be represented by counsel; Hiesiger agreed, according to Kenyon. (Tr. 796) Further, Bloom deposed that he informed Hiesiger in their telephone conversation at the close of the February 17 meeting that "any arrangement ... would have to be in writing and approved by this firm" (Ex. 130 at 18) a requirement to which, according to Bloom, Hiesiger agreed. (Tr. 799) Hiesiger, on the other hand, denied ever being told about these conditions. (Tr. 402-03)
It is our opinion, and we so find, bolstered by plaintiffs' own words and acts, that, as defendants claim, they reserved the right not to be bound until a formal contract was entered into. Our conclusion finds support in the very fact that Bloom was telephoned at the close of the February 17 meeting. Indeed, Hiesiger himself insisted that the content of the parties' discussions that day "be translated into a more formal document by Mr. Bloom...." (Tr. 181) In the presence of all three parties, Hiesiger spoke with Bloom on the telephone, explaining the parties' desire "to put this in formal form as quickly as possible so that there would be no further possibility of misunderstanding between the parties." (Tr. 191)
*1344 It is apparent to us that Hiesiger wanted to take advantage of the drafting process as a way to clarify and finalize the terms discussed by the parties. For instance, Hiesiger pointed out a serious potential problem area in the terms discussed at the February 17 meeting that he wished Bloom to work out for the parties: he anticipated that the sale of 25 percent of KCA stock to both Hiesiger and Ellis could result in a deadlock between Kenyon, on the one hand, and Hiesiger and Ellis, on the other. After offering a possible solution, i.e., an arbitration clause, Hiesiger suggested that Bloom's firm "bend its efforts to some other method...." (Tr. 191-92) Clearly, not only the defendants, but Hiesiger as well, believed that there were still issues to be resolved through the drafting process before the agreement achieved finality.
In this context, we note the recent observation by our Circuit Court of Appeals:
The actual drafting of a written instrument will frequently reveal points of disagreement, ambiguity, or omission which must be worked out prior to execution. Details that are unnoticed or passed by in oral discussions will be pinned down when the understanding is reduced to writing.
Winston, supra, at 82 (citing R.G. Group, supra, at 75). We entertain no doubt that such considerations motivated Hiesiger's desire to reduce the parties' discussions to a formal writing.
Perhaps the most striking and convincing evidence that the parties did not intend their discussions to constitute a final and binding agreement at the close of the February 17, 1984 meeting before they were put into a formal contract comes from the testimony of Ellis. At a meeting between Ellis and Kenyon in late April or early May of 1984 in Texas, Kenyon revealed that he was dissatisfied with their association with Hiesiger. Ellis replied by saying: "... remember, Larry, we agreed 50-50. You can forget Mr. Hiesiger, let's continue on with our original agreement of 50-50 and Mr. Hiesiger is out." (Tr. 644)
Furthermore, Ellis admitted that in a telephone conversation with Bloom in August, 1984, Ellis said he believed there was never any "deal" between himself, Mr. Hiesiger, and Mr. Kenyon. (Tr. 672). Bloom's deposition testimony corroborates this: "I recall Mr. Ellis telling me that there was no deal between Ellis, Hiesiger and Kenyon, and that in his mind there was only one agreement, and that was to be one with him and Larry Kenyon themselves without Mr. Hiesiger being involved." (Ex. 130 at 33-34) During their conversation, Ellis revealed to Bloom that he still desired an association with Kenyon and proposed some type of 50-50 stock split of KCA between himself and Kenyon. (Ex. 130 at 36)
In short, the trial testimony of Ellis and the actions taken by Hiesiger subsequent to the February 17 meeting demonstrate to us that they did not intend to be bound prior to the execution of a formal, written document.
The second factor we must consider in our balancing test is "whether all of the terms of the alleged contract have been agreed upon," Winston, supra, at 80, or, phrased differently, "whether there was literally nothing left to negotiate or settle, so that all that remained to be done was to sign what had already been fully agreed to." R.G. Group, supra, at 76. The extent to which there is agreement on the terms of a deal, especially the material terms, weighs heavily in support of or against a finding of an intent to be bound prior to execution.
Thus, in cases where the terms are definite and signing is "purely ministerial," R.G. Group, at 76; see Municipal Consultants & Publishers, Inc. v. Town of Ramapo, 47 N.Y.2d 144, 149, 417 N.Y.S.2d 218, 220, 390 N.E.2d 1143, 1145 (1979), this factor is strong evidence in favor of finding an intent to be bound prior to a formal execution. Conversely, where terms essential to the proposed deal are unclear or indefinite, a finding of an intent not to be bound without a written contract is likely. See R.G. Group, supra, at 76; V'Soske, *1345 supra, at at 500. Even where points of disagreement are not "of any substance" and an "oral agreement was actually reached on all of the remaining terms," the parties are not necessarily bound by the oral agreement. Winston, supra, at 82.
We now examine this second factor in the context of the instant case. Throughout the winter of 1983-84, the parties discussed working together in order to develop and commercially exploit the technology needed to modify foreign automobiles to EPA standards. At the conclusion of their February 17, 1984 meeting, although the parties had come to substantial agreement on several of the proposed terms, many of prime importance were left unresolved. Those terms agreed upon by all parties were the following, inter alia: Hiesiger would find an apartment he could lease to Kenyon; Kenyon's mother would receive profits made on KCA's test automobile; Elco Parts Co. would supply components for the parties' project; Kenyon would serve as consultant to Elco for a $5000 finder's fee; and Texas Coach would purchase certain inventory from KCA.
Among those terms left unclear were two of the most essential terms of any joint venture agreement: first, how profits would be shared, and second, whether Hiesiger and Ellis would assume the risks and liabilities of KCA, in which they intended to purchase stock. With respect to the first item, both plaintiffs testified that Kenyon had agreed to sell 25 percent of KCA stock for $5,000 to Hiesiger and 25 percent to Ellis at the same price, keeping 50 percent for himself. (Tr. 166, 601) Although Kenyon denies such an agreement, his own notes written prior to and during the February 17th meeting indicate his intention to sell plaintiffs stock in the same percentages and at the same price claimed by Hiesiger and Ellis. (Ex. 19)
However, as we have already noted, when Hiesiger spoke with Bloom over the telephone at the close of the February 17th meeting, he called to Bloom's attention his reservations about the proposed 50-25-25 stock split; he requested that Bloom's firm find a way to resolve the potential deadlock problem presented by such a split. (Tr. 191-92) Several resolutions were possible, one of which would have involved splitting the stock less evenly. Thus, Hiesiger could not have considered the proposed stock split to be definite.
Moreover, Ellis did not consider the stock split arrangement to be a certain term of the parties' agreement. As we have mentioned hereinabove, Bloom deposed that during his telephone conversation with Ellis in late April or early May of 1984, the latter said "there was never a deal where there would be a 50-25-25 split of stock." (Ex. 130 at 34) This corroborates Ellis' own testimony at trial that he told Kenyon in April, 1984 to "forget Mr. Hiesiger, let's continue on with our original agreement of 50-50," (Tr. 643) referring to their original discussions about joining forces apart from the involvement of Hiesiger.
The second significant term of the proposed deal, the assumption of the risks and liabilities of the alleged joint venture, was also unresolved. On February 17, Kenyon requested that Hiesiger and Ellis assume the risks and liabilities of KCA, through which the joint venture would operate. Kenyon testified that Hiesiger refused, (Tr. 796) whereas Hiesiger claims he agreed to the term. (Tr. 166, 202) Ellis, however, testified that the parties "talked about the liabilities that [Texas Coach] had and the liabilities that KCA had, and decided clearly that those would be shared only ... by us individually." (Tr. 601; Ex. N) It is apparent that the parties entertained different understandings on this point and that no agreement was ever reached.
In sum, we find that the parties could not come to an agreement on at least two essential terms of their understanding and left them unresolved seemingly to be worked out in a formal agreement, the drafting process of which was set in motion with their telephone call to Bloom on February 17. Consequently, the second factor in the four-part test whether all of the terms had been agreed upon must be answered in the negative.
The third factor we must take into account in our analysis is "whether the *1346 agreement at issue is the type of contract that is usually committed to writing," Winston, supra, at 80, or, put another way, "whether the agreement concerns those complex and substantial business matters where requirements that contracts be in writing are the norm rather than the exception." R.G. Group, supra, at 76. Evidence that a deal is complex enough so that it would be unusual to rely on an oral understanding includes, inter alia, the time span of the proposed deal, the amount of detail covered by its terms, and the amount of money at stake, including the amount sought by plaintiffs in any subsequent litigation. See R.G. Group, supra, at 77. In a recent Second Circuit case involving a complex, four million dollar business transaction, the Court noted that
the magnitude and complexity of the deal as reflected in the numerous written contract drafts not only reinforce the parties' stated intent not to be bound until written contracts were signed, but also reflect a practical business need to record all the parties' commitments in definitive documents.
Reprosystem, supra, at 262-63; see V'Soske, supra, at 501; Banking & Trading Corp. v. Floete, 257 F.2d 765, 769 (2d Cir.1958); 1 A Corbin, supra, § 30 at 105-06.
Although the transaction in Reprosystem involved a four million dollar sale of six companies located in different countries, it would be incorrect to characterize deals of lesser magnitude as simple. In a recent case, the Second Circuit reversed the lower court's determination that the transaction in question was "relatively simple," explaining that
... the $62,500 at issue [here] is not a trifling amount, and payment was to be made over several years.... Although the agreement consisted of only four pages, the parties evidently thought the terms and language used were complex enough to require substantial redrafting.
Winston, supra, at 83.
As in Winston, many elements of the instant case urge a finding of an intent to be bound only with a final written contract. Although the length of the proposed venture was never specified, due to the complex nature of the business importing automobiles, converting them, and then selling them there is a strong likelihood that the arrangement of the parties would have continued over a not insubstantial amount of time.
In addition, the proposed terms of this project were both numerous and varied; they ranged from the sale of components to financing arrangements to the performance of technical procedures. At the February 17th meeting, where plaintiffs claim their oral agreement was solidified on all terms, at least fifteen terms were discussed. When Bloom was asked by the parties to reduce these terms to written form, his firm began preparing six different documents totalling over twenty-five pages. (Tr. 215; Exs. 24, 25, 26, 27, 28) Indeed, as to a telephone call Hiesiger made to Bloom in March, 1984 in order to inquire why the drafts were taking so long to complete, Hiesiger testified: "[Bloom] told me it was a very complex matter.... Mr. Bloom said that this was beyond his ability to handle ... and he had referred it to [a] corporate partner, Mr. Sobolewski. ..." (Tr. 217)
Further evidence of the magnitude of the proposals by the parties lies in the amounts of money to be transferred among the parties. These transactions were to include the proposed stock sale involving $10,000; Hiesiger's financing the Gelaendewagen project for Kenyon; the purchase of $15,000 worth of KCA parts by Elco; and a finder's fee of $5,000 to be paid to Kenyon for serving as parts consultant to Elco. Certainly, the aggregate sums that the proposed deal involved are not `trifling;' logic would dictate that a prudent businessperson would require a signed instrument before being bound in such large amounts of money. See R.G. Group, supra, at 77 (referring to a writing requirement as "a practical business matter"); Teleprompter, *1347 supra, at 57 (Friendly, J., concurring) (describing the drafting process and "the realities of the formation of complex business arrangements"); V'Soske, supra, at 501 (with respect to a $1,700,000 sale of a business: "these are precisely the kind of matters which any prudent purchaser would with to have resolved before finally committing himself....").
In short, every facet of the proposed deal by the parties its duration, the great number and level of detail of its terms, and the amounts of money involved convinces us that this alleged agreement was of a complexity and magnitude sufficient to support a finding that the parties did not intend to be bound by an oral agreement.
The fourth and final factor that we must consider in determining at what point the parties intended to be bound is whether there has been partial performance of the contract. Winston, supra, at 80; R.G. Group, supra, at 75. "[P]artial performance is an unmistakable signal that one party believes there is a contract; and the party who accepts performance signals, by that act, that it also understands a contract to be in effect." R.G. Group, supra, at 75-76.
Plaintiffs claim that they rendered partial performance of their alleged joint venture agreement by providing: (1) funds; (2) administrative resources; (3) housing accommodations for Kenyon; and (4) Ellis' significant technical knowledge. (Plaintiffs' Post-Trial Memorandum at 113) We will address each of plaintiffs' claims to determine exactly what performance was rendered and whether any such performance was actually in furtherance of the terms agreed upon by the parties.
With respect to the provision of funds, plaintiffs may be referring to any of several payments. Hiesiger made two payments to Ellis in January, 1984 without Kenyon's knowledge (Tr. 364, 591), even though the larger of the two (for $100,000) was, according to Hiesiger, given to enable Ellis to develop a certification system using Kenyon's technology. (Tr. 146-47) We are not at all certain that these monies were not used in connection with projects between Hiesiger and Ellis, unrelated to Kenyon. Furthermore, these transfers were made before the February 17th meeting, when the terms of the parties' understanding were allegedly solidified.
Although certain of the payments discussed at the February 17th meeting were in fact made, e.g., the sale of KCA inventory to Texas Coach (Tr. 211-12; Ex. 22), the major financial terms of the alleged agreement were never carried out. The most significant the sale of KCA stock was never effectuated. Although Ellis testified that the payments of $5,000 from Hiesiger and $5,000 from Ellis for 25 percent of the stock each was merely a "token fee," (Tr. 601) no effort was made to pay the $10,000 until their understandings had fallen through. Another substantial term that was never pursued was that Hiesiger was to help Kenyon finance the Gelaendewagen project. In fact, there is no proof that Hiesiger made any payments in furtherance of this proposal. If the parties truly considered themselves bound at this point without a formal written document, what contingency were they awaiting before they proceeded to support the joint venture with financial resources?
Plaintiffs also argue that they provided "administrative resources." We are unsure what performance they allege to be in this category. If plaintiffs are referring to Hiesiger's promises to find an apartment he could lease to Kenyon and to set Kenyon up in the Gelaendewagen project, there is scanty and inconclusive evidence that Hiesiger invested any resources in these endeavors.[4]
Plaintiffs further claim that by allowing Kenyon to use one of Hiesiger's 400 apartments, Hiesiger rendered partial performance *1348 in furtherance of the alleged joint venture. With respect to the apartment Hiesiger provided rent-free for Kenyon: First, we note that Hiesiger could not provide Kenyon with a lease on that apartment due to arrangements he had previously made. (Tr. 121) Second, Hiesiger agreed at the February 17th meeting to attempt to find another apartment that he could rent to Kenyon. (Tr. 796-97) There is no evidence that this path was pursued. Third, Kenyon had used this apartment as early as September, 1983, when there was clearly not yet any serious contemplation of a contract between the parties.
With respect to setting Kenyon up in the Gelaendewagen project, although Hiesiger testified that he talked to individuals in Germany about the matter, there is no indication that he performed in any way other than by general discussions.
In contrast to what we have heretofore determined with respect to Hiesiger, Ellis did perform by providing technical expertise. In accordance with the February 17th discussions, Ellis performed and paid for the "coast down" procedure. (Tr. 198-99, Ex. 19) Ninety-three hours of his technicians' time was expended working on the car, and Ellis spent five weeks at the ATL center in Ohio working to bring the car to certification level. (Tr. 611-12)
Nonetheless, the facts that Ellis did perform one of the terms discussed by the parties at the February 17th meeting and that KCA inventory was sold to Texas Coach are insufficient to establish that the parties intended to be bound before a written document was executed. In addition to the factor of partial performance, we must consider the three other factors relevant to our determination of intent, i.e., reservation of right, agreement on all terms, and complexity and magnitude of the deal. In the instant case, we find that these three factors (plus the lack of partial performance on numerous terms of their alleged agreement) conclusively support a finding that the parties did not intend to be bound without a writing.
Consequently, we are compelled to conclude the parties did not consider that an oral agreement was reached on February 17, 1984 or that any discussions were to have legal effect, but were instead awaiting the execution of a formal written instrument before they were to be bound in a joint venture. This conclusion is amply supported by the record, in the words and actions of the parties and the nature of the agreement itself. Cf. Winston, supra, at 83; R.G. Group, supra, at 74. Since the joint venture agreement of the parties never became binding, plaintiffs cannot recover from defendants for breach of that agreement.
Elements of a Joint Venture
Even if we had found that the parties considered themselves bound without a writing, we would be compelled to find that such agreements as were reached by February 17, 1984 were legally insufficient to form a valid joint venture agreement.
Under New York law, a joint venture must contain each of four essential elements: (1) agreement between the parties to create a joint venture; (2) sharing of profits and losses; (3) joint control of the business; and (4) contributions of property, skill or knowledge. McGhan v. Ebersol, 608 F. Supp. 277, 282 (S.D.N.Y.1985); see Sherrier v. Richard, 564 F. Supp. 448, 457 (S.D.N.Y.1983); Yonofsky v. Wernick, 362 F. Supp. 1005, 1030-31 (S.E.N.Y.1973) (citing U.S. v. Standard Oil, 155 F. Supp. 121, 148 (S.D.N.Y.1957), aff'd, 270 F.2d 50 (2d Cir.1959), in 2 S. Williston, Contracts § 318A at 579 (1959) ); Ramirez v. Goldberg, 82 A.D.2d 850, 852, 439 N.Y.S.2d 959, 961 (2d Dep't 1981). We find that more than one of these elements are missing from the parties alleged oral agreements, although the absence of even one is fatal to the establishment of a joint venture. We now proceed to examine each element.
The first essential element of a joint venture that we address is the existence of an "agreement manifesting the intent of the parties to be associated as a joint venture." Chromalloy American Corp. v. Universal Housing Systems of America, Inc., 495 *1349 F.Supp. 544, 549 (S.D.N.Y.1980), aff'd, 697 F.2d 289 (2d Cir.1982) (citing Flammia v. Mite Corp., 401 F. Supp. 1121, 1127 (E.D.N. Y.1975), aff'd, 553 F.2d 93 (2d Cir.1977) ). Intent is crucial because a joint venture "is a voluntary relationship, the origin of which is wholly ex contractu, i.e., it is not a status created by law." Yonofsky, supra, at 1031. This manifestation of intent need not be explicit, id., at 1031, but the parties must be clear that they intend to form a joint venture, which is a fiduciary relationship, id., at 1037, and not a simple contract.
In the instant case, the parties expended much time, energy, and money meeting with eachother in both New York and Texas; their intent to create some kind of an association among themselves, one more involved than a simple contractual relation, was clearly demonstrated. Of equal importance is the nature of the agreement the parties discussed. The terms contemplated at the February 17, 1984 meeting were varied and complex and, if carried out, would have linked the parties to the extent New York law requires of joint venturers:
The ultimate inquiry is whether the parties have so joined their property, interests, skills, and risks that for the purposes of the particular adventure, their respective contributions have become one and the commingled properties and interest[s] of the parties have thereby been made subject to each of the associates on the trust and inducement that each would act for their joint benefit.
Sherrier, supra, at 457 (quoting Hanlon v. Melfi, 102 Misc. 2d 170, 423 N.Y.S.2d 132 (Sup.Ct., Suffolk Co.1979) ); see Stratford Group, Ltd. v. Interstate Bakeries, 590 F. Supp. 859, 862 (S.D.N.Y.1984); Steinbeck v. Gerosa, 4 N.Y.2d 302, 317, 151 N.E.2d 170, 178, 175 N.Y.S.2d 1, 13 (1958), app. dismissed, 358 U.S. 39, 79 S. Ct. 64, 3 L. Ed. 2d 45 (1958) (quoting Hasday v. Barocas, 10 Misc. 2d 22, 28, 115 N.Y.S.2d 209, 215 (Sup.Ct.N.Y.Co.1952) ). We have no doubt that the parties did intend to create such a relationship among themselves, as evidenced by their behavior and by the very nature of the terms they discussed. Consequently, we find that the parties intended to create a joint venture, although finalized only upon execution of a formal contract, as discussed hereinabove.
The next requisite element of a joint venture is the sharing of profits and losses.
An indispensable essential of a contract of partnership or joint venture ... is a mutual promise or undertaking of the parties to share in the profits of the business and submit to the burden of making good the losses.
Steinbeck v. Gerosa, 4 N.Y.2d 302, 317, 151 N.E.2d 170, 178, 175 N.Y.S.2d 1, 13, app. dismissed, 358 U.S. 39, 79 S. Ct. 64, 3 L. Ed. 2d 45 (1958) (citing Reynolds v. Searle, 186 A.D. 202, 203, 174 N.Y.S. 137, 138 (1919)); see Yonofsky, supra, at 1032. We find this element to be missing from the alleged agreement of the parties herein.
As we have already mentioned several times, although the parties tentatively agreed that the KCA stock would be split 50-25-25 with Kenyon retaining 50 percent, no definite understanding was reached; Hiesiger's telephone call to Bloom suggesting a mechanism be worked out to deal with a deadlock situation indicates a lack of certainty on exactly how the stock would be split and consequently how profits (and losses) would be shared. Furthermore, we note that the parties never otherwise discussed the question of sharing profits and losses. Consequently, this essential element of a joint venture agreement was not present.
The third element required to establish a joint venture is "joint control and management of the business." Sherrier, supra, at 457. Had the proposed sale of KCA stock been accomplished, the three parties would have been co-owners of the company through which the venture was to operate. However, the parties did not discuss at the February 17th meeting issues of control and management of KCA; it was not determined who would be the company's directors and officers or who would manage its operations. Although addressed at the *1350 May 18, 1984 meeting, (Ex. 23) they were never resolved. In short, the requisite element of joint control and management was never clearly decided.
The last essential element of a joint venture involves the contribution of each party. "There must be some contribution of property, financial resources, effort, skill or knowledge." Yonofsky, supra, at 1031. Among the terms agreed to by the parties at the February 17th meeting were that Hiesiger would provide financial resources, Ellis his technical expertise, and Kenyon his property and salesmanship applied to their venture. This element of a joint venture agreement, therefore, was satisfied.
In sum, even if we were to assume that the parties had intended to be bound without a written contract, since two of the four elements necessary to the existence of a joint venture have not been satisfied, we are constrained to, and do, conclude that no joint venture was formed.
Unjust Enrichment
Having determined that the parties did not intend to be bound without a formal writing and that in any event, there was no joint venture, we must still go on to decide whether plaintiffs are entitled to any equitable relief.
"Unjust enrichment" is premised on the notion that one should not be allowed to be enriched at the expense of another. See Reprosystem, B.V. v. SCM Corp., 727 F.2d 257, 263 (2d Cir.1984); Songbird Jet Ltd., Inc. v. Amax, Inc., 581 F. Supp. 912, 926 (S.D.N.Y.1984) (Weinfeld, J.). "[W]here the person sought to be charged is in possession of money or property which in good conscience and justice he should not retain, but should deliver to another," Indyk v. Habib Bank Ltd., 694 F.2d 54, 57 (2d Cir. 1982) (quoting Matarese v. Moore-McCormack Lines, 158 F.2d 631, 634 (2d Cir. 1946) ), the doctrine of unjust enrichment is applicable. The granting of such equitable relief is in the sound discretion of the trial court. Indyk, supra, at 57.
In order to recover for unjust enrichment, plaintiffs must prove: (1) defendants were enriched; and (2) such enrichment was unjust. Id.; see Reprosystem, supra, at 263; Songbird Jet Ltd., supra, at 926. We have no hesitancy in concluding that both elements were satisfied only with respect to the contribution made by Ellis to KCA's obtaining the two certificates of conformity.
Following the parties' February 17, 1984 meeting, 93 hours were expended by Ellis' technicians preparing Kenyon's "mule" car for the coast down test. Subsequently, Ellis spent five weeks at ATL working on bringing the "mule" car to certification level. Although Kenyon was also present over the weeks, he was at the plant considerably less frequently than Ellis. Further, most of the labor and technical work was done by Ellis; clearly he played a much more significant role than Kenyon in developing a certificate automobile.
Of course, Ellis sought to and did gain from the experience apart from the success reached in modifying that particular car. He learned how to develop an emissions system by using the Liphardt components in the configuration worked out while the "mule" car was at ATL. In other words, what Ellis learned was not incidental to Kenyon's test car; he developed a system that could be applied to other automobiles.
Ellis' gained knowledge, however, does not detract from the lengthy period of time he and his technicians spent working toward bringing Kenyon's car to certification level an effort that led to the success achieved. In that sense, this case differs from Songbird Jet Ltd., supra, wherein plaintiffs' services were designed to promote their own interests. Id. at 927. Here, Ellis' services were designed to benefit KCA.
Since a certificate of conformity was issued to KCA, defendants were clearly enriched. Further, since the certificate would not have been obtained without the efforts expended by Ellis, we find that such enrichment, which provided no monetary award *1351 to the person who bore most of the responsibility for the success, to wit, Ellis, was unjust. See Reprosystem, supra, at 263; Songbird Jet Ltd., supra, at 926. Finally, we note that Kenyon's enrichment was at Ellis' expense. See Dolmetta v. Uintah National Corp., 712 F.2d 15, 20 (2d Cir. 1983). In short, the circumstances herein convince us that "in equity and good conscience the defendant[s] should return [the portion of] the money or property" earned by Ellis' work. Id.
We do not reach the same conclusion concerning Hiesiger. Unlike Ellis, we find that he did not contribute toward the success of KCA. Although Hiesiger gave Ellis $100,000 in January 1984 while Ellis was developing the Liphardt system, Kenyon was never even informed of that transaction. We are not at all certain that the money was not used instead to promote other ventures between Ellis and Hiesiger apart from the project with Kenyon. Indeed, Hiesiger himself answered "No" when he was asked on cross-examination, "Was this $100,000 collateral or money that you advanced an obligation of the joint venture?" (Tr. 346)
We feel similarly with respect to the check for $15,055.41 written by Hiesiger on the account of PTL to KCA for parts sold to Texas Coach Company. If a benefit was conferred on any party as a result of that transaction, the true beneficiary was Ellis, who received components paid for by a company owned by Hiesiger.
Finally, we do not believe that Kenyon's rent-free use of Hiesiger's Manhattan apartment can be the basis of Hiesiger's recovery in unjust enrichment. Although Kenyon certainly benefited from that situation, it was at no expense to Hiesiger who could not accept rent for the apartment because of other arrangements he had entered into. (Tr. 796-97)
Accordingly, we find that Kenyon and KCA were not unjustly enriched at Hiesiger's expense. However, it is our conclusion that defendants were so enriched at the expense of Ellis who may recover the portion of the money his services earned.
UNCONVINCING TESTIMONY
Our obligation compels us to emphasize that we find unconvincing certain extremely vital portions of the trial testimony given by the witnesses Hiesiger and to a lesser degree Kenyon. In sharp contrast, that adduced by the witness Ellis was, in the main, of convincing nature.
CONCLUSION
For the reasons hereinabove presented, the complaint is dismissed in its entirety except as to the following: Plaintiff Ellis is entitled to recover from defendants the portion of money earned by his services in connection with certifying KCA's "mule" car. Before ordering a trial on damages with respect thereto, we proceed to follow a practice our Court has successfully employed for a long time: We direct the parties to endeavor to agree on a reasonable and proper amount of damages, then to provide us with a proposed form of judgment including such amount agreed upon. If no agreement thereon is reached within 60 days from the filing date of this opinion, the parties are to so notify us in writing and a date will be set for the trial on damages strictly limited to Mr. Ellis and solely to the extent set forth in this paragraph.
SO ORDERED.
NOTES
[1] Throughout this opinion, the letters "Tr." followed by a number in parentheses indicate a specific page in the trial transcript. The same applies to "Ex." which refers to a particular exhibit.
[2] Mrs. Ellis and Mrs. Hiesiger were also present in the apartment, though not as participants in the discussions.
[3] Bloom also deposed that he spoke to Ellis and gave him the same message; however, the testimony of Kenyon, Heisiger and Ellis contradict the position that those two spoke on that occasion. We find that Bloom talked with Kenyon and Heisiger, but not with Ellis. (Ex. 130 at 13)
[4] Furthermore, we find that Hiesiger having provided in September, 1983 a laboratory for Kenyon to work at on Long Island, when they first discussed converting a Mercedes-Benz, does not constitute partial performance of the alleged joint venture, since such work was performed prior to the commencement of the alleged joint venture. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1644967/ | 994 So. 2d 304 (2008)
CRITELLI
v.
STATE.
No. SC08-1881.
Supreme Court of Florida.
October 6, 2008.
Decision without published opinion. Rev.dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559083/ | 20 So. 3d 623 (2009)
Eric TATE
v.
STATE of Mississippi.
No. 2008-KA-01318-SCT.
Supreme Court of Mississippi.
October 29, 2009.
*625 Sanford E. Knott, Jackson, for attorney for appellant.
Office of the Attorney General by Ladonna C. Holland, attorney for appellee.
Before CARLSON, P.J., DICKINSON and PIERCE, JJ.
CARLSON, Presiding Justice, for the Court.
¶ 1. Eric Tate was convicted of one count of sexual battery and two counts of child fondling, with the acts having been committed when his female victim was nine years and ten years of age. The trial judge sentenced Tate to thirty years imprisonment on the sexual-battery conviction and ten years imprisonment on each of the child-fondling convictions, to run consecutively. From the Amite County *626 Circuit Court judgment of conviction and sentence, Tate appeals to us. Finding no reversible error, we affirm.
FACTS AND PROCEEDINGS IN THE TRIAL COURT
¶ 2. Eric and Curtileniea Tate were married in 2001, and from that union, two children were born. Curtileniea brought to this marriage her child Brittany,[1] who was born August 14, 1996. However, Brittany had lived with her maternal grandparents, Rosie and Curtis Holloway, since shortly after her birth. Eric, Curtileniea, and their two sons lived approximately one mile from the Holloways and Brittany in rural Amite County, and Brittany visited in the Tate home on a regular basis, sometimes spending the night on weekends. Eric Tate was employed by Sonoco Catering Company as an executive steward (galley cook), working on offshore rigs. Throughout his marriage to Curtileniea, Tate's work schedule required that he work offshore for two weeks at a time, with one week off at home in Amite County.
¶ 3. During May or June of 2007, Rosie Holloway became suspicious about Tate and Brittany because Tate was constantly phoning, wanting to talk with Brittany. Normally, these calls were made while Tate was either on the job or traveling to work. On a Tuesday in late July 2007, during one of these many phone conversations between Tate and Brittany, Holloway, unbeknownst to Brittany, was standing so close behind Brittany that Holloway could hear what Tate was saying to Brittany over the phone. Holloway heard Tate tell Brittany "what to wear, and [Brittany] told him she wouldn't wear those kind of clothes anymore." Holloway grabbed the phone from Brittany and hung up the phone as Brittany ran into the bathroom. Holloway followed Brittany into the bathroom and asked her if Tate "was touching her," and Brittany began crying. Brittany finally admitted to Holloway that Tate had been touching her, and Brittany further stated "but I am not doing anything. I promise. I am not doing anything but he's touching me." At this point, Holloway called Tate back on the phone and asked Tate if he was touching Brittany. Tate, who called his mother-in-law "Ma," kept saying, "Ma, Ma ... Ma, Ma." Holloway in turn said to Tate "you're a dirty dog," and hung up the phone.
¶ 4. On the same day, Holloway got in touch with Curtileniea and informed her of Brittany's disclosure. When Curtileniea confronted Tate about what her mother had told her, Tate "denied doing anything to [Brittany]." On Friday after the Tuesday phone call, Holloway, Curtileniea, and Brittany traveled to the Amite County Sheriff's Department and talked with Deputy Sheriff William P. Vallely, who had more than thirty years experience in law enforcement.[2] Curtileniea informed Deputy Vallely that Tate was molesting Brittany. Initially, Brittany was kept in another room while Curtileniea, with Holloway present, informed Deputy Vallely of Brittany's accusations.[3] Vallely eventually brought Brittany into the room and talked *627 with her briefly in the presence of Curtileniea and Holloway. During this conversation, Brittany, at Deputy Vallely's request, wrote out a statement in her own handwriting, describing what had happened between her and Tate. The statement, which was offered into evidence as Exhibit 3 in Tate's trial, described, in the words of a ten-year-old girl, acts by Tate involving vaginal penetration of Brittany with his penis and Tate's forcing Brittany to touch his penis. In this statement, Brittany also wrote about Tate's phone call which Holloway had overheard. Brittany likewise included in her statement the fact that after her mother, Curtileniea, learned of Brittany's accusations, Curtileniea sided with her, as opposed to Tate, and told Tate to get out of the house. Brittany signed this statement, and Curtileniea likewise signed the statement.
¶ 5. At the conclusion of this meeting, Deputy Vallely contacted the Amite County office of the Mississippi Department of Human Services (MDHS), which sent two case workers to interview Brittany. After this interview, Curtileniea signed a criminal affidavit charging Tate with "Molesting: 97-5-23."[4] MDHS referred Brittany to Dr. Leigh Gray, a physician specializing in obstetrics and gynecology in Brookhaven. On August 9, 2007, Dr. Gray saw Brittany, took a history from her, and conducted a pelvic examination.[5] Dr. Gray's examination of Brittany revealed "tears in her hymen which were consistent with evidence of trauma."
¶ 6. Eric Tate was indicted by the Amite County Grand Jury for one count of sexual battery and two counts of child fondling. On May 20 and 21, 2008, Tate was tried before a jury on all three counts of the indictment in the Circuit Court of Amite County, Judge Forrest A. Johnson, Jr., presiding. Testifying for the State were Brittany, Dr. Gray, Deputy Vallely, and Rosie Holloway. Testifying on behalf of Tate were Curtileniea Tate and Megan Grant.[6]
¶ 7. During the trial, in addition to the facts thus far depicted, Brittany testified that Tate had begun touching her when she was seven or eight years old. According to Brittany, on numerous occasions for more than one year, Tate had touched her on her breasts and in her vaginal area. On several occasions, Tate also had inserted "a little green wiggle thing" into her vagina. This item, which was described as resembling a writing pen, but in essence being a vibrator, was discovered by Holloway and Curtileniea in their search of Tate's room after the molestation charges surfaced. Holloway and Curtileniea also discovered a pornographic video in Tate's room, but the trial judge excluded the video from evidence. Brittany likewise testified that on at least one occasion, Tate had tried to put his "private part" inside her, but "it wouldn't fit." After Tate tried to penetrate Brittany's vagina with his penis, he had called Brittany to the bathroom, *628 where Tate had unbuttoned his boxer shorts, exposed his penis to Brittany and told her that the white excretion on his penis was "cum stuff." Brittany explained her failure to tell her mother about Tate's abuse of her by stating that she was afraid of Tate and felt that her mother would not believe her. In the end, Brittany's opinion that her mother would not believe her if she told her about Tate's physical abuse of her turned out to be prophetic.
¶ 8. By the time of Tate's trial, Curtileniea had abandoned her daughter and returned to Tate. Curtileniea testified that when the abuse charges had first surfaced, she had to make a choice, and she chose to believe Brittany and to press charges because Curtileniea's mother, Rosie Holloway, was a strong-willed woman who always wanted to "control everything and have her way." Curtileniea offered at least two reasons why Brittany would attempt to "frame" Tate with false charges of sexual abuse. First, according to Curtileniea, Tate and Curtileniea had tried to discipline Brittany, and neither Brittany nor Holloway had approved of their efforts. Likewise, Curtileniea stated that one day she had discovered $100 missing from her purse and when she asked Brittany about the missing $100, Brittany stated, "I don't have it. Eric may have it." When Curtileniea had confronted Tate about the missing cash, he had denied having it. Eventually, according to Curtileniea, Holloway had called and said that Brittany had the $100. Curtileniea opined that this incident would be another reason why Brittany might attempt to frame Tate for something he did not do. Finally, Megan Grant, a witness for Tate, testified that Brittany had falsely accused Tate of molesting her (Megan), and Megan denied that Tate had ever molested her. Thus, according to the defense theory, if Brittany would falsely accuse Tate of molesting Megan Grant, then Brittany was capable also of falsely accusing Tate of molesting her (Brittany).
¶ 9. At trial, the jury found Tate guilty on all three counts in the indictment. Judge Johnson sentenced Tate to terms of imprisonment of thirty years on the sexual-battery conviction and ten years on each of the two child-fondling convictions, with the sentences to run consecutively. On July 29, 2008, the trial court entered an order denying Tate's motion for judgment notwithstanding the verdict or, alternatively, for new trial, and Tate timely appealed to us.
DISCUSSION
¶ 10. Eric Tate assigns five errors which he states were committed by the trial court during the course of his trial, and couches them as follows: (1) Whether the trial court erred by not granting a mistrial when the prosecution commented on Tate's right not to testify; (2) whether the trial court erred by permitting prejudicial evidence to show "consciousness of guilt;" (3) whether the trial court's failure to examine individual jurors or grant a mistrial was error when the jury panel was exposed to prejudicial information; (4) whether the evidence "was not legally sufficient" to support the verdict; and (5) whether the trial court erred in denying Tate's motion for a new trial, given that the overwhelming weight of the evidence favored Tate. We restate and combine these assignments of error for the sake of today's discussion.
I. WHETHER THE TRIAL COURT ERRED IN REFUSING TO GRANT A MISTRIAL AFTER THE PROSECUTOR COMMENTED ON THE DEFENDANT'S RIGHT NOT TO TESTIFY.
*629 ¶ 11. Tate did not testify in this case. Therefore, the trial court instructed the jury in writing via Jury Instruction D-6 (Instruction No. 5), that the defendant had a constitutional right to not testify, that the jury could not draw any inference from the defendant's failure to testify, and that the fact that the defendant did not testify should not in any way be considered by the jury during the course of its deliberations.
¶ 12. An assistant district attorney conducted the first part of the State's closing argument. After the defendant's closing argument, the district attorney conducted the final (rebuttal) portion of the State's closing argument. Early in his closing argument, the district attorney argued to the jury that, because of the private nature of child sexual abuse, quite often it will be "her word against his." After two defense objections and two bench conferences, the trial judge sustained the defense objection and, sua sponte, instructed the jury to disregard the district attorney's comments. Tate asserts that, notwithstanding the trial court's sustaining his objection to the prosecutor's comments and informing the jury to disregard the comments, the prosecutor was guilty of impermissibly commenting on his failure to take the witness stand in his own defense in violation of his right to remain silent as guaranteed under the Fifth Amendment to the United States Constitution and Article 3, Section 26 of the Mississippi Constitution of 1890. Thus, Tate asserts that the trial court's failure to grant his motion for a mistrial was reversible error.
¶ 13. This Court's standard of review on appeal in determining whether the trial court erred in denying a motion for mistrial is abuse of discretion. Dora v. State, 986 So. 2d 917, 921 (Miss.2008) (citing Pulphus v. State, 782 So. 2d 1220, 1222 (Miss.2001)).
¶ 14. In considering issues regarding alleged improper opening statements and/or closing arguments by attorneys, we recently stated:
Attorneys are allowed a wide latitude in arguing their cases to the jury. However, prosecutors are not permitted to use tactics which are inflammatory, highly prejudicial, or reasonably calculated to unduly influence the jury. Hiter v. State, 660 So. 2d 961, 966 (Miss.1995). The standard of review that appellate courts must apply to lawyer misconduct during opening statements or closing arguments is whether the natural and probable effect of the improper argument is to create unjust prejudice against the accused so as to result in a decision influenced by the prejudice so created. Ormond v. State, 599 So. 2d 951, 961 (Miss.1992).
Dora, 986 So.2d at 921 (quoting Sheppard v. State, 777 So. 2d 659, 661 (Miss.2000)) (emphasis in original).
¶ 15. In Dora, the defendant was convicted of possession of more than thirty grams of cocaine and was sentenced as a drug recidivist and a habitual offender to serve a term of sixty years imprisonment without parole. Dora, 986 So.2d at 918. During the State's rebuttal portion of closing arguments, the prosecutor stated:
You also heard the fact that it is undisputed, [l]adies and [g]entlemen, that this defendant told Rebecca Dora, I will give you $5,000; I'm sorry I got you into this trouble, but I will give you $5,000 to go in there and take the rap for me. That is also undisputed. Nobody came forward said that didn't happen. I submit to you, [l]adies and [g]entlemen, that that is strong evidence that
*630 Id. at 920.[7] On appeal, the Court of Appeals found that these statements constituted an improper comment on the defendant's failure to testify and that the trial court had abused its discretion in denying the defendant's objection and motion for a mistrial. Id. See also Dora v. State, 986 So. 2d 965, 969-70 (Miss.Ct.App.2007). We granted certiorari and reversed the judgment of the Court of Appeals and reinstated and affirmed the circuit court's judgment of conviction and sentence. Dora, 986 So.2d at 918.
¶ 16. A prosecutor's comments, whether proper or improper, are in response to comments made by defense counsel in closing arguments. Such was the case in Dora, when defense counsel, during closing arguments, stated to the jury that "our theory of the case ... is that [Rebecca] stood to go to prison, and that they did not want to see Rebecca go to prison. So they put it on my innocent client, [Dora], who has the presumption of innocence before you, the jury." Id. at 923 n. 12. These statements by defense counsel prompted the prosecutor to respond in closing arguments that it was undisputed that the defendant had offered Rebecca $5,000 to "take the rap." In addressing this issue, this Court stated:
"There is a difference ... between a comment on the defendant's failure to testify and a comment on the defendant's failure to put on a successful defense." [Jimpson v. State, 532 So. 2d 985, 991 (Miss.1988)] (emphasis in original). The state is entitled to comment on the lack of any defense, and such comment will not be construed as a reference to the defendant's failure to testify by innuendo and insinuation. Shook v. State, 552 So. 2d 841, 851 (Miss.1989) (emphasis added). The question is whether the prosecutor's statement can be construed as commenting upon the failure of the defendant to take the stand. Ladner v. State, 584 So. 2d 743, 754 (Miss.1991).
Id. at 923 (quoting Wright v. State, 958 So. 2d 158, 161 (Miss.2007)) (emphasis added). In finding no abuse of discretion in the trial court's denial of the defendant's motion for a mistrial, we stated "that the prosecutor's statement was a permissible comment on the absence of evidence to support [the defendant's] defense," as opposed to a veiled attempt by the prosecutor to point out to the jury that the defendant had not taken the witness stand. Dora, 986 So.2d at 923.
¶ 17. Here, as in Dora, during the State's rebuttal, the district attorney was responding to comments made by defense counsel during closing arguments. Tate's theory was that Brittany could not be believed. Curtileniea testified that Brittany did not like to be disciplined by Tate, that Brittany may have felt she had been wrongly accused by her mother of taking $100 from her mother's purse, and that Brittany may have been upset because Curtileniea had believed Tate's denial of taking the money over her denial of taking the money. Thus, for one or both of these reasons, Curtileniea believed Brittany was falsely accusing Tate of these sexual improprieties. Likewise, the defense offered the testimony of young Megan Grant, who stated that Brittany had falsely accused Tate of sexually abusing her (Megan), a claim which Megan denied.
¶ 18. During closing arguments, defense counsel referred to Brittany as "a problem child." Defense counsel talked to the jury about the problems which arise *631 when parents are not able to discipline a child for that child's misconduct, and when a child "starts taking from her natural mother." Defense counsel argued to the jury that problems arise with a child when that child "feels like her mother does not love her," and that child "does not approve of the mother's husband, and thinks that the stepfather is treating her differently." Defense counsel accused Brittany of not telling the truth and stated that there were too many inconsistencies in her stories. Defense counsel reminded the jury that Brittany had stated the sexual abuse by Tate continued over a long period of time, but she had never told her mother about what Tate was doing to her because she had felt that her mother would not believe her. According to defense counsel, the reason that Brittany did not think her mother would believe her was because she had lied to her mother before. Likewise, defense counsel reminded the jury that Brittany did not tell Dr. Gray about Tate inserting the vibrator into her on several occasions, thus, Brittany's testimony about the vibrator was not believable. Additionally, defense counsel argued that "[t]he charges were filed by the mother, [b]ut when she began to think about and review this carefully in her mind, she realized this did not occur." Finally, defense counsel told the jury that "[w]hen you're charged with something you did not do, that person, whether it's me, you or anyone, becomes the victim in this case. Eric Tate, the executive steward of Sonoco, is the victim in this case."
¶ 19. When the district attorney stood to address the jury in the rebuttal portion of the State's closing arguments, the jury had before it not only these comments by defense counsel, but also the testimony of Curtileniea Tate. During the defendant's case in chief, Curtileniea had testified on direct examination that Tate had denied "doing anything to [Brittany]." The district attorney began his closing arguments:
Ladies and gentlemen, let me make one thing crystal clear to you before I say anything else. If every one of you go back in that jury room when we get through and vote not guilty, I will go home tonight and sleep like a baby. There's absolutely no way on what he's talking about this case was going to go to trial on these facts. All this business about if they'd have known this or if they had done that, this case was going to trial on these facts. I hate these cases. I hate them. I've been doing this for twenty years, and I hate these cases worse than anything else I do, and I'm going to tell you why, ladies and gentlemen. Because when people do this kind of stuff to children, they don't do it in front of anybody. They don't do it in front of other people. So what I end up with when it really gets down to it is her word against his. Think about it. They're not going to do it in front of the sheriff. They're not going to do it in front of their preacher. They're not even going to do it in front of their wife. Folks, if I want to eat some chocolate in my house and my wife don't want me to, I can promise you, I am eating the chocolate. Okay. It can be done
At this point, defense counsel objected, and after a nonrecorded bench conference, the judge announced, "Let's go ahead and proceed." The district attorney continued:
So when you have a case like this, ladies and gentlemen and don't get me wrong. [Defense counsel] is a very, very talented lawyer. He's done a good job, and he's done what he's supposed to do here today, and that's to try to defend his client to the best of his ability, but what happens in this (sic) cases is you've got to make the child the bad person. That's the only way it works. *632 It's her word against his, and as he says
Again, defense counsel objected and this time the trial judge sustained the objection. After another nonrecorded bench conference, the trial judge informed the jury that he was sustaining the objection and that the jury was "to disregard that last argument and remark of the prosecutor."
¶ 20. While we respect and appreciate the caution exercised by the trial judge in sustaining defense counsel's objection and sua sponte instructing the jury to disregard the district attorney's statements, it is apparent from the record that the district attorney's statements were not impermissible comments calculated to improperly call the jurors' attention to the fact that Tate had failed to testify in his own behalf. Instead, the comments were offered in an effort to counter Tate's efforts at a defense. Dora, 986 So.2d at 923. It is likewise apparent from the record that the prosecutor was properly responding to defense counsel's closing arguments regarding the defense theory that Tate "did not do it" and that Brittany was lying. We also are mindful that Curtileniea testified that Tate had "denied doing anything" to Brittany. Thus, from the totality of the record before us, the district attorney was justified in responding to defense counsel's comments during closing arguments. Consistent with Dora, we find that these comments were not improper. Dora, 986 So.2d at 923. See also United States v. Robinson, 485 U.S. 25, 34, 108 S. Ct. 864, 99 L. Ed. 2d 23 (1988).
¶ 21. However, since the trial judge sustained defense counsel's objections to these comments by the district attorney and instructed the jury to disregard them, any conceivable resulting prejudice was cured by this remedial action. "Juries are presumed to follow the instructions given to them by the court." Walton v. State, 998 So. 2d 971, 977 (Miss.2008) (citing Wheeler v. State, 826 So. 2d 731, 740 (Miss.2002)). In the end, the learned trial judge erred on the side of caution. This Court is entitled to presume that the jury followed the trial court's instructions and did not, during the course of its deliberations on the verdict, consider the "her-word-against-his" argument made by the prosecutor. But more importantly, for the reasons we have discussed, the district attorney's comments were not improper, and had the trial judge overruled defense counsel's objection, the trial judge would not have committed error. Thus, unquestionably, the trial judge did not abuse his discretion in denying defense counsel's motion for a mistrial.
¶ 22. For the reasons stated, we find this assignment of error to be without merit.
II. WHETHER THE TRIAL COURT ERRED BY PERMITTING PREJUDICIAL EVIDENCE TO SHOW "CONSCIOUSNESS OF GUILT."
¶ 23. Tate points to two instances during the course of the trial when he alleges the State improperly interjected into the proceedings that Tate had contemplated suicide, thus improperly showing "consciousness of guilt." This assignment of error obviously calls into question the propriety of the trial judge's admission of certain evidence. We repeatedly have stated that when this Court is called upon to review on appeal a trial judge's ruling on evidence, we will review "the trial court's admissibility of evidence under the abuse-of-discretion standard." Turner v. State, 3 So. 3d 742, 744 (Miss.2009) (citing Ellis v. State, 934 So. 2d 1000, 1004 (Miss. 2006)). Thus, as we consider whether the trial judge in today's case abused his discretion in allowing this evidence, "[u]nless *633 we can safely say that the trial court abused its judicial discretion in allowing or disallowing evidence so as to prejudice a party in a civil case, or the accused in a criminal case, we will affirm the trial court's ruling." Jones v. State, 918 So. 2d 1220, 1223 (Miss.2005) (citing McGowen v. State, 859 So. 2d 320, 328 (Miss.2003)).
A. Deputy Vallely's Testimony.
¶ 24. In addressing this assignment of error, we first focus on the testimony of Deputy Vallely. During the direct examination by the district attorney, Deputy Vallely testified about meetings with Curtileniea, Holloway, and Brittany. Deputy Vallely likewise informed the jury about contacting the MDHS in Amite County, with MDHS sending over two case workers to interview Brittany, followed by Curtileniea signing the criminal affidavit charging Tate with child molestation. The district attorney then questioned Deputy Vallely about his actions to have a warrant issued and served on Tate based on the criminal affidavit signed by Curtileniea. Deputy Vallely stated that at the time of the issuance of the warrant, Tate was working offshore. From Curtileniea, Deputy Vallely learned that when Tate returned from the offshore rig, he would come ashore at New Iberia, Louisiana; therefore, Vallely contacted the New Iberia Police Department. The following exchange occurred at trial:
Q. What, if anything, did you do what action did you take? I believe you said you called New Iberia. You talked with them. What did you do after that?
BY [DEFENSE COUNSEL]: I would object based upon relevancy.
BY THE COURT: I will overrule at this point, but let's cover this and move on.
BY [DISTRICT ATTORNEY]: Yes, sir. I am trying to get there, Judge.
BY THE WITNESS: I notified New Iberia to be on the lookout for him and for his vehicle because of possible suicide.
BY [DEFENSE COUNSEL]: Your Honor, I object to that.
BY [DISTRICT ATTORNEY]: I am not trying to solicit that, Your Honor.
BY THE COURT: I'll sustain. I'll sustain the objection to that. Ladies and gentlemen, you're to disregard that last statement. Now, apparently he was arrested. Let's move on to a different subject.
BY [DISTRICT ATTORNEY]: Yes, sir.
The district attorney then proceeded to ask Deputy Vallely about the details of the arrest and the initial appearance in justice court, to which defense counsel objected as to relevancy, and the trial judge sustained the objection, reasoning that "[i]t's been established he was arrested." In response to the district attorney's final question, Deputy Vallely stated he had no further involvement in the investigation of Tate's case, and Vallely was thus tendered for cross-examination by defense counsel.
¶ 25. Deputy Vallely unquestionably testified that he had informed personnel at the New Iberia Police Department "to be on the lookout for [Tate] and for his vehicle because of possible suicide." Once defense counsel objected, the district attorney informed the trial court that this was not the response he was attempting to elicit. The trial judge sustained defense counsel's objection and promptly admonished the jury, sua sponte, to disregard the last response by the witness. The trial judge likewise admonished the district attorney to "move on to a different subject," to which the district attorney responded, "Yes, sir." Additionally, the trial court instructed the jury in writing on this issue *634 by way of Jury Instruction D-7B (Instruction No. 2), which stated in pertinent part: "Do not consider for any purpose any offer of evidence that was rejected, or any evidence that was stricken by the Court; treat it as though you had never heard of it." The trial court likewise gave its general Instruction No. 1, which stated, inter alia, that the jurors were bound by their oath to follow the law as given by the trial court, and that the jury was to disregard all evidence excluded by the trial court and thus not consider this excluded evidence.
¶ 26. As we have noted, this Court on appeal generally has the right to presume that jurors will adhere to their oaths and follow the instructions given to them by the trial court. Walton, 998 So.2d at 977 (citing Wheeler, 826 So.2d at 740). Thus, in today's case, we find that any possible prejudice which could have resulted from the witness's unsolicited response to the district attorney's question was cured by the trial judge's prompt remedial action.
B. Curtileniea Tate's Testimony.
¶ 27. Tate also complains about the district attorney's cross-examination of Curtileniea Tate in Tate's case-in-chief.
¶ 28. Contrary to the testimony of Deputy Vallely and Rosie Holloway that, at the initial meeting with Deputy Vallely, Curtileniea had done most of the talking, Curtileniea testified that her mother had done all the talking, because she (Curtileniea) did not believe what Brittany was saying about Tate. During the State's cross-examination of Curtileniea, the district attorney questioned her about Exhibit 3, the statement that Brittany had written out and that Brittany and Curtileniea had signed. Curtileniea was questioned about the portion of the statement where Brittany wrote "I told my mom and she talked to [Tate] and he said he won't do it again," and Curtileniea testified the statement was not true. Curtileniea was questioned about her testimony that, although she had concluded by August or September of 2007 that Brittany's accusations against Tate were not true, Curtileniea and her mother had taken the "little green wiggle thing" (vibrator) to Deputy Vallely around September 10, 2007. The district attorney likewise questioned Curtileniea about the affidavit (Exhibit 5) she had signed under oath charging Tate with child molestation of Brittany, while at the same time stating that she did not believe the charges to be true.
¶ 29. The district attorney then questioned Curtileniea concerning the written statement she eventually took to Deputy Vallely. This statement, written and signed by Curtileniea, was marked as Exhibit A for identification, but was never received into evidence. This statement read:
To Whom it May Concern,
This is a statement about the conversation that I had with Erick (sic) Tate. My son had the phone and I grabbed it from him, I said hello twice and Erick (sic) said hey its (sic) me and how was I and the boys. I said how the F___ you think we doing. He said he was sorry. I said what did you do to [Brittany] and he said all the things she said I did I did not do. I told him just doing anything was wrong. I told him charges has (sic) been filled (sic) and he said he wasn't going back to prison, tell his boys he loved them, told me to continue to take care of his boys and don't bring them to his funeral and then he hung up the phone.
/s/ Curtileniea Tate
Since this statement generated an objection by defense counsel, the trial judge sent the jury out and then heard lengthy arguments from counsel, outside the presence of the jury. Defense counsel's main *635 objections focused on the comments about not going back to prison and not bringing the boys to his funeral. As to the latter comment, defense counsel opined that this was another reference to possible suicide, and defense counsel reminded the trial judge that he already had sustained defense counsel's objection to Deputy Vallely's reference to possible suicide by Tate. In the end, after finding that the comments in this statement were relevant, and after performing the required balancing test,[8] the trial judge stated that the district attorney could cross-examine Curtileniea about the contents of the statement, with the exception of Curtileniea's comment that "he said he wasn't going back to prison."
¶ 30. The trial court clearly did not err in allowing the district attorney to cross-examine Curtileniea as to the first part of the statement directly attributable to her. This was classic impeachment of a witness based on inconsistencies in the witness's in-court testimony and out-of-court statements, especially out-of-court statements which she voluntarily put in written form and submitted to Deputy Vallely. The statements attributable to Curtileniea as found in Exhibit A are inconsistent with Curtileniea's in-court testimony that she had questioned the veracity of Brittany's allegations from the very beginning. Curtileniea was provided limitless opportunities either to admit or deny her various in-court and out-court statements. Johnson v. State, 905 So. 2d 1209, 1212-13 (Miss. 2005). See also Miss. R. Evid. 613. Likewise, at the request of defense counsel, the trial court granted Jury Instruction No. D-7A (Instruction No. 6) (relating to how the jury could consider any witness's testimony deemed by the jury to be false, in whole or in part); and Jury Instruction No. D-12 (Instruction No. 8), which stated in part that "[t]he testimony of a witness may be discredited by showing that the witness testified falsely concerning a material matter, or by evidence that at some other time the witness said or did something... which is inconsistent with the testimony the witness gave at this trial." Tate no doubt wanted this jury instruction in order to be able to attack Brittany's credibility during closing arguments; however, the jury also could apply this jury instruction in considering and comparing Curtileniea's in-court testimony and her out-of-court statements.
¶ 31. Concerning the district attorney's use of the portions of Exhibit A attributable to Tate in his cross-examination of Curtileniea, we likewise find no error by the trial court in overruling defense counsel's objection. In addition to Curtileniea writing that Tate had said he was sorry and that he did not do what he was accused of doing, according to Curtileniea's statement, Tate also said, inter alia, that he was not going back to prison and that Curtileniea should not "bring [their boys] to his funeral." Since the trial judge refused to allow the district attorney to question Curtileniea about Tate's reference to not going back to prison, we focus on the remaining statement which Tate finds objectionable. Tate asserts that the comments in Curtileniea's written statement about not bringing the boys to his funeral is tantamount to an improper reference to suicide.
*636 ¶ 32. Both the State and Tate concede that this Court has never addressed the issue of whether a defendant's attempted suicide or threat of suicide is admissible in an effort to show consciousness of guilt.[9] The State asserts that, while twenty-four states have held that evidence of a defendant's attempted suicide is admissible to show consciousness of guilt, only four states (Illinois, Tennessee, Pennsylvania, and Georgia) have addressed the issue of a defendant's threat to commit suicide and found that suicide threats were admissible to show consciousness of guilt.[10] Nothing in the record indicates that Tate ever attempted suicide, so our initial inquiry must be whether Tate's statement to Curtileniea that she must not bring their sons to his funeral was a "threat of suicide."
¶ 33. We briefly turn to the four cases cited by the State for the purpose of determining in each case what act by the defendant was deemed to be "a threat of suicide." In People v. O'Neil, 18 Ill. 2d 461, 165 N.E.2d 319 (1960), the defendant, while being interrogated by law enforcement on an arson charge, "threatened to commit suicide." O'Neil, 18 Ill.2d at 463, 165 N.E.2d 319. In State v. Seffens, 1992 WL 75831 (Tenn.Crim.App. March 16, 1992), the defendant, who was charged with multiple counts of aggravated rape and assault of his children and step-children, "threatened to kill his wife and himself because he could get forty years for these offenses." Seffens, 1992 WL 75831, *4. In Commonwealth v. Sanchez, 416 Pa.Super. 160, 610 A.2d 1020 (1992), the defendant, who was charged with murder, rape, robbery, and burglary, had "an ideation of suicide," in that he revealed to the prison psychiatric unit personnel that "he was thinking of killing himself." Sanchez, 610 A.2d at 1026, 1028. Finally, in Duncan v. State, 269 Ga.App. 4, 602 S.E.2d 908 (2004), the defendant, who was charged with multiple counts of child molestation, on the date that his case was originally set for trial, left his mother and sister a note that "I just think it would be better that I'm not around any more," and then attempted suicide by shooting himself in the head. Duncan, 602 S.E.2d at 910.
¶ 34. We find the facts of today's case to be distinguishable from the cases just discussed.[11] It is critical that we look at *637 the totality of Tate's statements and the manner in which they were used by the State. Tate said to Curtileniea to "tell his boys he loved them, told me to continue to take care of his boys and don't bring them to his funeral." At the time the district attorney broached this subject during his cross-examination of Curtileniea, the trial judge sent the jury to the jury room and discussed this issue with counsel outside the jury's presence. The district attorney argued:
They want to put her up here and let her say she didn't ever believe it, but they don't want to deal with the problems that came with when she did believe it, and Your Honor, it's our position that short of that information about the prison situation, that statement is totally and fully admissible and relevant to this case.
Although the trial judge ultimately ruled that the written statement by Curtileniea chronicling what Tate had told her could not be offered into evidence, the trial judge ruled that, with one exception, the district attorney could question Curtileniea about this statement, reasoning:
She has taken the stand and testified for the defendant that although she signed the affidavit that she does not believe that he did it. The Court has read this statement which apparently was signed by her and given to law enforcement authorities. Again, the portion where it says about where he said he wasn't going back to prison, I find clearly that prejudice of that far outweighs any relevance. The remaining portions of the statement do have some relevance as to her conversations with the defendant which she has gotten up here and testified totally on his behalf, and the Court finds that any prejudice from this is outweighed by the relevancy, and I will allow the State to question her about the remaining part of the statement.
(Emphasis added).[12]
¶ 35. After this ruling by the trial judge, the jury was returned to the courtroom and the district attorney continued his cross-examination of Curtileniea about the statement, omitting the "he-said-he-wasn't-going-back-to-prison" comment. Once Curtileniea was questioned in detail about the contents of the statement and additionally had admitted that she had the conversation with Tate, had written out the statement, and had taken the statement to Deputy Vallely, the district attorney tendered Curtileniea for re-direct examination by defense counsel.
¶ 36. Of significant import is the method in which the State used this evidence concerning Curtileniea's testimony about her memorializing in the written statement what Tate had told her. During the first phase of the State's closing argument to the jury, the assistant district attorney stated:
You heard from his wife, Mrs. Curtileniea Tate tell you, "He wouldn't even talk to me about it. He told me I needed to call my mama to find out what was going on." Is that not the most ridiculous thing you have ever heard in your life. He didn't deny it. Then she comes to law enforcement, and she gives them a statement, and she says in the statement that she wrote for Deputy Vallely that she brought to him. "He said he was sorry. He said tell my boys I love *638 them. Don't bring them to my funeral." That's the kind of thing that guilty people write, ladies and gentlemen.
At this point, defense counsel objected, not on the basis of any perceived reference to suicide or guilty knowledge, but instead, on the basis that "[the assistant district attorney] read the statement, but she did not read the complete statement where he said he did not do this."
¶ 37. The only other reference to the objectionable statement is during the final portion of the State's closing arguments when the district attorney again read the statement (with the exception of the "he-said-he-wasn't-going-back-to-prison" comment) to the jury when discussing the fact that Curtileniea had been questioned about this statement on cross-examination. The district attorney then argued:
Now, [defense counsel] wants you to say, well he says he didn't do it in here because it says Eric said hey I said what did you do to [Brittany] and he said all the things she said I did I did not do. I submit to you, the way that reads is he said all the things she said I did I did not do. And I the reason I believe is, well, because then she says I told him just doing anything was wrong. So he's admitting it here, folks.
BY [DEFENSE COUNSEL]: Objection, Your Honor.
BY THE COURT: Again, let's move on, Mr. Harper.
BY [DEFENSE COUNSEL]: It's incredible.
BY [THE DISTRICT ATTORNEY]: What do you mean it's incredible. It's exactly what he says.
BY THE COURT: Just a second. Mr. Harper, you have about one minute. You've got about one minute. Let's wrap it up. Time is running out. You've got about one minute left.
BY [THE DISTRICT ATTORNEY]: I said what did you do to [Brittany], and he said all the things she said I did I did not do. I told him just doing anything was wrong. Y'all can interpret that any way you want to. Ladies and gentlemen, I think the case is clear. It's clear. [Defense counsel] calls his man the victim. I tell you, the victim is sitting right out there, and he told y'all yesterday morning, I remember this because he talked about Mrs. Holloway, the child's grandmother. Said she had a controlling spirit. Well, when his wife was testifying today, she said something about that she needed to get control of [Brittany], and then after he made these accusations and his wife had left him and was doing everything she could to help prove that he did these things, then she goes back to him. Y'all tell me who's got the controlling spirit in this picture.
This concluded the State's closing argument.
¶ 38. From the record before us, it is obvious that the State was not attempting to single out any perceived threat of suicide by Tate as being evidence of consciousness of guilt. The only time anyone made any reference to consciousness of guilt was when the assistant district attorney stated to the jury "That's the kind of thing that guilty people write." However, the assistant district attorney, in referring to "[t]hat's the kind of thing ..." was referring not to one, but three statements by Tate: "`He said he was sorry. He said tell my boys I love them. Don't bring them to my funeral.' That's the kind of thing that guilty people write, ladies and gentlemen."
¶ 39. We find from the totality of the evidence that there was no effort to prove via alleged suicide threats that Tate possessed a "consciousness of guilt." Additionally, *639 no jury instruction was submitted to, or considered by, the trial judge informing the jury that it could consider whether Tate's purported "suicide threats" showed consciousness of guilt. We thus decline to address on a case of first impression whether evidence of threats of suicide by the defendant in a criminal case is admissible in an effort by the State to prove the defendant's consciousness of guilt.
¶ 40. Finally, while we concede that the learned trial judge in this case did not utter verbatim the words found in Mississippi Rule of Evidence 403, the trial judge properly conducted the required Rule 403 analysis with regard to Exhibit A prior to ruling on this evidence. This Court previously has stated:
[The defendant] argues that such evidence should be subjected to a balancing test pursuant to the provisions of Miss. R. Evid. 403 and our case law. Indeed, the record does not reveal that the trial court performed a Rule 403 balancing test. Even though a trial judge's determination on the issue of admissibility of evidence must ultimately be filtered through Rule 403, a trial judge's failure to place Rule 403's magic words into the record does not necessarily create the presumption that the trial judge failed to consider Rule 403's requirements, nor does it automatically render the trial judge's decision on admissibility to be error, much less reversible error.
Havard v. State, 928 So. 2d 771, 797 (Miss. 2006) (footnote omitted). In Havard, a death penalty case, we ultimately determined that the trial judge's admission of certain photographic evidence was not an abuse of discretion and concluded that "the probative value of this relevant evidence was not substantially outweighed by the danger of unfair prejudice." Id. at 797-98.
¶ 41. In today's case, the record clearly reveals that the trial judge performed an on-the-record Rule 403 analysis, albeit in less-than-perfect language, by stating "[t]he remaining portions of the statement do have some relevance as to her conversations with the defendant which she has gotten up here and testified totally on his behalf, and the Court finds that any prejudice from this is outweighed by the relevancy, and I will allow the State to question her about the remaining part of the statement." (Emphasis added). We find that, although the "magic words" referenced in Havard were not uttered by the trial judge in today's case, the Rule 403 analysis was performed on this evidence, and the trial judge did not abuse his discretion in allowing the district attorney to cross-examine Curtileniea Tate on the statement she wrote out and presented to Deputy Valley. See Turner, 3 So.3d at 744.
¶ 42. Alternatively, even if we were to find error in the trial court's allowing the district attorney to cross-examine Curtileniea about the handwritten statement she gave to Deputy Vallely, such error, if any, was harmless beyond a reasonable doubt. McKee v. State, 791 So. 2d 804, 810 (Miss.2001) (error is harmless when apparent from record that fair-minded jury could arrive at no verdict other than guilty) (citations omitted). "Where the prejudice from erroneous admission of evidence dims in comparison to other overwhelming evidence, this Court has refused to reverse." Carter v. State, 722 So. 2d 1258, 1262 (Miss.1998) (citing Holland v. State, 587 So. 2d 848, 864 (Miss.1991)). As will be discussed in more detail under a separate assignment of error, the evidence of Tate's guilt was overwhelming, absent any reference to Tate's statement about not bringing his boys to his funeral. Such conclusion is based on the testimony of *640 Brittany, Dr. Leigh Gray, Deputy Sheriff Bill Vallely and Rosie Holloway.
¶ 43. For all the reasons stated, we find this assignment of error to have no merit.
III. WHETHER THE TRIAL COURT ERRED BY FAILING TO EXAMINE INDIVIDUAL JURORS OR TO GRANT A MISTRIAL ONCE THE JURY PANEL WAS EXPOSED TO PREJUDICIAL INFORMATION.
¶ 44. Both the trial judge and the district attorney conducted their respective voir dire examinations without incident. Defense counsel had almost concluded his voir dire on behalf of Tate, likewise without incident, when defense counsel asked a catch-all question of the jury venire:
BY [DEFENSE COUNSEL]: Thank you so much. Anyone else? There's something that you should have asked me, the attorneys. If you had asked me this question, I would have told you this. I would have told you that, or you know I simply can't sit on this jury. Know the type of crime. I can't do it because I can't be fair. I cannot be fair. Anyone that thinks that? Somebody else want to share with us? You're sure? Juror number ten.
BY JUROR HOLMES: I know Mr. Tate. Mr. Tate's cousin and my son are very good friends, and they have been friends for a while, and Mr. Tate along with his cousin and my son have had outings together, and I have heard of this before now.
BY [DEFENSE COUNSEL]: I am sorry. You did what?
BY JUROR HOLMES: I have heard of this what's going on in this case.
BY [DEFENSE COUNSEL]: You've heard of it?
BY JUROR HOLMES: I've heard of it before now, and I heard of another case that involved Mr. Tate also.
BY [DEFENSE COUNSEL]: Thank you so much for your response. Now is there anybody else? If that lawyer had asked me this question, I would have told you this. You're juror number ten, correct?
BY JUROR HOLMES: Right.
BY [DEFENSE COUNSEL]: Your Honor, that's all I have. Can we approach?
BY THE COURT: Yes, sir.
After a nonrecorded bench conference, the trial judge announced to the jury venire that he was declaring a thirty-minute recess to complete the jury selection process, and the trial judge admonished the members of the venire, inter alia, that they were to have no contact or conversation with anyone about this case during the recess.
¶ 45. In chambers, defense counsel moved for a mistrial based on Juror Holmes's response that she knew about another case involving Tate. Defense counsel also informed the trial judge that at the time Juror Holmes made the comment about another case involving Tate, he (defense counsel) noticed another female member of the jury panel smiling. After arguments of counsel, the trial judge denied the motion for a mistrial, but announced that he would remove Juror Holmes for cause, and that he would also remove for cause the smiling juror once the identity of that particular juror was known, although the trial judge expressed confidence that the smiling juror was so far down the list, based on defense counsel's description of where she was seated in the courtroom, that she would never be considered as a member of the trial jury for this particular case. Likewise, the trial judge stated that the jury would be properly *641 instructed on the law and how the jury must consider its verdict. After considering challenges for cause, the trial judge declared a recess so counsel could consider how they wanted to exercise their peremptory challenges.
¶ 46. Upon reconvening in chambers for the jury selection process, the trial judge was informed by defense counsel that during the recess, it was brought to his (defense counsel's) attention by Curtileniea that she had overheard "four or five" prospective jurors sitting on a bench outside the courtroom discussing "what other case [Tate] had against him." The trial judge placed Curtileniea under oath, and she testified as to what she had heard and observed regarding this juror conduct. In response to questioning, Curtileniea testified that one lady mentioned to the other (three or four) venire members "[w]hat other case he had," and Curtileniea testified that no one responded to this comment by the prospective female juror. The trial judge again denied defense counsel's motion for a mistrial, but offered to take "curative action" such as strongly instructing the venire members to disregard the comments made by Juror Holmes. The trial judge likewise offered to afford defense counsel "additional challenges as to these jurors" if the identity of the four or five jurors described by Curtileniea as discussing this "other case" could be ascertained. The trial judge, however, refused defense counsel's request to reopen voir dire. On the other hand, the trial judge again offered to admonish the jury venire to disregard Juror Holmes's comments, but that "I have to be requested at some point to do that." At this stage of the proceedings, the trial judge was unable to ascertain if the "four or five" members of the venire mentioned by Curtileniea were close enough to the top of the venire list to be considered for jury service on Tate's case.
¶ 47. Once the trial jury was selected, the trial judge again offered to defense counsel that once the jury was seated in open court, if Curtileniea informed defense counsel that she recognized one or more members of the trial jury as having been among the venire members discussing "the other case," defense counsel should inform the trial judge so that curative action could be taken. Likewise, the trial judge again inquired of defense counsel if he wished for the jury to receive any additional instruction regarding the comments made by Juror Holmes. After considerable discussion by the trial judge with all counsel, the trial jury was seated in open court, and the trial judge gave the customary instructions to the jurors regarding their conduct. The following then occurred:
BY THE COURT: Now, also I am going to instruct you at this time that you are to completely and totally disregard any comment that may have been made on voir dire about any other case against this defendant because there is no other case.[13] Does everybody understand that?
BY THE JURORS: Yes, sir.
BY THE COURT: Can you each follow the Court's instructions in that regard?
BY THE JURORS: Yes, sir.
BY THE COURT: Let the record show that each juror has nodded affirmatively.
The jury was then put in recess for lunch. The members of the jury likewise were reminded that throughout the trial, during *642 any recess, they were to have no contact or discussions with anyone about the case.
¶ 48. As noted in our discussion of Issue I, supra, our standard of review on a claim that the trial court committed error in refusing to grant a mistrial is one of abuse of discretion. Dora, 986 So.2d at 921. As we recently stated in applying this abuse-of-discretion standard: "[T]he trial court is in the best position to determine if an alleged improper comment had a prejudicial effect; therefore, absent an abuse of that discretion, the trial court's ruling will stand." Jones v. State, 962 So. 2d 1263, 1275 (Miss.2007) (citing Stevens v. State, 806 So. 2d 1031, 1057 (Miss. 2001)) (addressing alleged improper comment by prosecutor during closing arguments). See also Slaughter v. State, 815 So. 2d 1122, 1131 (Miss.2002).
¶ 49. More to the point, this Court in recent times has addressed this precise issue of alleged prejudicial comments by venire members during voir dire. In Shelton v. State, 853 So. 2d 1171, 1182-84 (Miss. 2003), the defendant was on trial for capital murder, and during voir dire, a venire member volunteered information that she had heard the defendant had been tried before on the same charges, resulting in "a hung jury." Id. at 1183. In denying a motion for a mistrial, the trial judge "acknowledged that a few prospective jurors heard that this was a second trial for [the defendant], but that the information would not affect their ability to make a decision." Id. at 1184. This Court found that the trial judge did not abuse her discretion in denying the motion for a mistrial inasmuch as "[t]here was no showing of misconduct that resulted in substantial or irreparable harm to [the defendant's] case pursuant to URCCC 3.12."[14]Id.
¶ 50. In applying this law to the facts of today's case, it is clear from the record that the trial judge zealously protected Tate's rights to a fair trial, to the point of admonishing the jury that it was "to completely and totally disregard any comment that may have been made on voir dire about any other case against this defendant because there is no other case," when in fact, the record reveals that there was another case pending against the defendant. The members of the trial jury responded affirmatively that they would disregard any comments about another case and that they would "follow the Court's instructions in that regard." Recognizing that (1) the trial judge is in the best position to gauge the effect of any objectionable comment by the venire member; (2) the trial judge admonished the trial jury to disregard the objectionable comment; and (3) the law presumes that jurors follow the trial judge's instructions, we find that there was no abuse of discretion by the trial judge when he denied Tate's motion for a mistrial concerning Juror Holmes's comments that she had "heard of another case that involved Mr. Tate also." Consistent with his curative action concerning the comments made by Juror Holmes, the trial judge likewise offered to consider striking "the smiling juror" if her identity could be ascertained. Also, the trial judge offered defense counsel additional challenges if the identity of the "four or five" venire members Curtileniea testified had discussed "the other case" against Tate during a recess became known, and/or if Curtileniea recognized any of these venire members once the trial jury was seated. The record is silent as to whether Curtileniea later came forward with any such information regarding any *643 of the venire members who ultimately were seated in the trial jury. Stated differently, nothing in the record reveals that defense counsel thereafter requested the trial judge to remove any of the jurors who ultimately were seated.
¶ 51. For all these reasons, we find this issue to be without merit.
IV. WHETHER THE TRIAL COURT ERRED BY DENYING THE MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT, ON IN THE ALTERNATIVE, FOR A NEW TRIAL.
¶ 52. A motion for judgment notwithstanding the verdict attacks the legal sufficiency of the evidence, while a motion for a new trial attacks the weight of the evidence. Bush v. State, 895 So. 2d 836, 843-44 (Miss.2005). In Bush, we took the opportunity to reiterate the critical distinctions between an attack on the legal sufficiency of the evidence as opposed to an attack on the weight of the evidence. Id.
¶ 53. Looking first to the issue of whether the evidence was legally sufficient to undergird the guilty verdicts against Tate, we must determine whether, when we consider the evidence in this case, as well as all reasonable inferences which may reasonably be drawn from the evidence, in the light most favorable to the prosecution, reasonable and fair minded jurors exercising impartial judgment might reach different conclusions as to each element of the charged offense. Id. at 843. If such inquiry is answered in the affirmative, the evidence is deemed to be legally sufficient to sustain the conviction. Id. See also Christmas v. State, 10 So. 3d 413, 422 (Miss.2009) ("relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt") (citing Bush, 895 So.2d at 843).
¶ 54. With this in mind, the indictment asserts, inter alia, that Tate, while in a position of authority over Brittany by virtue of being her step-parent, committed sexual battery upon Brittany by engaging in sexual penetration with Brittany, a female child under eighteen years of age (Count I); that Tate, being over eighteen years of age (and Brittany being under sixteen years of age), fondled Brittany's genitals (Count II); and that Tate, being over eighteen years of age (and Brittany being under sixteen years of age) fondled Brittany's breasts (Count III).
¶ 55. As to Count I, Mississippi Code Section 97-3-95(2) states in pertinent part that "[a] person is guilt of sexual battery if he or she engages in sexual penetration with a child under the age of eighteen (18) years if the person is in a position of trust or authority over the child including without limitation the child's ... legal guardian, parent, stepparent...." Additionally, Section 97-3-97 provides in pertinent part that:
For purposes of Sections 97-3-95 through 97-3-103 the following words shall have the meaning ascribed herein unless the context otherwise requires:
(a) "Sexual penetration" includes cunnilingus, fellatio, buggery or pederasty, any penetration of the genital or anal openings of another person's body by any part of a person's body, and insertion of any object into the genital or anal openings of another person's body.
Miss.Code Ann. § 97-3-97 (Rev.2006).
As to Counts II and III, Mississippi Code Section 97-5-23(1) provides that: "(1) Any person above the age of eighteen (18) years, who, for the purpose of gratifying *644 his or her lust, or indulging his or her depraved licentious sexual desires, shall handle, touch or rub with hands or any part of his or her body or any member thereof, any child under the age of sixteen (16) years, with out without the child's consent ... shall be guilty of a felony...." Miss.Code Ann. § 97-5-23 (Rev.2006).
¶ 56. Here, Brittany testified about Tate, her stepfather, fondling her breasts and touching her in her vaginal area, as well as inserting a vibrator into her vagina and attempting vaginal penetration with his penis. During this period of time, Brittany was between nine and ten years of age. Brittany's grandmother, Rosie Holloway, testified about overhearing a telephone conversation between Brittany and Tate, and standing so close to Brittany that she could overhear Tate on the phone telling Brittany what clothes to wear and Brittany responding that she no longer wore "those kind of clothes anymore." Holloway said she immediately confronted Brittany, who admitted that Tate was "touching her." Dr. Leigh Gray, a physician specializing in obstetrics and gynecology, testified that her examination of Brittany revealed "tears in her hymen which were consistent with evidence of trauma." On several occasions, Tate also inserted "a little green wiggle thing" into her vagina. This item, which was described as resembling a writing pen, but in essence being a vibrator, was discovered by Holloway and Curtileniea in their search of Tate's room after the molestation charges surfaced. Brittany likewise testified that on at least one occasion, Tate tried to put his "private part" inside her, but "it wouldn't fit." After Tate tried to penetrate Brittany's vagina with his penis, he called Brittany to the bathroom, where Tate unbuttoned his boxer shorts, exposed his penis to Brittany and told her that the white excretion on his penis was "cum stuff." Even this brief account of the evidence is more than legally sufficient to sustain the convictions for sexual battery and child-fondling. In addition to the evidence depicted immediately above, upon consideration of the entire record in this case, we reach the inescapable conclusion that the evidence against Tate is legally sufficient to undergird the jury's finding of guilt as to the sexual battery and child-fondling charges.
¶ 57. On the other hand, when this Court is requested to find that a new trial is warranted based on the weight of the evidence, we cannot disturb a jury verdict of guilty unless we find that the verdict "is so contrary to the overwhelming weight of the evidence that to allow it to stand would sanction an unconscionable injustice." Bush, 895 So.2d at 844 (citing Herring v. State, 691 So. 2d 948, 957 (Miss. 1997)). See also Miss. Unif. Cir. & Cty. R. 10.05(1)(2). In order to provide relief via a reversal of a conviction on a weight-of-the-evidence issue, this Court must find that the trial court abused its discretion when it denied a motion for a new trial challenging the weight of the evidence. Parramore v. State, 5 So. 3d 1074, 1078 (Miss.2009) (citing Wilkins v. State, 1 So. 3d 850, 854 (Miss.2008)). Again, when we consider the record before us, including all the evidence discussed throughout this opinion, we can safely conclude that the trial court did not sanction an unconscionable injustice by allowing the guilty verdicts to stand; thus, the trial court did not abuse its discretion in denying Tate's motion for a new trial.
¶ 58. For the reasons stated, we find that this issue has no merit.
CONCLUSION
¶ 59. Having fully addressed the issues presented to us and finding them all to be without merit, we affirm the Amite County Circuit Court's judgment of conviction entered against Eric Tate for one count of *645 sexual battery and two counts of child-fondling, and the resulting imposition of sentences of thirty years imprisonment on the sexual battery conviction and ten years imprisonment on each of the child-fondling convictions, to run consecutively.
¶ 60. COUNT I: CONVICTION OF SEXUAL BATTERY AND SENTENCE OF THIRTY (30) YEARS IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS, AFFIRMED. COUNT II: CONVICTION OF CHILD FONDLING AND SENTENCE OF TEN (10) YEARS IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS, AFFIRMED. COUNT III; CONVICTION OF CHILD-FONDLING AND SENTENCE OF TEN (10) YEARS IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS, AFFIRMED. SENTENCES SHALL RUN CONSECUTIVELY.
WALLER, C.J., DICKINSON, RANDOLPH, LAMAR, KITCHENS, CHANDLER AND PIERCE, JJ., CONCUR. GRAVES, P.J., NOT PARTICIPATING.
NOTES
[1] This is a pseudonym. Since Brittany is the victim in this case, we will protect her true identity due to the nature of this case.
[2] Deputy Vallely had retired as Chief Deputy of the Amite County Sheriff's Department in 2004, but continued to work on a part-time basis after his retirement.
[3] Curtileniea testified during the defendant's case-in-chief that it was her mother, Rosie Holloway, who did all the talking with Deputy Vallely, and that she (Curtileniea) did not say anything because she did not believe Brittany's allegations, and that Brittany "had confided in my mother about this, not me."
[4] This is the child-fondling statute. The affidavit Curtileniea signed charged, inter alia, that Tate "did willfully, unlawfully and feloniously, being a person above the age of eighteen (18) years, for the purpose of gratifying his lust or indulging his depraved, licentious sexual desires, handle, touch and rub with his hands [Brittany] a child under sixteen (16) years of age...." See Miss.Code Ann. § 97-5-23 (Rev.2006).
[5] Dr. Gray actually first saw Brittany on August 3, 2007, but because Brittany was "uncomfortable" with the pelvic examination, the office visit was rescheduled for August 9, so that Brittany could then "be put to sleep so she wouldn't be so uncomfortable with the exam."
[6] Likewise, as with Brittany, this is a pseudonym. Megan was a high-school student at the time of trial.
[7] Although the defendant's aunt, Rebecca Dora, initially had claimed responsibility for all the drugs found in her home, during the trial, Rebecca testified that the defendant had offered her $5,000 to "take the rap." Dora, 986 So.2d at 919.
[8] Mississippi Rule of Evidence 401 states: "`Relevant Evidence' means evidence' having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Mississippi Rule of Evidence 403 states in pertinent part: "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice...."
[9] On the other hand, this Court has on numerous occasions dealt with the issue of the propriety or impropriety of allowing evidence of flight and flight instructions concerning a defendant's consciousness of guilt. See e.g., Shumpert v. State, 935 So. 2d 962, 969-70 (Miss.2006); Randolph v. State, 852 So. 2d 547, 564-66 (Miss.2002); Reynolds v. State, 658 So. 2d 852, 856 (Miss. 1995); Fuselier v. State, 468 So. 2d 45, 57 (Miss. 1985).
[10] According to the State, five states have considered this issue; however, since the State does not inform us as to the identity of the fifth state, or supply any case citation from that state, we assume, arguendo, that this fifth state found that suicide threats were not admissible to show consciousness of guilt.
[11] On the other hand, Tate directs our attention to Penalver v. State, 926 So. 2d 1118 (Fla. 2006). In Penalver, involving a defendant charged with three counts of first-degree murder, when the defendant was first confronted by police with a search warrant, the defendant became upset and resisted police efforts to forcibly remove his shoes, exclaiming "something to the effect of `I might as well be dead' or `I want to kill myself.'" Penalver, 926 So.2d at 1132. The Florida Supreme Court found from the record that it was unclear whether these statements by the defendant "[were] in fact a threat to commit suicide." Id. at 1134. However, the Court concluded: "Moreover, even if the statement is considered a threat, the fact that [the defendant] turned himself in tends to negate the argument that his threat was probative of a desire to avoid prosecution. Thus, we find that the court erred in admitting this evidence." Id. However, Penalver is distinguishable from Tate's case because the record in today's case is devoid of any effort by the State to use Tate's statement about not bringing his boys to his funeral as a suicide threat in an effort to avoid prosecution.
[12] Rule 403 requires the weighing of otherwise relevant evidence via a probative value versus prejudice analysis, not relevance versus prejudice. Miss. R. Evid. 403. The trial judge's ruling in this regard will be discussed in more detail, infra.
[13] There was in fact another case pending against Tate, and this was a matter of contention between the district attorney and the trial judge during the in-chambers discussion with counsel as to how to admonish the trial jury to disregard the comments made by Juror Holmes during voir dire.
[14] Uniform Circuit and County Court Rule 3.12 states in pertinent part that the trial court may declare a mistrial if, during the trial, there is misconduct "resulting in substantial and irreparable prejudice" to a party's case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919658/ | 541 A.2d 924 (1988)
Judith C. BOLTON et al.
v.
Brian J. CAINE et al.
Supreme Judicial Court of Maine.
Argued September 11, 1987.
Decided May 25, 1988.
Sandra Hylander Collier (orally), Jill A. Culver, William Silsby, Silsby & Silsby, Ellsworth, for plaintiffs.
Paul F. Macri (orally), Jack H. Simmons, Berman, Simmons & Goldberg, Lewiston, for Cruickshank.
Steven J. Mogul (orally), Jules L. Mogul, Gross, Minsky, Mogul & Singal, Bangor, for Caine.
Before NICHOLS, WATHEN, GLASSMAN, SCOLNIK and CLIFFORD, JJ.
CLIFFORD, Justice.
The plaintiffs, Judith Bolton, the personal representative for the estate of Margery M. McDonald, the decedent, and Robert A. McDonald, the husband of the decedent, appeal from a judgment of the Superior Court, Hancock County, dismissing their complaint as barred by the applicable statute of limitations.[1] The plaintiffs allege that, during the course of treating the decedent for a fractured hip and wrist, the defendant physicians negligently failed to inform her of a possible cancerous lesion evident on her x-rays. Because we determine that the "discovery rule" for "foreign object" malpractice adopted in Myrick v. James, 444 A.2d 987 (Me.1982), should be extended to this case involving a physician's diagnostic malpractice, we vacate the judgment.
The facts as alleged in the plaintiffs' complaint are as follows. Margery McDonald, a California resident, fell and broke her right hip and wrist on October 7, 1983, while visiting in Bar Harbor. On the same day, Dr. Brian J. Caine, a local physician from whom Mrs. McDonald sought treatment, referred her to Dr. Frank J. Cruickshank, a radiologist, who took x-rays of Mrs. McDonald's chest, right hip and right wrist. In interpreting the chest x-ray, Dr. Cruickshank observed an ill-defined density in the upper lobe of the left lung and noted in writing that further x-rays should be taken, when Mrs. McDonald could better tolerate them, in order to exclude the possibility of a "coin lesion" in the upper left lobe. This information was transmitted to Dr. Caine, but neither physician communicated this information to the patient or to any other physicians.
*925 Mrs. McDonald returned to California. On or about July 19, 1984, she discovered that she suffered from a cancerous lesion in the upper lobe of the left lung. This condition caused her death on June 17, 1985. The plaintiffs claim that Mrs. McDonald first learned of Dr. Cruickshank's critical x-ray findings when her California physician informed her of them on November 20, 1984. By November 28, 1984, Mrs. McDonald had been apprised of facts sufficient to alert her that professional malpractice might have occurred.
The plaintiffs filed and served upon the defendants, Dr. Brian J. Caine and Dr. Frank J. Cruickshank, the mandatory notices of claim pursuant to the Maine Health Security Act, 24 M.R.S.A. § 2903 (Supp. 1987). This civil action was commenced by the filing of a complaint on July 21, 1986, almost three years after the x-rays were taken but less than two years from the date that the decedent learned of Dr. Cruickshank's x-ray findings.
The Superior Court granted the defendants' motions to dismiss the complaint on the ground that it was barred by the applicable two-year statute of limitations and the plaintiffs appealed.
14 M.R.S.A. § 753, the statute of limitations applicable to plaintiffs' malpractice cause of action,[2] provides that actions against physicians must be commenced within two years from the accrual of the cause of action. The general rule in Maine is that the cause of action accrues at the time of the wrongful act producing the alleged injury. Chiapetta v. Clark Assocs., 521 A.2d 697, 699 (Me.1987); Myrick, 444 A.2d at 994.
