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https://www.courtlistener.com/api/rest/v3/opinions/1565447/ | 433 S.W.2d 66 (1968)
William J. BESHEARS and Grace L. Beshears, Plaintiffs-Respondents,
v.
S-H-S MOTOR SALES CORPORATION, a corporation, Defendant-Appellant.
No. 24925.
Kansas City Court of Appeals, Missouri.
October 7, 1968.
*68 Howard D. Lay, Donaldson, Lay & Tarver, Kansas City, for defendant-appellant.
L. Glen Zahnd, Newhart & Zahnd, Savannah, W. E. Winbigler, Kansas City, for plaintiffs-respondents.
CROSS, Judge.
Plaintiffs, husband and wife, brought this action against multiple defendants to recover actual and punitive damages for fraud practiced in connection with the sale of an automobile to plaintiffs. In the course of trial to a jury, and prior to submission, dismissals were entered as to all defendants except S-H-S Motor Sales Corporation, a concern doing business in Kansas City, Missouri, under the name "Midwest Motors". The jury returned a verdict awarding plaintiffs $300.00 actual and $2,000.00 punitive damages upon which judgment was duly entered. Defendant S-H-S Motor Sales Corporation has appealed.
The case was tried and submitted on the theory that defendant, undertaking to sell plaintiffs a certain 1963 Dodge automobile, falsely and fraudulently represented (by and through its employees and agents) that the vehicle in question was a "demonstrator" which had been "on the road" for 27 days, (when in fact the automobile had been previously sold and delivered to a prior owner, had been used by that individual for three months, and had been repossessed); that defendant and its agents knew such representation was false; that the representation was material to the transaction; that plaintiffs purchased the automobile in reliance upon the truth of the representation; and that as a result plaintiffs suffered actual loss and damage in a sum equal to the difference in the reasonable market value of the automobile as it was represented to be and its actual market value at the time of the sale.
Defendant primarily contends that the trial court erred in denying its motion for a directed verdict, on the ground that plaintiffs failed to sustain their burden of proof to establish the necessary elements of a case of fraud, "Mainly (because) the evidence showed there was no reliance by plaintiffs and no damage". In determining this question we shall assume the truth of every fact and circumstance in plaintiffs' favor shown in evidence, whether by plaintiffs or defendant, and give plaintiffs the benefit of all reasonable inferences which may fairly be drawn therefrom. All evidence and inferences unfavorable to plaintiffs will be disregarded. Under the foregoing limitations, we set out applicable portions of the evidence.
Plaintiff William J. Beshears testified that on July 18th, 1963, he and Mrs. Beshears went to defendant's place of business "to buy a new car." They had previously seen defendant's newspaper and television advertisements of new Dodge Darts, and Beshears had called defendant by telephone to inquire about them. He talked to Don Wright who identified himself as one of defendant's salesmen. In the conversation Beshears inquired "about the ads" and about "what they had", and Wright told Beshears that the company had a "demonstrator" on hand that he might be interested in. When plaintiffs arrived at defendant's establishment Wright showed them the new Dodge Darts that had been advertised. Plaintiffs found those vehicles unsuitable because they were coupes of insufficient *69 size for their family. Other cars were shown plaintiffs, including the "demonstrator" which Wright identified as the one he had mentioned on the telephonea current model Dodge station wagon with a "Retail Price Sheet" taped on the left rear window listing the cost of the basic vehicle, the items of optional equipment and freighttotaling $3,064.90.
While showing plaintiffs the station wagon Wright referred to it several times as a demonstrator. Plaintiffs also talked to William Waldberg, defendant's sales manager, in Wright's presence. In the course of discussion Waldberg also referred to the car as a demonstrator several times. According to Beshear's testimony: "Mr. Waldberg volunteered the information that it (the station wagon) had been on the road 27 days and turned and said, `Isn't that right Don?' and Don said, `Yes'." Thereafter Mr. and Mrs. Beshears "drove the car around the block" and decided that it was suitable for their use. Waldberg "wrote up the sale" and "we completed the transaction." As will be set out more fully hereinafter, the car in question had previously been sold by defendant to another person, titled in his name, and repossessed upon his default. Prior to closing the sale, neither Wright, Waldberg nor anyone else on defendant's behalf divulged those facts to plaintiffs or said anything to indicate the car had been in the possession of any one other than defendant, or that it had been repossessed. Beshears stated that he had no knowledge of and made no inquiry concerning those matters before buying the car "because I had no reason to doubt their (Wright's and Waldberg's) integrity."