In Myrick, we held that a surgical malpractice action involving a foreign object negligently left in a patient's body accrues, for purposes of determining the commencement of the statute of limitations, when the patient discovers, or reasonably should discover, the presence of the foreign object left in the body. Myrick, 444 A.2d at 996. In doing so, we overruled Tantish v. Szendey, 158 Me. 228, 182 A.2d 660 (1962).
Subsequent to Myrick, in Box v. Walker, 453 A.2d 1181, 1183 (Me.1983), the question whether the discovery rule of Myrick would be applied to malpractice involving other than foreign object cases was left open for case by case adjudication.
In Myrick we said that a statute of limitations represented a balancing of the right of an injured plaintiff to pursue a meritorious claim against a defendant's rights to repose and protection from stale claims, with the difficulties of faded memories or unavailable witnesses and lost evidence. Myrick, 444 A.2d at 994. In weighing those interests, we were mindful of the confidential relationship existing between a patient and her surgeon, resulting in great reliance being placed in the surgeon, and the catastrophic losses resulting from foreign object malpractice. We concluded that the general rule of the cause of action accruing at the time of the negligent act worked "a manifest injustice in foreign object surgical malpractice cases ... where a patient, through no personal fault or failure of diligence, is unaware that her sutures hide a foreign object until the two-year period in which to bring an action has elapsed." Myrick, 444 A.2d at 995.
Defendants point out that the negligent diagnosis cases are different, result in injury less clearly defined, involve more questions of professional judgment and discretion than foreign object cases, and, unlike foreign object cases, always require expert medical testimony. Moreover, they assert, the credibility of the plaintiff is more apt to be crucial in the negligent diagnosis cases. Defendants further argue that the application of the discovery rule to negligent diagnosis cases would lead to fraudulent, as well as stale, claims and should compel us to limit the discovery rule to foreign object cases. See Robinson v. Weaver, 550 S.W.2d 18, 21-22 (Tex.1977).
Many states, however, have rejected the rationale of Robinson and applied the discovery *926 rule to the medical diagnosis case. Oliver v. Kaiser Community Health Found., 5 Ohio St. 3d 111, 449 N.E.2d 438 (1983); Moran v. Napolitano, 71 N.J. 133, 363 A.2d 346 (1976); Toth v. Lenk, 164 Ind.App. 618, 330 N.E.2d 336 (1975); Frohs v. Greene, 253 Or. 1, 452 P.2d 564 (1969); Prosser and Keeton, Law of Torts § 30 (5th ed. 1984). We join those states in declining to make the application of the discovery rule solely dependent on the type of evidence that may be produced at trial. The reasons compelling the application of the discovery rule to foreign object surgical malpractice are equally applicable to this case involving negligent diagnosis of a cancerous lesion.
The plaintiff-patient in this case, as in Myrick, had reason to rely on the defendants to correctly diagnose and inform her of a lesion appearing on an x-ray, and the alleged results of that failure are as catastrophic as they were for Mrs. Myrick. Because of the "inherent complexity of symptomatology and subsequent diagnosis [plaintiff was placed] in a position of blameless ignorance as to the cause of her malady and suffering." Myrick, 444 A.2d at 995, citing Franklin v. Albert, 381 Mass. 611, 411 N.E.2d 458, 463 (1980). Franklin involved a failure to diagnose and communicate to the patient abnormal x-ray findings that were the early manifestations of Hodgkin's disease, which the plaintiff was later diagnosed as having. Moreover, as was the case in Franklin, the presence here of tangible x-ray evidence reduces the risk of a more difficult to defend spurious claim.
In citing Franklin we were aware of the similarities between the foreign object and this type of diagnostic malpractice case. In both the plaintiffs are blamelessly ignorant of their latent medical conditions, and their resulting failure to seek medical help may cause catastrophic medical consequences. Plaintiff-patients in diagnostic malpractice cases of this type should have a full two years from the date the negligence is discovered, or with the exercise of reasonable diligence should have been discovered, to pursue any legitimate claim. See Myrick, 444 A.2d at 996.[3]
The entry is:
Judgment vacated.
Remanded for further proceedings consistent with the opinion herein.
All concurring.
NOTES
[1] 14 M.R.S.A. § 753 (1980) provides:
Actions for assault and battery, and for false imprisonment, slander, libel and malpractice of physicians and all others engaged in the healing art shall be commenced within 2 years after the cause of action accrues.
[2] For all actions filed, or for which a notice of claim is filed under section 2903, on or after August 1, 1988, the statute of limitations for physicians and others engaged in the healing art is set out in 24 M.R.S.A. § 2902. P.L.1985, ch. 804, §§ 13, 22.
[3] We are aware of the legislative enactment of P.L.1985, ch. 804, §§ 13, 22 amending 24 M.R.S.A. § 2902 (Supp.1987), establishing a three-year statute of limitations for all medical malpractice cases and limiting the discovery rule to foreign object cases. Since it applies only to actions filed, or for which notices of claim are filed under section 2903, on or after August 1, 1988, the amended section 2902 does not apply to the instant case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/4515669/ | IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
IN RE: 38" JUDICIAL DISTRICT - > No. 29 MM 2020
REQUEST FOR EMERGENCY JUDICIAL:
ORDER
ORDER
AND NOW, this 12" day of March, 2020, the Application of the Honorable
Thomas M. DelRicci, President Judge of the Thirty-Eighth Judicial District, requesting
an emergency judicial order, is GRANTED, IN PART.
The relief requested in Paragraphs 1(a), 1(b)(1), and 1(b)(2) of the Application is
GRANTED.
The relief requested in Paragraph 1(b)(3) is HELD UNDER ADVISEMENT
pending further order of this Court.
Interested parties may object to this order no later than noon on March 16, 2020.
Objections shall be filed at the above docket number and served on the District Court
Administrator of the Thirty-Eighth Judicial District.
Jurisdiction is retained.
hon ote.
OMAS G. SAYLO,
Chief Justice of Pennsylvania | 01-03-2023 | 03-12-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/1539367/ | 79 N.J. Super. 442 (1963)
191 A.2d 793
THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
THOMAS LEE NOBLES, DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Argued May 20, 1963.
Decided June 13, 1963.
*443 Before Judges GOLDMANN, FREUND and FOLEY.
Mr. Stanley H. Needell argued the cause for appellant.
Mr. C. William Caruso, Assistant Prosecutor, argued the cause for respondent (Mr. Brendan T. Byrne, Essex County Prosecutor, attorney; Mr. Caruso, of counsel and on the brief).
The opinion of the court was delivered by FREUND, J.A.D.
Defendant appeals from a County Court judgment of conviction, entered upon a jury verdict of guilty, for illegally possessing and dispensing narcotics. R.S. 24:18-4.
*444 The essential facts revealed at the trial are as follows. Thomas Monahan, a detective of the Newark Police Department assigned to the narcotics squad, testified that on April 14, 1960 at about 10:15 A.M. he was on regular duty in a police car on Quitman Street, Newark, with detectives Howard and Carr. He observed Rufus Hawk walking along Quitman Street, and at the nearby corner of Monmouth Street and Waverly Avenue Hawk met Wilbert Collins. On cross-examination, Monahan admitted that Hawk appeared to be normal. The only distinguishing fact was that Hawk was known by Monahan to be a "narcotic addict." Monahan stated that he did not know Collins.
As Hawk and Collins were walking along the street, the detectives stopped and searched Collins, finding "ten decks of suspected heroin" in his left-hand trouser pocket. William R. Seligman, a chemist for the Newark Police Department, later testified that he had analyzed the contents of two of the ten "decks" or small glassine paper envelopes taken from Collins and found that they contained heroin. Hawk and Collins were arrested and taken to police headquarters. Defendant was later taken into custody at "a bar on Waverly Avenue and Avon Place" and was also brought to headquarters.
According to Monahan, Collins in the course of being questioned accused defendant of giving him the narcotics earlier that morning at Collins' home. Collins was to sell "the ten decks" at $5 a piece, retaining $2 per envelope and paying defendant the balance. Collins, in defendant's presence, gave the police a written statement describing the alleged transaction with Nobles. Monahan testified that defendant denied the accusation and refused to give any statement. The Collins statement was received in evidence without objection.
Detective Theodore Howard's testimony substantially corroborated Monahan's description of the arrest of Hawk and Collins and the questioning at police headquarters. He described apprehending defendant at the Cotton Club, a bar on *445 the corner of Waverly Avenue and Avon Place, at about 1 P.M. of the same day (April 14, 1960). Howard further testified that when Collins' statement was read in the presence of Nobles, he made no comment.
Shirley Collins testified that she was the sister of Wilbert Collins and at the time they both resided at 155 Quitman Street. She stated that Nobles came to their home on April 14 at about 10 A.M. and asked to speak to Wilbert. She called her brother, who then had a conversation with defendant on the front porch. She did not overhear what they said. In the course of the trial, she identified Nobles as the man who called at her home to see her brother.
Rufus Hawk stated that on April 14, 1960, between 9:30 and 10 A.M., he went to see Collins at his residence, but Collins was not at home. Soon thereafter they met, and while they were walking the detectives stopped and searched them. After the heroin was found on Collins, they were arrested, taken to police headquarters, and questioned. Hawk testified that Collins informed the police of obtaining the narcotics from defendant but that defendant denied giving Collins the narcotics and denied the accusation in Collins' statement. Hawk explained that he was with Collins on the morning of the arrest for the sole purpose of pointing out to Collins potential customers for the narcotics.
The final witness for the State was Wilbert Collins, who was then serving a three to five-year sentence for possession of the narcotics on April 14, 1960. Collins testified that on the same day defendant visited him at his home about 8:30 A.M. He corroborated the testimony of his sister Shirley. Defendant met Collins on his front porch and defendant gave him the ten packages of heroin. Collins was to meet defendant at the Cotton Club at 1 P.M. Collins later saw defendant at police headquarters. Collins described giving his statement to the police. When this statement was read to defendant, "he [defendant] didn't say nothing." Collins stated that his purpose in meeting Hawk was to ascertain possible customers to whom he could "pass the narcotics."
*446 Cross-examination disclosed that Collins had known defendant since 1955 and had worked for him on a construction project. After about a week defendant removed Collins from this job, because Collins had an argument with a foreman. However, Collins stated that he was never angry with defendant.
Thomas Lee Nobles, the defendant, was the only witness for the defense. He testified that he was a building contractor and had first met Collins in 1955 when Collins worked for him for a few days, leaving after an argument with the job foreman. Defendant further stated that he and Hawk had been arrested in 1952 and that he had been sentenced to federal prison for two years for possession of narcotics.
Defendant testified that he received a telephone call from Hawk on the morning of April 14 at about 7:45 A.M. Hawk was seeking a job, and defendant arranged to meet him at the Cotton Club at 1 P.M. Defendant denied having any connection with the narcotics taken from Collins by the detectives; denied ever having had possession of the "ten decks of narcotics"; denied calling at Collins' home on the date of his arrest; and denied ever having seen Collins' sister before the trial. Although defendant admitted he was present when Collins gave his statement to the police and that it was read aloud so that he could hear its contents, nevertheless, he remained silent during the police interview. Nobles admitted that he heard Collins identify him as the one who gave Colline the ten decks of heroin. Nobles conceded that he made no reply when the identification was made.
On this appeal, defendant argues that the narcotics found in Collins' possession should be suppressed as the product of an illegal search and seizure, that Collins' statement was improperly received in evidence, and that the jury should have received cautionary instructions concerning the credibility of Collins and Hawk. Since defendant's trial counsel failed to make timely objection, the last two points are said to satisfy the plain error rule. R.R. 1:5-1, made applicable to this court by R.R. 2-5.
*447 The initial question is whether defendant has standing to attack the search of Collins and the seizure of the heroin. As Justice Frankfurter commented, in speaking for the court in Jones v. United States, 362 U.S. 257, 261, 80 S.Ct. 725, 731, 4 L.Ed.2d 697 (1960):
"In order to qualify as a `person aggrieved by an unlawful search and seizure' one must have been a victim of a search or seizure, one against whom the search was directed, as distinguished from one who claims prejudice only through the use of evidence gathered as a consequence of a search or seizure directed at someone else." (Emphasis added)
Cf. State v. Doyle, 77 N.J. Super. 328, 344-5 (App. Div. 1962), remanded 40 N.J. 320 (1963); State v. Robinson, 74 N.J. Super. 305, 312 (Cty. Ct. 1962). Even assuming that defendant could use the conviction for possessing and dispensing the heroin as a basis for retroactively claiming standing to challenge the search and seizure, it has been held that one not in possession of the property searched or seized has no standing to raise objections as to the constitutionality of that search or seizure. United States v. Walker, 190 F.2d 481, 483 (2 Cir. 1951), cert. denied 342 U.S. 868, 72 S.Ct. 109, 96 L.Ed. 653 (1951); United States v. Walker, 197 F.2d 287, 289 (2 Cir. 1952), cert. denied 344 U.S. 877, 73 S.Ct. 172, 97 L.Ed. 679 (1952). See Annotation, 4 L.Ed.2d 1999, 2004-2005 (1960). Defendant was not in possession of the seized narcotics, since they were in Collins' possession at the time of the search. Therefore, he has no standing to attack their subsequent admission.
Defendant relies upon United States v. Jones, supra, and Jeffers v. United States, 342 U.S. 48, 72 S.Ct. 93, 96 L.Ed. 59 (1951), in asserting that he has standing to challenge the admissibility of the heroin seized from Collins. But both cases are distinguishable, for in each instance the persons asserting the right were held to be lawfully in possession of the searched dwellings.
There is no merit to defendant's claim that Collins' statement was inadmissible. Although the State merely requested *448 that the document be marked for identification, defendant's trial counsel (not his present appeal counsel) expressly stipulated that the statement should be "marked into evidence," and added, "I have no objection" to its admission. This alone invalidates defendant's present objection.
We also observe that there was considerable testimony concerning the drafting of the statement, its contents and the nature of Collins' accusations. Introduction of the statement into evidence was therefore merely cumulative and corroborated the testimony of the State's witnesses. We find that defendant did not, as he alleges, suffer manifest wrong or injury. R.R. 1:5-1(a). See State v. Davis, 61 N.J. Super. 536, 547-8 (App. Div. 1960).
Defendant argues that the trial judge should have instructed the jury to regard the testimony of defendant's alleged accomplices with suspicion. But defendant neither requested this charge, nor did he make timely objection. R.R. 3:7-7(b). State v. Le Fante, 14 N.J. 584, 594-5 (1954). The rationale for the cautionary charge is, of course, that an accomplice may be tempted to "hope, or even bargain, for favor in later prosecution treatment of the witness' own criminal conduct in return for aid in convicting the defendant." State v. Begyn, 34 N.J. 35, 54 (1961). In the present case, since Collins had already been sentenced to prison for three to five years for his possession of the heroin, he had no special interest in the outcome of Nobles' trial. Collins merely related the circumstances under which he procured the heroin from defendant, the arrangements made with defendant for its disposition and the statement he gave the police in defendant's presence. Again, we fail to find "plain error" within the scope of R.R. 1:5-1(a).
We are satisfied from a careful review of the transcript of the testimony and the briefs that the various arguments by defendant are without merit.
During the pendency of this appeal, Collins signed an affidavit completely repudiating his sworn testimony against Nobles. Collins now claims that he was coerced into making *449 and signing the statement which accused defendant of possessing and dispensing narcotics. Based on Collins' affidavit, defendant moves for a new trial on the ground of newly discovered evidence.
A motion for a new trial based on the grounds of newly discovered evidence may be made at any time, but if an appeal is pending the trial court may grant the motion only on remand of the case. R.R. 3:7-11(a). Cf. State v. Petrolia, 37 N.J. Super. 326, 330 (App. Div. 1955), reversed on other grounds, 21 N.J. 453 (1956).
The judgment under review is affirmed. Any application for a new trial should be made to the trial court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1539378/ | 40 N.J. 280 (1963)
191 A.2d 457
STATE OF NEW JERSEY, BY DAVID D. FURMAN, ATTORNEY GENERAL, PLAINTIFF-APPELLANT AND CROSS-RESPONDENT,
v.
ELIZABETHTOWN WATER COMPANY, A NEW JERSEY CORPORATION (SUCCESSOR BY CONSOLIDATION TO PLAINFIELD-UNION WATER COMPANY AND ELIZABETHTOWN WATER COMPANY CONSOLIDATED), DEFENDANT-RESPONDENT AND CROSS-APPELLANT.
The Supreme Court of New Jersey.
Argued April 22, 1963.
Decided June 3, 1963.
*281 Mr. William M. Feinberg argued the cause for plaintiff-appellant and cross-respondent (Mr. Charles J. Kehoe and Mr. H. Douglas Stine, of counsel; Mr. William M. Feinberg and Mr. Alan Goldstein, on the brief).
Mr. John R. Sailer argued the cause for defendant-respondent and cross-appellant.
The opinion of the court was delivered by JACOBS, J.
The Appellate Division, in a full opinion by Judge Kilkenny, rejected the plaintiff's appeal and the defendant's cross-appeal from judgments entered in the Chancery Division. State v. Plainfield-Union Water Co., 75 N.J. Super. 571 (1962). We granted certification on petitions by the parties. 38 N.J. 498 (1962).
The State instituted custodial escheat actions against water companies which have been consolidated into the defendant *282 Elizabethtown Water Company. It asserted various claims and obtained judgments which are described in the Appellate Division's opinion and need not be detailed here. The State's appeal before us is confined entirely to an attack on the refusal of the lower courts to grant its additional claim with respect to sums deposited by land developers pursuant to type C main extension agreements. See 75 N.J. Super., at pp. 576-578. Those agreements set forth that, upon the understanding that the Water Company would extend its main at its own cost and expense, the developer would pay a stipulated sum to be returned to it without interest in the following manner:
"as houses are connected to and supplied with water from said extension, Water Company will make an estimate of the annual revenue to be derived from each house and will return to us Three and 50/100 ($3.50) for each One Dollar ($1) of such estimated revenue."
In many instances, application of the afore-mentioned formula resulted in refunds which did not exhaust the entire deposits. In such instances, the unrefunded balances were retained by the Water Company and were reflected on its books in accordance with the prescribed Uniform System of Accounts For Water Companies which provides under Account 218, designated as Customers' Advances For Construction, that when a customer receives a refund of "the entire amount to which he is entitled, according to the agreement or rule under which the advance is made, the balance, if any, remaining in the account shall be transferred to Account 219." During the course of many years the defendant's predecessors accumulated substantial amounts of such balances which were duly recorded in their accounts. In rate proceedings, the Public Utility Commission deducted these amounts from capital investment for the purpose of arriving at the base upon which reasonable return would be calculated. Cf. Langan v. West Keansburg Water Co., 51 N.J. Super. 41, 51 (App. Div. 1958), certif. denied, 28 N.J. 56 (1958).
*283 The State seeks custodial escheat of the afore-mentioned amounts remaining unclaimed for more than five years since July 13, 1945; that date was six years prior to the passage of the Custodial Escheat Act (L. 1951, c. 304) and the moneys in question were not reported thereafter as escheatable. See N.J.S. 2A:37-29 et seq.; State by Parsons v. United States Steel Corp., 22 N.J. 341 (1956). The State's position is that when a development has been completed and refund has been made on the basis of $3.50 for each dollar of estimated annual revenue, any unrefunded balance belongs to the developer and if unclaimed by him for a sufficient period, is subject to escheat. On the other hand, the position of the defendant is that so long as it has made refund on the basis of $3.50 for each dollar of estimated annual revenue, it is under no further obligation under the terms of the agreement and consequently nothing is escheatable. The issue turns on the true meaning of the agreement between the parties and in this connection the State suggests that we should confine ourselves to the four corners of the written agreement without resort to the Commission's regulations or its prescribed accounting practices or other extrinsic interpretive aids. We are satisfied that the agreement is not to be so read in a vacuum but is to be read in the full light shed by all of the attendant circumstances. See Atlantic Northern Airlines, Inc. v. Schwimmer, 12 N.J. 293, 301 (1953). This course would undoubtedly be followed if the developers themselves were claiming the unrefunded balances and while escheat actions are generally not to be viewed with hostility (State by Parsons v. United States Steel Corp., supra, 22 N.J., at p. 360), the State's claims are nonetheless derivative and certainly no broader than the developers' claims. See State by Richman v. Sperry & Hutchinson Co., 56 N.J. Super. 589, 596 (App. Div. 1959), aff'd, 31 N.J. 385 (1960).
Deposit agreements in connection with the extension of utility facilities to new land developments are of long standing in our State. See Elmora Villa, etc., Co. v. Plainfield-Union Water Co., 118 N.J. Eq. 317 (E. & A. 1935); Thomas, *284 "Public Utilities: Extension of Service," 16 Rutgers L. Rev. 318 (1962). R.S. 48:2-27 provides that the Board of Public Utility Commissioners may require an extension of facilities where, in its judgment, the extension is reasonable and practicable and will furnish sufficient business to justify the construction and maintenance of the same, and when the financial condition of the public utility reasonably warrants the original expenditure required in making and operating the extension. Under the statute, a land developer may institute a proceeding before the Public Utility Commission with a view towards compelling the utility to extend its facilities, and on a proper showing it may obtain a suitable order for the extension. See In re Bd. of Fire Commrs., Fire Dist. No. 3, Piscataway Tp. v. Elizabethtown Water Co., Consolidated, 27 N.J. 192 (1958); In re Tp. of Lakewood v. Lakewood Water Co., 29 N.J. Super. 422 (App. Div. 1954); cf. Petition of Highpoint Development Corp., 65 N.J. Super. 530 (App. Div. 1961), certif. denied, 34 N.J. 473 (1961). But the utility's obligation to extend is by no means an unconditional one for it is expressly subject to the statutory standards which, if unsatisfied, will preclude the order sought by the developer. See Langan v. West Keansburg Water Co., supra. To avoid the expense and delay incident to application to the Commission, along with the uncertainty of the outcome, the developer may be willing to enter into a voluntary business arrangement with the utility under which the utility's speculative risk is reduced or eliminated and the developer is enabled to proceed with knowledge of the incidental costs which will ultimately be borne by purchasers of the houses.
In 1922 such business arrangements were common but they varied in details from utility to utility. During that year a hearing was called by the Board of Public Utility Commissioners for the purpose of determining whether some standardization could be effected. In 1923 the Board announced recommended general rules and regulations which, though not strictly binding, were adopted by the utilities. The first of the rules related specifically to extensions "requested by land development *285 agencies." It set forth that where an application was made for extension to a newly developed tract of land, the utility could require a deposit covering the entire cost of installing the necessary main lines to serve the tract. And it provided that when the new houses abutting on the main lines were completed and occupied, "there shall be returned to the depositor an amount equal to the estimated charge for three years' service for an electrical extension, two years' service for a gas extension; and three and one-half years' service for a water extension; provided, however, that no part of the deposit remaining over ten years is to be returned." Thus it was contemplated that application of the formula set forth in the rule might not exhaust the entire deposit and that, in such event, the balance remaining upon the expiration of the ten-year period would be the property of the utility.
Mr. Winslow, who was president of the Plainfield-Union Water Company (one of the defendant's predecessors), testified that whenever a developer sought a main extension he was advised that the company would be pleased to install it under the rules governing extensions issued by the Public Utility Commission, that the company would require a deposit covering the cost of the extension, and that there would be a refund based on "estimated three and one-half times the annual revenue." He also testified that deposits were commingled with general funds and were set forth on the company's books in accordance with the Uniform System of Accounts. Over the years, various types of deposit agreements were used by the company and type C was the only developers' agreement which omitted specific reference to the ten-year period. When asked about this, Mr. Winslow testified that the ten-year provision was eliminated in the hope that its omission would persuade the Commission to alter its practice of deducting the unrefunded deposit balance from capital investment in determining the rate base; the Commission did not alter its practice and the provision was later restored. Mr. Winslow testified further that the intent of the formula was the same in all of the various types of deposit agreements and that the omission *286 of the ten-year provision in the type C contract merely meant that refunds could be had on the basis of three and one-half times estimated revenue, even after the ten-year period where additional houses were built on the tract following the expiration of that period. Cf. State v. Plainfield-Union Water Co., supra, 75 N.J. Super., at p. 582.
In 1960 the Board of Public Utility Commissioners revised its recommended general rules and regulations relating to main extensions. It stated that the formulae being suggested by it for the extension of utility services were not to be viewed as binding but would serve as guides to customers and utilities and that the parties were still free to exercise their rights under R.S. 48:2-27. Although the revision embodied a more liberal formula for developers, it continued the policy of placing the burden of the speculative risks on the developer, rather than on the utility and its prior customers, by gearing the refund to annual business from the newly developed tract and providing, as thertofore, that unrefunded balances after application of the formula during the ten-year period would be the property of the utility. The pertinent paragraph of the revision reads as follows:
"The deposit shall be returned in an amount equal to 5 times the estimated annual revenue from each such completion and occupancy and from fire protection charges on said extension. If during a ten-year period from the date of the original deposit, the actual annual revenue, during any year of said ten-year period, from premises abutting upon said extension and from amounts received from the municipality for fire protection service in the case of water main extensions, shall exceed the annual revenue which was the basis for the previous deposit return, there shall be returned to the depositor an additional amount equal to 5 times such excess. In no event shall more than the original deposit be returned to the depositor nor shall any part of the deposit remaining after ten years from the date of the original deposit be returned."
See Lake Intervale Homes, Inc. v. Parsippany-Troy Hills, 28 N.J. 423, 442-443 (1958); Petition of Highpoint Development Corp., supra, 65 N.J. Super., at p. 534; cf. Common-wealth ex rel. Green v. Alexandria Water Co., 192 Va. 512, 65 *287 S.E.2d 521, 523 (1951); Chandler Investment Co. v. Whitehaven Utility Dist., 44 Tenn. App. 1, 311 S.W.2d 603, 609 (1958); Thomas, supra, 16 Rutgers L. Rev., at p. 326.
The State does not question the history and terms of the Commission's general rules and regulations although it stresses that they were recommendatory rather than binding. Nor does it suggest that the claim on its appeal before us encompasses any instances in which the utilities did not refund an amount equivalent to three and one-half times a sum representing annual revenue from each of the houses built in the developments in question. Its contention is that, under the agreements, there was no contemplation that any balances remaining after the application of the three and one-half to one formula should become the property of the utilities. But on the record before us we cannot justly make a finding that there was no such contemplation; when the agreements are read in the light of the Commission's regulations, the prescribed accounting practices, and all of the other attendant circumstances, there may readily be an inference that such was the contemplation. That inference finds additional support in the practical interpretation by the parties; the utilities acted on the understanding that balances remaining after refunds in accordance with the three and one-half to one formula belonged to them and this understanding received some corroboration in the failure of the developers to assert further claims after receiving such refunds. Cf. Journeymen Barbers, etc., Local 687 v. Pollino, 22 N.J. 389, 395 (1956).
We are advised that there have been several instances in which developers asserted claims to balances and prevailed in summary trial proceedings which were never reviewed on appeal. We need not concern ourselves with those proceedings or the showings made there for the issue before us is whether the State's showing on the record here was legally sufficient for escheat purposes to establish that the parties contemplated by their agreements that there would be unconditional obligations to return balances remaining after application of the three and one-half to one formula. That showing rested on *288 the State's interpretation of the written agreements alone, was without any supporting testimony from the developers, and was met by the rebutting testimony from the utilities. We are satisfied, as were the lower courts, that the showing was insufficient to establish escheatable property within the intendment of the applicable statutory provisions. See State v. Plainfield-Union Water Co., supra, 75 N.J. Super., at p. 580; cf. State by Richman v. Sperry & Hutchinson Co., supra, 56 N.J. Super., at p. 596. This approach in nowise departs from State by Parsons v. United States Steel Corp., supra, 22 N.J., at p. 360, which is cited by the State as favoring "a broad construction of the escheat acts." In that case, and in others where escheat was allowed, there was no question as to the validity of the original claims and the only issue was whether they were barred by the lapse of time. Here the claims were brought into substantial question and the burden was upon the State to establish them. Nothing in the Custodial Escheat Act or elsewhere suggests any purpose or reason to minimize the need for properly discharging that burden. Indeed, the situation at hand would appear to be one in which there is fair justification for invoking the doctrine voiced in State v. United States Steel Corp., 12 N.J. 38, 47 (1953), that "any doubt as to whether property is subject to escheat is resolved against the State." Cf. State by Richman v. Sperry & Hutchinson Co., 49 N.J. Super. 165, 173 (Ch. Div. 1958), aff'd, 56 N.J. Super. 589 (App. Div. 1959), aff'd, 31 N.J. 385 (1960); State v. Otis Elevator Co., 10 N.J. 504, 514 (1952) (dissenting opinion), s.c. 12 N.J. 1 (1953).
On its cross-appeal, the defendant attacks the judgments rendered in the State's favor, claiming that the action of the lower courts in estopping it from relying on the statute of limitations because of its failure to report under N.J.S. 2A:37-42 was improper. See State v. Plainfield-Union Water Co., supra, 75 N.J. Super., at p. 576. It acknowledges that its position is contrary to State by Parsons v. United States Steel Corp., supra, 22 N.J. 341, and it presumably seeks to have that case overruled. Justice Burling there *289 delivered an opinion for the court which dealt fully with the controlling issues. The defendant has presented nothing which persuades us to withdraw from it and it is hereby reaffirmed. See State v. Union Bag-Camp Paper Corp., 35 N.J. 390, 393 (1961).
The defendant's brief attacks the custodial escheat award of $25 due on a 1927 bond coupon. The Appellate Division declined to interfere, pointing out that the defendant had advanced no reason in its brief or at oral argument for upsetting the trial court's determination that the sum was held in trust. See State v. Plainfield-Union Water Co., supra, 75 N.J. Super., at p. 583. At oral argument before us, counsel for the defendant indicated that the matter was not being pressed and we shall, therefore, not pursue it.
Affirmed.
For affirmance Chief Justice WEINTRAUB, and Justices JACOBS, FRANCIS, PROCTOR, HALL, SCHETTINO and HANEMAN 7.
For reversal None. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559173/ | 20 So.3d 862 (2009)
MORSS
v.
STATE.
No. 5D09-2896.
District Court of Appeal of Florida, Fifth District.
October 23, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559181/ | 20 So.3d 108 (2009)
Judith P. BRYAN et al.
v.
ALABAMA POWER COMPANY.
1060693.
Supreme Court of Alabama.
January 23, 2009.
Rehearing Denied April 10, 2009.
*109 George W. Walker III and J. David Martin of Copeland, Franco, Screws & Gill, P.A., Montgomery, for appellants.
Edward S. Allen, Ed R. Haden, and Stephen M. Parham of Balch & Bingham, LLP, Birmingham; and James A. Byram, Jr., and Paul A. Clark of Balch & Bingham, LLP, Montgomery, for appellee.
R. Bernard Harwood of Rosen Harwood, P.A., Tuscaloosa; Robert A. Huffaker of Rushton, Stakely, Johnston & Garrett, P.C., Montgomery; and Deborah Alley Smith of Christian & Small, LLP, Birmingham, for amici curiae Alabama Farmers Federation and American Land Foundation, in support of the appellants.
Robert E. Sasser and Joel Connally of Sasser, Bolton & Sefton, P.C., Montgomery, for Water Works and Sanitary Sewer Board of the City of Montgomery; and Richard H. Allen of Capell & Howard, P.C., Montgomery, for Alabama Forestry Association, Inc., for amici curiae Water Works and Sanitary Sewer Board of the City of Montgomery and Alabama Forestry Association, Inc., in support of the appellee.
J. Gorman Houston, Jr., of Lightfoot, Franklin & White, L.L.C., Birmingham; and Hugh Maddox, Montgomery, for amicus curiae Lake Martin Resources Association, in support of the appellee.
LYONS, Justice.[1]
Judith P. Bryan and 35 other parties (collectively "the farmers") appeal from a *110 summary judgment entered in favor of Alabama Power Company ("APCo") by the Elmore Circuit Court on their claims of negligence and wantonness. We affirm.
I. Procedural History
The farmers sued APCo in the Elmore Circuit Court on February 25, 2005. They alleged that APCo negligently operated Martin Dam during flood events in May and July 2003 and that its negligent operation of Martin Dam caused flood damage to their properties, which were downstream from the dam. The farmers later amended their complaint to add a breach-of-contract claim relating to a 1972 settlement agreement involving APCo's federal license to operate Martin Dam. On July 18, 2006, the farmers amended their complaint again, this time adding a claim of wantonness and abandoning the breach-of-contract claim.
The parties completed discovery, and on August 25, 2006, APCo moved for a summary judgment. The trial court granted APCo's motion on January 19, 2007, and entered a summary judgment in APCo's favor as to both the negligence and the wantonness claims. The trial court based its decision, in part, on Ellis v. Alabama Power Co., 431 So.2d 1242 (Ala.1983). The farmers filed a timely notice of appeal to this Court.
II. Facts
A. Martin Dam
It is undisputed that the farmers own property near the Tallapoosa River. APCo operates four hydroelectric dams on the Tallapoosa River upstream from the farmers' property. From north to south they are: Harris Dam, Martin Dam, Yates Dam, and Thurlow Dam. Yates Dam and Thurlow Dam are "run of the river" dams, which have no ability to store water and therefore release as much water as flows into them. Harris Dam and Martin Dam have reservoirs that form artificial lakes above the dams. The reservoirs provide storage space in which inflowing water may be held instead of being released downstream. Harris Dam and Martin Dam are therefore able to implement flood-control measures to the extent that storage space is available in their reservoirs.
The amount of storage space available in a reservoir is directly related to the level of the lake behind the dam. The higher the lake level, the less storage space is available for inflowing water. Lake level is measured in terms of feet above mean sea level. At Lake Martin above Martin Dam, "full pool," i.e., the highest summer elevation of the lake, is 490 feet above mean sea level. APCo does not own land above 490 feet, and once the lake level has reached full pool there is no storage space. However, the maximum holding capacity of the reservoir at Lake Martin is in excess of 500 feet. Lake Martin's level is controlled, in part, by releases of water through the hydraulic turbines or spillway gates at the dam.
APCo operates the Harris, Martin, Yates, and Thurlow Dams under licenses granted by the Federal Energy Regulatory Commission ("the FERC"). Its licenses were originally granted by the Federal Power Commission ("the FPC"); however, the FPC's responsibilities were transferred to the FERC on October 1, 1977. APCo's original license for Martin Dam was issued by the FPC in 1923 for 50 years. The 1923 license did not contain any provisions regarding flood control.
In 1965, when the FPC issued the license for Thurlow Dam, which is located downstream from Martin Dam, several downstream landowners attempted to intervene in the licensing proceeding. The landowners requested that the FPC require APCo to maintain storage space at *111 Thurlow Dam between December 1 and April 1 to absorb floodwater. Recognizing that Thurlow Dam was a run-of-the-river dam and did not have storage space, the FPC instead inserted provisions in the license for Thurlow Dam that required APCo "to operate all of its Tallapoosa River projects, including the Martin reservoir...[,] in a manner which will tend to insure that stages no higher than natural peak stage can occur downstream from the Thurlow dam."
In 1970, the FPC amended the Thurlow license to state the following requirements relative to APCo's operation of Martin Dam:
"Article 33. [APCo] shall coordinate the operations of all of its Tallapoosa River Projects in such a manner that, during periods when inflow to the reservoirs exceeds the water capacities of hydraulic turbines, rates of outflow from the reservoirs shall not exceed concurrent rates of inflow except to evacuate accumulated surcharge storage subsequent to the time of peak inflow.
". . . .
"Article 35. [APCo] shall in the interests of flood control and to the extent consistent with Licensee's power requirements, operate its [Thurlow Dam] in coordination with all of its Tallapoosa River Projects, and shall coordinate the operations, including those required under the provisions of Article 33 with the District Engineer, [United States Army] Corps of Engineers."
In a 1975 order regarding the Thurlow license, the FPC explained that "the purpose of Article 33 is not to ensure that flooding will be eliminated, but rather that operation of the project will not increase peak flood flow." The FPC noted: "It is not in the public interest nor is it the duty of [APCo] to completely eliminate flooding to the detriment of power generation, recreation in the reservoir, and other project purposes."
Articles 33 and 35[2] of the Thurlow license applied to all APCo's Tallapoosa River dams, including Martin Dam. APCo's representatives testified during depositions in this case that these provisions still apply to Martin Dam. Martin Dam is not subject to mandatory flood-control regulations of the United States Army Corps of Engineers ("Corps of Engineers"), as is Harris Dam, which is upstream from Martin Dam; however, Article 35 requires APCo to coordinate its operation of Martin Dam with the Corps of Engineers.
In 1970, three years before its 1923 license for Martin Dam was to expire, APCo filed an application with the FPC to renew the license. Pursuant to then existing federal regulations, APCo filed an exhibit with its application, Exhibit H, detailing how it would operate Martin Dam during times of low, normal, and flood flows. 18 C.F.R. § 4.41 (1970). Two groups of individuals intervened in the application process and commented regarding APCo's proposed operation of Martin Dam under Exhibit H.
First, the Lake Martin Recreation Association ("LMRA") objected to operation of Martin Dam in a manner that would allow lake levels to fluctuate or to remain low during the summer months. The LMRA contended that "the configuration of Lake Martin is such that a draw down of only a few feet exposes thousands of acres of [lake] bottom," rendering boat ramps, wharves, and piers unuseable. Second, downstream landowners objected to the operation of Martin Dam in a manner that would allow high lake levels during rainy seasons. Specifically, they wanted the *112 FPC to require APCo to maintain storage space in the Lake Martin reservoir between December 1 and April 1 each year. They stated: "There exists no threat of flood between 1 April and 15 September. Thus, during this period (1 April15 September), there exists no valid flood control reason that a relatively stable pool level would not be maintained at Lake Martin near maximum elevation."
After negotiations, APCo and the intervenors reached an agreement regarding the drawdown and fluctuation of the lake level at Lake Martin. Pursuant to that agreement, APCo drafted a revised Exhibit H ("Settlement Exhibit H"), which balanced the competing interests of the LMRA and the downstream landowners. Settlement Exhibit H included a chart showing the flood-control guideline and the operating guideline for Martin Dam. The flood-control guideline specifies the high lake level at which mandatory flood-control operations will engage throughout the year. The operating guideline is a guide for target lake levels throughout the year; it is not mandatory. Together, the flood-control guideline and the operating guideline make up the "operating curve" for Lake Martin. From May through mid-July, the operating curve shows the flood-control guideline at full pool, 490 feet, and the operating guideline at 489 feet. Accordingly, for the months at issue in this action, Settlement Exhibit H specified that APCo was to maintain Lake Martin at a lake level between 489 and 490 feet.
Depending on the lake level specified by the operating curve, Settlement Exhibit H established flood-control operations for Martin Dam in the form of controlled releases of water increasing to no more than 50,000 cubic feet per second ("cfs") up to a lake level of 490 feet. If the lake level continued to rise above 490 feet, Settlement Exhibit H specified that APCo should operate Martin Dam at its full discharge capacity of 145,000 cfs only after lake level reached 490.5 feet. Settlement Exhibit H also stated that APCo was to communicate with the Corps of Engineers during flood periods and to modify its operations pursuant to instructions from the Corps of Engineers if greater flood-control benefits could be attained. APCo filed Settlement Exhibit H with the FPC in February 1973, and the intervenors withdrew their objections. At the FPC's request, the Corps of Engineers reviewed Settlement Exhibit H. The Corps concluded that "the seasonal operating plan for the Martin project as shown in [Settlement] Exhibit H is satisfactory with respect to flood control operation."
The FPC extended APCo's license to operate Martin Dam. In May 1978, after the transfer of authority from the FPC to the FERC in 1977, the FERC issued APCo a new license to operate Martin Dam for 40 years, effective as of the 1973 expiration of its original license. In the 1978 license, the FERC identified numerous purposes and uses of the Martin Dam and reservoir, including "limited flood control" when the reservoir is in drawdown condition. The 1978 license included Settlement Exhibit H and recognized the flood-control obligations imposed by Articles 33 and 35 of the Thurlow license.[3] Consistent with the operating curve in Settlement Exhibit H, the license states that the reservoir will usually reach full pool in May and maintain an elevation above 487 feet until after September 1.
*113 In November 1978, APCo sent a letter to the FERC informing the FERC of changes APCo was implementing in the proposed flood-control operations of Martin Dam. APCo advised the FERC that it wanted to delete certain paragraphs from the flood-control operations detailed in Settlement Exhibit H and replace them with the following statement:
"When the reservoir is above the Flood Control Guideline and above elevation 488, turbines at Martin Dam will be operated [to provide a continuous outflow of approximately 11,000 cfs] and further, if required to avoid rising above elevation 490.0, will be operated to provide an outflow from Martin Reservoir at least equivalent to all turbine units available operating at full gate and gates will be raised so that the reservoir will not exceed elevation 490.0 except after all gates are raised and inflow exceeds the gate capacity. At elevation 490.0, the spillway will have a discharge capacity of 133,000 cfs."
Accordingly, the 1978 amendment did not allow the lake level to rise above 490 feet and did not prevent APCo from using its full discharge capacity of 145,000 cfs until the level reached 490.5 feet. As previously noted, Settlement Exhibit H had specified that APCo should operate Martin Dam at its full discharge capacity of 145,000 cfs only after the lake level had reached 490.5 feet. APCo's representatives testified that APCo made this change because it did not own property above 490 feet. The change did not affect the flood-control guideline or the operating curve. APCo did not notify the 1970 intervenors of the change. APCo offered to provide additional information regarding the change in operations to the FERC; however, the FERC never requested more information from APCo. The FERC did not expressly approve the 1978 amendment to Settlement Exhibit H. However, at APCo's request, after the farmers commenced this action, the FERC confirmed that the 1978 amendment to Settlement Exhibit H is binding on APCo.
Pursuant to the operating curve in Settlement Exhibit H as amended by the 1978 amendment, APCo maintained Lake Martin at full pool490 feetor slightly below during the summer months. In 1989, without prompting from the FERC, the Corps of Engineers, or any outside source, APCo decided to maintain one-half foot of storage in the Lake Martin reservoir and thereafter maintained Lake Martin at 489.5 feet during the summer months. APCo used the one-half foot of storage for several project purposes, including flood control. APCo's representatives testified that the additional one-half foot of storage enables APCo to begin flood-control operations at a lower lake level and helps prevent the lake level from rising above 490 feet. APCo pre-evacuates water in anticipation of flood events through the turbines at Martin Dam; it does not release water through the dam's spillway gates for pre-evacuation purposes.
B. The May 2003 Flood
The Tallapoosa River basin flooded in early May 2003 as a result of heavy rainfall upstream and downstream from Harris Dam. It is undisputed that APCo maintained the lake level at the Martin reservoir in compliance with the operating curve in Settlement Exhibit H, as amended, before the flood. The parties dispute how far in advance APCo was on notice of the potential for flooding in May 2003. The parties also dispute whether APCo could have been aware of the precise location rainfall would be heaviest and, consequently, where inflows would be higher along the Tallapoosa River.
It is undisputed that on May 7, 2003, APCo pre-evacuated water through the *114 turbines at Martin Dam and lowered the lake level to 489.24 feet. Accordingly, the Martin reservoir had approximately .7 feet of storage space for flood-control operations at the time of the May 2003 flood. The inflow into the Martin reservoir peaked between 1 and 2 o'clock a.m. on May 9, 2003. During the storms, APCo engaged in controlled releases of water, keeping the lake level at 489.94 feet. The peak discharge from Martin Dam during the flood was approximately 128,300 cfs. APCo's flood-control operations reduced flows by approximately 9,300 cfs immediately downstream from Martin Dam.
It is undisputed that during the May 2003 flood, APCo complied with the flood-control procedures in the 1978 amendment to Settlement Exhibit H and with Articles 33 and 35 of the Thurlow license. APCo also coordinated with the Corps of Engineers as required by Settlement Exhibit H. At all times during the May 2003 flood, the rate of outflow from Harris, Martin, Yates, and Thurlow Dams was less than the concurrent rate of inflow, except after the inflow peaked and the dams were operated to evacuate water that had accumulated in the storage spaces of the reservoirs.
The parties dispute whether the May 2003 rain event was a common event or an unusual event. The record does not include detailed information regarding damage to the farmers' properties as a result of the May 2003 flood; however, the parties do not dispute that the farmers' properties were damaged. The farmers' expert testified that APCo did not maintain storage space at Martin reservoir during the summer months and that what storage space was available during the May 2003 flood was not enough. The expert declined to state what lake level APCo should have maintained at Lake Martin; however, he opined that APCo should have reserved between 2 and 3 feet of storage space during the summer months for flood control, thus maintaining a lake level of between 487 and 488 feet, below the operating curve.
The farmers' expert admitted that his calculations did not account for intervening flows downstream from Martin Dam and stated that even more storage space should have been reserved to account for downstream flows between Martin Dam and the farmers' properties. The expert also testified that an additional foot and a half of storage space would not have prevented the May 2003 flooding and that operating under the flood-control procedures stated in Settlement Exhibit H instead of the 1978 amendment would not have made any appreciable difference in the flooding that occurred downstream.
C. The July 2003 Flood
In early July 2003, the Tallapoosa River basin flooded as a result of heavy rains associated with Tropical Storm Bill. The record shows that meteorologists had made errors in predicting the path of the storm such that heavy rains were not predicted for the Tallapoosa River basin until June 30, 2003, the day before the heaviest rainfall of the storm on the morning of July 1, 2003. On June 30, 2003, APCo lowered the lake level in the Martin reservoir from 489.6 feet to 489.47 feet, leaving.53 feet of storage space. The band of heaviest rainfall was split evenly upstream and downstream from Martin Dam but did not reach as far upstream as Harris Dam. The inflow into the Martin reservoir peaked between 9 and 10 o'clock a.m. on July 1, 2003. During the storm, APCo engaged in controlled releases of water, keeping the lake level at 489.99 feet. The peak discharge from Martin Dam during the flood was approximately 90,881 cfs.
It is undisputed that APCo maintained the lake level at the Martin reservoir in *115 compliance with the operating curve in Settlement Exhibit H before the flood. It is also undisputed that, during the July 2003 flood, APCo complied with the flood-control procedures stated in the 1978 amendment to Settlement Exhibit H, complied with Articles 33 and 35 of the Thurlow license, and coordinated its actions with the Corps of Engineers. At all times during the July 2003 flood, the rate of outflow from Martin, Yates, and Thurlow Dams was less than the concurrent rate of inflow, except after the inflow peaked and the dams were operated to evacuate the water that accumulated in the storage space of the reservoir for the Martin Dam. During the period of greatest inflows into the Martin reservoir, APCo's operation of Martin Dam reduced downstream flows by 6,383 cfs.
The record does not include detailed information regarding damage to the farmers' properties as a result of the July 2003 flood, but the parties do not dispute that the farmers' properties were damaged. The farmers' expert testified, as he did regarding the May 2003 flood, that APCo should have maintained two to three feet or more of storage space in the Martin reservoir. However, he also testified that an additional foot and a half of storage space would not have prevented the July 2003 flooding. He admitted that operating under the flood-control procedures stated in Settlement Exhibit H instead of the 1978 amendment would not have made any appreciable difference in the flooding that occurred downstream. He also testified that rainfall downstream from Martin Dam contributed to the flooding.
III. Standard of Review
"`The standard of review applicable to a summary judgment is the same as the standard for granting the motion. ...' McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So.2d 957, 958 (Ala.1992).
"`A summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. The burden is on the moving party to make a prima facie showing that there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law. In determining whether the movant has carried that burden, the court is to view the evidence in a light most favorable to the nonmoving party and to draw all reasonable inferences in favor of that party. To defeat a properly supported summary judgment motion, the nonmoving party must present "substantial evidence" creating a genuine issue of material fact"evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." Ala.Code 1975, § 12-21-12; West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala. 1989).'
"Capital Alliance Ins. Co. v. Thorough-Clean, Inc., 639 So.2d 1349, 1350 (Ala. 1994). Questions of law are reviewed de novo. Alabama Republican Party v. McGinley, 893 So.2d 337, 342 (Ala. 2004)."
Alabama Elec. Coop. v. Bailey's Constr. Co., 950 So.2d 280, 283 (Ala.2006).
IV. Analysis
On appeal, the parties primarily argue whether APCo owed a heightened duty of flood control to the farmers with respect to its operation of Martin Dam. Both the farmers' negligence claim and their wantonness claim require proof that *116 APCo owed them a duty. See, e.g., DiBiasi v. Joe Wheeler Elec. Membership Corp., 988 So.2d 454, 460 (Ala.2008); George v. Alabama Power Co., 13 So.3d 360, 364 (Ala.2008). "In Alabama, the existence of a duty is a strictly legal question to be determined by the court." Taylor v. Smith, 892 So.2d 887, 891 (Ala.2004). See also Baugus v. City of Florence, 985 So.2d 413, 419 (Ala.2007) ("The existence of a duty is a question of law for the court to resolve.").
A. APCo's Common-Law and Federally Imposed Duties
This Court has stated: "It is settled by our decisions that one who constructs a dam in a navigable stream is not an insurer against damages to lower owners, even when such damages are caused by the breaking of the dam. Some element of negligent conduct must appear." Alabama Power Co. v. Smith, 229 Ala. 105, 111, 155 So. 601, 604 (1934). Regarding the duty owed by the operator of a dam to downstream landowners, this Court has more recently stated:
"The law in Alabama is clear that an action which asserts liability for damages for the release of water will not lie in the absence of negligence. This Court has consistently held that one who owns or operates a dam owes a duty to lower riparian owners only to exercise reasonable care in operating or maintaining the dam."
Ellis v. Alabama Power Co., 431 So.2d 1242, 1245 (Ala.1983).
In Ellis, landowners on the Coosa River between Lay Dam and Mitchell Dam sued APCo, alleging negligence, trespass, and nuisance in connection with the flooding of their property in 1979. The trial court entered a summary judgment in APCo's favor, and the landowners appealed. The evidence showed that APCo had operated Mitchell Dam and Lay Dam and Logan Martin Dam, which is upstream from the Mitchell and Lay Dams, subject to and in compliance with regulations of the Corps of Engineers. The evidence also showed that the peak discharge from Logan Martin Dam during the 1979 flood was not greater than would have occurred under natural conditions, i.e., if there had been no dam. 431 So.2d at 1243-44.
This Court determined that APCo was not liable in nuisance because the landowners complained of a public nuisance and had no private right of action. 431 So.2d at 1244. Regarding trespass, this Court concluded that the landowners had failed to show that APCo's actions were unlawful or wrongful. With respect to negligence, this Court clarified the duty owed to a lower riparian landowner as quoted above and agreed with the trial court's finding that the landowners failed to meet the burden of proof of negligence. This Court also noted that the landowners had not cited any authority imposing on APCo the duty to acquire an additional storage easement.
The Ellis Court buttressed its findings of failure to offer evidence of wrongful, unlawful, or negligent conduct with dicta as to absence of evidence of causation, stating:
"Further, even assuming arguendo that there was a showing of negligence on the part of APCo, there was no showing by plaintiffs that this negligence proximately caused in fact the damage to their property (i.e. that absent the dams their property would not have been flooded to the same extent or perhaps more so)."
Ellis, 431 So.2d at 1246. The Court noted that APCo's operation of Mitchell Dam had actually mitigated the flooding of the landowners' properties. In Ellis, this Court found uncontradicted evidence of *117 compliance with federal regulations to be incompatible with a claim of breach of duty to a lower riparian landowner.
The farmers attempt to distinguish Ellis on the basis that the dams at issue in that case were subject to regulations of the Corps of Engineers while Martin Dam was not. However, the evidence showed that APCo's operation of Martin Dam was subject to federal regulation in the form of the FERC licenses for Martin and Thurlow Dams. Although they were not as detailed as the regulations of the Corps of Engineers, at all times relevant to this action the FERC licenses imposed specific duties on APCo with respect to its operation of Martin Dam. For example, the operating curve of the 1978 FERC license for Martin Dam specified that APCo was to maintain the lake level between 489 and 490 feet. Additionally, the FERC licenses specified that during flood periods APCo was not to operate Martin Dam with a rate of outflow greater than the concurrent rate of inflow. Furthermore, the FERC licenses required APCo to communicate and coordinate with the Corps of Engineers with respect to its flood-control operations. The record shows that the FERC licenses govern many other aspects of APCo's operation of Martin Dam as well. In light of the extensive federal involvement in APCo's operation of Martin Dam via the FERC licenses, it is apparent that Martin Dam is part of a general scheme of federal coordination and regulation of navigable waterways, including coordination with the Corps of Engineers. We do not find the fact that Martin Dam is not subject to detailed Corps of Engineers regulations to be a material point of distinction between this action and Ellis.
As in Ellis, APCo complied with the federal regulations governing its operation of Martin Dam during the floods at issue in this action. Pursuant to the FERC licenses, APCo maintained lake levels within the operating curve before the May and July 2003 floods; communicated and coordinated with the Corps of Engineers during the floods; and maintained outflows less than the concurrent rate of inflow. The farmers argue that APCo did not actually comply with the requirements of its FERC license because it operated pursuant to the flood-control operations stated in the 1978 amendment to Settlement Exhibit H and that amendment had not been expressly approved by the FERC. However, the evidence presented to the trial court from the farmers' expert shows that this distinction is irrelevant. As to both the May and July 2003 floods, the farmers' expert testified that APCo's operation under the flood-control procedures stated in Settlement Exhibit H instead of those stated in the 1978 amendment would not have made any appreciable difference in the flooding that occurred downstream. Accordingly, APCo's compliance with the flood-control requirements in the 1978 amendment instead of Settlement Exhibit H is immaterial.
The evidence shows that the 1978 amendment and Settlement Exhibit H were identical with respect to the lake level of the Martin reservoir, the farmers' primary area of grievance. They were also identical with respect to APCo's general operating requirements during flood flows. The evidence showed that APCo complied with those requirements and satisfied its federally imposed duties with respect to the operation of Martin Dam during the May and July 2003 floods. Additionally, it is apparent from the record that APCo's activities during the floods lessened the outflows from Martin Dam such that the flooding that did occur downstream was less than what would have occurred naturally. Accordingly, the evidence showed that APCo complied with *118 its common-law duty not cause greater flooding than would have occurred naturally.
B. A Heightened Duty of Flood Control
The farmers concede that APCo does not owe them a duty to eliminate flooding. However, they contend that APCo owed them a "heightened duty" of flood control beyond that imposed by the common law or by federal regulation. Specifically, the farmers contend that, under this heightened duty, APCo was required to "minimize" downstream flooding by maintaining "adequate" storage capacity in the Martin reservoir.
The farmers do not cite to any Alabama law to support the imposition of such a duty. They do not define what they mean by "minimizing" downstream flooding. Furthermore, they expressly decline to state what storage capacity would be "adequate" under their formulation of the heightened duty. The farmers appear to base their argument regarding the heightened duty, in part, on their argument regarding a voluntary assumption, which will be discussed separately below. However, to the extent that the farmers argue that APCo owed them an independent "heightened duty" of flood control, the farmers have not cited any authority to support their argument, and we are not persuaded that such a duty exists or that this Court is the suitable entity properly equipped to set standards applicable to such a duty.
C. Voluntary Assumption
Finally, the farmers contend that APCo voluntarily assumed a duty to operate Martin Dam for flood control during the summer months. For purposes of this argument, the farmers define "flood control" and APCo's resulting duty as the maintenance of a lake level at Martin reservoir between 487 and 488 feet, so as to allow 2 to 3 feet of storage in the reservoir. The basis for the scope of this duty apparently rests on the testimony of the farmers' expert that APCo should have maintained two to three feet of storage in the Martin reservoir. The farmers also argue that flood control includes pre-evacuation of the reservoir to create additional storage before a flood event.
The farmers argue that APCo assumed this duty by voluntarily maintaining the lake level at Martin reservoir at 489.5 feet during the summer months, thus providing.5 feet of storage space in the reservoir. The farmers also note that one of APCo's representatives testified that APCo in fact operated Martin Dam for flood-control purposes all year and that "flood control" involved minimizing downstream floods. An APCo representative also testified that APCo did, at times, pre-evacuate the Martin reservoir to create storage space in anticipation of flood events. Based on these facts, the farmers contend that APCo voluntarily assumed the duty of flood control defined above.
APCo denies that its voluntary maintenance of .5 feet of storage space imposed on it an obligation to maintain 2 to 3 feet of storage space. It also notes that its representatives testified that the .5 feet of storage space was used for multiple project purposes, including, but not limited to, flood control. Also, the record shows that another of APCo's representatives testified that "flood control" involved only reducing outflows, not minimizing floods. Furthermore, the record shows that the .5 feet of storage space is within the operating curve stated in the 1978 FERC license whereas any duty to operate Martin reservoir between 487 and 488 feet would require APCo to maintain a lake level below that specified in the operating curve.
*119 This Court has stated: "Alabama clearly recognizes the doctrine that one who volunteers to act, though under no duty to do so, is thereafter charged with the duty of acting with due care and is liable for negligence in connection therewith." Dailey v. City of Birmingham, 378 So.2d 728, 729 (Ala.1979). "However, the existence of a voluntarily assumed duty through affirmative conduct is a matter for determination in light of all the facts and circumstances." Parker v. Thyssen Mining Constr., Inc., 428 So.2d 615, 618 (Ala. 1983). The relevant inquiry often involves the scope, as well as the existence, of the duty assumed. See, e.g., Springhill Hosps., Inc. v. Larrimore, 5 So.3d 513, 516 (Ala.2008) (noting that the scope of a pharmacist's voluntary undertaking is a fact-specific inquiry); Dailey v. Housing Auth. for Birmingham Dist., 639 So.2d 1343, 1346 (Ala.1994) (discussing the limits of the scope of a duty voluntarily assumed where landlord hired security guard); Hodge v. United States Fid. & Guar. Co., 539 So.2d 229, 230 (Ala.1989) (workers' compensation insurance case in which this Court noted that the plaintiff bears the burden of proving the scope of the duty voluntarily assumed). Furthermore, the underlying principle that the "existence of a duty is a question of law for the court to resolve" applies. Baugus v. City of Florence, 985 So.2d 413, 419 (Ala.2007)
We must determine whether, by maintaining.5 feet of storage space in Martin reservoir, APCo voluntarily assumed a legal duty to maintain 2 to 3 feet of storage, approximately 4 to 6 times as much. The farmers cite Kunz v. Utah Power & Light Co., 526 F.2d 500 (9th Cir.1975), to support their argument; however, they do not point to any Alabama law discussing the voluntary assumption of flood-control obligations. In Kunz, the United States Court of Appeals for the Ninth Circuit concluded that the operator of a dam had voluntarily assumed a duty of flood control where it had altered water flows and regularly stored runoff from melting snow each spring. 526 F.2d at 501-03. The Ninth Circuit noted that, in reliance on the activities of the operator of the dam, the plaintiffs in Kunz had changed their farming operations. 526 F.2d at 502. Accordingly, the Ninth Circuit concluded that a relationship existed between the dam operator and the plaintiffs such that the dam operator owed a duty to the plaintiffs to reduce flooding. 526 So.2d at 503.
Most of the circumstances present in Kunz are not present in this action. No evidence shows that APCo regularly operated Martin Dam with 2 to 3 feet of storage during the months of May and July; in fact, the evidence showed that APCo annually operated Martin reservoir within.5 feet of full pool. Additionally, the farmers did not present any evidence indicating that they had altered their farming operations or any other use of their property in relation to APCo's activities. No evidence supports the conclusion that a relationship existed between APCo and the farmers similar to the relationship upon which the Ninth Circuit based its decision in Kunz.
Applying general principles regarding the voluntary assumption of a duty and the scope of the duty assumed, we cannot say that, by voluntarily maintaining .5 feet of storage for purposes not limited to flood control, APCo assumed a duty to maintain 2 to 3 feet of storage dedicated to flood control. In so concluding, we are mindful of the fact that operating Martin Dam to attain such storage would require APCo to maintain a lake level below the operating curve established by the FERC and approved by the Corps of Engineers. We are also mindful of the delicate balancing of interests between upstream and downstream landowners along the Tallapoosa *120 River basin. The balancing of those interests is subject to federal regulations and has been challenged, negotiated, and agreed upon by various individuals and entities during the last several decades. The farmers have not presented adequate authority justifying this Court's interference with the regulation and previous balancing of such interests. Accordingly, we decline to recognize a voluntary assumption of a duty of flood control.
V. Conclusion
Based on the foregoing, it is apparent that APCo showed that it did not breach its duty to the farmers. Accordingly, the trial court correctly concluded that no genuine issue of material fact existed and that APCo was entitled to a judgment as a matter of law. We therefore affirm the summary judgment entered by the trial court.
AFFIRMED.
COBB, C.J., and WOODALL, STUART, and BOLIN, JJ., concur.
MURDOCK, J., recuses himself.
NOTES
[1] This case was originally assigned to another Justice on this Court. It was reassigned to Justice Lyons on November 21, 2008.
[2] Article 34 is not relevant to this proceeding.
[3] The FERC's renewal of the license for Martin Dam in 1978 notes that the Martin license is subject to Articles 33-35 of the Thurlow license. The Thurlow license was subsequently amended to exclude those provisions but, based on the FERC's 1978 amendment, APCo concedes that, as to the Martin license, it remains subject to those provisions. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453747/ | 254 P.3d 751 (2011)
242 Or. App. 519
IN RE J.J.E.;
STATE
v.
J.J.E.
A144400
Court of Appeals of Oregon.
April 27, 2011.
Affirmed without opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858167/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-92-431-CR
ANTHONY BOLIEU,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 147TH JUDICIAL DISTRICT
NO. 921624, HONORABLE WILFORD FLOWERS, JUDGE PRESIDING
PER CURIAM
After appellant pleaded guilty and judicially confessed, the district court found him
guilty of possessing less than twenty-eight grams of heroin, a controlled substance, and assessed
punishment at imprisonment for twelve years. Tex. Health & Safety Code Ann. § 481.115 (West
1992). In his first point of error, appellant contends his guilty plea was not knowingly and
voluntarily entered. The State confesses error.
The record reflects that appellant pleaded guilty on the understanding that he could
appeal the overruling of his pretrial motion to suppress evidence. At the sentencing hearing,
defense counsel stated to the court, "His plea was conditioned on the ability to appeal." The
court replied, "Yes, we understand all of that." In addition, the judgment recites that the court
"gives its permission to the defendant that he may prosecute an appeal on any matter in the case
including those matters raised by written motions filed prior to trial." Appellant's guilty plea was
not a negotiated plea, however, and thus any error attending the overruling of the motion to
suppress was waived. Broddus v. State, 693 S.W.2d 459 (Tex. Crim. App. 1985); Helms v.
State, 484 S.W.2d 925 (Tex. Crim. App. 1972). Because it appears that appellant entered his plea
of guilty with the assurance of the trial court that the overruling of the motion to suppress could
be reviewed on appeal, we are constrained to hold that the plea was not voluntarily and knowingly
entered. Broddus, 693 S.W.2d at 461; see Lemmons v. State, 818 S.W.2d 58, 63-64 n.7 (Tex.
Crim. App. 1991).
The first point of error is sustained. Because of our disposition of this point, we
need not address the remaining points of error.
The judgment of conviction is reversed and the cause is remanded for a new trial.
Before Justices Powers, Jones and Kidd
Reversed and Remanded
Filed: October 27, 1993
Do Not Publish | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1919735/ | 91 B.R. 61 (1988)
In re FRANVIEW DRUG CORPORATION, Debtor.
Gerald A. RIMMEL, Plaintiff,
v.
William MORIAN, Defendant.
Bankruptcy No. 86-00217-DPM, Adv. No. 88-0065(2).
United States Bankruptcy Court, E.D. Missouri, E.D.
August 25, 1988.
*62 Deborah Benoit, Clayton, Mo., for plaintiff.
Edward B. Beis, St. Louis, Mo., for defendant.
MEMORANDUM OPINION
DAVID P. McDONALD, Bankruptcy Judge.
INTRODUCTION
The Trustee, Gerald A. Rimmel, filed a Complaint to subordinate the claims of William Morian on March 15, 1988. The Defendant filed his Answer on April 15, 1988. The case was set for trial and heard on June 13, 1988. For the reasons stated below, this Court finds in favor of the Defendant and against the Plaintiff Trustee.
JURISDICTION
This Court has jurisdiction over the parties and subject matter of this proceeding pursuant to 28 U.S.C. §§ 1334, 151, and 157 and Local Rule 29 of the United States District Court for the Eastern District of Missouri. This is a "core proceeding" pursuant to 28 U.S.C. § 157(b)(2)(B) and (O), which the Court may hear and determine.
FACTS
The parties stipulated to the facts of the case and they are not in dispute. The Defendant is the sole shareholder and officer of Franview Drug Corporation. He made unsecured loans to the Debtor corporation in the aggregate amount of $50,169.70 as of the day of the filing of the bankruptcy petition. There were no promissory notes signed to evidence these loans. A loan balance showing a loan payable from William Morian to the Debtor corporation was reported on some of the monthly and annual financial statements of the corporation. The loan balance was disclosed on corporate tax returns for the Debtor corporation for the years 1979 through 1985. The Debtor employed Donald A. Fick as his accountant. On the advice of his accountant, the Defendant paid federal and state taxes on the amounts loaned to the corporation. Further, information on these loans was available through Dun & Bradstreet.
The Defendant also made a claim of $1,851.03 for the balance of medical bills not covered by medical insurance. These expenses were carried on the corporate records and it was the corporate policy that the Debtor corporation pay the medical insurance and balance of any medical bills not covered by the medical insurance.
DISCUSSION
The Trustee contends the claims made by William Morian should be disallowed, or at least subordinated to the allowed claims of other creditors based on the principle of equitable subordination. The Eighth Circuit has adopted a three part test for determining whether equitable subordination is appropriate: (1) the claimant must have engaged in some type of inequitable conduct; (2) the conduct must have resulted in injury to the creditors or the bankrupt or conferred an unfair advantage on the claimant, and (3) equitable subordination *63 of the claim must not be inconsistent with the provisions of the Bankruptcy Code. In re Bellanca Aircraft Corporation, 850 F.2d 1275 (8th Cir.1988). There are basically three general categories of inequitable conduct: (1) fraud, illegality, breach of fiduciary duties; (2) under capitalization; and (3) use of the debtor as a mere instrumentality, or all three of these. Matter of Missionary Baptist Foundation of America, Inc., 712 F.2d 206 (5th Cir. 1983). There are no allegations of fraud in this case. Further, there has been no showing by the Trustee that the initial capital contribution was inadequate.
The Trustee's contention is Franview Drug Corporation is the alter ego of William Morian and that the alleged loans were really capital contributions because there were no promissory notes to document the loans. He points to evidence that William Morian was the sole shareholder and officer of Franview Drug Corporation and no other individuals were involved in the business. However, there is no general rule that debts based on a shareholder loan will be subordinated in bankruptcy so long as the claimant did not act fraudulently or take unfair advantage of the creditors. Matter of Rego Crescent Corporation, 23 B.R. 958 (Bankr.E.D.N.Y. 1982). The Defendant identified these funds as loans from the stockholder to the Debtor corporation on his financial statements and corporate tax returns. This information was available through Dun & Bradstreet to any creditor who requested financial statements. Although the Defendant did not keep receipts or promissory notes of the loans, this lack of documentation does not support a finding that the transactions were capital contributions, but rather more indicative of the casual manner in which a sole shareholder deals with a corporation. Matter of Rego Crescent Corporation at 961.
The first prong of the three part test for determining whether equitable subordination is appropriate has not been met. This Court does not find that the Defendant has engaged in any type of inequitable conduct. Therefore, equitable subordination is not appropriate in this case.
With respect to the medical payments, this Court heard testimony from Mr. Morian and found his testimony to be credible as to the corporate policy in dealing with hospital bills and medical insurance. The past business practices were such that the Debtor corporation always paid the medical insurance and balance of any medical bills not covered by the medical insurance.
This Court having heard the evidence at trial and having found the witness, William Morian, to be a credible witness, denies the Trustee's Complaint to subordinate the claims of William Morian. The loan was not a capital contribution and, therefore, his claim for $35,261.70 as an unsecured creditor will not be subordinated. Further, the Court will allow the claim for the medical bills filed by the Defendant due to the standard procedure between the Defendant and the corporation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919738/ | 91 B.R. 470 (1988)
In re James DAVIS, Debtor.
Bankruptcy No. 88 B 04017.
United States Bankruptcy Court, N.D. Illinois, E.D.
May 13, 1988.
Zalutsky, Pinski & Di Giacomo, Chicago, Ill., for Adams Sales & Service, Inc.
Michael E. Schwartz, Bickley & Bickley, Chicago, Ill., for debtor.
MEMORANDUM OPINION
RONALD S. BARLIANT, Bankruptcy Judge.
Adam Sales & Service, Inc. ("Adam") has moved for relief from the automatic stay imposed under 11 U.S.C. § 362(a). Adam seeks this relief to pursue its complaint in state court against the Debtor for conspiracy to interfere with business expectancy and breach of an employment contract. Adam's motion will be granted and the automatic stay modified to allow Adam to proceed to final judgment in the state court action.
Adam filed its complaint in the Circuit Court of Cook County in 1986 seeking damages against five defendants: the Debtor, Mr. James Davis a former employee of Adam; two other former Adam employees for breach of their employment contracts and other misdeeds; and two other defendants for tortiously interfering with Adam's *471 business. The most recent amended complaint (the third) was filed in February, 1988. That complaint alleges that the Debtor entered into both oral and written employment contracts with Adam, which provided that the Debtor would not compete with Adam for a period of eighteen months after the termination of the Debtor's employment. The Debtor allegedly breached these contracts. The complaint also alleges that the Debtor acted willfully and maliciously.
The Debtor filed his petition in bankruptcy on March 12, 1988, which automatically stayed further proceedings against the Debtor in the state court action. Adam argues that it is entitled to relief from the stay because the bases for the state court action are willful and malicious acts, liability for which is non-dischargeable under § 523(a)(6). Adam also asserts that it will be unduly damaged by continuation of the stay because it would be forced to proceed in two courts on essentially similar claims this court against the Debtor, and the state court against the other former employees and the other defendants.
The Bankruptcy Code, 11 U.S.C. § 362(d)(1), provides that the automatic stay may be modified "for cause, including the lack of adequate protection." The Bankruptcy Code does not provide a definition of "cause" for which modification of the stay is appropriate. Therefore, the court must determine whether discretionary relief from the stay is appropriate on a case by case basis. In re MacDonald, 755 F.2d 715, 717 (9th Cir.1985). Cause for lifting the stay exists here, principally because of the risks, if the stay is not lifted, of inconsistent results in two forums, of a conflict in the interpretation of state law between this court and the state court, and of duplication of lawyer and judicial effort.
Adam's complaint consists of seven counts. The first three counts allege that the three former employees (including the Debtor) breached nearly identical employment contracts. The Debtor is the defendant in Count II. Although the breach of contract claim against the Debtor is stated in a separate count, disposition of that claim will depend on the construction of the same contract language and the application of the same principles of Illinois law as the disposition of the counts against the other two former employees.
Count VII alleges a conspiracy among the Debtor and two other defendants to "circumvent the provisions of the restrictive covenants" of the employment contracts.[1] Specifically, the Debtor and another former employee are accused of diverting business to another defendant, a competitor of Adam. Adam relies on the Count VII allegations of willful and malicious conduct in asserting here that its claim against the Debtor is non-dischargeable. Although only this Court may determine the dischargeability of a debt, the predicate factual and legal issues are closely related to the claims against the other alleged co-conspirators.
Further, the administration of this bankruptcy case will not be prejudiced by granting Adam relief. Adam's claim can be determined in the state court without interfering with this Court's role. And this Court's decision as to the dischargeability of Adam's claims will simply await judgment in the state court. This Court can then rely upon that judgment to the extent appropriate in the dischargeability proceeding. See, Brown v. Felsen, 442 U.S. 127, 139, n. 10, 99 S. Ct. 2205, 2213, n. 10, 60 L. Ed. 2d 767, 776, n. 10 (1979) (state court judgment may have collateral estoppel effect in bankruptcy proceeding to determine dischargeability of debt) (dicta); In re Condict, 71 B.R. 485, 487 (N.D.Ill.1987) (same). "In lifting the stay, this court would not be abdicating its duty to determine the dischargeability of the debt, if any; it would merely be deferring that determination until another court decides the plaintiff's . . . claim." In re Larkham, 31 B.R. 273, 277 (Bankr.Vt.1983) (stay lifted to permit employment discrimination action to proceed).
*472 Another factor weighing in favor of granting relief is that to do so is consistent with Congressional concerns for comity and respect for state court jurisdiction expressed in 28 U.S.C. § 1334(c).[2] Since no motion for abstention has been made under that Section, it is not directly applicable here for at least that reason. Nevertheless, that section usefully informs the exercise of discretion here.
Factors similar to those here were sufficient cause to lift the stay in Piombo Corp. v. Castlerock Properties, 781 F.2d 159 (9th Cir.1986). There, the Debtor filed a chapter 11 petition which stayed a state court breach of contract action. The Ninth Circuit modified the stay, allowing the plaintiff to proceed with the action in state court. The Court found that two factors constituted "cause": first, "a clear congressional policy exist[ed] to give state law claimants a right to have claims heard in state court" under 28 U.S.C. § 1334(c), 781 F.2d at 163; second, and more important, since the case was about to be tried in state court, usurpation of that function by the bankruptcy court would be wasteful and duplicative. The Court therefore allowed the entire action to be disposed of in one forum. Id.
Although the facts of Castlerock are somewhat unique,[3] and here the state court case is not close to trial, the considerations that led to a finding of "cause" in Castlerock are applicable in the case at bar. The state court action commenced by Adam is "related to" the Chapter 11 case, but would not be a core proceedings. As such, the federal courts would lack jurisdiction to hear the state court action were it not for the Chapter 11 proceeding. These facts put Adam's contract action within the Congressional policy of allowing state court claims to be heard in state court. Further, a trial in the bankruptcy court involving the contract and conspiracy issues would be duplicative of a state court trial determining the rights of the other parties.
In addition, the Debtor will experience no hardship by defending the breach of contract action in state court. As suggested above, if the case is not tried in state court, the same proceeding will be conducted in bankruptcy court. A state court proceeding will neither prejudice the bankruptcy estate nor will it interfere with the bankruptcy proceedings. Where these factors are present, some courts have held that the mere desire of a party to modify the stay should constitute sufficient cause to lift the stay. In re Larkham, 31 B.R. 273, 276 (Bankr.Vt.1983); In re Rounseville, 20 B.R. 892, 893 (Bankr.D.R.I.1982), In re Elegant Concepts, 61 B.R. 723 (Bankr.E.D.N. Y.1986). While this Court need not go that far, these cases support the exercise of discretion under the more compelling circumstances found here.
An Order will be entered in accordance with the foregoing, modifying the stay to permit the continuation of the Adam's state court action to final judgment. In all other respects, the stay will remain in effect.
NOTES
[1] Counts IV, V and VI are not pertinent to this discussion. They state tort claims against parties other than the Debtor.
[2] Section 1334(c) provides as follows:
(c)(1) Nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11.
(2) Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction. Any decision to abstain made under this subsection is not reviewable by appeal or otherwise. This subsection shall not be construed to limit the applicability of the stay provided for by section 362 of title 11, United States Code, as such section applies to an action affecting the property of the estate in bankruptcy.
[3] In Castlerock, the debtor included state law contract counterclaims in his answer to the plaintiff's motion to modify the automatic stay. The plaintiff answered the counterclaims and moved to allow his own counterclaims which was denied by the bankruptcy judge. The paper chase in the case at bar is not as involved, but the differences in no way diminish the applicability of the principles established by the Ninth Circuit. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559210/ | 20 So.3d 933 (2009)
Eucenda SEGUNDO, Appellant,
v.
Cedric REID, Appellee.
No. 3D08-2039.
District Court of Appeal of Florida, Third District.
September 30, 2009.
*934 Kubicki Draper and Angela C. Flowers, Ocala, for appellant.
Philip D. Parrish, Miami, for appellee.
Before SHEPHERD, SUAREZ, and ROTHENBERG, JJ.
ROTHENBERG, J.
Eucenda Segundo ("the defendant") appeals from the trial court's orders awarding attorney's fees to Cedric Reid ("the plaintiff"), pursuant to the demand for judgment statute, section 768.79, Florida Statutes (2005), and the proposal for settlement rule, Florida Rule of Civil Procedure 1.442. We reverse.
On March 30, 2003, the defendant failed to stop at a stop sign and collided with the plaintiff's vehicle, striking the driver's side of the vehicle. On the following day, the plaintiff sought treatment from a chiropractor. Although the plaintiff complained of shoulder, neck, and back pain, the chiropractor provided treatment only for the plaintiff's neck and back.[1]
In August 2004, the plaintiff filed an auto negligence action against the defendant, and the discovery process began. The defendant admitted liability, and therefore, the case centered on the plaintiff's damages, with the plaintiff alleging injuries to his neck and back. On May 29, 2003, approximately two months after the accident, the plaintiff was treated at Parkway Regional Medical Center's emergency room for a shoulder dislocation. The medical center's records state that the dislocation followed a slip and fall.[2] During discovery, the plaintiff did not refer to the slip and fall, the shoulder dislocation, or his treatment at Parkway Regional.
On November 29, 2005, while the plaintiff's alleged damages continued to relate solely to his neck and back injuries, the plaintiff served a proposal for settlement/demand *935 for judgment ("proposal for settlement") pursuant to rule 1.442 and section 768.79, offering to settle the action for $10,000, inclusive of costs and attorney's fees. The defendant rejected the proposal for settlement, and countered with a $1,500 offer, which was, in turn, rejected by the plaintiff.
On May 15, 2006, the plaintiff's attorneys moved for a continuance of the trial date to determine whether the plaintiff's shoulder dislocations were causally related to the 2003 automobile accident. The trial court granted the continuance, and in July 2006, the plaintiff's physician issued a report, opining that the 2003 automobile accident either caused the initial dislocation or "weakened his shoulder to the extent that it became susceptible to dislocation," and recommending that the plaintiff "undergo painful and expensive shoulder surgery" to avoid future shoulder dislocations. Based on the physician's report, the shoulder injury was added to the claimed damages.[3]
In a letter dated August 17, 2006, the plaintiff's attorneys outlined the plaintiff's shoulder injury, and asked the defense to tender the policy limits of $10,000. The letter did not state that it was a settlement proposal nor reference rule 1.442 or section 768.79, and the plaintiff concedes that this letter does not constitute a proposal for settlement.
The matter proceeded to trial, and the jury heard evidence as to the plaintiff's alleged injuries and damages. During closing argument, counsel for the plaintiff argued that as a result of the alleged herniated disc, the plaintiff suffered "off and on" pain and that "not much can be done for a herniated disc." He stated that the plaintiff was not seeking future medical expenses regarding his back and neck injuries. The plaintiff's attorney asked the jury to award the plaintiff $13,755 in past medical expenses and $25,000 in future medical expenses for the recommended shoulder surgery. The jury awarded the plaintiff the $13,755 the plaintiff requested for past medical expenses, $5,000 for future medical expenses, zero for past pain and suffering, and $5,000 for future pain and suffering. Thereafter, the trial court entered a final judgment in favor of the plaintiff for $13,775, after applying a $10,000 personal injury protection setoff.
The plaintiff filed a motion for attorney's fees and costs under section 768.79 and rule 1.442, based on the defendant's failure to accept the plaintiff's proposal for settlement dated November 29, 2005. In response, the defendant argued that the proposal for settlement was not made in good faith because the plaintiff did not disclose or put the defendant on notice that the plaintiff had an alleged shoulder injury or that he would seek damages relating to a shoulder injury prior to the expiration of the proposal for settlement. Additionally, the defendant argued that attorney's fees and costs should not be awarded because the plaintiff did not furnish her with sufficient information to allow her to properly evaluate the proposal for settlement. Following a hearing on the plaintiff's motion for attorney's fees and costs, the defendant *936 filed a supplemental response, stating that although she was not abandoning her argument that the plaintiff should not be awarded any attorney's fees, if fees were awarded, pursuant to section 768.79(7)(b), the only reasonable hours that the plaintiff could claim are those from the date of the proposal for settlement to the last billing date before the claim for the shoulder dislocations was made (8.4 hours for a total of $1,710). The trial court granted the plaintiff's motion for attorney's fees, and entered an order awarding attorney's fees to the plaintiff's counsel in the amount of $29,023.[4] This appeal followed.
Pursuant to section 768.79(1), if a plaintiff serves a demand for judgment which is not accepted by the defendant, the plaintiff is entitled to recover reasonable attorney's fees and costs if the judgment he recovers is at least twenty-five percent greater than the offer. Section 768.79(1) provides in pertinent part:
If a plaintiff files a demand for judgment which is not accepted by the defendant within 30 days and the plaintiff recovers a judgment in an amount at least 25 percent greater than the offer, she or he shall be entitled to recover reasonable costs and attorney's fees incurred from the date of the filing of the demand.
Thus, section 768.79(1) serves as a sanction for an unreasonable rejection of a good faith offer of settlement. See Brower-Eger v. Noon, 994 So.2d 1239, 1241 (Fla. 4th DCA 2008) (noting that section 768.79 "authorizes an award of attorney's fees as a sanction against a party who unreasonably rejects a reasonable offer made in good faith").
In the instant case, the defendant acknowledges that the plaintiff's judgment was at least twenty-five percent greater than the proposal for settlement. The defendant, however, contends that: (1) pursuant to section 768.79(7)(a), the trial court abused its discretion by failing to disallow the award of attorney's fees as the proposal for settlement was not made in good faith, or (2) the trial court abused its discretion by awarding attorney's fees or by failing to significantly reduce the amount of attorney's fees requested by the plaintiff, as the fees requested were not reasonable based on the criteria set forth in section 768.79(7)(b) and the particular facts of this case. Section 768.79(7) provides in pertinent part as follows:
(7)(a) If a party is entitled to costs and fees pursuant to the provisions of this section, the court may, in its discretion, determine than an offer was not made in good faith. In such case, the court may disallow an award of costs and attorney's fees.
(b) When determining the reasonableness of an award of attorney's fees pursuant to this section, the court shall consider, along with all other relevant criteria, the following additional factors[.]
Rule 1.442(h)(1) and (h)(2) contain similar provisions.
Although we conclude that the November 2005 proposal for settlement was made in good faith based upon what the plaintiff believed his injuries and damages were at the time, we nonetheless conclude that pursuant to section 768.79(7)(b), the trial court abused its discretion by not completely disallowing an award of attorney's fees as that would be the only reasonable award under the circumstances of this case.
"The offeree bears the burden of proving the offeror's proposal was not *937 made in good faith." Liggett Group, Inc. v. Davis, 975 So.2d 1281, 1285 (Fla. 4th DCA 2008). In determining whether the offer was made in good faith, the trial court must determine "whether the offeror had a reasonable foundation upon which to make the offer." Id. (quoting Hall v. Lexington Ins. Co., 895 So.2d 1161, 1166 (Fla. 4th DCA 2005)); see Gurney v. State Farm Mut. Auto. Ins. Co., 889 So.2d 97, 99 (Fla. 5th DCA 2004) (holding that the "good faith inquiry requires a trial court to review the facts and circumstances known to the offeror at the time it made the offer"); Fox v. McCaw Cellular Commc'ns of Fla., Inc., 745 So.2d 330, 333 (Fla. 4th DCA 1998) ("Whether an offer was made in bad faith involves a matter of discretion reposed in the trial judge to be determined from the facts and circumstances surrounding the offer.").
The circumstances surrounding the instant case are unusual. In November 2005, when the plaintiff submitted his proposal for settlement, the plaintiff and his attorneys were only seeking damages for injuries to his neck and back, including a herniated disc.[5] Prior to making the proposal, the plaintiff obtained a medical opinion confirming that he had a herniated disc. When the proposal for settlement was submitted, the plaintiff did not believe that the dislocations of his shoulder were causally related to the 2003 automobile accident. Based on the information known to the plaintiff at the time when the proposal for settlement was made, the plaintiff offered to settle the claim for $10,000, which clearly was not premised, in any way, upon his alleged shoulder injury. Upon receiving the plaintiff's proposal, the defendant examined the proposal, and based on the facts known to her, including a medical opinion that the plaintiff did not have a herniated disc and that the plaintiff was alleging injuries only to his neck and back, rejected the offer, and countered with a $1,500 offer. It was not until May 2006, that the plaintiff's attorneys questioned whether the plaintiff's two shoulder dislocations were causally related to the 2003 automobile accident. Thus, when the proposal for settlement was submitted, both the defendant and plaintiff believed that the plaintiff would be seeking damages only for his alleged back and neck injuries, and each evaluated the merits of the plaintiff's proposal for settlement on the merits of those claimed injuries.
When the plaintiff submitted his proposal for settlement, he had a reasonable foundation upon which to make the offera medical opinion that he had a herniated disc which was caused by the automobile accident. Thus, the trial court correctly determined that the proposal for settlement was made in good faith, and the trial court did not abuse its discretion by denying the defendant's motion to disallow the attorney's fee award on the basis that the proposal for settlement was not a good faith offer.[6]
*938 Next, we address the defendant's alternative argument that, based on section 768.79(7)(b), the trial court abused its discretion by not disallowing or, at the very least, significantly reducing the amount of attorney's fees requested by the plaintiff, as the amount requested was unreasonable under the circumstances. Based on the record before us, including a review of the jury's verdict, we conclude that the trial court did abuse its discretion by not completely disallowing the award of attorney's fees under the circumstances of this case.
In determining the reasonableness of an attorney's fees award under section 768.79(7)(b), the trial court is required to consider not only the specific factors set forth in subsection (7)(b), but "all other relevant criteria." § 768.79(7)(b). Rule 1.442(h)(2) contains a similar provision.
Although we disagree with the defendant that any of the listed factors contained in section 768.79(7)(b) apply, we agree with the defendant that the trial court should have considered the actual damages awarded by the jury and the relationship between the award and the plaintiff's proposal for settlement under the "all other relevant criteria" provision contained in section 768.79(7)(b).
The record demonstrates that prior to the proposal for settlement, counsel for the plaintiff did not provide the defendant with any information indicating that the plaintiff would be seeking damages for a shoulder injury. Based on the information provided to the defendant, she rejected the plaintiff's proposal for settlement. It was only after the proposal was rejected that the plaintiff's physician diagnosed the plaintiff with a severe shoulder injury, and the plaintiff amended his claim for damages.
A review of the jury's verdict demonstrates that if the damages awarded to the plaintiff for the shoulder injury are not considered, the judgment recovered would not be at least twenty-five percent greater than the offer, § 768.79(1), and the plaintiff would not be entitled to an award of attorney's fees under section 768.79 or rule 1.442.[7] Thus, to require the defendant to pay attorney's fees as a sanction for "unreasonably" rejecting the plaintiff's proposal for settlement would penalize the defendant for damages not pled nor proven until after the proposal for settlement was rejected and permit the plaintiff to benefit from the changing nature of his claim after the proposal for settlement expired.
*939 We therefore conclude that, due to the unique circumstances of this case, the trial court abused its discretion by failing to consider the reasonableness of an award of attorney's fees and in awarding attorney's fees to the plaintiff, based upon the plaintiff's November 29, 2005, proposal for settlement. Accordingly, we reverse the orders under review and remand for entry of an order consistent with this opinion.
Reversed and remanded.
NOTES
[1] The plaintiff filled out an "Automobile Accident History Form," in which he reported that the defendant's vehicle hit the driver's side of his vehicle, "causing [his] arm to slip out of joint," and that he was feeling pain on his shoulder and lower and upper back. The chiropractor's notes reflect that the plaintiff's shoulder area was swollen.
[2] The plaintiff subsequently claimed that this dislocation occurred as he was reaching underneath his bed. In 2005, the plaintiff suffered a second shoulder dislocation when he was turning over in his bed.
[3] Prior to May 15, 2006, the plaintiff was not seeking damages for a shoulder injury. At a subsequent hearing held on the defendant's motion to dismiss, the plaintiff's attorney stated:
The interesting thing is, Judge, this is a very unusual case in the sense that when we were ready for trail [sic], I had not seen this case until a few days before trial, the entire thrust of the case was actually neck and back injuries because he had arguably a herniated disc and he was having pain going into his left arm. That is what all the doctors had talked about, I had not worked the case up.
[4] The trial court awarded costs to the plaintiff under the prevailing party statute, section 57.041, and the award of costs is not at issue in this appeal.
[5] The August 17, 2006 letter sent by the plaintiff's attorneys to the defendant's attorneys does not comply with section 768.79(2), which provides in pertinent part: "(2) ... An offer must: (a) Be in writing and state that it is being made pursuant to this section." Moreover, rule 1.442(c)(1) provides: "A proposal shall be in writing and shall identify the applicable Florida law under which it is being made." Because the letter failed to comply with either section 768.79(2) or rule 1.442(c)(1), it does not qualify as a proposal for settlement.