As Waldberg was preparing the "buyer's order" Beshears noticed that he employed the word "used" in describing the station wagon. Beshears testified as follows: "A. Well, of course he was on the other side of the desk, but I was casually watching him as he wrote it and I noticed he used the term `used'. So I asked him why since it was a demonstrator and he said, `Well, a demonstrator' something to the effect that a demonstrator, since it is not a new car, has to be listed technically as a used car. So then I said, `Well, I want to be sure that this is understood.' So I asked him to write the five year warranty or 50,000 miles on here, which he did, which is written across there (indicating)." As finally written, the buyer's order recites that the car was "Sold with 5500 miles Used", at a cash delivered price of $3,064.90 ($16.90 more than the price at which it was sold to the previous owner), with "5 year warranty or 50,000 miles". Upon delivery of the car to plaintiffs, defendant set the speedometer at zero miles.
After taking delivery, plaintiffs experienced considerable trouble with the car and had to "bring it back" for necessary repairs and adjustments. This involved 8 or 9 "trips" from plaintiffs' home in Grandview to Kansas City, and on two or three occasions Beshears had to leave the car overnight. On a family vacation trip taken soon after purchasing the car, brake trouble developed in North Carolina and new brake shoes had to be installed. Within six weeks after buying the car (and on the day plaintiffs' first payment was due) motor trouble had developed to the extent that "they put new rings and bearings in the car."
Some time after buying the automobile, Mr. Beshears accidentally learned of its previous ownership when he found an owner's manual or warranty book in the glove compartment issued to one "Orville J. Bartlett". A telephone call to that individual revealed that he was the first owner of the car and that it had been repossessed and titled in defendant. When confronted by those facts defendant's general manager Rosenthal admitted their truth, but stated that Bartlett had had the car in his possession "only eight days".
Pressed on cross-examination to state the "difference" between this car, as a demonstrator and as a used car, Beshears testified "* * * (T)here is a world of difference between a demonstrator which *70 is really a demonstrator in the sense they are advertised and a car that has been sold to another member of the public. * * * (T)he difference with me is that I wouldn't buy a used car in that way. * * * I don't want anyone else's problems, as they usually refer to a used car. * * * I would accept a demonstrator, which I did, on the basis of the reputation and the integrity of the dealer, as being a demonstrator. * * * I would assume that the miles on there had been put on with greater care than possibly if it had been put on by one individual and abused."
Bertram Bartlett, a son of Orville J. Bartlett, testified on behalf of plaintiffs that he and his father operated a restaurant business in Sedalia known as Dixieland Barbecue. The witness negotiated the original purchase of the station wagon on behalf of his father and took delivery of it "brand new" on December 24th (1962). The Bartletts had possession of it until March 29, 1963, (the date of repossession), using it for delivery purposes in connection with their barbecue business. They made trips between Kansas City and Sedalia with it "sometimes seven and eight times a week" to pick up supplies and used it to haul large volumes of meat, steam tables and heavy equipment. "It was used almost as a truck." The Bartletts had no garage and the car was parked outside during the three winter months they had it in their possession.
Robert Ray Davidson, produced by plaintiffs, identified himself as an experienced automobile salesman, who had been in the automobile sales business since 1936 except for three years in "the service" and a year and a half at Lake City Ordnance Plant. He testified that the term "demonstrator" as used in the automobile trade means "a new car that is taken out of stock, preferably a model with the most equipment so it can be demonstrated to the prospective purchaser, and is used to demonstrate the car and it is a car generally considered to be, in a new car dealer's stock as a new car and not a used car. In other words, one that hasn't been titled. When the car is sold it is sold as a demonstrator car and not as a used car"; that "used car" is "one that has been sold to some individual or company and then it is brought back or traded back by a dealer." The witness stated that in his opinion there would be a difference in value of at least $300.00 between two identical cars, such as the one Beshears had purchased, when one was a demonstrator and the other had been sold to and used by a member of the public and repossessed.
Both Wright and Waldberg testified as witnesses for defendant. Wright denied that he had told plaintiffs the station wagon was a demonstrator that had been driven only 27 days, but said he didn't know "what Mr. Waldberg said." He testified that he understood a demonstrator was "a new car that has been used in demonstration * * * but never titled." Waldberg had no independent recollection of his transaction with the plaintiffs other than what appeared in the sale documents. He said he didn't recall whether or not he had represented to Beshears that the station wagon "was a demonstrator" and that it had been on the road for only 27 days. He admitted, however, "it is possible I said it."
The essential elements of actionable fraud are considered by Missouri courts to be as follows: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; and (9) his consequent and proximate injury. Powers v. Shore, Mo.Sup., 248 S.W.2d 1; Williams v. Miller Pontiac Company, Mo.App., 409 S.W.2d 275.
Defendant has not advanced any argument of colorable validity to suggest that any of the first six elements of fraud above enumerated have not been established.
*71 It is our view that plaintiffs have sustained their burden in that respect for reasons here stated. (1) As hereinabove noted, there was evidence before the jury that two of defendant's salesmen represented to plaintiff that the automobile was a "demonstrator" which had been "on the road 27 days". In view of the meaning attributed to the term "demonstrator" by witnesses Davidson and Wright, the jury could reasonably believe that such statements made on behalf of defendant were intended as and were equivalent to representation that the automobile had not been owned by and titled in any person previously. (2) The falsity of such representation is attested by undisputed oral and documentary evidence that Orville J. Bartlett had legally certificated ownership of the car and used it from December 24th, 1962, until it was repossessed on March 29, 1963a period of time much greater than 27 days. (3) The materiality of the representation is evident from testimony by Beshears to the effect that plaintiffs were willing to buy a demonstrator, which they considered to be a car that had been used only by the dealer in the course of its business, but that they would not knowingly have bought a car that had been previously sold to and used by "another member of the public." (4) The jury at least could have believed that the representation was made in reckless disregard of the truth. (5) Since defendant was endeavoring to sell plaintiffs a car and plaintiffs were in the market to buy one, it was logical for the jury to believe that the representation was made with the intent that plaintiffs act upon it and purchase the station wagon. (6) That plaintiffs were ignorant of the falsity of the representation may be concluded from Beshears' testimony that when he agreed to purchase the station wagon he had no knowledge that Bartlett had previously owned it.
The principal thrust of defendant's contention that plaintiffs did not rely upon the representations made by its salesmen, and had no right to rely thereon, consists of argument essentially couched in the following language quoted from defendant's brief: "Before the sale was complete, plaintiff read the order which said oral representations would not be honored by the company. The order is unequivocal in its terms and declares this to be a used car with 5,500 miles. When Mr. Beshears saw the order he certainly had no right to rely upon something which he recalls was said during sales negotiation involving several cars. * * * (W)hen plaintiff purchased this car after his test drive * * * he had no right to expect or rely upon receiving anything but what the order called for, namely a used car with 5,500 miles." The theory thus advanced is not consistent with Missouri decisions. "The rule that all prior and contemporaneous oral agreements and representations are merged in the written contract entered into by the parties does not apply to fraudulent representations made for the purpose of inducing a party to enter into such contract." Horwitz v. Schaper, Mo.App., 119 S.W.2d 474. The instant question was presented to and thoroughly settled by this court in Burns v. Vesto Company, Mo.App., 295 S.W.2d 576. In that case the plaintiffs bought a television set from defendants which was represented to be new when in truth it was a used seta fact plaintiffs accidentally discovered some seven or eight months later when they found papers in the back panel of the set identifying a previous owner. Defendants contended that plaintiffs had no right to rely upon and introduce evidence of defendants' oral representations because they had signed a chattel mortgage which recited that it contained the entire agreement and "that there were no representations or warranties unless written into the contract." Ruling the issue we said: "It is no doubt true that the general rule is that the terms of a written contract may not be varied or contradicted by parol evidence. However, when fraud is relied upon, as here, that rule has no application." Also see Tiffany v. Times Square Automobile Co., 168 Mo. App. 729, 154 S.W. 865; National Theatre Supply Co. v. Rigney, Mo.App., 130 S.W.2d *72 258, 262; Clancy v. Reid-Ward Motor Co., 237 Mo.App. 1000, 170 S.W.2d 161.