[6] The record does not indicate that the plaintiff's failure to seek damages for his alleged shoulder injuries from the onset of the litigation amounts to a "gotcha" tactic. Cf. Cent. Motor Co. v. Shaw, 3 So.3d 367, 370 (Fla. 3d DCA 2009) (holding that allowing defendant whose offer of judgment was rejected to recover attorney's fees pursuant to section 768.79 and rule 1.442 "would counter the intent of the statute and would amount to nothing more than a `gotcha' tactic" where the defendant permitted his codefendant to settle the action for $10,000, in exchange for a dismissal with prejudice as to both defendants).
[7] The plaintiff was awarded $13,755 for past medical expenses pertaining to the back and neck injury, which was later reduced in the final judgment to $3755 due to the personal injury protection setoff. The $5000 awarded for future medical expenses was clearly for the shoulder injury as counsel for the plaintiff stated in closing argument that the plaintiff was not seeking future medical expenses for the neck and back injuries, but was seeking $25,000 for the recommended shoulder surgery. Finally, the jury awarded the plaintiff nothing for past pain and suffering and $5000 for future pain and suffering. Based on the jury's award of future medical expenses and counsel for plaintiff's argument that the plaintiff has only suffered "off and on" neck and back pain that is "not terrible," it would appear that a majority, if not all, of the future pain and suffering award was for the shoulder injury. However, even if we were to assume that the entire award of $5000 for future pain and suffering pertained to the neck and back injuries, the plaintiff's award for injury to his neck and back would total $8755, which is less than the plaintiff's proposal for settlement. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559239/ | 20 So.3d 1184 (2009)
Perry SMITH
v.
PRIME, INC.
No. 09-269.
Court of Appeal of Louisiana, Third Circuit.
October 7, 2009.
*1185 Joseph T. Dalrymple, Rivers, Beck, Dalrymple & Ledet, Alexandria, LA, for Plaintiff/Appellant, Perry Smith.
Rodney J. Lacoste, Jr., Perrier & Lacoste, LLC, New Orleans, LA, for Defendant/Appellee, Prime, Inc.
Court composed of ULYSSES GENE THIBODEAUX, Chief Judge, MARC T. AMY and SHANNON J. GREMILLION, Judges.
AMY, Judge.
The claimant alleges that he was injured while driving a tractor trailer for the defendant. The workers' compensation judge granted a motion for summary judgment in favor of the defendant after finding that the claimant was acting as an independent contractor. The claimant appeals. For the following reasons, we affirm.
Factual and Procedural Background
Perry Smith filed this workers' compensation claim, alleging that he was injured when the tractor trailer he was operating for Prime, Inc. overturned after being cut off by another vehicle. He named both Prime and Zurich American Insurance Company as defendants. In the claim form initiating this matter, he alleged that:
Claimant did long distance hauling for Prime, Inc., a substantial portion of *1186 which hauling consisted of mandatory unloading of cargoes with pallets, jacks. Claimant had suffered a previous injury while doing the same type of work for Prime, Inc. [in] approximately 2001, at which time Prime, Inc. paid him workers' compensation. Following the subject accident, Prime, Inc. advised claimant that they had changed insurance companies and provided him with paperwork to fill out and transmit to Zurich. Prime, Inc. never advised Perry Smith that the Zurich insurance was not workers' compensation benefits. He had been advised by Prime, Inc. prior to the subject accident that he would be considered an independent hauler and not an employee, but there was no discussion regarding workers' compensation eligibility or statutory employee status. Zurich advised Perry Smith that the disability and medical coverage with Zurich was not exactly workers' compensation, but just like it. The cost for the coverage with Zurich was defrayed totally by Perry Smith via weekly paycheck deductions for same by Prime, Inc., all in violation of the provisions of Title 23. Claimant is entitled to penalties and attorneys fees.
Prime denied that Mr. Smith was its employee. Rather, the defendants filed an exception of lack of subject matter jurisdiction or, alternatively, a motion for summary judgment asserting that Mr. Smith was an independent contractor. As for Zurich, it alleged that it provided benefits only under a Independent Contract Operators' Group Occupational Accident Insurance policy, a policy it asserted was issued only to independent contractors. It denied that the policy offered workers' compensation benefits.
The defendants' exhibits included the Independent Contractor Operator Agreement entered into between Mr. Smith and Prime on September 5, 2003. The agreement provided for the leasing of Mr. Smith's tractor trailer to Prime for the hauling of freight. The defendants further introduced the Personnel Service Agreement, also dated September 5, 2003, which set forth the parameters of the parties' relationship. In a supplemental filing, Prime introduced the 1099-MISC tax form it issued to Mr. Smith in 2003. As for the insurance policy, the defendants offered the Schedule of Benefits from the Zurich group accident insurance policy and the form enrolling Mr. Smith for the insurance under the group policy number.
The workers' compensation judge granted summary judgment.[1] The claimant appeals.
*1187 Discussion
The claimant questions the entering of summary judgment, primarily arguing that the defendants presented inadequate evidence that he was working as an independent contractor. The claimant points out that La.R.S. 23:1021(7), which currently defines independent contractor and excludes certain activities of a truck driver from being considered manual labor, was amended after the occurrence of the present injury.[2]
Louisiana Code of Civil Procedure Article 966(B) provides that a summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law." Paragraph (C)(2) provides as follows with regard to the burden of proof on the motion:
The burden of proof remains with the movant. However, if the movant will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the movant's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Thereafter, if the adverse party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact.
On appeal, a determination on a motion for summary judgment is reviewed de novo. Supreme Serv. and Specialty Co., Inc. v. Sonny Greer, Inc., 06-1827 (La.5/22/07), 958 So.2d 634.
As explained in Hillman v. Comm-Care, Inc., 01-1140 (La.1/15/02), 805 So.2d 1157, workers' compensation is unavailable without an employer-employee relationship. While the workers' compensation provisions are silent on the requirements of such a relationship, La.R.S. 23:1044[3] provides a statutory presumption of employment status. This presumption may be rebutted, however, upon a showing that 1) the claimant's services were not *1188 performed pursuant to the alleged employer's business or, as Prime alleges in this case, 2) the claimant was performing services as an independent contractor. Hillman, 805 So.2d 1157 (emphasis added).
La.R.S. 23:1021(6)[4] defined an "independent contractor" as:
[A]ny person who renders service, other than manual labor, for a specified recompense for a specified result either as a unit or as a whole, under the control of his principal as to results of his work only, and not as to the means by which such result is accomplished, and are expressly excluded from the provisions of this Chapter unless a substantial part of the work time of an independent contractor is spent in manual labor by him in carrying out the terms of the contract, in which case the independent contractor is expressly covered by the provisions of this Chapter.
An employer asserting that a claimant is an independent contractor is required to bear the burden of proving this status. See Rivera v. M & R Cable Contractors, Inc., 04-985 (La.App. 3 Cir. 12/15/04), 896 So.2d 90. In Hillman, 805 So.2d 1157, the supreme court noted that the essence of an employer/employee relationship, rather than a independent contractor relationship, is the right of control. It cited the following factors in determining whether an independent contractor or an employer-employee relationship existed: 1) Selection and engagement; 2) Payment of wages; 3) Power of dismissal; and 4) Power of control. Id. None of these factors is determinative. Id. Instead, the totality of the circumstances must be considered. Id. Further, the inquiry into a claimant's status as an independent contractor or an employee is factual in nature and is subject to the manifest error standard of review. Whitlow v. The Shreveport Times, 02-1215 (La.App. 3 Cir. 4/23/03), 843 So.2d 665, writ denied, 03-1406 (La.9/19/03), 853 So.2d 647.
Considering Prime's exhibits in this case, we conclude that it satisfied its initial burden of demonstrating that the claimant was working as an independent contractor rather than as an employee. Importantly, Prime presented the "Independent Contractor Operating Agreement" entered into between Prime and the claimant as well as the Personnel Service Agreement. These documents set forth the parameters of the parties' relationship, including the terms of the contract and the details of the claimant's payment. The Independent *1189 Contractor Operator Agreement evidences that the claimant retained the ultimate control over his work, the central inquiry in this case. In pertinent part, the agreement provides:
Prime is a for-hire motor carrier and utilizes independent contractors to assist in its business. You are willing to lease the following-described tractor (the "Equipment") to Prime for the purpose of hauling freight pursuant to the terms and conditions of this Agreement[.]
....
NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, it is hereby agreed as follows:
....
2. SERVICE. You agree to make the Equipment available to Prime, with qualified and Prime Certified drivers, to pick up loads and transport them to destinations designated by various shippers. Provided, however, You may refuse to haul any load offered to You by Prime.
The agreement also permitted the claimant to drive the equipment himself, employ other drivers on his own behalf, or lease drivers for the equipment. The supporting Personnel Service Agreement includes information regarding the claimant's ability to lease drivers from Prime for the operation of his business. From this documentation, it appears that Prime would be able to establish that the claimant was operating the leased tractor under his own control and direction. Thus, in the context of La.Code Civ.P. art. 966(C)(2), Prime, as the moving party sustained its burden of proof that it would be able to demonstrate that the claimant was working as an independent contractor. None of the descriptions of the work detailed by the agreements indicates that the claimant was to engage in manual labor.
Thereafter, it became the claimant's burden of proving he would be able to demonstrate that, although he was an independent contractor, "a substantial part of [his] work time [was] spent in manual labor by him in carrying out the terms of the contract[.]" La.R.S. 23:1021(6). See also 13 H. ALSTON JOHNSON, III, LOUISIANA CIVIL LAW TREATISE, WORKERS' COMPENSATION LAW AND PRACTICE § 76 (4th ed.2002). Much of the claimant's brief focuses on Prime's lack of evidence regarding the nature of his work, i.e., whether he was engaged in mental activities or physical activities. He contends that summary judgment could not have been entered absent such a showing. However, this argument mistakenly assumes that the burden rested with the purported employer. As an exception to a lack of coverage for independent contractors, however, this burden must be born by the party asserting that a substantial part of his work time as an independent contractor was spent in manual labor carrying out the terms of the contract. Id. (wherein the author notes that the issue of manual labor is a factual one and one on which the claimant must bear the burden or proof). Accordingly, we find no merit in the claimant's assertion that Prime's submission on its motion for summary judgment was insufficient due to lack of evidence regarding the amount of time he spent in mental activities rather than physical endeavors.
As the claimant failed to rebut the evidence presented by the movant, the workers' compensation judge did not err in entering summary judgment dismissing the claimant's suit against Prime. Neither did the trial court err in dismissing Zurich Insurance Company from this workers' compensation claim.
*1190 DECREE
For the foregoing reasons, the judgment of the workers' compensation judge is affirmed. All costs of this appeal are assigned to the appellant, Perry Smith.
AFFIRMED.
NOTES
[1] In oral reasons for ruling, the workers' compensation judge explained:
This Court would grant the Motion for Summary Judgment filed on behalf of both Prime, Incorporated and Zurich Insurance Company. Primarily reliance for such is upon Whitlow versus The Shreveport Times, 843 So.2d 665 [ (La.App. 3 Cir.4/23/03) ], a Third Circuit decision and Guillory versus Oberlin [sic] Express Company, [a] Third Circuit decision, 796 So.2d 887 [ (La.App. 3 Cir.10/3/01) ].
I was faced in the this Court was faced in the Whitlow case with an individual who delivered newspapers and the primary activity concerned the substantial amount of time spent in the delivery of newspaper paper delivery as opposed to picking up the papers, loading them into the vehicle, folding the papers. The substantial time spent was driving the vehicle in the delivery process, and, quite frankly, that's what you have with a driver of a of an 18-wheeler, semi-tractor/trailer. The substantial portion of the time is spent in the driving of that vehicle which the Court said in Guillory versus Oberlin [sic] Express is not manual labor which was one of the reasons the Court denied the claim in Whitlow.
Subsequent to those decisions, was the case of Spells versus Extreme Nissan, a Fourth Circuit decision, 884 So.2d 609 [(La.App. 4 Cir.9/1/04) ]. In wondering why the Fourth Circuit may have reached the conclusion it did it became apparent to this Court that the object of the contract of hire between Spells and Extreme Nissan was not driving. Was not driving. The object of the contract was the delivery of a motor vehicle which entailed the driving of the same vehicle. I think that's a significant distinction between the Spells case, Guillory and Whitlow. And the Court would grant the Summary Judgment.
[2] Louisiana Revised Statutes 23:1021(7) (emphasis added) presently provides:
"Independent contractor" means any person who renders service, other than manual labor, for a specified recompense for a specified result either as a unit or as a whole, under the control of his principal as to results of his work only, and not as to the means by which such result is accomplished, and are expressly excluded from the provisions of this Chapter unless a substantial part of the work time of an independent contractor is spent in manual labor by him in carrying out the terms of the contract, in which case the independent contractor is expressly covered by the provisions of this Chapter. The operation of a truck tractor or truck tractor trailer, including fueling, driving, connecting and disconnecting electrical lines with air hoses, hooking and unhooking trailers, and vehicle inspections are not manual labor within the meaning of this Chapter.
[3] Louisiana Revised Statutes 23:1044 provides that "[a] person rendering service for another in any trades, businesses or occupations covered by this Chapter is presumed to be an employee under this Chapter."
[4] As noted above, the legislature amended Paragraph 6 in 2004 to provide that: "The operation of a truck tractor or truck tractor trailer, including fueling, driving, connecting and disconnecting electrical lines and air hoses, hooking and unhooking trailers, and vehicle inspections are not manual labor within the meaning of this Chapter." 2004 La.Acts No. 188, § 1. Furthermore, and as specifically designated as "new law," Act 188, § 1 enacted Paragraph 13, which provided that:
[]"[O]wner operator" means a person who provides trucking transportation services under written contract to a common carrier, contract carrier, or exempt haulers which transportation services include the lease of equipment or a driver to the common carrier, contract carrier, or exempt hauler. An owner operator, and the drivers provided by an owner operator, are not employees of any such common carrier or exempt hauler for the purposes of this Chapter if the owner operator has entered into a written agreement with the carrier or hauler that evidences a relationship in which the owner operator identifies itself as an independent contractor. For purposes of this Chapter, owner operator does not include an individual driver who purchases his equipment from the carrier or hauler, and then directly lease the equipment back to the carrier or hauler with the purchasing driver.
The Louisiana State Law Institute later re-numbered the paragraphs, which currently appear as Paragraph (7) and (10) respectively. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559260/ | 796 F.Supp. 477 (1992)
PARKER LAND AND CATTLE COMPANY, INC., Plaintiff,
v.
UNITED STATES of America, Defendant.
Lyle R. PECK, Plaintiff,
v.
UNITED STATES of America, Defendant.
Nos. 91-CV-0039-B, 91-CV-0091-B.
United States District Court, D. Wyoming.
June 4, 1992.
*478 *479 Stanley K. Hathaway, Brent R. Kunz, and Rebecca L. Hellbaum, Hathaway, Speight, Kunz, Trautwein & Barrett, Cheyenne, Wyo., and Dennis C. Stickley, Wellington, New Zealand, for plaintiff Parker Land.
Mark J. White, Riverton, Wyo., for plaintiff Lyle R. Peck.
Carol A. Statkus and Matthew H. Mead, Asst. U.S. Attys., D. Wyo., Cheyenne, Wyo., for U.S.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
BRIMMER, Chief Judge.
This matter was presented in a trial to the Court on January 6-10, January 13-17 and January 21-24, 1992. The Court, having heard the testimony of witnesses, having considered the other evidence presented, having heard and considered the legal arguments of counsel, having reviewed the materials on file, and being fully advised in these premises, now makes the following Findings of Fact and Conclusions of Law:
FINDINGS OF FACT
A. The Land
1. The Parker Land and Cattle Company, Inc. (Parker), owns several hundred acres of land and leases more than 11,000 acres of land from its founder and sole stockholder, Thomas Parker. This property is located east of the Continental Divide (Divide) in Fremont County, Wyoming.
2. In addition to the deeded land, Parker controls two grazing allotments administered by the Bureau of Land Management (BLM). See Tr.Ex. 72.
3. Both of these allotments are located in Fremont County, Wyoming, east of the Divide.
4. The three types of BLM allotments are improve, maintain and custodial allotments. Custodial allotments provide the allottee with the maximum control over the land and the minimum interference by the government.
5. Parker requested and received custodial allotments. Id.
6. Allotment No. 2113 contains 3,681.21 acres and Allotment No. 2120 contains 519.68 acres of land. Id.
7. Allotment No. 2113 authorizes Parker to use a total of 668 animal unit months (AUMs) of grazing preference, half in the period between May 1 through June 30 and the other half in the period between October 1 through November 30 of each year. Id.
8. In Allotment No. 2120 Parker is authorized to use a total of 87 AUMs of grazing preference, half in the period between April 1 through June 30 and the other half in the period between October 1 and October 31 of each year. Id.
9. These BLM permits do not require livestock enter and leave on any specified dates, rather they provide a time period during which the allottee may use the land.
10. Parker requested the time period in the allotments and never requested said time periods be modified.
11. The BLM does not manage or control the allottee's livestock and the safety of such livestock is the responsibility of the allottee.
12. Parker also controlled two grazing allotments on the National Forest Lands which were administered by the United States Forest Service (USFS). See Tr. Exs. C3 and C3A.
13. USFS allotments were located in the Shoshone National Forest and were also east of the Divide. Id.
14. These two USFS permits included approximately 46,000 acres and provided that the permittee could use the allotment *480 from the middle of June through the first part of September. Id.
15. Like the BLM permits, the USFS permits provided a period of time in which the allottee may use the land. They do not, however, require that livestock enter or leave on certain dates. Id.
16. The USFS does not manage or control the permittee's livestock while that livestock is grazing on the federal permit. The well being of the cattle is the responsibility of the permittee, not the government.
17. John Story (Story), Parker's manager and president, treated the leased property as under his exclusive control and objected to the USFS allowing any other grazers on this land without first seeking his consent. Tr.Ex. R7.
18. The public lands may contain many dangers such as noxious weeds and diseased wildlife; however, this is a risk which a permittee accepts as a cost of doing business on such leased lands. Such risk is factored into the cost of the leases. The BLM and USFS do not owe a permittee or an allottee a duty to warn of all dangers located on the public lands.
19. The BLM and USFS are charged with the responsibility of managing the federal lands in accordance with the multiple-use objectives provided for in the federal statutes. See Multiple Use Sustained Yield Act, P.L. 86-517; and Federal Land Policy and Management Act, 43 U.S.C. § 1700 et seq.
20. These statutes expressly provide that nothing in them affects the responsibilities or jurisdiction of the states for the management of resident wildlife.
21. The Wyoming Game and Fish Department (WGFD) has primary responsibility for managing wildlife located on lands covered by the BLM and USFS grazing permits.
B. The Parker Herd
22. In February 1984, Parker purchased 25 bred-heifers through the Riverton Livestock Exchange.
23. The source herds for these purchased cattle were located in Wyoming and Montana.
24. Parker exchanged stray cattle with ranchers west of the Divide during the 1980's. All of these exchanges were from ranches located in Wyoming.
25. There were summer pasture grazing operations in the vicinity of the Parker operation, to which cattle were brought in on an annual basis; however out of state grazing cattle are only allowed to enter the state under strict standards.
26. For a limited period of time Parker used artificial insemination (AI) in its operation. The semen came from a national company located in Wisconsin.
27. Parker began a brucellosis vaccination program in 1985. Dr. Woody testified that in February 1989 John Story informed him that the Parker herd was approximately 65% vaccinated.
28. The decision to implement a vaccination program had to be phased in over a period of years as the United States Department of Agriculture (USDA), Animal and Plant Health Inspection Service (APHIS) only allows for vaccination of calves.
29. Dr. Norman R. Swanson, the recently retired Wyoming State Veterinarian, testified that as of 1985 his office has permitted calfhood vaccinations for animals between the ages of four to 12 months.
30. Prior to 1985 the vaccination was given in stronger doses and could only be given to animals which were younger than nine months of age.
31. The Parker operation began calving season in January and did not come off the leased land until October, thus the calves would then be too old to vaccinate.
32. Parker made a business decision to operate in the early calving season method in order to have bigger calves at the time they were sold.
33. Inherent in this business decision is that Parker was willing to risk not vaccinating its animals in order to achieve greater weights and thereby greater profits at sale.
*481 34. Parker was in sole control of the decision of when to begin calving season.
35. Other ranchers in the Parker area calved later in the year and then vaccinated their animals when they came off of summer range.
C. The Disease.
36. Brucellosis is a bacterial infection of the mammary glands and reproductive tracts, which causes sexually mature female animals to abort their fetuses. The disease also causes the host to produce infected milk.
37. Dr. E. Thomas Thorne, research veterinarian for the WGFD, testified the following must be present to transmit the disease: (1) A pregnant infected animal; (2) a susceptible cow, danger is heightened if said cow is pregnant; and (3) the cow and other animal are in same place at the time of a birth event or abortion.
38. Dr. Thorne also testified the possibility of transmission was enhanced in a situation where the infected elk could not get away from the cow as elk are solitary animals when they give birth.
39. Dr. Thorne testified that the female elk will attempt to clean the entire area of any evidence of the birthing event. This clean-up process includes eating all the discharge as well as the aborted fetus.
40. Dr. Thorne further testified that the disease is not transmitted by males in the natural breeding process, but can be passed under AI conditions.
41. Dr. Young testified that cows contract the disease by ingestion, such as licking of an aborted fetus or the fluids discharged during a birthing event, and not through feces or urine.
42. Wyoming has been designated as a brucellosis-free state since 1985.
43. The Parker brucellosis infection did not affect Wyoming's brucellosis-free status.
D. The Outbreak.
44. In November 1988 the Market Cattle Inspection (MCI) system identified a possible brucellosis suspect reactor cow which was traced to the Parker herd.
45. Dr. Douglas Woody, a veterinarian with APHIS, notified Story of the possible reactor.
46. Dr. Woody offered to test the Parker herd free of charge.
47. Story declined the offer and informed Dr. Woody that the herd was 100% percent vaccinated against brucellosis and that no new cows had been added to the herd for six or seven years.
48. As a result of this information, Dr. Woody did not order a whole herd test.
49. In February 1989 the MCI system traced a second brucellosis reactor back to the Parker herd.
50. Dr. Woody immediately quarantined the Parker herd.
51. The herd was then given three tests for brucellosis.
52. In the first test 45 reactors were identified. The second test identified 2 additional reactors. The final test indicated 38 more reactors and 23 suspect reactors.
53. Story then informed Dr. Woody that the herd was not 100% vaccinated, but rather approximately 65% vaccinated.
54. Story informed Dr. Woody that no females had been added to the herd for ten years.
55. After the extent of the infection was discovered, Parker followed the government's advice to depopulate the herd.
56. The decision to depopulate was reasonable in light of the extensive infection.
57. Potential sources for the Parker infection, from most likely to least likely, are as follows: (1) Imported cattle; (2) Neighboring cattle; (3) Summer pastured cattle; (4) Stray cattle; (5) AI; (6) Domestic animals such as dogs and horses; and (7) Wild animals such as elk or bison. Tr.Ex. FFF.
58. APHIS tested approximately 4000 head of cattle in the neighboring herds but found no other brucellosis reactors.
59. The MCI system has picked up no other suspect reactors from herds in the *482 Parker area since the time of the Parker outbreak.
E. The Bridgewater Report.
60. Dr. Donald Bridgewater is the Western Regional Epidemiologist of APHIS and in this capacity he investigated the Parker brucellosis outbreak.
61. Dr. Bridgewater reached the following conclusions in his report: (1) Parker was the index herd; (2) The brucellosis was introduced into the Parker herd in either the spring or summer of 1988; (3) To date, no epidemiological evidence is known that brucellosis was imported into the herd; (4) To date, there was no spread to other herds in the area; (5) No spread of brucellosis by bison/elk to other livestock in the area is known; and (6) Elk/bison remain a potential source of infection as no other source was found. Tr.Ex. Parker 2.
62. At trial Dr. Bridgewater testified that he believed, with a reasonable degree of medical certainty, that the Parker infection was caused by contact with either elk or bison.
F. Questioning the Bridgewater Report.
63. The report is limited to the information which Dr. Bridgewater was able to obtain from Story.
64. Dr. Bridgewater was not informed that Parker had purchased 25 bred heifers in 1984.
65. Dr. Bridgewater was not informed that Parker had experimented with AI during the 1980's.
66. Dr. Bridgewater was not informed that the Parker herd may have been exposed to a horse with Fistulas Withers, which could be another source for the infection.
G. Court's Conclusions as to the Validity of the Report.
67. The 25 bred heifers which were purchased in 1984 came from herds in Wyoming and Montana.
68. The source herds for these purchases have now been traced to areas which have not had any brucellosis outbreaks since prior to 1984.
69. Thus, brucellosis was not imported into the herd.
70. Parker used AI in the early 1980's and if the semen had been infected the disease would have been found prior to 1989.
71. Dr. Bridgewater's conclusions that the infection came from either elk or bison have been strengthened with time in that no other source has been identified and the only known pool of the disease is the wildlife in the Yellowstone Ecosystem.
72. The preponderance of the evidence showed that the Parker infection could have been caused by contact with either infected elk or bison.
H. Jackson and Yellowstone National Park Bison Herds.
73. Approximately 150 bison presently summer in Grand Teton National Park (GTNP) and winter on the National Elk Refuge (NER) which is above the current herd objective of 110 bison.
74. There are between 2,500 and 3,000 in Yellowstone National Park (YNP). This herd is a separate herd from the GTNP herd.
75. Bison were once indigenous to the area, however, the GTNP herd is a result of an attempt to reintroduce the animal to the area.
76. In 1949 bison from the Theodore Roosevelt National Park were relocated in the GTNP in order to reintroduce bison into the area.
77. The bison located in the Teton National Forest, the Washakie and Absaroka Wilderness Areas of the Shoshone National Forest, and the GTNP were designated as wildlife by the WGFD and the Wyoming Livestock Board in 1979.
78. More than 50% of the bison in the GTNP and YNP herds test sero-positive for the disease of brucellosis.
79. A tissue culture is the definitive way to test for brucellosis, however, blood *483 tests are fairly representative and may be used without killing the animals.
80. Dr. Mary Meagher testified that the YNP bison have had the disease of brucellosis long enough to develop a unique tolerance to the disease in that they no longer abort due to such infections.
81. Consequently, the danger of this YNP herd spreading the disease to other animals is sharply reduced.
82. Further, YNP bison migrate to the north into Montana and do not migrate in the direction of the Parker land.
83. The GTNP herd has not yet developed the same tolerance to the disease as the YNP herd.
84. Bison migration studies conducted between 1987 and 1989, indicated that no female bison migrated across the Divide during 1987 and 1988.
85. GTNP bison calve between mid-April and June 15. Abortions normally occur in the winter months from January onward.
86. These animals spend the winter months on the NER and calve in the GTNP.
87. Although there were sightings of bison east of the Divide, it is highly unlikely that a pregnant bison crossed the Divide and calved or aborted on the east side of the Divide.
88. Thus, in all probability the Parker livestock would not have had contact with any of these GTNP bison at a time in which there was a risk of transmission from the bison to the livestock.
89. Kay Bowles, long-time WGFD game warden, testified that there had been no reports of wild bison east of the Divide in Parker's area prior to the summer of 1988.
90. Story testified that he had not seen bison on his property prior to 1988.
91. The bison sightings in the summer of 1988 were not during a time period in which there was a danger of transmission of the disease.
92. Although there is evidence of negligence on the part of the NPS in the management of an infected bison herd that is allowed to roam free and thus possibly infect cattle, this Court cannot say that Parker has proved by a preponderance of the evidence that the infection was actually caused as the result of contact between its cattle herd and bison from either GTNP or YNP. The possibility of such contact exists, but that is not enough to satisfy the standard of a preponderance of the evidence.
93. Therefore, Parker cannot recover from the defendants on the basis that this disease was caused by bison.
I. Feedground Elk.
94. Approximately 7,500 elk are fed annually at the NER which is run by the United States Fish and Wildlife Service (FWS).
95. The NER is located outside of Jackson, Wyoming, on the western side of the Divide.
96. The Jackson Elk herd is a nationally significant herd.
97. There are also 22 state feedgrounds operated by the WGFD which are also located west of the Divide. The state feedgrounds have approximately the same rate of brucellosis infection as is found in the elk on the NER.
98. Approximately 16,000 elk are fed on the state feedgrounds.
99. The State of Wyoming originally began feeding elk in 1910.
100. The State of Wyoming requested help from the federal government and the first federal appropriation was passed on March 4, 1911.
101. The NER refuge has now been feeding elk in the Jackson area for eight decades.
102. Elk feedgrounds help maintain higher populations and keep the elk from eating haystacks of area ranchers.
103. But, the feedgrounds and particularly that operated by the defendant as the NER, also serve as a breeding ground for the disease of brucellosis. However, over the years the state has attempted to reduce *484 the risk of transmission of brucellosis by vaccinating elk on its feedgrounds, but the NER has had no vaccination program of its own and in fact has opposed it, without particularly good reason for that position.
104. The artificial concentration of animals over an extended period of time greatly enhances the spread of the brucellosis bacteria.
105. Blood tests for brucellosis indicate that feedground elk have a sero-positivity rate of approximately 40%, while non-feedground elk test sero-positive at a rate of approximately 1-1.5%.
106. Numerous witnesses testified that they observed elk crossing the Divide during the summer and fall months which is not a period of time in which there is a danger of transmission of the disease as elk are through calving by mid-June.
107. A 1978-1984 elk migration study conducted by the NER indicated that elk do not migrate east of the Divide during the winter or during calving season which are the relevant time periods for transmission of the disease.
108. The four feedgrounds closest to the Parker operation are Alkali, Fish Creek, Patrol Cabin, and Green River. All four of these feedgrounds are operated by the WGFD and not by any of the federal defendants.
109. The federal and state wildlife managers and biologists testified that they had not observed elk fetuses off of feedgrounds or outside experiment areas. This can be attributed the female elk's instinct to thoroughly clean-up the area after birthing events.
110. Not all fetuses are brucellosis related. A WGFD study indicates that only about one-half of elk abortions can be traced to brucellosis. Tr.Ex. B55.
111. Whether a pregnant NER elk crossed the Divide and either gave birth or aborted in the allotment of the Parker livestock is difficult to prove, and the Court has no great certainty that it happened or that it didn't happen.
112. If a pregnant elk did cross the Divide and enter Parker's allotments, it would be more likely than not to have come from one of the four closer state feedgrounds.
113. Although the NER, in its management of a very high number of brucellosis reactors on the feedground during the critical months when transmission of the disease is most likely, and without endeavoring to vaccinate against the spread of the disease, has clearly been negligent, the Court must nevertheless also find that plaintiff Parker has failed to prove by a preponderance of the evidence that the infection in its herd was the result of contact between its cattle herd and elk from the NER. The Court cannot conclude that the negligence of the United States was the proximate cause of the infection.
114. Therefore, Parker cannot recover from the defendants on the basis that this disease was caused by elk which were negligently managed by the federal government.
J. Elk in the Vicinity of the Parker Land.
115. The elk in the area of the Parker ranch are non-feedground elk.
116. These elk belong to the Wiggins Fork/Warm Springs elk herd which number approximately 4,000 animals.
117. The WGFD is the exclusive manager of this herd and maintains that the herd is brucellosis free.
118. Aside from the Parker outbreak, there have been no brucellosis problems diagnosed in Fremont County cattle for several years.
119. Millard Amerine, Sandy Gartner and Lyle Peck all testified that they saw elk fetuses in the area of the Parker cattle during the summer of 1988.
120. Dr. Thorne testified that it is highly unusual that three fetuses would be spotted in such a small time and that such phenomenon would probably have been the result of poison, not brucellosis.
*485 K. Federal Defendants' Activities.
121. The USFS and BLM are strictly land managers charged with administering the public lands under the multiple use standard. They do not have any jurisdiction over the management and control of wildlife.
122. The National Park Service (NPS) administers GTNP and YNP.
123. There are no grazing allottees in YNP.
124. There are a limited number of grazing allottees in the GTNP, however, such allottees know of the danger of wildlife brucellosis and have vaccinated their herds.
125. The ranchers most at risk are the Teton County ranchers who graze their cattle closest to the NER. These ranchers have entered an amicus appearance in support of the defendants.
126. The Teton County ranchers have not had a problem with brucellosis despite cattle-wildlife commingling, but those ranchers have vaccinated their herds 100%, unlike the plaintiff Parker.
127. There are no grazing allottees on the NER, which is administered by the FWS.
128. The NPS and FWS are charged with the responsibility of managing wildlife located in GTNP, YNP and the NER.
129. One of the objectives in the NER Manual is to manage habitat to minimize disease. Tr.Ex. Y2.
130. One of the goals in the Mission Statement of the NER is to provide safe and healthy habitat for a variety of wildlife. Tr.Ex. Parker 201.
131. The NPS and FWS have consistently maintained the elk and bison herds in excess of the stated objectives.
132. Bruce Smith, senior NER biologist, testified that in 1988 the elk herd numbered approximately 14,000 animals while the objective for the herd was 11,000 animals.
133. The only active brucellosis precaution which the NER has undertaken is changing its feeding methods from hay to alfalfa pellets in order to reduce the amount of time the elk spend on the feedline.
134. In 1990 the NER stopped providing financial support for the bio-bullet elk vaccination program which was being used by the state to vaccinate both on the NER and on state feedgrounds.
135. The state continues to vaccinate at the state feedgrounds and the NER at its own expense.
136. While grudgingly allowing some vaccination to continue, the NER has been far from cooperative with the state program. See Tr.Exs. Parker 145, 148 and 157.
137. The FWS has been directed to cooperate with APHIS and the states in developing forest plans. See 36 CFR 222.8(a).
138. Bob Barbe, the superintendent of YNP, testified that APHIS had recommended vaccinating bison but that YNP had never responded to this recommendation.
139. Steve Cain, wildlife biologist for the GTNP, testified that his agency did not believe bison posed a threat to cattle either in Teton County or east of the Divide and that is why no major action had been undertaken to address the problems with bison brucellosis.
140. In 1969, the GTNP bison were changed from being run as a fenced herd to being a free-roaming herd. At the time this change was implemented, the herd was brucellosis free.
141. While the herd was held captive the GTNP practiced an active brucellosis eradication program which included vaccination.
142. Since changing the herd to free-roaming, the GTNP has refused to use any methods of brucellosis control on these bison.
143. Cain testified that GTNP had rejected the following brucellosis control methods: (1) Depopulation; (2) Test and slaughter; (3) Vaccination, which it previously had practiced; and (4) Keeping the *486 bison off the NER feedlines where they eventually contracted the disease.
144. A representative of the FWS told Jim Herriges of the WGFD that the FWS would not make a "big push" to eradicate this disease in wildlife unless they were held liable in a lawsuit. Tr.Ex. 145.
145. The federal government agencies involved in this case have known of the brucellosis problem in wildlife for many years but have done very little more than form several committees to study the disease.
146. It was unreasonable for these agencies to do nothing more than commission studies in light of the fact it was their actions in managing the wildlife which dramatically increased the transmission of the disease. The least they could have done was to cooperate whole heartedly with the state in its vaccination program.
147. Thus, the FWS and NPS have acted negligently in managing the wildlife, in that they each have failed to take an active role in eliminating the brucellosis problem in the elk and bison which are under their control.
L. Uniform Methods and Rules for Brucellosis Eradication.
148. The Uniform Methods and Rules for Brucellosis Eradication (UMR) is a policy statement of APHIS that "contains the minimum standards of the Cooperative State-Federal Brucellosis Eradication Program." Tr.Ex. QQ.
149. These regulations have not been published in the Federal Register or codified in the Code of Federal Regulations. Id.
150. The UMR describes the program as follows:
the Cooperative State-Federal Brucellosis Eradication Program ... is administered under a Memorandum of Understanding between the appropriate agency in each of the States and the United States Department of Agriculture. This Program includes all the activities associated with detecting, controlling, and eliminating brucellosis from domestic livestock in the United States.
Id. at 18.
151. The UMR provides that "[a] State or area that achieves Class Free Status is officially recognized as being free of brucellosis in cattle." Id. at 83.
152. The UMR was intended to apply only to domestic livestock and cannot be extended to cover wildlife.
153. If the UMR was intended to pertain to wildlife then Wyoming could not have achieved free status as the wildlife in the Greater Yellowstone Ecosystem are heavily infected.
154. The regulations contained in Title 9 of the Code of Federal Regulations also do not apply to wildlife as it would not be physically possible to regulate wildlife in accordance with these directives.
155. While these regulations do not apply to the federal agencies in this instance, they are strong evidence of Congress' belief that brucellosis is a high priority problem which must be actively addressed.
M. Comparative Fault.
156. Parker could have prevented much of its damages had it allowed Dr. Woody to perform a whole herd test on the date that the first reactor was discovered.
157. Mr. Story withheld relevant information from Dr. Woody after the first reactor was discovered which would have led Dr. Woody to order a whole herd test.
158. If a whole herd test would have been performed in November of 1988 the extent of the Parker herd could have been greatly limited as the infection was more likely than not multiplied during Parker's calving season.
159. Parker could have protected itself by foregoing its early calving season in order to be able to vaccinate calves when they came off of summer range.
160. A reasonable rancher in the Fremont County area would have been practicing calfhood vaccination prior to 1985 when Wyoming was not classified as a brucellosis free state.
*487 N. Lyle Peck.
161. Lyle Peck works for the Parker ranch.
162. During the 1989 calving season Mr. Peck assisted in the delivery of several calves in the Parker herd.
163. As a result of this activity, Mr. Peck contracted the disease of brucellosis.
164. Dr. Mike Miller, Peck's attending physician, diagnosed brucellosis and placed Mr. Peck on several courses of medication.
165. The treatment has apparently been effective as a December 5, 1991, tests indicated that Mr. Peck was no longer infected with the disease. Tr.Ex. G7.
166. Mr. Peck, however, cannot prove that the federal defendants were the cause of his infection.
167. As with Parker, Mr. Peck showed they were a possible source of his infection, but did not prove by a preponderance of the evidence that it was more likely so than not so that the federal defendants were the cause of the disease in the Parker herd which in turn infected Mr. Peck.
168. Therefore, Mr. Peck cannot recover for damages from these defendants.
CONCLUSIONS OF LAW
A. Discretionary Function.
1. The defendants contend that this action is jurisdictionally barred by the discretionary function exception to the FTCA pursuant to 28 U.S.C. § 2680(a). The pertinent part of the statute reads:
The provisions of this chapter and section 1346(b) of this title shall not apply to (a) Any claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.
Id.
2. If a claim falls within the discretionary function exception to the FTCA, then the Court is without jurisdiction to hear the case. Baird v. United States, 653 F.2d 437, 440 (10th Cir.1981).
3. In 1988 the United States Supreme Court set forth a two-prong test to analyze questions involving the discretionary function exception. Berkovitz v. United States, 486 U.S. 531, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988). The first prong of the test which the court must answer is whether the challenged conduct is a matter of choice for the acting employee. Id. at 536, 108 S.Ct. at 1958. The second prong of the test is whether such a decision is the type of decision the discretionary function exception was designed to shield. Id.
4. The purpose of the discretionary function exception is to "prevent judicial second guessing of legislative and administrative decisions grounded in social, economic and political policy[.]" Id. at 536-37, 108 S.Ct. at 1959.
5. In a recent opinion the Tenth Circuit has held that the failure to warn of certain dangers found in the national parks is covered by the discretionary function exception. Johnson v. United States, 949 F.2d 332 (10th Cir.1991). The Johnson Court held that failure to warn of the dangers of mountain climbing in the national parks was covered by the discretionary function exception. Id. at 338. That court held that the decision not to post additional signs was part of an overall policy to limit governmental interference with climbing and to preserve the park in its natural state. Id.
6. The present case is factually distinguishable from the Johnson case. The policy considerations of not interfering with the public's activity or preserving the natural state of the park do not apply in this instance. In the case at the bar, the government's contention that it is protected by the discretionary function exception fails under the second prong of the Berkovitz test. The government did not show that the decision not to warn area ranchers was based on social, economic or political policy. In fact, the evidence showed that the federal defendants didn't really consider the dangers they have posed to the domestic livestock industry.
*488 7. The federal government does not have the discretion to do nothing in the fight against a disease which it is perpetuating by its wildlife management practices at the NER, GTNP and YNP.
B. Collateral Estoppel.
8. The defendants next argue that Parker is barred from asserting these claims under the doctrine of collateral estoppel.
9. The defendants contend that Parker has already litigated its claim in front of a state administrative law judge. In the earlier action Parker was seeking to recover, from the State of Wyoming, under the Wyoming Big Game Animal Damage Statute, Wyo.Stat. 23-1-901.
10. The defendants believe that this administrative hearing afforded Parker a full and fair opportunity to litigate the issue as required in Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980).
11. This Court disagrees that Parker had a full and fair opportunity to litigate the issue of causation. First, the administrative hearing was a very narrow procedure to determine damages and does not require the proof of negligence. Second, that determination is currently being appealed. Third, Parker has discovered additional information which was not available during the pendency of the hearing at the state level.
12. Thus, the Court finds that Parker is not estopped from asserting these claims.
C. Land Management Agencies no Duty to Warn.
13. The BLM and USFS owe no duty to warn lessees of public lands of potential dangers upon said lands.
14. The allottee accepts the risk that many dangers may be found on a grazing permit.
15. The federal government factors in these risks when it arrives at a cost for the leases.
16. Therefore, neither the BLM nor the USFS owed a duty to warn Parker of dangers which Parker's cattle may have faced while grazing on the public land.
D. Causation.
17. To recover on a claim of negligence the plaintiff must prove the following: "(1) a duty, (2) a violation of that duty, (3) which is the proximate cause of, (4) injury to the plaintiff." MacKrell v. Bell H2S Safety, 795 P.2d 776, 779 (Wyo.1990) (citing Thomas v. South Cheyenne Water and Sewer Dist., 702 P.2d 1303, 1307 (Wyo. 1985)).
18. In the case at hand the plaintiffs failed to prove by a preponderance of the evidence that the Parker herd was infected by any wildlife which were negligently managed by the federal defendants.
19. While possible, it wasn't shown to be likely that a pregnant elk or bison from the NER or GTNP crossed the Divide and calved or aborted in the vicinity of the Parker livestock.
20. Thus, the plaintiffs have failed to prove the necessary element that the negligence on the part of the defendants caused their injuries.
21. Therefore, the plaintiffs are not entitled to recover in this lawsuit.
CONCLUSION
The Court concludes that the Parker brucellosis outbreak was most likely caused by contact with infected elk or bison, as those are the only two known sources of the disease in the entire State of Wyoming, but that the plaintiffs did not prove that the elk or bison which infected the Parker herd came from the NER, GTNP or YNP.
THEREFORE IT IS
ORDERED AND ADJUDGED that plaintiff, Parker Land and Cattle Co., Inc., take nothing of defendants. IT IS FURTHER
ORDERED AND ADJUDGED that plaintiff, Lyle R. Peck, take nothing of defendants. IT IS FURTHER
*489 ORDERED AND ADJUDGED that the parties bear their own costs of suit. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559263/ | 796 F.Supp. 1506 (1992)
Tom GREENWALD, Plaintiff,
v.
PALM BEACH COUNTY, BY AND THROUGH its BOARD OF COUNTY COMMISSIONERS, and Denise J. Bleau, individually, Defendants.
No. 92-8251-CIV.
United States District Court, S.D. Florida.
June 24, 1992.
George Sigalos of Mattlin & McClosky Boca Raton, Fla., for plaintiff.
Pete Hurtgen of Morgan, Lewis & Bockius, Miami, Fla., for defendant.
PAINE, District Judge.
ORDER ON MOTION TO REMAND ACTION TO STATE COURT
This matter comes to be heard on the Plaintiff's, Tom Greenwald ("Greenwald"), Motion to Remand Action to State Court (DE 11). Having reviewed the file and relevant authorities, the court enters the following order.
Placing Their Bets
On April 9, 1992, the Plaintiff commenced this action in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida alleging that the Defendants, inter alia, disciplined and retaliated against him for revealing numerous conflicts of interest and improprieties, within the Palm Beach County Attorney's Office, to the Florida State Attorneys' Office and the Palm Beach Post. On April 29, 1992, the Defendants removed the proceeding on the ground that this court had original jurisdiction, insofar as Count III of *1507 Greenwald's Complaint sought relief for violation of civil rights pursuant to 42 U.S.C. § 1983.[1] Thereafter, the Plaintiff filed a Notice of Voluntary Dismissal of Count III of Complaint (DE 10) and the subject Motion contending that this matter should be remanded to state court as the sole basis for removal, the federal civil rights cause of action, had been voluntarily dismissed, divesting the court of its only basis for exercising subject matter jurisdiction.
Rolling the Dice: Pleading a Federal Cause of Action in State Court
Greenwald's proposed course of action, however, is contrary to binding precedent which holds that a district court's jurisdiction is not defeated when a Plaintiff voluntarily revises his Complaint, so as to eliminate the federal claim upon which removal is based. In re Greyhound Lines, Inc., 598 F.2d 883, 884 (5th Cir.1979).[2]See Boelens v. Redman Homes, Inc., 759 F.2d 504, 507 (5th Cir.1985); Westmoreland Hosp. Ass'n v. Blue Cross, 605 F.2d 119, 123 (3d Cir.1979), cert. denied, 444 U.S. 1077, 100 S.Ct. 1025, 62 L.Ed.2d 759 (1980); Hazel Bishop, Inc. v. Perfemme, Inc., 314 F.2d 399, 403 (2d Cir.1963); Brown v. Eastern States Corp., 181 F.2d 26, 28 (4th Cir.1950); Austwick v. Board of Educ. of Township High Sch., 555 F.Supp. 840, 842 (N.D.Ill. 1983); Armstrong v. Monex Int'l, Ltd., 413 F.Supp. 567, 569 (N.D.Ill.1976). The policy behind this rule is obvious:
When a plaintiff chooses a state forum, yet also elects to press federal claims, he runs the risk of removal. A federal forum for federal claims is certainly a defendant's right. If a state forum is more important to the plaintiff than his federal claims, he should have to make that assessment before the case is jockeyed from state court to federal court and back to state court. The jockeying is a drain on the resources of the state judiciary, the federal judiciary and the parties involved; tactical manipulation [by the] plaintiff ... cannot be condoned.
Boelens, 759 F.2d at 507 (quoting Austwick, 555 F.Supp. at 842).
Snake Eyes!
In choosing to file his action in Florida state court and electing to press a claim pursuant to 42 U.S.C. § 1983, the Plaintiff rolled the dice, running the risk of removal to the United States District Court for the Southern District of Florida, and "crapped out." In sum, the undersigned will not permit Greenwald to oust the court's jurisdiction by voluntarily dismissing without prejudice the sole federal cause of action in his Complaint.[3]
In view of the foregoing, it is hereby ORDERED and ADJUDGED that the Plaintiff's Motion to Remand Action to State Court (DE 11) is DENIED.
DONE and ORDERED.
NOTES
[1] Section 1983 provides, in relevant part, that:
Every person who, under color of any statute, ordinance, regulation, custom, or usage of any State ... subjects, or causes to be subjected, any citizen of the United States ... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.
[2] The Eleventh Circuit, in the en banc decision Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981), adopted as precedent decisions of the former Fifth Circuit rendered prior to October 1, 1981.
[3] If the Plaintiff were intent on having this action heard in a state forum, nothing would appear to preclude him from voluntarily dismissing this action without prejudice and later filing a "new action" in state court, omitting any basis for federal jurisdiction in the Complaint. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559186/ | 796 F.Supp. 154 (1992)
CHARTER RISK RETENTION GROUP INSURANCE COMPANY, Plaintiff,
v.
David W. ROLKA, Joseph Rhodes, Jr., and Wendell F. Holland, Commissioners, Public Utility Commission, Defendants.
Civ. A. No. 1:CV-92-236.
United States District Court, M.D. Pennsylvania.
June 11, 1992.
*155 M. Hannah Leavitt, Andrew S. Gordon, Buchanan Ingersoll P.C., Harrisburg, Pa., for plaintiff.
H. Kirk House, John F. Povilaitis, John E. Herzog, Harrisburg, Pa., for defendants.
Philip C. Olsson, David L. Durkin, Olsson, Frank & Weeda, P.C., Washington, D.C., amicus National Risk Retention Ass'n.
MEMORANDUM
CALDWELL, District Judge.
I. Introduction
Plaintiff, Charter Risk Retention Group Insurance Company, seeks a declaratory judgment that defendants' enforcement of section 512 of the Pennsylvania Public Utility Code (the Code), 66 Pa.C.S. § 512, and certain regulations of the Pennsylvania Public Utility Commission (the Commission), 52 Pa.Code § 32.11, is unconstitutional and in violation of the Liability Risk Retention Act of 1986 (the Act), 15 U.S.C. § 3901, et seq. Defendant commissioners, David W. Rolka, Joseph Rhodes, Jr., and Wendell F. Holland, have filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) and failure to state a claim pursuant to Fed. R.Civ.P. 12(b)(6). An amicus curiae brief has been filed in opposition to defendants' motion by the National Risk Retention Association.
II. Background
Plaintiff is a risk retention group and an insurance company licensed in Nebraska. It is registered with Pennsylvania's Insurance Commissioner, but is not licensed in the Commonwealth.[1] During a public *156 meeting on October 17, 1991, the Commission determined that plaintiff "does not possess a certificate of authority issued by the Insurance Department and thus is not an insurer authorized to do business in this Commonwealth." (Order to Show Cause, Exhibit 1, Defendant's Brief) (emphasis added). On that ground, the Commission subsequently issued orders to show cause against sixteen limousine companies insured by plaintiff. The orders directed the companies to establish why they should not be required to obtain insurance coverage by an insurer licensed in Pennsylvania. A showing that the companies had "acceptable" insurance was required within a designated period or they would be "subject to suspension or revocation proceedings," which would force them to obtain insurance from a licensed insurer. Id.
Defendants, acting as commissioners for the Commission, based their decision upon their interpretation of section 512 of the Code and the Commission's regulations, 52 Pa.Code § 32.11(a) and (b), which require that private carrier utilities obtain insurance from an insurer "authorized to do business within the Commonwealth." Defendants determined that plaintiff's insurance plan did not comply for purposes of demonstrating financial responsibility, because it is not licensed in Pennsylvania and for that reason is not "authorized to do business in the Commonwealth." Id.
The complaint alleges that the defendants' action is in violation of section 3902(a)(1) through (4) of the Act, including its anti-discrimination provisions, which preempts state insurance laws that require risk retention groups to "obtain authorization under differing standards before being permitted to do business in a given state." (Complaint at ¶ 17). The complaint further avers that the Act "authorized duly constituted groups to offer its members liability insurance coverage in every state without having to obtain a license from each state." (Complaint at ¶ 18). The Act provides:
Except as provided in this section, a risk retention group is exempt from any State law, rule, regulation, or order to the extent that such law, rule, regulation, or order would:
(1) make unlawful, or regulate directly or indirectly, the operation of a risk retention group except that the jurisdiction in which it is chartered may regulate the formation and operation of such a group ...
. . . . .
(4) otherwise discriminate against a risk retention group or any of its members, except that nothing in this section shall be construed to affect the applicability of State laws generally applicable to persons or corporations.
15 U.S.C. § 3902(a)(1) and (4). Plaintiff claims that it and its members will suffer irreparable harm to their business interests and ability to operate in Pennsylvania unless defendants are enjoined from enforcing the orders to show cause and the state laws as interpreted by them.
III. Discussion
Defendants contend that the Act does not apply to this action and, accordingly, plaintiff may not avail itself of 28 U.S.C. § 1331 or 1337(a) as there is no federal question jurisdiction.[2] They argue further that plaintiff's claim against them in their individual capacities is in effect a claim against the Commission which is barred by the eleventh amendment. Finally, they aver that the complaint fails to state a claim pursuant to 42 U.S.C. § 1983.
With regard to subject matter jurisdiction, defendants contend that declaratory actions filed pursuant to 28 U.S.C. § 2201 must have some basis for federal jurisdiction other than the request for declaratory relief itself. See, Schilling v. *157 Rogers, 363 U.S. 666, 677, 80 S.Ct. 1288, 1295-96, 4 L.Ed.2d 1478 (1960); Getty Oil Co. (Eastern Operations), Inc. v. Ruckelshaus, 467 F.2d 349, 356 (3d Cir.1972). Defendants contend, therefore, that the ultimate question in this matter concerns whether plaintiff is an "authorized insurer," which is strictly a question of state law. We disagree. The crux of this matter is whether defendants interpretation of section 512 and 52 Pa.Code § 32.11 has the indirect effect of precluding risk retention groups from operating without impediments in Pennsylvania, which is, as indicated, a violation of federal law.[3]
Defendants argue that the orders to show cause against the limousine companies were issued out of concern that certain motor carrier utilities were covered by insurers that were "non-admitted" or not licensed in Pennsylvania. Defendants allege that the orders do not cancel the recipients' certificates of insurance and do not direct that they immediately terminate their policies and switch to licensed insurance companies. In sum, defendants argue that the orders did not single out risk retention groups in general, but were directed at any non-licensed insurer, and that plaintiff happened to be the insurer involved. Therefore, they contend that the Commission's action does not prohibit plaintiff from offering insurance in Pennsylvania, and thus, is not in conflict with the Act.
Plaintiff alleges that pursuant to the Act it has the right "to do business" and "offer insurance" without the interference of state regulation. The amicus and plaintiff have established that the Act preempts state law which obstructs the ability of risk retention groups to operate on a multi-state basis, even though they are only licensed in one state.[4] On that ground, plaintiff contends that the orders directing plaintiff's members to show cause why they should not secure coverage from a licensed insurer indirectly impedes plaintiff's ability to provide them coverage and forces them to obtain insurance elsewhere. Plaintiff urges that these orders, and defendants' interpretation of the state laws in question, directly conflict with the intent of Congress to enable risk retention groups to provide insurance for their members on a nationwide level.
Defendants counter that the Commission's action is expressly authorized by the Act itself. They rely almost exclusively upon section 3905(d) of the Act which provides:
Subject to the provisions of section 3(a)(4) [15 U.S.C. § 3902(a)(4)] relating to discrimination, nothing in this Act ... shall be construed to preempt the authority of a State to specify acceptable means of demonstrating financial responsibility where the State has required a demonstration of financial responsibility as a condition for obtaining a license or permit to undertake specified activities. Such means may include or exclude insurance coverage obtained from an admitted insurance company, *158 an excess lines company, a risk retention group, or any other source regardless of whether coverage is obtained directly from an insurance company or through a broker, agent, purchasing group, or any other person.
15 U.S.C. § 3905(d) (emphasis added).
Defendants overlook the first sentence which states "[s]ubject to the provisions of section 3(a)(4)," i.e., that states may not discriminate against risk retention groups or their members or otherwise directly or indirectly regulate their operation. To interpret section 3905(d) as defendants insist (thus, granting states unlimited discretion to dictate the means of demonstrating financial responsibility) would render meaningless the anti-discrimination provisions of Act. Rather, the two sections must be read together to properly construe the Act's meaning.
Nevertheless, defendants argue that "[c]learly, financial responsibility for the specially licensed activity of a passenger carrier utility is required to be demonstrated by the submission of a certificate of insurance by an insurer authorized to do business in the Commonwealth of Pennsylvania." (Defendants' Brief, at 7).[5] We agree that the Act authorizes states to require demonstration of financial responsibility for specially licensed activities, and plaintiff does not dispute that motor carriers must demonstrate this responsibility to receive a permit. However, the issue is whether risk retention groups may be deemed "not authorized" in light of the Act's preemption requirements.
Plaintiff argues that by categorizing risk retention groups as inappropriate or unacceptable for purposes of showing financial responsibility, defendants have indirectly regulated plaintiff's business by effectively compelling its members to obtain insurance elsewhere, in direct violation of the Act. Thus, the defendants' orders to show cause, which on their face presumptively designate plaintiff's coverage as an unacceptable plan for motor carriers, is arguably equivalent to an "order" that "regulate[s], directly or indirectly, the operation" or otherwise discriminates against risk retention groups. 15 U.S.C. § 3902(a)(1). Discrimination may be established simply on the ground that plaintiff's members are required to show cause why they should not be required to have acceptable insurance, which is not a burden placed on carriers who use licensed insurers and which may cause such members to seek insurance elsewhere, even if just to avoid this burden. We agree with this position.
While the orders to show cause do not cancel the carriers' certificate of insurance or immediately terminate their policies with plaintiff, such orders have already determined that plaintiff is not an authorized insurer in Pennsylvania, and plaintiff's members merely have an opportunity to demonstrate "why it should not be required to have an acceptable certificate of insurance filed by an insurer which is authorized to do business in this Commonwealth, as evidenced by possession of a certificate of authority issued by the Insurance Department." Thus, as indicated, the central issue is whether duly constituted risk retention groups may be deemed "unacceptable" or unauthorized in the first instance. We agree with defendants that the Commission's action does not actually prohibit plaintiff from insuring motor carrier utilities in Pennsylvania. However, we find that the complaint states a claim whether the orders to show cause are discriminatory on their face and whether defendants' apparently unrebuttable presumption that risk retention groups are not authorized to do business in Pennsylvania violates the Act. Defendants even concede the conclusiveness of their position when they state "Charter Risk fails to recognize that it is only through an authorized insurance company that such coverage may be purchased by a common carrier in Pennsylvania" and that states are allowed to set standards based upon this presumption with regard to specially licensed activities. (Defendants' Reply Brief, at 4-5). Defendants do not dispute that the orders may *159 ultimately require plaintiff's members to acquire coverage by licensed insurer or suffer revocation proceedings.
We conclude that whether defendants' action is preempted by the Act involves the construction of a federal statute (including an interpretation of section 3905(d) as suggested by defendants), which is clearly a federal question.[6]
Defendants' second argument is that plaintiff has failed to state a claim that the Commission violated the anti-discrimination provisions of the Act. They contend that the orders to show cause were instituted against over one-hundred utilities which were not insured by a licensed insurer, and thus, "did not single out risk retention groups."[7] We disagree. Simply because an action pertains to groups other than plaintiff does not preclude a finding of discrimination if the action prevents risk retention groups in general from receiving the same privileges as other insurance companies. Of course, discrimination must be proven by plaintiff, but at this stage in the litigation the plaintiff has stated a viable claim.[8]
We turn now to whether plaintiff has stated a claim pursuant to 42 U.S.C. § 1983 and 28 U.S.C. §§ 1343(a)(3) and (4). "[A] civil rights complaint under § 1983 must set forth with factual specificity the conduct of defendants alleged to have harmed the plaintiff." Darr v. Wolfe, 767 F.2d 79, 80 (3d Cir.1985) (citations omitted). The complaint must specify the conduct which violates the plaintiff's civil rights, "when and where that conduct occurred, and who was responsible ... [and] will be dismissed if it contains only vague and conclusory allegations." La Plant v. Frazier, 564 F.Supp. 1095, 1097 (E.D.Pa.1983).
The individual defendants are charged with interpreting and enforcing the laws in question in a manner preempted by federal law. Defendants contend that the complaint does not specify when, where, and how they engaged in actions which deprived plaintiff of its rights, privileges, and immunities to justify relief under section 1983. We construe the complaint as alleging that the individual defendants, acting as commissioners during the public meeting of October 17, 1991, violated plaintiff's rights under the Act when they instituted the relevant orders to show cause. Defendant relies upon its earlier argument that no federal question is involved here, and any violation would concern plaintiff's state rights. As indicated, the allegation of preemption involves a federal question and thus plaintiff has stated a claim under section 1983.
Defendants' final argument in moving for dismissal is that the complaint fails to state claims against the defendants in their individual capacities and that any claims against the Commission are barred by the eleventh amendment. Defendants argue that plaintiff is attempting to impose liability on them simply because of their position with the Commission. Hence, in defendants' view, the plaintiff is really making a claim against the Commission. This argument must be rejected. Of course, the defendants have acted only in their capacity as commissioners and thus it could be argued that subjecting them to suit actually involves the Commission *160 which in turn is entitled to eleventh amendment immunity. But this argument ignores the holding of Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), which considers a state official acting in violation of the federal constitution to be "stripped of his official or representative" capacity so that the eleventh amendment would not bar an action against the official. Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 102, 104 S.Ct. 900, 909, 79 L.Ed.2d 67, 80 (1984) (quoting Young, supra, in part). Even if the defendants were sued in their official capacities, an action for prospective declaratory or injunctive relief is "not treated as actions against the state." Kentucky v. Graham, 473 U.S. 159, 167 n. 14, 105 S.Ct. 3099, 3106 n. 14, 87 L.Ed.2d 114, 122 n. 14 (1985); Will v. Michigan Department of State Police, 491 U.S. 58, 71 n. 10, 109 S.Ct. 2304, 2311-12 n. 10, 105 L.Ed.2d 45, 58 n. 10 (1989).[9]
For all of the above reasons we are constrained to deny defendants' motion to dismiss and an appropriate order will issue.
ORDER
AND NOW, this 11th day of June, 1992, upon consideration of defendants' motion to dismiss, it is ORDERED that the motion is DENIED.
A scheduling conference in this matter will be held with counsel on Tuesday, June 30, 1992, at 9:00 a.m. The scheduling order previously entered in this case shall continue in effect.
NOTES
[1] According to the amicus, "Charter Risk has filed with the Insurance Department of the Commonwealth its business plan of operation and all revisions thereto and its annual financial statements as required by 15 U.S.C. § 3902(d)(2) and (3). Charter Risk has designated the Commonwealth's Insurance Commissioner as its agent for service of process as contemplated by 15 U.S.C. § 3902(a)(1)(D). The Insurance Commissioner of the Commonwealth has apparently never sought to initiate an examination of Charter Risk `to determine the group's financial condition' as authorized by 15 U.S.C. § 3902(a)(1)(E) or to allege that Charter Risk is `in hazardous financial condition or is financially impaired,' as would be permitted under 15 U.S.C. § 3902(e)(2)." (Amicus Brief, at 4).
[2] Plaintiff asserts jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), and 1343(a)(3) and (4), that venue is proper pursuant to 28 U.S.C. § 1391(a) and (b), and that it is authorized to bring the present action by Article VI, cl. 2 of the United States Constitution, 42 U.S.C. § 1983, and 28 U.S.C. § 2201.
[3] Section 512 provides:
... all motor carriers of passengers ... shall cover each and every vehicle, transporting such passengers, with a public liability insurance policy or a surety bond issued by an insurance carrier or a bonding company authorized to do business in this Commonwealth....
66 Pa.C.S. § 512 (emphasis added). The Commission's regulations pertaining to passenger carrier insurance provides:
... no certificate or permit will issue, or remain in force, ... until there has been filed with and approved by the Commission a certificate of insurance by an insurer authorized to do business in this Commonwealth.
52 Pa.Code § 32.11(a) (emphasis added). The language "authorized to do business" does not specify that state licensure is required and defendants do not point to any other section which does. Thus, authorization for risk retention groups arguably may be gleaned from the Act's preemption provisions.
[4] See, Home Warranty Corp. v. Caldwell, 777 F.2d 1455, 1472 (11th Cir.1985) ("once a risk retention group was approved by any particular state, that state's minimum capitalization requirements and other requirements enacted under state law for the protection of state citizens would be binding upon the risk retention group on a national basis. Sufficient financial strength to support risks assumed in one state would suffice for underwriting risks nationwide. Functioning thus as an index of public accountability, this qualification in a single state was to be a license binding all states for the operation of risk retention groups nationwide").
[5] This assertion implies that plaintiff is not authorized to do business in Pennsylvania, which is precisely what plaintiff contends is contrary to the Act.
[6] We agree with defendants that section 3905(d) of the Act allows states to demand that its demonstration of financial responsibility include or exclude particular forms of insurance. However, the amicus' argument is well-taken that this provision means that should a particular risk retention group fail to meet conditions of financial responsibility, they may properly be excluded. Any other reading of this provision (such as that states may exclude risk retention groups in general as a means of financial responsibility) would allow states to discriminate against all risk retention groups and their members in violation of the anti-discrimination provisions of the Act.
[7] The orders to show cause were directed not only against utilities insured by risk retention groups but against surplus line carriers, which also are not licensed in Pennsylvania.
[8] Defendants contend that plaintiff is required to prove "purposeful discrimination," yet do not cite any supporting authority. Rather, evidence of discrimination in the present case need only be established according to the meaning of the Act.
[9] Defendants do not contend that the eleventh amendment bars an action against a state official in his individual capacity. Rather, they argue that it cannot be discerned from the complaint what kind of relief is sought. However, as indicated, we construe the complaint as against the defendants individually. They were the commissioners who issued the orders to show cause and as such are allegedly accountable for interpreting and enforcing the laws in question. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453744/ | 256 P.3d 205 (2011)
242 Or. App. 682
STATE
v.
NIX.
Court of Appeals of Oregon.
May 18, 2011.
Affirmed without opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565979/ | 284 S.W.2d 903 (1955)
Lee MANNING, Appellant,
v.
The STATE of Texas, Appellee.
No. 27711.
Court of Criminal Appeals of Texas.
October 19, 1955.
*904 William F. Jackson, J. C. McEvoy, Hempstead, for appellant.
C. W. Karisch, County Atty., Hempstead, Leon B. Douglas, State's Atty., Austin, for the State.
MORRISON, Presiding Judge.
The offense is a violation of Article 924, V.A.P.C., which denounces, among other things, the placing of substances deleterious to fish life in the waters of this State for the purpose of catching fish; the punishment, 90 days in jail and a fine of $100.
The appellant plead guilty without the services of an attorney and then filed a motion for new trial.
We shall discuss the contentions ably briefed and argued in this Court by his capable attorney employed on appeal.
He first contends that the court heard evidence in the absence of the accused. He supports this contention with the following proof. On the morning before the appellant plead guilty, the county attorney acquainted the county judge that certain "fish cases" were to be presented to the court and that "somebody said fish were dead all along the creek." Without a further showing than this, we would not be inclined to give application to the rule expressed in Phelps v. State, 158 Tex. Crim. 510, 257 S.W.2d 302. The appellant showed further that the State had subpoenaed several landowners along Clear Creek to appear at the trial but did not call on them to testify. In his brief he says, "The only conceivable purpose in arraying such landowners before the Judge and in having them in attendance was to influence the County Judge in assessing the maximum penalty herein, which was done." We cannot attribute so sinister a motive to the State, nor can we agree that our court would be so affected.
Appellant next contends that when Article 698b, V.A.P.C. (Pollution of public waters), was enacted in 1943, it had the effect *905 of repealing Article 924, V.A.P.C., under which this prosecution was had.
Article 698b, P.C., does not expressly repeal Article 924, P.C. These articles are not contradictory and may exist at the same time, each being applicable to a different state of facts. Hence, there was no repeal by implication. Naylor v. State, 159 Tex. Crim. 583, 265 S.W.2d 831.
In 12 Tex.Jur., sec. 22, page 238, we find the following:
"But repeals by implication are not favored in law, and the legislative intention to repeal the existing statute must clearly appear."
We are next confronted with appellant's contention that he was induced to plead guilty by prior representations of the county attorney and the game warden that the punishment to be assessed would be a fine only.
The appellant did not testify at the hearing on the motion for new trial. He made an effort to support such contention by the testimony of the two parties who he said misled him, and from an examination of their testimony we have concluded that he failed in such effort.
Appellant says the evidence does not support the maximum penalty. If the punishment is within that prescribed by the statute, it is beyond the province of this Court to pass upon the question. Pineda v. State, 157 Tex. Crim. 609, 252 S.W.2d 177.
His last contention is that there were extenuating circumstances that should have been introduced in evidence. This may certainly be true, but the time to have developed them would have been when he entered his plea before the court.
We find the information to have been drawn in the language of Form 419, Willson's Criminal Forms, and we overrule appellant's contention as to its insufficiency.
Since the justice court had no jurisdiction to try this case, Article 64, V.A. C.C.P., has no application here.
Finding no reversible error, the judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566026/ | 284 S.W.2d 76 (1955)
Doris RAY and Bee Wright, Appellants,
v.
COMMONWEALTH of Kentucky, Appellee.
Court of Appeals of Kentucky.
November 11, 1955.
F. Dale Burke, Pikeville, for appellants.
J. D. Buckman, Jr., Atty. Gen., George B. Akin, Asst. Atty. Gen., for appellee.
*77 CAMMACK, Judge
Doris Ray and Bee Wright are appealing from their conviction of unlawfully and feloniously breaking and entering the building of another and stealing goods therefrom. They, together with Eugene Miller Johnson, were indicted for breaking into the lunch room of the Virgie High School in Pike County, and stealing articles of food which allegedly they ate while driving around in an automobile after the breaking. Ray and Wright were tried together and sentenced to two years' imprisonment.
Approximately two weeks after the break-in occurred, Eugene Johnson signed a confession which implicated both Ray and Wright. It stated that Ray broke out a window in the lunch room, entered the room and handed out food to Johnson, who took it to the car. The confession did not specify Wright's role in the break-in, other than to state that he was a party. It also mentioned a fourth party, the driver of the car, who was unknown to Johnson.
The day after Johnson made his confession it was signed by Wright before a justice of the peace. Ray refused to sign it and denied any connection with, or knowledge of, the crime. At the trial the Johnson-Wright confession was admitted as evidence without any qualification by the court as to its effect or application. Wright testified he was intoxicated when he signed the confession, and did not remember signing it. Also, he denied any connection with the crime. A deputy sheriff testified that Wright said he was drunk and had remained in the car while the others brought the food out.
The only testimony against Ray, other than the Johnson-Wright confession, was that of the high school principal who said Ray told him that he remained outside while the others broke into the school; and that he (Ray) was willing to pay the value of the goods taken. Ray admitted that he talked with the principal and offered to pay for the goods, but he denied saying he had been a party to the crime. He said this conversation occurred six months after his indictment and he wished to keep down publicity because his younger brother and sister were attending the school.
On this appeal Ray contends that the court committed prejudicial error by admitting as evidence against him the Johnson-Wright confession. Wright contends that (1) the evidence was insufficient to show his participation in the crime; and (2) the evidence necessitated an instruction on his drunkenness and its effect upon the question of his intent to commit the offense with which he was charged.
Aside from the question of conspiracy, the confession was improperly admitted as evidence against Ray. It was mere hearsay, and therefore inadmissible. It did not bear his signature, hence was not an admission on his part. Nor was the statement made in his presence so as to constitute a tacit admission.
On the question of a conspiracy, it is well settled that evidence of a conspiracy is admissible under an indictment charging only a particular offense. Shell v. Commonwealth, 245 Ky. 223, 53 S.W.2d. 524; Crenshaw v. Commonwealth, 227 Ky. 223, 12 S.W.2d 336; Day v. Commonwealth, 173 Ky. 269, 191 S.W. 105; 11 Am. Jur., Conspiracy, section 37. When a conspiracy is established, the acts and declarations of each participant are admissible against his co-conspirators. Canada v. Commonwealth, 281 Ky. 641, 136 S.W.2d 1061; 11 Am.Jur., Conspiracy, section 40; but this type of evidence is competent only when a prima facie showing of the conspiracy is made. Canada v. Commonwealth, 281 Ky. 641, 136 S.W.2d 1061; Davis v. Commonwealth, 256 Ky. 423, 76 S.W.2d 259. Even after such independent proof of the conspiracy is shown, statements of the conspirators are admissible against each other only if the statements were made in furtherance of the common purpose; and only if the conspiracy existed at the time the statements were made. Meadors v. Commonwealth, 281 Ky. 622, 136 S.W.2d 1066; Shell v. Commonwealth, 245 Ky. 223, 53 S.W.2d 524; 11 Am.Jur., Conspiracy, section *78 41. Applying these principles to the instant case, it is clear that the Johnson-Wright confession should not have been admitted as evidence against Ray. There was no prima facie showing of a conspiracy between the appellants and Johnson. Furthermore, it can not be said that the statement was made in furtherance of the objects of a conspiracy, and it is clear that the conspiracy, if any, had terminated at the time the confession was made. The statement by Johnson and Wright was highly prejudicial to Ray, and, therefore, it was reversible error to permit its introduction as evidence against him.
Wright's first contention on this appeal is that the evidence against him merely pointed to his presence in the automobile at the time of the crime and did not show his participation in the unlawful act. It is true that mere presence, in the absence of some sort of participation in a crime, is not sufficient to constitute one an aider and abettor. Alexander v. Commonwealth, 285 Ky. 233, 147 S.W.2d 401. However, Wright signed the confession which read, "On the night of February 23rd, Monday night, 1953, that myself, Eugene Miller Johnson, Bee Wright and Doris Ray did break into the Virgie High School lunch room * * *." This, of itself, was sufficient evidence to support a conviction as a participant in the crime.
Wright next contends that the court should have given an instruction on intoxication. It is axiomatic that it is the duty of the trial court to instruct on all the law in a criminal case and to present fairly the defense of the accused. Intent to steal is an element of the crime with which Wright was charged. We have held that in a prosecution for a crime in which intent to steal is an essential element, it is reversible error to fail to charge that the accused should be acquitted if he was too drunk to entertain the required intent. Allen v. Commonwealth, 277 Ky. 168, 125 S.W.2d 1013; Mays v. Commonwealth, 265 Ky. 558, 97 S.W.2d 419; Brennon v. Commonwealth, 169 Ky. 815, 185 S.W. 489. These cases, of course, make it clear that such an instruction must be justified by the evidence.
We think there was sufficient evidence to support an instruction on Wright's drunkenness. A deputy sheriff testified that Wright told him he remained in the car while the school was broken into, and was drunk and did not know what articles had been taken from the school. Wright testified that he was a heavy drinker; that he did not remember anything about the night the crime was committed; and that he was drunk when he signed the confession and did not know what he was signing. The tenor of all the evidence on the question is that Wright, due to intoxication, could remember nothing about the crime. Under these circumstances, an instruction should have been given on intoxication and its effect upon the intent required for the commission of this crime.
The judgments are reversed, with directions to set them aside, and for proceedings consistent with this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559290/ | 796 F. Supp. 754 (1992)
Angel A. BRITO, Plaintiff,
v.
William J. DIAMOND, Regional Administrator, General Services Administration, Region 2, General Services Administration, Region 2, Richard Austin, Administrator, General Services Administration, General Services Administration, United States of America, John Ulianko, individually and in his official capacity as Chief of Operations, Law Enforcement Branch, General Services Administration, Region 2, Horst E. Mueller, individually and in his official capacity as Regional Personnel Officer, General Services Administration, Region 2, Defendants.
No. 91 Civ. 0982 (RLC).
United States District Court, S.D. New York.
June 26, 1992.
*755 BLS Legal Services Corp., Federal Litigation Program (Minna J. Kotkin, of counsel), Brooklyn, N.Y., for plaintiff.
Otto G. Obermaier, U.S. Atty., S.D.N.Y. (Sara L. Shudofsky, of counsel), New York City, for defendants.
OPINION
ROBERT L. CARTER, District Judge.
Plaintiff Angel Brito brings this action asserting various claims in connection with his dismissal from his position as a Federal Police Officer employed by the General Services Administration ("GSA"). Defendants in this action are: William Diamond, Regional Administrator of the GSA, Region 2; the GSA, Region 2; Richard Austin, Administrator of the GSA; the GSA; the United States of America; John Ulianko, a GSA official; and Horst E. Miller, a GSA official. Plaintiff alleges violations of the First and Fifth Amendments to the United States Constitution, the Civil Service Reform Act, 5 U.S.C. § 7114 et seq. (1988), his collective bargaining agreement, and GSA regulations. Plaintiff also asserts that his dismissal was arbitrary and capricious. Defendants have moved, under Rule 12(c), F.R.Civ.P., for judgment on the pleadings and alternately under Rule 56, F.R.Civ.P., for summary judgment on all plaintiff's claims. Plaintiff has moved for summary judgment on his Fifth Amendment claim.
I.
The GSA hired plaintiff Angel Brito as a Federal Police Officer on June 5, 1989. Plaintiff's first year of service was a probationary period and, according to the GSA's records, plaintiff executed his duties completely satisfactorily until March 23, 1990. On that date, according to the GSA, plaintiff, while on duty, received a radio message directing him to respond to a call but replied that he could not respond because he was having lunch. The GSA also alleges that on March 26, plaintiff broadcast a message over the official Federal Protective Service telecommunications system directing all units to respond to an emergency *756 when in fact plaintiff knew that no emergency existed. The GSA further alleges that on March 27, after a meeting with defendant Ulianko and another GSA official concerning the March 23 and March 26 incidents, plaintiff failed to report back to work in a reasonable time. Plaintiff contests the accuracy of the GSA's descriptions of the March 23 and March 27 incidents, although he does not substantially contest the accuracy of the description of the March 26 incident. Plaintiff also asserts that at the March 27 meeting with defendant Ulianko, he requested to have his union representative present but was prevented from doing so until the meeting had ended.
In a memorandum dated May 14, 1990, defendant Mueller informed plaintiff that his employment by the GSA would be terminated on May 25, ten days before the end of his probationary period. The memorandum cited the March 23 and March 26 incidents. No formal hearing was held with respect to plaintiff's alleged misconduct and the GSA terminated him on May 25. The GSA remained in possession of plaintiff's personnel file which contained records of the March 23, 26 and 27 incidents and the reasons for plaintiff's termination. The GSA's procedures allow it to distribute plaintiff's personnel file to prospective employers. Plaintiff appealed his termination to the Merit Systems Protection Board, which dismissed the appeal, but did not file a claim with the Federal Labor Relations Authority. Plaintiff subsequently began this action.
II.
Defendants have submitted affidavits and other material with their motion. Since the motion will be decided based on this extra-pleading material, as well as that submitted by plaintiff, it may not be decided on the basis of a judgment on the pleadings, see Rule 12(c), F.R.Civ.P., and must be evaluated as a motion for summary judgment. See id. In order to prevail on a summary judgment motion, a party must show that "there is no genuine issue as to any material fact and that [he] is entitled to a judgment as a matter of law." Rule 56, F.R.Civ.P. The court is not to "weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue" which must be reserved for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In this inquiry, the court must decide whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250, 106 S.Ct. at 2511.
III.
Both plaintiff and defendants have moved for summary judgment on plaintiff's Fifth Amendment claim. Plaintiff claims that his dismissal constituted a deprivation of liberty without due process of law in violation of the Fifth Amendment because he was denied a hearing to refute the charges against him.[1] In Board of Regents of State Colleges v. Roth, 408 U.S. 564, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972), the Supreme Court held that a government employee's liberty interest is implicated when he is dismissed amid charges that "impose[] on him a stigma or other disability that foreclose[s] his freedom to take advantage of other employment opportunities" or that "might seriously damage his standing and associations in his community." See id. at 573, 92 S.Ct. at 2707. The court stated that, for example, charges of "dishonesty, or immorality" would stigmatize an employee because they call into question his "`good name, reputation, honor, or integrity.'" Id. (quoting Wisconsin v. Constantineau, 400 U.S. 433, 437, 91 S. Ct. 507, 510, 27 L. Ed. 2d 515 (1971)). In such a case, the employee must be provided with a name-clearing hearing. See id.
*757 In order for a dismissal to be an unconstitutional deprivation of liberty, the charges against the dismissed employee must be stigmatizing and likely to be disclosed to prospective employers, and the employee must allege that the charges are false. See, e.g., Brandt v. Board of Coop. Educ. Servs., Third Supervisory Dist., 820 F.2d 41 (2d Cir.1987). In the present case, defendants claim that the allegations surrounding plaintiff's dismissal are not sufficiently stigmatizing to constitute an unconstitutional deprivation of liberty.
In order to be stigmatized enough to be deprived of liberty, a dismissed employee must be accused of something more than unsatisfactory job performance. In Russell v. Hodges, 470 F.2d 212 (2d Cir. 1972), the Second Circuit, per Judge Friendly, evaluated a liberty interest claim of an employee who had been dismissed based on allegations of incompetence. The court, in rejecting his liberty interest claim, stated:
[W]e believe the Court [in Roth] was thinking of something considerably graver than a charge of failure to perform a particular job, lying within the employee's power to correct; the cases cited as illustrations involved charges of chronic alcoholism or association with subversive organizations. Indeed, a general rule that informing an employee of job-related reasons for termination created a right to a hearing, in circumstances where there was no constitutional requirement for the state to do anything, would be self-defeating; the state would merely opt to give no reasons and the employee would lose the benefit of knowing what might profit him in the future.
470 F.2d at 217. The Court of Appeals read Roth to mean that an accusation of incompetence is insufficient to constitute an unconstitutional deprivation of liberty. See id.; see also Schwartz v. Thompson, 497 F.2d 430, 432 & n. 3 (2d Cir.1974) (explaining Russell's holding).
Building on this holding, this court has held that a dismissal must be accompanied by an accusation of dishonesty, illegality or immorality in order to meet Roth's requirement that the employee be stigmatized. See Capers v. Long Island R.R., 429 F. Supp. 1359, 1368 (S.D.N.Y.) (Gagliardi, J.) (accusations of incompetence and inability to get along with coworkers are not sufficient), aff'd without opinion sub nom Harris v. Long Island R.R., 573 F.2d 1291 (2d Cir.1977); see also Watson v. Sexton, 755 F. Supp. 583, 592 (S.D.N.Y.1991) (Mukasey, J.) (accusations of drug use are sufficiently stigmatizing, but accusations of abuse of company sick time and lateness policy are insufficient); Nauta v. City of Poughkeepsie, 610 F. Supp. 980 (S.D.N.Y. 1985) (Lasker, J.) (accusations of inefficiency and incompetence are not sufficient). Plaintiff appears to concede that the accusations against him do not meet this standard.
Plaintiff, however, argues that the Second Circuit has modified this rule, and that the proper test merely requires plaintiff to show that the charges are stigmatizing enough to foreclose other job opportunities, rather than requiring him to show that he has been accused of dishonesty, illegality or immorality. Plaintiff relies on Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438 (2d Cir.1980). There the Court of Appeals noted that Roth does not impose a requirement that the employee be accused of immorality or dishonesty and that "[o]ur review of analogous cases indicates that stigmatizing information is not limited to charges of illegality, dishonesty or immorality." 613 F.2d at 446 n. 4. However, that portion of Quinn was dicta since in that case there were allegations of dishonesty and since the court did not rely on this language for its disposition of the case. See 613 F.2d at 446-47. Hence Russell and its progeny must be regarded as providing the governing law.[2]
Therefore plaintiff must show that he was dismissed amid allegations of dishonest, *758 illegal or immoral conduct in order to be stigmatized enough to be unconstitutionally deprived of liberty. Plaintiff is required to present facts that would support such a showing for his Fifth Amendment claim to survive a summary judgment motion. Since he has not done so, his Fifth Amendment claim must be dismissed.
IV.
A.
In addition to his claim that he was denied a hearing in violation of Due Process, plaintiff also claims that he was denied the opportunity to have his union representative present at his March 27 meeting with defendant Ulianko and another GSA official concerning his alleged misconduct. Plaintiff alleges that this denial violated his statutory right to union representation under Title VII of the Civil Service Reform Act of 1978 ("CSRA" or "the Act"), 5 U.S.C. § 7101 et seq. (1988). Defendants have moved to dismiss this claim, contending that Title VII requires that the claim be asserted administratively before the Federal Labor Relations Authority ("FLRA") before being brought in federal court.
Since its enactment in 1978, Title VII of the CSRA has been "the controlling authority" governing labor relations between the federal government and its employees. Karahalios v. National Fed'n of Fed. Employees, Local 1263, 489 U.S. 527, 531, 109 S. Ct. 1282, 1285, 103 L. Ed. 2d 539 (1989). Title VII provides a complex statutory scheme governing labor relations in the federal sector, which the FLRA has primary responsibility for administering. The FLRA has broad authority to adjudicate claims arising under the statute. See 5 U.S.C. § 7105. Review of a final decision of the authority is available in the federal courts. See 5 U.S.C. § 7123(a), (b).
It is settled law that the FLRA has exclusive jurisdiction over Title VII claims. Courts have concluded that both the structure of the Act, with its complex system for administrative resolution of labor disputes, and its legislative history indicate that Congress intended the procedures outlined in the Act to be the exclusive means for resolving disputes arising under Title VII. See Karahalios, supra, 489 U.S. at 531-37, 109 S.Ct. at 1285-88; Columbia Power Trades Council v. United States Dep't of Energy, 671 F.2d 325, 326-27 (9th Cir.1982); Walsh v. United States, 588 F. Supp. 523, 525-26 (N.D.N.Y.1983); Clark v. Mark, 590 F. Supp. 1, 5-8 (N.D.N.Y.1980). For this reason, courts have refused to create an implied right of action in federal court for adjudication of Title VII disputes, see Karahalios, supra, 489 U.S. at 531-37, 109 S.Ct. at 1285-88, and have even held that the enactment of the CSRA implicitly repealed certain prior grants of federal court jurisdiction to adjudicate labor disputes. See United States v. Fausto, 484 U.S. 439, 108 S. Ct. 668, 98 L. Ed. 2d 830 (1988) (CSRA repealed former direct rights of action under Tucker Act and Back Pay Act).
Therefore, plaintiff's claim that his dismissal violated his statutory right to union representation under Title VII of the CSRA comes within the exclusive jurisdiction of the FLRA and must be asserted before that agency. Federal court review of this claim is only available after it has been asserted before the FLRA and the agency has rendered a final decision. Therefore the claim must be dismissed.
Plaintiff also claims that his dismissal violated his union's collective bargaining agreement and internal GSA rules and regulations. These claims must also be dismissed, since they are also Title VII claims meant to be asserted before the FLRA as unfair labor practices, see 5 U.S.C. §§ 7116(a)(1), (7), (8), 7118, or through Title VII's grievance procedures. See 5 U.S.C. § 7103(a)(9), 7121.
B.
Plaintiff also brings a constitutional claim based on the alleged denial of his request to have a union representative present at the March 27 meeting. Plaintiff asserts that this denial violated his right to associate under the First Amendment to the United States Constitution. Defendants *759 have moved to dismiss this claim, contending that it must also be asserted before the FLRA.
The requirement that claims cognizable under Title VII of the CSRA be asserted in that statute's administrative processes has been extended to constitutional claims. In Bush v. Lucas, 462 U.S. 367, 103 S. Ct. 2404, 76 L. Ed. 2d 648 (1983), the Supreme Court declined to recognize a Bivens-type federal court remedy for a federal employee who claimed he was discharged in violation of his First Amendment right to free speech. The Court reasoned that Congress' creation of the complex statutory and regulatory scheme embodied in the CSRA and its associated regulations militated against the fashioning of an additional, constitutional remedy. See 462 U.S. at 374-90, 103 S.Ct. at 2409-17. The concurrence, however, noted that the personnel actions complained of in that case could be adequately remedied in the administrative process and that different result would be dictated if there was not an adequate administrative remedy for the unconstitutional conduct. See 462 U.S. at 390-91, 103 S.Ct. at 2417-18 (Marshall, J., concurring). While the Supreme Court decided Bush in the context of the CSRA's provisions governing dismissals for misconduct, see 462 U.S. at 386-87, other courts have applied the same rationale to constitutional claims cognizable under Title VII of the CSRA.
In Andrade v. Lauer, 729 F.2d 1475 (D.C.Cir.1984), the D.C. Circuit held that a federal court must decline jurisdiction over constitutional claims when they are "virtually identical" to claims that could be asserted under Title VII, if the administrative process is "capable of granting full relief," and if there is a "fair and efficient administrative process" to handle the claims. See 729 F.2d at 1492-93. In that situation, the employee must be relegated to the administrative process. See id. Any other rule would allow federal employees to circumvent Title VII's administrative processes simply by "clever drafting of a complaint." Steadman v. Governor, United States Soldiers' & Airmen's Home, 918 F.2d 963, 967 (D.C.Cir.1990). Other courts have similarly held that when a constitutional claim is identical to a claim cognizable under Title VII, the employee must assert his claim in the administrative process. See Carter v. Kurzejeski, 706 F.2d 835, 841-42 & n. 9 (8th Cir.1983); Walsh, supra, 588 F.Supp. at 526-27; Clark, supra, 590 F.Supp. at 8. The aggrieved employee may assert his constitutional claim in federal court, through the appropriate review procedure, only after he has exhausted the administrative process. See Steadman, supra, 918 F.2d at 968; Carter, supra, 706 F.2d at 841 (noting that judicial review of administrative determinations under Title VII includes review of constitutional claims).
In the present case, plaintiff's constitutional claim is a mere restatement of his Title VII claim. Plaintiff's claim that he had a right to "associate" with his union representative at the March 27 meeting is merely a repetition of his Title VII claim that he had a right to have that representative present at that meeting, and he seeks the same damages for both claims. If the administrative process is fair and capable of hearing his claim, then the claim must be asserted in that process. See Andrade, supra, 729 F.2d at 1492-93. As the following discussion indicates, Title VII's administrative processes provided plaintiff with two avenues to adjudicate this claim, each of which appears to be a fair means for its resolution.
First, plaintiff could have challenged the denial of his request for union representation as an unfair labor practice. 5 U.S.C. § 7114(a)(2) provides, in pertinent part:
An exclusive representative of an appropriate unit in an agency shall be given the opportunity to be represented at
. . . . .
(B) any examination of an employee in the unit by a representative of the agency in connection with an investigation if (i) the employee reasonably believes that the examination may result in disciplinary action against the employee; and (ii) the employee requests representation.
See also Internal Revenue Serv. v. Federal Labor Relations Auth., 671 F.2d 560, 562-63 (D.C.Cir.1982). Under this provision, *760 plaintiff had the right to have his union representative present at the March 27 meeting, since it would be reasonable to expect that the misconduct plaintiff was accused of might lead to disciplinary action. Denial of this right is an unfair labor practice, see 5 U.S.C. § 7116(a)(8), for which plaintiff could have filed a charge with the FLRA. See 5 U.S.C. § 7118(a)(1). Plaintiff's probationary status forecloses neither this right nor plaintiff's right to resort to grievance procedures. See 5 U.S.C. § 7103(a)(2). The FLRA has authority to conduct a hearing on the complaint and grant the appropriate relief, see 5 U.S.C. § 7118(a)(2), (5)-(8), with ultimate judicial review or enforcement of its final action available in the appropriate United States Court of Appeals. See 5 U.S.C. § 7123(a), (b).
Alternatively, since Title VII mandates that grievance procedures be included in collective bargaining agreements, see 5 U.S.C. § 7121(a)(1), plaintiff could have asserted his claim through the applicable grievance procedure. Since Title VII defines "grievance" broadly enough to encompass plaintiff's claim that his right to union representation was denied, see 5 U.S.C. § 7103(a)(9)(A) ("`grievance' means any complaint by any employee concerning any matter relating to the employment of the employee."), plaintiff could have used this procedure.[3] Unresolved grievances are submitted to arbitration, see 5 U.S.C. § 7121(b)(3)(C), with review of the arbitration award in the FLRA, see 5 U.S.C. § 7122(a), and, in cases involving unfair labor practices, in the United States Courts of Appeals. See 5 U.S.C. § 7123(a), (b).
Since plaintiff's constitutional claim is indistinguishable from his Title VII claim and the administrative process is fair and capable of providing him with complete relief, the constitutional claim must be dismissed along with the statutory one.[4]
V.
Lastly, defendants have moved to dismiss plaintiff's claim that his dismissal was arbitrary and capricious, arguing that plaintiff's claim is insufficient on the merits. This issue, however, need not be decided because the court lacks jurisdiction to hear the claim.
In his complaint, plaintiff bases jurisdiction over this claim on the judicial review provisions of the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. However, plaintiff misconceives the nature of the APA. The APA is not interpreted as a grant of jurisdiction to review agency actions. See, e.g., Estate of Watson v. Blumenthal, 586 F.2d 925, 932 (2d Cir. 1978). Jurisdiction must be based on some authority outside of the Act.
An alternate basis for jurisdiction might be the federal courts' authority to review decisions of the Merit Systems Protection Board ("MSPB"), since plaintiff appealed his dismissal to the Board pursuant to 5 C.F.R. § 315.806 (1992).[5] However, exclusive jurisdiction to review the MSPB's denial of plaintiff's claim is lodged in the Court of Appeals for the Federal Circuit, except in cases involving discrimination. See 5 U.S.C. § 7703(b)(1), (2); 28 U.S.C. § 1295(a)(9). Since plaintiff has not alleged that his dismissal was the product of discrimination, this court has no jurisdiction *761 over an appeal from the MSPB. Likewise, plaintiff cannot base jurisdiction on the federal courts' authority to review Title VII claims, since he has not pursued his claim in Title VII's administrative processes and federal court review of such claims is available only in the Courts of Appeals.
The complaint asserts other bases for jurisdiction over a challenge to agency decisionmaking but these are also inadequate. District Court jurisdiction may not be founded on 28 U.S.C. § 1331 when a different court is given exclusive jurisdiction over challenges to agency action. See, e.g., Estate of Watson, supra, 586 F.2d at 932. Likewise, plaintiff's attempt to ground jurisdiction in the mandamus statute, 28 U.S.C. § 1361, cannot succeed, since "the extraordinary relief it provides is unavailable when adequate alternative remedies exist." Wingate v. Harris, 501 F. Supp. 58 (S.D.N.Y.1980) (Carter, J.). Since, as explained above, the statutory scheme governing plaintiff's claims provided him with a plethora of remedies, the mandamus statute does not provide additional relief.
The court has been unable to discern any basis for jurisdiction over plaintiff's challenge to his dismissal as arbitrary and capricious and this claim must be dismissed.
CONCLUSION
Accordingly, plaintiff's motion, under Rule 56, F.R.Civ.P., for summary judgment on his Fifth Amendment claim is denied. Defendants' motion, under Rule 12(c), F.R.Civ.P., for judgment on the pleadings is denied. Defendants' motion, under Rule 56, F.R.Civ.P., for summary judgment on all of plaintiff's claims is granted and this action is dismissed.
IT IS SO ORDERED.
NOTES
[1] While, as a probationary employee, plaintiff had no Fifth Amendment property interest in continued employment, see Smith v. Lehman, 689 F.2d 342, 345 (2d Cir.1982), cert. denied, 459 U.S. 1173, 103 S. Ct. 820, 74 L. Ed. 2d 1018 (1983), he still possessed a liberty interest in protecting his reputation from the publication of false information. See id. at 346 n. 8.
[2] Likewise, plaintiff's argument that Roth's language is broad enough to encompass the rule he prefers may also be rejected. While Roth's language is broad enough to be given this construction, the Supreme Court was not faced with the present issue in Roth or any subsequent case. Hence the rule in this court will be followed.
[3] Plaintiff asserts that he "was prohibited from seeking relief through the arbitration or grievance procedures under his union agreement." Plaintiff's Memorandum of Law in Opposition to Defendant's Motion at 15. However, plaintiff has neither included a copy of the agreement nor explained why it excludes him from its provisions. As explained in the text, Title VII envisions that such agreements should be broad enough to cover persons such as plaintiff. In any event, even if plaintiff was foreclosed from seeking relief through the grievance procedures he nonetheless could have asserted his claim before the FLRA as an unfair labor practice.
[4] Plaintiff opposes this part of defendants' motion by explaining that his Fifth Amendment claim is not cognizable before the FLRA, since the FLRA will not grant him a name-clearing hearing but will only evaluate his allegation that he was denied union representation. Since the Fifth Amendment claim has been dismissed, this argument need not be considered.
[5] 5 C.F.R. § 315.806 gives probationary employees the right to appeal termination decisions to the Merit Systems Protection Board, although only limited issues may be raised on appeal. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559294/ | 796 F. Supp. 633 (1992)
BANK OF NEW ENGLAND OLD COLONY, N.A., and Federal Deposit Insurance Corp., as Receiver, Plaintiffs
v.
R. Gary CLARK, Tax Administrator of the State of Rhode Island, Defendant.
Civ. A. No. 91-408L.
United States District Court, D. Rhode Island.
June 15, 1992.
*634 Mark A. Pogue, Alfred Samuel Lombardi, Edwards & Angell, Providence, R.I., for plaintiffs.
Bernard J. Lemos, Marcia McGair Ippolito, R.I. Div. of Taxation, Providence, R.I., for defendant.
MEMORANDUM AND ORDER
LAGUEUX, District Judge.
I. INTRODUCTION
This case presents a thought-provoking issue arising out of an apparent conflict between the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), 12 U.S.C. § 1819 (1988 & Supp. I 1989), and the principles of comity and abstention embodied in the Tax Injunction Act of 1937, 28 U.S.C. § 1341 (1988). Plaintiffs are the Bank of New England Old Colony, N.A. ("BNE") and its receiver, the Federal Deposit Insurance Corporation ("FDIC"). Defendant is R. Gary Clark, Rhode Island's Tax Administrator. Plaintiffs claim that Rhode Island owes BNE a refund for state bank excise taxes paid for calendar year 1987.
This case really started on September 15, 1988, when BNE filed its Bank Excise Tax Return for the calendar year 1987 with the Rhode Island Tax Division, claiming a refund for taxes already paid. In October of 1988, a partial refund was issued to BNE. BNE contested this decision because it *635 wanted a larger refund. It requested and received an administrative hearing. Thereafter, the Tax Administrator issued a Final Decision and Order on August 15, 1990, in which he affirmed the previous decision and denied BNE's claim for an additional refund. BNE then filed a complaint in the Rhode Island District Court, Sixth Division, seeking a de novo review of the Tax Administrator's Decision under applicable state law.
In January 1991, while review of the administrative Decision was pending before the Rhode Island District Court, BNE was declared insolvent. The FDIC became BNE's receiver in July 1991, and the FDIC removed the case to this Court in August 1991.
Defendant moved to dismiss the case or to remand it to the Rhode Island District Court, contending that the Tax Injunction Act prohibits federal courts from adjudicating state tax disputes. The FDIC opposed the motion, arguing that FIRREA gives the FDIC extremely broad powers, confers jurisdiction on this Court to hear the matter, and provides an implicit exemption from the Tax Injunction Act.
The matter was referred to a Magistrate Judge for consideration under 28 U.S.C. § 636 and Fed.R.Civ.P. 72. On February 24, 1992, Magistrate Judge Hagopian issued a Memorandum and Order, concluding that the matter was properly removed to this Court and, therefore, defendant's motion to remand had to be denied. On the same date he issued a Report and Recommendation to the effect that since this Court has jurisdiction of the matter, defendant's motion to dismiss should be denied. The defendant then filed an objection to the denial of the motion to remand (effectively an appeal) as well as an objection to the Recommendation that the motion to dismiss be denied, thus bringing the whole matter before this Court for review.
Briefs were filed by both sides, and the Court heard oral arguments and thereafter took the matter under advisement. It is now in order for decision.
Only a few other courts have faced this clash between FIRREA and the Tax Injunction Act. Courts that have considered the problem have reached different conclusions. See, e.g., Federal Deposit Ins. Corp. v. New York, 732 F. Supp. 26, 28 (S.D.N.Y.1990) (Tax Injunction Act requires dismissal of FDIC's suit from federal court, despite FIRREA), aff'd, 928 F.2d 56 (2d Cir.1991); Federal Deposit Ins. Corp. v. City of New Iberia, 921 F.2d 610, 613 (5th Cir.1991) (FDIC is exempt from Tax Injunction Act). In the First Circuit, this is apparently a question of first impression.
The problem raises difficult questions of statutory interpretation, the relationship between federal and state governments, and the nature and powers of the FDIC. For the reasons that follow, the Court concludes that, under FIRREA, the Court has jurisdiction of cases involving the FDIC even when no federal question is presented. However, under the Tax Injunction Act, this Court is powerless to resolve this particular controversy involving state taxes and, therefore, the only equitable solution to this impasse is to remand the case to the state courts, where this dispute can be resolved.
II. DISCUSSION
A. Background Facts and Standard of Review
The facts relevant to this matter are not in dispute. The FDIC, as receiver for BNE, challenges a state tax that was imposed on BNE in 1987. It raises an issue purely of state law. A review of the administrative proceedings was underway in the Rhode Island courts before the FDIC removed the action to this Court in 1991.
This Court reviews the Magistrate Judge's Report and Recommendation de novo. Fed.R.Civ.P. 72(b). It normally reviews a Magistrate Judge's decision to deny a motion to remand under a "clearly erroneous" standard, but since only questions of law are presented here, a de novo standard applies in this case. See 28 U.S.C. § 636 (1988).
*636 B. FIRREA
With the 1989 enactment of FIRREA,[1] Congress granted the FDIC's wish list, which included substantially expanded jurisdiction for the federal courts to hear claims brought or removed by the FDIC. Pima Fin. Serv. Corp. v. Intermountain Home Sys., Inc., 786 F. Supp. 1551, 1557 (D.Colo.1992); see also National Credit Union Admin. Bd. v. Regine, 749 F. Supp. 401, 410 (D.R.I.1990). The Court must follow FIRREA's jurisdictional commands.
When the FDIC removed the action to this Court,[2] FIRREA provided:
Except as provided in subparagraph (D), the [FDIC] may, without bond or security, remove any action, suit, or proceeding from a State court to the appropriate United States district court.
12 U.S.C. § 1819(b)(2)(B) (1988 & Supp. I 1989). Subparagraph (D), which applies to receivership of state-insured institutions, is not relevant to this case. FIRREA also provides:
The [FDIC], in any capacity, shall be an agency of the United States for purposes of section 1345 of Title 28, without regard to whether the [FDIC] commenced the action.
Id. § 1819(b)(1). Section 1345 of Title 28 sets forth:
Except as otherwise provided by Act of Congress, the district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States, or by any agency or officer thereof expressly authorized to sue by Act of Congress.
28 U.S.C. § 1345 (1988).
This is extremely clear and direct language. The broad jurisdictional grant of section 1819 applies to any action removed by the FDIC and, except as otherwise provided by another federal statute, all claims brought by the FDIC in any capacity. 12 U.S.C. § 1819(b) (1988 & Supp. I 1989), 28 U.S.C. § 1345 (1988). Clearly, Congress wanted the federal courts to have jurisdiction of all cases in which the FDIC is a party. See Pernie Bailey Drilling Co. v. FDIC, 905 F.2d 78, 80 (5th Cir.1990).
C. The Tax Injunction Act, Comity, and Abstention
The Tax Injunction Act, 28 U.S.C. § 1341, broadly prohibits federal district courts from adjudicating a taxpayer's challenge to a state tax. This law normally requires the federal courts to dismiss or remand all state tax claims. See, e.g., Keating v. Rhode Island, 785 F. Supp. 1094 (D.R.I.1992). The statute provides:
The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.
28 U.S.C. § 1341 (1988).
The Tax Injunction Act is certainly relevant to this dispute. Any action by this Court granting plaintiffs their requested tax refund, including a declaratory judgment, would "restrain the assessment, levy or collection of a tax under State law." California v. Grace Brethren Church, 457 U.S. 393, 408, 102 S. Ct. 2498, 2507, 73 L. Ed. 2d 93 (1982); United Gas Pipe Line Co. v. Whitman, 595 F.2d 323, 325-26 (5th Cir.1979); Keating, 785 F.Supp. at 1097. This Court has already determined conclusively that Rhode Island's procedures for challenging state taxes meet the other requirements of section 1341. Keating, 785 F.Supp. at 1097; Sterling Shoe Co. v. Norberg, 411 F. Supp. 128, 132-33 (D.R.I.1976); Fruit Growers Express Co. v. Norberg, C.A. No. 78-0045 (D.R.I.1981).
In addition to the Tax Injunction Act, longstanding principles of federalism also weigh against litigating this dispute in federal court. American federalism embodies: *637 a system in which there is sensitivity to the legitimate interests of both State and National Governments, and in which the National Government, anxious though it may be to vindicate and protect federal rights and federal interests, always endeavors to do so in ways that will not unduly interfere with the legitimate activities of the States.
Younger v. Harris, 401 U.S. 37, 44, 91 S. Ct. 746, 750, 27 L. Ed. 2d 669 (1971), quoted in Colonial Courts Apartment Co. v. Paradis, 780 F. Supp. 88, 90 (D.R.I.1992). To preserve this political balance, federal courts should permit state courts to adjudicate state-law cases free from federal interference, especially when the parties may fully litigate their claims in state court. Hicks v. Miranda, 422 U.S. 332, 349, 95 S. Ct. 2281, 2291-92, 45 L. Ed. 2d 223 (1975); Younger, 401 U.S. at 43, 91 S.Ct. at 750. A federal district court should abstain from ruling on claims, even those involving federal constitutional questions, whenever ongoing state judicial proceedings involving important state interests have been initiated, substantive proceedings on the merits have not yet taken place in the federal court, and the state proceedings afford an adequate opportunity to raise the federal claims. Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229, 237-38, 104 S. Ct. 2321, 2327-28, 81 L. Ed. 2d 186 (1984); Middlesex County Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 432, 102 S. Ct. 2515, 2521, 73 L. Ed. 2d 116 (1982); Medical Malpractice Joint Underwriting Ass'n of R.I. v. Pfeiffer, 832 F.2d 240, 243 (1st Cir. 1987); Colonial Courts, 780 F.Supp. at 90. The grounds for abstention are even more compelling when the dispute centers on a pure question of state law. Federal Reserve Bank of Boston v. Commissioner of Corp. & Taxation, 499 F.2d 60, 64 (1st Cir.1974).
The Tax Injunction Act's prohibitions are closely related to the abstention doctrine. See generally Keating, 785 F.Supp. at 1097. For state tax disputes, the Tax Injunction Act codified a jurisdictional rule that had previously been a judicial policy of comity and restraint. See United Gas Pipe Line, 595 F.2d at 324-25. The statute does not, however, subsume the common law doctrine or codify every aspect of the traditional principles. Rosewell v. LaSalle Nat'l Bank, 450 U.S. 503, 525, 101 S. Ct. 1221, 1235, 67 L. Ed. 2d 464 (1981). The Tax Injunction Act does not alter the federal courts' duty to employ principles of comity and abstention. Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 300-01, 63 S. Ct. 1070, 1074, 87 L. Ed. 1407 (1943), cited in United States v. State Tax Comm'n, 481 F.2d 963, 972 (1st Cir.1973). Most importantly, the Tax Injunction Act does not alter the "federal instrumentalities" exception to the traditional doctrines of comity and abstention.
D. The Federal Instrumentalities Exception
Section 1341 and the principles upon which it is based are subject to a significant federal common law exception. When a state attempts to tax an instrumentality of the federal government that, under the Constitution or a federal statute, is exempt from state taxation, the instrumentality may pursue its claim in federal court despite the Tax Injunction Act. Department of Employment v. United States, 385 U.S. 355, 358, 87 S. Ct. 464, 466-67, 17 L. Ed. 2d 414 (1966); see also State Tax Comm'n, 481 F.2d at 975; Federal Deposit Ins. Corp. v. New York, 928 F.2d 56, 58-59 (2d Cir.1991). The rationale for grafting this common law exception onto a clearly worded federal statute is the presumption that Congress would not deny the United States access to its own courts without explicitly saying so. See Housing Auth. of Seattle v. Washington Dep't of Revenue, 629 F.2d 1307, 1310-11 (9th Cir.1980).
The federal instrumentality exception does not apply in this case. Although it is a tax-exempt federal agency, the FDIC is not always entitled to this exception. The exception is limited to federal instrumentalities that challenge state taxes on the basis of a federal statute or the Constitution. In the words of the Supreme Court, the Tax Injunction Act does not apply to suits brought "by the United States to protect itself and its instrumentalities *638 from unconstitutional state exactions." Department of Employment, 385 U.S. at 358, 87 S.Ct. at 467 (emphasis added); Moe v. Confederated Salish & Kootenai Tribes of Flathead Reservation, 425 U.S. 463, 470, 96 S. Ct. 1634, 1639-70, 48 L. Ed. 2d 96 (1976). The First Circuit Court of Appeals has recognized "the absence of any bright line" to determine whether an agency is entitled to the federal instrumentality exception. Federal Reserve Bank of Boston, 499 F.2d at 64. Whether the exception applies to the FDIC depends upon the FDIC's functions, its exposure to the state tax, and whether the state tax calls into question the sovereign interests of the United States.
In this case Rhode Island has not attempted to tax the FDIC. The State has taxed BNE, a private corporation. Significantly, this dispute involves no question of intergovernmental tax immunity under the Constitution or a federal statute. The federal instrumentalities exception does not apply when the FDIC, as receiver, challenges a state tax imposed on a private institution that is not a federal instrumentality. See FDIC v. New York, 732 F.Supp. at 28; accord Pima Fin. Serv., 786 F.Supp. at 1560-61.
Because the FDIC does not qualify for the federal instrumentalities exception in this case, the Tax Injunction Act applies to the FDIC's claim. Therefore, the Court must now reconcile the Tax Injunction Act with FIRREA.
E. The Tax Injunction Act and FIRREA
FIRREA and the Tax Injunction Act seem to express conflicting Congressional intentions, but the statutes are not irreconcilable. FIRREA grants jurisdiction, while the Tax Injunction Act is a rule of abstention.
The Tax Injunction Act does not mention jurisdiction. Many courts, however, have interpreted it as a jurisdictional statute. See, e.g., Grace Brethren Church, 457 U.S. at 396, 102 S.Ct. at 2501-02 (Tax Injunction Act "deprive[s] the District Court of jurisdiction" to hear challenges to state tax laws); Rosewell, 450 U.S. at 522, 101 S.Ct. at 1233-34 (purpose of Tax Injunction Act is "to limit drastically federal district court jurisdiction" to interfere with collection of state taxes); Carrollton-Farmers Branch Indep. Sch. Dist. v. Johnson & Cravens, 13911, Inc., 858 F.2d 1010, 1014 (5th Cir. 1988) (discussing "section 1341's extensive prohibition of federal jurisdiction over state tax matters"); Housing Auth. of Seattle, 629 F.2d at 1310 ("finding that the [Tax Injunction] Act is applicable would effectively eliminate federal jurisdiction").
Nonetheless, this Court should not ignore the distinction between an abstention statute such as the Tax Injunction Act and a jurisdiction statute merely because other, higher courts have used the word "jurisdiction" to describe the Tax Injunction Act's effect. In those cases, the courts did not confront a conflict between rules of jurisdiction and abstention; those courts had no need to sort out the differences. When those courts said that the Tax Injunction Act deprives a federal court of jurisdiction to hear state tax matters, they were using jurisdiction as shorthand for power or authority to grant relief.
This distinction between a court's jurisdiction and its power or authority to grant relief is subtle, but it is not meaningless. When a court lacks power to grant relief, the effect is the same as if the court lacked jurisdiction, and vice versa. But a court may possess jurisdiction while lacking the authority to use it. Jurisdiction is a prerequisite to, not the equivalent of, a court's authority to grant relief. Jurisdiction and abstention are separate concepts, and they are not contradictory.
A comparison to federal diversity jurisdiction clarifies this point. Section 1332 of Title 28 gives the federal district courts "original jurisdiction of all actions" involving disputes above $50,000 between parties of diverse citizenship. This language is as broad and direct as the words of 12 U.S.C. § 1819. Moreover, unlike 12 U.S.C. § 1819, the diversity statute does not weaken its force with such deferential words as "[e]xcept as otherwise provided by Act of Congress." FIRREA's jurisdiction provisions *639 are no more absolute than those of the diversity statute. And there is no doubt that the federal courts can and routinely do abstain from deciding claims although federal diversity jurisdiction exists.
This Court's recent decision in Colonial Courts, 780 F. Supp. 88, exemplifies the compatibility of jurisdiction with the principles of abstention. In that case, this Court had both diversity and federal question jurisdiction, but the undisputed jurisdiction did not prevent the Court from abstaining in deference to ongoing state proceedings. Id. at 92. Similarly, in the present action, there is no inconsistency in concluding that 12 U.S.C. § 1819 gives the Court jurisdiction over the FDIC's claim, while also deciding that the Tax Injunction Act and its related doctrines prevent the Court from granting relief. See, e.g., United States v. City of New York, 175 F.2d 75, 77 (2d Cir.) ("the existence of jurisdiction is not enough" to avoid Tax Injunction Act), cert. denied, 338 U.S. 885, 70 S. Ct. 189, 94 L. Ed. 543 (1949).
When it is understood that jurisdiction does not preclude abstention, it becomes clear that FIRREA and the Tax Injunction Act do not conflict. There is, therefore, no basis for presuming that Congress intended FIRREA's jurisdiction provisions to cut into the Tax Injunction Act. Moreover, FIRREA's sweeping jurisdictional provisions are less specific than the Tax Injunction Act. In FIRREA Congress did not state explicitly that, in addition to unfettered access to the federal courts, the FDIC should also enjoy immunity from the federalist principles of comity and abstention, as embodied in the Tax Injunction Act. Without such language, FIRREA cannot trump the Tax Injunction Act.
The First Circuit Court of Appeals confronted a statute similar to FIRREA in Federal Reserve Bank of Boston, 499 F.2d at 63. Massachusetts had taxed certain transactions of the Federal Reserve Bank, and the Bank sought to contest the constitutionality of the tax in federal court. The federal statute at issue, 12 U.S.C. § 632, granted the Federal Reserve Bank unfettered access to the federal courts. Describing this statute, the Circuit Court stated, "Congress has made it plain by express statute that a federal reserve bank is to have unrestricted access to the district courts" and that "[s]uch a clearly expressed strong federal interest in litigating all reserve bank business in the federal courts further tips the scale away from the general hostility to interfering with a state taxing scheme." Id.
Federal Reserve Bank of Boston did not address the determinative question in this case. The Court of Appeals explained that the Federal Reserve Bank's dispute was largely, if not entirely, a federal question: whether Massachusetts had taxed the federal government in violation of a federal statute and the Constitution. Id. at 60. It was a classic federal instrumentalities case, thereby distinguishable from the present lawsuit.
But the Court then added, in dicta, that "were the case to raise a pure question of state law ... we might think it wise to require abstention by the district court pending litigation of the state issue in the state court. Abstention in such circumstances is appropriate even when the United States is a party." Id. at 64 (emphasis added).
The reasoning of Federal Reserve Bank of Boston supports the conclusion that the Tax Injunction Act applies despite FIRREA's broad jurisdictional grant in this case. The Court of Appeals acknowledged that Congress had sought to provide federal jurisdiction for all cases involving the Federal Reserve Bank and held that jurisdiction was proper. But the Court then softened its conclusion by noting that it would have ruled differently had the dispute involved solely a question of state law as in the present lawsuit. Implicitly, the First Circuit's dicta embraced the notion that, unless the federal instrumentalities exception is available, the Tax Injunction Act requires abstention even when a federal statute provides federal court jurisdiction in the broadest possible terms.
This Court cannot grant plaintiffs the relief they seek. The Tax Injunction Act ties the Court's hands. As a subtle, technical *640 matter, this Court has jurisdiction to entertain the FDIC's claim, just as the Court had jurisdiction to entertain the plaintiffs' claims in Colonial Courts, 780 F. Supp. 88, and Keating, 785 F. Supp. 1094. But jurisdiction is not enough. See City of New York, 175 F.2d at 77. Like other jurisdictional statutes, FIRREA allows the FDIC to enter this Court; the Tax Injunction Act, however, ultimately forces the FDIC to return to the state courts.
Since there are no ongoing state proceedings, this Court has neither the obligation nor even the option to stay the federal action to allow state litigation to run its course. D'Amario v. Russo, 718 F. Supp. 118, 124 (D.R.I.1989). Dismissal, moreover, might cast this lawsuit into state court limbo. Instead, a remand of this lawsuit, which is really a state administrative appeal, is the most appropriate way to get this controversy finally resolved.
III. CONCLUSION AND ORDER
Accordingly, defendant's objection to the Magistrate Judge's Report and Recommendation is overruled, but defendant's appeal of the Magistrate Judge's denial of the motion to remand is sustained. Therefore, this action is hereby remanded to the Rhode Island District Court, Sixth Division.
It is so ordered.
NOTES
[1] Pub.L. 101-73, Title II, § 209(4), 103 Stat. 183, 216-17 (Aug. 9, 1989).
[2] In December 1991, several months after the FDIC removed the suit to this Court, Congress added a 90-day deadline to FIRREA's removal provision. Pub.L. 102-242, Title I, § 161(d), 105 Stat. 2286 (Dec. 19, 1991). In this case, even if the 90-day requirement were applied retroactively, the FDIC has met it. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566448/ | 592 S.W.2d 597 (1979)
COASTAL INDUSTRIAL WATER AUTHORITY, Petitioner,
v.
CELANESE CORPORATION OF AMERICA, Respondent.
No. B-8437.
Supreme Court of Texas.
November 28, 1979.
*598 Fred Spence, Houston, for petitioner.
Winters, Deaton, Briggs & Britton, Alfred L. Deaton, III, Houston, for respondent.
McGEE, Justice.
This is a condemnation proceeding brought by the Coastal Industrial Water Authority[1] to condemn a water line easement *599 on land owned by the Celanese Corporation. The trial court sustained Celanese's special exceptions to the Authority's petition and dismissed the suit. The court of civil appeals affirmed the order of dismissal. 578 S.W.2d 544. We hold that the trial court erred in sustaining the special exceptions; therefore, we reverse the judgment of the court of civil appeals and remand the cause for trial.
In condemnation proceedings the property owner is given a single opportunity to recover damages for the taking of his property for public use. The procedure is governed by statute and the statutory requirements are to be strictly followed.[2]City of Bryan v. Moehlman, 155 Tex. 45, 282 S.W.2d 687, 690 (1955).
Under the general eminent domain statutes formal proceedings begin when the condemnor files a statement with the county judge. The contents of the statement are set out in article 3264:
"It shall describe the land sought to be condemned, state the purpose for which it is intended to be used, the name of the owner, if known, and that the plaintiff and the owner have been unable to agree upon the value of the land or the damages."
Tex.Rev.Civ.Stat.Ann. art. 3264 (Vernon 1968). In 1973 the Authority filed a "Plaintiff's Statement" with the county court. The statement sought to condemn a "permanent water line easement in, on, upon, along, under, over and across the following described tract or parcel of land ...." The easement was located and described by metes and bounds. It was approximately 2900 feet long and 115 feet wide.
Special commissioners appointed to assess damages entered an award of $29,000. Pursuant to article 3268, the Authority deposited the award with the registry of the court, took possession of the property, and constructed its underground water pipeline. See Tex.Rev.Civ.Stat.Ann. art. 3268 (Vernon 1968 & Supp.1979).
Celanese timely filed objections to the award, requesting that the cause be tried in the county court. Later Celanese withdrew the award from the registry, and although it was thereby prevented from litigating the Authority's right to take the property, it could continue to litigate the issue of compensation. See State v. Jackson, 388 S.W.2d 924, 925-26 (Tex.1965). Subject to the requirements of article 3264, the Authority's "Plaintiff's Statement" was comparable to an original petition; Celanese was entitled to challenge its sufficiency with special exceptions. See Curfman v. State, 240 S.W.2d 482, 485 (Tex.Civ.App. Dallas 1951, writ ref'd n. r. e.).
Celanese's first two special exceptions complained that the statement failed to allege:
"No. 1: The specific rights of use of said easement taken by Plaintiff;
"No. 2: The specific rights of use of said easement remaining to Defendant;...."
The remaining exceptions complained of the lack of allegations regarding specific rights and uses of the easement: Celanese's right of crossing the easement by road, Celanese's rights of crossing the easement by pipeline, limitations on ingress and egress along the easement, Celanese's right to fence the property, the Authority's responsibility for grass and drainage, ownership of the fee title of the subject property, the parties' rights to construct improvements on the *600 easement, and the Authority's liability for possible damage to improvements placed on the easement by Celanese.
These special exceptions were sustained by the trial court. The Authority refused to amend its statement and the trial court ordered the suit dismissed. The initial question presented on appeal was whether the trial court erred in sustaining the special exceptions. We agree with the opinion of the court of civil appeals that there was no necessity that Celanese's specific rights and uses be set out in the petition. We disagree, however, with the opinion of the court of civil appeals insofar as it held that the first exception was correctly sustained.
The Authority contends that its petition complied with the allegations required by article 3264, including the purpose for the condemnation and a description of the property to be condemned. It argues that an unlimited easement for the purpose of a water line was clearly made the subject of the proceeding and the easement was accurately described and located by metes and bounds. We agree with this contention.
The Authority's statement alleged that it wished to acquire the water line easement "for the transportation of water and other facilities and uses incidental thereto or in connection therewith for Trinity Water Conveyance System." We find this to be an adequate statement of the purpose for which the easement was desired. Further allegations regarding the purpose of the condemnation or the necessity of the taking were unnecessary. In the absence of allegations that the condemnor acted arbitrarily or unjustly, the legislature's declaration that a specific exercise of eminent domain is for public use is conclusive, and the condemnation proceedings are limited to a determination of the amount to be paid to acquire that use. When the right to condemn is not limited to cases of necessity, the question of necessity is not a matter to be pleaded and proved. See Housing Authority v. Higginbotham, 135 Tex. 158, 143 S.W.2d 79, 88-89 (1940); Joyce v. Texas Power & Light Co., 298 S.W. 627, 629 (Tex. Civ.App.El Paso 1927, no writ). Celanese does not contend that the condemnation was not for a public use or was not necessary. Moreover, by withdrawing the funds from the registry Celanese narrowed the proceedings to a determination of the amount of compensation.
The petition in a condemnation proceeding has several functions that require an accurate description of the property to be condemned: "Unless the land is adequately identified, the owner cannot know what portion of his property is required, nor the commissioners what damages to assess, nor can the court by its decree effectively pass title." State v. Nelson, 160 Tex. 515, 334 S.W.2d 788, 790 (1960). The petition's description of the property is the basis for the decree. The adequacy of the petition's description is tested by the standards used for adequacy of description in a deed. "[T]he certainty required in the description of the land in a condemnation proceeding `is of the same nature as that required in conveyances of land, so that a surveyor could go upon the land and mark out the land designated.'" Wooten v. State, 142 Tex. 238, 177 S.W.2d 56, 57 (1944); see Miers v. Housing Authority, 153 Tex. 236, 266 S.W.2d 842, 844 (1954).
In Parker v. Ft. Worth & D. C. Ry. Co., 84 Tex. 333, 19 S.W. 518 (1892), the landowner challenged the adequacy of the description of a railroad right of way obtained by condemnation. The description in the petition was found to be inadequate because although it identified a certain tract, it alleged only that a line had been located on the tract: "The petition alleged that a line had been located, but referred to no object and gave no description whereby that line might be ascertained ...." Id. at 520. In contrast to the petition in Parker v. Ft. Worth & D. C. Ry. Co., a petition to condemn an unlimited easement sufficiently describes the easement when the tract from which the easement is to be taken is described and the easement is specifically located upon it. The petition quoted in Compton v. Texas Southeastern Gas Co., 315 S.W.2d 345 (Tex.Civ.App.Houston *601 1958, writ ref'd n. r. e.), contains a description of a pipeline easement "as it lies upon the ground." Id. at 346-47, 349. Other condemnation cases have found metes and bounds descriptions of easements similar to the physical description in this case to be adequate. See, e. g., Browne v. Jefferson County, 507 S.W.2d 293 (Tex.Civ.App. Beaumont 1974, writ ref'd n. r. e.); Southwestern Bell Telephone Co. v. Brassell, 427 S.W.2d 709 (Tex.Civ.App.Tyler 1968, writ ref'd n. r. e.); Sinclair Pipe Line Co. v. Peters, 323 S.W.2d 651 (Tex.Civ.App. Beaumont 1959, no writ).
The petition in a condemnation proceeding also serves as notice to the landowner of the damages to which he may be entitled, and as the basis for evidence and issues on the question of damages. "[T]he petition should so describe the land to be taken that ... the interested parties may come prepared with evidence to show what will be just compensation for the land to be condemned." Parker v. Ft. Worth & D. C. Ry. Co., supra at 519. Celanese contends that the petition failed to give reasonable notice of the damages attributable to the taking. It argues that the ability of the trial court to properly admit or refuse evidence and to charge the jury on the amount of compensation was impaired by the failure to describe the rights and uses of the parties. We disagree with this contention.
When a permanent, unlimited easement is sought the landowner is entitled to the difference in market value of the easement strip and the remainder at the time of the taking. In making this determination it must be considered that an unlimited easement carries with it all rights as are reasonably necessary for enjoyment consistent with its intended use. A pipeline easement allows the condemnor, in the maintenance and construction of its pipeline, to do what is reasonably necessary to accomplish the intended purposes for which the condemnation is sought. Myers v. Texas Eastern Transmission Co., 306 S.W.2d 751, 753 (Tex.Civ.App.Waco 1957, writ ref'd n. r. e.). The language used to describe the easement, the situation of the parties, and the purposes of the condemnation may all be considered in determining the scope of an easement. Baer v. Dallas Theater Center, 330 S.W.2d 214 (Tex.Civ. App.Waco 1959, writ ref'd n. r. e.).
The pleading and proof should be directed toward aiding the court in assessing damages consistent with principles governing the legal effect of the particular easement. As to the court's charge, it is the duty of the court to explain the rights of the parties under the particular easement sought. Texas Power & Light Co. v. Cole, 158 Tex. 495, 313 S.W.2d 524, 529 (1958). When an unlimited easement is sought, this may be done by explaining the legal rights of the parties in language consistent with principles governing common law and statutory rights connected with the easement. See South v. Texas Eastern Transmission Corp., 332 S.W.2d 442, 444-45 (Tex.Civ.App.San Antonio 1960, no writ).
In view of these established guidelines for the conduct of condemnation proceedings, we find that the Authority's petition was sufficient to condemn an unlimited water line easement. It constituted an adequate basis for writing a decree declaring the property rights of the parties and for admitting evidence and charging the jury on damages.
We recognize that in some situations a condemnor may not desire to use an easement to its full legal extent. The condemnor may intend to limit its rights from those to which he is entitled under common law and statutory rules, or to create specific proprietory rights in the landowner. Under these circumstances the condemnor will be seeking only a limited easement. In other situations the parties may vary their common law rights and duties by agreement or agree that certain rights or duties should be clearly set out in the decree. In these situations the petition should include allegations to that effect. Consistent with the pleadings, the charge may apprise the jury of any limitations on the easement and damages may be commensurately reduced.
*602 In Texas Power & Light Co. v. Cole, supra, this court held that the jury was properly instructed that the easement acquired was subordinate to the landowner's right to enter the property to remove sand and gravel. The condemnor had filed a supplemental petition expressly reserving those proprietory rights in the landowner. These same rights were fixed by the court decree. Id. at 529.
In Texas Power & Light v. Lovinggood, 389 S.W.2d 712 (Tex.Civ.App.Dallas 1965, writ ref'd n. r. e.), the parties desired to ensure that the land upon which an easement was to be condemned would remain available for residential subdivision. The petition set out particular rights and duties of the parties in view of future residential use. The court held that a requested instruction apprising the jury of these limitations should have been given. Id. at 716.
Caution must be exercised by the condemnor in writing its petition to avoid the type of allegations prohibited in White v. Natural Gas Pipeline Co., 444 S.W.2d 298 (Tex.1969). In White this court determined whether certain allegations in a condemnation petition were valid limitations on the pipeline easement sought to be condemned, or merely promissory statements and expressions of the condemnor's future intentions. Certain allegations were found to be merely promissory and thus could properly be stricken. The court reasoned that such allegations served only to detrimentally affect the landowner's right to recover all damages in a single proceeding. Having no effect as limitations on the easement, these allegations stood as unaccepted promises, revocable at the will of the condemnor. A promise to pay for future crop damage, for example, constituted a mere offer by the condemnor not accepted by the landowner. The condemnor's liability for crop damage was outside the scope of duties connected with the easement. Damage to crops is considered in assessing compensation only insofar as the market value of the land at the time of the taking is affected. Id. at 301.
In Coastal Industrial Water Authority v. Reynolds, 503 S.W.2d 593 (Tex.Civ.App. Houston [1st Dist.] 1973, writ ref'd n. r. e.), the condemnor's petition sought a strip of land for use as a canal and promised to maintain and construct a bridge but did not describe it. The court held that the proper way to reduce the desired taking and create a proprietory right in the landowner was by way of an amendment to the petition setting out in detail the plans and specifications of the bridge. Id. at 604.
The distinction between promissory statements prohibited by White v. Natural Gas Pipeline Co., and statements creating property rights was discussed in State v. Frost, 456 S.W.2d 245 (Tex.Civ.App.Houston [14th Dist.] 1970, writ ref'd n. r. e.). The petition in Frost sought to condemn the fee title to land for use as a highway interchange. It contained an allegation that "the right of ingress and egress to or from the remaining property of defendants abutting on said highway has not and is not to be denied ...." The court held that the pleadings were not merely promissory. The right of the landowner to access was a right not taken unless the petition called for its taking. A general allegation pertaining to ingress and egress did not add to or diminish the rights of the parties under established rules for determining the extent of proprietory interest taken. Id. at 254-55.
We hold that the special exceptions to the Authority's petition were incorrectly sustained. The absence of allegations that merely restated the permissible legal effect of the unlimited water line easement described in the petition did not cause it to be inadequate. Moreover, because an unlimited water line easement was sought, allegations to the effect that the authority's rights would be reduced or Celanese's rights enlarged would be inconsistent and possibly improper under the holding of White v. Natural Gas Pipeline Co. If the Authority had desired only a limited water line easement, allegations to that effect could have been included in its statements. Furthermore, if during the course of the condemnation proceedings the parties agree to limit *603 or clarify the legal extent of the easement, the statement is amendable to embody such negotiations. Through discovery the landowner may learn of the condemnor's intentions for future use of the water line easement. In a case such as this, where the water pipeline has already been put into use, the landowner will already be aware of the existing use of the condemned property and the effect of this use on its own particular needs. Attention will thus be directed toward specific situations calling for negotiation and express delineation of the parties' rights and duties.
The judgments of the court of civil appeals and the trial court are reversed and the cause is remanded for trial to determine the amount of compensation to which Celanese is entitled.
NOTES
[1] The Authority is a water supply and control district created pursuant to Article 16, Section 59 of the Texas Constitution and has the power of eminent domain. See Tex.Laws 1967, ch. 601, at 1381-82, as amended by Tex.Laws 1969, ch. 767, at 2277-81.
[2] The statute creating the Coastal Industrial Water Authority provides that it has the authority granted in the statutes pertaining to water control and improvement districts. These included articles 7880-125 and 7880-126, governing eminent domain proceedings, which were the predecessors of sections 51.231 to 51.279 of the current Water Code. Section 51.233 provides that the condemnor may elect to proceed under the provisions of the Water Code or under the general eminent domain statutes. See Tex.Water Code Ann. arts. 51.231-279 (Vernon 1972). The Authority alleged in its statement that the proceedings were to be brought under the eminent domain statutes. See Tex.Rev.Civ.Stat.Ann. arts. 3264-3271 (Vernon 1968). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559187/ | 20 So.3d 532 (2009)
831 BARTHOLOMEW INVESTMENTS-A, L.L.C., 831 Bartholomew Investments-B, L.L.C., 837 Bartholomew Investments-A, L.L.C., 837 Bartholomew Investments-B, L.L.C.
v.
David J. MARGULIS.
No. 2008-CA-0559.
Court of Appeal of Louisiana, Fourth Circuit.
September 2, 2009.
*533 George D. Fagan, Catherine L. Davidson, Leake & Andersson, L.L.P., New Orleans, LA, for Defendant/Appellant.
James M. Garner, Darnell Bludworth, Kevin M. McGlone, Sher Garner Cahill Richter Klein & Hilbert, L.L.C., New Orleans, LA, for Plaintiffs/Appellees and Third-Party Defendants/Appellees.
(Court composed of Judge MICHAEL E. KIRBY, Judge MAX N. TOBIAS, JR., Judge EDWIN A. LOMBARD).
KIRBY, Judge.
Defendant, David J. Margulis, appeals the January 28, 2008 trial court judgment sustaining the peremptory exception of no cause of action as to the amended third party demand, and dismissing with prejudice the claims of Mr. Margulis against *534 Shea Embry and Carolyn Mangham. Mr. Margulis also appeals the trial court judgment rendered on September 14, 2007 granting the motion for partial summary judgment and exception of prematurity filed by plaintiffs, 831 Bartholomew Investments-A, L.L.C., 831 Bartholomew Investments-B, L.L.C., 837 Bartholomew Investments-A, L.L.C. and 837 Bartholomew Investments-B, L.L.C. (collectively referred to as "831 and 837 Bartholomew"), and the trial court judgment rendered on September 21, 2007 denying plaintiffs' motion for new trial.
On May 2, 2007, plaintiffs, 831 and 837 Bartholomew, filed a Petition for Temporary Restraining Order, Preliminary and Permanent Injunctive Relief and Declaratory Judgment against Mr. Margulis. Plaintiffs are the owners of properties located at 831-33 and 837 Bartholomew Street in New Orleans, having purchased these properties on September 20, 2006. Mr. Margulis occupies the property at 837 Bartholomew Street and has been paying rent to plaintiffs pursuant to an agreement he originally entered into with the property's former owners, William and Fanaafi Chapman, on March 1, 2006. When plaintiffs acquired ownership of 837 Bartholomew Street, they granted two mortgages on this property in favor of their lender and the seller.
In plaintiffs' petition, they note that it is Mr. Margulis' contention that the lease agreement between the parties is a bond for deed contract entitling him to obtain ownership of the property at the expiration of the agreement. Mr. Margulis told plaintiffs that he would invoke Louisiana's bond for deed statutes to have the two mortgages cancelled on or after May 7, 2007 unless plaintiffs agreed to release their mortgages. Plaintiffs alleged that Mr. Margulis is not entitled to have these mortgages cancelled and requested a preliminary injunction prohibiting him from taking such action. Plaintiffs' position is that the instrument executed between Mr. Margulis and the former owners of the property is not a bond for deed agreement as that term is defined under Louisiana law. Alternatively, plaintiffs contended that even if the agreement is construed as a bond for deed agreement, Mr. Margulis cannot seek to cancel any mortgages in favor of another party until such time as he acquires ownership and title to the property.
In addition to injunctive relief, plaintiffs requested a declaratory judgment declaring that the agreement at issue is a lease with an option to purchase the property at 837 Bartholomew Street, and that the contract is vitiated and the parties restored to their original positions because there has been no meeting of the minds as to the execution of the agreement. Plaintiffs also requested a declaration that the agreement be limited to the property located at 837 Bartholomew Street.
Shortly thereafter, the parties entered into a consent judgment, agreeing to dismiss plaintiffs' motions for temporary restraining order, preliminary and permanent injunctive relief as moot. They further agreed that Mr. Margulis would take no action to cancel the sale to plaintiffs or the mortgages granted by plaintiffs in favor of First American Bank and William and Fanaafi Chapman as to the properties located at 831-833 and 837 Bartholomew Street pending final resolution of the issues raised in plaintiffs' action for declaratory judgment. Plaintiffs agreed not to sell to any third party (defined as a party other than Shea R. Embry, Carolyn A. Mangham or any juridical entity owned by them) or mortgage the above-mentioned properties pending final resolution *535 of the issues raised in plaintiffs' action for declaratory judgment.
Mr. Margulis then filed a reconventional demand for breach of contract and the enforcement of the bond for deed against the plaintiffs in the main demand, 831 and 837 Bartholomew, and against Shea Embry and Carolyn Mangham, who were not plaintiffs in the main demand. Ms. Embry and Ms. Mangham are alleged to be the managers of the four investment companies named as defendants in the reconventional demand. In the reconventional demand, the defendant/plaintiff-in-reconvention, Mr. Margulis, asked for judgment for breach of contract by default on the bond for deed and for an order of enforcement of the bond for deed by specific performance requiring the companies represented by Ms. Embry and Ms. Mangham to transfer title to the properties located at 831-833 and 837 Bartholomew Street. Mr. Margulis also asked for attorney's fees, penalties, costs, interest and any other remedy allowed by law. As an alternative to his request for specific performance, Mr. Margulis asked for damages, attorney's fees, penalties, costs, interest and any other remedies allowed by law.
The parties named as defendants in the reconventional demand filed exceptions to the demand. The plaintiffs in the main demand, 831 and 837 Bartholomew, filed an exception of prematurity as to the reconventional demand. Ms. Embry and Ms. Mangham, who are not plaintiffs in the main demand but were brought into this action as defendants in the reconventional demand, filed a peremptory exception of no cause of action as to the third party demand. Their counsel noted that even though the pleading against Ms. Embry and Ms. Mangham was captioned as a reconventional demand, it is actually a third party demand as to them because they are not plaintiffs in the main demand.
In arguing that the reconventional demand against 831 and 837 Bartholomew is premature, those parties contend that even if the agreement at issue is a bond for deed contract, which they argue it is not, the reconventional demand should be dismissed because specific performance would not be available until the agreement expired in March 2008. Ms. Embry and Ms. Mangham sought dismissal of the third party demand against them because neither was a party to any agreement or acts of sale for the properties that are the subject of this litigation. Furthermore, they argue that the parties to the agreement were separate juridical entities and, as such, Ms. Embry and Ms. Mangham are not liable individually.
831 and 837 Bartholomew also filed a motion for partial summary judgment based on their contention that the purported agreement between William and Fanaafi Chapman is not a bond for deed contract as that term is defined in Louisiana; rather, the agreement is a lease with an option to purchase and plaintiffs have not exercised that option. Specifically, they argued that the agreement is not a bond for deed contract because it contains no term providing for the transfer of title at the conclusion of the agreement, there is no provision for appointment of an escrow agent, and the agreement clearly contemplates a lump sum payment at its conclusion rather than the payment of the purchase price over periodic installments.
On September 14, 2007, the trial court rendered judgment granting plaintiffs' motion for partial summary judgment, finding, as a matter of law, that the March 1, 2006 agreement between William and Fanaafi Chapman and David J. Margulis is not a bond for deed contract. The trial court also sustained the exception *536 of no cause of action filed by third party defendants, Shea Embry and Carolyn Mangham, and dismissed without prejudice the third party demand against those parties. The court allowed Mr. Margulis thirty days from the date of the judgment to file an amended third party demand against Ms. Embry and Ms. Mangham. The trial court also sustained the exception of prematurity filed by defendants-in-reconvention, 831 and 837 Bartholomew, and dismissed without prejudice the reconventional demand filed by defendant, David J. Margulis. Mr. Margulis filed a motion for new trial, which was denied by the trial court in a judgment dated September 21, 2007.
On October 15, 2007, Mr. Margulis filed an amended third party demand against Ms. Embry and Ms. Mangham. In the amended demand, Mr. Margulis alleged that the actions of Ms. Embry and Ms. Mangham, in their efforts to acquire the properties located at 831-833 and 837 Bartholomew Street from April 2006 until September 21, 2006, were unfair, deceitful, fraudulent and in violation of La. R.S. 51:1401 et seq.
Third party defendants Ms. Embry and Ms. Mangham filed a peremptory exception of no cause of action as to the amended third party demand filed by Mr. Margulis. In their exception, Ms. Embry and Ms. Mangham argued that Mr. Margulis' amended third party demand still fails to state a cause of action against them.
On January 28, 2008, the trial court rendered judgment sustaining the third party defendants' peremptory exception of no cause of action, and dismissed with prejudice the amended third party demand against Ms. Embry and Ms. Mangham. On March 7, 2008, Mr. Margulis filed a motion for devolutive appeal from the January 28, 2008 judgment. His motion for appeal was granted on that same date.
On April 3, 2008, Mr. Margulis filed an amended motion for devolutive appeal. In that amended motion, Mr. Margulis clarified that the scope of his devolutive appeal encompassed "all rulings and decisions issued in this matter, including the final Judgment signed on January 28, 2008, the interlocutory Judgments rendered on September 14, 2007 and September 21, 2007, denying the Motion for New Trial and Reconsideration of the Court's September 7, 2007 rulings granting the Plaintiff's Motion for Partial Summary Judgment and sustaining the Plaintiff's Exception of Prematurity, and any other rulings by the court." The trial court issued an order on May 7, 2008 granting Mr. Margulis' amended motion for devolutive appeal.
After this appeal was lodged, the plaintiffs, 831 and 837 Bartholomew, filed a Motion for Partial Dismissal of Appeal for Lack of Jurisdiction as to the trial court judgments of September 14, 2007 and September 21, 2007. Mr. Margulis filed an opposition to the motion, and the plaintiffs filed a reply brief thereto. We find that plaintiffs' motion has merit.
The trial court erred in granting Mr. Margulis' amended motion for devolutive appeal of the September 14, 2007 and September 21, 2007 judgments because neither of those judgments resolved all of the claims brought by the 831 and 837 Bartholomew against Mr. Margulis, and neither judgment was designated as a final, appealable judgment by the trial court as required by the provisions of La. C.C.P. article 1915(B) relative to the appeal of partial summary judgments.[1] After the *537 parties agreed to dismiss plaintiffs' motions for temporary restraining order, preliminary and permanent injunctive relief as moot, the only remaining action from the original demand was plaintiffs' action for declaratory judgment. In that action, plaintiffs sought a declaration that the agreement at issue is a lease with an option to purchase the property at 837 Bartholomew Street, and that the contract is vitiated and the parties restored to their original position because there has been no meeting of the minds as to the execution of the agreement. Plaintiffs also requested a declaration that the agreement is limited to the property located at 837 Bartholomew Street.
In the September 14, 2007 judgment, the trial court held that the March 1, 2006 agreement is not a bond for deed contract, but did not define the nature of the agreement or address plaintiffs' other requests in its action for declaratory judgment. The September 21, 2007 judgment was merely a denial of the Mr. Margulis' motion for new trial and reconsideration filed in response to the September 14, 2007 judgment. Therefore, other issues in the main demand are still pending in the trial court. For these reasons, we grant the motion of 831 and 837 Bartholomew, and dismiss Mr. Margulis' appeal of the September 14, 2007 and September 21, 2007 interlocutory judgments for lack of jurisdiction.
Mr. Margulis timely appealed the trial court's January 28, 2008 judgment, which is a final, appealable judgment pursuant to La. C.C.P. article 1915(A). The January 28, 2008 judgment is the only judgment properly presented for appellate review. Five of Mr. Margulis' six assignments of error pertain to rulings made by the trial court in its September 14, 2007 and September 21, 2007 judgments. Because of our ruling that this Court lacks jurisdiction to consider Mr. Margulis' appeal of those two interlocutory judgments at this time, the five assignments of error pertaining to rulings made in those judgments will not be considered in this opinion, including the ruling that the agreement at issue is not a bond for deed.
In the only assignment of error relating to the trial court's January 28, 2008 judgment, Mr. Margulis argues that the trial court erred in granting the exception of no cause of action as to the amended third party demand because this pleading on its face sets out a cause of action under La. C.C. article 1953, the Louisiana Limited Liability Statute at La. R.S. 12:1301 et seq., and the Louisiana Unfair Trade Practices Act ("LUTPA") at La. R.S. 51:1401 et seq. In Ramey v. DeCaire, XXXX-XXXX, pp. 7-8 (La.3/19/04), 869 So.2d 114, 118-119, the Louisiana Supreme Court set forth the law regarding the peremptory exception of no cause of action as follows:
A cause of action, when used in the context of the peremptory exception, is defined as the operative facts that give rise to the plaintiffs right to judicially assert the action against the defendant. Everything on Wheels Subaru, Inc. v. Subaru South, Inc., 616 So.2d 1234, 1238 (La.1993). The function of the peremptory exception of no cause of action is to test the legal sufficiency of the petition, which is done by determining whether the law affords a remedy on the facts alleged in the pleading. Id. at 1235. No evidence may be introduced to support or controvert an exception of no cause of action. La. C.C.P. art. 931. Consequently, the court reviews the petition *538 and accepts well-pleaded allegations of fact as true. Jackson v. State ex rel. Dept. of Corrections, 00-2882, p. 3 (La.5/15/01), 785 So.2d 803, 806; Everything on Wheels Subaru, 616 So.2d at 1235. The issue at the trial of the exception is whether, on the face of the petition, the plaintiff is legally entitled to the relief sought. Montalvo v. Sondes, 93-2813, p. 6 (La.5/23/94), 637 So.2d 127, 131.
Louisiana has chosen a system of fact pleading. La. C.C.P. art. 854 cmt. (a); Montalvo at p. 6, 637 So.2d at 131. Therefore, it is not necessary for a plaintiff to plead the theory of his case in the petition. Kizer v. Lilly, 471 So.2d 716, 719 (La.1985). However, the mere conclusions of the plaintiff unsupported by facts does [sic] not set forth a cause of action. Montalvo at p. 6, 637 So.2d at 131.
The burden of demonstrating that the petition states no cause of action is upon the mover. City of New Orleans v. Board of Com'rs of Orleans Levee Dist., 93-0690, p. 28 (La.7/5/94), 640 So.2d 237, 253. In reviewing the judgment of the district court relating to an exception of no cause of action, appellate courts should conduct a de novo review because the exception raises a question of law and the lower court's decision is based solely on the sufficiency of the petition. Fink v. Bryant, 01-0987, p. 4 (La.11/28/01), 801 So.2d 346, 349; City of New Orleans at p. 28, 640 So.2d at 253. The pertinent question is whether, in the light most favorable to plaintiff and with every doubt resolved in plaintiff's behalf, the petition states any valid cause of action for relief. City of New Orleans at p. 29, 640 So.2d at 253.
La. C.C. article 1953 states:
Fraud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction.
La. C.C.P. article 856 states that when pleading fraud, the circumstances constituting fraud shall be alleged with particularity. In his amended third party demand, Mr. Margulis has not alleged with particularity how Ms. Embry and Ms. Mangham misrepresented or suppressed the truth in their efforts to purchase the properties at 831-33 and 837 Bartholomew between April 2006 and September 21, 2006. His allegations that the actions of Ms. Embry and Ms. Mangham were fraudulent are merely conclusory and, therefore, insufficient to set forth a cause of action under La. C.C. article 1953.
The amended third party demand also does not set forth a cause of action under the Louisiana Unfair Trade Practices Act ("LUTPA") at La. R.S. 51:1401 et seq. La. R.S. 51:1405(A) provides that "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful." As explained in Jefferson v. Chevron U.S.A., Inc., 98-0254, 97-2436 (La.App. 4 Cir. 5/20/98), 713 So.2d 785, 792-793:
LUTPA provides a cause of action both for trade practices which are "unfair" and those which are "deceptive." An act is not required to be both unfair and deceptive. What constitutes unfair and/or deceptive practices is not specifically defined, but is determined on a case by case basis. Wyatt v. PO2, Inc., 26,675 (La.App. 2 Cir. 3/1/95), 651 So.2d 359, writ denied, 95-0822 (La.5/5/95), 654 So.2d 331.
The statutory definition of an "unfair" practice is broad and subjectively stated and does not specify particular violations. Jarrell v. Carter, 577 So.2d 120, *539 123 (La.App. 1st Cir.1991), writ denied 582 So.2d 1311 (La.1991). A practice is unfair when it offends established public policy and when the practice is unethical, oppressive, unscrupulous, or substantially injurious. Jarrell v. Carter, 577 So.2d at 123. What constitutes an unfair trade practice is to be determined on a case-by-case basis. Monroe Medical Clinic, Inc. v. Hospital Corp. of America, 522 So.2d 1362, 1365 (La.App. 2nd Cir.1988).
A trade practice is "deceptive" for purposes of LUTPA when it amounts to fraud, deceit or misrepresentation. United Group of Nat. Paper Distributors, Inc. v. Vinson, 27,739 (La.App. 2 Cir. 1/25/96), 666 So.2d 1338, 1346, writ denied, 96-0714 (La.9/27/96), 679 So.2d 1358.
LUTPA does not prohibit sound business practices, the exercise of permissible business judgment or appropriate free enterprise transactions. Harris v. Poche, XXXX-XXXX, p. 7 (La.App. 4 Cir. 4/12/06), 930 So.2d 165, 171.
Mr. Margulis argues on appeal that his amended third party demand sufficiently alleges that the actions of Ms. Embry and Ms. Mangham, in their efforts to acquire the subject properties from April 2006 to September 21, 2006, were in violation of the LUTPA. We disagree. The amended third party demand merely sets forth allegations regarding numerous attempts made by Ms. Embry and Ms. Mangham to acquire ownership of the subject properties during that time period. While Mr. Margulis alleges that Ms. Embry and Ms. Mangham were aggressive and persistent in their efforts to acquire ownership of the properties, he has not set forth any facts to support his conclusion that the actions of Ms. Embry and Ms. Mangham were unfair or deceptive. Furthermore, his allegations that Ms. Embry and Ms. Mangham wanted to purchase the properties to deprive Mr. Margulis of his rights under the agreement at issue are merely conclusory.
Similarly, Mr. Margulis has failed to set forth any facts supporting his claim that Ms. Embry or Ms. Mangham intentionally interfered with his contract with the former owners of the subject properties. Other than the trial court's interlocutory judgment holding that the agreement at issue is not a bond for deed, the trial court has not yet ruled on the nature of the agreement formerly between Mr. Margulis and the Chapmans and now between Mr. Margulis and 831 and 837 Bartholomew or on Mr. Margulis' rights under that agreement. Throughout these proceedings, Mr. Margulis has continued to occupy the residence located at 837 Bartholomew Street.
The amended third party demand also does not state a cause of action for breach of contract against Ms. Embry and Ms. Mangham. Mr. Margulis alleged that Ms. Embry and Ms. Mangham are in bad faith breach of contract for their actions taken prior to September 19, 2006. 831 and 837 Bartholomew, the companies managed by Ms. Embry and Ms. Mangham, did not acquire the subject properties until September 20, 2006. Because no contract between 831 and 837 Bartholomew and Mr. Margulis existed prior to September 19, 2006, there can be no breach of contract claim against Ms. Embry and Ms. Mangham.
We also find no merit in Mr. Margulis' argument that the amended third party demand sets forth a valid cause of action under the Louisiana Limited Liability Statute, La. R.S. 12:1301 et seq. The amended third party demand alleges that Ms. Embry and Ms. Mangham attempted to shield themselves from personal liability for their alleged willful, intentional, wrongful and deceptive practices prior to September 19, 2006 by forming four entities *540 (plaintiffs in the original petition) to purchase the subject properties.
A member of a limited liability company is generally not liable for the debts, obligations or liability of the company. La. R.S. 12:1320 B. An exception to this rule is set forth in La. R.S. 12:1320 D, which states: "Nothing in this Chapter shall be construed as being in derogation of any rights which any person may by law have against a member, manager, employee, or agent of a limited liability company because of any fraud practiced upon him, because of any breach of professional duty or other negligent or wrongful act by such person, or in derogation of any right which the limited liability company may have against any such person because of any fraud practiced upon it by him."
As stated above, the amended third party demand does not set forth with particularity how the actions of Ms. Embry and Ms. Mangham constituted fraud and does not assert facts supporting the allegations that the actions of Ms. Embry and Ms. Mangham were unfair or deceptive. Because Mr. Margulis has not sufficiently pled fraud, negligence or wrongful conduct on the part of Ms. Embry or Ms. Mangham, he has not stated a cause of action for the personal liability of the third party defendants under La. R.S. 12:1320 D.
For the reasons stated above, we find that the trial court correctly granted the exception of no cause of action as to Mr. Margulis' amended third party demand and dismissed his claims against Ms. Embry and Ms. Mangham with prejudice. The trial court judgment of January 28, 2008 is hereby affirmed. This case is remanded to the trial court for further proceedings.
AFFIRMED.
NOTES
[1] If the trial court had designated these two judgments as final and appealable, which it did not, Mr. Margulis' amended motion for devolutive appeal would have been untimely as to the September 14, 2007 and September 21, 2007 judgments because it was filed more than sixty days after those judgments were rendered. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559188/ | 20 So.3d 557 (2009)
Huey GONZALES, Ralph G. Gonzales, Kathy Gonzales and Thomas Gonzales
v.
James GONZALES and Progressive Insurance Company, Inc.
No. 2008-CA-0258.
Court of Appeal of Louisiana, Fourth Circuit.
September 30, 2009.
Rehearing Denied October 29, 2009.
*559 Davy P. Laborde, Jr., Law Firm Of Davy P. Laborde, L.L.C., New Orleans, LA, for Huey Gonzales, Ralph G. Gonzales and Kathy Gonzales.
David A. Strauss, Christian A. Garbett, King Krebs & Jurgens, P.L.L.C., New Orleans, LA, for Progressive Insurance Company.
Leonard A. Washofsky, Leonard A. Washofsky, A Law Corporation, Metairie, LA, for James Gonzales.
(Court composed of Judge CHARLES R. JONES, Judge PATRICIA RIVET MURRAY, Judge EDWIN A. LOMBARD).
EDWIN A. LOMBARD, Judge.
This case arises out of a September 2000 boating accident involving a boat owned and operated by James Gonzales and insured by Progressive Insurance Company ("Progressive") in September 2000. After review of the record in light of the arguments of the parties and applicable law, we affirm the judgment of the trial court and deny the Exceptions of Prescription and Res Judicata filed by James Gonzales.
Relevant Facts and Procedural History
On July 18, 2001, the plaintiffs/appellants (Huey Gonzales, Ralph G. Gonzales, Kathy Gonzales, and Thomas Gonzales), filed this lawsuit alleging that they were injured on a September 25, 2000, family outing when James Gonzales negligently drove his sixteen foot boat into the pilings of a stationary platform located in the Mississippi River Gulf Outlet in St. Bernard Parish. James Gonzales and his insurer, Progressive, were named as defendants in the lawsuit. On November 19, 2003, Progressive filed an amended and supplemental answer, instituting a reconventional demand against the plaintiffs and a cross-claim against their insured, James Gonzales, alleging fraud and a conspiracy between the plaintiffs and James Gonzales to stage the purported accident. In response, the plaintiffs dismissed James Gonzales as a defendant. Progressive expressly reserved all rights against him and he remains in the lawsuit as a defendant and cross-appellee.
On April 4, 2005, following an eight day trial on the merits, the trial court dismissed the plaintiffs' claims against Progressive, granted Progressive's reconventional demand against the plaintiffs, and dismissed Progressive's cross-claim against James Gonzales. In his reasons for judgment, the trial judge found that James Gonzales was negligent in striking a piling or part of a piling in the Mississippi River Gulf Outlet on September 25, 2000, but that the claim he conspired with the *560 plaintiffs to defraud the insurance company was unsubstantiated. The trial judge held that the plaintiffs failed to prove by a preponderance of the evidence all the elements of their claims against Progressive. He specifically found that the plaintiffs were not credible witnesses because they repeatedly contradicted each other as well as their own prior deposition testimony with regard to the details and events surrounding the accident, their testimony was inconsistent with the physical evidence and related expert testimony introduced at trial and, when viewed in light of the medical testimony and records, the trial judge found the plaintiffs' testimony unconvincing on the issue of causation. With regard to the reconventional demand, the trial judge found that Progressive proved by a preponderance of the evidence that the plaintiffs schemed to defraud Progressive in order to receive damages not owed to them and, accordingly, ordered Huey, Ralph, and Kathy Gonzales to repay sums of $2480.00, $2183.00, and 1,992.00, respectively, to Progressive for medical payments coverage made to them.
On appeal, the plaintiffs argue that the trial court was manifestly erroneous in granting Progressive's prescribed reconventional demand against the plaintiffs; (2) in issuing inconsistent and contradictory judgments; (3) in finding that the plaintiffs schemed to defraud Progressive; and (4) in denying the plaintiffs' claims for special and general damages related to injuries suffered in the accident. In response, Progressive asserts that the trial court judgment pertaining to the plaintiffs' claims should be affirmed but argues that the trial court erred in failing to find that James Gonzales, the defendant-in-reconvention, conspired with the plaintiffs to defraud the insurance company. James Gonzales has filed two exceptions related to this matter: (1) an Exception of Prescription, asserting that Progressive's claims in the reconventional demand were prescribed; and (2) an Exception of Res Judicata, arguing that because Progressive failed to timely file a separate appeal to the judgment as it pertained to his dismissal from the case and only appealed that part of the judgment in his answer to the plaintiffs' appeal, the doctrine of res judicata is applicable and proscribes consideration of Progressive's appeal.
Discussion
In reviewing the factual findings of a trial court, this court is limited to a determination of manifest error. Stobart v. State through Dept. of Transp. and Development, 617 So.2d 880 (La.1993); Arceneaux v. Domingue, 365 So.2d 1330 (La. 1978). On review, an appellate court may not re-weigh the evidence or substitute its own factual findings because it would have decided the case differently and, accordingly, where there are two permissible views of the evidence, the fact finder's choice between them cannot be manifestly erroneous or clearly wrong. Smith v. Louisiana Dept. of Corrections, 93-1305 (La.2/28/94), 633 So.2d 129, 132. Moreover, "[w]hen the findings are based on determinations regarding the credibility of witnesses, the manifest error-clearly wrong standard demands greater deference to the trier of facts' findings [] for only the factfinder can be aware of the variations in demeanor and tone of choice that bear so heavily on the listener's understanding and belief in what is said...." Rosell v. ESCO, 549 So.2d 840, 844-845 (La.1989).
In this case, the plaintiffs contest the trial judge's dismissal of their claims against Progressive. In order to prevail on a negligence tort claim, the plaintiffs must prove three elements by a preponderance of the evidence: fault, causation, and damages. See Austin v. Abney Mills, *561 Inc., 01-1598 (La.9/4/02), 824 So.2d 1137, 1150. After review of the evidence adduced at trial under the applicable manifest error standard of review, we can find no error in the trial judge's factual findings, credibility determinations, or judgment. The plaintiffs contend that they were injured when James Gonzales lost control of his boat and hit the platform piling while traveling at approximately 30 miles per hour, but there are no independent witnesses to the accident and the plaintiffs offer conflicting testimony as to the details of the accident, such as where the boat hit the piling, how far it travelled, and the results of the impact upon the passengers. Moreover, although expert testimony suggests that such an impact at 30 miles per hour would have, in all likelihood, resulted in one or more of the passengers being ejected from the boat[1] and very visible injuries, none of the plaintiffs were ejected from the boat and the only visible injury noted at the emergency room that day was a contusion on the chest of one of the plaintiffs. No non-family witnesses to the accident or its immediate aftermath appeared at trial which is striking because the plaintiffs claim that they were rescued by two people in a boat and taken back to the boat launch at Bayou Bienvenue. Notably, each plaintiff gives a conflicting description of the rescuers (including gender and age) and the rescue boat and, apparently, no one learned the rescuers name. Upon returning to the boat launch, the plaintiffs[2] drove in two separate vehicles to Lakeland Hospital where a Progressive adjuster met them and gave both Kathy and Ralph Gonzales checks in the amount of $1000.00. While the plaintiffs submitted extensive medical records and testimony, in light of the substantial amount of evidence pertaining to prior accidents and injuries, as well as indications that the plaintiffs misrepresented or gave conflicting medical histories to their treating physicians, we do not find that the trial judge was manifestly erroneous in finding that the plaintiffs failed to establish that the accident in September 2000 was the cause of their medical complaints. Thus, there is no error in the trial judge's finding that the plaintiffs failed to prove the requisite elements of their claim.
Next, the plaintiffs argue that the judgment dismissing their claims against Progressive must be overturned because it conflicts with the judgment dismissing Progressive's claim against James Gonzales. The plaintiffs contend, in effect, that once the trial judge found that an accident occurred due to James Gonzales' negligence and that Progressive did not substantiate its claim that James Gonzales fraudulently conspired with the plaintiffs, a finding that the plaintiffs established their claim necessarily must follow. According to the plaintiffs, the trial judge could believe that all the members of the family, including James Gonzales, conspired to defraud the insurance company or that none of them conspired to defraud the insurance company, but to rule in favor of Progressive with regard to the reconventional demand against the plaintiffs while dismissing Progressive's claim against James *562 Gonzales constitutes irreconcilable judgments which must be overturned. Similarly, Progressive contends that the dismissal of its claim against their insured, James Gonzales, is manifestly erroneous. Specifically, with citation to American Cyanamid Company v. Electrical Industries, 630 F.2d 1123 (5th Cir.1980), Progressive asserts "if one of the Gonzales's is found to have committed fraud, all of the plaintiffs and James must be found to have conspired in the fraudulent scheme."
However, Progressive's reliance on American Cyanamid, a federal case, for the proposition that under Louisiana law when one alleged conspirator is found to have committed fraud, all alleged conspirators must be found to have committed fraud, is misplaced. La. Civ.Code art. 2324(A) provides that "[h]e who conspires with another person to commit an intentional or willful act is answerable, in solido, with that person, for the damaged caused by the act." Nothing in American Cyanamid, or other caselaw interpreting Article 2324(A), supports the all-or-nothing position proposed by the parties in this case. Rather, claims are determined separately and, although the evidence in this case may suggest that James Gonzales was also culpable in an attempt to defraud his insurer, we cannot find that the trial judge was clearly wrong in determining that the evidence does not support such a finding.
Finally, the plaintiffs argue that the trial court erred in rendering judgment on Progressive's reconventional demand against them because, at the time Progressive filed its reconventional demand alleging fraud, the claim had prescribed. To determine whether a claim is prescribed, a court looks to the time when a plaintiff knew or should have known that a cause of action arose or existed and prescription statutes are strictly construed against prescription and in favor of the claim that is said to be extinguished. See Louisiana Health Service and Indemnity Company v. Tarver, 93-2449, pp. 11-12 (La.4/11/94), 635 So.2d 1090, 1098; Fontaine v. Roman Catholic Church of Archdiocese of New Orleans, 625 So.2d 548, 551 (La.App. 4 Cir.1993), writ denied, 93-2719, (La.1/28/94), 630 So.2d 787. In effect, the plaintiffs claim that Progressive should have immediately known that the plaintiffs claims were fraudulent on the day the lawsuit was filed and, because the reconventional demand was not filed within a year after the lawsuit was filed, Progressive's claim is prescribed.
The boat incident in this case occurred on September 25, 2000, the lawsuit was filed on July 18, 2001, and, after a period of discovery, Progressive filed its amended answer and reconventional demand on November 19, 2003. Clearly, the payments made immediately to the plaintiffs for medical expenses indicate that, initially, the insurance company did not suspect fraud. Rather, the fact that the reconventional demand subsequent to the plaintiffs' filing of the lawsuit and after a period of discovery suggests that it was only during the discovery process that Progressive began to question the legitimacy of the plaintiffs' claims. In his Exception of Prescription, James Gonzales contends that Progressive filed a Motion for Protective Order on December 12, 2001[3], that indicated the insurance company had become suspicious as to the nature of the accident and claims. Although the plaintiffs contend *563 that the insurance company always treated this as a fraud case, there appears to be no record evidence that Progressive knew or should have known of the plaintiffs' fraud on or before November 19, 2003, and, accordingly, the reconventional demand (filed in November 2003) appears to be timely.
With regard to the substance of Progressive's reconventional demand, an action for fraud consists of the following elements: (1) a misrepresentation of material fact; (2) made with the intent to deceive; and (3) causing justifiable reliance with resultant injury. See Becnel v. Grodner, XXXX-XXXX, p. 3 (La.App. 4 Cir. 4/2/08), 982 So.2d 891, 894. Our review of the extensive medical testimony and records indicates that that the plaintiffs not only offered conflicting testimony to the court about the cause and nature of their alleged injuries and prior medical histories, but also misrepresented their medical histories to their treating physicians. Thus, in accordance with our standard of review, we find that the record supports a finding that Progressive substantiated their fraud claim against the plaintiffs.
Conclusion
For the above stated reasons, we find that Progressive timely filed its reconventional demand and that the record supports the trial judge's dismissal of Progressive's claim against James Gonzales and, therefore, deem the issues raised by James Gonzales in his Exception of Prescription and Exception Res Judicata moot. Accordingly, we affirm the judgment of the trial court and deny as moot the Exceptions of Prescription and Res Judicata.
JUDGMENT AFFIRMED; EXCEPTIONS DENIED AS MOOT.
MURRAY, J., concurs with reasons.
Although I concur in the result, I write separately to address two issues: (i) the alleged inconsistent factual findings, and (ii) the res judicata exception.
(i) the alleged inconsistent factual findings
The plaintiffs contend that the trial court's factual finding that James Gonzales' negligence caused the boating accident and that he was not involved in fraud of his insurer, Progressive, is inconsistent with its finding of fraud on their part. Progressive similarly contends that the trial court's finding of no fraud on James Gonzales' part is inconsistent with its finding of fraud on the plaintiffs' part. Contrary to the parties' contentions, these factual findings are not inconsistent. The trial court found there was an accident but that the plaintiffs even assuming they were in the accident were not injured as a result of it. The trial court reasoned that the plaintiffs were not credible and that the cause of the injuries they sustained was not the accident. The trial court thus found fraud on the plaintiffs' part. This finding of fraud is reconcilable with the findings of negligence on James Gonzales' part in causing the accident and the lack of fraud on his part.
(ii) the res judicata exception
In this court, James Gonzales filed an exception of res judicata based on Progressive's failure to file a separate timely appeal of the trial court's judgment dismissing Progressive's cross-claim against him. He contends that Progressive's answer to the plaintiffs' appeal procedurally was insufficient to bring him into the appeal as a cross-appellee. He thus contends that the judgment dismissing Progressive's cross-claim against him has become final.
*564 The majority addresses the merits of Progressive's cross-appeal and finds that the trial court did not err in dismissing Progressive's cross-claim against James Gonzales. Based on that finding, the majority concludes that the exception of res judicata is moot. Because the exception raised an issue regarding this court's jurisdiction to entertain the cross-appeal, the exception should have been addressed before reaching the merits of the cross-appeal. Nonetheless, I agree with the majority's decision to deny the exception.
The general rule on which James Gonzales' exception is based is that an appellee cannot by answering an appeal raise an issue regarding a party who is not an appellant. See La. C.C.P. art. 2133 (providing that an answer "shall be equivalent to an appeal on his [(the appellee's)] part from any portion of the judgment rendered against him in favor of the appellant and of which he complains in his answer.") "[T]he answer to the appeal does not serve as an appeal by the appellee from any portion of the judgment rendered against him or her and in favor of another appellee." 1 Frank L. Maraist and Harry T. Lemmon, Louisiana Civil Law Treatise: Civil Procedure § 14.11 (1999). This rule, however, is subject to an exception for certain situations involving incidental demands: "an appellee may by answer to the appeal, demand modification, revision, or reversal of the judgment insofar as it did not allow or consider relief prayed for by an incidental action filed in the trial court." La. C.C.P. art. 2133. Such is the case here. In its answer, Progressive demands reversal of the trial court's judgment insofar as it denies relief on its cross-claim (an incidental action) against James Gonzales. Progressive therefore properly included in its answer its cross-appeal against James Gonzales.
For these reasons, I respectfully concur in the result.
NOTES
[1] It is particularly likely that someone who was standing in the boat at the time of impact, as Ralph Gonzales claims he was, would have been ejected from the boat.
[2] Peggy Gonzales testified that she drove half the family to Lakeland and Ralph Gonzales drove there in his own truck; Kathy Gonzales testified that Ralph drove himself and everyone else went in Huey Gonzales's truck. Ralph testified that he did not discuss hospital options at the boat launch and, thus, it was apparently coincidental that although Lakeland was not the hospital closest to the boat launch site, they all arrived at the same hospital.
[3] The record index indicates that a Motion for Protective Order was filed on December 13, 2001. However, However, the index also indicates that pages 1-858 or the record are missing "due to Hurricane Katrina" and, accordingly, the contents of the December 2001 motion is not in the record. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559190/ | 20 So.3d 848 (2009)
COOPER
v.
STATE.
No. SC09-1851.
Supreme Court of Florida.
October 7, 2009.
Decision Without Published Opinion Review dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559267/ | 20 So.3d 872 (2009)
Anthony John SMITH, Appellant,
v.
STATE of Florida, Appellee.
No. 4D08-1978.
District Court of Appeal of Florida, Fourth District.
August 19, 2009.
Rehearing Denied December 3, 2009.
Carey Haughwout, Public Defender, and Peggy Natale, Assistant Public Defender, West Palm Beach, for appellant.
Bill McCollum, Attorney General, Tallahassee, and Heidi L. Bettendorf, Assistant Attorney General, West Palm Beach, for appellee.
WARNER, J.
In this appeal of multiple convictions for uttering a forged instrument, possession of *873 a counterfeit payment instrument, third-degree grand theft, and organized fraud, appellant claims that the trial court erred and departed from its position of neutrality when, in instructing the jury, it identified which state exhibit applied to each count of the information. He also contends that he was entitled to a judgment of acquittal on several of the counts, because no one testified to his possession of the counterfeit checks. We affirm on both issues.
The state presented evidence that appellant Smith was the mastermind behind a scheme involving the creation and cashing of counterfeit checks. Among those who testified were Smith's codefendants, Tina Partlow and Jennifer Ford. Partlow testified that Smith hired her to open bank accounts and cash checks. She admitted to signing and cashing nine counterfeit checks. Smith provided her with some of the checks she cashed at Cash Plus. Ford also provided her with a few checks. She was not sure which checks she received from whom.
Ford testified that she put the names that Smith provided her on the checks for him. Using a computer, they printed a name on a piece of paper, put the check on top of it while matching the name with the line on the check, and ran the check through the printer. At Smith's request, she also cashed three checks, transported people to cash checks, and brought checks to other people.
Parag Patel, a manager at A & M Discount Beverage, testified that Ford and another codefendant each cashed two checks which later came back as counterfeit. Smith came into the store within an hour after Ford left and tried to cash the same type of check. Patel saw Ford waiting in the car.
Defense counsel moved for a judgment of acquittal as to several counts of possession of a counterfeit payment instrument and uttering a forged instrument on the ground that Partlow was not sure which checks were given to her by Smith and which were given to her by Ford. The state argued that under the principal theory, Smith provided the checks to Ford who then passed them on to Partlow. Finding sufficient evidence in the record to establish a prima facie case, the court denied the motion.
During the charge conference, the court decided that it would list the state's exhibit number which applied to each count in brackets after each count. For example, count 1 would read: "Count 1: [allegation regarding state's exhibit 53]" and then list the elements the state must prove. The court reasoned that the jury needed to know which exhibit it would be examining for each particular count. Otherwise it would be very time-consuming for the jury to sort out which of the approximately fifty exhibits involving checks corresponded with each count. Defense counsel objected and argued that it was for the jury to decide whether an exhibit matched a count. The court would be helping the jury by providing it with an itemized list. The court noted the objection, but found nothing inappropriate in tying a count to an exhibit. The state then told the court which exhibits corresponded with which counts.
The jury found Smith guilty of all counts as charged. The court imposed a twenty-year total sentence for all charges, some of the sentences on individual charges running consecutively. This appeal follows.
Smith argues that the trial court erred by instructing the jury which state's exhibit corresponded to each count in the information, because in doing so the judge departed from his role as a neutral and detached magistrate and assisted the state *874 in its presentation of its case. The state maintains that the trial court did not depart from its position of neutrality when it clarified evidence for the jury. The court was concerned with the smooth proceeding of the jury deliberation, not with whether one party might gain a tactical advantage over another party.
To support his position Smith relies on cases where the trial court essentially acted as a prosecutor. For instance, in McFadden v. State, 732 So.2d 1180 (Fla. 4th DCA 1999), the judge assisted "an unprepared state attorney" by encouraging the state to reopen its case to cure omissions, questioning and cross-examining the probation officer and the defendant to establish elements essential to the violation of probation, sua sponte ordering a fingerprint comparison, suggesting that the probation officer file a corrected warrant, and encouraging the state to amend the affidavit to reinstate charges that had previously been dismissed. In Edwards v. State, 807 So.2d 762 (Fla. 2d DCA 2002), the trial court conducted all of the questioning of the state's witnesses. In Lyles v. State, 742 So.2d 842 (Fla. 2d DCA 1999), the trial court sua sponte ordered the defendant to submit to fingerprinting and bifurcated the hearing to allow additional testimony. In Department of Highway Safety & Motor Vehicles v. Griffin, 909 So.2d 538 (Fla. 4th DCA 2005), this court found that the hearing officer departed from her neutral role as magistrate when she stopped the hearing to locate the registration certificate for the machine used to conduct a breath test on the defendant and then entered the certificate into evidence.
In all of the foregoing cases, the trial court assisted the state in presenting its prima facie case. The court ensured that the prosecutor presented evidence properly or actually secured additional evidence in order to complete the state's case. Here, however, the trial court did not assist in presenting the case. Instead, the trial court sua sponte determined that it would reduce juror confusion and time to associate each charge with the exhibit the state introduced to prove that charge. The court did not determine itself which document supported each charge. It asked the prosecutor to supply that information. The court did not depart from a position of neutrality. It commendably acted to assist the jury in its deliberations.
As to Smith's judgment of acquittal on several of the charges, we also affirm. The state presented evidence that Smith was the principal in all of the transactions. Although some of the checks and instruments were given to Partlow by Ford, Ford testified that she acted at Smith's request or direction. The state presented sufficient evidence to withstand a motion for judgment of acquittal.
Affirmed.
POLEN, J., and KAPLAN, MICHAEL G., Associate Judge, concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559274/ | 20 So.3d 1005 (2009)
Willard Nathaniel PAUL, Appellant,
v.
STATE of Florida, Appellee.
No. 4D08-3063.
District Court of Appeal of Florida, Fourth District.
November 4, 2009.
*1006 Carey Haughwout, Public Defender, and Peggy Natale, Assistant Public Defender, West Palm Beach, for appellant.
Bill McCollum, Attorney General, Tallahassee, and Katherine Y. Mclntire, Assistant Attorney General, West Palm Beach, for appellee.
MAY, J.
The defendant appeals his conviction and sentence for first degree murder. He argues that the prosecutor's statements during closing argument denied him a fair trial. We disagree and affirm.
The State charged the defendant with first degree murder. While no one saw the shooting or the defendant with a gun, several witnesses testified to events surrounding the shooting. Those witnesses either saw the defendant driving his girlfriend's car or rode with him to the scene of the shooting. They observed a heated argument between the defendant and the victim, and some of them tried to intervene. They saw the defendant leave in the car alone, and then return to where the victim was standing. The witnesses heard gunshots and saw the defendant drive away from the location.
The victim sustained two gunshot woundsone consistent with a face to face encounter and the other consistent with the shooter standing over a person lying on his back. The police responded and located the described car at the home of the defendant's girlfriend. A few days later, the police arrested the defendant. At trial, the State played the defendant's tape recorded interview, in which he admitted driving his girlfriend's car and getting into a fight with the victim. The jury found the defendant guilty. He received a life sentence.
The defendant argues on appeal that he was denied a fair trial because of comments made by the prosecutor during closing argument. The defense objected to some of those comments, but failed to object to others. The trial court sustained the objections that were made, but denied the defense motion for mistrial.
We review decisions on motions for mistrial to determine whether the trial court abused its discretion. Smith v. State, 866 So.2d 51, 64 (Fla.2004).
When comments are made without objection, we reverse only if fundamental error occurred. See Crump v. State, 622 So.2d 963, 972 (Fla.1993). To preserve error, a party must object at the time the error occurs. See id. at 972 (citing Davis v. State, 461 So.2d 67, 71 (Fla.1984)). Lacking a contemporaneous objection, only a fundamental error permits us to review *1007 the issue on appeal. Id. Fundamental error is defined as an error that goes to the foundation of the case or the merits of the cause of action. See DeFreitas v. State, 701 So.2d 593, 596 (Fla. 4th DCA 1997) (citing Ryan v. State, 457 So.2d 1084, 1091 (Fla. 4th DCA 1984)). It "reaches 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." Power v. State, 886 So.2d 952, 963 (Fla.2004).
The following comments were made by the prosecutor, without objection, during closing argument:
You heard from all those witnesses that are are listed on that second paragraph there, they all said they met met up with the Defendant, they all drove into the Sheraton Plaza area, they all got into a Dodge Stratus car. Is there any reasonable doubt for us to know that on the night of June 6, 2006, he was with those people? No. Okay, unless you believe they're all lying. And then you have to discount the Defendant's own statements.
. . . .
If you hold the State of Florida to a higher burden than the law requires, it is a violation of the oath you took to follow the law. You know, this is a difficult job. No doubt about it, your job is difficult. You sit here, you decide the facts, you take time off from work. Nowadays it's really important to get back to work as soon as possible and it is tough. But for generations, Americans have made sacrifices and I'm not asking you to take the hill, the People of the State of Florida is not asking you to take the hill. You can steel yourselves and you can do this job. You can hold the State to the burden only required by law. Steel yourselves for this duty. ...
. . . .
The consequences are great for both sides and that's why they're not sitting there in that jury box. Fear is not a reasonable doubt-fear of the consequences. Do not allow yourselves to be held hostage to that. That standard does not change. Be fearless in your duties. Doubt in the back of your mind is not a reasonable doubt is what His honor tells you.
. . . .
Now if the vic if the witnesses had lied about the Defendant driving the vehicle. Well, you know, there's no DNA, there's no prints usable prints that he was driving that vehicle, so they must have lied. Well, the problem with that is why would they lie about that and not also lie he al we also saw him shoot Mr. Pierre? That is an illusion of a doubt, this whole reference about the unusable prints. Even the Defendant in his statement said he was riding in the vehicle. All right, we are a nation of laws. In return from [sic] freedom, we ask that you follow the laws the rules, that's what you're doing today, that's what he must be held accountable for. ...
(emphasis added).
The defendant argues that the prosecutor's comments misstated the law concerning reasonable doubt and led the jury to believe it had a duty to convict. We disagree. The prosecutor simply argued a conclusion that could be drawn from the evidence because the defendant admitted to being in the car. Similarly, we find no fundamental error in the prosecutor asking the jury not to base its verdict on fear. Indeed, the standard jury instructions essentially instruct the jury not to be influenced by feelings of prejudice, bias, or sympathy. The prosecutor's request for the jury to do its job did not rise to fundamental error, as those statements *1008 taken in context reminded the jury to simply perform its duty to follow the law.
Defense counsel did object to the prosecutor's argument and a slide used by the prosecutor. The slide reflected the following:
Duty and Honor
* No one can force you to abide by your oaths.
* No one can force you to follow the law.
* No one can force you to use your common sense.
* Nothing we can say or do can stop you from elevating the burden of proof because you are not comfortable with your role.
The defense argued that the slide appealed to the jury's emotion because it suggested some sort of possible religious undertone and was inflammatory. The trial court sustained the objection, but denied the defense motion for mistrial.
On rebuttal, the prosecutor made the following argument:
The bottom line is you cannot be 100 percent sure. I will honestly tell you that, you cannot be. Unless you're a victim or a witness, you cannot be. If you were there. Okay, but that's not the standard. The standard is following my oath your oath, following the law, using your commonsense, using the instructions that His Honor gave you, do you find a reasonable doubt? If not, you can walk out of here knowing you did your job.