Defendant additionally argues that plaintiffs had no right to rely upon the representation because they were negligent in failing to utilize means of knowledge equally available to all parties, from which they could readily have learned the "pedigree" of the automobile, hence, had no right of reliance. Defendant submits that if plaintiffs had exercised ordinary prudence they "could have opened the glove compartment and found the prior owner's book" and thus have known that "the car in this case had been titled to the customer Bartlett". The foregoing suggestion presupposes, without evidentiary basis, that the owner's book was in the glove compartment at the time the parties were negotiating. For that matter, it was for the jury to say whether in the exercise of due prudence plaintiffs should have searched the automobile for documentary evidence relating to its previous ownership and use. See Meyer v. Brown, Mo.App., 312 S.W.2d 158. It is further suggested by defendant that plaintiffs could have divided 27 days into 5,500 miles and determined that the car had been driven 200 miles daily, and thereby have realized that the vehicle was not a demonstrator. In support of this suggestion defendant cites and relies upon Hanson v. Acceptance Finance Company, Mo.App., 270 S.W.2d 143, where this court held that a plaintiff had no right to rely upon defendant's false representation that interest on a loan at 8% had been included as part of the principal, because plaintiff could have determined the true rate of interest by simple mathematical computation and thus have known the falsity of the statement. While the "simple computation" in the Hanson case completely solved the arithmetic problem there involved, the exercise in mathematics suggested by defendant in this case (27 into 5500) would not establish, as a matter of absolute fact, that the station wagon was not a demonstrator. Hanson is not in point. It is our conclusion that there is sufficient evidence in the record to justify submission of the elements of reliance and the right to rely upon the representation involved.
We also find there is substantial evidence to support submission of the requisite element of "consequent and proximate injury", to-wit: the testimony of plaintiffs' witness Davidson who, after qualifying to the court's satisfaction as an expert witness on automobile value by reason of some twenty-five years experience as a car salesman, testified that the station wagon as a previously owned automobile was worth at least $300.00 less than an identical vehicle used only as a demonstrator.
The trial court's refusal to direct a verdict in favor of defendant was not error.
Defendant's second point assigns error in the reception of evidence as to the station wagon's defects and malfunctions, the necessary repairs that were required and performed, the "trips" required for those purposes and the attendant inconveniences suffered by plaintiffs. Defendant insists that those subjects of evidence "were not relevant, not pleaded and are not part of their measure of damage and were used to prejudice the jury." The point is without merit. Clearly the evidence in question had probative bearing on the issue of punitive damages. In resolving that question the jury should take into consideration the attendant circumstances, both mitigating and aggravating, and the character and extent of the injury inflicted. Beggs v. Universal C.I.T. Credit Corporation, Mo.Sup., 409 S.W.2d 719; 25 C.J.S. Damages § 126(1), pp. 1163-1164.
Defendant finally complains that the trial court erred in submitting the issue of punitive damages to the jury, on the ground that "there was no express or implied malice shown". The complaint has no merit. Punitive damages may be awarded in a case of fraud and deceit where legal malice is present. In order *73 to establish that there was legal malice, it is sufficient to show that a wrongful act was intentionally done without just cause or excuse. It is not necessary to show that the particular act was attended by any spite or ill will or that it was wilfully or wantonly done. Universal C.I.T. Credit Corporation v. Tatro, Mo.App., 416 S.W.2d 696; Jones v. West Side Buick Auto Co., 231 Mo.App. 187, 93 S.W.2d 1083; Luikart v. Miller, Mo.Sup., 48 S.W.2d 867. There is abundant evidence in the record to support a jury finding of "legal malice" in the sense our courts have defined that term.
We have duly considered all authorities submitted by defendant but we find nothing therein to warrant conclusions other than those we have expressed.
Accordingly, we affirm the judgment.
All concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565466/ | 34 So. 3d 507 (2010)
JUSTISS OIL COMPANY, INC., Plaintiff-Appellee,
v.
LOUISIANA STATE MINERAL BOARD, OF The STATE OF LOUISIANA, et al., Defendants-Appellants.
Nos. 45,212-CA, 45,253-CA.
Court of Appeal of Louisiana, Second Circuit.
April 14, 2010.
James D. "Buddy" Caldwell, Attorney General, Irys L. Allgood, Ryan M. Seidemann, Assistant Attorneys General, for Defendant-Appellant, State of Louisiana, State of Louisiana Dept. of Natural Resources and State Mineral Board of the State of Louisiana.