Defense counsel objected to the State's characterization of a conviction as the jury "doing their job." The prosecutor responded that he only argued that the jury's duty was simply to follow the law. The trial court told the prosecutor to rephrase the statement.
The State's slide labeled "Duty and Honor" did not require the court to grant the motion for mistrial because the slide did not impair the fairness of the trial. See Breedlove v. State, 413 So.2d 1, 8 (Fla.1982). The prosecutor simply reminded the jury of its duty to follow the law. The prosecutor's comment concerning reasonable doubt and asking the jury to do its job likewise did not rise to the level of fundamental error. See Power, 886 So.2d at 963. The prosecutor did not tell the jurors that it was their job to convict the defendant. Rather, the prosecutor advised the jury to follow the reasonable doubt standard. The theme of the prosecutor's comments was adherence to the law and abidance to the juror's oaths to follow the law and hold the State accountable to its burden of proof.
We find the trial court properly sustained the objections when made and correctly denied the motion for mistrial. The unobjected to statements, neither alone nor in combination, rose to the level of fundamental error. Even if error occurred, we find that error to be harmless. State v. DiGuilio, 491 So.2d 1129 (Fla. 1986).
Affirmed.
DAMOORGIAN and CIKLIN, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559811/ | 5 Md. App. 609 (1969)
249 A.2d 200
GEORGE SANTONI
v.
STATE OF MARYLAND.
No. 102, September Term, 1968.
Court of Special Appeals of Maryland.
Decided January 15, 1969.
The cause was argued before MURPHY, C.J., and ANDERSON, MORTON, ORTH, and THOMPSON, JJ.
Frank B. Cahn, II, for appellant.
Bernard L. Silbert, Assistant Attorney General, with whom *611 were Francis B. Burch, Attorney General, and Charles E. Moylan, Jr., State's Attorney for Baltimore City, on the brief, for appellee.
MURPHY, C.J., delivered the opinion of the Court.
Appellant Santoni was charged in a two-count indictment in the Criminal Court of Baltimore with (1) larceny of $7,580.00, the money of Charles Grogan, and (2) with obtaining said money from Grogan by a false pretense. He was tried by the court sitting without a jury, found not guilty of false pretenses but guilty of grand larceny. Upon this verdict, the court sentenced the appellant to two years imprisonment under the jurisdiction of the Department of Correction. The sentence was suspended upon condition of "good behavior" and a fine of $1,000.00 was imposed. On this appeal, Santoni contends (a) that the evidence was insufficient to support the larceny conviction, and (b) that the lower court committed prejudicial error by restricting the scope of his cross-examination of the prosecuting witness.
The pertinent facts disclosed by the record are these: By an agreement written in longhand dated August 2, 1965, Joseph Wallsachs agreed to purchase the business known as the Surf Club, Inc. from Frank Stancliffe, individually, and T/A Central Auto Service and Surf Club, Inc. It was specified in the agreement that the purchase price was to be $30,000.00, of which $3,000.00 was to be paid in cash at the time of signing the agreement, with the balance of $27,000.00 being payable "at settlement," $17,000.00 in cash, and a $10,000.00 note payable five years after date, without interest. The agreement further specified that the buyer would lease the premises on which the business was being conducted for five years at a rental of $6,000.00 annually, with certain options to renew the lease and purchase the premises, and an option to require the seller to transfer all stock "held by him and others" back to the corporation. In an addendum to the agreement dated August 2, 1965, the buyer was given the right to possession of the premises upon twenty-four hours notice to the seller, with the proviso that he first purchase the liquor inventory at wholesale prices. The *612 entire transaction was made expressly contingent upon the successful transfer of the liquor license, and settlement was to be held five days after the transfer of the license was approved by the appropriate authorities.
The negotiations were conducted and the agreement prepared and concluded at an establishment known as the Ravens Nest in Baltimore, this apparently being the appellant Santoni's place of business. In addition to the buyer's and seller's presence, Roy Graner, the manager of the Surf Club, was also present, as well as Wallsachs's attorney Erwin Frenkil, John DiTomasso, Erwin Kardin, Santoni, and Charles Grogan, the latter being the prosecuting witness. Graner signed the agreement witnessing Stancliffe's signature; Grogan signed the agreement witnessing Wallsachs's signature. The written agreement, including the addendum thereto, was offered and received in evidence.
Stancliffe testified that he received the $3,000.00 down payment from Wallsachs when the agreement was signed and that as Wallsachs began operating the business on August 2, 1965, he was also paid $2,000.00 for the liquor inventory and $400.00 to replace cash in the cash register.
Stancliffe testified further that at the time of the signing of the agreement on August 2, 1965, Graner, the manager of the Surf Club, held an option to purchase the business, and that appellant Santoni, DiTomasso, and Kardin, had previously offered Graner $5,000.00 for his option; that when the agreement between Wallsachs and himself was signed, $5,000.00 was to be paid for Graner's option at the time of the signing; that this sum was not paid between August 2 and August 11, 1965, although he, Stancliffe, had made demand on Santoni for it, presumably on Graner's behalf; that on August 13, after he had talked with Santoni on the phone, Kardin was sent over from the Ravens Nest with $1,000.00, mostly in fifty dollar bills; that on August 14, he got a check for $1,000.00 from the Ravens Nest and three weeks later the balance of $3,000.00 was paid to him in cash by one Thomas Averella, who had been brought in by DiTomasso.[1]
*613 Stancliffe testified that Wallsachs operated the business for ten days to two weeks, after which Kardin and DiTomasso operated it until, in October of 1965, he (Stancliffe) re-purchased the liquor stock and took back the business. He stated that the sale of the Club was never consummated; that under the agreement he was to get a first mortgage of $10,000.00, but later discovered that he was to receive only a second mortgage because "they" were taking a $20,000.00 loan from one Albert Aaron. Stancliffe testified that he kept Wallsachs's down payment of $3,000.00 "for a lot of debt that was incurred."
The prosecuting witness, Charles Grogan, testified that he had agreed to "back" Wallsachs to the extent of $10,000.00 in the event that Wallsachs purchased the Surf Club; that he was present when the agreement between Wallsachs and Stancliffe was signed on August 2, 1965 and that Frenkil (Wallsachs's attorney) "printed a check" for $3,000.00 at that time, which Wallsachs signed and gave to Stancliffe as a down payment; that on August 3, 1965, he (Grogan) went to the Surf Club and gave Frenkil $20,000.00 in the form of two checks; that the money was to be placed in escrow, to be released to Wallsachs only on Grogan's written signature, and only if Wallsachs, within ten days, or by August 13, had himself put in $10,000.00; that if Wallsachs failed to post this sum of money, the agreement between him and Wallsachs was off; and that in return for his $10,000.00 he (Grogan) was to receive a chattel mortgage on the equipment of the business, together with a life insurance policy, both in the amount of $10,000.00.
Grogan testified that on August 11, Wallsachs showed him a statement to the effect that $5,400.00 of the escrowed funds had already been spent; that this expenditure was completely without his knowledge and he did not know how the money was withdrawn from the escrow account; and that on August 11, he and Wallsachs went to see Santoni at the Ravens Nest, at which time Santoni gave Wallsachs a check for $2,000.00.[2]
Grogan testified further that on August 12 he went to Frenkil's office, apparently to make inquiry with respect to the expenditure *614 of the $5,400.00 of the escrow funds; that Santoni also came to Frenkil's office in response to Frenkil's phone call; that Santoni said to him, "I understand you are pulling out of the deal. I want my five grand"; that he asked Santoni "What five grand are you talking about," to which Santoni responded by saying "The five grand I paid out in payoff"; that Frenkil then arranged for him (Grogan) and Santoni to be alone in an adjacent office, at which time Santoni hold him that he "was out" another $2,500.00 which he had advanced to Wallsachs for expenses; that Santoni then said to him "You are going to loan me 7,500 bucks"; that after he (Grogan) declined, Santoni said, "You will loan it to me, you so-and-so, or your life won't be worth $75.00"; that Santoni also said "We will either get the 7,500 bucks or we won't get out of the City of Baltimore today."
Grogan further testified that at one time Kardin came into the room and he and Santoni "spent considerable time trying to get me to say Wallsachs was a thief"; that Santoni told him that Kardin "had connections with the Teamsters Union" and that "if they didn't get me today, eventually they would have a truck run me off the road and kill me"; that thereafter he (Grogan) and Santoni returned to Frenkil's office where Frenkil said,
"I'm drawing two checks, one for seven thousand five hundred and eighty dollars and one for six thousand, nine hundred and forty dollars. You sign both of them."
He further testified that he (Grogan), in Santoni's presence, then signed the checks, which were made payable to his (Grogan's) order because Santoni "forced me to sign it" by his threats; that he told Frenkil that he didn't owe Santoni any money and had no intention of loaning him any money; that he didn't want to sign the checks because "It's nothing but fraud," but Frenkil told him "go ahead, sign them."
Grogan testified that Frenkil then went to the bank and came back with a cashier's check drawn to his order for $6,460.00 and that Frenkil "handed to Mr. Santoni in the presence of everyone three bundles of one hundred and fifty dollars bills. *615 which Santoni ruffled and put in his pocket"; that he didn't tell Frenkil not to give the money to Santoni; that thereafter Santoni said to him (Grogan), "I am giving you a note for this money," to which he responded by stating that he didn't want Santoni's note, that it was "no good," and that "I want money"; and that Santoni said "I will give you good juice," meaning interest.
Santoni's note to Grogan was in the amount of $9,092.00 and called for payments of $100.00 weekly. The note was signed by Santoni in Frenkil's presence.
Grogan testified that he did not know how much money Frenkil gave Santoni when he returned from the bank; that Santoni gave $500.00 in cash to Frenkil for his legal fees; that although he made demand for payment of Santoni's note on October 25, 1965 from one Manning,[3] no payments were ever made; and that he never wrote to Santoni about the note because he couldn't locate him.
On cross-examination Grogan testified that Wallsachs had executed a note to Santoni dated August 12, 1965, the amount of which was to be the same as the amount of the note executed by Santoni to Grogan. Grogan was then asked by defense counsel:
"Q. Actually, was it not that Mr. Wallsachs was supposed to pay you back this money and you would not accept his note. Isn't that true?"
The question was objected to by the State and the court sustained the objection. No reason was given either for the State's objection or the Court's ruling, and no proffer of proof was made by appellant's counsel.
A statement made by Erwin Frenkil was received in evidence by stipulation of the parties and was substantially as follows: That Kardin, Grogan and Wallsachs "developed a transaction for the purchase of the Surf Club"; that on August 2, 1965 he drew a contract between Wallsachs and Stancliffe for the sale of the Surf Club; that the parties insisted that the *616 matter had to be consummated then and there because among other reasons "an individual holding an option had to be satisfied rather promptly"; that Wallsachs gave him a blank check for the $3,000.00 down payment which, after it was filled in and signed by Wallsachs, was given to Stancliffe; that after the sellers left, Grogan, Kardin, DiTomasso and Wallsachs "discussed the matters to be taken up between them as to their respective interests, salary, personnel, etc."; that Wallsachs and Grogan were "the money people" in the transaction and they were to own one-half of the business; that Grogan gave him $20,000.00 on August 3 which was placed in his (Frenkil's) attorney escrow account; that "I was advised that $5,440.00 had been dispersed for the deposit payment, the liquor inventory and change for cash register, and was requested to make a first disbursement to Wallsachs of this amount which was done on August 4"; that on August 10, Wallsachs told him that all the money in the transaction belonged to him and that Grogan was not a real investor in the transaction, and that "papers" should be prepared to delete Grogan from the transaction; and that after "some discussion" an agreement was prepared and turned over to Wallsachs, Kardin and Santoni;[4] that on August 12, Grogan came to his office unannounced, demanding a certified check for the balance of $14,560.00 in the escrow account, claiming this to be his money; that he (Frenkil) arranged a meeting at that time with Wallsachs, Kardin, Santoni, DiTomasso, and Grogan being present; that he told them to resolve their differences and they discussed the matter out of his presence; that after some time had elapsed, he was told that Wallsachs was not to receive anything; that Grogan asked him to issue a check for $7,580.00 which he was "to turn over to Santoni, and then to issue a check for the balance to him (Grogan)"; that Frenkil then prepared two checks, one for $7,580.00 and the other for $6,940.00; that Grogan asked him to get the checks cashed and to this end, he and Grogan went to the bank together; that Grogan cashed the one check for $7,580.00, placing the money in an envelope which he put in his pocket; that *617 as to the check for $6,940.00, Grogan got $500.00 in cash for payment toward the legal fees, and a cashier's check for the remainder of $6,440.00 payable to himself; that they then returned to Frenkil's office where Grogan gave him $500.00 in cash towards his (Frenkil's) fee; that Grogan then gave $7,580.00 in cash to Santoni (of which Santoni paid $500.00 to Frenkil for legal services); that at no time did Grogan protest the payment arrangement with Santoni, or decline to endorse the checks, or indicate that he was under any duress; that he was then instructed to prepare a promissory note from Wallsachs to Grogan but Grogan said he didn't want Wallsachs's note; that thereafter he was directed to draw two more notes, both in the amount of $9,200.00, one from Wallsachs to Santoni and the other from Santoni to Grogan; that Wallsachs was told by both Grogan and Santoni to make check payments on his note to Grogan's order, but to mail them to Santoni; that he (Frenkil) did not understand the basis of the computations, but that it was "his general understanding that the Notes were in connection with Wallsachs making good the monies which were lost in the Surf Club transaction because of his misrepresentation to all parties, including Grogan, Kardin and counsel"; that Wallsachs acknowledged his deception, and that when Grogan left his office after the meeting had terminated he did so in company with Kardin, Wallsachs, and Santoni, with "Dr. Grogan shaking my hand, expressing regret for aggravation caused me, regret at his own ineptness in being caused his financial loss, and stating in his farewell that should he have a matter in this area again, he would like to be able to call upon me for representation."
Frenkil's stipulated testimony further indicated that Grogan had accused him of misappropriating $5,440.00, as a result of which he was indicted, but that the State entered a "Confession of not guilty" in the case.
An F.B.I. agent, Arthur Hamilton, testified that on November 17, 1965, he spoke with Santoni at the Ravens Nest in connection with an investigation he was conducting into the sale of the Surf Club;[5] that Santoni told him that in July of 1965 *618 he met Grogan and Wallsachs; that Wallsachs expressed interest in buying a business such as the Ravens Nest; that Wallsachs gave him a check for $2,000.00 as a down payment on a business known as the Quimby Room and that he (Santoni) still had that check in his possession; that because Grogan didn't like the Quimby Room, they decided to buy the Surf Club; that Graner had an option to buy the Surf Club and that DiTomasso "had arranged to have this option removed for a figure of five thousand dollars," the payment therefor to be made (a) $1,000.00 from the profits earned by the Surf Club and be paid by Kardin, (b) $1,000.00 in the form of a check from the Ravens Nest, and (c) $3,000.00 from Averella, a friend of DiTomasso, who was interested in getting him "located somewhere"; that the $7,500.00 that he (Santoni) received on August 12 was, as to $5,000.00 thereof, for Graner's option, $2,000.00 for his (Santoni's) expenses, and $500.00 for Frenkil's legal fees; and that $1,000.00 of this money was repaid to Kardin, $1,000.00 repaid to the Ravens Nest, and $3,000.00 given to Kardin and DiTomasso to return to Averella. Hamilton testified further that in response to his statement that Averella had never been repaid, Santoni said that "he knew nothing about this" but that "If we get this five thousand dollars back to Grogan, will that take care of everything?" According to Hamilton's testimony, Santoni denied that no money had been paid on account of Graner's option prior to August 11; Santoni admitted going to Frenkil's office with Wallsachs on one occasion to draw out of the escrow account a sum in excess of $5,000.00 to be placed in Wallsachs's account to cover checks Wallsachs had issued, one for $3,000.00 for the down payment on the Surf Club, and the other in payment for the liquor inventory of the Surf Club.
Santoni did not testify and no other evidence was introduced at the trial.
The lower court, in reaching its verdict, stated:
"Gentlemen, I have given very careful consideration to the evidence in this case, and the issue of credibility is the principal issue as far as the trier of the facts is concerned in this case. As counsel very candidly admitted, *619 while it is true that one cannot view Mr. Grogan with a great deal of sympathy with all of his past dealings; were there no corroboration at all of certain elements about which he testified, the court might be inclined to reach a different conclusion. However, the testimony of Mr. Grogan concerning his conversations with Mr. Santoni, the offer of Mr. Santoni to an agent of the Federal Bureau of Investigation a sum of money, together with the question, `Would that satisfy Mr. Grogan?' all combined together to make this court believe that Mr. Santoni is, in fact, guilty of larceny; not guilty of false pretenses."
It thus appears from the lower court's abbreviated analysis of the evidence that it predicated Santoni's guilt of larceny upon Grogan's testimony that he gave $7,580.00 to Santoni because of the latter's threats to kill or injure him if he did not do so; and that Santoni's statement to Agent Hamilton indicating a willingness to return $5,000.00 to Grogan was evidence corroborative of the criminal agency of Santoni in acquiring the money from Grogan.
Appellant contends that the "true nature of the transaction" was that Grogan was making a loan of $7,580.00 to Wallsachs so that Wallsachs could "make good the monies which were lost in the Surf Club transaction because of his [Wallsachs] misrepresentations"; and that as Grogan consented to the transaction there was no trespassory taking of the money sufficient to constitute larceny when it was turned over to Santoni.
The State contends on the other hand that there was a trespassory, non-consensual taking of the money from Grogan by Santoni based on Santoni's threats upon Grogan's life and safety; and that since Grogan didn't owe Santoni any money, the giving of the promissory note by Santoni to Grogan was an obvious ruse to lend some color of legitimacy to Santoni's criminal act.
As the record clearly indicates, a sharp conflict exists between the testimony of Grogan and the statement of Frenkil, particularly with respect to the critical events occurring on August 12 when the $7,580.00 was turned over to Santoni; and *620 that the lower court viewed this conflict as presenting an issue of credibility, i.e., whether to believe Grogan's version of what occurred on August 12, or Frenkil's version of the transaction.
After Grogan had testified that he was compelled by threats to pay over the money to Santoni, and that he didn't want Santoni's promissory note for the money, the appellant, on cross-examination of Grogan, developed the fact that on the same day (August 12) Wallsachs had executed a promissory note payable to Santoni in the same amount as that given by Santoni to Grogan. When appellant then sought to elicit an admission from Grogan that Wallsachs was to pay the money back to him (Grogan), the court foreclosed further inquiry along this avenue by sustaining the State's objection to appellant's question.[6]
As was later shown by the statement of Frenkil, he had on August 12 prepared a note from Wallsachs to Grogan for the money Grogan had paid over to Santoni, but when Grogan refused to accept Wallsachs's note, two other notes were prepared, both in the same amount, one from Wallsachs to Santoni and the other from Santoni to Grogan, with instructions given by both Santoni and Grogan that Wallsachs, in making payments on his note, was to make his checks payable to Grogan but mail or deliver them to Santoni (indicating then the probability that Wallsachs was the primary debtor of Grogan, with Santoni also being liable, perhaps secondarily, on his note to Grogan).
As Frenkil's statement was to the effect that he didn't know the basis of the computations made on August 12 because "These people were in the habit of making their own deals and reporting only the net result that they wanted to have handled by me," it was of paramount importance to appellant's defense that he be permitted the fullest opportunity to cross-examine Grogan in an effort to develop, if he could, that in reality the transaction was a loan of money from Grogan to Wallsachs with payment thereof being made to Santoni on behalf of Wallsachs.
*621 We think that in view of the state of the record before us as unenlightening a record as we have have ever had before us to review that the lower court's restriction upon the scope of appellant's cross-examination of Grogan was such as under the circumstances constituted prejudicial error. In so concluding, we are not unmindful of the rule that the scope of cross-examination is a matter committed to the sound discretion of the trial court, Plumley v. State, 4 Md. App. 671, and that ordinarily where, as here, no proffer was made of the answer to the question to which the objection was sustained, there is no issue properly before us for review, Darby v. State, 3 Md. App. 407, Bowyer v. State, 2 Md. App. 454, and Brown v. State, 1 Md. App. 571. But as the answer sought to be elicited from Grogan by the appellant was so obvious and apparent from the question itself (and so very vital to appellant's defense), we do not think that a proffer of the substance of the expected answer was necessary, Baldwin v. State, 226 Md. 409, 414, so that a new trial must be granted to afford the appellant a fair opportunity to question Grogan as to whether the $7,580.00 was in any sense viewed by him as being a loan to Wallsachs, to be repaid to him; and, in this connection, to inquire as to Grogan's understanding of the purpose and meaning of the promissory note prepared on August 12 from Wallsachs to Santoni, and particularly as to his understanding of the directions purportedly given by Santoni and himself that Wallsachs was to make payments on his note to Santoni to Grogan.[7] In view of our conclusion, *622 we need not consider the question of the sufficiency of the evidence to convict appellant of larceny. We note, however, that the indictment charged the larceny of the money itself, and not of the checks signed by Grogan on August 12 (see Maryland Code, Article 27, Section 343, and Felkner v. State, 218 Md. 300). To constitute larceny there must be a taking sufficient to constitute a trespass, Loker v. State, 2 Md. App. 1 a taking from the possession of the owner against his will, Murray v. State, 214 Md. 383. More specifically, larceny is the wrongful and fraudulent taking and removal of goods or chattels (including money) from the possession of another against his will with the intent to deprive the person entitled thereto of his ownership thereof. Brown v. State, 236 Md. 505; Fletcher v. State, 231 Md. 190; Putinski v. State, 223 Md. 1; Robinson v. State, 4 Md. App. 515; Reagan v. State, 2 Md. App. 262. Ordinarily, the taking of money or other property by putting the owner in fear of personal injury constitutes robbery, Osborne v. State, 4 Md. App. 57, Harrison v. State, 3 Md. App. 148, and may under appropriate circumstances constitute extortion in violation of Maryland Code, Article 27, Section 562 (see Iozzi v. State, 5 Md. App. 415). It has been held in several older cases that under some circumstances, at least, it may constitute larceny to take property from another through fear induced by threats. See State v. Kallaher, 39 A. 606 (Conn.); Beasley v. State, 38 N.E. 35 (Ind.). As stated in 32 Am. Jur. Larceny, Section 35, the rule is that a felonious taking with the consent of the owner, when the giving of his consent is not a voluntary act but is the result of actual fear induced by threats calculated to excite a reasonable apprehension of bodily injury is, in effect, a taking without the owner's consent and may constitute a larceny. To like effect, but with little authority cited in support of the text, see 52A C.J.S. Larceny, Section 23; Wharton's Criminal Law and Procedure (Anderson Edition), Section 507; Perkins on Criminal Law, page 203.
Judgment reversed; case remanded for a new trial.
NOTES
[1] Averella later demanded that the $3,000.00 be returned to him. Stancliffe signed a note for the money some six months thereafter.
[2] The evidence fails to disclose why Santoni gave the check to Wallsachs.
[3] The record does not provide any insight into the identity of Manning.
[4] There is no evidence to indicate the terms or details of this agreement.
[5] The record does not indicate how the F.B.I. became involved in the case.
[6] As heretofore set out, the question was:
"Q. Actually, was it not that Mr. Wallsachs was supposed to pay you back this money and you would not accept his note. Isn't that true?"
[7] Although neither Santoni nor Grogan were contracting parties under the agreement for the sale of the Surf Club, it is clear that both were intimately involved in that transaction. As there was some evidence showing that Santoni, together with Kardin and DiTomasso had obligated themselves to pay $5,000.00 to acquire Graner's option on the Surf Club, and that this money was actually paid (although after August 12), and as there was evidence to the effect that Santoni paid $2,000.00 to Wallsachs, and $500.00 to Frenkil for legal services rendered in connection with the transaction, appellant's claim that Wallsachs was turning the money over to him in order to "make good the monies that were lost in the Surf Club transaction because of his (Wallsach's) misrepresentations to all parties" is not entirely without some evidentiary foundation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559304/ | 20 So.3d 863 (2009)
SWAIN
v.
STATE.
No. 5D09-2910.
District Court of Appeal of Florida, Fifth District.
October 27, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559310/ | 20 So.3d 852 (2009)
GRAY
v.
STATE.
No. 2D08-4714.
District Court of Appeal of Florida, Second District.
October 30, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453722/ | 362 F. Supp. 2d 885 (2005)
ACUITY, A MUTUAL INSURANCE COMPANY Plaintiff
v.
PLANTERS BANK, INC. Defendant.
No. CIV.A. 3:03CV-367-H.
United States District Court, W.D. Kentucky, at Louisville.
March 28, 2005.
*886 *887 Thomas E. Crafton, Keith D. Heath, Alber Crafton, Louisville, KY, Clifford E. Yuknis, Lawrence R. Moelmann, Michael J. Leech, Hinshaw & Culbertson, Chicago, IL, for Plaintiff.
Janet P. Jakubowicz, Elisabeth S. Gray, James W. Herr, Greenebaum Doll & McDonald, Louisville, KY, for Defendant.
Roberta S. Dunlap, Trustee in Bankruptcy, Dunlap & Nesmith LLC, Evansville, IN, for Star Construction, Inc. Third Party Defendant.
MEMORANDUM OPINION
HEYBURN, Chief Judge.
This dispute arises because a contractor, Star Construction, Inc. ("Star"), defaulted on both its construction contract with the Commonwealth of Kentucky (the "Commonwealth") and its loan repayment with Planters Bank (the "Bank"). The contractor's surety, Acuity, claims the right to contract funds that the Bank had set off *888 from Star's account. To resolve the conflict between the surety's rights in subrogation and the bank's rights as creditor, the Court must clarify: (1) the precise extent of a subrogee's rights and the bank creditor's rights; (2) the ownership of progress payments deposited in the contractor's account; and (3) whether any legal or equitable theory allows the surety to pursue the contract funds now held by a third party.
The Court's duty is to clarify and untangle the interaction of various long-standing principles and, ultimately, to predict how Kentucky courts would apply that law to our circumstances. Davis v. Ford, 244 F.supp.2d 784 (W.D.Ky.2003); Dinsmore Instrument Co. v. Bombardier, Inc., 199 F.3d 318, 320 (6th Cir.1999). In doing so, it has the benefit of excellent argument by very knowledgeable counsel on each side.
I.
The setting for the current dispute arose as follows. Star had a longstanding business relationship with Acuity. In July, 1999, the two had entered into a General Indemnity Agreement that governed the terms under which Acuity, a Mutual Insurance Company, would issue surety bonds. In March, 2001, the Commonwealth contracted with Star for work on a public construction project at Western Kentucky University (the "WKU contract"). Pursuant to a contract requirement, Acuity provided payment and performance bonds for Star guaranteeing its completion of the WKU contract.
In 2002, Star obtained a line of credit with Planters Bank. As a condition of the credit, Star kept its general business accounts with the Bank and allowed the Bank to set off funds from that account in the event of a default. Ultimately, Star drew on that line of credit to the extent of approximately $1,700,000 for its general business operations. For reasons apparently unrelated to the current dispute, Star's business deteriorated. In early 2003, Star was unable to make scheduled interest payments and fell into default on its line of credit.
The default alerted the Bank to Star's financial problems. The Bank monitored Star's bank account. Within a day after Star deposited a WKU contract progress payment of $410,602.34 in its account, the Bank seized those funds to reduce Star's debt. Several months later, Star's financial condition deteriorated such that it could not complete the WKU job. Eventually, the Commonwealth declared Star in default and called upon Acuity to complete the WKU contract. Acuity did so and completed all its obligations under its payment and performance bonds. One of those obligations was to pay Star's subcontractors for work performed and billed, but which was unpaid.
After learning of the Bank's setoff, Acuity filed this lawsuit to assert its rights in subrogation to the funds that the Bank had taken from Star's account. The Bank has moved for summary judgment on the grounds that it had a legal right to take funds from Star's corporate bank account and that no special trust provisions covered the funds. Soon afterwards, Acuity moved for leave to amend its complaint and responded that Star had indeed held the construction funds in trust and that the Bank surely knew it.[1]
II.
Acuity primarily asserts rights in subrogation. The first step in the Court's analysis is to describe as nearly as possible the extent of those rights.
*889 Subrogation is a "creature of equity" common in the construction industry. See Louisville Trust Co. v. Royal Indemnity Co., 230 Ky. 482, 20 S.W.2d 71 (1929). Some time ago, Chief Judge Hiram Church Ford in the Eastern District of Kentucky set out its principles that remain valid today. National Surety Corporation v. Allen-Codell Co., 70 F. Supp. 189, 191-192 (E.D.Ky.1947). Subrogation allows an equitable adjustment among parties where one performs another's obligation. A surety is subrogated to the rights of another when it performs on a construction bond and fulfills the obligations of its principal. In our case, a surety, such as Acuity, who performs the obligations of its bonds, may be subrogated to all the rights and remedies of a contractor in default, such as Star; the owner, such as the Commonwealth; or even subcontractors whom it pays. Id.
The principles of equity govern the specific remedies available under subrogation. The rights and remedies of the subrogee-the surety-are never greater than those of its subrogor-the contractor-and, in fact, are subject to any pre-existing defenses and limitations. As a general proposition, therefore, the surety that performs a contract, acquires all the contractor's rights under that construction contract. The most significant one is the right to receive all construction draws due for work already performed or that will be performed in the future. As grounds to recover funds due the contractor, some courts have termed the surety's interest an equitable lien on all funds due. See, e.g., Prairie State Bank v. United States, 164 U.S. 227, 229, 32 Ct. Cl. 614, 17 S. Ct. 142, 41 L. Ed. 412 (1896); In re Cummins Const. Corporation, 81 F. Supp. 193 (D.Md.1948). Under Prairie State and its progeny, it is beyond dispute that Acuity has a right to funds due under the WKU contract. Moreover, the security interest or retainage in a construction contract is reserved for the surety who completes the job. The surety's special equitable right to contract proceeds encourages performance on construction bonds. This preference in equity raises sureties above other creditors in a bankruptcy proceeding. Pearlman v. Reliance Ins. Co., 371 U.S. 132, 134-135, 83 S. Ct. 232, 9 L. Ed. 2d 190 (1962).
The surety's right to contract funds arises at the time the bond is issued. However, its rights are said to be incomplete, inchoate and unenforceable until the surety suffers a loss on the bond by either performing or making a payment to subcontractors. Prairie State, 164 U.S. at 232, 237, 240, 17 S. Ct. 142. So long as the owner holds funds due for work performed, the surety standing in the shoes of the contractor has a priority to those funds. When a surety pays subcontractors and materialmen for work completed, it also becomes subrogated to their rights against others for payment. Pearlman, 371 U.S. 132, 83 S. Ct. 232.
III.
Some general rules of banking law also apply in these circumstances. First, in the event of a default, a bank may set off the funds of its debtor from funds maintained in the debtor's name at the bank. Ferguson Enterprises, Inc. v. Main Supply, Inc., 868 S.W.2d 98, 99 (Ky.App.1993). Here, no one denies that the Bank loaned money on the condition that Star maintain its general business account with the Bank and that Star authorized the Bank to set off funds from its account in the event of default. Neither does Star dispute the default or its agreement that the Bank may take funds from Star's account.
A second general rule of banking law amounts to a broad exception to the first. A bank may not apply a deposit, *890 consisting of trust funds or funds belonging to one other than the depositor, to the individual indebtedness of the depositor if "it knows, or can properly be charged with knowledge of, the trust character or true ownership of the funds." AMJUR BANK § 887; National Bank of Owenton v. Greene at al., 114 S.W. 322, 323 (Ky.1908); See also Mitchell v. First National Bank, 203 Ky. 770, 263 S.W. 15 (Ky.1924) (a bank paying out deposit of check made payable to one as agent on individual account is liable to principal). Courts have applied this rule in a variety of circumstances: to funds received by the debtor in its capacity as executor, administrator, trustee, agent, guardian, curator, or various other types of fiduciaries or representatives. Id.
Kentucky courts have applied these principles and sometimes struggled to articulate them since the turn of the last century. In First National Bank of Owenton v. Greene et al., the Court of Appeals of Kentucky held that "where a check for a ward's share of an estate was payable to both the ward and the guardian, and the bank where it was deposited knew that the money was the ward's" the bank will be held liable for applying the proceeds of the check to pay the debt due from the guardian individually. (Not reported in Ky. Reports), 114 S.W. 322, 323 (Ky.1908); see also Fidelity & Deposit Co. of Maryland v. Commonwealth, 249 Ky. 170, 60 S.W.2d 345 (1933); Farmers' & Traders' Bank v. Fidelity & Deposit Co. of Maryland, 108 Ky. 384, 56 S.W. 671 (1900); Hill v. Flemming, 128 Ky. 201, 107 S.W. 764 (Ky.1908) ; Bank One, Pikeville v. Commonwealth, 901 S.W.2d 52, 54-55 (Ky.App.1995) (finding that an escrow agreement transfers title and interest of the funds).[2] In each of these cases, the Kentucky Court of Appeals found an exception to the setoff rule where title or interest in the funds was held for or in the name of a third party. In our case, this means that an evidentiary and legal defense to a bank's setoff is that (1) the funds actually belong to or were held for the benefit of a third party, not the debtor and (2) the bank knew the true character of the funds.
IV.
Acuity's theory of recovery evolves from the above exception. Acuity argues that Star held the funds in question in trust for the benefit of its subcontractors on the WKU project and that the Bank either knew or should have known this. In other words, Acuity maintains that the funds did not belong to Star, so the Bank had no right to take them to repay Star's debt. Thus, the precise legal or equitable ownership of the funds in Star's bank account at the time of the setoff will be a deciding factor in this case. Acuity advances several theories why the contract progress payments retain a special character that makes the Bank's setoff voidable. After much study, the Court finds these theories either out of step with Kentucky law or inapplicable to our circumstances.
At the outset, the Court notes that in some jurisdictions, the state legislature have assured that where a general contractor receives payment for work provided by laborers, subcontractors and materialmen, it becomes a statutory trustee of the payments received for the benefit of those persons. See, e.g., Blair v. Trafco Products, Inc., 142 Mich.App. 349, 369 N.W.2d *891 900 (1985) ; Utica Sheet Metal Corp. v. JE Schecter Corp., 53 Misc. 2d 284, 278 N.Y.S.2d 345 (N.Y.Sup.1967). Kentucky law does provide protections for subcontractors on both public and private jobs. For instance, all contractors on public work must post performance and payment bonds to protect subcontractors and materialmen. KRS §§ 45A.190; 45A.435. The Kentucky statutes do not evidence a policy of greater protection, however. None of the statutes use the word "trust" or the word "fund." Id. The Court's thorough review of those statutes reveals that the Kentucky legislature has not chosen to create a statutory trust for construction contract progress payments.
Often, parties to a construction contract create an express trust as to specific contract funds. The Court finds a classic example of such a trust in Federal Insurance Co. v. Fifth Third Bank, 867 F.2d 330 (6th Cir.1989). [3] There, the construction contract provided that the State of Ohio as settlor would pass construction draws to the contractor as trustee. Acuity does not seem to seriously advance the argument that the WKU Contract created such a trust and for good reason. The WKU contract contains no language that classifies the Commonwealth's progress payments as payments "in trust" for the benefit of the subcontractors. Though the WKU Contract does obligate Star to pay its subcontractors from each construction draw, the language falls far short of an "express intent to create a trust." Moreover, the Commonwealth took no independent action to create either an express trust or some sort of joint ownership in the funds. It paid each construction draw directly to Star and in Star's own name. Thus, the Court finds that neither the WKU contract nor the Commonwealth's actions evidence any intent whatsoever to impress a trust or other special legal character upon the contract funds.
By necessity, therefore, Acuity focuses attention on its 1999 General Indemnity Agreement. That agreement remained in effect in 2003 when these events took place. The specific relevant General Indemnity provision provides:
If any of the Bonds are executed in connection with a contract which by its terms or by law prohibits the assignment of the contract price, or any part thereof, the Contractor and Indemnitors covenant and agree that all payments received for or on account of said contract shall be held as a trust fund in which the Surety has an interest, for the payment of obligations incurred in the performance of the contract and for labor, materials, and services furnished in the prosecution of the work provided in said contract or any authorized extension thereof; and, further, it is expressly understood and declared that all monies due and to become due under any contract or contracts covered by the Bonds are trust funds, whether in the possession of the Contractor or Indemnitors or otherwise, for the benefit of and for payment of all such obligations in connection with any such contract or contracts for which the Surety would be liable under any of said Bonds, which said trust also inures to the benefit of the Surety for any liability or loss it may have or sustain under any said Bonds, and this Agreement and declaration shall also constitute notice of such trust. (General Indemnity Agreement, page 2).
Acuity contends that this provision creates an express trust that governed all payments on future bonded construction projects, such as the WKU contract. The *892 Court must test this contention under the requirements of Kentucky law.
The four requisite elements of an express trust under Kentucky law are: (1) an express intent to create a trust; (2) an ascertainable res; (3) a sufficiently certain beneficiary; and (4) a trustee who owns and administers the res for the benefit of another (the beneficiary). In re: Smith, 238 B.R. 664, 670 (Bankr.W.D.Ky.1999) ; see also Frazier v. Hudson, 279 Ky. 334, 130 S.W.2d 809, 810 (1939). The General Indemnity Agreement does evidence Star's original intent to create a trust. Moreover, the beneficiaries seem sufficiently certain. These limited findings, however, leave Acuity a long way from establishing that specific contract funds were held in trust.
The Bank argues that Star cannot act both as settlor and as trustee of the supposed trust. That is not necessarily so. Under Kentucky law, a settlor of a trust may also act as its trustee. To do so, however, the settlor must manifest an intent that particular funds be held in trust. See Cruse v. Leary, 727 S.W.2d 408 (Ky.App.1987)(same person can be the settlor and the trustee of a trust); Stouse v. First Nat. Bk. Of Chicago, 245 S.W.2d 914 (Ky.1951)(same). One cannot contribute a trust asset as settlor of that trust until one actually owns that asset. To avoid the awkwardness of defining when one person is acting as a settlor of a trust and when the same person acts as that trust's trustee, this kind of trust is sometimes called a trust by declaration. Star as settlor and trustee must take some action to create a trust by declaration. Dawson v. Dawson's Adm'x, 272 S.W.2d 666, 668 (Ky.1954). To agree to do so at some future time, unaccompanied by later action or evidence of intent to create a trust, is not enough. REST 2d Trusts §§ 17, 26. Thus, Star's promise made in 1999 alone cannot impress a trust on funds received free of encumbrance in 2003.
There are sound reasons why most jurisdictions impose such strict requirements for creating a trust. See Compton v. Compton, 435 S.W.2d 76 (Ky.1968). The court in Compton discussed the fear that a person would be made a trustee by witnesses after his death. The strict requirements of trust creation were to avoid this sort of injustice. More broadly, the requirements of trust creation serve to delineate trustees from unencumbered owners of property. As Star attempts here, a corporation may not operate as an absolute owner but claim a trust in hindsight. The strict requirements of trust creation are particularly important where, as here, one entity does try to act as both settlor and trustee. A corollary to this rule favoring strict construction is that where a trust may have been formally, legally created but the trustee is in actuality an absolute owner, the trust will be defeated. Alexander v. Hicks, 488 S.W.2d 336, 338 (Ky.1972)(recognizing the principle that "unbridled discretion in a trustee is incompatible with the essential nature of a trust").
A problem related to the requirement of a declaration is that a trust cannot exist without a trust corpus. See, e.g., In re Construction Alternatives, Inc., 2 F.3d 670, 676 (6th Cir.1993)(Ohio). As the Kentucky Court of Appeals said in Deleuil's Ex'rs et al. v. Deleuil, 255 Ky. 406, 74 S.W.2d 474, 476 (1934), even where the intent to create a trust is "clear and unmistakable," the trust "would be incomplete unless executed and effectuated" by bringing property within the trust. Under Kentucky law, to merely identify a future trust asset or res does not create a trust corpus. The Court of Appeals explained that "the property must then have been in existence and its identity definite so that it *893 could be ascertained as to just what was set aside. The donor could not create a trust in property which he intended in the future to purchase and put in the box." Id. at 477.
As the Kentucky Court of Appeals reiterated a few years after Deleuil, "To satisfy the requirements for determining that a trust has been created, the subject matter of the trust must be definite or definitely ascertainable from facts existing at the time of the creation of the trust." Ridley v. Shepard, 293 Ky. 91, 168 S.W.2d 550, 552 (1943)(citing Restatement (First) of Trusts § 76). Star's expression of intent to place in trust certain assets that did not yet exist and over which it held no right, title or interest, has no legal effect as to the WKU contract funds. Star was without an actual ownership interest in those funds until it received those funds from the Commonwealth or, at the least, until it performed work entitling it to payment. Thus, none of its actions prior to receiving the funds could effectuate the trust.
Acuity argues strenuously that as in Federal Insurance Co. v. Fifth Third Bank, the ascertainable res is the progress payment, and that the trust beneficiaries are both the surety and the subcontractors. Vast and material differences separate Federal Insurance from our case, however. In Federal Insurance, the court encountered a classic trust where the state as settlor passed the contract funds in trust to the contractor as trustee for the benefit of subcontractors. By doing so, the parties avoided all of the difficulties Acuity now faces. Unlike the circumstances in Federal Insurance, the WKU contract neither created a trust nor required that contract draws be paid in trust. Thus, unlike the construction funds in Federal Insurance, those in the WKU contract were not impressed by a trust upon payment to Star. Consequently, Federal Insurance provides absolutely no support for the relief that Acuity requests in our circumstances.
From the foregoing discussion the Court concludes that Acuity's trust theory fails due to the absence of a coincidence between the existence of a trust res and a declaration of intent. The boilerplate language of the General Indemnity Agreement alone is an insufficient basis to create a trust. Star did not keep the progress payments in a separate trust account. It neither deposited the progress payment with special instructions nor requested payment as trustee for the alleged beneficiaries. Star did nothing, other than promise Acuity to create a future trust. Under Kentucky law, this is an insufficient basis to impose a trust upon funds received some three years later.[4] To find otherwise would accord Star limited rights to funds in hindsight when in reality it had unfettered use of them.
V.
Acuity also argues that even if the funds were not held in trust, it has an *894 equitable interest in the funds because, as surety, it is entitled to receive contract funds due for work its principals have performed. It is true that a surety subrogated to the contractor's rights is entitled to funds held as security on performance of the contract (retainage) where the surety acquired that equitable lien prior to the bank, though the surety seeks enforcement later. This general rule does not provide a basis for Acuity retaining the contract funds in these circumstances.
The Supreme Court explained this rule in Prairie State Nat'l Bank of Chicago v. United States v. Hitchcock et al., 164 U.S. 227, 32 Ct. Cl. 614, 17 S. Ct. 142, 41 L. Ed. 412 (1896) where the performing surety prevailed over a bank that had acquired a lien on a contractor's final payment subsequent to the issuance of the bond on the same construction contract. The Court further stated that "[s]ureties and guarantors are not to be made liable beyond the express terms of their engagements." 164 U.S. at 239, 17 S. Ct. 142. In Prairie State, the retainage was security for performance of the construction contract and was thus due the surety Hitchcock who bonded the same contract. The surety's favored position in equity flows from this concern expressed in Prairie State and its progeny, namely that the surety get the benefit of the contract proceeds for which it bargained. To find otherwise would alter the terms of the agreement between the project owner, the United States, and its contractor. This would in turn release the surety from its obligation under its suretyship agreement with the contractor.
The doctrine of equitable subrogation allows the surety to take whatever rights to contract proceeds the contractor, the project owner, and the subcontractors hold. Only a surety who fully performs on a payment or performance bond may enforce this equitable interest and only then against unpaid funds or those retained as a security on a construction contract. In Pearlman, 371 U.S. 132, 83 S. Ct. 232, the Supreme Court established the surety's right to subrogation to a subcontractor's claims. A surety who has paid subcontractors has a right to receive remaining contract proceeds based upon an "equitable interest." The equitable interest attaches to sureties like Acuity to encourage performance on their bonds, and the retainage or final payment in a construction contract acts as a security for both the owner and the surety.
By virtue of their performance of Star's contracts, Acuity occupies this equitably favored position in our case. Acuity is not, however, entitled to the funds in question. A case from our own district readily illustrates this result. Maryland Casualty Co. v. Lincoln Bank & Trust Co., 18 F. Supp. 375 (W.D.Ky.1937) involves circumstances like ours except that the contractor consented to apply a particular construction contract payment to an outstanding bank loan, rather than the bank setting off the funds from an account.[5] Judge Hamilton of the Western District of Kentucky considered the Prairie State line of cases noting,
[w]here payments are made to a public contractor unconditionally, he can use the money so paid in any way he desires. Such payments are not subject to an equitable lien, nor does the right of subrogation inhere to a surety of the payee.
Id. at 377. In Maryland Casualty, the contract funds at issue were those that the owner paid to a contractor prior to the contractor's default. In our case as in *895 Maryland Casualty, the funds at issue are already paid, not retained contract proceeds. Thus, Judge Hamilton contrasts Prairie State which concerned an equitable lien on retained contract funds. Id. at 378. Equity treats the two differently because the surety's right to the funds rests squarely on the contractor's actions.
Acuity as the surety on the WKU contract has a specific right in equity to all due and unpaid contract proceeds. Acuity also has a contractual right as a surety to Star's assets up to the point of full reimbursement. Plaintiff argues that funds paid without condition to Star and setoff by the Bank remain contract proceeds of the sort awarded sureties under the doctrine of equitable subrogation. The Court disagrees. As Maryland Casualty and Prairie State make clear, Acuity has an equitable interest in unpaid contract proceeds. Star could not circumvent that interest by assigning its right to receivables to a party other than Acuity. Acuity does not have an equitable right to contract proceeds due and paid its principal once its principal had allowed those funds to be used to pay another debt.
VI.
Lastly, Acuity argues that the circumstances here create an equitable lien in favor of the subcontractors as to WKU contract funds. Acuity bases this argument on the Bank's knowledge of (1) the supposed custom and practice of the construction industry to hold contract funds in trust, and (2) the intended use and purpose of the funds. Acuity cites an Illinois case at length holding that principles of equity and justice impress a trust on funds deposited to the contractor's account for payment to subcontractors. See In re Tonyan Construction Company, 28 B.R. 714, 724-26 (Bkrtcy.N.D.Ill.1983). Acuity argues that the Bank's right to setoff was subject to the interests of the subcontractors in the funds. Even if the Court were to accept these two propositions, it finds no legal theory under Kentucky law or statute that supports Acuity's recovery. Under Kentucky law, any claim of equitable subrogation against the Bank's rights must be premised upon a trust as to the funds in question.
First, the Court finds no support for the argument that either the "custom and practice" of an industry or their "unique status" as contract funds, by itself, can create a trust upon those funds. If indeed such a custom or practice exists, the Commonwealth and Star evidently neglected to follow it. If such a trust is to be created, the parties must do it by their contract and their actions. To be sure, the subcontractors had a right to payment from Star and Acuity is subrogated to that right. However, the right to payment is a far different matter from having a legal, equitable or beneficial interest in specific funds.
Second, the Bank's mere knowledge that Star intended to pay the funds to its subcontractors is quite irrelevant to the issue of whether Star held the funds in trust. Of course, that knowledge is precisely the reason it took the funds. Even if the Bank had inquired further, it would have discovered that Star had received funds in a corporate capacity and had not taken action to place those funds in trust. Acuity retains the right to collect on its indemnity agreement against Star and its individual indemnitors, but not from the Bank. This is not a case where the bank colluded with the principal to defraud the intended beneficiary in an effort to collect on a personal debt. See Farmers' & Traders' Bank v. Fidelity & Deposit Co. Of Maryland, 108 Ky. 384, 56 S.W. 671 (1900). In such a case, equity would allow the surety to bring a wrongful setoff action on the theory of constructive trust. A constructive trust is a remedy imposed to right wrongdoing. Nor is this a case where the bank *896 received funds on an individual debt impressed with a trust in favor of a third party. See Hill v. Flemming, 128 Ky. 201, 107 S.W. 764, 766 (1908). Indeed, the Court has found that these funds were not held in trust. Consequently, here the Court finds no damage to the surety in equity.
VII.
From the foregoing, the Court concludes as follows. The Bank validly set off the contract funds in Star's account. Those funds were not subject to a trust created either by the WKU contract or the Indemnity Agreement, or by acts of the Commonwealth and Star. Most important, Star evidenced no intent to place these specific funds in trust. Neither Star nor its subcontractors have valid rights of action against the Bank to which Acuity is subrogated. The circumstances here do not create a special equitable lien or interest that Acuity can assert in subrogation to recover funds paid to its principal.
The Court will enter an order consistent with this Memorandum Opinion.
ORDER
The Defendant has moved to dismiss all claims in this case. The Court has carefully considered the issues in an accompanying Memorandum Opinion. Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that Defendant's motion for summary judgment is SUSTAINED and Plaintiff's claims are DISMISSED WITH PREJUDICE.
IT IS FURTHER ORDERED that Plaintiff's motion to amend its original complaint is DENIED as futile pursuant to Fed.R.Civ.P. 15.
This is a final and appealable order.
NOTES
[1] In this Memorandum Opinion, the Court considers all possible claims set forth in either the original complaint or the proposed amended complaint.
[2] In Bank One, the Kentucky Court of Appeals quoted approvingly a Florida court as the most succinct statement of the rule, "The depositor's creditor [in our case the Bank] is not entitled to the money if it is actually owned by somebody else. Instead, the somebody else is." Bank One, Pikeville, Ky. v. Comm., 901 S.W.2d at 55 (quoting Ginsberg v. Goldstein, 404 So. 2d 1098, 1099 (Fla.Dist.Ct.App.1981)).
[3] Though Federal Insurance interprets Ohio law, the requirements for an express trust in both Kentucky and Ohio are substantially the same.
[4] Two examples suggest the need for more action than a mere promise of future action. The Restatement of Trusts (2d) provides the following example: If A tells B that if and when A receives funds he will hold the funds in trust for C and A receives the funds but makes no further manifestation of an intention to be trustee, A is not trustee of the funds RST (2d) Trusts § 26 Comment J (1959); In Gins v. Gins (Ky.1930) the Kentucky Court of Appeals considered whether someone had created a trust. The Court said that "the mere expression of a wish to give, unaccompanied by acts sufficient to execute the purpose, will not be enforced." While Kentucky Courts have not applied § 26 of the Restatement 2d of Trusts, Kentucky courts have applied other sections of the Restatement 2d of Trusts in Compton v. Compton, 435 S.W.2d at 78 and Hurst v. First Kentucky Trust Co. 560 S.W.2d 819, 820 (Ky.1978) indicating a willingness to apply the RST 2d in this area of law.
[5] Even in our case, the bank obtained proper and binding prior consent to setoff account funds in the event of default. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2460802/ | 976 S.W.2d 368 (1998)
Steven Edward RIGSBY, Appellant,
v.
The STATE of Texas, Appellee.
No. 09-98-066-CR.
Court of Appeals of Texas, Beaumont.
Submitted October 6, 1998.
Decided October 7, 1998.
Rehearing Overruled November 5, 1998.
*369 David M. Cook, Lufkin, for appellant.
Clyde M. Herrington, District Attorney, Lufkin, for state.
Before WALKER, C.J., and BURGESS, and STOVER, JJ.
OPINION
PER CURIAM.
On August 21, 1992, pursuant to a plea bargain agreement, Steven Edward Rigsby entered a plea of guilty to possession of a controlled substancecocaine. The trial court deferred adjudication and placed Rigsby on probation for a period of five years. On March 9, 1995, the State filed a motion to proceed with adjudication of guilt based on Rigsby's violation of his terms of probation. A capias was issued the same day. On February 3, 1998, the State filed an amended motion to proceed with an adjudication of guilt and a hearing was held that same day. Rigsby pled true to allegations contained in the motion. The trial court revoked Rigsby's probation, adjudicated him guilty, and sentenced him to a term of four years' confinement in the Institutional Division of the Texas Department of Criminal Justice. On appeal, Rigsby contends: (1) he did not receive a punishment hearing prior to sentencing; (2) the trial court lacked jurisdiction to hear the State's motion to proceed, since it occurred after the probationary period expired, and the State did not prove due diligence in apprehending him and bringing him before the trial court for the revocation hearing; and (3) the trial judge did not remain impartial during the revocation hearing.
We are without jurisdiction to consider Rigsby's points of error because he has failed to comply with Tex.R.App. P. 25.2(b)(3), formerly rule 40(b)(1). A defendant who receives deferred adjudication pursuant to a negotiated plea bargain and is later adjudicated guilty must comply with the notice requirements of rule 25.2(b)(3). See Watson v. State, 924 S.W.2d 711, 714 (Tex.Crim.App. 1996) (applying former rule 40(b)(1)). TEX. R.APP. P. 25.2(b)(3) requires the following:
[I]f the appeal is from a judgment rendered on the defendant's plea of guilty or nolo contendere under Code of Criminal Procedure article 1.15, and the punishment assessed did not exceed the punishment recommended by the prosecutor and agreed to by the defendant, the notice must:
(A) specify that the appeal is for a jurisdictional defect;
(B) specify that the substance of the appeal was raised by written motion and ruled on before trial; or
(C) state that the trial court granted permission to appeal.
Rigsby filed a general notice of appeal; he has not specified in his notice any of the three matters set out in Rule 25.2(b)(3). Failure to do so deprives an appellate court of jurisdiction.[1]See Watson, 924 S.W.2d at 714; Walker v. State, 970 S.W.2d 27 (Tex. App.Dallas 1997, no pet.) (applying former rule 40(b)(1)); Hulshouser v. State, 967 S.W.2d 866 (Tex.App.Fort Worth 1998, pet. ref'd, untimely filed). Therefore, we dismiss the appeal for lack of jurisdiction.
APPEAL DISMISSED.
NOTES
[1] One exception to that rule, however, is voluntariness of the plea, which may be raised on a general notice of appeal. See Flowers v. State, 935 S.W.2d 131, 134 (Tex.Crim.App.1996) (applying former Rule 40(b)(1)). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559279/ | 20 So. 3d 856 (2009)
VELASQUEZ
v.
STATE.
No. 2D08-4207.
District Court of Appeal of Florida, Second District.
October 30, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559293/ | 20 So. 3d 854 (2009)
JONES
v.
STATE.
No. 2D08-5358.
District Court of Appeal of Florida, Second District.
October 23, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858082/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-92-133-CR
JEFFREY LAYNE BARRETT,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
NO. 3-92-134-CR
ZONKER DOUGLAS, A/K/A WAYNE DOUGLAS DUNCAN,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF CALDWELL COUNTY, 22ND JUDICIAL DISTRICT
NOS. 91-032 & 91-033, HONORABLE FRED A. MOORE, JUDGE PRESIDING
In a joint trial, a jury found appellants guilty of the offense of arson. See Tex.
Penal Code Ann. § 28.02 (West Supp. 1993). Punishments were assessed by the court at eight
years' confinement for Barrett and at five years' confinement for Douglas. In single points of
error, appellants challenge the sufficiency of the evidence to support the convictions. We will
overrule appellants' points of error and affirm the judgments of the trial court.
Appellants had been living in and conducting a lawn care business out of a mobile
home which was destroyed by fire on August 4, 1989. Robert Lee, a professional fire fighter,
testified that his "outfit" responded to a call at 2:30 a.m. on the date in question to find a mobile
home on Caldwell County Road 191 "fully involved" in fire. Upon arrival at the scene, Lee
observed sparks coming from an electric line leading to the house. Lee saw two people standing
in the street, but was unable to identify them. Lee stated an electrical short "could cause a fire."
Ed Stamnitz, an investigator with the State Fire Marshall's office, testified that his
investigation revealed a "pour pattern" burn on the floor of the mobile home that was not natural
to a regular fire. Stamnitz collected two debris samples, one of which was determined to contain
a medium range petroleum distillate substance such as a "lighting fluid product." Stamnitz
concluded that the fire was deliberately set and the source of the accelerant was found in debris
samples examined in the D.P.S. crime lab in Austin. Douglas testified that there were two coal
oil lamps used in the mobile home; however, Stamnitz stated that he was unable to find any
evidence of coal oil lamps nor was he able to find any coal oil in the samples. Stamnitz related
that his investigation excluded any accidental causes.
It is undisputed that there is no direct evidence which places appellants at the fire
scene immediately prior to, during, or immediately after the fire. Appellants testified that they
were on a camping trip north of Dallas at Lake Lavon and East Fork Camp on the night of the
fire. A "user permit" shown to be issued by the Army Corps of Engineers reflects that a camping
permit was issued to Douglas for the East Fork area of the Lavon project on August 2, 1989, with
a stated departure date of August 7, 1989. Appellants testified that they were at Delana Teems'
house in the White Rock area of Dallas earlier that evening. Teems, however, did not testify.
The State offered evidence that it would have been possible for appellants to leave Teems' home
at the stated time and reach the mobile home before the fire began.
Applicable to the instant cause, a person commits the offense of arson if he starts
a fire with intent to destroy or damage a habitation, knowing that said habitation is insured against
damage or destruction. See Tex. Penal Code Ann. § 28.02(a)(2)(B) (West Supp. 1993). Barrett
and his parents owned the mobile home. Barrett had purchased the lawn care business from
Douglas in 1988 and owed Douglas "approximately" fifteen thousand dollars of the purchase price
at the time of the fire. In addition, Barrett owed Douglas five to ten thousand dollars for personal
property, including five thousand dollars for an antique organ alleged to have been purchased
from Douglas in 1988. Barrett received two checks from the insurance company, one for six
thousand dollars and one for twenty-five dollars. Douglas made no claim against the insurance
company.
The convictions in the instant causes are dependent on circumstantial evidence.
Recognizing that jurors are no longer instructed on the law of circumstantial evidence, and that
direct and circumstantial evidence are equally probative, the Court of Criminal Appeals in Geesa
v. State, 820 S.W.2d 154 (Tex. Crim. App. 1991), rejected the former analysis for sufficiency
of the evidence that circumstantial evidence must exclude every other reasonable hypothesis other
than guilt. The Geesa court found that an appellate review which focused on the outstanding
reasonable hypothesis analysis "effectively repudiates the jury's prerogative to weigh the evidence,
to judge the credibility of the witness, and to choose between conflicting theories of the case.
When understood from this perspective, the construct effectively places the reviewing court in the
place of a 'thirteenth juror.'" Id. at 159. Since the instant cause was tried in January 1992, a date
following the effective date of Geesa, our review of the sufficiency of the evidence does not
include a determination of whether there is an outstanding reasonable hypothesis inconsistent with
guilt. We note that the trial court gave the definitional instruction on reasonable doubt that was
formulated by the Geesa court. See id. at 162-63.
In reviewing the evidence as an appellate court, we must determine whether,
viewing the evidence in the light most favorable to the conviction, 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, 319 (1979); Butler v. State, 769 S.W.2d 234, 239 (Tex. Crim. App. 1989),
overruled by Geesa v. State, 820 S.W.2d 154, 161 (Tex. Crim. App. 1991) (overruled to extent
that opinion conflicted with Geesa by using analytical construct of excluding every reasonable
hypothesis). The Court of Criminal Appeals in Moreno v. State, 755 S.W.2d 866, 867 (Tex.
Crim. App. 1988), amplified on the correct way to apply the Jackson standard:
The court is never to make its own myopic determination of guilt from reading the
cold record. It is not the reviewing court's duty to disregard, realign or weigh
evidence. This the factfinder has already done. The factfinder, best positioned to
consider all the evidence first-hand, viewing the valuable and significant demeanor
and expression of the witnesses, has reached a verdict beyond a reasonable doubt.
Such a verdict must stand unless it is found to be irrational or unsupported . . . by
. . . the evidence, with such evidence being viewed under the Jackson light.
Concrete application of the Jackson standard is made by resolving inconsistencies
in the testimony in favor of the verdict.
Since the exclusion of the reasonable hypothesis analysis in circumstantial evidence cases, the
Jackson standard is applicable in determining the legal sufficiency of the evidence in all criminal
cases.
Appellant contends that the evidence has been held insufficient to support the
conviction where the accused is not placed at or near the scene of the fire. See Baugh v. State,
776 S.W.2d 583 (Tex. Crim. App. 1989); O'Keefe v. State, 687 S.W.2d 345 (Tex. Crim. App.
1985). In Baugh, the evidence showed that the defendant had removed some of his furniture to
be refinished. Prior to the fire, the defendant was asleep in a trailer house approximately one-half
of a mile from the house. The defendant explained that he frequently slept in the trailer house
because it was air conditioned and the structure that burned was not. The evidence regarding the
incendiary nature of the fire was highly controverted, both the State and the defendant having
offered the testimony of expert witnesses. The defendant explained that he had used gasoline in
refinishing the furniture, and that it was stored on the front porch. The defendant had made no
threat to start a fire nor had there been any suspicious circumstances such as showing an increase
in insurance coverage. The Baugh court held that the State did not negate every reasonable
hypothesis as to the cause of the fire, stating that the evidence circumstantially supported the
inference that the fire started as the result of an accident rather than arson. Baugh, 776 S.W.2d
at 586.
In O'Keefe, the defendants were observed departing the scene of the fire at a "slow
rate of speed" a short time before the fire started. Only one of the defendants made a claim on
insurance. The defendants, father and son, were at a car-wash when they were notified of the
fire. Several witnesses testified that the defendants' reaction was one of shock and disbelief and
that they immediately returned to the scene of the fire. Both sides presented expert testimony that
was in direct conflict as to whether the fire had been intentionally set. The O'Keefe court
concluded that there were at least two other reasonable hypothesis besides arson, and that there
was no evidence connecting the defendants with the fire. O'Keefe, 687 S.W.2d at 349-50.
In noting that Baugh and O'Keefe predated Geesa, we are not passing on whether
Geesa lessened the standard by which an appellate court reviews the sufficiency of the evidence
to sustain a conviction. However, our review of the sufficiency of the evidence in a post-Geesa
circumstantial evidence cause does not include a determination of the existence of an outstanding
reasonable hypothesis inconsistent with guilt.
While none of the following circumstances, standing alone, meet the State's burden
of proof in the instant cause, we find the cumulative effect of all the incriminating evidence
sufficient to sustain the jury's findings of guilt under the Jackson and Moreno standard. A
number of factors distinguish the instant cause from Baugh and O'Keefe. Appellants had made
it known that they were in dire need of money, and the lawn care business was insolvent and no
longer in operation. Tracey Krause, a former employee, testified that Douglas stated in July 1989
that, "he might as well burn it and take the money and go." Krause related that the business was
in bad financial condition before she was fired. While it was shown that Krause was not on
friendly terms with appellants, the jury, as the fact finder, was in a position to determine the
weight to be given her testimony. Both appellants stood to improve their financial condition as
the result of the fire. While Douglas made no claim against the insurance company, his chance
of collecting any portion of the money Barrett owed him would be greatly enhanced by Barrett's
collection of insurance following a fire. Eight months prior to the fire, Barrett increased
insurance coverage on the personal property in the mobile home from six thousand dollars to
eleven thousand dollars. The State's expert testimony about the incendiary origin of the fire and
the deliberate setting of the fire was not controverted. While fireman Lee testified that a fire
could be started by an electrical short, he voiced no opinion about the cause of the instant fire.
Both appellants were shown to have had experience with insurance claims and Douglas had some
knowledge of fire investigations from having been a volunteer fireman.
Appellants removed a number of personal property items from the mobile home
prior to the fire. A television, a V.C.R., and some clothes were taken on the camping trip. Two
dogs were removed to a barn behind the mobile home. Other items of personal property were
taken from the mobile home and placed in the barn, including a trunk owned by Douglas that
contained his personal property. During the investigation of the fire a television was found on
top of the trunk with no dust or debris on it. Appellants related that items were placed in the barn
because it was a safer location. However, Barrett claimed that he had left nine hundred dollars
in an antique organ in the mobile home. No evidence of the existence of an antique organ was
found by investigators following the fire.
Appellants were notified of the fire the following morning between nine and ten
o'clock. Unlike the defendants in O'Keefe who returned home immediately after learning of the
fire, the appellants remained at the camp ground the remainder of the day and did not start their
return trip home until the next morning. Barrett testified that four people could place appellants
in Dallas "at about 10:00 p.m." the night preceding the fire; however, no witnesses testified at
trial to confirm the alibi. The State offered evidence that if appellants were in Dallas or at the
camp site at the stated time, they could have driven home before the fire started. Both appellants
failed to cooperate with the fire investigator. Barrett initially told the investigator that the
business had not experienced financial difficulties and gave conflicting reports about what he owed
Douglas. The only items related to the investigator as having been removed from the house were
the television and the V.C.R. until the investigator started his investigation at the barn. Terry
DePhillips, a representative of the insurance company, identified a claim filed by Barrett for the
sum of $11,950 in which Barrett listed, among other items lost in the fire, an antique organ valued
at five thousand dollars, nine hundred dollars in cash, a 12 x 12 oriental rug, a 4 x 6 oriental rug,
and 250 record albums valued at $1,500. Barrett did not fill out the portion of the claim form
listing the "month and year of purchase, store and city, things like that."
Viewing the cumulative effect of all the incriminating circumstances, we conclude
that any rational trier of fact could have found the essential elements of the offense beyond a
reasonable doubt. Appellants' points of error are overruled.
The judgments are affirmed.
Tom G. Davis, Justice
Before Justices Powers, Aboussie and Davis*
Affirmed on Both Causes
Filed: December 22, 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/1919696/ | 91 B.R. 213 (1988)
In re 82 MILBAR BOULEVARD INC., Debtor.
Bankruptcy No. 887-71879.
United States Bankruptcy Court, E.D. New York, at Westbury.
September 29, 1988.
*214 D'Amato & D'Amato, New Hyde Park, N.Y., for debtor.
Andrew J. Maloney, U.S. Atty., E.D.N.Y., Brooklyn by William H. Beckerleg, Jr., Sp. Asst. U.S. Atty., for U.S.
Marilyn Frier, Woodmere, N.Y., Trustee.
John A. Esposito, Asst. U.S. trustee, Garden City, N.Y.
MEMORANDUM DECISION AND CONDITIONAL ORDER DIRECTING CONVEYANCE OF POSSESSORY INTEREST
ROBERT J. HALL, Bankruptcy Judge.
This matter came to be heard upon the motion of the Trustee, Marilyn Frier, to dismiss the debtor's voluntary Chapter 7 petition pursuant to 11 U.S.C. § 305 or in the alternative, for an order authorizing abandonment of all the debtor's assets as being burdensome to the estate, and for such other and further relief as this Court finds appropriate. The United States, on behalf of the Environmental Protection Agency ("EPA"), concurs in the motion to dismiss and objects to the alternative motion to abandon. The debtor objects to dismissal of its Chapter 7 case.
This court hereby deems the Trustee's motion in part a notice of resignation and finds it not unduly burdensome for the administration of this estate to permit the Trustee to withdraw. The U.S. Trustee is hereby directed to appoint a successor trustee pursuant to 11 U.S.C. § 703. In the event that no interim or successor trustee is in place as of 30 days from the date of this Memorandum Decision, the absence of an appointed trustee shall be cause for dismissal pursuant to 11 U.S.C. § 707(a).
For the reasons discussed below, this Court finds neither abstention nor dismissal pursuant to 11 U.S.C. § 305 appropriate to the facts of this case. However, this Court is prepared to issue, pursuant to 11 U.S.C. § 725 an Order Directing Conveyance of the estate's possessory interest in the subject real property (but not title thereto) to the EPA or its nominee provided that the following prerequisites are met:
1. The EPA agrees to accept possessory interest in the subject real property.
2. A successor trustee is in place.
3. An agreement acceptable to this court has been reached by and among the EPA, the successor trustee and the debtor as to the circumstances under which title together with possessory interest shall again vest in the same party at a determined time in the future (including but not limited to the contingencies of eventual dismissal or closing of this case at a future date). Such agreement shall also include reporting requirements wherein the EPA agrees to report periodically to the trustee the status of cleanup efforts and expenditures related thereto.
I
The debtor filed a voluntary Chapter 7 petition with this Court on January 13, 1988, having exhausted its liquid assets in litigation concerning pollution by a prior tenant of the debtor's only substantial asset. The debtor's primary asset is real estate consisting of three commercial buildings and a connecting building suitable for light manufacturing and other commercial activities. The property is presently unoccupied and generates no income. Federal, State and County agencies have alleged that the premise contains toxic waste and pollutants.
The debtor, its former tenant (Circuitron Corp.) and the parent companies of the former tenant (A.D.I. Electronics, Inc. and F.E.E. Industries) reached a settlement agreement wherein the tenant and its parent companies agreed to remove all toxic waste and pollutants from the real estate in accordance with governmental requirements. Thereafter the tenant and its parent companies filed a voluntary Chapter 11 petition in this Court and failed to perform under the settlement agreement. There are pending administrative proceedings against the debtor brought by the County of Suffolk, Department of Health Services, *215 the N.Y. State Department of Environmental Conservation and the United States Environmental Protection Agency. There is also an action pending in the Supreme Court County of Suffolk by a certain Joanne Johnson against the debtor and others with respect to personal injuries allegedly caused when she was conducting an inspection of the premises.
The debtor has commenced an action against the Great Atlantic Insurance Company of Delaware, Royal Insurance, Safeguard Insurance Company and Hartford Insurance Company for breach of insurance agreements for failure to appear and defend the debtor in claims brought against it, and for failure to reimburse the debtor for loss and damage sustained as a result of the actions of the tenant and its parent companies in causing toxic waste and pollutants to damage the property.
The trustee's motion to dismiss or in the alternative abandon all of the debtor's assets followed shortly after the petition was filed and a hearing was held March 8, 1988 before this Court ("Hearing").
II
The trustee moved to dismiss this case pursuant to § 305 of the Bankruptcy Code.[1] Both the United States and the U.S. Trustee concur that "as a practical matter" and in view of the leading case law on abandonment of polluted assets, dismissal is appropriate under the circumstances of this case. A memorandum in opposition to dismissal was filed by the debtor. We find § 305 inapplicable to the facts at hand, but, as provided above, basis for cause pursuant to § 707(a) of the Bankruptcy Code[2] may become manifest.
The language of § 305 is clear and its application is narrow. In addition to the creditors' interest it is necessary to prove that dismissal under § 305 would also be in the best interest of the debtor. In re Commercial Oil Service, Inc., 58 B.R. 311 (Bankr.N.D.Ohio 1986). Section 305 is not limited to involuntary cases but ". . . it certainly will have limited applicability . . . to voluntary cases." In re G-N Partners, 48 B.R. 459, 461 (Bankr.D.Minn.1985). See also, In re Pine Lake Village Apartment Company, 16 B.R. 750, 753 (Bankr.S.D.N. Y.1982).
The Trustee argues that upon dismissal the debtor will be able to retain counsel for the purpose of prosecuting the aforementioned insurance claims, counsel which she finds it inappropriate to retain in view of their lack of disinterestedness and which she further believes cannot be satisfactorily resolved with full disclosure. The United States argues that no purpose is served for the creditors by continuing a Chapter 7 proceeding and that they are equally benefitted by pursuing remedies afforded to them in state court.
Counsel for the debtor argued at the Hearing that one of the benefits of the proceeding is that it provides a centralized forum for the resolution of claims against the debtor.[3]
We are not persuaded that the interests of both debtor and all creditors are such that dismissal pursuant to § 305 is warranted. It is true that the EPA may find dismissal more readily facilitates their cleanup of the site. However, one purpose *216 of a Chapter 7 proceeding is to facilitate an equitable distribution of a debtor's assets among all creditors and the record is bereft of evidence as to the exact cost involved in cleanup and the likelihood of success in recovery pursuant to the insurance claims. Absent a showing that the EPA's claim will overwhelm the possibility of recovery by other claimants, dismissal may not be in the interest of other creditors who would benefit from a trustee's collection efforts.
Examples of where dismissal pursuant to § 305 may be appropriate would include voluntary out of court arrangements between the debtor and its creditors and pending foreign proceedings involving the debtor and its creditors. The mere availability of an alternative forum is not an underlying rationale for § 305. The legislative history shows that it was thought that less expensive arrangements may be practicable and best serve the interests involved in certain cases, but that this was viewed as the exception rather than the rule.[4]
In denying a motion to dismiss under § 305(a) for a Chapter 11 debtor, the Court in In re Pine Lake,[5] stated that this section should be used sparingly and not as a substitute for a motion to dismiss under 11 U.S.C. § 1112(b). Nor should it be used as a substitute for § 707(a).
Finally, dismissal pursuant to § 305 is to be used sparingly. Unlike dismissal pursuant to § 707(a), a § 305 dismissal is "not reviewable by appeal or otherwise."[6] We therefore decline to grant the motion pursuant to 11 U.S.C. § 305.
III
The trustee moved in the alternative for an order authorizing abandonment of all the debtor's assets. Section 554 of the Bankruptcy Code[7] constitutes the authority for the trustee's power to abandon assets of the estate. Before ordering abandonment, the bankruptcy court must find either: 1) the property is burdensome to the estate; or, 2) the property is both of inconsequential value and inconsequential benefit to the estate.[8] The trustee has not persuaded this court that the provisions of § 554 are satisfied with respect to the insurance claims. There appears to be no dispute that the real property in question has a negative value when the cost of cleanup is factored in. We are not persuaded, however, that there is no benefit to the estate to retaining title to the property under the conditions outlined in the proposed Order Directing Conveyance.
The leading case authority on abandonment of a toxic or hazardous waste site is Midlantic National Bank v. New Jersey Department of Environmental Protection, 474 U.S. 494, 106 S. Ct. 755, 88 L. Ed. 2d 859 (1986) ("Midlantic").[9] In their 5-4 decision, the Supreme Court held that a court may not authorize abandonment of a hazardous waste site pursuant to § 554 absent the formulation of conditions that will adequately protect the public's health and safety.[10]
As in the case before us, Midlantic involved a Chapter 7 debtor, Quanta Resources Corporation ("Quanta"). In that case, the debtor's assets included two waste oil processing facilities, one in Long Island City, New York and the other in *217 Edgewater, New Jersey. In June 1981, the New Jersey Department of Environmental Protection ("NJDEP") discovered that Quanta had accepted more than 400,000 gallons of PCB contaminated oil. The NJDEP and Quanta were negotiating a cleanup of this site when Quanta filed a Chapter 11 bankruptcy petition. The proceeding converted to a Chapter 7 liquidation on November 12, 1981.
At first, the trustee in Quanta maintained a 24 hour security guard service at the Long Island facility at a cost in excess of $1,100 per week. The trustee personally borrowed $20,000 and used most of it to pay for security services.[11] After unsuccessful attempts to sell the property, the trustee notified the creditors and the Bankruptcy Court for the District of New Jersey that he intended to abandon the property pursuant to § 554(a). No party to the proceeding disputed the trustee's allegation that the site was "burdensome" and of "inconsequential value" within the meaning of § 554.[12]
The decision of the Bankruptcy Court authorizing abandonment was affirmed by the District Court of New Jersey.[13] In reversing, the Third Circuit of the Court of Appeals acknowledged that Quanta presented "an issue of major importance under the Bankruptcy Reform Act of 1978" with corresponding social implications:
"It is only recently that the public has learned of the magnitude of the dangers associated with toxic waste disposal; at the same time, the last few years have witnessed a rising tide of bankruptcies. Lurking in the shadows of these phenomena is the specter of the changing fortunes of the nuclear power industry, with the concomitant potentiality for unusable facilities. If trustees in bankruptcy are to be permitted to dispose of hazardous wastes under the cloak of the abandonment power, compliance with environmental protection laws will be transformed into governmental cleanup by default. It cannot be said that the bankruptcy laws were intended to work such a radical change in the nature of local public health and safety regulation the substitution of governmental action for citizen compliance without an indication that Congress so intended."[14]
In affirming the Third Circuit Court of Appeals the Supreme Court found, notwithstanding the plain language of § 554, a restriction on the abandonment power implied by Congress in their enactment of other provisions of the Bankruptcy Code and repeated congressional emphasis in other statutes passed in pursuit of their stated goal of "protecting the environment against toxic pollution."[15]
*218 Prior to Midlantic, case law reflects that trustees would typically seek to abandon property pursuant to § 554 where the estimated cleanup cost exceeded projected market value of the unpolluted asset.[16] This practice was consistent with the traditional role of the trustee and application of the abandonment power in bankruptcy law.[17] The need for a rule of abandonment was manifest in light of the objectives of a bankruptcy proceeding, especially a liquidation proceeding, and the conceptual role of a trustee therein. The overriding purpose of bankruptcy liquidation is the expeditious reduction of the debtor's property to money, for equitable distribution to creditors.[18] The role of the trustee under the Bankruptcy Code is to represent the estate.[19] The duties of the trustee are delineated in the Bankruptcy Code[20] and are largely administrative.
The holding in Midlantic implies a duty on the part of the trustee which is independent of the estate's ability to fund his performance of that duty. This decision, evaluated in conjunction with (i) the trustee's capacity to "sue and be sued,"[21] and (ii) federal, state and local environmental regulations which do not limit the liability of a trustee in bankruptcy, threatens to undermine the integrity of the system heretofore developed for the administration of bankruptcy cases.
In recognizing a narrow[22] exception to the abandonment power, the Supreme Court did not address how, as a practical matter, a trustee can bring a property into compliance with the applicable state and local regulations, or at a minimum, take precautions to safeguard the public, absent the funds in the estate to do so.[23]
In seeking to apply § 554 to the facts at hand we must accommodate the Midlantic holding without abandoning other policy *219 objectives inherent in the "rising tide" of similar bankruptcies.[24]
We note that case law since Midlantic reflects mixed results in the application of § 554.[25] At least one chapter 7 case beset with environmental problems has been dismissed.[26] Dismissal is tantamount to abandonment of the entire estate, not just the affected asset. It is our view that the mere presence of a tainted asset should not preclude a debtor from access to the protections afforded by the Bankruptcy Code. Nor should creditors be denied the forum of this court for the orderly resolution of competing claims, particularly where there are good assets to administer. Unsecured creditors may benefit from the efforts of a trustee to collect on other assets of the debtor and to challenge questionable claims. Unlike many of the reported cases, it is not clear that this debtor was the polluter.
In order for Chapter 7 to continue to be a viable forum for the orderly liquidation of claims, however, a trustee is required. The Midlantic holding may result in discouraging capable and prudent professionals from acting as trustees. The proposed conditional order represents an attempt to reconcile the policy of preserving the integrity of the system which has been established for the administration of cases in this Court, for the benefit of debtors and all creditors (including but not limited to the EPA), with the directive of Midlantic.
We believe that the holding in Midlantic precludes our being able to issue an order which abandons the specific property in question pursuant to § 554 for absent funds in the estate with which to effect compliance and a trustee with sufficient expertise necessary to implement the order, we are as a practical matter without the power to provide for the "health, safety and welfare of the public" in such an order.[27]
In the proposed Order Directing Conveyance we authorize conveyance of the possessory interest in the site to the EPA pursuant to § 725.[28] Section 725 addresses situations involving property in which an entity other than the estate has an interest that has not been disposed of *220 under another section of title 11.[29] It is not disputed that this property is a toxic site which is covered by CERCLA. We therefore find that the EPA has an interest in this site, albeit at present contingent and unliquidated. As stated, we are not satisfied that abandonment in compliance with Midlantic can be accomplished in this case. We note that other courts have held abandonment is appropriate under similar circumstances notwithstanding Midlantic,[30] but we are concerned lest this piecemeal approach to administering an estate deny to other creditors (1) the ability to monitor expenditures related to the cleanup, and (2) adequate assurance that the property will be sold for the highest possible price.
Apart from § 554, it is unlikely that this property will be disposed of under another section of title 11, unless the case is dismissed for cause. Section 725 gives to this court the authority and flexibility to direct disposal of property not otherwise administered under the Bankruptcy Code. We acknowledge that this application of § 725 is novel, however, it conforms with the broad-sweeping intent of the drafters to give the court flexibility to meet special circumstances.
Upon abandonment the asset reverts to the debtor or party with possessory interest.[31] The debtor is without the funds to bring the site into compliance with environmental regulations. By conveying possessory interest directly to the EPA (i) the EPA will be in a position to carry out its mandate under the Comprehensive Environmental Response Compensation and Liability Act of 1980 ("CERCLA")[32] and (ii) the successor trustee is distanced from (but, it is arguable, not insulated entirely) from potential liability under applicable environmental legislation.
Such an Order Directing Conveyance leaves the safety and welfare of the public at no greater risk than would be the actuality upon dismissal of this case. It avoids the necessity of time consuming litigation in a non bankruptcy forum to facilitate cleanup of the site by the EPA. The proposed order does not favor the EPA over other creditors. By maintaining title to the asset within the estate we implicitly recognize that the EPA is but one creditor and there are other parties at interest which will be affected by the claim filed against the estate by the EPA. These other creditors, together with the EPA have a vested interest in seeing that the site post cleanup is sold for the highest possible price and that the expenditures incurred for the cleanup be prudent.[33]
The creditors have an interest in the successful prosecution of insurance claims, and in insuring that the proceeds recovered not be dissipated or otherwise require extraordinary effort to collect.
In order for such an Order Directing Conveyance to be implemented, however, a successor trustee must be in place.
It is our assessment that a mere lifting of the stay to facilitate cleanup of the site does not adequately address our concerns with respect to potential trustee liability. It is possible that the agreement which we *221 contemplate between the EPA and a successor trustee will address this issue.
Thus, having analyzed the alternatives of abandonment, lifting the stay and dismissal pursuant to § 707(a) (infra), we believe that our proposed application of § 725 represents the best approach under difficult circumstances.
IV
Absent a successor trustee, the only alternative available to this court is dismissal for cause pursuant to § 707(a). The holding in Midlantic implies that where there is an estate to administer, such an estate must be administered in compliance with environmental laws. However, there must be an administrator. To the extent that the potential liability to a trustee exceeds that which is reasonable under the scope of a trustee's role and duties as set forth in the Bankruptcy Code, it contravenes the policy of ensuring the integrity of the administration of cases in this Court. We hold that the mere existence of a polluted asset is not cause for dismissal pursuant to § 707(a), however, the reasonable unwillingness of a capable and prudent trustee to serve under the circumstances described herein, shall constitute cause for dismissal pursuant to § 707(a).[34]
The legislative history of 11 U.S.C. § 707 reveals that the examples of cause referred to are illustrative only and not exhaustive.[35] The determination of whether cause for dismissal exists, is a matter within the sound discretion of the court.[36]
While we have held that the absence of a willing trustee may constitute cause for dismissal pursuant to § 707(a), this case also presents facts similar to cases where the following circumstances have been found to constitute cause for dismissal: an inability to administer the cases because of a lack of funds and a threat to public safety,[37] and an inability to administer a case as a result of an ongoing environmental nuisance.[38]
CONCLUSION
We believe that the proposed Conditional Order Directing Conveyance of Possessory Interest represents a considered response to the interests of all parties concerned when a debtor beset with environmental problems seeks the protection of this court. Section 554 and relevant case law prior to the enactment of the Bankruptcy Code typically addressed disposal of assets which hindered the expeditious administration of an estate and offered no incremental return to the unsecured shareholders. Abandonment of assets which are the subject of CERCLA and similar environmental legislation, however, is qualitatively different. These assets are typically associated with claims which will be filed against the estate pursuant to cleanup expenditures. They represent not merely zero value or benefit, but a net cost to the estate. Claims filed against the estate are subject to the adversary procedures established in this court for the resolution of contested claims. Access to this forum may be the most appropriate alternative for a debtor beset by environmental problems.
The integrity of the system which has been established for the administration of cases before this court is fundamental to the exercise of our jurisdiction. We recognize that one of the objectives of CERCLA was, in addition to facilitating cleanup directly by the EPA of subject hazardous *222 waste sites, to grant to the EPA the authority to direct a third party to comply with environmental regulations. We believe that the scope of a trustee's duties under the Bankruptcy Code is inconsistent with the potential liability of a bankruptcy trustee under CERCLA and state and local legislation. Therefore, the presence of assets within an estate which present an unreasonable risk of liability to the trustee pursuant to environmental legislation may constitute acceptable cause for resignation of a trustee.
In the event that a successor trustee is not in place as of 30 days from the date of this Memorandum Decision, or such time as this period may be extended by further order of this Court, such event shall be deemed cause pursuant to 11 U.S.C. § 707(a) and this case shall accordingly be dismissed.
SO ORDERED.
NOTES
[1] Section 305(a)(1) provides:
"(a) The court, after notice and a hearing, may dismiss a case under this title, or may suspend all proceedings in a case under this title, at any time if
(1) the interest of creditors and the debtor would be better served by such dismissal or suspension;
11 U.S.C. § 305(a)(1)
[2] Section 707(a) provides:
(a) The court may dismiss a case under this chapter only after notice and a hearing and only for cause including
(1) unreasonable delay by the debtor that is prejudicial to creditors;
(2) nonpayment of any fees or charges required under chapter 123 of title 28; and
(3) failure of the debtor in a voluntary case to file within 15 days or such additional time as the court may allow after the filing of the petition commencing such case, the information required by paragraph (1) of section 521, but only upon a motion by the United States trustee.
11 U.S.C. § 707(a).
[3] Record, at 5.
[4] H.R. 95-595, 95th Cong. 1st Sess. 325 (1977), S.R. No. 95-989, 95th Cong. 2nd Sess. 36 (1978), U.S.Code Cong. & Admin.News 1978, pp. 5787, 6281, 5822.
[5] In re Pine Lake Village Apartment Co., 16 B.R. 750 (Bankr.S.D.N.Y.1982).
[6] 11 U.S.C. § 305(c).
[7] Section 554(a) provides:
(a) After notice and a hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value of the estate.
11 U.S.C. § 554.
[8] In re K.C. Machine & Tool Company, 816 F.2d 238, 245 (6th Cir. Mich.1987).
[9] Midlantic National Bank v. New Jersey Department of Environmental Protection, 474 U.S. 494, 106 S. Ct. 755, 88 L. Ed. 2d 859 (1986), reh. den., Midlantic National Bank v. New Jersey Department of Environmental Protection, 475 U.S. 1091, 106 S. Ct. 1482, 89 L. Ed. 2d 736 (1986).
[10] Id. 106 S.Ct. at 762.
[11] Cosetti, J. and Friedman, J., "Midlantic National Bank, Kovacs, and Penn Terra: The Bankruptcy Code and State Environmental Law Perceived Conflicts and Options for the Trustee and State Environmental Agencies," 7 Journal of Law and Commerce 65 (1987), citing Record at 4, In re Quanta Resources, No. 81-05967 (Blecky, D.N.J. June 29, 1982), Brief of Trustee Appellee at 7, In re Quanta Resources, 739 F.2d 912 (3rd Cir.N.J.1984).
[12] Midlantic, supra, 106 S.Ct. at 766 (Rehnquist, J., dissenting).
[13] There were two paths to Midlantic. After obtaining an order authorizing the abandonment of the Edgewater facility, the trustee moved for a similar order with respect to the Long Island facility. The order of the Bankruptcy Court authorizing abandonment of the Long Island facility was affirmed by the District Court of New Jersey in Matter of Quanta Resources Corp., 55 B.R. 696 (D.N.J.1983), reversed, Matter of Quanta Resources Corp., 739 F.2d 912 (3rd Cir.N.J.1984), cert. granted, Midlantic National Bank v. New Jersey Department of Environmental Protection, 469 U.S. 1207, 105 S. Ct. 1168, 84 L. Ed. 2d 319 (1985), aff'd., Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U.S. 494, 106 S. Ct. 755, 88 L. Ed. 2d 859 (1986). The order authorizing abandonment of the Edgewater facility was appealed directly to the Court of Appeals on consent of the parties. The order of the Bankruptcy Court was reversed in In re Quanta Resources Corp., 739 F.2d 927 (3rd Cir.N.J.1984), cert. granted, Midlantic National Bank v. New Jersey Department of Environmental Protection, 469 U.S. 1207, 105 S. Ct. 1168, 84 L. Ed. 2d 319 (1985), aff'd., Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U.S. 494, 106 S. Ct. 755, 88 L. Ed. 2d 859 (1986).
[14] Matter of Quanta, supra, 739 F.2d 912, at 921-22.
[15] Midlantic, 106 S.Ct. at 762.
[16] Abandonment of toxic sites was the general rule prior to Midlantic. Matter of Quanta Resources was an exception to this rule. See e.g. In re Stevens, 53 B.R. 783 (Bankr.D.Me.1985), In re Wall Tube & Metal Products Co., 831 F.2d 118 (6th Cir.Tenn.1987) at 120 (referencing 1984 authorization by bankruptcy court of conveyance by trustee pursuant to Bankruptcy Rule 6007), In re Catamount Dyers, Inc., 50 B.R. 790 (Bankr. D.Vt.1985), In re A & T Trailer Park, Inc., 53 B.R. 144 (Bankr.D.Wyoming 1985), and Matter of Borne Chemical Company, Inc., 54 B.R. 126 (Bankr.D.N.J.1984). See also, Matter of National Smelting of New Jersey, Inc., 49 B.R. 1012 (D.Colorado 1985) citing In the Matter of Quanta Resources, 739 F.2d 912 in its reversal of the order of the Bankruptcy Court authorizing abandonment. Further grounds for reversal included a finding that the trustee failed to establish that the elements of section 554 were met. "The trustee apparently assumes that the cost would be astronomical, but no evidence has been presented on this issue." Id. at 1015.