*508 Department of Wildlife & Fisheries by Frederick C. Whitrock, Baton Rouge, for Defendants-Appellants, State of Louisiana Dept. of Wildlife & Fisheries and Wildlife & Fisheries Commission of State of State of Louisiana.
Donald R. Wilson, R. Joseph Wilson, New Orleans, for Plaintiff-Appellee, Justiss Oil Co., Inc.
Blanchard, Walker, O'Quin & Roberts by Wm. Timothy Allen, III, Stacey D. Williams, Shreveport, for Defendant-Appellee, Wilson Production 16 LLC.
Before WILLIAMS, STEWART and MOORE, JJ.
STEWART, J.
In this concursus action to determine entitlement to the proceeds from a producing gas well in DeSoto Parish, the trial court granted summary judgment in favor of the plaintiff, Justiss Oil Company, Inc., ("Justiss"), recognizing it as the owner of one-half of the mineral rights attendant to property referred to herein as "Lot 5." The defendants, Wilson Production 16, L.L.C., along with the Louisiana State Mineral Board, the Louisiana Wildlife and Fisheries Commission, the Louisiana Department of Wildlife and Fisheries, and the Louisiana Department of Natural Resources now appeal the granting of summary judgment in favor of Justiss and the denial of their cross-motions for summary judgment.
At issue is whether the mineral rights were reserved to the State of Louisiana (the "State") under La. Const. 1921, Article IV, § 2, when a patent conveying Lot 5 was issued in 1935, upon presentation of a lieu warrant that had been issued in 1919. For reasons explained in this opinion, we find that the mineral rights attendant to Lot 5 were reserved to the State by operation of law when the patent was granted in 1935. Accordingly, the trial court erred in granting summary judgment in favor of Justiss and in denying the cross-motions by the defendants.
FACTS
Justiss is the operator of a producing natural gas well in DeSoto Parish identified as the "Justiss Oil Company, Inc. Louisiana Wildlife and Fisheries 16 No. 1 well." Included in the unit for the well is Lot 5, which is identified as follows:
Governmental Lot 5 or the fractional Southwest Quarter of the Northeast Quarter, Section 16, Township 14 North, Range 12 West.
Lot 5 comprises about 37 acres out of the total unit of about 627 acres, and .05872036 of the gross production revenue for the well has been allocated to Lot 5.
Ownership of the mineral rights underlying Lot 5 is disputed. Justiss claims ownership of one-half of the mineral rights. Defendants claim the State owns all the mineral rights. Because Justiss as operator of the well is charged with distributing the production revenue, it filed this concursus action to have the conflicting ownership claims asserted and resolved.
Justiss filed a motion for summary judgment, which was followed by cross-motions for summary judgment by the defendants. In support of its motion, Justiss filed an affidavit by R. Joseph Wilson, the attorney who rendered the "Division Order Title Opinion" for the well. Exhibits to the affidavit include documentation establishing the chain of title for Lot 5.
Relevant to this dispute, the chain of title shows that in August 1896, the State had mistakenly sold 40 acres to which it had no title. On April 9, 1919, Frank J. Pierson had the erroneous 1896 entry certificate and patent cancelled and obtained *509 "Land Warrant No 187," referred to hereafter as the "lieu warrant." This entitled Pierson, his heirs or assigns to have the lieu warrant located upon lands of the "same class" as that of the original entry certificate and patent of 1896.
In January 1935, Joseph A. Clements presented the lieu warrant to the State's land office to have it located on Lot 5. Accordingly, Patent No. 101068 was issued by the State evidencing the conveyance of Lot 5 to Clements.
Justiss acquired Lot 5 along with other property through a sheriff's sale on September 9, 1981. Then, by act of sale dated January 11, 1999, Justiss sold Lot 5 and other acreage to the Louisiana Land Company of Rapides, Inc. ("LLCR"). In the act of sale, Justiss reserved "an undivided one-half (½) interest in and to all oil, gas and minerals in, on or under" the property.
By a cash sale deed executed on October 7, 1999, LLCR sold acreage, inclusive of Lot 5, to the Louisiana Wildlife and Fisheries Commission and the Louisiana Department of Wildlife and Fisheries. In June 2006, the Louisiana State Mineral Board granted a mineral lease to Cypress Energy Corporation covering state-owned acreage in DeSoto and Red River Parishes.
Justiss sought to establish by the chain of title that it reserved and owns an undivided one-half interest in the mineral rights underlying Lot 5. Defendants stipulated to the correctness of the chain of title established by Justiss. However, they argued that the mineral rights were not conveyed in 1935, but were reserved in favor of the State as mandated by La. Const. 1921, Article IV, § 2. Justiss countered that because the patent was issued pursuant to a 1919 lieu warrant, Art. IV, § 2 did not apply.
The trial court agreed with Justiss's argument and granted summary judgment in its favor, recognizing it as owner of one-half of the mineral rights underlying Lot 5. Defendants now appeal.
DISCUSSION
Summary judgments are reviewed de novo on appeal using the same criteria that govern the trial court's consideration of whether summary judgment is appropriate. Bellard v. American Cent. Ins. Co., XXXX-XXXX (La.4/18/08), 980 So. 2d 654. Summary judgment shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits show that there is no genuine issue as to material fact and that the mover is entitled to summary judgment as a matter of law. La. C.C.P. art. 966(B).
The facts of this matter are undisputed. What remains to be determined is whether the patent issued by the State in 1935, pursuant to the 1919 lieu warrant, conveyed the mineral rights with the land or whether the State reserved the mineral rights as mandated by La. Const. 1921, Art. IV, § 2. Though similar disputes have been addressed by the courts, the facts of this case present a res nova issue.
Issuance of the lieu warrant in 1919 was authorized by Act No. 104 of 1888, which was enacted for the following purpose:
To authorize the register of the State land office, where it is made to appear that dual or double entries have been made, to cancel the invalid and erroneous entry and to issue a warrant therefor, locatable on other State lands of the same class as was originally entered.
As indicated in Act No. 104, there were instances where the State had sold the same land twice or sold land that had already been patented and sold by the United States government. To resolve the *510 conflicting claims, the State authorized the land office to cancel the erroneous sales and issue "warrants," referred to here as lieu warrants, which were assignable. The lieu warrants could then "be located on the same class of lands that were originally entered by the party or parties in whose favor they were issued." Act No. 104 of 1888, Section 3.
In 1921, a new state constitution was adopted. La. Const. 1921, Art. IV, § 2 included the following language:
In all cases the mineral rights on any and all property sold by the State shall be reserved, except where the owner or other person having the right to redeem may buy or redeem property sold or adjudicated to the State for taxes.
Almost 14 years after the Constitution of 1921 was adopted, Joseph Clements presented the 1919 lieu warrant to the State to have it located on Lot 5 in DeSoto Parish. A patent declaring that the State "does give, grant, and sell" the specified land to Clements was issued on January 28, 1935.
Even though Art. IV, § 2 mandated the reservation of mineral rights on any and all property sold by the State, Justiss argues that this provision did not apply to the conveyance that took place in 1935. Instead, Justiss focuses on the date of the lieu warrant. Justiss asserts that the issuance of the lieu warrant in 1919 pursuant to Act 104 created a contractual or vested right. Citing La. Const. 1921, Art. IV, § 15, which prohibited the passage of ex-post facto laws, laws impairing the obligation of contracts, or laws that would operate to divest one of vested rights, Justiss asserts that Art. IV, § 2 could not be applied retroactively so as to impair the rights under a lieu warrant issued prior to 1921. Rather, Art. IV, § 2 applies prospectively only. Lastly, Justiss asserts that jurisprudence has consistently held that lieu warrants issued before 1921 obligated the State to convey mineral rights along with surface rights.
Contrary to Justiss's assertion, defendants interpret jurisprudence as holding that no rights vest with the issuance of the lieu warrant. They assert that property rights vest only when the lieu warrant is presented to obtain a patent for a specifically identified parcel of land. Defendants assert that this occurred when Clements applied to the State in 1935 for a patent to locate the lieu warrant on Lot 5. By then, the 1921 Constitution had been in effect for almost 14 years, and no mineral rights were conveyed with the land.