[17] Prior to the enactment of the Bankruptcy Code in 1978, no statute expressly authorized a trustee to abandon burdensome property in a liquidation case. Former Sections 64(a)(4), 70(a)(2) and 70(b) of the Bankruptcy Act of 1898 authorized the abandonment of property burdened by, respectively, taxes, pending applications for patents, trademarks and copyrights, and executory leases, including leases of real property. 4 Collier on Bankruptcy (15th Ed.) paragraph 554.01. Case law prior to the enactment of the Bankruptcy Code had expanded this power and § 554 represents the codification of the judicially developed rule of abandonment. Midlantic, 106 S.Ct. at 759.
[18] Midlantic, (Rehnquist, J. dissenting) at 763 citing Kothe v. R.C. Taylor Trust, 280 U.S. 224, 227, 50 S. Ct. 142, 143, 74 L. Ed. 382 (1930), 4 Collier paragraph 554.01.
[19] 11 U.S.C. § 323(a).
[20] Section 704 provides in part:
The trustee shall
(1) collect and reduce to money the property of the estate for which such trustee serves, and close such estate as expeditiously as is compatible with the best interests of parties in interest;
11 U.S.C. § 704(1).
[21] 11 U.S.C. § 323(b).
[22] Midlantic, 106 S.Ct. at 762, n. 9.
[23] The Third Circuit discounted the relevance of the extent of the expenditures involved, stating this in itself was not sufficient to outweigh the public interest at stake. The expenditures relevant to the size of the estate may be relevant, however. But nowhere was it alleged that the other assets available in Quanta would have covered all of the cost necessary to comply with state and local regulations. See n. 9, Matter of Quanta, 739 F.2d 912, 921.
Cf. Express rejection by the Fourth Circuit of the trial court's conclusion that the financial condition of the debtor was irrelevant in In re Smith-Douglass, Inc., 856 F.2d 12 (4th Cir.N.C. 1988).
[24] As of August 1985, it was estimated that 74 hazardous waste facilities had filed for bankruptcy. An EPA study concluded that over the next fifty years, 25-30% of the firms owning land disposal facilities will petition for bankruptcy. Cosetti and Friedman, supra, citing U.S. General Accounting Office, Hazardous Waste, Environmental Safeguards Jeopardized When Facilities Cease Operating (1986), p. 18.
[25] Cases denying a trustee's motion to abandon include In re Peerless Plating, 70 B.R. 943 (Bankr.W.D.Mich.1987), In re Stevens, 68 B.R. 774 (Bankr.D.Me.1987) reversing In re Stevens, 53 B.R. 783 (Bankr.Me.1985), In re Beker Industries Corp., 64 B.R. 900 (Bankr.S.D.N.Y.1986). Abandonment has been allowed in the following cases: In re Smith-Douglass, Inc., 856 F.2d 12 (4th Cir.N.C.1988), affirming In re Smith-Douglass, Inc., 75 B.R. 994 (E.D.N.C.Raleigh Div. 1987), In re Brio Refining, 86 B.R. 487 (D.N.D. Texas, Dallas Div.1988), In re Purco, 76 B.R. 523 (Bankr.W.D.Pa.1987), In re Franklin Signal Corp., 65 B.R. 268 (Bank.D.Minn.1986), In re Mowbray, 67 B.R. 34 (Bankr.Ala.1986), and In re Oklahoma Refining Company, 63 B.R. 562 (Bankr.W.D.Okla.1986).
[26] In re Commercial Oil Service, Inc., 58 B.R. 311 (Bankr.N.D.Ohio 1986), aff'd., In re Commercial Oil Service, Inc., 88 B.R. 126 (D.N.D. Ohio 1987).
[27] This case is distinguished from In re Commercial Oil Service, Inc., supra, n. 25, in that there is no express assurance that the environmental authorities are ready to take action as soon as they were free from the restrictions of the automatic stay. While this site has been evaluated for inclusion on the National Priority List by the EPA, pursuant to CERCLA, there is no assurance that environmental authorities will take immediate action to clean the site. A practical effect of dismissal may be the indefinite postponement of cleanup. Openchowski, Charles, "Bankruptcy is Not an Answer", 15 Environmental Law Reporter 10314 (1985), in response to Drabkin, Moorman and Kirsch, "Bankruptcy and the Cleanup of Hazardous Waste: Caveat Creditor", 15 Environmental Law Reporter 10168 (1985).
[28] Section 725 provides:
"After the commencement of a case under this chapter, but before final distribution of property of the estate under section 726 of this title, the trustee, after notice and a hearing, shall dispose of any property in which an entity other than the estate has an interest, such as a lien, and that has not been disposed of under another section of this title."
11 U.S.C. § 725.
[29] The legislative history for § 725 strongly suggests "interest" is restricted to an ownership or security interest. H.R.Rep. No. 95-595, 95th Cong., 1st Sess. 382-83 (1977); S.Rep. No. 95-989, 95th Cong., 2d Sess. 96 (1978), U.S.Code Cong. & Admin.News 1978, pp. 6338, 5882. An excessively narrow interpretation of this meaning conflicts, however, with the purpose of § 725 in permitting a determination with respect to property that is not disposed of under another section of the bankruptcy code, "such as by abandonment under 554, by sale or distribution under 363, or by allowing foreclosure by a secured creditor by lifting the stay under section 362."
[30] See, n. 25, supra.
[31] See Ohio v. Kovacs, 469 U.S. 274, 105 S. Ct. 705 at 711, n. 12, 83 L. Ed. 2d 649.
[32] 42 U.S.C. §§ 9601 et seq., as amended.
[33] In some cases the extent of the expenditures and nature of what is required to comply with environmental regulations may be a matter of dispute. See comment, "Superfund and the National Contingency Plan: How Dirty is Dirty? How Clean is Clean?" 12 Ecology Law Quarterly 89 (1984). The court in In re T.P. Long Chemical Inc., recognized the possibility that a party may challenge the cost incurred by the EPA in removing hazardous waste, 45 B.R. 278 (Bankr.N.D.Ohio 1985), at 287.
[34] See In re Mattiace Industries, 76 B.R. 44 (Bankr.E.D.N.Y.1987) denying a motion to convert a Chapter 11 case to a Chapter 7 citing the potentially unlimited scope of a trustee's liability and dismissing pursuant to § 1112(b).
[35] H.R.Rep. No. 595, 95th Cong., 1st Sess. 380 (1977); S.Rep. No. 989, 95th Cong., 2d Sess. 94 (1978), U.S.Code Cong. & Admin.News 1978, p. 5787; see also 11 U.S.C. § 102 (which, in providing rules of construction, states that the term "including" is not limiting in nature.)
[36] Cf. In re Way, 2 B.R. 372 (Bankr.N.D.Ohio 1980).
[37] In re 30 Hill Top Street Corp., 42 B.R. 517 (Bankr.D.Mass.1984).
[38] In re Charles George Land Reclamation Trust, 30 B.R. 918 (Bankr.D.Mass.1983), In re Commercial Oil Service, 58 B.R. 311 (Bankr.N.D.Ohio 1986), aff'd., In re Commercial Oil Service, 88 B.R. 126 (N.D.Ohio 1987). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919713/ | 91 B.R. 125 (1988)
In re Bruce A. DEAN, Debtor.
Bruce A. DEAN, Plaintiff,
v.
STATE FARM MUTUAL INSURANCE COMPANIES, Defendant.
Bankruptcy No. 87-11396, Adv. No. 88-0160.
United States Bankruptcy Court, N.D. Alabama.
September 2, 1988.
*126 John Davidson, Birmingham, Ala., for plaintiff.
Ronald S. Held, Birmingham, Ala., for defendant.
Thomas E. Reynolds, Birmingham, Ala., trustee.
MEMORANDUM OF DECISION
GEORGE S. WRIGHT, Chief Judge.
This matter came before the Court on the Debtor's Complaint to Determine Debtor's Exemptions and for Declaratory Judgment. After a hearing and consideration of applicable law, it is the opinion of this Court that the Debtors complaint is due to be DENIED. This memorandum shall constitute findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052.
FINDINGS OF FACT
The facts in this case have been stipulated to by both parties and are as follows:
The Debtor/Plaintiff, Bruce A. Dean, was an insurance sales agent for the Defendant, State Farm Mutual Insurance Companies under his State Farm's Agent Agreement until May 31, 1986 when Mr. Dean terminated his Agent's Agreement. At that time, Mr. Dean became conditionally entitled to certain termination payments. These payments are based on the number of personally produced policies credited the agent's account on the date of termination. The termination payments are paid in sixty (60) monthly installments beginning one (1) month after termination. Mr. Dean began receiving his termination payments in June, 1986. Thereafter, on or about December 18, 1987, Mr. Dean filed his petition under Chapter 7 of the U.S. Bankruptcy Code. State Farm continued to make termination payments direct to Mr. Dean until February, 1988 when Thomas E. Reynolds the Trustee of Mr. Dean's bankrupt estate, demanded that all future payments be made to him claiming that the installment payments due Mr. Dean are property of the bankrupt estate pursuant to 11 U.S.C. Section 541. Thereafter, beginning in February, 1988, *127 Mr. Dean's termination payments have, in fact, been made to Thomas E. Reynolds, Trustee. Thereafter, the Debtor, Bruce A. Dean, filed his Complaint to Determine Debtor's Exemptions and for Declaratory Judgment claiming the termination payments exempt under the Code of Alabama 1975 Section 6-10-7 and Section 6-10-6. Thomas E. Reynolds, the Trustee, thereafter filed his Counterclaim essentially alleging that the payments due from State Farm do not identify any deduction for social security, federal, state or local taxes and that the payments constitute property of the estate and that said funds are not subject to exemption as alleged by the debtor.[1]
This Court must now decide whether, on the facts before it, the termination payments from State Farm are exempt under Section 6-10-6 or Section 6-10-7 of the Code of Alabama, 1975.
CONCLUSIONS OF LAW
The Plaintiff has conceded[2] at the outset of this case that in order for the debtor to be entitled to the termination payments no further personal services are required of the debtor and that the termination payments have been fully earned pre-petition by the debtor. This being so, both parties agree that the termination payments are property of the estate.[3] The question now becomes whether Section 6-10-6 and Section 6-10-7 of the Code of Alabama apply to the termination payments.
APPLICATION OF SECTION 6-10-7
Section 6-10-7 provides in pertinent part:
The wages, salaries or other compensation of laborers or employees, residents of this state, for personal services, shall be exempt from levy under writs of garnishment or other process for the collection of debts contracted or judgments entered in tort in an amount equal to 75 percent of such wages, salaries or other compensation due or to become due to such laborers or employees, and the levy as to such percentage of their wages, salaries or other compensation shall be void. . . . (underlining for emphasis)
Section 6-10-7 Code of Alabama (1975). The threshold question of this section turns on whether the debtor can be classified as a LABORER or EMPLOYEE.
LABORER
The test for determining who is a laborer has been set out in Oliver v. Macon Hardware Co., 98 Ga. 249, 25 S.E. 403, 404 (1896) as whether the individual's duties, "consists manly of work requiring mental skill or business capacity, and involving the exercise of his intellectual faculties, rather than work the doing of which properly would depend upon mere physical power to perform ordinary manual labor." It is the later part of this test that defines a laborer. A laborer is one whose duties are mainly physical or toilsome and not mental. Howel v. Atkinson, 3 Ga.App. 58, 59 S.E. 316 (1907). Each case requiring the determination of laborer status is to be, "determined with reference to its own particular facts and circumstances" and "the character of the work . . . must be taken into consideration." Oliver v. Macon, 25 S.E. at 404. In the case at bar, it is clear the Debtor's responsibilities were predominately mental or intellectual. Although the Debtor may have had to exert physical effort in meeting with clients and discussing various insurance policies, this minimal physical labor does not preponderate over the intellectual aspect of his duties and thus the debtor does not meet the definition of laborer.
EMPLOYEE
Section 6-10-7 also includes "employee" within its purview. The test for establishing an employer/employee relationship is stated in Ex parte Board of School Commissioners of Mobile County, *128 235 Ala. 82, 178, So. 63, granting cert. Daves v. Rain, 28 Ala.App. 54, 178 So. 59 (1937) as, "the relationship of master and servant exists whenever the employer retains the right to direct the manner in which the business shall be done, as well as the result to be accomplished, as, in other words, not only what shall be done, but how it shall be done." The characteristics of an employer/employee relationship are further set out in Porter v. St. Louis-San Francisco Railway Co., 354 F.2d 840, 843 (5th Cir.) 1966 as:
The essential characteristic of the master and servant relation is the retention by the employer of the right to direct and control the manner in which the work shall be performed, the right to determine not merely the result but the methods and means by which such result is to be accomplished.
Citing 56 C.J.S. Master and Servant Section 2d(1), p. 33.
Porter v. St. Louis-San Francisco Railway, 354 F.2d at 843 also distinguished the employer/employee relationship from an independent contractor relationship and defined an independent contractor as:
An independent contractor is one who, exercising an independent employment, contracts to do a piece of work according to his own methods, without being subject to the control of his employer except as to the result of his work; an independent contractor is not a servant, and there is not master and servant relation between his servants and the employer or contractee.
Citing 56 C.J.S. Master and Servant Section 3(1) p. 41.
The State Farm Agent's Agreement that was entered into by the Debtor states in Section 1(B):
You are an independent contractor for all purposes. As such you have full control of your daily activities, with the right to exercise independent judgment as to time, place and manner of soliciting insurance, servicing policyholders, and otherwise carrying out the provisions of this agreement. (Underlining for emphasis)
The Preamble to the State Farm Agent's Agreement explicitly states the existence of an independent contractor relationship by declaring in paragraph one:
The purpose of the agreement is to reduce to writing the objectives, and responsibilities essential to the relationship between the agent, operating as an independent contractor, and State Farm. (Underlining for emphasis)
Paragraph two of the Agent's Agreement states:
You [the agent] have chosen this independent contractor relationship . . . in preference to one which would place you in employee status. (Underlining for emphasis)
Clearly the State Farm Agent's Agreement and the conduct of the debtor place him in an INDEPENDENT CONTRACTOR STATUS and not an EMPLOYEE status. This being so, the debtor has failed to come within the bounds of Section 6-10-7 and thus the provisions of Section 6-10-7 are not available to the debtor.
APPLICATION OF SECTION 6-10-6
The question remains as to the applicability of Section 6-10-6 to the termination payments. Section 6-10-6 provides:
The personal property of such resident to the extent of the resident's interest therein, to the amount of $3,000.00 in value, to be selected by him or her, and, in addition thereto, all necessary and proper wearing apparel for himself or herself and family, all family portraits or pictures and all books used in the family shall also be exempt from levy and sale under execution or other process for the collection of debts.
Section 6-10-6 Code of Alabama (1975). This section does not turn on "laborer" or "employee" status and is available to all persons claiming its protection as to personal property. The debtor may used 6-10-6 to exempt only the portion of the termination payments that bring him up to the $3,000.00 limit, after first taking into consideration assets already claimed exempt *129 under this section in the debtor's petition.
CONCLUSION
The Court finds that Section 6-10-7 of the Code of Alabama is not applicable to the debtor and that Section 6-10-6 of the Code of Alabama may be used by the debtor only after first taking into account the personal property exemptions already claimed by the debtor and only to the extent that the termination payments bring the debtor within the $3,000.00 limit set out in Section 6-10-6.
This memorandum shall constitute findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052. A separate order will be entered in accordance with the foregoing.
NOTES
[1] Plaintiff's Memorandum Brief and Defendant's Reply Brief.
[2] Plaintiff's Memorandum Brief p. 5.
[3] See In re Marshburn, 5 B.R. 711 (Bkrpt Col. 1980). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919725/ | 91 B.R. 777 (1988)
In re REVCO D.S., INC., et al., Debtors.
Bankruptcy Nos. 588-1308 through 588-1321, and 588-1305.
United States Bankruptcy Court, N.D. Ohio.
September 30, 1988.
*778 John Silas Hopkins, III, Baker & Hostetler, Cleveland, Ohio, for debtors.
Stuart E. Hertzberg, Hertzberg, Jacob & Weingarten, Detroit, Mich., Harry W. Greenfield, Javitch & Eisen Co., L.P.A., Cleveland, Ohio, for Trade Creditors Committee.
Conrad Morganstern, Cleveland, Ohio, U.S. Trustee.
Brad Eric Scheler, Fried, Frank, Harris, Shriver & Jacobson, New York City, for Unsecured Noteholders Committee.
Joseph F. Hutchinson, Jr., Brouse & McDowell, Akron, Ohio, for Bank Group.
FINDINGS OF FACT AND DISCUSSION OF LAW AS TO MOTION OF THE DEBTORS.
HAROLD F. WHITE, Bankruptcy Judge.
This matter came before the Court on September 27, 1988 for a hearing upon "Motion of the Debtors for Authority to Pay Certain Prepetition Priority Trust Fund Taxes Owed by the Debtors" filed September 7, 1988. Notice of said hearing was given pursuant to Administrative Order No. 1 entered by this Court on August 29, 1988.
The Trade Creditors' Committee (Committee) filed an answer, objection and brief to said motion.
Counsel for Debtors, the Committee, the Bank Group, the Official Committee of Unsecured Noteholders and the United States Trustee appeared at the hearing.
FINDINGS OF FACT
The Court makes the following twelve Findings of Fact.
1. On July 28, 1988 (Filing Date), the Debtors filed with the Court separate chapter 11 petitions pursuant to section 301 of the Bankruptcy Code, 11 U.S.C. sec. 301, and were thereupon continued in the management and operation of their businesses and properties as debtors in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code, 11 U.S.C. secs. 1107, 1108.
2. This Court has jurisdiction hereof pursuant to section 1334(a) of the Judicial Code, 28 U.S.C. sec. 1334(a). Venue is this judicial district pursuant to section 1409(a) of the Judicial Code, 28 U.S.C. sec. 1409(a). This is a core proceeding pursuant to 28 U.S.C. sec. 157.
3. Debtors presented the testimony of Gregory Raven to the Court. The Committee cross-examined Mr. Raven. Mr. Raven is the executive vice president of finance and treasurer of Revco D.S., Inc. (Revco) since September 1, 1988. He has previously served as vice president of finance and treasurer for Revco. His employment at Revco has made him thoroughly knowledgeable of the accounting, finance and tax functions of the corporation. Specifically, Mr. Raven is familiar with the various excise and sales taxes which the Debtors, as sellers of goods and services, are required to collect from customers and pay over to a taxing authority (hereinafter referred to as "trust fund taxes").
4. Although Debtors' motion refers to both pre-petition and post-petition trust fund taxes, Mr. Raven stated in his testimony that all trust fund taxes which are the subject of this motion represent pre-petition trust fund taxes.
5. Debtors are requesting authority to pay a maximum total of $9,262,948.91 of pre-petition trust fund taxes. (Debtors Ex. A)
6. The State of Ohio has made personal assessments against certain officers and employees of the Debtors for $1,376,022.80 *779 for trust fund taxes owed the State by the Debtors.
7. The State of Ohio has withdrawn its assessments in light of the fact that Debtors have filed the subject motion.
8. Several tax authorities from other states have "threatened" Debtors' corporate officers with personal assessments for the trust fund taxes owed and criminal procedures for issuing checks with insufficient funds.
9. The articles of incorporation of the Debtors provides that the corporation will indemnify its officers for any amounts paid in satisfaction of a personal assessment for a tax claim and all related costs and expenses. (Debtors Ex. B)
10. The threat of assessment of trust fund taxes only, has caused stress for the corporate officials in their ability to direct their efforts towards formulating a plan of reorganization.
11. The Bank Group and the Official Committee of Unsecured Noteholders support the Debtors' motion.
12. The Court finds the State of Ohio and the Tax Commissioner of the State of Ohio were notified of this proceeding, and the Court was notified, by telephone, by the State of Ohio and the Tax Commissioner that they would not appear at this hearing.
BACKGROUND
Debtors seek authorization to pay the trust fund taxes but only to the extent that the taxing authority responsible for the collection of the tax agrees to eliminate all penalties and post-petition interest assessed, agrees to refrain from making any assessment in the future in relation to the trust fund taxes on returns or other filings filed with the taxing authority and agrees to refrain from attempting to impose personal liability for the trust fund taxes, penalties and interest on Debtors' corporate officers.
Debtors assert that the trust fund taxes represent third party funds and are entitled to priority status pursuant to sec. 507(a)(7)(A) (E) and will eventually have to be paid in full pursuant to sec. 1129(a)(9)(C) in order for a plan of reorganization to be confirmed, therefore it would be preferable to pay the trust fund taxes now to the taxing authorities who will comply with the conditions of payment stated earlier.
ISSUE
HAVE DEBTORS PRESENTED ADEQUATE JUSTIFICATION FOR THE PAYMENT OF PRE-PETITION TRUST FUND TAXES PRIOR TO CONFIRMATION OF A PLAN OF REORGANIZATION?
DISCUSSION OF LAW
Debtors provide no authority under the Bankruptcy Code or case law to authorize payment of the trust fund taxes prior to payment of claims having priority over the trust fund taxes and other taxes that have accrued in the same priority status prior to a time when a plan of reorganization is confirmed.
Debtors submit that the relief requested would not be without precedent as the Bankruptcy Court for the Southern District of New York authorized a debtor in a chapter 11 proceeding to pay certain pre-petition trust fund taxes prior to confirmation of a plan of reorganization in In re Chateaugay Corp., Reomar, Inc., The LTV Corporation, et al., Nos. 86 B 11270 through 86 B 11334 inclusive, 86 B 11402 and 86 B 11464 (Bankr.S.D.N.Y. April 7, 1987) (Order Authorizing Debtors to pay pre-petition trust fund tax claims).
The Court, on its own volition, obtained a copy of the application and order in the Chateaugay case and upon review of the documents finds that said order is not persuasive for the relief requested in the instant case. In the Chateaugay order the debtors were authorized to pay pre-petition federal employment trust fund taxes of $51,000. In the instant case Debtors seek authority to pay approximately $9,200,000 in pre-petition trust fund taxes.
While this Court is cognizant that the Chateaugay case involves a large and *780 highly complex group of companies, Debtors have failed to provide sufficient information regarding the Chateaugay case to allow this Court to fully analyze the order in relation to the issues of the instant case. Accordingly, this Court finds the Chateaugay order is not persuasive authority for the relief requested.
Debtors further state that the potential personal liability of corporate officers is ". . . distracting and demoralizing, and it hinders the reorganizational efforts of the Debtors." (page 3 of the motion). Debtors assert that payment of the trust fund taxes will preserve the time, morale and energies of key personnel to work towards the reorganization effort.
Debtors further contend that failure to pay the trust fund taxes will result in penalties being assessed in addition to the trust fund taxes already due.
The Committee objects to the motion because Debtors seek authority to pay trust fund taxes having lower priority than various reclamation claims filed against Debtors which have priority under sec. 546(c) and pursuant to a previous order of this Court providing that reclamation claims be treated as expenses of administration. The Committee asserts that trust fund taxes should be paid in accordance with sec. 1129(a)(9)(C) of the Bankruptcy Code, 11 U.S.C. sec. 1129(a)(9)(C), upon the confirmation of a plan of reorganization.
The Committee further asserts that neither the Bankruptcy Code nor case law provide authority for payment of the prepetition trust fund taxes.
A fundamental principle of bankruptcy law requires that all unsecured creditors be treated in a like manner throughout the bankruptcy proceeding. In re Cascade Oil Co., Inc., 65 B.R. 35 (Bankr.D.Kan.1986). It is fundamental that in every bankruptcy case distributions to creditors are governed by the scheme of priorities established by the Bankruptcy Code. Section 507 of the Bankruptcy Code, 11 U.S.C. sec. 507, specifies the kinds of claims that are entitled to priority in distribution and the order of priority.
The parties agree that the subject trust fund taxes are entitled to priority status pursuant to section 507(a)(7)(A) (E).
The Bankruptcy Code does not authorize the payment of pre-petition debts prior to confirmation of a plan of reorganization except in the event of an assumption of an executory contract. 11 U.S.C. sec. 365(b). In fact, 11 U.S.C. sec. 1129(a) provides for payment of pre-petition claims as a requirement for confirmation of a plan. It provides:
(a) The court shall confirm a plan only if all of the following requirements are met:
(9) Except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that
(C) with respect to a claim of a kind specified in section 507(a)(7) of this title, the holder of such claim will receive on account of such claim deferred cash payments, over a period not exceeding six years after the date of assessment of such claim, of a value, as of the effective date of the plan, equal to the allowed amount of such claim.
It is clear that the Bankruptcy Code does not authorize payment of pre-petition trust fund taxes prior to confirmation of a plan of reorganization.
An application to pay a pre-petition debt to an employee benefit plan was denied in In re Wexler Knitting Mills, 44 B.R. 1019 (Bankr.E.D.Pa.1984). The debtor asserted that failure to pay the debt would result in a substantial Internal Revenue Code penalty as well as a decline in morale among the affected employees. The debtor argued that both consequences would threaten reorganization efforts. Debtor further asserted that the anticipated plan of reorganization would provide a one hundred percent (100%) payment to creditors. The court found debtors averment regarding the plan as merely speculative and held that debtors had not presented adequate justification for the payment. See also In re FCX, Inc., 60 B.R. 405 (Bankr.E.D.N.C.1986), (denial of application to pay pre-petition grain purchases) *781 and In re Vermont Real Estate Investment Trust, 25 B.R. 806 (Bankr.D. Vt.1982), (denial of application to pay pre-petition claims at a discount).
In the Matter of Crowe & Associates, Inc., 713 F.2d 211 (6th Cir.1983) involves a chapter 11 proceeding wherein a union engaged in a strike against the debtor employer to collect pre-petition pension payments. The Bankruptcy Court issued a permanent injunction against the striking union. The District Court reversed and dissolved the injunction and the Sixth Circuit affirmed the dissolution of the injunction.
The Circuit Court, in its per curiam opinion, recognized that as a result of its ruling the union could strike the debtor employer again with disastrous results to the debtor's operations. The court stated at page 216:
We recognize that this legal result casts upon Crowe inequities. Even if Crowe desired to make the delinquent payments, the bankruptcy court may not permit it to do so.
In the instant case the Debtors seek authority to pay the trust fund taxes to facilitate efforts to reorganize; the Debtors must note, as the Circuit Court in Crowe & Associates did, that they have little or no control over many economic factors that affect the outcome of the reorganization.
In the matter before the Court, the Debtors admitted that they did not make any attempt to secure injunctive relief that could be possibly granted under 11 U.S.C. sec. 1105. It has been admitted, not disputed, that the corporate officials have been threatened with personal assessment and possible criminal prosecution for non-payment of the trust fund taxes and the checks issued prior to the filing of the chapter 11 proceedings. If all debtors in similar situations were to succumb to the threats of the state taxing authorities, it would become the norm for debtors and taxing authorities to attempt to circumvent the bankruptcy statutes, which were enacted for the benefit of all creditors, by the simple threat of personal assessment and criminal prosecution. See In re Jon Co., 30 B.R. 831 (Bankr.D.Colo.1983).
Debtors' motion requests authority to pay only pre-petition "trust fund taxes". These trust fund taxes are entitled to priority status pursuant to section 507(a)(7)(A), (C) and (E).
While Debtors request authority to pay only the trust fund taxes, a review of sec. 507(a)(7) reveals that said section provides equal priority status for other "non-trust fund" taxes or claims including the following subsections of 507(a)(7): (B) property tax; (F) a customs duty arising out of the importation of merchandise; and, (G) a penalty related to a claim within this priority and in compensation for actual pecuniary loss.
Debtors, by their motion, propose to pay only pre-petition "trust fund" taxes and no other taxes or claims within the level of priority of section 507(a)(7) claims and the result of such payment would create Debtors' own unique priority of claims, clearly in violation of the order of priority established by sec. 507(a)(7). Furthermore, payment of the trust fund taxes would prejudice creditors with priority status under sec. 546(c), as said creditors are entitled to a higher priority than the "trust fund taxes."
CONCLUSION
Debtors have failed to establish any authority under the Bankruptcy Code or case law to support their motion. Debtors' motion for authority to pay only pre-petition "trust fund taxes" prior to confirmation of a plan of reorganization is clearly prejudicial to other creditors of higher priority under sec. 546(c) and equal priority within sec. 507(a)(7).
Therefore, Debtors' motion for authority to pay pre-petition priority taxes is denied. A separate Order will be issued on these Findings. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/429415/ | 724 F.2d 413
14 Fed. R. Serv. 1715
Marion K. SEIDMAN, Individually, Plaintiff,andDavid M. Rogers, as Administrator for the Estate of RichardScott Seidman, deceased, Appellant,v.FISHBURNE-HUDGINS EDUCATIONAL FOUNDATION, INC., t/a TheFishburne Military School, Appellee.
No. 82-1865.
United States Court of Appeals,Fourth Circuit.
Argued April 13, 1983.Decided Jan. 6, 1984.
Barry A. Stiefel, Alexandria, Va. (Wayne M. Mansulla, Washington, D.C., Ashcraft & Gerel, Alexandria, Va., on brief), for appellant.
Susan E. Greenlief, Arlington, Va. (Robert L. Ellis, Siciliano, Ellis, Sheridan & Dyer, Fairfax, Va., on brief), for appellee.
Before MURNAGHAN, SPROUSE and ERVIN, Circuit Judges.
SPROUSE, Circuit Judge:
1
This appeal involves a wrongful death action arising from the tragic suicide of a cadet at a private military school. Marion K. Seidman, the mother of the deceased cadet, Richard Seidman, and David M. Rogers, the administrator of his estate, brought a diversity action against Fishburne-Hudgins Educational Foundation, Inc., t/a The Fishburne Military School. Seidman and Rogers appeal from a judgment for Fishburne entered after a jury verdict absolving the school of liability. They contend that the trial court should have excluded testimony about a conversation between Mrs. Seidman and a religious minister because it was privileged; that the court erred in refusing to give proffered instructions pertaining to the duty of care owed by the school; and that it committed prejudicial error in commenting on the evidence. We affirm.
2
Richard Seidman was a sixteen-year-old cadet in his second year of studies at Fishburne. Late in the fall semester of 1979, Richard strapped a home-made explosive device to his chest and threatened suicide. Fishburne officials were successful in restraining Richard and immediately sent him to the school infirmary to await instructions from his mother. After the incident, school officials discovered a .22 caliber rifle, which had been a gift from his mother, a shotgun, and ammunition in Richard's room. They placed the weapons and ammunition in locked cabinets in the school's storage facility. The school's policy permits the cadets to keep weapons in the storage facility, but restricts their use to supervised hunting trips and target shooting.
3
Richard was transferred from the school infirmary to a Maryland hospital at his mother's direction. Soon afterwards, he was moved again to the Psychiatric Institute in Washington, D.C., where he received extensive treatment. His condition improved sufficiently by the summer of 1980 that arrangements were made for his re-enrollment at Fishburne for the following September. The only condition placed on his re-enrollment was that he continue to receive psychiatric care while in school. Richard was discharged from the Psychiatric Institute on August 8, 1980, and arrived at Fishburne on September 6, accompanied by his mother. He was to register the following day. When Richard and his mother appeared for registration, they were taken to the office of the Commander of Cadets. The Commander informed them that Richard and a friend had been observed by a school instructor smoking marijuana the previous evening in a dormitory room. Richard was questioned concerning the incident and then told that he would not be permitted to re-enroll. His friend was also expelled because of the marijuana incident.
4
After the interview with the Commander, Mrs. Seidman told Richard to gather his belongings, and they returned to their hotel. Shortly after arriving, Richard informed his mother that he had left personal items at the school. He returned there without his mother and requested his weapons from the sergeant in charge of the storeroom. They were released to Richard, who died shortly thereafter of a self-inflicted bullet wound to the head.
5
Mrs. Seidman sued the school, alleging that Fishburne officials had acted negligently in three respects: (1) they had failed to exercise reasonable care in planning for the readmission of a student with Richard's special problems; (2) they had negligently handled the marijuana incident; and (3) they had failed to exercise reasonable care in releasing the firearms to Richard. The jury found for Fishburne on all three claims.
6
A central issue before the jury was the contributory or intervening negligence of Richard's sister in allegedly giving him the marijuana involved in the smoking incident. The evidence concerning the alleged gift of marijuana first appeared in the deposition of an Episcopalian priest. The priest had been at the hospital near the school when Mrs. Seidman brought Richard there after the shooting. As he was leaving, he was approached by a nurse asking him to stay with Mrs. Seidman until a local rabbi could be found. There was difficulty finding a rabbi, and the priest talked with and consoled Mrs. Seidman for about two hours. It was during this conversation that Mrs. Seidman told the priest that her daughter had given Richard the marijuana.
7
Mrs. Seidman contends on appeal that her disclosures to the priest enjoyed the protection of the priest-penitent privilege. She argues that, under Virginia law, the district court erred in allowing the deposition of the priest to be read into evidence and in allowing Fishburne to use the privileged communication in cross-examining her.
8
Section 8.01-400 of the Code of Virginia (1977 & Supp.1983) establishes the priest-penitent communication privilege for civil cases.1
9
No regular minister, priest, rabbi or accredited practitioner over the age of eighteen years, of any religious organization or denomination usually referred to as a church, shall be required in giving testimony as a witness in any civil action to disclose any information communicated to him in a confidential manner, properly entrusted to him in his professional capacity and necessary to enable him to discharge the functions of his office according to the usual course of his practice or discipline, wherein such person so communicating such information about himself or another is seeking spiritual counsel and advice ....
10
Although this statute has not been interpreted by the Virginia Supreme Court in any reported case, we agree with the district court that the plain meaning of the statute grants the privilege only to the minister, priest or rabbi, not to the penitent or lay communicant.
11
The priest-penitent or clergyman-communicant privilege has no firm foundation in common law. See 8 Wigmore, Evidence Sec. 2394 (McNaughton rev. 1961). The privilege, in modern practice, traces its existence to state statute or, in very rare cases, to state decisional law, id. Sec. 2395, and is generally acknowledged to offer very narrow protection to the claiming witness. See, e.g., Reese, Confidential Communications to the Clergy, 24 Ohio St.L.J. 1 (1963). Statutes creating the privilege vary, but generally are designed to safeguard the clergyman's status as a secure repository for the confessant's confidences. Id. Most penitent-priest statutes have a common feature: they explicitly prohibit the clergyman from disclosing the contents of a confidential communication "without the consent of the person making the communication," Ore.Evid.Code, Rule 506 (1981); In re Williams, 269 N.C. 68, 152 S.E.2d 317, 324 (1967); see also Reese, Confidential Communications to the Clergy, supra. Significantly, the Virginia statute contains no such prohibition; it simply says that "no regular minister, priest, rabbi or accredited practitioner ... shall be required to disclose any information" entrusted to him in a confidential conversation. This language plainly invests the priest with the privilege and leaves it to his conscience to decide when disclosure is appropriate.2 The priest in the present case did not invoke the privilege, but testified freely in a pretrial deposition about his conversation with Mrs. Seidman. Since the privilege was his alone to claim, Mrs. Seidman has no standing to object to the introduction of the priest's deposition into evidence or its use during cross-examination.
12
Seidman next contends that the district court erred in permitting Fishburne to amend its complaint at trial to incorporate the defense theory of contributory negligence.3 Fishburne requested leave to amend after evidence was introduced showing a possibility that the decedent's sister had contributed to the tragic suicide by giving marijuana to her brother. Seidman argues that the request should have been denied because of a Virginia rule specifying that "[c]ontributory negligence shall not constitute a defense unless pleaded or shown by the plaintiff's evidence." Rules of the Supreme Court, 3:16(d). She contends that this rule creates substantive law which supersedes the liberal amendment provisions of Federal Rule of Civil Procedure 15(b).4
13
Rule 3:16, read in conjunction with Rule 1:8 of the Virginia Supreme Court Rules, specifies when the defense of contributory negligence may be raised. For the purpose of determining if the Federal Rules of Civil Procedure apply, the Virginia rules are clearly procedural. Hanna v. Plumer, 380 U.S. 460, 85 S. Ct. 1136, 14 L. Ed. 2d 8 (1965). See also Yarber v. Allstate Insurance Co., 674 F.2d 232 (4th Cir.1982). "When a situation is covered by one of the Federal Rules ... the [district] court has been instructed to apply the Federal Rule, and can refuse to do so only if ... [the Supreme] Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor constitutional restrictions." Hanna, 380 U.S. at 471, 85 S.Ct. at 1144. The constitutionally valid federal rule must be given effect in district court, even if it would supply a different result than would state law. Id.; see also Walker v. Armco Steel Corp., 446 U.S. 740, 747-48, 100 S. Ct. 1978, 1983-84, 64 L. Ed. 2d 659 (1980). The trial court's decision was a proper exercise of its discretion under Rule 15(b) and therefore Mrs. Seidman's challenge to the amendment must fail.
14
Seidman next argues that the trial judge erred in his jury charge by unduly emphasizing the defendant's theories of intervening cause and contributory negligence, without giving the same attention to her theories of liability. A trial judge in the federal system has wide latitude to assist juries by explaining, summarizing, and commenting on the evidence. See, e.g., United States v. Tello, 707 F.2d 85 (4th Cir.1983). He is not an idle observer of the proceedings, "but is the governor of the trial for the purpose of assuring its proper conduct and of determining questions of law." Quercia v. United States, 289 U.S. 466, 469, 53 S. Ct. 698, 699, 77 L. Ed. 1321 (1933). The dual interests of fairness and impartiality, of course, place natural limitations on judicial comment. The judge must be circumspect in his comments and avoid favoring one party over another. See Pullman Co. v. Hall, 46 F.2d 399, 404 (4th Cir.1931); see also Tello, supra. "In charging the jury [however] the trial judge is not limited to instructions of an abstract sort." Quercia, 289 U.S. at 469, 53 S.Ct. at 699. He may draw the jury's attention to the parts of the evidence he considers important. The trial judge may even "express his opinion upon the facts, provided he makes it clear to the jury that all matters of fact are submitted to their determination." Id. His comments must be balanced and impartial, but he is not required to divide the time and emphasis given to each side's theories with mathematical precision.
15
The trial judge in this case concededly discussed Fishburne's defense theories in more detail than Seidman's liability theories, but we perceive no partiality in his comments. He never gave his personal views on the believability of the defendant's theories. He was careful to note that "they [Fishburne] say" Seidman's son was treated like any other cadet and that "they say" no reason existed to foresee the son would take his life. He immediately followed this general discussion of the defense theories with a plainly stated admonition that "you [the jury] have to weigh that along with other evidence in the case and make an independent determination." The trial judge carefully explained that, for the defendants to prevail on their affirmative defenses, those defenses must be proven by a preponderance of the evidence. He then identified the requisite elements of a successful contributory negligence defense.
16
Significantly, the trial judge balanced his general description of Fishburne's defense theories with an exposition of the plaintiff's major theory of liability:
17
I tell you as a matter of law young Seidman and his mother were at Fishburne for purposes of enrolling him as a student. They had a perfect right to be there, and they were invitees of Fishburne for purposes of enrolling, or whatever they had gone there for. Now, that imposes certain duties on a host who calls someone to come on their premises. And in this case it was the duty of the defendant Fishburne Military School in operating its school to exercise ordinary care for the benefit of its students in the following areas: One, to adopt and publish rules concerning its code of conduct; two, to call infractions of its rules to the attention of the violator in a reasonable manner; and three, if it accepted a student with special problems, after being informed of the problems, to take reasonable steps to cope with the problems. (emphasis added)
18
Taken together, the court's expressions endorsed neither the plaintiffs' nor the defendant's legal theories or evidence, but were substantially impartial.
19
Finally, Seidman argues that the trial judge's refusal to give four proffered instructions on the degree of care owed by Fishburne to the decedent was error. We disagree. These instructions were directed principally to one of the central issues in the case: whether Fishburne owed a high degree of care in releasing the rifle and whether its action in turning over the weapon to the decedent was reasonable under the circumstances. The trial court dealt with this key issue in two ways. It first instructed the jury as to Fishburne's duty of care in its general relationship with students:
20
[I]n this case it was the duty of the defendant Fishburne Military School in operating its school to exercise ordinary care for the benefit of its students in the following areas: One, to adopt and publish rules concerning its code of conduct; two, to call infractions of its rules to the attention of the violator in a reasonable manner; and three, if it accepted a student with special problems, after being informed of the problems, to take reasonable steps to cope with the problems.
21
It later instructed more specifically concerning the events surrounding the return of the weapon and the applicable standard the jury must apply:
22
Now, there has been evidence in the case that the decedent had certain property that was in the defendant's custody, and at some point in time after the decedent's connection with the school ended, that this property had to be returned. And there is no question that it was the decedent's property, and he was entitled to get it back at some point in time. I tell you, however, that it is up to you to decide whether the manner in which it was done here was reasonable under the circumstances.
23
You have heard a great deal of conflicting testimony about the normal manner that they use for returning guns and ammunition to students, and that since it is in conflict you have to make that decision for yourself. (emphasis added)
24
The reasonable or ordinary care standard is not a static concept in Virginia law. The Virginia Supreme Court made this plain in Perlin v. Chappell, 198 Va. 861, 96 S.E.2d 805, 808 (1957):
25
" 'Reasonable care' or 'ordinary care' is a relative term, and varies with the nature and character of the situation to which it is applied. The amount or degree of diligence and caution which is necessary to constitute reasonable or ordinary care depends upon the circumstances and the particular surroundings of each specific case. The test is that degree of care which an ordinarily prudent person would exercise under the same or similar circumstances to avoid injury to another." Montgomery Ward & Co. v. Young, 195 Va. 671, 673, 79 S.E.2d 858, 859 (further cites omitted).
26
See, e.g., Sturman v. Johnson, 209 Va. 227, 163 S.E.2d 170, 176 (1968) (automobile accident); Colonial Stores, Inc. v. Pulley, 203 Va. 535, 125 S.E.2d 188, 190 (1962) (invitee on land); Daughtery v. Hippchen, 175 Va. 62, 7 S.E.2d 119, 120 (1940) (explosives).
27
In its charge to the jury, the court emphasized that Fishburne's acceptance of a student with special problems created a corresponding duty "to take reasonable steps to cope with the problems." The court instructed the jury that the reasonableness of Fishburne's conduct in releasing the rifle was to be judged from the circumstances, thus making it aware that the evidence bearing on the school's procedures, its knowledge of the student's mental condition and age, and the school's actual conduct were all relevant to the issue of liability. Its charge fairly and adequately presented the applicable law. See, e.g., Mercer v. Burnette, 662 F.2d 706, 708 (11th Cir.1981); Carruba v. Transit Casualty Co., 443 F.2d 260, 264 (6th Cir.1971); see also Wiles v. Nationwide Life Insurance Co., 334 F.2d 296, 300 (4th Cir.1964).
28
Accordingly, the judgment of the district court is affirmed.
29
AFFIRMED.
1
When the substantive decision in a case is governed by state law, the state law also determines the privilege of a witness. Fed.R.Evid. 501
2
This interpretation of the priest-penitent statute is further buttressed by referring to other provisions of the Virginia Code relating to testimonial privileges. The physician-patient privilege is described in Section 8.01-399:
Except at the request of, or with the consent of, the patient, no duly licensed practitioner of any branch of the healing arts shall be required to testify in any civil action, respecting any information which he may have acquired in attending, examining or treating the patient ....
Va.Code Sec. 8.01-399 (1977 & Supp.1983) (emphasis added).
The psychologist-client privilege is described in Section 8.01-400.2:
Except at the request of or with the consent of the client, no licensed professional counsel, ... licensed clinical social worker, or licensed psychologist ... shall be required in giving testimony as a witness in a civil action to disclose any information communicated to him in a confidential manner ....
Va.Code Sec. 8.01-400.2 (1977 & Supp.1983) (emphasis added).
The Virginia legislature included provisions in these statutes which allow communicants to require testimony concerning confidential disclosures to doctors or psychologists. The Legislature's omission of a similar provision from the priest-penitent statute strongly indicates that the clergyman's privilege cannot be affected by the communicant.
3
Fishburne had asserted the defense of contributory negligence against the decedent's mother in its pleadings. It had not, however, asserted a similar defense against the decedent's sister
4
Rule 15(b) of the Federal Rules of Civil Procedure provides in pertinent part:
(b) Amendments to Conform to the Evidence. When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment .... [T]he court may allow the pleadings to be amended and shall do so freely ....
The State of Virginia has adopted a similar approach to amending pleadings in Rule 1:8 of the Rules of the Supreme Court:
No amendments shall be made to any pleading after it is filed save by leave of court. Leave to amend shall be liberally granted in furtherance of the ends of justice.
In granting leave to amend the court may make such provision for notice thereof and opportunity to make response as the court may deem reasonable and proper. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/2466699/ | 973 S.W.2d 530 (1998)
Belinda BROWN, Appellant,
v.
SCHNUCK MARKETS, INC., Respondent.
No. 73295.
Missouri Court of Appeals, Eastern District, Division Two.
August 4, 1998.
*531 Paul J. Passanante, Joan M. Tanner, St. Louis, for appellant.
Michael B. Maguire, T. Michael Ward, Bart B. Zuckerman, St. Louis, William W. Cheeseman (Guardian Ad Litem), Troy, for respondent.
Before CRANE, P.J., and RHODES RUSSELL and HOFF, JJ.
PER CURIAM.
Belinda Brown ("customer") appeals after a judgment notwithstanding the verdict was entered in favor of Schnuck Markets ("Schnuck") on her claim that Schnuck owed a duty to protect her from foreseeable criminal activity on its premises. Customer argues that she produced substantial evidence concerning prior criminal incidents on Schnuck's premises thereby establishing a duty to protect her. Customer also argues that Schnuck's placement of security guards on its premises and the occurrence of six additional non-violent crimes on or near the premises also created Schnuck's duty. We affirm in that Schnuck owed customer no duty of protection under the circumstances herein.
For many years, Schnuck operated a grocery store located on the 1400 block of South Florissant Road ("old store"). Schnuck provided parking facilities to customers in a lot *532 shared with at least two other businesses. This parking lot also doubled as a commuter lot. In April 1991, Schnuck closed the old store and opened up a new grocery store about two blocks away. The parking facilities at the new store were at a different location than the old store's parking facilities.
On January 8, 1992, customer arrived at the new store at approximately 8 p.m. After completing her shopping and loading her groceries into her car, customer was approached by an unidentified male. The assailant threw the automobile door open and placed a gun to the side of her neck. After unsuccessfully attempting to move customer to the passenger seat, the assailant began striking her on the side of her head with both the gun and his fist. After striking her at least ten times, the assailant dislodged customer from the car, propelled her into a nearby shopping cart holder, and fled in his automobile with her purse.
The following year, customer brought suit, claiming that Schnuck's negligence in failing to protect her from criminal activity caused her to sustain injuries and damages when she was unexpectedly attacked by the unknown assailant. Following a three day trial, the jury found for the customer and awarded her $25,000 in damages. The trial court subsequently entered a judgment notwithstanding the verdict in favor of Schnuck, explaining that customer had produced insufficient evidence to invoke a duty upon Schnuck to protect her from the criminal acts of unknown third persons. This appeal follows.
Customer recites three points on appeal. She claims that the trial court erred in granting the judgment notwithstanding the verdict because she presented substantial evidence as to previous criminal incidents on Schnuck's property, thereby imposing a duty upon Schnuck to protect customer. Customer also claims that Schnuck assumed a duty to protect its customers by its placement of security guards on and about its premises. Finally, she asserts that the trial court erred in refusing to admit evidence of six prior non-violent crimes which had occurred on the parking lots of Schnuck's old and new grocery stores.
A motion for judgment notwithstanding the verdict presents the issue of whether the plaintiff has made a submissible case. Kimbrough v. J.R.J. Real Estate Investments, Inc., 932 S.W.2d 888, 889 (Mo. App.1996). If at least one element of a cause of action is not supported by substantial evidence, a motion for judgment notwithstanding the verdict should be granted. Kennedy v. Fournie, 898 S.W.2d 672, 680 (Mo.App. 1995). The question of whether evidence in a case is substantial is a question of law. Kimbrough, 932 S.W.2d at 888.
To determine whether plaintiff has made a submissible case, all evidence and reasonable inferences drawn therefrom must be viewed in a light most favorable to the plaintiff. Kimbrough, 932 S.W.2d at 889. A jury verdict will not be overturned unless there is a complete absence of probative facts to support it. Id.
Customer's first point on appeal concerns the duty of a landowner to protect business invitees from the criminal activity of third parties. In an action for negligence, a plaintiff is required to establish (1) a duty on the part of defendant to protect plaintiff from injury; (2) a breach of that duty; and (3) an injury to plaintiff as the direct result of that breach of duty. Claybon v. Midwest Petroleum Co., 819 S.W.2d 742, 744 (Mo.App.1991). Ordinarily, a landowner has no duty to protect a business invitee from the perpetuation of deliberate criminal activity by third parties. Madden v. C & K Barbecue Carryout, Inc., 758 S.W.2d 59, 61 (Mo. banc 1988). Moreover, a duty does not develop even though the area is one of high crime. Keenan v. Miriam Foundation, 784 S.W.2d 298, 302 (Mo.App.1990).
In spite of this general principle, a duty arises for a landowner to protect others, including business invitees, from deliberate criminal activity by third persons when "special facts and circumstances" are shown to exist. Madden, 758 S.W.2d at 61; Keenan, 784 S.W.2d at 302. The "special facts and circumstances" exception encompasses two possible theories of liability: (1) an intentional infliction of injury by known and identifiable third parties and (2) numerous and recent incidents of violent crime against *533 persons on the premises by unknown assailants. Bowman v. McDonald's Corp., 916 S.W.2d 270, 277 (Mo.App.1995).
As the case at issue deals with an unknown assailant and an unidentifiable third party, we will focus exclusively upon the second theory of liability under the "special facts and circumstances" exception. To state a cause of action for a third party criminal assault by unknown persons against her, a plaintiff must prove: (1) the necessary relationship between the plaintiff and defendant; (2) the prior specific incidents of violent crimes on the premises that are sufficiently numerous and recent to put a defendant on notice, either actual or constructive, that there is a likelihood that third persons will endanger the safety of defendant's invitees; and (3) the incident causing the injury is sufficiently similar in type to the prior specific incidents occurring on the premises that a reasonable person would take precautions against that type of activity. Keenan, 784 S.W.2d at 303. The touchstone for the creation of this duty is foreseeability, and the duty arises out of circumstances in which there is a foreseeable likelihood that particular acts or omissions will cause harm or injury. Bowman, 916 S.W.2d at 277.
The first prong of this cause of action involves the relationship between the plaintiff and the defendant. The relationship that must exist for a duty to be established is that of a business or property owner to an invitee. Keenan, 784 S.W.2d at 303; Keesee v. Freeman, 772 S.W.2d 663, 669 (Mo.App.1989). As customer was on Schnuck's property to purchase goods and engage in business transactions, we will assume that the required relationship was in effect at the time of the assault.
The second prong of a plaintiff's prima facie case is the production of evidence of prior specific incidents of violent crimes on the premises that are sufficiently numerous and recent to put a defendant upon notice that his or her invitee is in danger. Groce v. Kansas City Spirit, Inc., 925 S.W.2d 880, 885 (Mo.App.1996) (emphasis in original). It is insufficient for plaintiff to merely prove that defendant is located in a high crime or high danger area. Id.
Originally, five crimes were admitted into evidence by the trial court. These crimes consisted of an assault, two purse snatchings,[1] an undisclosed robbery involving a juvenile perpetrator, and a reported criminal incident which, upon investigation, was deemed unsubstantiated. Three crimes occurred at the old store; two crimes occurred at the new store. However, in its judgment notwithstanding the verdict, the trial court emphasized that any control Schnuck may have had over the old parking lot was not contemporaneous with its control over the new parking lot. Therefore, the occurrence of an act at the old store's parking lot would not necessarily put Schnuck on notice that such an act would be likely at the new store's parking lot.
Of the five crimes admitted into evidence, only two, a purse snatching and a robbery by a juvenile, occurred on the premises of Schnuck's new store. As previously stated, Schnuck's new store was located about two blocks from its old store, where the remaining three crimes had occurred. Without any cited authority, this court cannot accept customer's conclusory presumption that there is no reason that the frequency with which crimes occurred would change significantly by moving two blocks. We are reluctant to begin arbitrarily targeting the distance in which notice of prior criminal activity will be imputed. To do so would be contrary to already established case law which requires that "prior specific incidents of violent crimes on the premises" be established by the invitee plaintiff before a duty on behalf of a defendant develops. Groce, 925 S.W.2d at 885. The first three prior criminal incidents *534 did not occur on the same premises where customer's assault occurred, therefore, they should not be considered in establishing a duty on behalf of Schnuck.
Customer argues that Schnuck should not be allowed to evade its duty to protect its customers from violent criminal acts simply by moving next door. This argument has no merit. Notwithstanding the fact that Schnuck moved about two blocks away, customer has not presented any evidence that Schnuck effectuated its move to skirt a duty of protection. To extend the area in which crimes could be considered would penalize businesses for moving to a safer location. In any event, this duty is dependent on the existence of prior crimes on the same premises and is not triggered by crimes on other property owned or used by a defendant. We are thus spatially limited to considering the criminal incidents occurring at the new store.
We must further determine whether customer has met her burden of producing sufficient evidence of numerous and recent specific prior incidents of violent crime as to establish a duty. Several Missouri cases speak directly to both sides of the issue. In Madden, the Supreme Court found that six armed robberies, six strong arm robberies, one assault, and one purse snatching were sufficient to put the defendant on notice of the possibility that his invitees may be exposed to third party criminal action. Madden, 758 S.W.2d at 62. In Brown v. National Super Markets, Inc., 731 S.W.2d 291, 293 (Mo.App.1987), this court found that evidence of twenty-two violent crimes was sufficient to establish a duty on the part of the landowner. Finally, in Keesee, evidence of eighty-eight violent crimes over a two year period was sufficient to trigger a duty. 772 S.W.2d at 669.
Conversely, in Decker v. Gramex Corp., 758 S.W.2d 59, 63 (Mo. banc 1988), the court noted that one armed robbery, one purse snatching, and multiple thefts might not be sufficient to establish a duty of protection. Moreover, Keenan held that evidence of ten shoplifting incidents, two non-violent purse snatchings, a cash register theft, and threats to security personnel was insufficient to impose a duty. 784 S.W.2d at 300, 303.
The present scenario is more similar to Decker and Keenan. The prior crimes occurring at the new store consisted of a non-violent purse snatching and a robbery whose details were unknown because the records had been sealed by the juvenile court. A non-violent purse snatching, occurring seven months prior to the incident in question, and a robbery whose details are undeterminable, occurring three and one-half months prior to the incident in question, can hardly be sufficient to impute notice to Schnuck, thereby establishing a duty to protect business invitees from criminal activity by unknown parties. Plaintiff has, therefore, failed to establish the second prong of a prima facie case against defendant for a third party criminal assault by unknown persons.
The third element of the plaintiff's prima facie case is the production of evidence that the incident causing the injury is sufficiently similar in type to the prior specific incidents occurring on the premises such that a reasonable person would take precautions against that type of activity. Keenan, 784 S.W.2d at 303. Of the two relevant prior incidents occurring on the new store's parking lot, neither is analogous to customer's assault. A purse snatching in which there was no evidence of physical contact and a robbery for which the record has been sealed are not "sufficiently similar" to an attempted abduction and pistol whipping so as to put Schnuck upon notice such that a reasonable person would take precautions against that type of activity. See Keenan, 784 S.W.2d at 303.
There is no evidence herein that the prior thefts involved a serious or permanent injury. Furthermore, there is no indication that a weapon was used in those incidents. These prior crimes would not put Schnuck on notice that a third party would attempt to abduct at gunpoint, and pistol whip a customer on its parking lot. Plaintiff has also failed to prove the third element of a prima facie case against defendant. No duty has been established. Point one is denied.
Customer's second point asserts that Schnuck assumed a duty to protect its business invitees by providing security guards on *535 its parking lot. During the evening hours, Schnuck generally provided one security guard to secure the front of the new store and patrol the parking lot frequently.
We agree with customer's contention that "[t]he law imposes an obligation upon everyone who attempts to do anything, even gratuitously, for another, to exercise some degree of care and skill in the performance of what he has undertaken." Hoover's Dairy, Inc. v. Mid-America Dairymen, Inc./Special Products, Inc., 700 S.W.2d 426, 432 (Mo. banc 1985). However, merely because a business chooses to have a security program is not equivalent to the assumption of a duty to protect invitees from third party criminal acts. Bowman, 916 S.W.2d at 287 n. 7; Miller v. South County Center, Inc., 857 S.W.2d 507, 512 (Mo.App.1993).
Customer relies significantly upon Keenan v. Miriam Foundation. In Keenan, when a woman donating dishes to a charitable center was instructed to drive toward the back of the defendant's building, she was assured that "there would be somebody with her" and "it would be `all right."' Keenan, 784 S.W.2d at 304. After driving to the back of the building and beginning to unload her donations, she was assaulted and shot. Id. This court found that the defendant had assumed a duty to protect the plaintiff, not necessarily because defendant provided security, but because of defendant's express assurances that someone would be available to provide protection to her person and her property. Id.
Customer attempts to analogize her situation to the Keenan scenario. She claims that since a personalized express assurance of safety to each customer would be impossible, the mere placement of a security guard in the store should suffice to establish an assurance of safety. However, to submit to such an analogy would be to ignore the more recent case law of Miller and Bowman. When no express assurance of safety is made, the employment of security guards, standing alone, cannot support the necessary finding of a duty to protect a customer. Miller, 857 S.W.2d at 512. In failing to recognize a duty by a landowner to protect business invitees, Miller distinguished itself from Keenan by emphasizing that "[i]n Keenan, express assurances of safety were given. Here, no such assurances were made. Furthermore, there are no allegations that [p]laintiff relied on the presence of security guards for her protection." Id. at 513.
No express assurances of safety were given by Schnuck, nor were there any allegations that customer relied upon the presence of security guards for protection. To extend a greater duty for the benefit of patrons would undermine the public policy that encourages landowners to provide for the safety of their premises. Miller, 857 S.W.2d at 512. To hold landowners liable for the employment of security guards would simply lead to fewer landowners hiring security guards and consequently, less security. As the Miller decision succinctly summarized, "[g]reater prudence than the law otherwise requires is not a proper basis for the imposition of a duty; it is conduct society seeks to encourage." Id. Point two is denied.
Customer's third point argues that six other crimes, albeit non-violent, committed on the parking lots of the old and new stores, should have been admitted into evidence. Customer argues the crimes were relevant to establish a breach of duty on the part of Schnuck.
Our analysis of customer's previous point established that Schnuck owed no duty to a business invitee to protect her from criminal activity by third parties. Therefore, because no duty by law existed, it is moot whether evidence was excluded that demonstrated a breach of that non-existent duty. Customer's third point is denied.
The judgment of the trial court is affirmed.
NOTES
[1] "Evidence of purse snatching falls into [an equivocal] category. Some purse snatchings involve sufficient force to constitute robbery in the second degree; in others, there is no violence." Brown v. National Super Markets, Inc., 731 S.W.2d 291, 295 (Mo.App.1987). In neither of the purse snatchings at issue was there any evidence of violence. In one, three males grabbed a purse from a woman's hand and ran; in the other, a male fled with a woman's purse after seeking spare change from her. The trial court found no evidence existed that either incident involved physical contact. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559410/ | 20 So.3d 681 (2008)
James Earl HOLMES, Appellant.
v.
STATE of Mississippi, Appellee.
No. 2007-KA-01344-COA.
Court of Appeals of Mississippi.
December 2, 2008.
Rehearing Denied August 4, 2009.
Certiorari Denied November 5, 2009.
Erin Elizabeth Pridgen, Leslie S. Lee, Jackson, attorneys for appellant.
Office of the Attorney General by W. Glenn Watts, Jackson, attorney for appellee.
Before KING, C.J., CHANDLER and BARNES, JJ.
BARNES, J., for the Court.
¶ 1. This appeal proceeds from the Circuit Court of Clay County, on James Earl Holmes's conviction of sexual battery and sentence of thirty years as a habitual offender in the custody of the Mississippi Department of Corrections (MDOC) without eligibility for parole and a fine of $10,000.
SUMMARY OF FACTS AND PROCEDURAL HISTORY
¶ 2. On or about June 4, 2006, Holmes was in West Point, Mississippi to attend the funeral of his sister. After visiting with family, Holmes went to the home of his former live-in girlfriend, B.L.,[1] whom he had known for more than twenty years. B.L. planned to drive him home to Jackson, Mississippi, the next morning.
¶ 3. B.L. lived with her two daughters ages twenty-years-old and fifteen-years-old. The oldest daughter, R.L., is trainable mentally retarded with an I.Q. between 25 and 50 and has limited conceptual and communication skills. B.L. allowed Holmes to sleep with her while her daughters slept elsewhere in the house. According to B.L., Holmes asked her several *682 times during the night if she were asleep, and she answered negatively each time. After her answer, Holmes would then get up and leave the room, which he repeated several times. B.L. eventually got out of bed to investigate.
¶ 4. As B.L. walked through the house, she passed her youngest daughter who was asleep on the couch in the den and proceeded to the open door of the kitchen. It was there she witnessed Holmes standing behind her oldest daughter, R.L., having sexual intercourse with her. R.L. was bent over with her pants down, and Holmes was standing behind her with his eyes closed. B.L. yelled at Holmes, who jumped and then fell to his knees pleading with B.L. not to tell his family.
¶ 5. B.L. contacted the police and then took R.L. to the hospital that evening where the nurses performed a rape kit. One of the nurses, Shelly Thomas, said that R.L. appeared nonchalant. When asked what had happened, R.L. indicated Holmes had touched her and signaled to her rectal area.
¶ 6. The Mississippi Crime Laboratory analyzed R.L.'s rape kit, as well as the suspect kit that Holmes submitted. The suspect kit contained samples taken from Holmes for the purpose of having comparison evidence when analyzing the rape kit. William Jones, the DNA section chief of the biosciences division at the Mississippi Crime Laboratory, examined both kits and found no evidence that biologically linked Holmes to the evidence contained in R.L.'s rape kit. There was no presence of seminal fluid in any of the samples. The samples taken from R.L. included, but were not limited to, two rectal swabs, four vaginal swabs, and two vulvar swabs.
¶ 7. On or about October 6, 2006, Holmes was indicted for sexual battery under Mississippi Code Annotated section 97-3-95(1)(b) (Rev.2006), which states: "A person is guilty of sexual battery if he or she engages in sexual penetration with.... [a] mentally defective, mentally incapacitated or physically helpless person[.]" (Emphasis added). A jury trial was held on July 25-26, 2007, and Holmes was convicted of sexual battery and sentenced to thirty years as a habitual offender in the custody of the Mississippi Department of Corrections. It is from this conviction that Holmes now appeals, raising a single issue on appeal.
Whether the trial court erred in failing to grant Holmes's motion for a directed verdict, in denying his request for a peremptory instruction of "not guilty," and in denying his motion for a judgment notwithstanding the verdict as the sufficiency of the evidence did not support a conviction of sexual battery.
¶ 8. During the trial, Holmes submitted a motion for a directed verdict at the close of the State's case-in-chief, which was denied. Holmes also submitted a motion for a JNOV or, in the alternative, for a new trial on July 27, 2007, which was also denied by the trial court. "The standard of review for a denial of a directed verdict, peremptory instruction and a J.N.O.V. are identical." Hawthorne v. State, 835 So.2d 14, 21(¶ 31) (Miss.2003) (citing Coleman v. State, 697 So.2d 777, 787 (Miss.1997)). All "challenge the legal sufficiency of the evidence." Id. (citing McClain v. State, 625 So.2d 774, 778 (Miss.1993)). The evidence, when viewed in the light most favorable to the State, must prove "all elements of the offense existed and the accused committed the act charged beyond a reasonable doubt." Graves v. State, 984 So.2d 1035, 1040(¶ 12) (Miss.Ct.App.2008) (citing Bush v. State, 895 So.2d 836, 843(¶ 16) (Miss. 2005)). However, "[i]f the evidence is found to be legally insufficient, then the defendant must be discharged." Drake v. State, 800 So.2d 508, 516(¶ 34) (Miss.2001) *683 (citing May v. State, 460 So.2d 778, 781 (Miss.1984)).
¶ 9. Holmes argues that his motions for a directed verdict and a JNOV were improperly denied as there was no evidence presented of sexual penetrationa necessary requirement in establishing sexual battery under section 97-3-95. Holmes bases this assertion on the fact that the tests run by the Mississippi Crime Laboratory showed no seminal fluid was present. Consequently, Holmes argues that there was insufficient evidence to support his conviction. "[Sexual] [p]enetration is the very essence of the crime of sexual battery." Washington v. State, 645 So.2d 915, 917 (Miss.1994). Sexual penetration is defined in Mississippi Code Annotated' section 97-3-97(a) (Rev.2006) as "cunnilingus, fellatio, buggery or pederasty, any penetration of the genital or anal openings of another person's body by any part of a person's body, and insertion of any object into the genital or anal openings of another person's body." Holmes notes that the only evidence presented to prove the element of sexual penetration was the testimony of B.L., an eyewitness.
¶ 10. While penetration must be proved beyond a reasonable doubt, "it need not be proved in any particular form of words, and circumstantial evidence may suffice." Lang v. State, 230 Miss. 147, 158-59, 87 So.2d 265, 268 (1956). B.L. stated repeatedly at trial that Holmes was "having sex" with her daughter, physically demonstrated for the jury the positions in which she found Holmes and her daughter, and described the demeanor of both R.L. and Holmes. Based on this testimony, the jury could have found beyond a reasonable doubt that sexual penetration was occurring at the moment B.L. walked in on R.L. and Holmes. Additionally, although R.L. was unable to explain what had happened to her due to her mental status, the nurse who examined her at the hospital stated that R.L. pointed to her rectum when explaining where Holmes had touched her. Even the employee from the crime lab, who was Holmes's witness, testified that it was possible for sexual penetration to have occurred without the presence of seminal fluid.
¶ 11. Accordingly, we find that the trial court did not err in denying Holmes's motion for a directed verdict, request for a peremptory instruction, and motion for a JNOV. We, therefore, affirm Holmes's conviction and sentence.
¶ 12. THE JUDGMENT OF THE CIRCUIT COURT OF CLAY COUNTY OF CONVICTION OF SEXUAL BATTERY AND SENTENCE OF THIRTY YEARS AS A HABITUAL OFFENDER IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS WITHOUT ELIGIBILITY FOR PAROLE AND TO PAY A FINE OF $10,000 IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO CLAY COUNTY.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, CHANDLER, GRIFFIS, ISHEE, ROBERTS AND CARLTON, JJ., CONCUR.
NOTES
[1] Due to the sensitive nature of the case, the victim and her mother are identified only by their initials. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559412/ | 20 So.3d 849 (2009)
OLIN
v.
STATE.
No. SC09-1856.
Supreme Court of Florida.
October 7, 2009.
Decision Without Published Opinion Mandamus dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559419/ | 20 So.3d 849 (2009)
TAYLOR
v.
NIKOLITS.
No. SC09-1811.
Supreme Court of Florida.
September 30, 2009.
Decision Without Published Opinion Review dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559335/ | 20 So.3d 702 (2009)
Johnny Steve PARKER, Appellant,
v.
STATE of Mississippi, Appellee.
No. 2007-KA-01646-COA.
Court of Appeals of Mississippi.
April 7, 2009.
Rehearing Denied August 4, 2009.
Certiorari Denied November 5, 2009.
*703 John A. Ferrell, Booneville, attorney for appellant.
Office of the Attorney General by Ladonna C. Holland, attorney for appellee.
Before KING, C.J., ROBERTS and CARLTON, JJ.
ROBERTS, J., for the Court.
¶ 1. A jury sitting before the Alcorn County Circuit Court found Johnny Steve Parker guilty of murder. The circuit court sentenced Parker to life imprisonment in the custody of the Mississippi Department of Corrections (MDOC). Parker filed an unsuccessful post-trial motion for a judgment notwithstanding the verdict (JNOV) or, alternatively, for a new trial. Aggrieved, Parker appeals and raises four issues. According to Parker, the circuit court erred when it: (1) allowed a witness to testify that Parker threatened to kill her if he caught her with anyone else, (2) denied Parker's motion for a mistrial regarding a discovery violation, (3) denied Parker's challenges to the sufficiency of the evidence, and (4) denied Parker's motion for a new trial. Finding no error, we affirm.
FACTS AND PROCEDURAL HISTORY
¶ 2. The jury's verdict supports the following version of events. On June 16, 2005, Debbie Dillingham finalized her divorce from Parker. The next day, Debbie had a date with Tim Kingen. Debbie's half-sister, Brenda Hillis, called Debbie during Debbie's date with Tim. Brenda was distraught, so Tim and Debbie picked Brenda up. Tim, Debbie, and Brenda rode around, went back to Tim's house, and socialized until early the next morning. On the following Saturday and Sunday, Tim had some friends over to play cards.
¶ 3. On Sunday, Parker delivered some of Debbie's belongings. Parker told Debbie that he had hired a private investigator to follow her. Parker let Debbie know *704 that he was aware of her date with Tim. In reality, Parker had not hired a private investigator. Instead, Brenda had informed Parker of Debbie's date with Tim.
¶ 4. At approximately 9:00 p.m. on Monday, David Michael Strachan and Mary Beth Anderson went to Tim's house. David stayed at Tim's house for approximately fifteen to twenty minutes. At approximately the same time, Parker picked up Brenda to "go riding." During their ride, Brenda told Parker how to find Tim's house. At approximately 12:45 a.m., Parker and Brenda drove past Tim's house.
¶ 5. Debbie was at Tim's house at that time. Debbie later testified that she and Tim saw a van tap its brake lights in front of Tim's house. Debbie remembered commenting that Parker was the only person she knew who drove a van. Debbie left Tim's house around 2:00 a.m.
¶ 6. At approximately 3:00 a.m., Brenda, who had been dropped off a couple hours earlier, tried to call Parker to check on him. Brenda recounted that Parker appeared very upset when he saw Debbie's car at Tim's house. Brenda did not reach Parker, though. Parker's son, John, answered the phone and informed Brenda that Parker was not at home.
¶ 7. Parker finally returned home the next morning. John could not remember the exact time Parker returned, but he estimated that it was sometime between 10:00 a.m. and noon. Parker would not tell John where he had been. Brenda spoke with Parker shortly after 10:00 a.m. According to Brenda, Parker told her that she better not tell anyone that she had showed him where Tim lived.
¶ 8. John later testified that he and Parker had a conversation that day and that Parker told John that Debbie "was using his car to drive around and f everybody." Parker also bragged that he had sex with Brenda. Later, Parker went and retrieved the car that Debbie had been driving. Debbie testified that Parker said "if he caught me with anyonethat he would kill them, that he would kill me, and the very last thing he said to me before he left is, I told you what I would do if I caught you with another man." Parker again told Debbie that he was aware that she was seeing Tim, and he "told [her] what [he] would do to a man."
¶ 9. The following Tuesday night, Tim did not show up for dinner plans with friends. During the remainder of the week, Debbie tried unsuccessfully to contact Tim. On June 25, 2005, Tim's mother, Janie Kingen, went to Tim's house. Janie was concerned because she had not been able to get in touch with Tim. Unfortunately, Janie found Tim's lifeless body. Tim died as the result of a gunshot wound.
¶ 10. Investigator Michael Beckner of the Alcorn County Sheriff's Department investigated the case. Investigator Beckner's inquiries led to Parker. An Alcorn County grand jury returned an indictment against Parker and charged him with murder. Parker pled not guilty and proceeded to trial. Ultimately, the jury found Parker guilty. Following an unsuccessful post-trial motion for a JNOV or, alternatively, for a new trial, Parker appeals.
ANALYSIS
I. DEBBIE'S TESTIMONY
¶ 11. Debbie testified that, on Tuesday June 21, 2005, Parker came to her house to retrieve a vehicle that he had been awarded in their divorce. Debbie began to testify that Parker "told [her] that if he ever caught [her] with another man that." Before Debbie could finish her statement, Parker's attorney objected and stated that Parker was "not on trial for anything having to do with her." According to counsel for Parker, Debbie's statement was not *705 relevant. The circuit court conducted a bench conference, but that conference was not transcribed in the record. In any event, the circuit court next reported that Parker's objection was overruled. Debbie went on to testify that Parker told her "that if he caught [her] with anyone that that he would kill them, that he would kill [her], and the very last thing he said to [her] before he left is, `I told you what I would do if I caught you with another man.'"
¶ 12. Parker raises multiple claims regarding Debbie's testimony. Many of Parker's claims are best reserved for Parker's allegation that the jury's verdict was contrary to the overwhelming weight of the evidence. However, the crux of Parker's argument is that the circuit court erred when it allowed the prosecution to submit Debbie's statement into evidence to demonstrate Parker's motive or intent to kill Tim because Tim was already dead at the time Parker made the statement at issue. Additionally, Parker argues that his statement was not an admission, but it was instead a "hypothetical statement of future action."
¶ 13. As we consider this issue, we are mindful of the appropriate standard of review. "The standard of review regarding the admission or exclusion of evidence is abuse of discretion." Terrell v. State, 952 So.2d 998, 1005(¶ 31) (Miss.Ct.App.2006). We will only find an abuse of discretion if "a defendant shows clear prejudice resulting from an undue lack of constraint on the prosecution or undue constraint on the defense." Id. In other words, "[t]his Court shall not disturb a trial court's decision unless it is clearly wrong." Id.
¶ 14. We are also mindful that a party may not raise an issue that was not first presented to the trial court. M.R.E. 103(a)(1). Because Parker objected to Debbie's testimony solely on the basis that it was irrelevant, he is restricted to that argument on appeal.[1]
¶ 15. "`Relevant Evidence' means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." M.R.E. 401. "All relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, the Constitution of the State of Mississippi, or by [the Mississippi Rules of Evidence]." M.R.E. 402. "Evidence which is not relevant is not admissible." Id.
¶ 16. According to Debbie's testimony, on the same day that someone killed Tim, Parker told Debbie, who had been dating Tim, that he would kill any man she dated. Debbie's testimony tended to reveal Parker's state-of-mind and his motive. Without question, Debbie's testimony tended to make it more probable that Parker killed Tim. Accordingly, Debbie's testimony was relevant. Accordingly, we must conclude that the circuit court did not abuse its discretion when it allowed Debbie to testify as to the statement at issue.
II. DISCOVERY VIOLATION
¶ 17. The prosecution called Rhonda Lindsey during its case-in-chief. Rhonda was one of Tim's neighbors. She testified that she saw a brown van parked at Tim's house during the early morning hours of June 21st. Brenda had previously testified that she and Parker rode around in his "brown-looking" van.
*706 ¶ 18. Rhonda gave a statement to investigators on June 28, 2005. On direct examination, the prosecution asked Rhonda whether any details had been omitted from her June 28th statement. Rhonda initially replied, "[n]o, sir." However, after she refreshed her memory by reviewing her statement, Rhonda replied, "[j]ust about hearing a gunshot." The prosecution then concluded its examination, and the circuit court excused Rhonda after Parker's attorney cross-examined her. The prosecution called one more witness that afternoon. Afterwards, the circuit court recessed for the day.
¶ 19. The next morning, Parker's attorney moved for a mistrial and stated as follows:
During the testimonyfirst, to lay the background, Your Honor, we, of course, filed for discovery in this case. Like you typically do, received [sic] voluminous documents, statements of witnesses, the synopsis of Beckner, which the Court is well aware, we cross-examined him on that. And one of the statements we received was the statement from Rhonda Lindsey, and Ms. Lindsey was offered as a witness yesterday by the State, and testified basically that she saw a van that looked like the van in the picture, that's Mr. Parker's van, in the driveway of [Tim's] residence. She didn't remember the day or the time.
If you remember, [Investigator] Beckner testified that she offered additional information and said that she thought it was earlier in the week, last week, was probablymay have been Tuesday ... and may have been around 11:00 a.m. [the prosecutor] was asking her some questions in follow-up on that, and if I may approach the court reporter to read exactly what waswhat transpired.
(Reading from the court reporter's computer screen.)
[The prosecutor] asked this question: Okay. Are there details that you talked about today that wereare not in that statement that you told the officers about back on the 28th day of June of 2005? Her answer, just about hearing a gunshot, whereupon [the prosecutor] made no further inquiry about the gunshot. On cross-examination I certainly didn't, because I had no idea, had no notice about this woman ever having told anybody that she had heard a gunshot.
. . . .
And again, we have received no indication at all that this lady was going to testify about having heard a gunshot.
[The prosecutor] certainly may not have intended to elicit that, but that begs the question that we, as attorneys for the defendant, are entitled to all information relative to their case, which would include exculpatory information, and the question was asked specifically, during your conversation with the officers on June 28th of 2005. So obviously, this lady remembers telling [Investigator] Beckner, who took the statement on June 28th of 2005, that she heard a gunshot.
Now, it's my understanding, from talking with [the prosecutor] about this matter, that he has indicated that he was aware that the lady had heard gunshots, indicated there wereit was really nothing unusual about it out there at that time.
But what is important, Your Honor, is that the information this woman testified to, about a van looking like my client's being in the driveway of the deceased around the time that they are saying he was killed, but that the gunshots that she was talking about were not heard at that time. It is my understanding that *707 she never gave anybody indication she heard gunshots at that time.
Therefore, information about other gunshots, when my client's van is not there, would be exculpatory, and we are entitled to have that information, and so we submit to you, Your Honor, that by not getting this information properly and timely and getting information that is exculpatory to our client's case, warrants a mistrial, and we are moving for a mistrial at this time.
¶ 20. The prosecutor responded and stated that he spoke with Rhonda the night before she testified, and she did not discuss any gunshots. However, the prosecutor also stated that "over two weeks" prior to the trial, Rhonda mentioned "something about gunshots." The prosecutor elaborated that Rhonda "said she lived in a rural area ... [and] that there were people who shot guns there all the time." The prosecutor added that he "did not see it as any way relevant to what [he] was going to have her testify to regarding the van, and therefore [he] didn't see anything to it." Finally, the prosecutor argued that a mistrial was inappropriate because he had provided discovery to Parker's attorney, including Rhonda's status as a potential witness. Additionally, the prosecutor provided Parker's attorney with Rhonda's statement. Finally, the prosecutor noted that Parker's attorney "had an opportunity to talk with [Rhonda] and gather any other information that may be pertinent to the van or anything else."
¶ 21. Parker's attorney replied that "to expect the defense counsel to ask a witness a question on information that is a surprise in open court is absurd." Parker's attorney then stated that he did not find out that Rhonda's statement was exculpatory until after he talked with the prosecutor. Finally, Parker's attorney commented as follows:
As far as the timeliness of it, again I am in a catch 22. Am I goingyou know, I don't know what the woman is talking about, because nobody has said anything to me about it, and I'm going to go into that in front of the jury? So, you know, I was shocked, to say the least. That's why we have discovery, to avoid shock and surprise, and to expect me to be able to[overcome] that and sayI didn't timely object to it I think is also absurd.
¶ 22. The circuit court took Parker's motion into consideration, but the court never specifically ruled upon it. After the prosecution called an expert in firearms, the prosecution recalled Rhonda. The prosecution questioned Rhonda, and Parker's attorney cross-examined her. During Rhonda's recall testimony, Rhonda clarified that there was no relationship between the gunshots she heard and the van that she saw at Tim's house.
¶ 23. On appeal, Parker argues that the circuit court erred when it denied his motion for a mistrial. According to Parker, "recalling ... [Rhonda] did not cure the obvious detriment to [him] in the preparation of his case and had [he] been aware of the true substance of the statements made by [Rhonda], more investigation would have been warranted into her knowledge about gunshots in the area and when." We are mindful that "[t]he authority to declare a mistrial is left largely to the sound discretion of the trial judge." Williams v. State, 854 So.2d 1077, 1080(¶ 10) (Miss.Ct.App.2003). However, because Parker did not request a continuance or move for a mistrial when Rhonda gave the testimony at issue, Parker is *708 barred from raising this issue on appeal.[2] "If a defendant who has been surprised by undisclosed discoverable evidence does not request a continuance at the time of such surprise, he waives this issue on appeal." Hughery v. State, 799 So.2d 105, 116(¶ 12) (Miss.Ct.App.2001).
¶ 24. Procedural bar notwithstanding, we find no merit to Parker's arguments. After Parker moved for a mistrial, the prosecution recalled Rhonda. During Rhonda's recall testimony, both the prosecution and Parker's attorney elicited testimony from Rhonda. That testimony clearly demonstrated the potential exculpatory nature of Rhonda's testimony. Accordingly, Parker's attorney was able to elicit exactly the testimony that he claimed was precluded by the prosecution's alleged untimely disclosure. It follows that we find no merit to this issue.
III. SUFFICIENCY OF THE EVIDENCE
¶ 25. Parker claims the circuit court should have granted his motion for a JNOV. A motion for a JNOV challenges the legal sufficiency of the evidence. Terrell, 952 So.2d at 1004(¶ 23). "Appellate review is limited to whether the evidence shows beyond a reasonable doubt that [the] accused committed the act charged, and that he did so under such circumstances that every element of the offense existed, and where the evidence fails to meet this test it is insufficient to support a conviction." Id. "After viewing the evidence in the light most favorable to the State, the evidence is sufficient if any rational trier of fact could have found the defendant committed each element of the crime beyond a reasonable doubt." Id.
¶ 26. This is a circumstantial-evidence case.[3] "[A] circumstantial[-]evidence case is one in which there is neither an eyewitness nor a confession to the crime." Stephens v. State, 911 So.2d 424, 437(¶ 43) (Miss.2005). "Circumstantial evidence need not exclude every possible doubt, but only every other reasonable hypothesis of innocence." Id. (internal quotations omitted).
¶ 27. The jury found Parker guilty of murder in violation of Mississippi Code Annotated section 97-3-19(1)(a) (Rev. 2006). Pursuant to section 97-3-19(1)(a), a person is guilty of murder when he or she kills someone "with deliberate design to effect the death of the person killed, or of any human being." Id. Viewed in the light most favorable to the State, the jury heard the following evidence: (1) Brenda showed Parker where Tim lived at approximately 12:45 a.m. on Tuesday, June 21, 2005; (2) Parker later told Brenda that she better not tell anyone that she had showed him where Tim lived; (3) Parker was furious when he saw that Debbie was at Tim's house; (4) Debbie noticed that someone in a van similar to Parker's drove by Tim's house; (5) Parker dropped Brenda off at approximately 1:00 a.m.; (6) Tim was last seen alive at approximately 2:00 a.m.; (7) Brenda tried to call Parker at approximately 3:00 a.m., but he was not at his home; and (8) Tim's neighbor, Rhonda, noticed that a van similar to Parker's was *709 parked in Tim's driveway early Tuesday morning.
¶ 28. Parker's son, John, lived with Parker during June 2005. According to John, he arrived home at approximately 10:00 p.m. on June 20th. John testified that Parker was not there. John also testified that Parker's vehicle was not there. John went on to testify that Parker did not come home until sometime between 10:00 a.m. and noon on June 21st. When John asked Parker where he had been, Parker did not answer. John testified that Parker was angry because Debbie had his car. According to John, Parker said Debbie used "his car to drive around and F everybody." As previously mentioned, when Parker picked up his car from Debbie, Parker reminded Debbie "that if he caught [her] with anyone thatthat he would kill them, that he would kill [her], and the very last thing he said to [her] before he left is, `I told you what I would do if I caught you with another man.'" Finally, John testified that Parker sent him a letter. In that letter, Parker told John to tell the authorities that Parker traded his nine-millimeter pistol for a hunting rifle. Tim died due to a gunshot wound from a nine-millimeter pistol.
¶ 29. Parker claims that Debbie's testimony was "riddled with inconsistencies, falsehoods[,] and contradictions to such an extent that it is not worthy of belief." According to Parker, Debbie was not a credible witness because: (1) Debbie was a convicted felon; (2) she gave three different times at which she left Tim's house in the early morning hours of June 21, 2005; (3) she was an admitted drug user; (4) she lied about where she went after she left Tim's house; and (5) she had a motive to incriminate Parker because she faced criminal liability for action she took regarding Parker's vehicle titles. However, witness credibility is irrelevant to our present analysis because "[m]atters regarding the credibility and weight to be accorded the evidence are to be resolved by the jury." Terrell, 952 So.2d at 1003(¶ 20). In other words, "[t]his Court does not have the task of re-weighing the facts in each case to, in effect, go behind the jury to detect whether the testimony and evidence they chose to believe was or was not the most credible." Id. at 1003(¶ 22). Considering the evidence in the light most favorable to the State, we must conclude that a rational trier of fact could have found that Parker was guilty of murdering Tim. Accordingly, we find no merit to this issue.
IV. WEIGHT OF THE EVIDENCE
¶ 30. In his final issue, Parker claims the circuit court erred when it denied his motion for a new trial. "A motion for a new trial seeks to vacate the judgment on grounds related to the weight, not sufficiency, of the evidence." Id. at 1002(¶ 16). "We may only reverse the circuit court's decision if we are convinced that the circuit court abused its discretion when it overruled the defendant's motion for a new trial." Id. at 1002-03(¶ 16).
¶ 31. Parker reiterates his arguments under the previous issue. For all of the reasons we discussed above, we cannot conclude that the circuit court abused its discretion when it overruled Parker's motion for a new trial. Therefore, we find no merit to this issue.
¶ 32. THE JUDGMENT OF THE ALCORN COUNTY CIRCUIT COURT OF CONVICTION OF MURDER AND SENTENCE OF LIFE IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
*710 KING, C.J., LEE AND MYERS, P.JJ., IRVING, GRIFFIS, BARNES, ISHEE, CARLTON AND MAXWELL, JJ., CONCUR.
NOTES
[1] The record indicates that there was a bench conference after Parker's attorney objected. However, that bench conference went unrecorded and any discussion that transpired during that bench conference is omitted from the record. We make no assumptions regarding the events that took place during that bench conference.
[2] A motion for a mistrial is a sufficient request for a continuance. Snelson v. State, 704 So.2d 452, 458(¶ 35) (Miss. 1997).
[3] Jury instruction C-4 stated that the prosecution could prove its case by direct or circumstantial evidence or both. Additionally, instruction C-4 informed the jury that "[c]ircumstantial or indirect evidence is that which tends to establish a disputed fact by proving another, and which, through time, does not [in and] of itself conclusively establish that fact but which affords an inference or presumption of its existence." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559340/ | 20 So.3d 862 (2009)
NEAL
v.
STATE.
No. 5D09-2523.
District Court of Appeal of Florida, Fifth District.
October 20, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559344/ | 20 So.3d 757 (2009)
Javoras MOTEN, Appellant
v.
STATE of Mississippi, Appellee.
No. 2008-KA-00970-COA.
Court of Appeals of Mississippi.
November 3, 2009.
*758 Edmund J. Phillips, Newton, P. Shawn Harris, Forest, attorneys for appellant.
Office of the Attorney General by Stephanie Breland Wood, attorney for appellee.
Before KING, C.J., IRVING and CARLTON, JJ.
CARLTON, J., for the Court.
¶ 1. On May 6, 2008, a Leake County jury found Javoras Moten guilty of simple assault of an employee of a private correctional facility in violation of Mississippi Code Annotated section 47-4-1 (Rev.2004). He was sentenced to serve four and one-half years in the custody of the Mississippi Department of Corrections (MDOC) with the sentence to run consecutively to any prior sentence he was serving. Moten argues on appeal that the indictment was fatally defective; thus, the trial court erred in failing to grant his motion for a directed verdict, request for a peremptory instruction, and motion for a new trial. *759 We find no error and affirm Moten's conviction and sentence.
FACTS
¶ 2. On November 1, 2007, LaDonna Jenkins, a correctional officer at Walnut Grove Correctional Facility, was going from cell to cell picking up dinner trays. During this time, the inmates were on lock-down in their cells. Jenkins testified that when she unlocked Moten's cell to get his tray, Moten stepped outside of his cell and informed Jenkins that he was not locking down. He told Jenkins that she should call someone, because he wanted to leave his cell zone and go somewhere else. Jenkins tried to secure Moten's door several times, but he would run between the door so she could not shut it. Jenkins stated that she noticed that Moten had placed an object in the door to prevent it from locking properly. Jenkins testified that when she tried to take the object out, Moten swung at her and hit her with his fist in her upper body, which led to a physical altercation between the two of them. Jenkins testified that during the altercation, she slipped on some carrots on the floor, causing her to fall and bruise her knee.[1] Moten ran back into his cell, and Jenkins called for assistance.
¶ 3. On May 6, 2008, a jury found Moten guilty of simple assault of an employee of a private correctional facility. He was sentenced to four and one-half years in the custody of the MDOC with the sentence to run consecutively to any prior sentence he was serving. Moten timely appeals his conviction, alleging the following assignment of error: the indictment was fatally defective; thus, the trial court erred in failing to grant his motion for a directed verdict, request for a peremptory instruction, and motion for a new trial. Finding no error, we affirm.