State ex rel. Hyams' Heirs v. Grace, 173 La. 215, 136 So. 569 (La.1931), hereafter "Hyams I," and State ex rel. Hyams' Heirs v. Grace, 197 La. 428, 1 So. 2d 683 (La.1941), hereafter "Hyams II," are the main cases relied on by Justiss. Both stem from the same underlying facts. In 1863, Henry Hyams purchased land from the State which had already been sold by the United States government. By the time Act No. 104 was passed to indemnify the holders of patents for land which the State did not own, Mr. Hyams had died and his children were all minors. Pursuant to Act 104, Hyams' executor had the erroneous patent canceled in 1888, and at the same time filed an application for a lieu warrant. The executor died before the lieu warrant was issued, and no action was taken by the State on the warrant application. When Hyams' heirs reached the age of majority, the warrant application was found, and a lieu warrant was issued to them in 1917. At the same time, Hyams' heirs applied for a patent to partially locate the lieu warrant on 120 acres of land in Union Parish.
In Hyams I, the State refused to issue the patent on the grounds that the lieu warrant had been issued in 1917, after Act *511 No. 104 had been repealed and superseded by Act No. 131 of 1906. Act 131 authorized refunds rather than the issuance of lieu warrants to the holders of erroneously granted patents. The Hyams heirs filed a mandamus action to compel the State to issue the patent. Though the trial court ruled in favor of the State, the judgment was reversed on appeal and mandamus relief granted. The supreme court concluded that Act 131 neither repealed nor superseded Act 104. Even though the lieu warrant had not been issued until 1917, Hyams' executor had applied for the lieu warrant in 1888, and had done everything required of him under Act No. 104 to obtain the lieu warrant. However, the register of the State's land office had failed to fulfill his ministerial duty and had not issued the lieu warrant until 1917. Accordingly, the Hyams heirs had the same rights as if the warrant had been issued when applied for in 1888.
Hyams II, which is more relevant to this matter, was another mandamus proceeding brought by the Hyams heirs after the State refused applications for patents to locate the lieu warrant on specified lands. The heirs also sought injunctive relief to prevent the State from granting mineral leases before issuance of the patents. Patent applications made in 1917, 1918, 1919, and again in 1938 were all rejected. The main issue on appeal concerned the State's claim that the action to enforce the lieu warrant was a personal action that had prescribed. Noting that a lieu warrant "contemplates a future location of the warrant on lands of like character belonging to the State without designating any particular time within which it can be done," the court rejected the State's prescription argument. Hyams II, 197 La. at 437, 1 So.2d at 686. Relevant to the case sub judice, the State also argued that the patents could not be issued without a reservation of the mineral rights as required by Art. IV, § 2. The court rejected this argument. Concluding that the constitutional provision had prospective effect only, the court explained:
There is no language used therein to indicate that this constitutional provision is to apply to transfers of property under lieu warrants previously issued under Act No. 104 of 1888. In our opinion it deals with future sales of land made by the State and there is nothing contained therein to suggest that it was intended to destroy or impair a contract previously entered into by the State.
Hyams II, 197 La. at 438, 1 So.2d at 686.
Justiss's reliance on Hyams II appears well founded. The opinion suggests that lieu warrants issued under the authority of Act No. 104 create a contractual right that cannot by impaired by Art. IV, § 2. The Hyams II holding was reiterated again by the supreme court in support of its decision in Schwing Lumber & Shingle Co. v. Board of Com'rs of the Atchafalaya Basin, 200 La. 1049, 9 So. 2d 409 (La.1942), in which ownership of mineral rights was disputed between the plaintiff and the State. Schwing had purchased the land from a private party in 1930, at which time the levee district executed a quitclaim deed. The levee district had previously entered a contract to sell the property in 1900, and received the purchase price in 1904 from the original purchasers. However, it argued that title did not divest from the State until execution of the quitclaim deed in 1930, after Art. IV, § 2 was in effect. The court rejected the Levee District's argument and found that the quitclaim deed merely confirmed and made certain the title to both the land and minerals that had already vested in the original purchasers, and then to Schwing, long before adoption of the Constitution of 1921.
*512 Though Schwing, supra, cites Hyams II as support for its finding that the State did not own the mineral rights, the evidence in Schwing established that the State through the levee district had sold the specific property at issue years before Art. IV, § 2 was enacted in 1921. Even in Hyams II, the heirs had applied for patents to locate the lieu warrant on specifically identified land three times before adoption of the Constitution of 1921. It was the State's failure to act on the patent applications that delayed issuance until after 1921. Because the heirs had done all the law required them to do to obtain the patents, the supreme court was correct in ordering them issued without reservation of mineral rights by the State. Considering that the sale and transfer of the land in Schwing, supra, occurred years before 1921, that case does little to advance Justiss's position. Moreover, the specific facts of Hyams II, supra, and the supreme court's subsequent opinions on similar matters weigh in the defendants' favor.