STANDARD OF REVIEW
¶ 4. The issue of whether an indictment is fatally defective is a question of law; therefore, the standard of review is de novo. Qualls v. State, 947 So.2d 365, 369(¶ 9) (Miss.Ct.App.2007) (citations omitted).
¶ 5. This Court has set forth the standard for reviewing the denial of a motion for a directed verdict as follows: "all evidence supporting a guilty verdict is accepted as true, and the prosecution must be given the benefit of all favorable inferences that can be reasonably drawn from the evidence." Cortez v. State, 876 So.2d 1026, 1030(¶ 11) (Miss.Ct.App.2003) (citing Nelson v. State, 839 So.2d 584, 586(¶ 3) (Miss.Ct.App.2003)). "A motion for a directed verdict challenges the sufficiency of the evidence." McMillan v. State, 6 So.3d 444, 446(¶ 8) (Miss.Ct.App.2009) (citing Bush v. State, 895 So.2d 836, 843(¶ 16) (Miss.2005)). In Bush, the Mississippi Supreme Court expressed that "the critical inquiry is whether the evidence shows `beyond a reasonable doubt that accused committed the act charged, and that he did so under such circumstances that every element of the offense existed.'" Id. (citing Carr v. State, 208 So.2d 886, 889 (Miss. 1968)). If any rational trier of fact, when viewing the evidence in the light most favorable to the State, could have found that the essential elements of the crime existed beyond a reasonable doubt, this Court "will affirm the denial of a motion for a directed verdict." McMillan, 6 So.3d at 446(¶ 8). "If we find that reasonable, fair-minded jurors could have concluded *760 that the defendant was guilty of the accused crime, the evidence will be deemed sufficient." Id. "The standard of review for peremptory instructions and directed verdicts are the same." Wall v. State, 718 So.2d 1107, 1111(¶ 15) (Miss.1998). In Ross v. State, 954 So.2d 968, 1016 (¶ 127) (Miss.2007) (citing Bush, 895 So.2d at 844(¶ 18)), the supreme court set forth the standard of review for a motion for a new trial as follows:
A motion for new trial challenges the weight of the evidence[;][w]hen reviewing a denial of a motion for a new trial based on an objection to the weight of the evidence, we will disturb a verdict only when it is so contrary to the overwhelming weight of the evidence that to allow it to stand would sanction an unconscionable injustice.
When weighing the evidence, the Court, sitting as a thirteenth juror, views the evidence in the light most favorable to the verdict. Id.
DISCUSSION
¶ 6. Moten argues that "the indictment was fatally defective; the court erred in failing to grant [his] motion for [a] directed verdict, request for [a] peremptory instruction and motion for a new trial." However, we find that the foundation of Moten's argument is whether the indictment was defective. We will address this issue first, and then address the denial of his motions for a directed verdict, a peremptory instruction, and a new trial.
¶ 7. Moten contends that the indictment in the present case was fatally defective in that it did not charge him expressly with simple assault; instead, it described an act that constitutes simple assault. Moten alleges that the defective indictment did not provide him with sufficient notice of the nature and cause of the accusation, which ultimately prejudiced his defense. Indictments purport "to inform the defendant with some measure of certainty as to the nature of the charges brought against him so that he may have a reasonable opportunity to prepare an effective defense." Qualls, 947 So.2d at 369(¶ 9) (citing Moses v. State, 795 So.2d 569, 571(¶ 13) (Miss.Ct.App.2001)). Uniform Rule of Circuit and County Court 7.06 mandates that the indictment shall contain "the essential facts constituting the offense charged and shall fully notify the defendant of the nature and cause of the accusation."
¶ 8. In Richmond v. State, 751 So.2d 1038, 1046(¶ 19) (Miss.1999) (citation omitted), the Mississippi Supreme Court expressed that "[s]o long as from a fair reading of the indictment, taken as a whole, the nature and cause of the charge against the accused are clear, the indictment is legally sufficient." In sum, "[a]n indictment must specifically reference the elements of a charged offense so that it informs a defendant of the charges against him and the possible defenses to the charged offense." Clark v. State, 923 So.2d 256, 257(¶ 3) (Miss.Ct.App.2006) (citation omitted). This Court notes that "[t]he ultimate test, when considering the validity of an indictment on appeal, is whether the defendant was prejudiced in the preparation of his defense." Fuqua v. State, 938 So.2d 277, 281(¶ 11) (Miss.Ct. App.2006) (quoting Medina v. State, 688 So.2d 727, 730 (Miss.1996)).
¶ 9. The indictment against Moten states:
Javoras Moten late of the County aforesaid, on or about the 1st day of November in the year of our Lord, 2007, in the County and State aforesaid, and within the jurisdiction of this Court, did willfully, unlawfully, feloniously, purposely and knowingly cause bodily injury to LaDonna Jenkins with his fist, at a time when *761 the said LaDonna Jenkins was acting within the scope of her employment with the Walnut Grove Youth Correctional Facility, contrary to and in violation of Section 47-4-1, Miss.Code Ann. (1972), against the peace and dignity of the State of Mississippi.
¶ 10. Here, the indictment charges that Jenkins suffered bodily injury as a result of Moten's striking her with his fist. Moten argues that the language is defective because it is undisputed that striking Jenkins with his fist did not cause her any injury; instead, her injury was a result of falling on the floor. Moten argues that his trial counsel reasonably could have prepared a defense that Moten's hitting Jenkins with his fist caused no injury, but as a result of the defective indictment, Moten did not have sufficient notice necessary to prepare his defense properly. In the present case, we find that from reading the indictment as a whole, the nature and cause of the charge against Moten are clear, and the indictment properly informs Moten of the possible defenses to the charged offense of "willfully, unlawfully, feloniously, purposely and knowingly [causing] bodily injury to LaDonna Jenkins." See Richmond, 751 So.2d at 1046(¶ 19); Clark, 923 So.2d at 257(¶ 3). Moten has not further demonstrated how he was prejudiced in the preparation of his defense, and we find that this issue is without merit.
¶ 11. Moten submits that to support a conviction, the proof at trial must conform to the indictment in all material particulars. Moten argues that because his allegedly striking Jenkins with his fist did not directly cause her injury, the evidence presented at trial failed to conform to the material allegation in the indictment, and it failed to prove that allegation beyond a reasonable doubt. He alleges that as a result, he was entitled to a directed verdict and a peremptory instruction. Although Jenkins admitted at trial that she did not suffer bruising on her upper body as a direct result of being hit by Moten, she did suffer an injury to her knee when she slipped on carrots and fell onto the floor during the altercation. Jenkins testified that if she had not been "tussling" with Moten, she would not have slipped on the carrots, fallen, and injured her knee. Thus, Jenkins has established that she suffered an injury as a result of Moten's striking her with his fist, as stated in the indictment. When viewing the evidence in the light most favorable to the State, we find that the State proved beyond a reasonable doubt every necessary allegation of the indictment. Therefore, we find that the trial court did not err in denying Moten's motion for a directed verdict or request for a peremptory instruction. This issue is without merit.
¶ 12. Moten's argument for a new trial stems from the same basis as his argument for a directed verdict and request for a peremptory instruction. We find that the trial court was within its discretion when it found that the jury properly weighed the evidence and determined that the State established that Jenkins suffered an injury as a result of Moten's striking her with his fist. Viewing the evidence in the light favorable to the verdict, we find that allowing the verdict to stand would not sanction an injustice, and the trial court properly denied Moten's motion for a new trial. This issue is without merit.
¶ 13. THE JUDGMENT OF THE LEAKE COUNTY CIRCUIT COURT OF CONVICTION OF SIMPLE ASSAULT OF AN EMPLOYEE OF A PRIVATE CORRECTIONAL FACILITY AND SENTENCE OF FOUR AND ONE-HALF YEARS IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS, WITH THE SENTENCE *762 TO RUN CONSECUTIVELY TO ANY PRIOR SENTENCE THE DEFENDANT IS SERVING, IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO LEAKE COUNTY.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, GRIFFIS, BARNES, ISHEE, ROBERTS AND MAXWELL, JJ., CONCUR.
NOTES
[1] Jenkins testified at trial that she did not receive any bruising on her upper body as a result of being hit by Moten. The only injury she suffered as a result of the altercation was the bruise on her knee. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/8304435/ | Mr. Chief Justice Burnett
delivered the opinion of the Court.
This is an automobile accident case wherein damages were awarded the plaintiff, and on appeal to the Court of Appeals these damages were affirmed with a minor exception. As a result of this affirmance the case has been revived by Mr. Buffington’s administrator, Mr. Buffing-*317ton having died after the case was appealed and was pending in the Court of Appeals.
We, after reading the record, authorities, etc., granted the writ for the purpose of considering two questions therein presented. These questions are: (1) when an automobile is left parked on the side of a hill and rolls down from this place without any driver and runs into a car traveling along the highway, and it was only shown who was the owner of this car, do the statutory presumptions apply to the owner of this ear in the absence of any proof on the question; and (2) does the failure of the trial judge to charge the imperative “must” in the instruction in reference to contributory negligence when he used only the term “would” in such instruction make it a reversible error?
The plaintiff, Whitson, sued the defendant, Bullington, for $15,000.00 damages as the result of an automobile accident which happened on U.S. Highway 70-N in Putnam County, on August 15, 1965. The suit was for personal injuries, damage to his automobile, medical expenses for his wife and for loss of her services and consortium. The suit was based on the alleged negligence of the defendant in parking his automobile in a driveway on an incline without applying the brakes or putting it in parking gear with the result that it rolled off said incline into the highway striking plaintiff’s car as he drove along said highway.
The case was tried before a Circuit Judge and jury and that body rendered judgment in favor of the plaintiff breaking it down into various aspects. The judgment rendered as a whole was for $11,250.00 and this was divided as follows: for the plaintiff’s personal injuries $731.85; for his personal medical expenses $39.00; for *318damage to Ms automobile $3,350.00; rental for a car until he could get a new model Cadillac to use in his business $686.00; for domestic help to assist his wife during her illness and while suffering disability from injuries received in the wreck, $450.00; for his wife’s doc- or bill $200.00; for her drug bill $215.00; for her hospital bill $578.15; and for loss of her services and consortium $5,000.00.
The Court of Appeals affirmed this judgment m toto except for the rental of a car for $686.00 until he got his car fixed, wMch is not complained of here.
The parties to this lawsuit agreed, and there was no proof on the subject one way or the other, that the defendant and the plaintiff were the owners of the two cars involved in this collision; it was also stipulated that the damage done to plaintiff’s Cadillac was $3,350.00. The principal complaint made by the petition here, and which was also made in the Court of Appeals, is that there was no evidence to support the verdict. The argument on this is that there was no proof at all about how tMs car was left on the incline, who left it there, or how it got there or anything else. There was just the fact that as the plaintiff passed along by the car it rolled down the incline and ran into the car that was passing along on the highway and caused the damages; and there being no other proof the various statutes on presumption did not meet the requirements so as to show there was any evidence of negligence against the defendant.
We disagree with this argument and think unquestionably that T.C.A. Section 59-1037 and Section 59-1038, as now carried in the Code, make proof of ownership prima¡ facie evidence that the vehicle at the time of the accident was being operated by the owner or by the *319owner’s employee for the owner’s use in the conrse and scope of the employment. This being the same type of proof as already provided under T.C.A. Section 59-1038, Registration. The argument here is that since there was no one operating this car of the defendant this presumption does not apply. We feel confident that the meaning of the statute is that as long as it is shown who the car belonged to and the way the wreck happened then there is a presumption that the owner of that car is responsible for parking it there and for not taking the proper precautions to keep it from running down the hill and injuring someone negligently. This presumption maintains until there is evidence offered to the contrary that the vehicle was not put there by its owner or anyone authorized by him to do so. In other words, the burden is on the defendant after it is shown how the accident happened of going forward with proof to rebut the fact that he or his servants or members of his family left the car in the position which was the cause of this wreck. This burden of going forward with such proof to rebut such presumption normally would be a jury question but circumstances could be shown by the introduction or positive credible evidence on the subject to rebut such presumption.
In Cyclopedia of Automobile Law and Practice, Blash-field, Vol. 9B at Section 6075, the author says in reference to runaway automobiles that:
“Motor vehicles have dangerous potentialities and, when not handled carefully by competent persons, become, under certain conditions, dangerous instru-mentalities and public nuisances. Therefore, the unexplained presence upon a public highway of a runaway motortruck, without a driver or occupant, moving along *320the highway to the far' side thereof, mounting the curb, and causing serious physical injury to a person lawfully there, raises a prima facie presumption of negligence on the part of the owner and his employee having charge of the truck. ’ ’
Some oases are cited under this statement which apply the doctrine of res ipsa loquitur to such a situation. We think that under the authorities of this State such a doctrine is applicable here. In the case of Roberts v. Ray, 45 Tenn.App. 280, 322 S.W.2d 435, Judge Felts, who was then a member of the Court of Appeals and after-wards on this Court, in his very thorough and painstaking manner annunciated that doctrine in a similar kind of case where a car in Davidson County ran down a grade into a street and crashed into a building, and Judge Felts said in that case:
“We think these circumstances are such as to make a case res ipsa loquitur ‘ (W)here the thing (causing- the harm) is shown to be under the management of the defendant or his servants, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of explanation by defendant, that the accident arose from want of care’. Sullivan v. Crabtree, 36 Tenn.App. 469, 473, 258 S.W.2d 782, 783-784; McCloud v. City of La Follette, 38 Tenn.App. 553, 559, 276 S.W.2d 763, and cases there cited. ’ ’
As we have said above, we think unquestionably the fact that this car was shown to have belonged to the defendant, that is, the car that ran down the hill, that this shifts the burden to him to come forward with proof to show that he or those responsible to him did not leave *321the car in an unsafe way, and consequently the doctrine of res ipsa loquitur applies and means that the facts of such, occurrence are evidence of negligence and that the circumstances unexplained justify an inference of negligence. Judge Pelts defined the doctrine of res ipsa loquitur in the Roberts opinion, supra, taking his definition from Boykin v. Chase Bottling Works, 32 Tenn.App. 508, 522, 222 S.W.2d 889, 986, as follows: Res Ipsa Lo-quitur “is not an arbitrary rule (but) is rather a common sense appraisal of the probative value of circumstantial evidence.” This certainly applies under the factual situation in this case.
One of the principal reasons for the application of this doctrine is that the proof of the cause of the injury is more accessible to the person against whom the rule is applied than it is to the other party. In this case now before us the plaintiff was driving along U. S. Highway 70-N near Cookeville, which is a public thoroughfare, when suddenly, and without any warning, an automobile with no driver crashed into the side of the car he was driving, and severely damaged his car. The car that ran into and damaged him, it is conceded, belonged to the defendant. The most logical conclusion under such circumstances is that the defendant or someone for him had exclusive control of this car where it was left. We think, unquestionably, the defendant becomes liable for the damages done herein.
Under the statutes in Pennsylvania, which are similar to our statutes, above referred to, that court in Endler v. U. S., D.C.Pa., 101 F.Supp. 332, held that when anyone leaves an automobile and within a short space of time the automobile is found without a driver some distance away the trier of facts can draw an inference that the driver *3224id not leave the automobile in a proper condition, and unless the driver produces evidence which is believed by the trier of facts that explains the accident the trier of facts has a right to believe that the driver was negligent. We think such is applicable here.
The last question we think necessary to consider in this case is that the defendant complains of a charge that the court gave the jury in words and figures, as follows:
“If the Defendant’s wrongful and negligent acts were the proximate cause of the injury to the Plaintiff, and the Plaintiff was guilty of negligence which was not the proximate cause, nor did it proximately contribute thereto, then the Plaintiff would be entitled to recover, and his negligence, if you should find that he was guilty of negligence, would be weighed in mitigating or lessening the damages allowable.” (Emphasis supplied.)
The complaint about this charge is in the use of the word, “would”, in the last sentence, as it is not imperative as is required under the authorities of this State, which has been gone into fully by this Court in McClard v. Reid, 190 Tenn. 337, 229 S.W.2d 505, and again in Poe v. Atlantic Coast Line R. Co., 205 Tenn. 276, 326 S.W.2d 461. It is not necessary for us to again discuss or go into the question of why the imperative “must” should be used rather than the word “would”.
To establish the defense of contributory negligence which was not the proximate cause of the injury but only that it contributed thereto, the court in charging the jury must charge that this contributory negligence must, that is in a mandatory form, be credited on such damages *323that plaintiff would otherwise get from the defendant. The nse of the word “would” in the instruction to the jury did not make it a mandatory instruction since the word “would” expresses merely a possibility or a contingency, and the use of it, as we held in the two cases cited above, as well as others, in such an instruction makes it such an error that the harmless error statute (T.C.A. Section 27-117) does not cure the error.
The Court of Appeals felt that this could be harmless error because:
“From the proof, it appears that if plaintiff was guilty of any negligence in failing to see defendant’s car as it approached the highway, it must have been proximate and not remote negligence. ’ ’
And then for the further reason that at the time the charge was given and before the case was submitted to the jury, the trial judge asked if there was anything else, and counsel on both sides responded, “no”, and thus counsel did not request any special charge to correct this error. We in McClard v. Reid, supra, held that the failure to charge “must” in such an instruction, or an imperative word of the kind, amounts to an affirmative error and that no special request was necessary to correct such an erroneous charge and that the harmless error statute (T.C.A. Section 27-117) did not apply to an affirmative error. This has been reiterated time and again, and was again said in McCullough v. Johnson Freight Lines, Inc., 202 Tenn. 596, 605, 308 S.W.2d 387.
In the present ease there was some proof in the record by a man who was driving a short distance ahead of the plaintiff that he did see this car rolling down the hill towards the road, and thus the argument is that since *324this witness saw the car the jury should take that into consideration as to whether or not the plaintiff was guilty of contributory negligence by not seeing this car coming toward the highway and turn his car in another way or do something of the kind to help protect himself. The argument is, which is correct, that the jury brought in all the damages sought by the plaintiff and made no allowance for contributory negligence, and that that shows that they did not take it into consideration and did not understand it. Of course, whether they did or did not is a question for the jury under the different factual situations with a. proper legal charge, and we, as a Court, cannot speculate on whether they did or did not.
After hearing arguments on this certiorari and studying the authorities, we think for the reasons above expressed that the judgment of the Court of Appeals must be reversed and the cause remanded for a new trial consistent with what is herein said. | 01-03-2023 | 10-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/1559346/ | 20 So.3d 850 (2009)
WALKER
v.
STATE.
No. SC09-1798.
Supreme Court of Florida.
September 29, 2009.
Decision Without Published Opinion Review dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559356/ | 20 So.3d 743 (2009)
Reginald D. CLAY a/k/a Reginald Darnell Clay a/k/a Reginald Clay, Appellant,
v.
STATE of Mississippi, Appellee.
No. 2008-KA-00691-COA.
Court of Appeals of Mississippi.
October 13, 2009.
*744 Benjamin Allen Suber, attorney for appellant.
*745 Office of the Attorney General by Stephanie Breland Wood, attorney for appellee.
Before KING, C.J., GRIFFIS and MAXWELL, JJ.
KING, C.J., for the Court.
¶ 1. Reginald Clay was indicted in November 2006 for possession of cocaine, approximately 2.37 grams. Because he was a habitual offender and this was his second drug offense, the State sought an enhanced sentence. Convicted in abstentia, Clay was sentenced to a term of life in the custody of the Mississippi Department of Corrections (MDOC) without eligibility for probation, parole, earned time, or good time credit. Aggrieved, Clay appeals alleging the following assignments of error: (1) whether a life sentence as a habitual offender for possession of cocaine is disproportionate to the crime and constitutes cruel and unusual punishment, and (2) whether the trial court erred in denying Clay's motion for a new trial because the verdict is against the overwhelming weight of the evidence. Finding no error, we affirm the judgment of the trial court.
FACTS
¶ 2. While on general patrol in Meridian, Mississippi at approximately 1:35 a.m. on July 23, 2006, Deputy Ruston Russell and Officer Jerome Moore, saw a blue and white Oldsmobile run a stop sign. Deputy Russell turned on his lights and sounded his siren a couple of times to summon the driver of the vehicle to pull over. The driver slowed down, but he drove an additional 200-300 feet before coming to a stop. During that time, the officers noticed the back-seat passenger making suspicious movements.
¶ 3. As Deputy Russell requested the driver to step out of the car, he smelled alcohol coming from the vehicle and marijuana coming from the driver's person. The driver identified himself as Roger Hearn. Hearn stated that he had just left the club and had been drinking and had smoked some marijuana a few hours earlier. Deputy Russell then asked Hearn the identity of the passengers. Hearn identified the front-seat passenger as Terrance Bryant and the back-seat passenger as his cousin, Reginald Clay. Deputy Russell testified that he then asked the back-seat passenger his name. After Clay told Deputy Russell his name was "Mark Clay," Deputy Russell asked Clay to step out of the car. Deputy Russell questioned Clay and conducted a protective pat down. Deputy Russell testified that during the pat down of Clay, a small crack pipe dropped out of Clay's pocket onto the ground and shattered. Deputy Russell also stated that he found a small rock of crack cocaine in Clay's right-front pocket.
¶ 4. The officers testified that they were unable to retrieve any part of the crack pipe; however, they were able to conduct a field spot test (color reagent test) on the rock retrieved from Clay's pocket. This test required placing the rock sample in a pink liquid known as cobalt thiocyanate. Forensic Scientist Grady Downey testified that if the sample contains cocaine base, a chemical reaction occurs and the liquid becomes blue. Deputy Russell and Officer Moore testified that the rock retrieved from Clay's pocket tested positive for cocaine. Clay was indicted in November 2006 for possession of cocaine, approximately 2.37 grams, as a habitual offender pursuant to Mississippi Code Annotated section 99-19-83 (Rev.2007). Because this was Clay's second drug offense, the State sought enhanced punishment under section 41-29-147 of the Mississippi Uniform Controlled *746 Substance Law.[1]
¶ 5. On February 19, 2008, the trial court conducted a pretrial hearing. At that time, Clay declined to enter a guilty plea and informed the trial court that he intended to go to trial the following day. On February 20, 2008, the morning of trial, Clay did not show for trial, so he was tried in abstentia. The trial court issued a bench warrant for Clay's arrest and ordered his bond forfeited. On February 21, 2008, a jury convicted Clay, in abstentia, of possession of cocaine (2.37 grams). On March 22, 2008, Clay was located, arrested, and returned to the custody of the Lauderdale County Sheriff's Department. On April 17, 2008, Clay was sentenced to serve life in the custody of the MDOC without eligibility of probation, parole, earned time, or good-time credit. Thereafter, Clay filed a motion for new trial or, in the alternative, for a judgment notwithstanding the verdict (JNOV). On April 18, 2008, the trial court denied Clay's motion for a new trial or, alternatively, for a JNOV.
ANALYSIS
I. Habitual-offender Status
¶ 6. Clay argues that his sentence as a habitual offender to life without parole is unduly harsh and constitutes cruel and unusual punishment. Clay asserts that the trial judge did not appear to compare the gravity of the offense with the harshness of the sentence before imposing a life sentence.
¶ 7. Under Mississippi Code Annotated section 99-19-83, if a defendant has been previously convicted of at least two prior state and/or federal felony offenses, one being a violent crime, arising out of different transactions at different times and has been sentenced to and served one year or more, it is mandatory that he be sentenced to life. During sentencing, the State introduced records maintained by the MDOC and a fingerprint card into evidence. The pen paks established the following facts:
1. In Cause No. 148-92, Clay pled guilty to robbery and was sentenced on February 23, 1993, to serve a term of fifteen years in the custody of the MDOC with eleven years suspended, four years to serve, followed by five years of supervised probation for robbery. Clay was paroled on April 29, 1994, after serving one year and three months. On December 8, 1995, Clay's probation in Cause No. 148-92 was revoked, and Clay was sentenced to serve eleven years in the custody of the MDOC. Clay was paroled on July 21, 1998, after serving a term of two years and nine months.
2. In Cause No. 313-93, Clay pled guilty to possession of cocaine and was sentenced on August 30, 1993, to serve one year, to run concurrently with the robbery conviction. Clay served seven months for this conviction.
3. In Cause No. 841-00, Clay pled guilty to attempted uttering forgery and was sentenced on May 31, 2001, to serve a term of seven years in the custody of the MDOC, six years and three hundred and sixty-four days suspended with one day to serve, followed by five years of post-release supervision. On November 28, 2001, Clay's probation was revoked. Clay was sentenced to serve six years and three hundred sixty-four days in the custody of the MDOC. Clay initially served four years and three and a half months and was released on earned-release supervision (ERS) on December 18, 2005. Clay violated ERS and was sent back to serve an additional year *747 and one month. Clay served a total of five years and four and a half months.
4. In Cause No. 240-02, Clay pled guilty to felony DUI and was sentenced on October 2, 2002, to serve one year to run consecutive to the probation revocation in Cause No. 841-00.
¶ 8. The evidence established that: (1) Clay had at least two separate felony convictions, one of which was for a violent crime, robbery; and (2) he had served at least one year on each of his two felony convictions. See Magee v. State, 542 So.2d 228, 236 (Miss.1989) (holding that robbery is a crime of violence for purposes of habitual-offender sentencing).
¶ 9. Clay asserts that while he received enhanced punishment as a habitual offender and because he had a prior drug conviction, when the proportionality test in Solem analysis is applied to his sentence, it is shown to be patently, unconstitutionally disproportionate to his offense and should be vacated. "Unless a threshold comparison of the crime committed to the sentence imposed leads to an inference of `gross disproportionality,'" the supreme court has held that it will "not engage in the analysis set forth in Solem v. Helm, 463 U.S. 277, 292, 103 S.Ct. 3001, 77 L.Ed.2d 637 (1983)." Ford v. State, 975 So.2d 859, 869(¶ 39) (Miss.2008). "Sentencing is within the complete discretion of the trial court and not subject to appellate review if it is within the limits prescribed by statute." Hoops v. State, 681 So.2d 521, 537 (Miss.1996). "[T]he general rule in [Mississippi] is that a sentence cannot be disturbed on appeal so long as it does not exceed the maximum term allowed by statute." Fleming v. State, 604 So.2d 280, 302 (Miss.1992). "A sentence that is grossly disproportionate to the crime committed is subject to attack on Eighth Amendment grounds." Williams v. State, 794 So.2d 181, 188(¶ 30) (Miss.2001) (overruled on other grounds).
¶ 10. Although life imprisonment is a rather severe sentence, the trial court has complete discretion in sentencing as long as it does not exceed the maximum as defined by statute. According to Mississippi Code Annotated section 41-29-139(b)(1) (Rev.2005), the maximum sentence for possession of a Schedule II controlled substance is imprisonment for not more than thirty years. Because this was a second drug offense for Clay, he was subject to twice the maximum sentence or sixty years. Miss.Code Ann. § 41-29-147. As a habitual offender, Clay was also subject to an additional enhanced penalty under section 99-19-83. That enhancement calls for a mandatory life sentence. After taking into consideration the two enhancements, it is not necessary for this Court to engage in the Solem analysis because a threshold comparison of the crime committed to the sentence imposed does not infer a gross disproportionality. Accordingly, we find that this issue is without merit.
II. Motion for a New Trial
¶ 11. "A motion for a new trial simply challenges the weight of the evidence." Sheffield v. State, 749 So.2d 123, 127(¶ 16) (Miss.1999). If such motion is denied by the trial court, the appellate court will reverse that decision only if the trial court abused its discretion. Gleeton v. State, 716 So.2d 1083, 1088(¶ 18) (Miss. 1998) (overruled on other grounds). "We will not order a new trial unless convinced that the verdict is so contrary to the overwhelming weight of the evidence that, to allow it to stand, would be to sanction an unconscionable injustice." Groseclose v. State, 440 So.2d 297, 300 (Miss.1983). "Factual disputes are properly resolved by the jury and do not mandate a new trial." McNeal v. State, 617 So.2d 999, 1009 (Miss.1993).
*748 ¶ 12. Clay was not the driver or owner of the car. He argues that the State failed to present evidence that linked the cocaine found under the carpet in the back seat of the vehicle to him. Clay claims that besides the testimony of Deputy Russell and Officer Moore, there was no evidence, i.e., report, to suggest that the rock-like substance found on Clay was cocaine. Clay maintains that to allow the verdict to stand would sanction an unconscionable injustice.
¶ 13. The jury heard testimony from Deputy Russell and Officer Moore that the bag of cocaine was found in the back seat of the vehicle and that Clay was the only passenger in the back seat. Both officers testified that Clay exhibited suspicious behavior before the stop and behaved in a nervous-like manner during the stop, unlike the other persons in the vehicle. Also, a crack pipe and a small amount of cocaine were found on Clay's person during the pat-down search. Clay told Deputy Russell that his name was "Mark Clay," which was a false name.
¶ 14. In addition, the defense rested without calling any witnesses or presenting any evidence or testimony to refute the testimony of Deputy Russell, Officer Moore, or Downey. There was sufficient evidence presented to support the jury's verdict. Accordingly, when viewed in the light most favorable to the verdict, we find that the jury's verdict is not against the overwhelming weight of the evidence, and that the trial court did not abuse its discretion by denying Clay's motion for a new trial.
¶ 15. Therefore, for the reasons stated, we affirm the judgment of the trial court.
¶ 16. THE JUDGMENT OF THE CIRCUIT COURT OF LAUDERDALE COUNTY OF CONVICTION OF POSSESSION OF COCAINE (2.37 GRAMS) AND SENTENCE AS A HABITUAL OFFENDER OF LIFE IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS WITHOUT ELIGIBILITY FOR PROBATION, PAROLE, EARNED TIME, GOOD-TIME CREDIT, REDUCTION OR SUSPENSION IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO LAUDERDALE COUNTY.
LEE AND MYERS, P.JJ., IRVING, GRIFFIS, BARNES, ISHEE, CARLTON AND MAXWELL, JJ., CONCUR. ROBERTS, J., CONCURS IN PART AND IN THE RESULT.
NOTES
[1] Miss.Code Ann. § 41-29-147 (Rev.2005). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559371/ | 796 F.Supp. 997 (1992)
Viola LONGORIA, et al.
v.
Jo Ann CEARLEY, et al.
No. A-91-CA-955.
United States District Court, W.D. Texas, Austin Division.
June 18, 1992.
*998 *999 *1000 R. Louis Bratton, The Bratton Firm, Austin, Tex., Leon Breeden, San Marcos, Tex., for plaintiffs.
William David Deaderick, Tulk & Deaderick, Austin, Tex., for Jo Ann Cearley.
John T. Anderson, Graves, Dougherty, Hearon & Moody, Austin, Tex., for Celtic Life Ins. Co.
ORDER
NOWLIN, District Judge.
Before the Court is the Plaintiffs' Motion to Remand, filed February 18, 1992. On June 4, 1992, this Court held a hearing to address the various issues relating to removal and remand in this case. Having reviewed and considered this motion, the responses thereto, and the applicable law, the Court finds that this motion should be GRANTED.
I. BACKGROUND
The plaintiffs initiated this lawsuit in state court. The plaintiffs allege various state law claims relating to the initial enrollment by them (or their employer of them) into a group insurance program of the defendant insurance company.
The plaintiffs' employer is Community Action, Incorporated, a nonprofit corporation. Community Action already had group health insurance for its employees from another insurance company. That company, however, declined to insure the plaintiffs and some other employees because of their poor medical histories.
The defendant insurance agent, Jo Ann Cearley, then advised Community Action to apply for coverage of these employees with *1001 the defendant Celtic Life Insurance Company. The plaintiffs claim that the insurance agent Cearley promised coverage by defendant Celtic despite the plaintiffs' preexisting conditions. The plaintiffs allege that defendant Cearley intentionally concealed those conditions by entering false data on the enrollment cards submitted to defendant Celtic. The plaintiffs also assert that Defendant Cearley was at all times acting in an agency relationship for Defendant Celtic Life Insurance Company.
Subsequently, upon discovery of the alleged misrepresentations of the preexisting conditions and of the number of people employed by Community Action, defendant Celtic rescinded the policy and refunded the premiums paid, less claims paid, to the employer.
To determine whether removal is proper in this case, the following issues must be addressed:
(1) Does a plan exist?
(2) If a plan does exist, is the plan covered under ERISA?
(3) Is the plan a "governmental plan" and, therefore, excluded from coverage under ERISA?
II. THE RELEVANT ERISA LAW
General Removal Issues
Pursuant to 28 U.S.C. § 1446(c)(5), this Court held an evidentiary hearing to determine whether to grant the petition to remove filed by the Defendant Celtic and joined in by the other defendant or to grant the motion to remand filed by the plaintiffs. 28 U.S.C. § 1446(c)(5).
Removing defendants generally have the burden to show that the federal court would have jurisdiction over the lawsuit if the plaintiff initially sued in federal court. See Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 19 and n. 18, 103 S.Ct. 2841, 2851 and n. 18, 77 L.Ed.2d 420 (1983). However, reiterating an independent corollary to the well-pleaded complaint rule, the Supreme Court stated that a plaintiff may not defeat removal by omitting to plead necessary federal questions in a complaint. See id., 463 U.S. at 22, 103 S.Ct. at 2853 (citations omitted). Also, original federal jurisdiction is available if either: (1) some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims; or, (2) one of the claims is effectively one of federal law. See id., 463 U.S. at 13, 103 S.Ct. at 2848. The Court explained:
[A]ny state action coming within the scope of § 502(a) [29 U.S.C. § 1132(a) of ERISA] would be removable to federal district court, even if an otherwise adequate state cause of action were pleaded without reference to federal law.
See id., 463 U.S. at 24, 103 S.Ct. at 2854. When the federal claim arises only as a defense to a state created action, federal declaratory judgment jurisdiction is lacking. See id., 463 U.S. at 16, 103 S.Ct. at 2850 (citing to and quoting from 10A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2767, pp. 744-745 (2d. ed. 1983)). If the state courts reject a claim of federal preemption, that decision may ultimately be reviewed on appeal by the United States Supreme Court. See id., 463 U.S. at 12 n. 12, 103 S.Ct. at 2848 n. 12.
Although noting that the Construction Laborers Vacation Trust decision involved a suit seeking a declaration that state laws were not preempted by ERISA, the Supreme Court stated that the pending action involved companies subject to ERISA, regulation that sought injunctions against claims that are preempted by ERISA. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 n. 14, 103 S.Ct. 2890, 2899 n. 14, 77 L.Ed.2d 490 (1983) (emphasis in original). Similarly to Shaw v. Delta Air Lines, the issue in this action is whether the plaintiffs' claims "relate to" employee benefit plans within the meaning of 29 U.S.C. § 1144(a) and, if so, whether any exception in ERISA saves these claims from preemption. See id., 463 U.S. at 96, 103 S.Ct. at 2899.
The Fifth Circuit has attempted to clarify the "relates to" requirement of ERISA preemption:
[T]he most important factor for a court to consider in deciding whether a state *1002 law affects an employee benefit plan "in too tenuous, remote, or peripheral a manner to be preempted" is whether the state law affects relations among ERISA's named entities. "[C]ourts are more likely to find that a state law relates to a benefit plan if it affects relations among the principal ERISA entities the employer, the plan, the plan fiduciaries, and the beneficiaries than if it affects relations between one of these entities and an outside party, or between two outside parties with only an incidental effect on the plan."
Memorial Hospital System v. Northbrook Life Insurance Co., 904 F.2d 236, 249 (5th Cir.1990) (citing Sommers Drug Stores Co. Employee Profit Sharing Trust v. Corrigan Enterprises, Inc., 793 F.2d 1456, 1467 (5th Cir.1986) cert. denied 479 U.S. 1034, 107 S.Ct. 884, 93 L.Ed.2d 837 (1987)) (footnote omitted).
This lawsuit does not "relate to" an ERISA plan under the distinct facts and circumstances of this case. There is no longer any arrangement or plan in existence between the employer and the insurance company or between the employees and the insurance company. The plaintiffs are not alleging that they were wrongly denied benefits under the group policy. The plaintiffs' suit will not affect any plan.
Section 1003 states that ERISA generally applies to any employee benefit plan established or maintained:
(1) by any employer engaged in commerce or in any industry or activity affecting commerce; or
(2) by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce; or
(3) both.
29 U.S.C. § 1003(a). ERISA does allow state laws which regulate insurance to apply to an employee welfare benefit plan which is a fully-insured multiple employer arrangement. See 29 U.S.C. § 1144(b)(6). For other multiemployer arrangements that are ERISA plans, state laws are preempted to the extent inconsistent with ERISA. See id. The pertinent requirement is that the multiemployer arrangement also must be an ERISA employee welfare plan.
Even if removal is not proper in this case, the defendants may nevertheless argue in state court that, because of ERISA, they are not subject to state laws.[1]
ERISA defines some terms which are pertinent to this action.[2] ERISA defines a "multiemployer plan" as:
a plan (i) to which more than one employer is required to contribute, (ii) which is maintained pursuant to one or more collective bargaining agreements between one or more employee organizations and more than one employer, and (iii) which satisfies such other requirements as the Secretary may prescribe by regulation.
29 U.S.C. § 1002(37)(A). Even if the group policy in this action should be considered a "plan," the group policy would not qualify as a "multiemployer plan" under ERISA because there has been no showing of the second requirement that the program was maintained pursuant to one or more collective bargaining agreements. See id.
Another major issue before this Court is whether the policy was self-funded or not. This question seems to turn primarily on who bore the risk under the plan. If for example, an ERISA plan only contracted out for someone to "administer" the plan but the ERISA plan retained all of the risk of loss due to claims made under *1003 the plan, such a plan would be a self-funded plan. If a plan paid premiums to some other entity that would bear the risk of the loss, then the plan would not be self-funded and would be insured. Applying substance over form, this Court finds that the employer who purchased this insurance has not been shown to be bearing the risk. Rather, the plan itself appears to be bearing the risk. Determining whether a plan is self-funded or insured is very fact specific and can often be a judgment call.
"[T]he saving clause retains the independent effect of protecting state insurance regulation of insurance contracts purchased by employee benefit plans." FMC Corp. v. Holliday, 498 U.S. 52, ___, 111 S.Ct. 403, 411, 112 L.Ed.2d 356.
The Fifth Circuit has clarified the difference between a "self-insured" plan and an "insured" plan. See MDPhysicians & Associates v. State Board of Insurance, 957 F.2d 178 (5th Cir.1992). A multi-employer welfare arrangement ("MEWA") that is an employee welfare benefit plan under ERISA does qualify for the limited preemption under ERISA from state insurance regulations. See id. at 181. Under ERISA, MEWAs include "all arrangements `established or maintained for the purpose of offering or providing' certain benefits `to the employees of two or more employers ... or to their beneficiaries.'" Id. (quoting from 29 U.S.C. § 1002(40)(A). All MEWAs are not plans covered under ERISA. See id. Apparently, the group policy provided by Celtic Insurance did constitute a MEWA in the broad definition.
MEWAs that do not qualify as employee benefit welfare plans under ERISA are subject to state regulation. Id. Whether a plan constitutes an "employer welfare benefit plan" is a question of fact. Id. at 182 (citations omitted).
The Fifth Circuit proceeded to address what types of plans are covered under ERISA:
ERISA applies to "any employee benefit plan if it is established or maintained (1) by an employer ...; or (2) by an employee organization ...; or (3) by both" an employer and an employee organization. 29 U.S.C. § 1003(a). ERISA defines an "employee welfare benefit plan" as any plan, fund, or program ... established or maintained by an employer or by an employee organization, or by both, ... for the purpose of providing its participants or their beneficiaries [with certain medical and health benefits] through the purchase of insurance or otherwise." 29 U.S.C. § 1002(1).
Id. (footnote omitted).
To fall within the scope of the term "employer" under ERISA, an entity must prove that it acted:
(1) directly as an employer in relation to an employee benefit plan; or
(2) indirectly in the interests of an employer in relation to an employee benefit plan.
Id. at 6 (emphasis in original) citing 29 U.S.C. § 1002(5). The second characterization makes "a group or association of employers acting [indirectly] for an employer" an "employer" under ERISA. Id. (emphasis in original). The Fifth Circuit held that the multi-employer welfare arrangement in the case did not act indirectly for the subscribing employers but rather for itself. Id. at 3518. The entities primary interest was in profiting from the provision of medical and administrative services. Id. The Fifth Circuit stated:
To allow an entrepreneurial venture to qualify as an "employer" by establishing and maintaining a multiple employer welfare arrangement without input by the employers who subscribe to the plan would twist the language of the statute and defeat the purposes of Congress.
Id. (emphasis added).
Like the MDP plan in MDPhysicians, the only possible "plan" in this lawsuit would be the defendant insurance company itself. Viewed as a distinct entity, the insurance company is also an entrepreneurial venture formed to market insurance policies, and the subscribing employers did not participate in the day-to-day operation or administration of the insurance company. See MDPhysicians, 957 F.2d at 183. The insurance company's rescission *1004 of the arrangement did not constitute an action by a plan fiduciary with respect to the plan. Instead, the insurance company acted in its own corporate capacity to effectively annul the arrangement.
This Court does recognize that the MDPhysicians court did not decide "whether any of the Subscribing Employers directly established or maintained "single employer" [employee welfare benefit plans] covered by ERISA...." See id. at 182 n. 4 (citations omitted). Therefore, Defendant Celtic Life could be a fiduciary under ERISA with respect to other employers subscribing to the group health policy plan.
Is There a "Plan" at all under ERISA?
The Eleventh Circuit has discussed the statutory requirements for a "welfare plan" under ERISA:
By definition, then, a welfare plan requires (1) a "plan, fund, or program" (2) established or maintained (3) by an employee organization, or by both, (4) for the purpose or providing medical, surgical, hospital care, sickness, accident, disability, death, unemployment or vacation benefits, apprenticeship or other training programs, day care centers, scholarship funds, prepaid legal services or severance benefits (5) to participants or their beneficiaries.
See Donovan v. Dillingham, 688 F.2d 1367, 1371 (11th Cir.1982) (en banc). The Eleventh Circuit stated:
[A]n employer or employee organization, or both, and not individual employees or entrepreneurial businesses, must establish or maintain the plan, fund, or program.
Id. at 1373. The Fifth Circuit has adopted the rationale of this en banc decision of the Eleventh Circuit to determine if a plan is established under ERISA. See Memorial Hospital System v. Northbrook Life Insurance Co., 904 F.2d 236, 240-241 and n. 4 (5th Cir.1990). "[A]n ERISA plan is established `if from the surrounding circumstances a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of the financing, and procedures for receiving benefits.'" See id. (emphasis added) (quoting Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982) (en banc)) (footnote omitted). A subscription by a person to a multiemployer trust does not fall within the definition of a "plan, fund, or program," under 29 U.S.C. § 1002(1):
"where, as here, the purchasing employer neither directly or indirectly owns, controls, administers or assumes responsibility for the policy or its benefits.... The corporation did no more than make payments to a purveyor of insurance, patently for tax reasons."
Id. at 242 (citing to and quoting from Taggart Corp. v. Efros, 475 F.Supp. 124, 127 (S.D.Tex.1979)) (emphasis added).
Before a court can determine whether a plan is an ERISA plan, the first question for a court is whether there is in fact a "plan." Hansen v. Continental Insurance Co., 940 F.2d 971, 977 (5th Cir. 1991). In deciding whether a particular arrangement constitutes an employee benefit plan under ERISA, a court must initially "satisfy itself that there is in fact a `plan' at all." MDPhysicians, 957 F.2d at 183. The plaintiffs initially argue the insurance company's rescission and voiding, ab initio, of the group policy in its entirety demonstrates that there is not now a plan under ERISA. Although this factor is not alone determinative, the complete termination of the past arrangement does along with the other considerations compel a finding that the plaintiffs' claims are not preempted by ERISA.
Is The Plan An ERISA Plan?
The mere existence of a plan does not mean that the plan is covered under ERISA. Hansen, 940 F.2d at 971. Whether a plan is an ERISA plan is a question of fact governed by well-established legal standards. Id. at 976.
The Department of Labor has established certain requirements for the exclusion of plans from ERISA coverage. See Hansen, 940 F.2d at 976-977. Even if the plan is not excluded under the Department of Labor's regulations, the court *1005 must then determine if the plan meets the Fifth Circuit's own criteria to determine which plans are covered by ERISA. See id. (emphasis in original).
The Department of Labor's regulations exclude from ERISA coverage group or group-type insurance programs offered by an insurer to employees of an employer or to members of an employee organization if under the plan:
(1) No contributions are made by an employer or employee organization;
(2) Participation [in] the program is completely voluntary for employees or members;
(3) The sole functions of the employer or employee organization with respect to the program are, without endorsing the program, to permit the insurer to publicize the program to employees or members, to collect premiums through payroll deductions or dues checkoffs and to remit them to the insurer; and,
(4) The employer or employee organization receives no consideration in the from of cash or otherwise in connection with the program, other than reasonable compensation, excluding any profit, for administrative services actually rendered in connection with payroll deductions or dues checkoffs.
29 C.F.R. 2510.3-1(j); see also Hansen, 940 F.2d at 976-977. The Fifth Circuit excludes group insurance plans which meet these criteria from ERISA coverage. See Hansen, 940 F.2d at 977 (citations omitted). The Hansen court only had to address the third requirement because the other three were clearly met. See id. at 977.
An employer or employee organization must have established or maintained the plan to provide certain benefits to its employees. See Hansen, 940 F.2d at 977-978 (citations omitted). To determine whether an employer has established or maintained an ERISA plan, the court should focus on the employer and its involvement with the plan. Id. at 978 (citing Gahn v. Allstate Life Insurance Co., 926 F.2d 1449, 1452 (5th Cir.1991)). ERISA does not apply to "bare purchases of health insurance where ... the purchasing employer neither directly nor indirectly owns, controls, administers or assumes responsibility for the policy or its benefits." See Taggart Corp. v. Life & Health Benefits Admin., Inc., 617 F.2d 1208, 1211 (5th Cir. 1980), cert. denied, 450 U.S. 1030, 101 S.Ct. 1739, 68 L.Ed.2d 225 (1981); see also Hansen, 940 F.2d at 978. "... Fifth Circuit precedent precludes any interpretation of the [Labor Department's regulation] that leads to the conclusion that the employer's contribution of premiums alone is sufficient to create a group health plan." Kidder v. H & B Marine, Inc., 932 F.2d 347, 352 (5th Cir.1991). Therefore, Community Action's contribution of the premium charges, without more, does not establish a group health plan. Also, the fact that this arrangement was terminated unilaterally by Defendant Celtic Life Insurance shows a complete lack of any substantive control by the employer Community Action.
In order for such a plan to exist, the employer must have an intent to benefit employees and the employer must carry out that intent through the provision of benefits consistent with those described in 29 U.S.C. § 1002(1) and (2). See Hansen, 940 F.2d at 978 (citations omitted). In the present situation, the employer did have an intent to benefit its employees. Because of the insurance company's rescission of the arrangement, the employer was unable to provide those benefits. The arrangement could have provided for either the payment of higher premiums by the employer to cover any later-discovered preexisting conditions or some other alternative where the employer would at least have had the opportunity to continue the arrangement. From the record before this Court, the employer had no such options.[3]
*1006 In Hansen, the court concluded that the disputed plan was an ERISA plan. Hansen, 940 F.2d at 978. Although not purchasing the insurance for its employees, the employer did assume some responsibility administering the program and paying benefits. Id. The employer provided a full time employee benefits administrator who accepted claim forms from employees and submitted the forms to the insurer. Id. The employer clearly signalled its intent to provide such benefits for its employees by providing other such ERISA plans and by providing a booklet by the employer encouraging employees to consider participating in the plan. Id. Notably, unlike the dispute in the present situation, the dispute in Hansen involved a policy that was still in existence at the time of the initial suit and the plaintiff in Hansen was directly seeking to recover benefits under that policy. See generally id. at 973-975.
The Taggart case appears have a similar factual setting to the situation before this Court. In Taggart, employers would subscribe to the group insurance plan and thereby become members of the "group" of subscribers to the plan. See Taggart Corp., 617 F.2d at 1210. The plan provided group insurance to employers too small to qualify for group rates on their own. Id. The plan provider, an insurance company, would then pool the "group's" premiums and purchase insurance for the members. Id. In Taggart, the plan provider informed the employer that the provider was denying coverage to the plaintiff because of alleged misrepresentations in his insurance application. Id. Again unlike the present situation, Taggart involved a claim for benefits under a policy that still existed. See id. The plaintiff employee then brought suit under ERISA pursuant to 29 U.S.C. § 1132. Id. The venture was established and maintained by entrepreneurs to make a profit, and none of the employers participated in the daily operation or administration of the program. Id. Holding that neither the plan nor the employer's subscription to the plan constituted a "plan, fund, or program" within the meaning of 29 U.S.C. § 1002(1), the Fifth Circuit upheld the district court's dismissal of the plaintiff's ERISA action. Id. at 1211. The court did recognize that the plaintiffs could pursue their insurance claims in the appropriate state court. See id. at 1212 (citations omitted).
The "provider" of the arrangement in this situation is an insurance company. The counsel for the defendant insurance company stipulated that the arrangement is insured and is not self-funded. Consequently, the insurance company bears the risk of loss under the arrangement. Presumably, the insurance company was trying to make a profit. Also, there has been no showing that the employer participated in the daily operation or maintenance of the arrangement. The defendant has shown that the employer did participate in seeking coverage from various insurance companies for its employees. The overall approach of the employer Community Action to obtain insurance benefits for its employees may well be properly regarded as an ERISA plan. Any attempts to sue the employer would then be preempted under ERISA. However, the various component insurance companies that were solicited to provide coverage are not part of the employer's ERISA plan.
Presumably, claims for benefits were submitted directly to Celtic Insurance Company with no involvement from Community Action. In Hansen, the employer had a full-time employee benefits administrator who initially received claims and would then submit them to the insurer. See Hansen, 940 F.2d at 977.
More recently, the Fifth Circuit has limited the extent of its holding in Taggart. See generally Kidder, 932 F.2d at 353. "[T]he purchase of a policy or multiple policies covering a class of employees offers substantial evidence that a plan, fund, or program, has been established." Id. (emphasis in original, quoting Donovan, 688 F.2d at 1373). The Kidder court stated:
Moreover, as in Memorial Hospital and unlike in Taggart, this case does not involve a single employee who is essentially purchasing insurance for himself while attempting to characterize his insurance as a group health plan. Therefore, *1007 although we do not adopt the district court's apparent reasoning that the payment of premiums alone is sufficient to create a plan, we affirm its conclusion that an ERISA plan did exist.
Kidder, 932 F.2d at 353. Kidder is distinguishable from Taggart because Kidder involved an employee's suit against his former employer. See id. at 349. The present situation does not involve a suit against the employer.
The Memorial Hospital court also distinguished its facts from those of Taggart:
Unlike Taggart, the present case does not involve the bare purchase of insurance by a lone employee through a [multiemployer trust]. [The statutory employer] has chosen to provide welfare benefits to all of its full-time employees through the purchase of a group insurance policy. [The employer] is solely responsible for submitting monthly premiums directly to [the insurance company] by the premium due dates. The fact that the [employer's] administrative functions are minimal is perfectly in keeping with its intent that [the insurance company] administer the plan as well as insure it. There is, thus, an employer-employee-plan relationship that was lacking in Taggart.
Memorial Hospital, 904 F.2d at 242-243 (emphasis added). The Memorial Hospital case did involve a multiemployer trust arrangement. See id. at 242. In a footnote, the Memorial Hospital court did dispel the argument that the absence of a trust fund from which the insurer would pay benefits would preclude the application of ERISA. See id. at 243 n. 9.
This Court finds somewhat extraordinary the argument for the application of ERISA to shield insurance companies from state law claims when the insurance companies are both the administrator and the insurer of the participants in the arrangement. Whether the employer or the employees pay the premiums should make little difference. The insurance company bore the entire risk of profit and of loss, and the insurance company made all of the administrative decisions concerning the group policy. To allow an insurance company to escape the reach of state law in such a situation is not necessary.[4] In such situations, when the entire arrangement has been terminated by the insurance company, any claims against the insurance company will not affect the employer.
If the plan at issue meets the statutory definition of an "employee welfare benefit plan" at 29 U.S.C. § 1002(1), then the federal courts have jurisdiction over the dispute. Hansen, 940 F.2d at 976. Preempting state law causes of action, ERISA provides the only remedies for the plaintiffs for disputes relating to plans covered under ERISA.
The Preemptive Scope of ERISA
In Holliday, the Supreme Court has explained the preemption clause:
The pre-emption clause is conspicuous for its breadth. It establishes as an area of exclusive federal concern the subject of every state law that "relate[s] to" an employee benefit plan governed by ERISA.
Id. The Supreme Court broadly reads this clause to ensure that the regulation of employee benefit plans remains within the federal forum. See E-Systems, Inc. v. Pogue, 929 F.2d 1100, 1103 (5th Cir.1991) cert. denied, ___ U.S. ___, 112 S.Ct. 585, 116 L.Ed.2d 610 (1991) (citing to Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 46, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39 (1987)).
A determination that a plan is an ERISA plan effectively bars the plaintiffs' state law causes of action. See Hansen, 940 F.2d at 979. The Fifth Circuit has held that claims asserted under article 21.21 of the Texas Insurance Code are barred because of preemption by ERISA. Id. (citations omitted). Although not specific to the business of insurance, common law tort actions are also preempted by ERISA. Id.; Metropolitan Life Insur. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 *1008 L.Ed.2d 55 (1987). Even if such preemption may leave a victim of fraud or misrepresentation without a remedy, ERISA bars such state law causes of action. Hansen, 940 F.2d at 979 (citations omitted).[5] When beneficiaries seek to recover benefits from an ERISA plan, the exclusive remedy is ERISA at 29 U.S.C. § 1132(a)(1)(B). Id. (citation omitted).
Plaintiffs cannot circumvent ERISA with creative pleading. The Fifth Circuit has upheld ERISA's preemption when "an insured attempts to use the "abuse of rights" doctrine to defeat the contractual right of an insurance company to cancel an employee benefit plan." Gahn v. Allstate Life Insur. Co., 926 F.2d 1449, 1454 (5th Cir.1991). The Gahn court also held that the plaintiff's cause of action under a state statute which prohibits insurance companies from terminating coverage in certain situations was not preempted by ERISA. See id. Such statutes meet all three criteria of whether a law regulates the "business of insurance."[6]Id. However, the Fifth Circuit has refused to allow a plaintiff to "recharacterize" a lawsuit as based upon a state statute that makes misrepresentations of an insurance policy to cause a policyholder to lapse, forfeit, or surrender her insurance. See Perkins v. Time Insur. Co., 898 F.2d 470, 472-473 (5th Cir.1990).
In Perkins, the Fifth Circuit held that ERISA does not preempt "a claim that an insurance agent fraudulently induced an insured to surrender coverage under an existing policy, to participate in an ERISA plan which did not provide coverage." Perkins, 898 F.2d at 473 (emphasis added). Such a claim "relates to" the ERISA plan only indirectly. Id. Although ERISA preempts misrepresentation claims of bad faith against insurance companies administering ERISA plans that are in existence and although ERISA plans cannot be modified by oral representations, insurance agents may nevertheless be held personally liable for their solicitation of potential participants in an ERISA plan prior to its formation. Id. Such a claim must be remanded to state court if no other basis for federal jurisdiction exists. Id. at 474.
In Perkins, the plaintiff conceded at oral argument that the plan was an ERISA plan. Id. at 472. Unlike the present situation, the claim in Perkins centered around the denial of coverage relating to a particular condition of a covered person rather than the termination of an entire policy. See id. at 472. The claims against the defendant insurance agent in this case should, consequently, be remanded to state court.
The Fifth Circuit has held that ERISA preempts state common law causes of action for breach of fiduciary duty, negligence, equitable estoppel, breach of contract and fraud. See Hermann Hospital v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1290 (5th Cir.1988) (holding that ERISA allows assignment of health care benefits). The Fifth Circuit based its ruling on the Supreme Court's decision that ERISA preempts state common law claims for tortious breach of contract, breach of fiduciary duty, and fraud in the inducement, brought by beneficiaries who alleged failure to pay benefits under an ERISA plan. Id. (citing to Pilot Life Insur. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987)). When based upon the employer's amendments to an ERISA plan, and later disclosure thereof, such claims are preempted by ERISA. See Christopher v. Mobil Oil Corp., 950 F.2d 1209, 1220 (5th Cir.1992).
Is the plan a Governmental Plan?
29 U.S.C. § 1003(b)(1) provides that ERISA does not apply to any employee *1009 benefit plan that is a governmental plan as defined in Section 1002(32). 29 U.S.C. § 1002(32) defines a "governmental plan" as:
... a plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing....
29 U.S.C. § 1002(32).
Although the plaintiffs vigorously assert that the plan is a governmental plan, the Fifth Circuit has held otherwise. The Fifth Circuit has held that similar corporations were not public corporations. See generally Hines v. Cenla Community Action Committee, Inc., 474 F.2d 1052 (5th Cir. 1973); see also Robles v. El Paso Community Action Agency Bravo, Inc., 456 F.2d 189 (5th Cir.1972). The Office of Economic Opportunity did not exercise the requisite control over such corporations to make them "public corporations." See Hines, 474 F.2d at 1058. The Office of Economic Opportunity did not have the right to direct the manner of carrying out the approved program, nor did the OEO have the right to select or discharge employees of the corporation. See id.; see also Robles, 456 F.2d at 190-191. The Fifth Circuit concluded that such a corporation is a private employer. See Hines, 474 F.2d at 1058. As such an employer, the plan cannot be a "governmental plan" under ERISA.
The United States Supreme Court has also held that:
a community action agency is a local, not a federal enterprise; thus agents and employees of a local community action agency are not "employee[s] of the [Federal] government." 28 U.S.C. § 2671.
United States v. Orleans, 425 U.S. 807, 816, 96 S.Ct. 1971, 1977, 48 L.Ed.2d 390 (1976). The Court explicitly rejected the arguments that community action agencies were part of the federal government because community action agencies received federal funds and must comply with federal regulations and laws. See generally id. The Court effectively held that community action agencies were independent contractors in relation to the federal government. Id. Community action agencies are not federal agencies and the employees of community action agencies are not federal employees. See id., 425 U.S. at 819, 96 S.Ct. at 1978. The Supreme Court stated:
Nothing could be plainer than the congressional intent that the [community action agencies] have complete control over operations of their own programs with the Federal Government supplying financial aid, advice, and oversight only to assure that federal funds not be diverted to unauthorized purposes.
Id., 425 U.S. at 818, 96 S.Ct. at 1977 (footnote omitted).
In a decision rendered after Hines but before Orleans, the Fifth Circuit retreated from its holding in Hines. See Robison v. Wichita Falls & North Texas Community Action Corp., 507 F.2d 245, 250-251 (5th Cir.1975). In Robison, the Fifth Circuit stated:
[W]e construe the Court's holding in Hines to mean that the particular association involved in that case was a private corporation and not that all community action groups are categorically private corporations for purposes of the Fourteenth Amendment and Section 1983.
Id. at 251. The Robison court did not reach the issue of whether the community action agency was a public corporation. Id.
More recently, explaining the unique nature of federal, state, and local involvement in these community action agencies, the Fifth Circuit has stated:
[N]o level of government supervises their [the community action agencies'] day-to-day operations, and their very purpose is to function as autonomous bodies responsive to the poor in the community served.
Cervantes v. Guerra, 651 F.2d 974, 977 (5th Cir.1981). The "peculiar hybrid nature" of community action agencies has left many questions unresolved. Id. "It has not been settled whether and when [community action agencies] may be treated as state or federal instrumentalities to *1010 which constitutional guarantees are applicable." Id.
The Tenth Circuit has held that community action agencies may be held to have engaged in "state action" if the conduct meets the two-part test established by the Supreme Court. See Gilmore v. Salt Lake Community Action Program, 710 F.2d 632, 637 (10th Cir.1983) (referring to Lugar v. Edmondson Oil Co., 457 U.S. 922, 937, 102 S.Ct. 2744, 2754, 73 L.Ed.2d 482 (1982)). The two-part test requires that:
First, the deprivation must be caused by the exercise of some right or privilege created by the state or by a rule of conduct imposed by the state or by a person for whom the state is responsible.... Second, the party charged with the deprivation must be a person who may fairly be said to be a state actor.
Id. (quoting from Lugar). The Tenth Circuit did expressly state that "funding and regulation provide insufficient grounds for finding governmental action." See id. "[F]ederal oversight of independent contractors is common, and, of itself, insufficient to establish federal action." Griffith v. Bell-Whitley Community Action Agency, 614 F.2d 1102, 1108 (6th Cir.1980) cert. denied 447 U.S. 928, 100 S.Ct. 3025, 65 L.Ed.2d 1122 (1980).
Community action agencies are indeed a unique creation. In the present situation this agency cannot be said to be either an "instrumentality or agency" of the federal, state, or local government within the meaning of 29 U.S.C. § 1002(32).
III. CONCLUSION
Based upon the foregoing analysis, this cause of action should be remanded to state court. Although ERISA provides a broad preemption, the particular claims of this case do not fall within the coverage of ERISA. This Court lacks subject matter jurisdiction over these claims.
IT IS ORDERED that the Plaintiffs' Motion To Remand is GRANTED and that this cause is hereby REMANDED pursuant to 28 U.S.C. § 1447(c) to the state court. Each side shall bear its own costs related to the litigation before this Court.
NOTES
[1] This court's statements are not intended to, nor should they, have any preclusive effect on the state court's consideration of the defendants' substantive preemption defense under ERISA. See Soley v. First National Bank of Commerce, 923 F.2d 406, 409 (5th Cir.1991).
[2] Specifically, ERISA defines these terms:
(1) "employee benefit plan" or "plan:"
an employee welfare benefit plan or an employee pension benefit plan or a plan which is both.... 29 U.S.C. § 1002(3);
(2) "person:"
an individual, partnership, joint venture, corporation, mutual company, joint-stock company, trust, estate, unincorporated organization, association, or employee organization. 29 U.S.C. § 1002(9); and,
[3] This Court is aware of the allegation that the employer made the original alleged misrepresentations to the insurance company. Such conduct would seem to implicate the employer at least as much or more than the defendant insurance agent. This Court does not understand why the employer has not been joined in this lawsuit. Presumably, the plaintiffs also relied upon representations made by the employer.
[4] Again, this Court expresses no views on the applicability of the state claims asserted in this action. Those claims may indeed be meritless, and this Court is certain that the state court will carefully consider the law and the facts in this case.
[5] The Court does note that the outcome of this order may well be different in a situation where the insurance company only terminated coverage under a single group policy with respect to some, but not all, of the employees.
[6] Specifically a law regulates the "business of insurance" if:
(1) the law can transfer the risk of non-coverage from an insured to the insurer;
(2) the law is "an integral part of the relationship between the insurer and the insured"; and,
(3) the law only applies to the insurance industry.
Gahn, 926 F.2d at 1454 (citations omitted). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/991836/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JONATHAN E. PUMPHREY; CLAY
KEITH; BALTIMORE NEIGHBORHOODS,
INCORPORATED,
Plaintiffs-Appellants,
v.
No. 95-1998
STEPHEN HOMES, INCORPORATED;
SHEILA ORT,
Defendants-Appellees.
UNITED STATES OF AMERICA,
Amicus Curiae.
JONATHAN E. PUMPHREY; CLAY
KEITH; BALTIMORE NEIGHBORHOODS,
INCORPORATED,
Plaintiffs-Appellees,
v.
No. 95-3032
STEPHEN HOMES, INCORPORATED;
SHEILA ORT,
Defendants-Appellants.
UNITED STATES OF AMERICA,
Amicus Curiae.
JONATHAN E. PUMPHREY,
Plaintiff-Appellant,
and
CLAY KEITH; BALTIMORE
NEIGHBORHOODS, INCORPORATED,
Plaintiffs,
No. 96-1157
v.
STEPHEN HOMES, INCORPORATED;
SHEILA ORT,
Defendants-Appellees.
UNITED STATES OF AMERICA,
Amicus Curiae.
Appeals from the United States District Court
for the District of Maryland, at Baltimore.
John R. Hargrove, Senior District Judge.
(CA-93-1329-HAR)
Argued: October 31, 1996
Decided: March 25, 1997
Before RUSSELL, ERVIN, and WILKINS, Circuit Judges.
_________________________________________________________________
Affirmed in part, reversed in part, and remanded by unpublished per
curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Andrew David Freeman, BROWN, GOLDSTEIN &
LEVY, Baltimore, Maryland, for Appellants. Francis Raymond Laws,
2
KOHLMAN & SHEEHAN, P.A., Baltimore, Maryland, for Appel-
lees. ON BRIEF: Lauren E. Willis, BROWN, GOLDSTEIN &
LEVY, Baltimore, Maryland, for Appellants. Deval L. Patrick, Assis-
tant Attorney General, David K. Flynn, Lisa J. Stark, UNITED
STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Amicus Curiae.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Plaintiffs Jonathan E. Pumphrey, Clay Keith, and Baltimore Neigh-
borhoods, Inc. (BNI) appeal various rulings of the district court con-
cerning their action alleging that Stephen Homes, Inc. and Sheila Ort,
a sales agent for Stephen Homes, engaged in discriminatory housing
practices in violation of 42 U.S.C.A. § 3604(a), (d) (West 1994).1 Ste-
phen Homes and Ort cross-appeal, challenging the denial of their
motion for attorney's fees and the award of attorney's fees to Pum-
phrey. We affirm in part, reverse in part, and remand.
I.
Pumphrey is an African-American who lived in a neighborhood
known as Greenridge II in Harford County, Maryland. Stephen
_________________________________________________________________
1 Subsection (a) provides that it is unlawful "[t]o refuse to sell or rent
after the making of a bona fide offer, or to refuse to negotiate for the sale
or rental of, or otherwise make unavailable or deny, a dwelling to any
person because of race, color, religion, sex, familial status, or national
origin." 42 U.S.C.A. § 3604(a). Subsection (d) makes it unlawful "[t]o
represent to any person because of race, color, religion, sex, handicap,
familial status, or national origin that any dwelling is not available for
inspection, sale, or rental when such dwelling is in fact so available." 42
U.S.C.A. § 3604(d).
3
Homes was building houses on several lots in Greenridge II and
employed Ort as a sales representative for the community. Pumphrey
became interested in moving to another location in the neighborhood,
and he approached Ort about the possibility of purchasing a lot and
building one of the houses offered by Stephen Homes. Ort indicated
that the only lot in Greenridge II that could accommodate the type of
house that Pumphrey desired to build was Lot No. 698. After viewing
the lot, Pumphrey expressed an interest in it and asked Ort how he
should proceed. According to Pumphrey, Ort did not instruct him to
place a deposit on the lot, but instead advised him not to take any
action until Ort verified that the lot would accommodate the house
Pumphrey was interested in building.
Pumphrey testified that Ort telephoned him the following day and
informed him that the lot was unavailable because it had been sold.
Ort agreed that she indicated the lot was unavailable, but claimed that
it was because she accepted a "verbal hold" on the lot--without
requiring any money from the prospective purchasers--after Pum-
phrey decided not to place a deposit on it. One week later, however,
the Crimis--friends of Pumphrey who were Caucasian--visited Ort
and inquired about the availability of Lot No. 698. Ort informed them
that the lot was for sale. Pumphrey claimed that upon learning of
Ort's conversation with the Crimis, he called Ort to reaffirm his inter-
est in Lot No. 698, but that she again stated that it was unavailable.
Further, Pumphrey alleged that Ort did not respond to a letter that he
slipped under her office door expressing his continuing interest in the
lot.
Pumphrey subsequently contacted BNI and requested that it inves-
tigate Stephen Homes' housing practices.2 BNI sent two "testers"--
one African-American and one Caucasian--to visit Ort in her office
and inquire about the availability of lots. Ort allegedly informed the
Caucasian tester that five lots were available in a new section of
Greenridge II. Also, Ort asked him whether he was a contingent or
non-contingent buyer, explaining that two additional lots could be
made available for non-contingent buyers. The African-American tes-
_________________________________________________________________
2 BNI is an organization that is concerned generally with community
housing issues, including the enforcement of federal and state fair hous-
ing laws.
4
ter, Clay Keith, testified that Ort told him no lots were available in
Greenridge II and that he might consider looking elsewhere. Keith
further contended that Ort did not inquire whether he was a contin-
gent or non-contingent buyer. Keith admitted, however, that Ort
answered all of his questions, provided him with a price list and
advised him that, although no property was currently available, Ste-
phen Homes planned to open a new section in thirty days.
Pumphrey, Keith, and BNI then filed this action against Ort and
Stephen Homes, asserting that they had unlawfully misrepresented the
availability of lots in Greenridge II and refused to negotiate for the
sale of a dwelling because of Pumphrey's and Keith's race in viola-
tion of 42 U.S.C.A. § 3604(a), (d).3 At the close of the presentation
of evidence, the district court granted judgment as a matter of law to
Stephen Homes and Ort on Plaintiffs' claims brought pursuant to
§ 3604(a) and on Plaintiffs' request for punitive damages. The jury
then returned a verdict in favor of Pumphrey, but against Keith and
BNI, on their claim that Stephen Homes and Ort misrepresented the
availability of the Greenridge II property in violation of § 3604(d).
Following trial, the district court granted Pumphrey's motion for
attorney's fees and costs, awarding him $37,796.82, and denied a
cross-motion by Stephen Homes and Ort for attorney's fees. Pum-
phrey appeals the decision of the district court granting judgment as
a matter of law on his claim for punitive damages and challenges the
adequacy of the award of attorney's fees.4 Keith and BNI appeal the
dismissal of their claims under § 3604(a). Stephen Homes and Ort
cross-appeal the award of attorney's fees to Pumphrey and the refusal
of the district court to award attorney's fees to them.
_________________________________________________________________
3 Plaintiffs also asserted a cause of action pursuant to 42 U.S.C.A.
§§ 1981, 1982 (West 1994). That claim is not at issue on appeal.
4 Keith and BNI also appeal the dismissal of punitive damages.
Because we affirm the grant of judgment as a matter of law on their
claims under § 3604(a), and since the jury returned a verdict against
Keith and BNI on their § 3604(d) claims, we decline to address their
argument with respect to punitive damages.
5
II.
Pumphrey contends that the district court erred in ruling that under
Maryland law, he had not produced sufficient evidence of malice or
ill will to warrant submitting the issue of punitive damages to the
jury. We conclude that the district court erred in determining that
Maryland law governed the recovery of punitive damages. Moreover,
we find that the record contains sufficient evidence to merit submis-
sion of punitive damages to the jury as to Ort.
Although Congress has provided for the recovery of punitive dam-
ages by victims of discriminatory housing practices, it established no
guidance with respect to the evidentiary standard that justifies an
award of punitive damages. See 42 U.S.C.A.§ 3613(c)(1) (West
1994). The parties agree that the standard for recovery of punitive
damages in fair housing cases is a question of federal law. And, fed-
eral courts have consistently held that punitive damages are recover-
able in actions under § 3604 "`when the defendant's conduct is shown
to be motivated by evil motive or intent, or when it involves reckless
or callous indifference to the federally protected rights of others.'"
Asbury v. Brougham, 866 F.2d 1276, 1282 (10th Cir. 1989) (quoting
Smith v. Wade, 461 U.S. 30, 56 (1983)); United States v. Balistrieri,
981 F.2d 916, 936 (7th Cir. 1992) (citing Smith , 461 U.S. at 51); see
also Fountila v. Carter, 571 F.2d 487, 491 (9th Cir. 1978) (explaining
that actual malice is not a prerequisite to the recovery of punitive
damages for discriminatory housing practices). Thus, contrary to the
ruling of the district court, Pumphrey was not required to prove mal-
ice or ill will.
Applying this standard, we conclude that the district court erred in
refusing to submit the issue of punitive damages to the jury with
respect to Ort. One view of the evidence presented was sufficient to
demonstrate that Ort intentionally discriminated against Pumphrey.
Indeed, the district court instructed the jury that it could find in favor
of Pumphrey on the issue of compensatory damages only if "the
defendant intentionally and purposely discriminated against [Pum-
phrey] because of [his] race." J.A. 715. The jury therefore necessarily
found that Ort acted intentionally in misrepresenting the availability
of housing to Pumphrey in violation of § 3604(d)--a finding that is
not challenged on appeal. Additionally, Ort testified at trial that she
6
was required to attend seminars that included instruction concerning
legal requirements relating to equal housing and that the model home
--where she spent six to eight hours each day--displayed posters
stating that racially discriminatory housing practices were illegal
under federal law. The fact that Ort knew discriminatory treatment
with respect to housing was unlawful, coupled with evidence that she
intentionally misrepresented the availability of lots being sold by Ste-
phen Homes, could lead a reasonable juror to conclude that Ort acted
with a reckless or callous indifference to Pumphrey's rights under
§ 3604(d). See Tyus v. Urban Search Management, 102 F.3d 256, 266
(7th Cir. 1996) (reversing judgment as a matter of law in favor of
defendant on punitive damages in a Fair Housing Act case because
plaintiffs presented evidence that defendants had knowledge of the
law and engaged in intentional acts of housing discrimination).
Because there was evidence in the record, viewed in the light most
favorable to Pumphrey, from which the jury reasonably could have
concluded that an award of punitive damages was justified, we find
that the district court improperly granted judgment as a matter of law.
See Fed. R. Civ. P. 50(a)(1); Benesh v. Amphenol Corp. (In Re Wilde-
wood Litig.), 52 F.3d 499, 503 (4th Cir. 1995). Accordingly, we
reverse the grant of judgment as a matter of law on Pumphrey's
request for punitive damages against Ort and remand for the issue of
punitive damages to be submitted to a jury.
However, we find no evidence in the record that Stephen Homes
ratified or facilitated the discriminatory acts of Ort. See City of Chi-
cago v. Matchmaker Real Estate Sales Ctr., Inc., 982 F.2d 1086, 1100
(7th Cir. 1992) (noting that in fair housing actions "`[a] principal is
liable for punitive damages for the discriminatory acts of [its] agent
only if [the principal] knew of or ratified the acts'" (quoting Hamilton
v. Svatik, 779 F.2d 383, 389 (7th Cir. 1985) (first alteration in origi-
nal))). We therefore affirm the judgment as a matter of law on Pum-
phrey's request for punitive damages against Stephen Homes.
III.
In addition to the punitive damages issue, the parties raise various
other challenges to the district court's rulings. Keith and BNI contend
that the district court erred in granting judgment as a matter of law
to Stephen Homes and Ort on their claims pursuant to§ 3604(a);
7
Pumphrey challenges the amount of the award of attorney's fees as
calculated by the district court; and, Stephen Homes and Ort appeal
the award of attorney's fees to Pumphrey and the denial of their
motion for attorney's fees. After carefully considering the arguments
and briefs of counsel and reviewing the record, we conclude that the
district court committed no reversible error with respect to these rulings.5
IV.
For the foregoing reasons, we affirm the dismissal of the claims of
Keith and BNI under § 3604(a), the rulings with respect to attorney's
fees, and the evidentiary and pretrial determinations of the district
court. We reverse the decision of the district court granting judgment
as a matter of law to Ort on Pumphrey's claim for punitive damages
and remand for further proceedings consistent with this opinion.
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED
_________________________________________________________________
5 Plaintiffs also raise various evidentiary and pretrial issues. We con-
clude that these claims are without merit.
8 | 01-03-2023 | 07-03-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559470/ | 20 So.3d 848 (2009)
JACKSON
v.
RUTHERFORD.
No. SC09-382.
Supreme Court of Florida.
October 7, 2009.
Decision Without Published Opinion Habeas Corpus dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559473/ | 20 So.3d 802 (2009)
Robert Earl ROUTZONG
v.
Marisa Lynne Routzong BAKER.
2070987.
Court of Civil Appeals of Alabama.
April 17, 2009.
*803 Thomas E. Haigh, Troy, for appellant.
Jimmy S. Calton, Jr., of Calton & Calton, Eufaula, for appellee.
THOMAS, Judge.
Robert Earl Routzong ("the father") appeals from a judgment finding him in contempt for failing to comply with the terms of a judgment divorcing him from Marisa Lynne Routzong Baker ("the mother") and awarding the mother $2,200. We affirm.
The parties were divorced in 2005. The divorce judgment provided that the parties would have "joint custody" of the parties' children and that the mother would have "primary custody." The parties had 2 sons, who were, at the time of trial in the present case, 11 and 15 years old. The divorce judgment incorporated an agreement of the parties that included, among other provisions, the following at paragraph nine:
*804 "9. The parties agree that the [father] will pay child support in the amount of $410.00 a month per child. Any expenses such as braces, school expenses and extracurricular activities incurred in any month will be shared equally by the [mother] and the [father]. The [father] agrees to immediately reimburse the [mother] for any payments not made by the [father] within 10 days after the [mother] provides receipt of payment."
In 2007, the mother filed a contempt petition, alleging that the father had, since the time of the divorce, failed to reimburse her for his share of the children's medical expenses and extracurricular activities, which, she said, amounted to $2,860. The court conducted ore tenus proceedings on December 4, 2007, and February 4, 2008. The mother testified that she considered the children's extracurricular activities to encompass "anything they do outside the school day, whether it's an optional science project or fair, or a summer camp, football, baseball, basketball, church." The father took issue with the mother's interpretation of the term "extracurricular activities," and he objected to paying for any such activities because, he said, he had not been consulted by the mother before she spent the money. The father testified that "[j]oint custody mean[s] I have equal say in anything extra and above regular child support spent on the child." When the trial court asked the father whether he disagreed with the parties' sons being involved in activities such as music, sports, or church activities, the father answered:
"Not necessarily. But I needed to be consulted so that I could make the decision whether I could afford it or not. I have approximately $500 a month after I pay all my bills and child support.
"This agreement never intended to give [the mother] an open checkbook to spend my money however she [saw] fit."
The mother testified that the extracurricular activities for which she was seeking a 50% expense reimbursement from the father were the same type of activities in which the children had been participating at the time of the divorce.
On February 25, 2008, the trial court entered a lengthy and comprehensive judgment determining, in pertinent part, the following:
"The Court hereby finds the language of the agreement to be clear, conspicuous and unambiguous as to its meaning and the responsibility of good faith compliance. The Court finds the [father's] excuse for his failure to pay said timely reimbursement in compliance with the agreement to be disingenuous.
"The Court interprets the agreement and finds that the parties intended for the word `any' to have its usual and customary definition. The Court interprets and defines the word `expenses' as those expenses that are paid and incurred on behalf of the minor children and which are other than those expenses to be covered by the payment of child support. The Court interprets and defines the phrase `such as' to be intended by the parties to give an example or illustration of an expense covered under the agreement. The Court finds that the phrase `such as' is not intended to be a term of limitation.
"Further, in consideration of the entire context of the agreement and what is in the best interest of the minor children, the Court finds the [mother's] arguments persuasive in that the parties intended for out of pocket medical and dental expenses to be covered in this reimbursement agreement as given by the example of `braces.' The Court does *805 not interpret the word `braces' to limit the reimbursement agreement simply to braces, while leaving the entire burden of other out of pocket medical or dental expenses to be carried solely by the [mother].
"Further, the Court interprets the agreement and finds that the parties intended for the phrase `school expenses' and `extracurricular expenses' to have its usual and customary definition. The Court finds that `school expenses' is intended by the parties in their agreement to cover those expenses required for the minor children's participation in school activities. The Court finds that `extracurricular expenses' is intended by the parties to cover those expenses required for the minor children's participation in activities out-side of school. The Court finds that the activities set forth for reimbursement under these categories are reasonable. The Court finds that the expenses and activities set forth for reimbursement were either being incurred in a similar manner at the time of the divorce or that said expenses and activities were reasonably anticipated to be incurred and they were intended by the parties to be covered under their agreement.
"The Court finds that the language of the parties' agreement shows a reasonable anticipation of school expenses and extracurricular expenses to be incurred by the parties at the time of their agreement. The Court finds that these expenses, for which the [mother] has asked the [father] for reimbursement, are expenses which are customarily and reasonably expected and these expenses or activities are not unusual or extraordinary nor are the expenses or activities which are associated with school or extracurricular events considered by the Court to be extravagant or unduly burdensome on the [father] since the parties are equally proportioning those expenses for reimbursement. The Court finds that it is in the best interest of the minor children for their parents to encourage them to participate in said activities and the parties should share in these expenses equally as they originally agreed.
"Further, the Court finds that the phrase `receipt of payment' does not limit, restrict or require the [mother], as the primary custodial parent, to provide only written receipt of payment as the only acceptable form of proof and actual notice of expenses for reimbursement covered under the parties' agreement. The Court finds that the parties' agreement contemplates that the [mother's] burden is to place the [father] on reasonable actual notice that reasonable expenses, as contemplated under their agreement, have either been incurred by the primary custodial parent or that reasonable expenses are expected to be incurred. The Court finds that the [mother] complied with this actual notice requirement in the past by both verbal and written notice of payment to the [father]. Further, the Court cannot find anywhere in the agreement that the parties agreed and intended for the [mother], the primary custodial parent, to get permission from the [father], the noncustodial parent, for each and every nonextraordinary expense which was contemplated to be covered in their agreement.
"The Court has reviewed the submissions of the parties and considered the testimony and demeanor of the parties and finds that the [father] has failed in good faith to reasonably and timely reimburse the [mother] for expenses which total $2200.00."
Standard of Review
In R.G. v. G.G., 771 So.2d 490, 494 (Ala.Civ.App.2000), this court set out the standard of review applicable to this case:
*806 "`[A] settlement agreement which is incorporated into a divorce decree is in the nature of a contract.' Smith v. Smith, 568 So.2d 838, 839 (Ala.Civ.App.1990). A divorce judgment should be interpreted or construed as other written instruments are interpreted or construed. Sartin v. Sartin, 678 So.2d 1181 (Ala. Civ.App.1996). `The words of the agreement are to be given their ordinary meaning, and the intentions of the parties are to be derived from them.' Id., at 1183. Whether an agreement is ambiguous is a question of law for the trial court. Wimpee v. Wimpee, 641 So.2d 287 (Ala.Civ.App.1994). An agreement that by its terms is plain and free from ambiguity must be enforced as written. Jones v. Jones, 722 So.2d 768 (Ala.Civ. App.1998). An ambiguity exists if the agreement is susceptible to more than one meaning. Vainrib v. Downey, 565 So.2d 647 (Ala.Civ.App.1990). However, if only one reasonable meaning clearly emerges, then the agreement is unambiguous. Id. Finally, if a provision of an agreement is certain and clear, it is the duty of the trial court to determine its meaning, and the court's determination is afforded a heavy presumption of correctness and will not be disturbed unless it is clearly erroneous. Id."
This court reviews de novo a trial court's determination with respect to whether an agreement incorporated into a divorce judgment is ambiguous. Meyer v. Meyer, 952 So.2d 384, 391 (Ala.Civ.App.2006); Smith v. Smith, 892 So.2d 384, 387-88 (Ala.Civ.App.2003).
I.
Citing Smith v. Smith, 887 So.2d 257 (Ala.Civ.App.2003), the father acknowledges that the divorce judgment awarding the parties "joint custody" but awarding the mother "primary custody" must be construed to mean that the parties have joint legal custody and that the mother has sole physical custody of the children. Section 30-3-151(2), Ala.Code 1975, defines "joint legal custody" as follows:
"Both parents have equal rights and responsibilities for major decisions concerning the child, including, but not limited to, the education of the child, health care, and religious training. The court may designate one parent to have sole power to make certain decisions while both parents retain equal rights and responsibilities for other decisions."
(Emphasis added.) The father maintains that his having "joint legal custody" of the children requires the mother to consult with him before she spends money on the children's "education, health care, and religious training," as well as other issues concerning the children, such as their involvement in extracurricular activities. He asserts that the trial court erred by failing to consider the meaning of the term "joint legal custody" as it relates to the provisions of paragraph nine. The trial court's judgment indicates that it did consider the meaning of "joint legal custody" when it construed the provisions of paragraph nine. By finding that the expenses for which the mother sought reimbursement were "customarily and reasonably expected," rather than "unusual or extraordinary," the trial court implicitly rejected the father's argument that the mother had, without consulting him, made "major decisions" within the meaning of § 30-3-151(2). Moreover, the trial court explicitly rejected the father's argument that he had a right to be consulted beforehand about the expenses for which the mother was seeking reimbursement when it determined:
"[T]he Court cannot find anywhere in the agreement that the parties agreed and intended for the [mother], the primary custodial parent, to get permission *807 from the [father], the noncustodial parent, for each and every nonextraordinary expense which was contemplated to be covered in their agreement."
It is evident that the trial court's decision was based on its finding that the expenses the mother submitted to the father were for the type of activities in which, the parties contemplated at the time of the divorce, the children would participate after the divorce. Hence, the trial court was authorized to find that prior consultation between the parents as to the propriety of the expenses for such activities was unnecessary because the parents had already come to a meeting of the minds regarding the children's extracurricular activities. The trial court specifically found that the expenses
"for which the [mother] has asked the [father] for reimbursement, are expenses which are customarily and reasonably expected and these expenses or activities are not unusual or extraordinary."
(Emphasis added.)
As a general proposition, we agree with the father that a right to be consulted about expenses that are not "customarily and reasonably expected," but that are "unusual or extraordinary," is implicit in the concept of "joint legal custody." Section 30-3-153, Ala.Code 1975, provides:
"(a) In order to implement joint custody, the court shall require the parents to submit, as part of their agreement, provisions covering matters relevant to the care and custody of the child, including, but not limited to, all of the following:
"(1) The care and education of the child.
"(2) The medical and dental care of the child.
"(3) Holidays and vacations.
"(4) Child support.
"(5) Other necessary factors that affect the physical or emotional health and well-being of the child.
"(6) Designating the parent possessing primary authority and responsibility regarding involvement of the minor child in academic, religious, civic, cultural, athletic, and other activities, and in medical and dental care if the parents are unable to agree on these decisions. The exercise of this primary authority is not intended to negate the responsibility of the parties to notify and communicate with each other as provided in this article.
"(b) If the parties are unable to reach an agreement as to the provisions in subsection (a), the court shall set the plan."
(Emphasis added.) Section 30-3-153 provides that if the parties cannot agree on a "parenting plan," designating which parent has the "primary authority and responsibility regarding involvement of the minor child[ren] in academic, religious, civic, cultural, athletic, and other activities, and in medical and dental care," then the trial court is required to set a "parenting plan." This court has previously held that the parenting-plan requirement of § 30-3-153 is applicable only to joint-custody arrangements, i.e., when the parties have joint legal custody and joint physical custody. See Ratliff v. Ratliff, 5 So.3d 570, 585 (Ala.Civ.App.2008). We have never held, however, that, in the absence of a joint-custody arrangement, the custodial parent has no duty to consult with the noncustodial parent about issues "regarding involvement of the minor child[ren] in academic, religious, civic, cultural, athletic, and other activities." To the contrary, this court has indicated that sole physical custody implies "`primary responsibility of care and control.'" Moncrief v. Gilbert, 675 So.2d 895, *808 896 (Ala.Civ.App.1996) (emphasis added). As § 30-3-153(a)(6) cautions, however, "[t]he exercise of this primary authority is not intended to negate the responsibility of the parties to notify and communicate with each other ...."
We conclude that when parents have joint legal custody of their children and one parent has sole physical custody, the parents have the duty to "notify and communicate with each other" about issues concerning the children. Thus, if the trial court's judgment could be read to allow the mother to make any and all decisions with respect to the children's extracurricular activities without ever consulting the father, it would be erroneous. We do not believe, however, that the judgment in this case can be read so broadly. Instead, paragraph nine of the parties' agreement must be considered, as it was in the trial court's judgment, in light of what the parties contemplated at the time of the divorce that notification and communication as to the type of extracurricular activities in which the children would participate was unnecessary because the parties were in apparent agreement on that issue at the time of the divorce.
We affirm the award to the mother of $2,200, representing the father's share of the expenses for items enumerated in paragraph nine. Although the father was not consulted about all the expenditures, he presented no evidence indicating that, if he had been consulted about a particular expenditure, he would have vetoed it.
II.
The trial court held that the phrase "extracurricular expenses" in paragraph nine of the parties' agreement was not ambiguous for two reasons. First, the court determined that the "usual and customary" meaning of the phrase "extracurricular expenses" is "those expenses required for the minor children's participation in activities outside of school."
The father contends that the trial court's determination is erroneous because, he says, the dictionary definition of "extracurricular" denotes school sponsorship or supervision of an activity. Citing Webster's New World Dictionary of the American Language, Second College Edition, the father contends that "extracurricular" means
"[n]ot part of the required curriculum; outside the regular course of study but under the supervision of the school (dramatics, athletics, and other extracurricular activities)."
(Emphasis added.) Citing Merriam-Webster's OnLine Dictionary, the father says that "extracurricular" means
"of or relating to officially or semiofficially approved and usually organized activities (as athletics) connected with school and usually carrying no academic credit."
(Emphasis added.)
The mother points out that "extracurricular" has a broader connotation than the meaning urged by the father. Citing, among other sources, the Random House Unabridged Dictionary, the mother contends that "extracurricular" may indicate an activity "outside one's regular work, responsibilities, or routine." We note that Merriam-Webster's Collegiate Dictionary 444 (11th ed. 2003) provides, as an additional definition for "extracurricular," the following: "lying outside one's regular duties or routine."
Alabama appellate opinions have generally recognized the same distinction made by the trial court, i.e., that "extracurricular activities" occur outside of school, or during after-school hours, and may be, but are not necessarily, sponsored by or conducted under the supervision of a school. See, e.g., McGowin v. McGowin, 991 So.2d 735, *809 740 (Ala.Civ.App.2008) (recognizing that summer camp is an extracurricular activity); Giardina v. Giardina, 987 So.2d 606, 611 (Ala.Civ.App.2008)(recognizing that sports and scouting are extracurricular activities); Tompkins v. Tompkins, 843 So.2d 759, 763 (Ala.Civ.App.2002) (recognizing that horseback riding, gymnastics, and dance lessons are extracurricular activities); Jones v. State, 753 So.2d 1174, 1196 (Ala.Crim.App.1999)(recognizing that "`church activities such as choir'" and "`playing in the school band'" are extracurricular activities).
The second reason given by the trial court for determining that the phrase "extracurricular expenses" was free of ambiguity was based on the parties' own prior history. The court found that, during the time they were married, the parties had paid the expenses for the children to engage in the same type of activities for which the mother paid and sought reimbursement after the divorce. The trial court determined that
"the expenses and activities set forth for reimbursement were either being incurred in a similar manner at the time of the divorce or that said expenses and activities were reasonably anticipated to be incurred and they were intended by the parties to be covered under their agreement."
We conclude that the trial court did not err in deciding that the term "extracurricular expenses" was not ambiguous; that it had a "usual and customary" meaning; and that the parties had, at the time they reached the settlement agreement incorporated into their divorce judgment, reasonably anticipated the meaning attributed to the term by the trial court.
III.
The father argues that the trial court applied an improper standard to find him in contempt. He insists that his failure to have abided by the terms of the divorce judgment was the result of a good-faith error in interpretation and not a matter of willfulness or bad faith. He cites In re Powers, 523 So.2d 1079, 1082 (Ala.Civ. App.1988), for the proposition that "[a]n error in judgment without clear and convincing evidence of bad faith intent is insufficient for a finding of contempt." Specifically, the father argues that, because the terms "extracurricular activities" and "receipt of payment" in paragraph nine of the parties' agreement were ambiguous, he had a good-faith reason for failing to pay the sums the mother demanded.
We have already held that the trial court did not err by concluding that the term "extracurricular activities" is not ambiguous. With regard to the term "receipt of payment," the trial court held:
"[T]he Court finds that the phrase `receipt of payment' does not limit, restrict or require the [mother], as the primary custodial parent, to provide only written receipt of payment as the only acceptable form of proof and actual notice of expenses for reimbursement covered under the parties' agreement. The Court finds that the parties' agreement contemplates that the [mother's] burden is to place the [father] on reasonable actual notice that reasonable expenses, as contemplated under their agreement, have either been incurred by the primary custodial parent or that reasonable expenses are expected to be incurred. The Court finds that the [mother] complied with this actual notice requirement in the past by both verbal and written notice of payment to the [father]."
We agree that the term "receipt of payment" is "`reasonably susceptible to more than one meaning,'" Ex parte Littlepage, 796 So.2d 298, 301 (Ala.2001)(quoting Vainrib v. Downey, 565 So.2d 647, 648 (Ala. *810 Civ.App.1990)) and that the father could not properly be held in contempt for failing to pay those expenses demanded by the mother without a written receipt. The evidence at trial, however, indicated that for many, if not most, of the expenses, the mother had provided a written receipt, yet the father still did not pay.
The mother asserts that the trial court did not actually find the father in contempt, but, she says, a contempt finding would have been warranted by the evidence. We conclude that the trial court did find the father in contempt and that it used the correct standard in doing so.
"Civil contempt" is defined as a "willful, continuing failure or refusal of any person to comply with a court's lawful writ, subpoena, process, order, rule, or command that by its nature is still capable of being complied with." Rule 70A(a)(2)(D), Ala. R. Civ. P. The determination of whether a party is in contempt is within the sound discretion of the trial court, and that determination will not be reversed absent a showing that the court exceeded the limits of its discretion. Stack v. Stack, 646 So.2d 51 (Ala.Civ.App.1994).
The trial court made the following finding in the first paragraph of its judgment:
"This matter having come before the Court upon the [mother's] Rule Nisi petition and testimony and exhibits having been submitted and considered by the Court, the Court hereby finds in favor of the [mother] as to her claims that the [father] has, without cause, failed to reimburse her for those expenses the parties agreed to be equally responsible for over and beyond the Rule 32 child support guideline amount of $410.00 per child."
(Emphasis added.) The trial court found that the father's excuse for failing to comply with paragraph nine was "disingenuous," and it concluded that the father "ha[d], without cause," failed to reimburse the mother for most of the expenses the parties had agreed to divide. In awarding the mother an attorney fee, the trial court found that the father "did, in fact, receive detailed notices of the expenses claimed for reimbursement and he failed to reimburse the [mother] for said expenses within 10 days, as clearly stipulated in the parties' agreement," and that the father had violated the trial court's discovery order.
Although none of the trial court's findings specifically refer to the father's noncompliance as "willful," we conclude that, reading the judgment as a whole, a "willfulness" finding is inescapable. Accordingly, we hold that the trial court used the proper standard. "It is completely within the trial court's discretion to determine whether a party is in contempt. In reviewing a case alleging contempt, our review of the record is limited solely to determining if there is support for the trial court's order." Grant v. Grant, 849 So.2d 186, 188 (Ala.Civ.App.2002). The record contains support for the trial court's order, and, accordingly, we hold that the trial court did not exceed the limits of its discretion in determining that the father was in contempt for failing to comply with the provisions of paragraph nine of the parties' agreement incorporated into their divorce judgment.
IV.
The father contends that the trial court failed to follow Rule 32(B)(7)(c), Ala. R. Jud. Admin., when it did not recalculate his child-support obligation to reflect that he, rather than the mother, was providing health-insurance coverage for the children. The father did not present this argument to the trial court, and, accordingly, he has failed to preserve it for *811 appellate review. This court cannot consider arguments raised for the first time on appeal. Our review is restricted to the evidence and the arguments considered by the trial court. Andrews v. Merritt Oil Co., 612 So.2d 409, 410 (Ala.1992); Abbott v. Hurst, 643 So.2d 589 (Ala.1994). See also Rule 4(a)(3), Ala. R.App. P. (any error asserted in the trial court may be asserted on appeal).
The judgment of the Barbour Circuit Court is affirmed.
AFFIRMED.
PITTMAN, BRYAN, and MOORE, JJ., concur.
THOMPSON, P.J., concurs in the result, without writing. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559494/ | 252 Md. 173 (1969)
249 A.2d 180
ATLANTIC, GULF AND PACIFIC COMPANY
v.
STATE DEPARTMENT OF ASSESSMENT AND TAXATION
[No. 13, September Term, 1968.]
Court of Appeals of Maryland.
Decided January 15, 1969.
The cause was argued before HAMMOND, C.J., and MARBURY, BARNES, McWILLIAMS, SINGLEY and SMITH, JJ.
Albin M. Plant and George D. Hubbard, with whom were Semmes, Bowen & Semmes on the brief, for appellant.
Anthony M. Carey, Assistant Attorney General, with whom was Francis B. Burch, Attorney General on the brief, for appellee.
BARNES, J., delivered the opinion of the Court.
This appeal involves an exemption from tangible personal property taxation of the dredge Pittsburgh, owned and operated by the appellant, Atlantic, Gulf and Pacific Company (Atlantic) *175 for the taxable year 1965. The appellee, State Department of Assessments and Taxation of Maryland (State) denied the exemption and was sustained in this action by both the Maryland Tax Court and the Baltimore City Court.
The facts are not in dispute. Atlantic, a West Virginia corporation, was incorporated in 1899. It is and has been engaged in the hydraulic dredging business. It has no regular place of business in Maryland but is qualified to do business in this State.
Atlantic's dredge Pittsburgh worked in the Chesapeake and Delaware Canal in Maryland from April 23 to May 25, 1964. Prior to that time it had not worked in Maryland. It worked on another job in that canal from April 2, 1965 to July 1, 1965. It worked in Baltimore Harbor from June 2 to August 3, 1964 and also from September 10, 1964 to March 11, 1965.
Prior to April 23, 1964, when the Pittsburgh first worked in Maryland, it had worked in New York and Connecticut in 1955, in Connecticut and Massachusetts in 1956, in New York and Massachusetts in 1957, in New Jersey in 1958, in Virginia and West Virginia in 1959, in New Jersey and New York at various times during 1960, 1961 and 1962 and in Florida in 1964. The Pittsburgh worked in Philadelphia, Pennsylvania from August 9, 1965 to October 5, 1965.
The Pittsburgh is one of seven dredges owned by Atlantic on January 1, 1965, the date of finality in this case. It was built in 1914 and is 192 feet long. It was revitalized in 1964 at a cost of approximately $300,000 in order to permit it to compete more favorably with more recently constructed dredges. It is a registered vessel, with an official number assigned by the United States Collector of Customs; it is documented as a dredge and can be towed anywhere in the world. It carries all the equipment used by it in its dredging operations, except for two storage barges, which the State also assessed, and certain other vessels which accompany it as an operating unit.
The Pittsburgh, when in operation, works 24 hours a day, seven days a week. When in operation, there are three shifts with a total payroll of between 85 and 90 men. It has a commissary and sleeping quarters for 15 to 20 men. It widens or deepens the channel of the waterway by submerging a ladder, *176 with a high powered cutter, to the bottom. The material that is dug up, whether sand, clay or rock is sucked up through a suction pipe, goes through a pump and is pumped out of the back of the dredge through a pipe, which may be as much as 2000 feet in length, to a designated disposal area. It has no motive power of its own but is towed from location to location. When working, it is attached to anchors and is moved by the use of cables attached to a derrick winch.
The State, finding the Pittsburgh in Maryland waters on the date of finality, January 1, 1965, entered a tangible personal property assessment in the amount of $786,500 for the taxable year 1965. This assessment in its entirety was certified to Baltimore City. The foreign corporation assessor for the Department testified that it had been the long practice of the Department to assess a dredge without proration if the dredge was found within Maryland on a date of finality. He testified that during his 20 years of service as an assessor, the Department had always interpreted the provision set forth in Code (1957), Article 81, Section 9, subsection (26), which provides an exemption for "all ships, or other vessels, including aircraft which are regularly engaged in commerce, in whole or in part, outside the territorial limits of this State," as not applicable to a dredge but only to vessels "that may be engaged in foreign commerce in the transport of goods and people." He conceded that the Pittsburgh was a "vessel" within the meaning of the language of the exemption.
Atlantic does not challenge the amount of the assessment; its challenge is addressed to the validity of the assessment.
Atlantic advances two propositions in this appeal: (1) the trial court erred in finding that the Pittsburgh was not a vessel "engaged in commerce, in whole or in part, outside the territorial limits" of Maryland, and thus exempt from taxation pursuant to the plain and unambiguous meaning of the words of the statutory exemption either alone or as reinforced by the history of the legislation and (2) that if the tax were otherwise applicable as the State contends, it would be unconstitutional as an unapportioned tax upon an instrumentality of interstate commerce and thus prohibited by the commerce clause of the Federal Constitution as construed by the cases.
*177 As we agree with Atlantic's first proposition, we will reverse the order of the lower court, but accordingly, we do not find it necessary to pass upon the merits of the constitutional challenge to the statute advanced by Atlantic.
(1)
The language used in the statute itself is the primary source for determining the legislative intent. As we stated in Maryland Medical Service, Inc. v. Carver, 238 Md. 466, 477-78, 209 A.2d 582, 588 (1965):
"The cardinal rule of construction of a statute is to discover and to carry out the real legislative intention. Barnes v. State, ex rel Pinkney, 236 Md. 564, 574; 204 A.2d 787, 792 (1962). Casey Development Corp. v. Montgomery County, 212 Md. 138, 129 A.2d 63 (1957). The legislative intent is to be sought in the first instance in the words used in the statute and if there is no ambiguity or obscurity in the language used in the statute, there is usually no need to look elsewhere to ascertain the intent of the legislature. Board of Supervisors of Election of Baltimore City v. Weiss, 217 Md. 133, 141 A.2d 734 (1958). See particularly the comprehensive review of the prior Maryland cases at pages 136 and 137 of 217 Md. If the legislative intent is expressed in clear and unambiguous language, this will be carried into effect by this Court even if this Court might be of the opinion that the policy of the legislation is unwise, or even harsh or unjust, if no constitutional guarantees are impaired by the legislation. Schmeizl v. Schmeizl, 186 Md. 371, 46 A.2d 619 (1946)."
Article 81, Section 9 (26) as it appears in the Maryland Code is as follows:
"(26) Vessels and aircraft engaged in interstate commerce All ships or other vessels, including aircraft, which are regularly engaged in commerce,[1] in *178 whole or in part, outside the territorial limits of this State."
To be entitled to the exemption, the property owner must under the statute establish three essential elements:
1. That the property is a vessel (or aircraft)
2. That it is regularly engaged in commerce and
3. That this occurs in whole or in part, outside the territorial limits of Maryland.
In our opinion, Atlantic has successfully established all three of the essential elements.
The first element, i.e., that the property is a "vessel," was conceded by the foreign corporation assessor for the State and by counsel for the State in the Maryland Tax Court as well as in the State's brief and argument before us.[2] This element is therefore established by the property owner.
Nor is the third element, i.e., that its use and work occurs in part outside the territorial limits of Maryland, in dispute. The times and places of the Pittsburgh's use and work in other *179 jurisdictions have been fully set forth, and no argument is made by the State in regard to that element.
The principal dispute and, in fact, the only issue contested in this case, is whether or not the Pittsburgh was "regularly engaged in commerce." There is no question raised in regard to the regularity of the engagement of the Pittsburgh as the proof indicates that it is constantly used in dredging, 24 hours a day and seven days a week. This has been the usual and constant method of operation over the past five year period in the various locations in which the Pittsburgh was used.
In considering the meaning of the word "commerce," it should be observed that the General Assembly used the general word "commerce" without limitation. There are no qualifying words.
In Webster's New Twentieth Century Dictionary, Unabridged, 2d ed, 1964, "commerce" is defined as:
"1. An interchange of goods, wares, productions or property of any kind, between nations or individuals, either by barter or by purchase and sale; trade; traffic. Syn. barter, business, communication, dealing, exchange, intercourse, trade, traffic."
"Commercial" is defined as "1. Of or pertaining to commerce. * * * 3. Made or done for sale or profit."
In 15 C.J.S. Commerce § 1, at 383-84 (1967), the following appears:
"The question of what is commerce is to be approached both affirmatively and negatively, that is, from the points of view as to what it includes and what it excludes. While commerce includes trade, traffic, the purchase, sale, or exchange of commodities, and the transportation of persons or property, whether on land or water or through the air, according to various definitions of the term, and also, as indicated infra §§ 23, 26, according to judicial exposition apart from formal definitions, nevertheless commerce is broader than, and is not limited to, trade, traffic, transportation, or the purchase, sale, or exchange of goods or commodities."
*180 See also 15 Am.Jur.2d Commerce § 2 at 631-32 (1964).
It should also be observed that the word "commerce" is used in Article 1, Section 8 of the Federal Constitution in granting the power to the Congress: "To regulate Commerce with foreign Nations, and among the several States and with the Indian Tribes; * * *."
The word "commerce" has been broadly construed by the Courts, both State and Federal, and we must assume that the General Assembly in using the word "commerce" without qualification intended that it receive a similar construction by the Courts. Cf. Maryland-National Capital Park and Planning Comm'n v. Silkor Development Corp., 246 Md. 516, 524, 229 A.2d 135, 140 (1967); St. Joseph Hospital v. Quinn, 241 Md. 371, 379, 216 A.2d 732, 736 (1966).
In the Federal decisions, there is little doubt that the Pittsburgh was engaged in interstate commerce. As the Supreme Court of the United States stated in Mitchell v. C.W. Vollmer & Co., Inc., 349 U.S. 427, 429-30, 75 S.Ct. 860, 862, 99 L.Ed. 1196, 1200 (1955) a case involving the applicability of the Fair Labor Standards Act to employees working on construction of an embankment and concrete platform for a canal lock:
"Repair of facilities of interstate commerce is activity `in commerce' within the meaning of the Act as we held in Fitzgerald Construction Co. v. Pedersen, 324 U.S. 720, 65 S.Ct. 892, 89 L.Ed. 1316. And we think the work of improving existing facilities of interstate commerce, involved in the present case, falls in the same category."
See Overstreet v. North Shore Corp., 318 U.S. 125, 63 S.Ct. 494, 87 L.Ed. 656 (1943). See also Mitchell v. Emala & Associates, Inc., 274 F.2d 781 (4th Cir., 1960).
Dredges were specifically held to be engaged in interstate commerce in Walling v. Sternberg Dredging Co., 64 F. Supp. 758 (E.D. Mo. 1946), aff'd, 158 F.2d 678 (8th Cir.1946), and in Cuascut v. Standard Dredging Corp., 94 F. Supp. 197 (D. Puerto Rico 1950).
The evidence indicated conclusively that the Pittsburgh is used by a purely commercial corporation to earn a profit in *181 its operation as the fact that the owner corporation expended some $300,000 to make the Pittsburgh more competitive clearly indicates. The Pittsburgh is obviously not a pleasure craft, the operation of which is not connected with any profit or financial gain to its owner. See Guinness v. King County, 32 Wash.2d 503, 202 P.2d 737, 6 A.L.R.2d 1361 (1949), in which the Supreme Court of Washington held that a yacht, used solely for pleasure cruising and operating out of the Port of Seattle during World War II, was not engaged in "commerce" and the imposition of a personal property tax on the yacht by King County, Washington did not constitute an interference with "commerce." The yacht was held to have acquired a situs for local taxation in the State of Washington.
We cannot accept the result urged upon us by the Department and in which the Maryland Tax Court acquiesced as they have both seemingly added by construction to the legislative provision after the word "aircraft," the words "being propelled from place to place in the carriage of goods and/or passengers, or handling some commodity involved in trade." The General Assembly could have added these words, but the plain fact is that it chose not to add such qualifying language. Indeed, the legislative history of the legislation precludes such a construction as it seems clear to us that the legislative intent was to liberalize the language of the exemption by a progressive removal of restrictive language upon its applicability.
The original legislation on this subject appeared in the Laws of 1924, Chapter 264, which provided:
"All vessels of over five hundred (500) deadweight tons registered at any port in this State and owned by an American citizen, partnership or association, or by any corporation incorporated under the laws of the State of Maryland, regularly engaged in foreign or coastwise commerce, between any port in the State of Maryland as the port of origin and terminus of their respective voyages and any other port or ports beyond the limits of the Chesapeake Bay and its tributaries, are exempted from all taxation in this State for State or local purposes. * * *." (Emphasis supplied.)
*182 It will be observed that the exemption was limited to a vessel which began and terminated its voyage in Maryland.
Chapter 264 of the Laws of 1924 was amended by the Laws of Maryland 1929, Chapter 226, which reads as follows:
"Vessels of over five hundred (500) dead weight tons registered at any port in this State owned by American citizens or partnerships or by any domestic corporation regularly engaged in foreign or coastwise commerce between any port in the State of Maryland and any port or ports beyond the limits of the Chesapeake Bay and its tributaries, provided that the exemption granted by this sub-section shall end December 31, 1935." (Emphasis supplied.)
It will be noted that Chapter 226 of the Laws of 1929 broadened the exemption by eliminating the requirement that the vessel depart from and return to a Maryland port.
By the Laws of 1931, Chapter 425 the exemption was extended to "aircraft of over five (5) dead weight tons."
The Laws of 1941, Chapter 912, which enacted the exemption in its present form further liberalized the exemption and removed the restriction on the size of vessels, their registration in any port in Maryland, their ownership by an American citizen or "domestic corporation" and the language "between any port in the State of Maryland and any port or ports beyond the limits of the Chesapeake Bay and its tributaries" was also eliminated.
Although it is not necessary to review the legislative background of the present statutory provision in order to discover the meaning of the words used by the General Assembly inasmuch as, in our opinion, the words are clear and unambiguous, a consideration of this legislative background is helpful in indicating that the General Assembly did not intend the language used in Chapter 912 of the Act of 1941 to be construed otherwise than in accordance with its normal, broad meaning.
The State relies upon two maxims of statutory construction, i.e., (1) that tax exemptions are to be narrowly construed, and (2) that where the legislation is susceptible of two constructions, a long continued and unvarying construction applied by *183 the administrative officials administering the statute in question is strongly persuasive and should not be disregarded by the courts except for weighty reasons. These maxims are well established and often useful in proper cases, but they are not applicable here as we find no unclear or ambiguous language which needs to be construed, nor does the alternative construction urged upon us by the State appear to us to be a reasonable interpretation of the language of the statute. As Chief Judge Brune, for the Court, stated in Armco Steel Corp. v. State Tax Comm., 221 Md. 33, 40-41, 155 A.2d 678, 681 (1959):
"The usual rule in tax exemption cases is that the exemption is to be strictly construed, but it should not be so strictly construed as to defeat the intent of the enacting body. Suburban Propane Gas Corp. v. Tawes, 205 Md. 83, 106 A.2d 119; John McShain, Inc. v. Comptroller, 202 Md. 68, 95 A.2d 473; Shaughnessy v. Linguistic Society of America, 198 Md. 446, 84 A.2d 68; Clarke v. Union Trust Co. of D.C., 192 Md. 127, 63 A.2d 635. However, `strict construction does not require that an unreasonable or unusual meaning must be given to the words used in exemption statutes.' State Tax Commission v. Whitehall Foundation, Inc., 214 Md. 316, 320, 135 A.2d 298."
It is well settled that where the language of a statute is clear and unambiguous, an administrative interpretation contrary to that clear and unambiguous meaning will not be given effect by this Court. Department of Motor Vehicles v. Greyhound Corp., 247 Md. 662, 669, 234 A.2d 255, 258-59 (1967); Smith v. Higinbothom, 187 Md. 115, 132, 48 A.2d 754, 763 (1946).
The Maryland Tax Court in its opinion (adopted by the lower court as its opinion) relied upon the decision of the Supreme Court of Washington in North America Dredging Co. v. Taylor, 56 Wash. 565, 106 Pac. 162 (1910), in which it was held that the dredge in that case had established a tax situs in the State of Washington and was not a vessel "sailing from one port to another as a carrier of State, interstate or international traffic" and thus, according to the law of Washington then effective, taxable only in its State of domicile. The North American *184 Dredging Co. case was not concerned with any definition or construction of the word "commerce" and indeed, there was no question in regard to the interpretation of the Washington statute. In our opinion, reliance upon this case by the Maryland Tax Court was misplaced and it does not support the finding by that court that the Pittsburgh was not engaged in commerce within the meaning of that word as used in the Maryland statute.
(2)
Atlantic earnestly urges upon us that, in any event, if otherwise applicable, the tax in this case would be unconstitutional as an unapportioned tax upon an instrumentality of interstate commerce and prohibited by the commerce clause of the Federal Constitution and the cases construing that clause. Atlantic forcefully argues that under the decisions of the Supreme Court of the United States, a State may validly levy a tax upon an instrumentality of interstate commerce only if the State taxes on the basis of some fair apportionment formula reflecting the time the personal property is situated in or used in the taxing state, relying on Central Railroad Co. v. Pennsylvania, 370 U.S. 607, 82 S.Ct. 1297, 8 L.Ed.2d 720 (1962). Atlantic also points out that the presence of the risk of multiple taxation is sufficient to render invalid an unapportioned tax on an instrumentality of interstate commerce citing several Federal cases apparently establishing this principle. Atlantic's argument is persuasive, but, as we have indicated, we need not pass upon this interesting question in view of our agreement with Atlantic on its first point, i.e., that it is entitled to the exemption under the language of the statute itself. It is highly probable that the General Assembly used the word "commerce" without limitation and in its broad sense in order to avoid the constitutional conflict with the commerce clause of the Federal Constitution which would almost inevitably otherwise occur from the attempted imposition of an unapportioned tax. Our construction effectuates this policy.
Order reversed, the appellee to pay the costs.
NOTES
[1] It is to be observed that in the body of the legislation the word "commerce" is used without limitation, but in the headline of Section 9 (26) the words are "engaged in interstate commerce."
Although possibly of minimal importance in the present case, it should be pointed out that Code (1957), Article 1, Section 18 (1968 Repl. Vol.) provides: "The captions or headlines of the several sections of this Code which are printed in bold type, and the captions or headlines of the several subsections of this Code which are printed in italics or otherwise, are intended as mere catchwords to indicate the contents of the sections and subsections. They are not to be deemed or taken as titles of the sections and subsections, or any part thereof; and, unless expressly so provided, they shall not be so deemed or taken when any of such sections and subsections, including the captions or headlines, are amended or reenacted."
[2] There is little doubt that this concession was entirely proper in view of the unanimity of the authorities holding that dredges and barges are vessels. See Summerlin v. Massman Const. Co., 199 F.2d 715 (4th Cir.1952); Maryland Casualty Co. v. Lawson, 94 F.2d 190 (5th Cir.1938); Kibadeaux v. Standard Dredging Co., 81 F.2d 670 (5th Cir.1936); Butler v. Ellis, 45 F.2d 951, 955 (4th Cir.1930); The Alligator, 161 Fed. 37 (3rd Cir.1908); Early v. American Dredging Co., 101 F. Supp. 393 (E.D. Pa., 1951); and Charles Barnes Co. v. One Dredge Boat, 169 Fed. 895 (E.D. Ky., 1909). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559496/ | 796 F.Supp. 1456 (1992)
Larry D. RICHARDS, Plaintiff,
v.
UNITED STATES of America, Defendant.
No. 91-C-1304A.
United States District Court, D. Utah, C.D.
June 5, 1992.
*1457 Loni F. DeLand, Salt Lake City, Utah, for plaintiff.
Wayne T. Dance, Asst. U.S. Atty., Salt Lake City, Utah, for defendant.
ORDER GRANTING MOTION UNDER 28 U.S.C. § 2255
ALDON J. ANDERSON, Senior District Judge.
Presently before the court is plaintiff's motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255. On August 10, 1990, based on his plea of guilty to one count of possession with intent to manufacture methamphetamine in violation of 21 U.S.C. § 841(a)(1),[1] plaintiff was sentenced to the custody of the Bureau of Prisons for one hundred eighty-eight (188) months. Plaintiff currently is incarcerated at El Reno, Oklahoma.
The material facts underlying plaintiff's arrest and conviction are as follows. At the time of his arrest, plaintiff was in possession of approximately 8.5 gallons of a liquid mixture in which a detectable amount of methamphetamine was suspended. Statement of Defendant in Advance of Plea of Guilty, Case No. 89-CR-168A, Doc. No. 67 at 5. Plaintiff stipulated that the weight of the liquid mixture was thirty-two kilograms. Id. The court sentenced plaintiff according to 21 U.S.C. § 841(b)(1)(A)(viii) and U.S.S.G. § 2D1.1. Section 841(b)(1)(A)(viii) provides that a person whose violation of section 841(a) involves "100 grams or more of methamphetamine ... or 1 kilogram or more of a mixture or substance containing a detectable amount of methamphetamine" shall be subject to a minimum mandatory sentence of ten years, a fine of up to $4,000,000, and supervised release of at least five years. Section 2D1.1 of the Sentencing Guidelines requires that a person convicted of possessing with intent to manufacture a controlled substance in amounts of "[a]t least 30 KG but less than 100 KG of Methamphetamine, or at least 3 KG but less than 10 KG of Pure Methamphetamine" shall be subject to a base offense level of 38. U.S.S.G. § 2D1.1(c)(3).[2]
*1458 Of crucial import to this case is the footnote to section 2D1.1(c) of the sentencing guidelines which provides, in relevant part, that "[u]nless otherwise specified, the weight of a controlled substance set forth in the table refers to the entire weight of any mixture or substance containing a detectable amount of the controlled substance." U.S.S.G. § 2D1.1(c) n. * (emphasis added). Despite the agreement of the government and plaintiff that the mixture here involved was not pure methamphetamine base and, in fact, was diluted by other chemicals, the court felt compelled by the above-referenced footnote to sentence plaintiff as if the entire liquid mixture were methamphetamine base.[3] Accordingly, the court applied the base offense level appropriate to the entire weight of the mixture in arriving at its sentence of 188 months.
On December 26, 1991, plaintiff filed the present motion to vacate, set aside, or correct his sentence. The basis of plaintiff's motion is that, in sentencing him, the court erroneously applied the sentencing guidelines. Specifically, plaintiff alleges that the court erred in its calculation of his base offense level because it used the total weight of the liquid mixture containing methamphetamine base. Plaintiff alleges that the 8.5 gallons of liquid mixture in his possession contained only "traceable" amounts of methamphetamine, that the mixture, as of the time of the seizure, was not in marketable, digestible, ingestible, or otherwise usable form, and that the mixture was a toxic by-product left over from the methamphetamine manufacturing process and of no market worth. Plaintiff argues that the court should have used an "extraction" method whereby the actual amount of marketable methamphetamine should have been removed from the mixture and that amount should have been used as the basis for calculating his base offense level.
The government responds to Plaintiff's motion with four arguments: (1) that plaintiff waived his argument because he failed to pursue it on direct appeal; (2) that plaintiff waived his argument by not including it in a previous post-sentence motion; (3) that plaintiff waived the argument by failing to lodge an objection with the court at the time of sentencing; and (4) that the court properly sentenced plaintiff under the applicable legal rules.[4] Because the court believes that its application of the sentencing guidelines and the relevant legal rules was erroneous in light of subsequent cases construing those rules, it grants plaintiff's motion.
The government relies on United States v. Dorrough, 927 F.2d 498 (10th Cir.1991), and United States v. Callihan, 915 F.2d 1462 (10th Cir.1990), for the proposition that, when calculating the base offense level for a crime involving possession of a mixture in which a detectable amount of a controlled substance is present, the total weight of the mixture is the proper basis for applying the sentencing guidelines. Both Dorrough and Callihan stem from the same factual circumstances. In Callihan, the defendant entered a plea of guilty *1459 to conspiring to manufacture, possess with intent to distribute, and distribute amphetamine. Callihan, 915 F.2d at 1463. At the time of the defendant's arrest, 94 kilograms of a chemical mixture containing phenalytic acid, sodium acetate, acetic anhydride, and phenyl-2-propanone ("P-2-P") were seized. Id. When heated, the chemical mixture seized would have produced more P-2-P, a controlled substance and a precursor of amphetamine. However, at the time of the seizure, only 2.95 kilograms of P-2-P were actually present in the mixture. Id. The court literally construed the footnote to section 2D1.1 and held that the district court did not err in basing the defendant's sentence on the weight of the entire 94 kilogram mixture rather than on the 2.95 kilograms of P-2-P actually present. Id. The court explained that "[t]he footnote meant what it said: that the scale weight of a mixture or compound containing a controlled substance is the entire amount of the mixture or compound." Id. (citations omitted).
In Dorrough, the defendant was convicted of attempting to manufacture P-2-P and amphetamine and for possession of P-2-P with intent to manufacture amphetamine. Dorrough, 927 F.2d at 499. The base offense level for defendant's sentence was based on the same 94 kilogram mixture as was involved in Callihan. Id. at 502. Rather than arguing that the base offense level should be based on the actual amount of P-2-P present, the defendant argued that the base offense level should be based on the amount of P-2-P that could have been produced from the seized chemicals. Id. The defendant specifically argued that the amount of waste material in the mixture should not have been counted for purposes of sentencing. Id. The court rejected the defendant's argument and affirmed the sentence relying on both the footnote to section 2D1.1 of the guidelines and Callihan. Id.
It thus appears that plaintiff's argument that his sentencing should not have been based on the entire amount of the seized mixture is without legal support in this circuit. However, after both Callihan and Dorrough were rendered, the United States Supreme Court decided Chapman v. United States, ___ U.S. ___, 111 S.Ct. 1919, 114 L.Ed.2d 524 (1991). There the Court held that, under 21 U.S.C. § 841(b)(1)(B)(v),[5] the weight of blotter paper on which lysergic acid diethylamide ("LSD") was applied and which acted as a carrier medium is to be included in the weight of the controlled substance for purposes of sentencing. Id. 111 S.Ct. at 1925-26. Section 841(b)(1)(B)(v) refers to "1 gram or more of a mixture or substance containing a detectable amount of [LSD]." The Court held that the combination of blotter paper and LSD formed a mixture or substance and therefore the entire weight of the mixture should be considered under section 841(b). Id. at 1926. The Court noted that
[t]he LSD is diffused among the fibers of the paper. Like heroin or cocaine mixed with cutting agents, the LSD cannot be distinguished from the blotter paper, nor easily separated from it. Like cutting agents used with other drugs that are ingested, the blotter paper, gel, or sugar cube carrying LSD can be and often is ingested with the drug.
Id.
At first blush, Chapman appears to support the government's reliance on Callihan and Dorrough. In Chapman, however, the Court explained the legislative intent underlying 21 U.S.C. § 841:
The current penalties for LSD distribution originated in the Anti-Drug Abuse Act of 1986, Pub.L. 99-570, 100 Stat. 3207 (1986). Congress adopted a "market-oriented" approach to punishing drug trafficking, under which the total quantity of what is distributed, rather than the amount of pure drug involved, is used to determine the length of the sentence. H.R.Rep. No. 99-845, pt. 1, *1460 pp. 11-12, 17 (1986). To implement that principle, Congress set mandatory minimum sentences corresponding to the weight of a "mixture or substance containing a detectable amount of" the various controlled substances, including LSD. 21 U.S.C. §§ 841(b)(1)(A)(i)-(viii) and (B)(i)-(viii). It intended the penalties for drug trafficking to be graduated according to the weight of the drugs in whatever form they were found cut or uncut, pure or impure, ready for wholesale or ready for distribution at the retail level. Congress did not want to punish retail traffickers less severely, even though they deal in smaller quantities of the pure drug, because such traffickers keep the street markets going. H.R.Rep. No. 99-845, supra, at pt. 1, p. 12.
Id. at 1925 (emphasis added).
Since the Supreme Court decided Chapman, the Sixth, Eleventh and Second Circuits have seized upon the Court's marketbased approach in resolving issues under section 2D1.1 of the sentencing guidelines. In United States v. Rolande-Gabriel, 938 F.2d 1231 (11th Cir.1991), the Eleventh Circuit held that the weight of an unusable, non-drug solution in which pure cocaine and a cutting agent were suspended was not properly included with the weight of the cocaine and cutting agent for purposes of sentencing. Id. at 1238. Rolande-Gabriel involved 241.6 grams of a liquid mixture in which 7.2 grams of pure cocaine and 65 grams of a cocaine cutting agent were dissolved. Id. at 1233. At sentencing, defendant's base offense level was calculated using the gross weight of the solution. Id. In holding that the district court should have based the defendant's sentence only on the weight of the pure cocaine and the cutting agent, the court noted that "the inclusion of the weight of unusable mixtures in the determination of sentences under section 2D1.1 leads to widely divergent sentences for conduct of relatively equal severity." Id. at 1235. The court discussed Chapman at length, and although it relied on the "market-oriented" approach of Chapman, it distinguished the facts of Chapman as follows:
In Chapman, the LSD and other drugs in carrier mediums considered by the Court were usable, consumable, and ready for wholesale or retail distribution when placed on standard carrier mediums. ...
While LSD is ready for sale, use, or consumption when it is placed on standard carrier mediums ... the cocaine mixture in this case was obviously unusable while mixed with the liquid waste material. Prior to subjecting the contents of [the defendant's] bags to a chemical extraction process, the cocaine mixture was not ready for retail at the street-level or for wholesale ... The Court stated the inclusion of the weight of standard carrier mediums is rational because standard carrier mediums facilitate the use, marketing and access of LSD and other drugs.... The liquid waste in this case, however, did not accomplish any of these purposes. The inclusion [in] the carrier medium of unusable liquid waste in this case for sentencing is irrational.
Id. at 1237. Notwithstanding this factual distinction, the court harmonized its conclusion with Chapman:
The distinction we recognize is consistent with the Supreme Court's analysis in Chapman. The entire weight of drug mixtures which are usable in the chain of distribution should be considered in determining a defendant's sentence. This case does not conflict with that proposition because [the defendant's] sentence will be based on the gross weight of the usable drug mixture in this case.
Id. (emphasis in original).
Similarly, in United States v. Jennings, 945 F.2d 129 (6th Cir.1991), the Sixth Circuit relied on the market approach articulated in Chapman to conclude that a district court erred in basing a sentence on the entire 4180 grams of a mixture only 1.67% of which was methamphetamine. Id. at 136. The evidence in Jennings consisted of a mixture of chemicals that, at the time of seizure, was "cooking" and that, if allowed to continue cooking, would have reacted to form pure methamphetamine. Id. *1461 at 134. The court remanded the case for resentencing with the instruction that the district court rely only on the amount of methamphetamine which could have been produced from the seized chemicals. Id. at 137. The court agreed that, ordinarily, the government may assume that the gross weight of a mixture containing detectable amounts of a controlled substance should be included for sentencing. Id. at 136. Such an assumption would not, however, be warranted where the subject mixture "contained a small amount of methamphetamine and poisonous by-products not intended for ingestion." Id. (emphasis in original). The court applied Chapman by explaining:
By diluting the drug with some other substance, the distributor is increasing the amount of the drug he has available to sell to consumers and therefore is appropriately subject to punishment for the entire weight of the mixture. Such is clearly not the case here. If the Crockpot contained only a small amount of methamphetamine mixed together with poisonous unreacted chemicals and by-products, there would have been no possibility that the mixture could be distributed to consumers. At this stage of the manufacturing process, the defendants were not attempting to increase the amount of methamphetamine they had available to sell by adding a dilutant, cutting agent, or carrier medium, but rather were attempting to distill methamphetamine from the otherwise uningestible byproducts of its manufacture.
Id. at 137.
Finally, and most recently, in United States v. Acosta, 963 F.2d 551 (2d Cir. 1992), the Second Circuit held that the weight of six bottles of creme liqueur in which 2.245 kilograms of pure cocaine were dissolved should not be included in the weight for calculating the defendant's base offense level. Id. at 557. In Acosta, the gross weight of the liqueur-cocaine mixture was 4.662 kilograms, and the district court, relying on Chapman, used that weight for calculating the base offense level. Id. at 552. The court acknowledged the "market" approach of Chapman, but noted that
[i]n stark contrast to the LSD in Chapman, the "mixture" here was useless because it was not ready for distribution at either the wholesale or the retail level. It could not be ingested or mixed with cutting agents unless and until the cocaine was distilled from the creme liqueur. After distillation, it could be sold at the wholesale level or diluted with cutting agents and sold at the retail level. Only at that point, could Congress' rationale for penalizing a defendant with the entire amount of a "mixture" sensibly apply.
Id. at 555. Accordingly, the court reversed the imposition of the defendant's sentence and remanded for resentencing. Id. at 557.
The rule that emerges from the court's review of the decisions in Chapman, Rolande-Gabriel, Jennings, and Acosta is that, when a detectable amount of a controlled substance is found in a mixture containing unusable, uningestible or poisonous materials that cannot be classified as standard carrier mediums, and the entire mixture is rendered unmarketable because of the contents of the mixture, only the weight of the controlled substance and any standard carrier medium which enhances or facilitates the marketability of the controlled substance should be used for purposes of sentencing.
This position has not been unanimously adopted by the courts that have considered it. A brief review of some of those cases and the reasons proffered for rejecting the rule of Jennings, Rolande-Gabriel, and Acosta supports this court's application of that rule. The First Circuit has rejected the position of the Sixth, Eleventh and Second Circuits in a series of post-Chapman cases. In United States v. Mahecha-Onofre, 936 F.2d 623 (1st Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 648, 116 L.Ed.2d 665 (1991), the defendant was found in possession of two suitcases that were manufactured of an acrylic material into which 2.5 kilograms of cocaine were chemically bonded. Id. at 624. The court held that the entire weight of the suitcases, less the weight of the metal components, was the appropriate sentencing consideration *1462 under U.S.S.G. § 2D1.1 and 21 U.S.C. § 841(b)(1)(A). Id. at 626. The court concluded that Chapman dictated that the weight of the suitcases be included for sentencing purposes, and discounted the factual dissimilarities of the two cases:
Unlike blotter paper or cutting agents, the suitcase material obviously cannot be consumed; and the cocaine must be separated from the suitcase material before use. We do not believe, however, that this fact alone can make a difference to the outcome.
Id. Thus, under the First Circuit's analysis, whenever a traceable amount of a controlled substance is present in a "mixture", regardless of the ingestibility, and hence the marketability of the substance, the entire weight of the mixture is the basis for sentencing. This position has been followed by the First Circuit in subsequent cases. See United States v. Restrepo-Contreras, 942 F.2d 96, 99 (1st Cir.1991) (entire weight of statues made of beeswaxcocaine mixture properly included for calculation of base offense level); United States v. Lopez-Gil, 965 F.2d 1124, 1127-28 (1st Cir.1992) (weight of entire suitcase manufactured of fiberglass-cocaine mixture correctly considered for sentencing). In Lopez-Gil, the court specifically considered the rule emerging from Jennings and Rolande-Gabriel only to conclude that
[w]e recognize that if this case were before the Sixth or Eleventh Circuit today, the result would be different. We, however, follow First Circuit precedent and affirm the district court's use of the suitcases' weight in calculating [the defendant's] sentence.
Lopez-Gil at 1129. The dissenting opinion in Lopez-Gil questioned the First Circuit's interpretation of Chapman:
The cocaine was not usable as long as it was mixed with the fiberglass suitcase material. It could not be swallowed, snorted or otherwise absorbed into the body. Further, the record does not show that there was any likelihood that the fiberglass and cocaine mixture would be sold or that it was even marketable on the retail or wholesale cocaine market, either prior to or after the chemical extraction by [a] DEA chemist.... it makes no physical or legal sense to permit non-usable carrier mediums to play such a determining role in denying a person of his liberty.
Id. at 1135 (Brown, J., dissenting).
Similarly, on virtually identical facts as are here involved, the Fifth Circuit held that the entire weight of a waste water solution containing a trace amount of methamphetamine should be used for sentencing under U.S.S.G. § 2D1.1. United States v. Walker, 960 F.2d 409, 412-13 (5th Cir. 1992). In Walker, the court distinguished Chapman because the facts of Chapman involved LSD and blotter paper and concluded that Chapman was not binding in cases involving liquid solutions. Id., at 412. The court refused to follow Jennings and Rolande-Gabriel because the Fifth Circuit had previously decided cases[6] holding that the entire weight of waste water containing methamphetamine should be included in sentencing, and the Walker court felt compelled to follow that precedent. Id. 412 n. 5.
With due respect to the First and Fifth Circuits, the court is of the opinion that the better rule, and the rule that would be adopted by the Tenth Circuit were the question before it, is that adopted by the Second, Sixth and Eleventh Circuits. The court disagrees with the First Circuit that the ingestibility of the target mixture is irrelevant to determining marketability, which, under Chapman is the crucial factor. Although a mixture containing a controlled substance does not necessarily need to be ingestible to be marketable, if the non-drug portion of the mixture renders the mixture uningestible or unusable without a complicated or obscure chemical or mechanical process, the mixture is not *1463 marketable as that term appears to have been used in Chapman.
Moreover, unlike the First Circuit in Lopez-Gil and the Fifth Circuit in Walker, this court is not faced with precedent which compels a result other than that reached.[7]Dorrough and Callihan involved a precursor chemical presumably having the potential to produce commercially significant amounts of amphetamine. The mixture involved in the present case, however, is alleged to be waste water having only trace amounts of methamphetamine and no apparent commercial worth. More importantly, whereas a mixture containing P-2-P might be marketable even in its precursor state, the waste water found in plaintiff's possession would be unmarketable because of both the toxicity of the mixture and the relatively insignificant amounts of methamphetamine present.
Finally, the court agrees with the dissent in Lopez-Gil that the rule requiring drug-related sentences to be based on the gross weight of any mixture containing even a trace amount of a controlled substance will produce inconsistent, arbitrary and inequitable results. The court need look no further than the present facts to envision the case where a truly insignificant amount of controlled substance is present in a large amount of unusable, non-drug material which does not act as a viable carrier medium to enhance marketability. In such cases, under the rule advocated by the government, the defendant will invariably be sentenced according to the weight of the entire mixture. Such a result is arbitrary because it is in no way proportional to criminal culpability, the touchstone of any sentencing scheme. Such a result is inequitable to the defendant who frequently will be punished more severely than other persons who introduce more commercially significant amounts of drugs into society. Finally, such a result is counterproductive because it requires incarceration, at great public expense, of persons whose criminal conduct does not warrant such severe treatment.
Accordingly, the court believes that, in light of Chapman and the cases applying it, the authority relied upon by the government no longer compels the sentence rendered by the court in this case, and will not defeat plaintiff's motion to set that sentence aside. Plaintiff alleges in his motion that the mixture seized at the time of his arrest was "waste water" or the worthless, uningestible and unmarketable by-product of methamphetamine manufacturing. He suggests that the actual amount of methamphetamine present in the mixture was minimal and that his sentence should be based on that amount. To the extent that the seized mixture actually was what plaintiff alleges, he is entitled to have his sentence set aside. Plaintiff's motion in that respect is therefore granted. Plaintiff will be resentenced at a time to be set after consultation with the plaintiff and the government. Pursuant to that resentencing, the court will conduct an evidentiary hearing at which both plaintiff and the government will be invited to present evidence regarding the precise nature and contents of the mixture seized at the time of plaintiff's arrest. For purposes of resentencing, counsel who represented plaintiff at his original sentencing is hereby reappointed.
IT IS SO ORDERED, ADJUDGED AND DECREED.
NOTES
[1] Section 841(a)(1) provides:
Except as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally
(1) to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute or dispense, a controlled substance.
21 U.S.C. § 841(a).
[2] In his Statement in Advance of Plea of Guilty, plaintiff stipulated that his conduct involved 32 kilograms of a mixture containing methamphetamine base and that such an amount would subject him to a base offense level of 36. Case No. 89-CR-168A Doc. No. 67 at 5.
However, under the guidelines, in order to qualify for a base offense level of 36, the offense would had to have involved "[a]t least 10 KG but less than 30 KG of Methamphetamine, or at least 1 KG but less than 3 KG of Pure Methamphetamine." U.S.S.G. § 2D1.1(c)(4). Because the weight of the mixture involved in the present case exceeded 30 kilograms, the base offense level of 36 was erroneously applied. In light of the court's disposition of plaintiff's motion, it need not and does not address this error.
[3] In addition to the footnote to section 2D1.1, the court was guided in its sentencing by the Tenth Circuit cases relied upon by the government in opposition to the present motion and discussed hereafter. See United States v. Dorrough, 927 F.2d 498, 502 (10th Cir.1991); United States v. Callihan, 915 F.2d 1462, 1463 (10th Cir.1990).
[4] The court notes that, of the four arguments asserted by the government in opposition to plaintiff's motion, three are procedural waiver arguments based on plaintiff's failure to raise the issue here presented at the time of sentencing, on direct appeal, or on a previous section 2255 motion.
The court is unpersuaded by these arguments in light of the fact that the cases relied on by the court and discussed herein had not been decided at the time of defendant's sentencing and there would have been no viable legal basis for plaintiff's argument. Plaintiff did not, therefore, waive his opportunity to present his argument. Accordingly, the court will address the government's response only as it relates to the substantive issue presented.
[5] This section provides that a person convicted of a drug crime involving "1 gram or more of a mixture or substance containing a detectable amount of lysergic acid diethylamide (LSD)" shall be subject to a minimum mandatory sentence of 5 years, a fine of up to $2,000,000, and supervised release of at least 4 years. 21 U.S.C. § 841(b)(1)(B).
[6] The court cited three previous cases. Walker at 412 (citing United States v. Mueller, 902 F.2d 336 (5th Cir.1990); United States v. Butler, 895 F.2d 1016 (5th Cir.1989), cert. denied, ___ U.S. ___, 111 S.Ct. 82, 112 L.Ed.2d 54 (1990); United States v. Baker, 883 F.2d 13 (5th Cir.), cert. denied, 493 U.S. 983, 110 S.Ct. 517, 107 L.Ed.2d 518 (1989)).
[7] But cf. United States v. Killion, 788 F.Supp. 1165 (D.Kan.1992). Killion involved a conviction for manufacturing P-2-P. The defendant was sentenced on the basis of the entire weight of a mixture which included only trace amounts of P-2-P. Id. at 1166. On the defendant's section 2255 motion, the court relied on Dorrough and Callihan to conclude that the entire weight of the mixture should be used for sentencing. Id. at 1166. The court considered, but was unwilling to apply Rolande-Gabriel because of "the direct Tenth Circuit pronouncements, which hold definitively that the waste products of the P-2-P manufacturing process are includable in determining a defendant's sentence." Id. at 1166. The court did, however, acknowledge that "the reasoning in Rolande-Gabriel has some force." Id. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858073/ | Hardeman v. State
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-93-363-CR
DWAYNE HARDEMAN,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 167TH JUDICIAL DISTRICT
NO. 0931370, HONORABLE TOM BLACKWELL, JUDGE PRESIDING
A jury convicted Dwayne Hardeman, appellant, of aggravated assault. Tex. Penal
Code Ann. §§ 22.01(a), 22.02(a)(4) (West 1989 & Supp. 1994). The trial judge assessed
punishment, enhanced by a prior conviction, at five years' imprisonment. In one point of error,
appellant asserts that the trial court erred in admitting evidence of two prior misdemeanor assault
convictions for purposes of impeachment. We will affirm the conviction.
Appellant and the complainant had been involved in a sporadic and volatile
relationship for four years before the events that led to appellant's conviction. On the evening of
September 6, 1992, the complainant and two female friends went to a nightclub in Austin. At
approximately 2:00 a.m. the next morning, appellant arrived at the same club and saw the
complainant and a male leaving the club together. Appellant approached them and demanded to
know why the complainant was with another man. After explaining that he was only a friend and
was simply walking the complainant to her car, the other male departed. Appellant and the
complainant began arguing about their relationship. The argument escalated and as the
complainant began to walk away, appellant put a gun to her side and "forced [the complainant]
into her car." For the next four hours, appellant forced the complainant to drive them to various
locations around Austin, during which time he physically assaulted her and threatened her with
the gun. Ultimately, after returning appellant to his mother's home, the complainant reported the
incident to the police.
Appellant was later arrested and charged with aggravated kidnapping and
aggravated assault of the complainant. During the ensuing three-day jury trial, appellant took the
stand and testified in his own behalf. At the beginning of the State's cross-examination of
appellant, the prosecutor indicated that she intended to introduce two prior convictions of
appellant for misdemeanor assault against the complainant as impeaching evidence under rule 609
of the Texas Rules of Criminal Evidence. Over appellant's objection, the trial court concluded
that, pursuant to the requirements of rule 609, a misdemeanor assault by a man against a woman
is a crime involving moral turpitude and is therefore admissible for impeachment. The prosecutor
was permitted, therefore, to introduce evidence that appellant had previously been convicted of
two class "A" misdemeanors for assault against the complainant. The jury found appellant guilty
of aggravated assault. Upon a plea of "true" to an enhancement paragraph alleging a prior felony
conviction for possession of a controlled substance, the trial judge assessed punishment at five
years' imprisonment.
On appeal, appellant's sole point of error is that the two misdemeanor assault
convictions admitted into evidence were not crimes involving moral turpitude and therefore were
not admissible for impeachment under rule 609. Rule 609(a) states:
For the purpose of attacking the credibility of a witness, evidence that he has been
convicted of a crime shall be admitted . . . only if the crime was a felony or
involved moral turpitude, regardless of punishment, and the court determines that
the probative value of admitting this evidence outweighs its prejudicial effect to a
party.
Tex. R. Crim. Evid. 609(a) (emphasis added).
"Moral turpitude" has been defined as "[t]he quality of a crime involving grave
infringement of the moral sentiment of the community as distinguished from statutory mala
prohibita." Black's Law Dictionary 1008-09 (6th ed. 1990) (citing People v. Ferguson, 286
N.Y.S.2d 976, 981 (N.Y. Sup. Ct. 1968)); see also Muniz v. State, 575 S.W.2d 408, 411 (Tex.
Civ. App.Corpus Christi 1978, writ ref'd n.r.e.). The Court of Criminal Appeals has
considered various situations in determining whether a given offense is one that involves moral
turpitude. See, e.g., Holgin v. State, 480 S.W.2d 405 (Tex. Crim. App. 1972) (prostitution
involves moral turpitude); Stephens v. State, 417 S.W.2d 286 (Tex. Crim. App. 1967) (driving
while intoxicated does not involve moral turpitude); Bensaw v. State, 88 S.W.2d 495 (Tex. Crim.
App. 1935) (theft involves moral turpitude); Sherman v. State, 62 S.W.2d 146 (Tex. Crim. App.
1933) (swindling involves moral turpitude); Garrison v. State, 252 S.W. 511 (Tex. Crim. App.
1923) (drunkenness in a public place does not involve moral turpitude); Miller v. State, 150 S.W.
635 (Tex. Crim. App. 1912) (gambling does not involve moral turpitude); Kemper v. State, 138
S.W. 1025 (Tex. Crim. App. 1911) (simple assault does not involve moral turpitude).
Several cases have addressed whether a misdemeanor assault by a man against a
woman is an offense involving moral turpitude. First is a series of cases in which the Court of
Criminal Appeals held that a misdemeanor assault by a man against his wife involves moral
turpitude. See Lloyd v. State, 204 S.W.2d 633, 634 (Tex. Crim. App. 1947); Stewart v. State,
272 S.W. 202, 203 (Tex. Crim. App. 1925); Curtis v. State, 81 S.W. 29, 30 (Tex. Crim. App.
1904); see also Crawford v. State, 412 S.W.2d 57, 59 (Tex. Crim. App. 1967).
Next is a series of cases involving assaults by a man against a woman not his wife.
The first case of interest in this group is Dempsey v. State, 266 S.W.2d 875 (Tex. Crim. App.
1954). During cross-examination of the defendant, the prosecutor introduced evidence of the
defendant's prior conviction for aggravated assault against a woman who was not his wife. (1)
Dempsey, 266 S.W.2d at 877. The trial court also erroneously allowed other evidence of
extraneous offenses to be admitted. In addressing the propriety of admitting evidence regarding
the assault conviction, the court stated that "this court has not held that the offense of aggravated
assault is an offense involving moral turpitude because committed upon a female. We have held
that an aggravated assault by an adult male upon his wife involves moral turpitude." Id. The
court went on to conclude that "[t]he error in admitting the foregoing testimony as to prior
misconduct, charges and convictions of appellant, and the details thereof, requires that the
conviction be set aside." Id. at 878. Thus, the court declined to hold misdemeanor assault by a
man against a woman who was not his wife to be an offense involving moral turpitude. It
appears, however, that this holding was not necessary to the court's decision, because the trial
court's other errors would almost certainly have resulted in a reversal of the conviction anyway.
Sixteen years after Dempsey the issue was mentioned in Valdez v. State, 450
S.W.2d 624 (Tex. Crim. App. 1970). The issue on appeal was the propriety of defense counsel's
failure to introduce two prior convictions of aggravated assault (not shown to be on a female) to
impeach the injured party. Id. at 625. In concluding that counsel's failure to offer the prior
convictions had not been an error, the court stated that "the prior arrests and convictions for
aggravated assault were not available for impeachment . . . . Aggravated assault (not committed
on a female) is not a misdemeanor involving moral turpitude . . . ." Id. (emphasis added).
Next, in a footnote in a 1972 opinion, the court again observed that "aggravated
assault, not committed on a female, is not a misdemeanor involving moral turpitude." Knox v.
State, 487 S.W.2d 322, 326 n.2 (Tex. Crim. App. 1972) (emphasis added).
In 1976, the Court of Criminal Appeals again addressed the issue in Trippell v.
State, 535 S.W.2d 178 (Tex. Crim. App. 1976). In Trippell the witness had previously pleaded
guilty to the offense of misdemeanor aggravated assault on a female. Id. at 180. He had received
one year's probation, which had been completed by the time of the defendant's trial. The relevant
statute at that time, article 38.29 of the Code of Criminal Procedure, provided that such evidence
could not be used for the purpose of impeachment "unless . . . such person has been placed on
probation and the period of probation has not expired." Act of May 27, 1965, 59th Leg., R.S.,
ch. 722, § 1, 1965 Tex. Gen. Laws 317, 471 (Tex. Code Crim. Proc. art. 38.29, since deemed
repealed by Tex. R. Crim. Evid. 609). In concluding that the assault conviction was not
admissible for impeachment, the court stated that "[t]he offense of aggravated assault on a female
is a misdemeanor involving moral turpitude, but the witness had completed his probation at the
time of the trial." Trippell, 535 S.W.2d at 180 (emphasis added).
Although the Court of Criminal Appeals has not addressed whether a misdemeanor
assault by a man against a woman is a crime involving moral turpitude since the 1973 Penal Code
was enacted, two courts of appeals have been presented with the issue. In Tenery v. State, 680
S.W.2d 629 (Tex.App.Corpus Christi 1984, pet. ref'd), the defendant complained on appeal that
the trial court had erred in refusing to allow him to establish that a state's witness had been fined
in 1976 for misdemeanor assault on a woman. Unfortunately, the court's opinion is of little help
in resolving the question whether a misdemeanor assault by a man against a woman is an offense
involving moral turpitude. The court concluded:
The offense of aggravated assault on a female is a misdemeanor involving moral
turpitude. Trippell v. State, 535 S.W.2d 178 (Tex.Crim.App. 1976). However,
in the present case, there was no evidence that the assault charges against [the
witness] back in 1976 amounted to an aggravated assault. More importantly, even
assuming the offense in question was shown to be one involving moral turpitude,
the testimony elicited did not show that a final conviction had resulted.
Tenery, 680 S.W.2d at 639. Because the 1973 Penal Code classified aggravated assault as a
felony, the Tenery court's consideration of whether the assault in question was aggravated was
irrelevant to the question of whether misdemeanor assault on a woman involves moral turpitude.
All prior case law arose when (1) aggravated assault was a misdemeanor and (2) any assault by
a man against a woman was, by definition, aggravated assault.
Most recently, the issue was briefly considered in Patterson v. State, 783 S.W.2d
268 (Tex. App.Houston [14th Dist.] 1989, pet. ref'd), where the court noted that "misdemeanor
assaultive offenses which do not involve violence against women are not crimes involving moral
turpitude." Id. at 271 (citing Knox, 487 S.W.2d 322, and Valdez, 450 S.W.2d 624).
We believe an assault by a man against a woman is generally regarded by the
members of our society as more morally culpable than some other types of assaultive crimes.
Holding evidence of such a crime to be admissible for impeachment under rule 609 does not,
therefore, offend traditional notions of "moral turpitude." Although the court in Dempsey
declined to label an assault by a man against a woman as an offense involving moral turpitude,
we do not regard Dempsey as controlling, for two reasons: (1) the statements in Dempsey were
dicta; and (2) the five opinions that have addressed the issue since Dempsey, including three by
the Court of Criminal Appeals, have completely disregarded the distinction made by the Dempsey
court between assault by a man against his wife and assault by a man against a woman not his
wife. Although none of the five subsequent cases is completely dispositive of the question, all
reflect the view that a misdemeanor assault by a man against a woman is an offense involving
moral turpitude.
We hold, therefore, that a conviction for misdemeanor assault, as defined by Penal
Code § 22.01, by a man against a woman is a crime involving moral turpitude and therefore is
admissible as impeaching evidence under rule 609 of the Texas Rules of Criminal Evidence.
In addition, there is a second basis on which appellant's conviction must be upheld.
During cross-examination of the complainant, defense counsel questioned her about the numerous
physical fights that she and appellant had during their relationship, apparently attempting to
establish that the complainant was just as much the aggressor as appellant:
Q (by defense counsel): You had a bunch of fights during the time you all
were together?
A (by the complainant): Yes.
Q: You fought, physically fought?
A: Uh-huh.
Q: Both of you?
A: I wouldn't say both because there's no way that I could overpower him.
Q: But he's a bit bigger than you and you might not be able to beat him up, but
that won't prevent you from punching him or hitting him or scratching him?
A: That is correct.
Q: And you did do that?
A: Yes, I did, to defend myself.
Defense counsel later established that the complainant had once threatened in a letter to kill
appellant.
We hold that by eliciting evidence that the complainant might have been the
aggressor during their stormy relationship, appellant "opened the door" for the State to present
evidence refuting that implication. See Lucas v. State, 791 S.W.2d 35, 53 (Tex. Crim. App.
1989). Thus, the trial court did not err in admitting evidence of appellant's prior convictions for
misdemeanor assault against the complainant.
Accordingly, we overrule appellant's sole point of error and affirm the conviction.
J. Woodfin Jones, Justice
Before Justices Powers, Jones and Kidd
Affirmed
Filed: December 29, 1993
Publish
1. Before the revision of the Penal Code in 1973, aggravated assault was a misdemeanor.
Moreover, the 1925 Penal Code stated that "an assault or battery becomes aggravated when
committed . . . by an adult male upon the person of a female." See Act of May 20, 1971,
62nd Leg., R.S., ch. 911, § 2, 1971 Tex. Gen. Laws 2808, 2809 (Tex. Penal Code art. 1147,
since repealed and recodified at Tex. Penal Code Ann. §§ 22.01, .02 (West 1989 & Supp. 1994)).
Before 1973, therefore, any assault by a man against a woman was, by statutory definition, a
misdemeanor aggravated assault.
A new Penal Code was enacted in 1973. First, "assault by an adult male on the person of
a female" was removed as an aggravating factor under Penal Code § 22.02(a). The only
remaining aggravating factors were (1) causing serious bodily injury to another; (2) threatening
with a deadly weapon, threatening to causing bodily injury, or causing bodily injury to a peace
officer or other specified employee of the criminal justice system; and (3) causing bodily injury
to a participant in a court proceeding. Second, aggravated assault was reclassified as a felony.
See Tex. Penal Code § 22.02(c). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1566442/ | 592 S.W.2d 40 (1979)
Marianne BRADDOCK et al., Appellants,
v.
Janice L. TAYLOR, Appellee.
No. 8345.
Court of Civil Appeals of Texas, Beaumont.
November 15, 1979.
Rehearing Denied December 6, 1979.
*41 James W. Shoff, II and Robert C. Cowan, San Antonio, for appellants.
Levey & Goldstein, San Antonio, for appellee.
DIES, Chief Justice.
This is a suit on bill of review, to set aside a default judgment in a judgment declaring heirship. The bill of review was brought by Janice L. Taylor, as plaintiff, against Marianne Braddock and Dawn Elizabeth Taylor, a minor whose guardian is Dana L. Taylor.
Trial was to the court without a jury which granted the bill of review, set aside the default judgment, and declared that Janice L. Taylor was David E. Taylor's wife at the time of the latter's death, from which defendants below, Marianne Braddock, Dawn Elizabeth Taylor, and guardian Dana L. Taylor perfect this appeal.
Appellants first contend the trial court erred in granting the bill of review and setting aside the default judgment because appellee's failure to answer appellants' heirship suit on time was due to the *42 fault of her attorney, citing Alexander v. Hagedorn, 148 Tex. 565, 226 S.W.2d 996 (1950), and Brothers Department Store, Inc. v. Berenzweig, 333 S.W.2d 445 (Tex.Civ. App.San Antonio 1960, writ ref'd n. r. e.), and others.
Appellee contends she took the citation to her attorney, who had ten days to answer. On answer day, November 7, 1977, her attorney was ill and called his office, had one secretary send the other secretary to file the answer at the Bexar County Courthouse. The secretary messenger left in timeat 9:30 A.M.but didn't actually file the answer until 10:06 A.M., six minutes late.
The cases cited by appellants do not, we believe, control this situation. Tex.Prob. Code Ann. § 31 (Vernon 1956) provides:
"Any person interested may, by a bill of review filed in the court in which the probate proceedings were had, have any decision, order, or judgment rendered by the court, or by the judge thereof, revised and corrected on showing error therein... and no bill of review shall be filed after two years have elapsed from the date of such decision, order, or judgment...."
In Hamilton v. Jones, 521 S.W.2d 350, 353 (Tex.Civ.App.Houston [1st Dist.] 1975, writ ref'd n. r. e.), the court stated:
"The ordinary rules as to diligence in making motions for new trials and appealing from the judgment complained of do not apply in a bill of review under Article 31 of the Probate Code."
We believe the court was correct in setting aside the default judgment, and overrule appellants' points directed to his action.
Appellants next contend the court erred in holding that appellee was the commonlaw wife of the deceased.
The facts are these: Appellee and deceased began living together and holding themselves out as husband and wife in Texas. Texas, of course, recognizes commonlaw marriages. At that time deceased was already married. Appellee and deceased then moved to California and continued their relationship. Deceased obtained a divorce from his wife and subsequently died in the State of California.
Appellee insists that she qualified as the deceased's common-law wife under Tex. Fam.Code Ann. § 2.22 (Vernon 1975), which provides:
"A marriage is void if either party was previously married and the prior marriage is not dissolved. However, the marriage becomes valid when the prior marriage is dissolved if since that time the parties have lived together as husband and wife and represented themselves to others as being married."
This provision does apply to common-law marriage. Rodriguez v. Avalos, 567 S.W.2d 85 (Tex.Civ.App.El Paso 1978, no writ).
The law of another state is usually presumed to be the same as Texas law. See 1 E. Oakes, Speer's Marital Rights in Texas § 50 (4th ed. 1961); see also, Durr v. Newman, 537 S.W.2d 323, 326 (Tex.Civ.App.El Paso 1976, writ ref'd n. r. e.). However, when a proper motion is filed in accordance with Tex.R.Civ.P. 184a the court shall take judicial notice of the laws of another state.
Here the appellants complied with the rule. Therefore, the court should have taken notice that California does not recognize common-law marriages. See Schwartz v. Vecchiotti, 529 S.W.2d 603 (Tex.Civ.App. Houston [1st Dist.] 1975, writ ref'd n. r. e.).
The validity of a marriage is determined by the law of the place where it was celebrated. Nevarez v. Bailon, 287 S.W.2d 521 (Tex.Civ.App.El Paso 1956, writ ref'd); Reed v. Reed, 226 N.W.2d 795 (Iowa Sup.Ct.1975). Since no marriage between the deceased and appellee was ever contracted or celebrated in California, nor contracted in Texas after the impediment was removed, that part of the judgment below finding that Janice L. Taylor is the wife and heir of the decedent David E. Taylor is reversed and judgment now rendered that his sole heir is Dawn Elizabeth Taylor.
REVERSED and RENDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919704/ | 91 B.R. 655 (1988)
In re V. SAVINO OIL & HEATING CO., INC., Debtor.
Bankruptcy No. 187-72500-353.
United States Bankruptcy Court, E.D. New York.
October 25, 1988.
Lateef Mtima, Coudert Bros., New York City, for Bayside Fuel Oil Depot Corp.
Louis P. Rosenberg, Rosenberg, Rosenberg & Koral, Brooklyn, N.Y., for debtor.
Abraham Backenroth, Harvis & Zeichner, New York City, for Creditors' Committee.
Dena Jaffe, New York City, for Ferrantino & Co., Inc.
Stuart Newmark, Taylor, Newmark & Rosenberg, New York City, for Vincent A. Savino and G. Thomas Meier.
MEMORANDUM OPINION AND ORDER
JEROME FELLER, Bankruptcy Judge.
Before the Court is a motion of Bayside Fuel Oil Depot Corp. ("Bayside"), a creditor in the above-captioned Chapter 11 case, seeking authorization to commence an adversary proceeding on behalf of the Debtor *656 against Ferrantino & Company, Inc. ("Ferrantino"), for the recovery of alleged fraudulent conveyances. For the reasons discussed below, the motion of Bayside is denied.
I.
V. Savino Oil & Heating Co., Inc. ("Debtor"), filed a petition for reorganization on November 20, 1987 and by so doing was constituted a debtor-in-possession. A Creditors' Committee was duly appointed by the United States Trustee pursuant to 11 U.S.C. § 1102(a). The Creditors' Committee has been active and vigorous in the representation of its constituency. Among other things, the Creditors' Committee has filed a motion for the appointment of a trustee pursuant to 11 U.S.C. § 1104, which motion is presently pending before this Court. In addition, the Creditors' Committee has sought and obtained authorization to commence an adversary proceeding on behalf of the estate to recover property allegedly fraudulently transferred or converted. In accordance with the judicial authorization obtained, the Creditors' Committee, in July 1988, filed a multi-defendant complaint initiating an adversary proceeding on behalf of the Debtor, alleging incestuous transactions or dealings between the Debtor and related/affiliated persons or entities, particularly companies owned or controlled by persons related to the sole stockholder and principal officer of the Debtor, Vincent A. Savino (Committee of Unsecured Creditors of V. Savino Oil & Heating Co., Inc. v. V. Savino Oil & Heating Company, Inc., Adversary Proceeding No. 188-0130-353). This adversary proceeding is also pending.
Ferrantino is a company whose principal is the father-in-law of Vincent A. Savino and is engaged in business similar to that of the Debtor. Ferrantino is a named defendant in the Adversary Proceeding No. 188-0130-353 commenced by the Creditors' Committee. The allegations of the complaint are broadly drafted and would appear to encompass any and all possible bases for recovery on behalf of the estate as against Ferrantino. See, for example, the seventh and ninth causes of action in Adversary Proceeding No. 188-0130-353.
Bayside too now seeks to sue Ferrantino for the benefit of the estate on a fraudulent transfer theory. Although its motion papers do not expressly identify the provisions of the Bankruptcy Code under which the lawsuit would be brought, we would assume from a reading of the papers that Bayside's lawsuit would sound in alleged fraudulent transfers violative of § 544(b) and/or 11 U.S.C. § 548.
II.
Standing to invoke the avoidance powers contained in §§ 544(b) and 548 rests with the trustee by the express provisions of those statutes. These focused and specific grants of authority to the trustee alone are not unique to these provisions of the Bankruptcy Code. Other sections of the Bankruptcy Code similarly grant only the trustee a right to invoke other bankruptcy avoidance powers, e.g., 11 U.S.C. § 545 (avoiding statutory liens); 11 U.S.C. § 547 (avoiding preferences); § 549 (avoiding postpetition transactions). Under 11 U.S.C. § 1107(a), a Chapter 11 debtor-in-possession is generally accorded de jure trustee status and thus vested with the authority to avoid transfers of property under 11 U.S.C. §§ 544(b), 548 and the other avoidance provisions.[1]
The commencement of litigation by a trustee or debtor-in-possession on behalf of an estate in bankruptcy under the avoidance provisions is permissive and not mandatory. The responsibilities of a trustee or debtor-in-possession to collect assets and to effectuate the policy of equality of distribution do not per se compel litigation by such fiduciaries. To the contrary, a trustee or debtor-in-possession has a substantial degree of prosecutorial discretion to sue or not to sue. If, however, a trustee/debtor-in-possession unjustifiably fails *657 to employ its statutory arsenal of avoiding powers or otherwise abuses its discretion in not suing, a creditors' committee has implied authority[2] to bring an action on behalf of the estate in bankruptcy with the approval of the bankruptcy court. Unsecured Creditors Committee of Debtor STN Enterprises, Inc. v. Noyes (In re STN Enterprises), 779 F.2d 901, 904 (2d Cir. 1985); Official Committee of Unsecured Creditors Committee of Joyanna Holitogs, Inc. v. I. Hyman Corp. (In re Joyanna Holitogs, Inc.), 21 B.R. 323, 325-26 (Bankr.S.D.N.Y.1982); Committee of Unsecured Creditors v. Monsour Medical Center (In re Monsour Medical Center), 5 B.R. 715 (Bankr.W.D.Pa.1980).
As a rule, individual creditors such as Bayside lack the authority to institute avoidance actions. Nebraska State Bank v. Jones, 846 F.2d 477 (8th Cir.1988); Saline State Bank v. Mahloch, 834 F.2d 690, 694-695 (8th Cir.1987); Hansen v. Finn (In re Curry and Sorensen, Inc.), 57 B.R. 824 (9th Cir.B.A.P.1986); Drinker, Biddle & Reath v. Bacher (In re Bacher), 47 B.R. 825, 829 (Bankr.E.D.Pa.1985). As indicated, such actions must be instituted by a trustee, debtor-in-possession or, with court approval, by a creditors' committee upon demonstrating that the trustee or debtor-in-possession unjustifiably declines to sue. This is not to suggest that a bankruptcy court can never authorize an avoidance action on behalf of the estate by an individual creditor in a Chapter 11 case. Fair and orderly bankruptcy administration, however, would dictate that such authority might be granted upon showings of particularly extraordinary circumstances.[3]
Bayside has failed to set forth any extraordinary circumstances or reasons to justify granting the remarkable relief it seeks. Ferrantino, among others, has already been sued on behalf of the estate by an active Creditors' Committee on causes of action similar or identical to what Bayside would propose to sue. While it is true, as Bayside argues, that the Debtor's principals would never institute, much less zealously prosecute a lawsuit of the type represented by Adversary Proceeding No. 188-0130-353, no one has suggested that the Creditors' Committee will fail to "zealously prosecute" that lawsuit. And, if a trustee is appointed in this Chapter 11 case, he presumably would be substituted as plaintiff so as to prosecute the lawsuit. See, Bankruptcy Rules 2012 and 6009. In any event, Bayside has no cause to complain in light of its participatory rights in Adversary Proceeding No. 188-0130-353 pursuant to 11 U.S.C. § 1109(b). Official Unsecured Creditors' Committee v. Michaels (In re Marin Motor Oil, Inc.), 689 F.2d 445 (3rd Cir.1982), cert. denied, 459 U.S. 1206, 103 S. Ct. 1196, 75 L. Ed. 2d 440 (1983); but see, Fuel Oil Supply and Terminaling v. Gulf Oil Corporation, 762 F.2d 1283 (5th Cir.1985).
III.
For all of the foregoing reasons, the motion of Bayside Fuel Oil Depot for authorization to commence an adversary proceeding on behalf of the Debtor against Ferrantino & Company, Inc. is denied.
IT IS SO ORDERED.
NOTES
[1] With certain limitations and exceptions not here relevant, a debtor-in-possession under § 1107(a) has "all the rights . . . and powers" and is required to perform "all the functions and duties" of a trustee.
[2] 11 U.S.C. § 1103(c)(5) Powers of a creditors' committee include right to "perform such other services as are in the interest of those represented."
[3] It is significant to note that Bayside fails to cite a single Chapter 11 case where an individual creditor was authorized to commence an avoidance action. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919709/ | 91 B.R. 598 (1988)
In re WINDHAM POWER LIFTS INC., Debtor.
QUALITY PLUS EQUIPMENT INC., Plaintiff,
v.
WINDHAM POWER LIFTS INC., Defendant.
Adv. No. 87-0183-APG.
United States Bankruptcy Court, M.D. Alabama, S.D.
April 28, 1988.
*599 *600 Ernest H. Hornsby, Johnson, Hornsby, Etheredge and Dowling, Dothan, Ala., M. Lloyd Roebuck, Mobile, Ala., for plaintiff.
C.H. Espy, Jr., Dothan, Ala., for defendant.
DECISION ON COMPLAINT FOR DECLARATORY JUDGMENT
A. POPE GORDON, Bankruptcy Judge.
The debtor filed a complaint for declaratory judgment to determine the title to property in the possession of the debtor, consisting of component parts, work in process, and completed forklift units. This matter has been submitted on a joint stipulation of facts, opposing briefs and cross motions for summary judgment. This adversary proceeding arises from the following uncontested facts.
On January 2, 1985, the United States government, through Warner Robbins Air Logistics Center, Department of the Air Force (the Government), awarded Contract No. F09603-85-C-0125, a DO priority-rated defense contract, to Quality Plus Equipment Inc. (Quality). On that date Quality was an authorized dealer for Windham Power Lifts Inc. (debtor). Under a dealer's agreement with the debtor, Quality had been specifically authorized by the debtor to bid on government procurement contracts and the debtor would participate in the preparation of bid submissions.
The government contract dated January 2, 1985, provided for the manufacture and delivery of 401 forklifts built to precise specifications. This number was increased from an original number of 234 forklifts.
Under the government contract, Quality was the prime contractor. Quality subcontracted the actual manufacture of the forklifts to the debtor. The debtor began manufacture of the forklifts and has delivered, to date, 97 of the 401 units called for under the contract.
The original contract between Quality and the Government, as modified, incorporated by reference, Alternate I, 48 C.F.R. § 52.232-16 (1987). This section provides for the payment to a contractor or subcontractor of "progress payments." These payments are based on costs that accrue to the contractor or subcontractor as the contract progresses. These payments are designed to defray the costs of material, direct labor and other direct in-house costs. Small businesses, such as the debtor, may qualify for progress payments in amounts of up to 95% of the actual costs of production.
The debtor would receive progress payments periodically during the course of the debtor's performance under the contract. The practice between the debtor and Quality with regard to the progress payments was that the debtor would invoice Quality periodically for payment based on debtor's costs. Quality would receive progress payments directly from the government and in turn remit progress payments to the debtor. During the course of performance under the contract, the debtor received approximately $4,660,000 in progress payments.
As a condition of Quality's receipt of progress payments from the Government, section 52.232-16 also provides:
(1) Title to the property described in this paragraph (d) shall vest in the Government. Vestiture shall be immediately upon the date of this contract, for property acquired or produced before that date. Otherwise, vestiture shall occur when the property is or should have been allocable or properly chargeable to this contract.
(2) "Property," as used in this clause, includes all of the below-described items acquired or produced by the Contractor that are or should be allocable or properly chargeable to this contract under sound and generally accepted accounting principles and practices.
*601 The contract, as modified to include the foregoing clause, was entered into by Quality and the Government. The contract is not signed by the debtor.
Upon execution of the contract by Quality and the Government, Quality ordered the debtor to begin production of the forklifts. The order was made by way of a purchase order dated June 19, 1986, signed and accepted by a representative of the debtor. The purchase order contained the following terms:
Forklift, 10,000 # cap @ 48" L.C. Specifications IAW USAF Contract F09603-85-C-0125.
All terms and conditions of contract F09603-85-C-0125 apply including but not limited to MIL-I-45208A.
Delivery schedule to be negotiated at a later date.
Progress payments available IAW
FAR requirements.
Government inspection is required prior to shipment from your plant. Upon receipt of this order, promptly notify the Government Representative who normally services your plan so that appropriate planning for Government inspection can be accomplished.
It is also important to note that the dealership agreement between Quality and the debtor dated April 2, 1982, and modified April 5, 1982, contained the following terms:
A. CASH transactions. As a rule all WINDHAM sales to DEALER will be cash on delivery. The title and right to possession to all items sold hereunder, wherever situated and whatever its mode of attachment to either realty or personality [sic], shall remain WINDHAM'S until full payment in cash has been made therefor and DEALER agrees to do all things and acts necessary to maintain WINDHAM'S right and title therein.
Furthermore, QUALITY is authorized to engage in bidding on United States and Foreign Government acquisitions as approved by WINDHAM or under which a standard piece of WINDHAM equipment might be furnished. Any and all such bidding shall be jointly agreed to by both parties as to price, terms, conditions and responsibilities prior to submission of any such bid. These prices, terms, conditions and responsibilities shall be set forth in writing and executed by both parties prior to initial submission of a bid package. Such agreement shall be executed on an individual basis as pertains to each bid package.
Furthermore, no terms and conditions adversely affecting, through monetary means or in any other way, the daily operation of either WINDHAM or QUALITY shall be agreed to without the concurrence of both parties. QUALITY shall insure that WINDHAM is authorized to maintain direct contact with the applicable Government agency through whatever means possible.
Quality argues that title to the parts, work in process, and completed forklift units in possession of the debtor is vested in the Government by virtue of the title-vesting clause under 48 C.F.R. § 52.232-16 incorporated by reference in the government contract between Quality and the Government. The Government has adopted the position of Quality.
The debtor argues that it was not a party to the contract between Quality and the Government and, therefore, is not bound by its terms and, at best, the contract creates an unperfected security interest lien in the parts, work in process, and completed forklift units.
Two issues present themselves for resolution in this matter:
1. Is the debtor bound by the terms of the contract between Quality and the Government? If so,
2. What is the effect of the title-vesting clause of 48 CFR § 52.232-16?
With regard to the first issue, it is the opinion of the court that the debtor is bound by the terms of the contract between Quality and the Government. The purchase order for the forklift units clearly stated that the order was subject to the terms and conditions of Government Contract No. F09603-85-C-0125. The purchase *602 order was signed and accepted by the debtor.
It is undisputed that the debtor actively participated in the bid submission for this particular contract. It is further undisputed that the debtor received substantial progress payments during the course of performance of the contract.
The debtor argues, in brief, that it should not be bound by the Government contract on the basis of a "[p]urchase order [that] merely attempts to incorporate some terms of the prime contract by reference . . . [T]erms . . . not made known to the debtor . . . in direct derogation to the terms of the prior Dealers Agreement between the Debtor and Quality." Debtor's reply brief at 2. (emphasis in the original)
The court disagrees with the debtor. A purchase order is a true offer and when a purchase order is accepted, signed, and returned, the contract is formed. Banner Iron Works Inc. v. Amax Zinc Co. Inc., 621 F.2d 883 (8th Cir.1980); Graham, Van Leer & Elmore Co. Inc. v. Jones & Wood, 656 F. Supp. 667 (D.D.C.1987).
Construction of the contract between Quality and the debtor must be determined under the laws of Alabama. Fleming v. Pan American Fire & Casualty Co., 495 F.2d 535 (5th Cir.1974). The intention of the contracting parties controls in construing a written contract. Southern Housing Partnerships Inc. v. Stowers Management Company Inc., 494 So. 2d 44 (Ala.1986). Intention of the parties is derived from the plain and unambiguous language of the contract itself. Logan v. Citizens National Bank of Opp, 460 So. 2d 1239 (Ala.1984).
The contract, i.e. purchase order, between Quality and the debtor clearly and unambiguously incorporated all terms of Government Contract No. F09603-85-C-0125. It is undisputed that the debtor was aware of the government contract, had actively participated in the acquisition of the contract, and had specifically authorized Quality to bid on such contracts. The incorporation of the terms of the government contract by reference in the purchase order was not ambiguous or uncertain.
The fact that the terms incorporated in the purchase order, are in derogation of the earlier dealer's agreement between the debtor and Quality is of no effect. Under Alabama law, parties to a contract may modify an executory contract as they see fit. Peoples Bank & Trust v. Coleman, 736 F.2d 643 (11th Cir.1984).
The purchase order and its terms were a modification of the earlier dealer's agreement. The modification was signed by both parties in accordance with the terms of the dealer's agreement.
In summary, in accordance with the terms of the purchase order, the debtor is bound by the terms of Government Contract No. F09603-85-C-0125. It is undisputed that the government contract incorporates the title-vesting clause set out above.
Now that it is determined that the debtor is bound to the terms of the contract between Quality and the Government, the next question involves the effect of the title-vesting clause. The debtor argues that the clause, at most, creates a security interest in the parts, work in process, and finished goods, and that the security interest has not been perfected under state commercial laws. The debtor cites United States v. Kimbell Foods Inc., 440 U.S. 715, 99 S. Ct. 1448, 59 L. Ed. 2d 711 (1979), where the court held that the federal government must observe the state commercial codes in dealing with private businessmen. In Kimbell, the court adopted state commercial law in determining the priority of contractual liens arising from SBA and FHA loan programs with respect to pre-existing private liens.
The court adopted state commercial law because:
. . . [A] national rule is unnecessary to protect the federal interests underlying the loan programs.
Kimbell, 440 U.S. at 718, 99 S. Ct. at 1453.
The application of the rule in Kimbell is questionable here. What is involved is not a federal loan program, but rather a priority-rated defense contract, and a subcontractor receiving virtually all of its production *603 costs by way of progress payments. The "federal interest" to be protected here is markedly different from the interest that concerned the Kimbell court. Moreover, and most important, there is a title-vesting clause not found in Kimbell.
The title-vesting clause is the vehicle the government chose to protect its interest under the contract. A choice well within its province.
Regardless of whether the reason back of the [title vesting] provision is beneficient or harsh, however, here we have the sovereign making a contract. In the absence of constitutional inhibitions the sovereign can make such contract as it pleases and no one can object.
In re American Boiler Works, 220 F.2d 319, 321 (3d.Cir.1955).
Title-vesting clauses are a common part of virtually all government procurement contracts. Federal courts have consistently upheld the validity of title-vesting clauses in government contracts. United States v. Ansonia Brass & Copper Co., 218 U.S. 452, 31 S. Ct. 49, 54 L. Ed. 1107 (1910); In re Double H. Products, 462 F.2d 52 (3d.Cir.1972); In re American Pouch Foods, 769 F.2d 1190 (7th Cir.1985). This is particularly so where a contractor has received progress payments during the course of performance of the contract.
It has long been recognized and understood that an "advance payment" is a loan by the Government and can be made "only upon adequate security" . . . but "partial payments" ["progress payments"] are payments made by the Government in purchase of materials and are authorized when ownership thereto vests in the Government.
In re American Pouch Foods, 30 B.R. 1015, 1019 (N.D.Ill.1983); citing City of Detroit v. Murry Corp., 355 U.S. 489, 78 S. Ct. 458, 2 L. Ed. 2d 441 (1958).
Courts have upheld title-vesting clauses in government contracts notwithstanding preexisting perfected private liens. In re Double H. Products, supra.
The fact situation at bar closely resembles In re Reynolds, 68 B.R. 219 (Bankr.W. D.Pa.1986). Reynolds involved a declaratory action between the government and a creditor bank over title to parts, materials and inventory of the debtor. The debtor was a subcontractor under a priority-rated defense contract that contained an identical title-vesting clause. After a thorough research of authority the court held:
. . . [T]hat the title-vesting clause is to be literally applied to all property irrespective of whether it relates to the national security or whether the Government has paid for the . . . materials. However, when the goods acquired are for the national defense, then the purpose for a title-vesting clause for a literal application of its language is even clearer.
Reynolds, 68 B.R. at 224.
Based on the foregoing authority, the court concludes that the title-vesting clause should be literally applied and that the Government possesses full and absolute title to the property covered by the clause.
In addition to the issues previously stated, the debtor has raised a number of issues that the court feels are not dispositive but merit a brief discussion. The debtor argues that a prior "blanket lien" on inventory in favor of the creditor SBA defeats the title-vesting clause. This argument is without merit. The title-vesting clause vested title to the goods in the government immediately upon acquisition by the debtor thereby avoiding any prior lien on the material in favor of another creditor. In addition, many courts have held that the title-vesting clause in government contracts defeat preexisting private liens. In re Double H. Products Corp., supra; In re Reynolds, supra.
The debtor also raises the issue that certain title-passing and seller's-remedies statutes under Alabama commercial law affect the rights of the parties under the government contract.
It is the opinion of the court that where the government contract and state commercial law are at odds, the language of the government contract must prevail.
*604 Procurement policies so settled under federal authority may not be defeated or limited by state law. The purpose of the supremacy clause was to avoid the introduction of disparities, confusions and conflicts which would follow if the Government's general authority were subject to local controls. The validity and construction of contracts through which the United States is exercising its constitutional functions, their consequences on the rights and obligations of the parties, the titles and liens which they create or permit, all present questions of federal law not controlled by the law of any state.
In re Double H. Products Corp., 462 F.2d at 57, citing United States v. Allegheny, 322 U.S. 174, 64 S. Ct. 908, 88 L. Ed. 1209 (1944).
The debtor further raises as an issue whether or not the debtor may withhold delivery of the goods to the prime contractor as a remedy under state law upon the prime contractor's breach of the subcontract. It is the opinion of the court that the debtor may not withhold delivery of the goods to the prime contractor acting on behalf of the Government. This is especially so under a DO priority-rated defense contract.
. . . [T]he Government's right to reclaim incompleted items from a bankrupt defense contractor, where those items may be of critical importance to national defense, cannot be seriously questioned on the basis of . . . state [law].
In re Double H. Products Inc., 462 F.2d at 55 n. 2.
The debtor also argues that the interests of other creditors, i.e. materialmen and other lienholders, may be superior to the interests of the Government under the contract. The court disagrees. As stated above the title-vesting clause is valid against preexisting private liens to goods covered by the title-vesting clause. Further, it has been held that the title-vesting clause is valid against materialmen claims under state law. United States v. Ansonia Brass and Copper Co., 218 U.S. 452, 31 S. Ct. 49, 54 L. Ed. 1107 (1910).
Finally, the debtor argues that the title-vesting provision constitutes an uncompensated "taking" under U.S. Const. Amend. V. This argument is without merit. In addition to the progress payments already received, the debtor may possess a valid claim against the Government or the prime contractor for any balance due the debtor for performance under the contract.
The parties to this proceeding have filed motions for summary judgment pursuant to Rule 7056, Bankruptcy Rules. The court finds that there is no material fact in dispute and that Quality is entitled to judgment as a matter of law.
A separate judgment will enter. | 01-03-2023 | 10-30-2013 |
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