Douglas v. State, 208 La. 650, 23 So. 2d 279 (La.1945), is another matter stemming from the same facts as Hyams I and Hyams II. After issuance of the lieu warrant in 1917, Judith Hyams Douglas applied for a patent in 1919 to locate part of the warrant on land in Union Parish. No action was taken until she renewed her application in 1939, at which time her application was rejected. The State had withdrawn the land from sale and had granted a mineral lease in favor of Standard Oil Company of Louisiana. Following abandonment of the lease by Standard Oil and the decisions in Hyams I, supra, and Hyams II, supra, the State issued Douglas's patent. Claiming that the property became hers when she filed for the patent in 1919, or at least when she renewed her application in 1939, Douglas filed suit to recover the cash bonus received by the State for the mineral lease. The supreme court agreed with Douglas and explained:
[W]hen the plaintiff applied for the patent in 1919 and renewed the same in 1939, her right thereto became perfect and complete and she thereby acquired a vested right to the property the same as if the patent had issued, entitling her to all revenues derived therefrom.
Douglas, 208 La. at 663, 23 So.2d at 283.
The court focused on the date of the patent application, rather than the date of the lieu warrant, as the date when Douglas acquired vested rights in the property. Though the court referred to dates both in 1919 and 1939, we can reasonably deduce that Douglas's rights vested upon her initial patent application in 1919, prior to adoption of the 1921 Constitution, thereby entitling her rather than the State to ownership of the mineral rights and the bonus paid to the State for the mineral lease. The supreme court's focus on the patent date can be read as a clarification of its earlier decision in Hyams II wherein the court concluded that the 1921 Constitution would not apply to "transfers under lieu warrants previously issued" under Act No. 104. In both Hyams II and Douglas, supra, the Hyams heirs had applied for patents as to specifically identified property prior to the enactment of the 1921 Constitution. But for the State's failure to act and wrongful denial of the patent applications, the "transfers under lieu warrants" would have occurred prior to adoption of the 1921 Constitution. The plaintiffs' property rights vested at the time of their patent applications in 1917, 1918, and 1919, entitling them to both the surface of the land and the mineral rights attendant thereto.
In Lewis v. State, 244 La. 1039, 156 So. 2d 431 (La.1963), the supreme court reversed a judgment that had decreed the *513 plaintiff owner of mineral rights to property for which a patent had issued in 1943. A defective patent had been issued by the State in 1862. The holders of the defective patent did not apply for the lieu warrant authorized by Act 104 until 1942. Shortly after the lieu warrant was issued, its holder applied for and obtained a patent locating the warrant on land in Calcasieu Parish. A dispute then arose as to ownership of the mineral rights. The State claimed that because the patent had not issued until 1943, it owned the mineral rights by application of Art. IV, § 2. The plaintiff claimed that constitutional provision did not apply because her rights accrued from Act 104, which authorized the lieu warrant as a remedy for defective patents. In reliance on Hyams I, supra, and Hyams II, supra, the appellate court reasoned that the property for which the patent had issued was delivered in final consummation of the defective 1862 sale and in fulfillment of the obligations assumed by the State when it issued the lieu warrant under the authority of Act 104. The supreme court rejected this reasoning.
The supreme court explained that the only events that occurred prior to 1921 were the issuance of the defective patent in 1862 and the passage of Act 104. Neither of these events gave or vested any rights in connection with the land at issue. Addressing Act 104, the court explained that it merely authorized the State's land office "to cancel a defective patent and issue a warrant locatable on other state lands of the same class." Lewis, 244 La. at 1045, 156 So.2d at 433. Act 104 contemplated specific action by the holder of the defective patent to achieve a vesting of rights. The court concluded that Art. IV, § 2 applied to the conveyance at issue where no action had been taken by the holder of the defective patent until 1942. The court stated that Article IV, § 2 is "mandatory" and explained:
It applies to all sales of land, whereby the state divests itself of title, with one exception: the redemption of property adjudicated to the state for taxes. Had it been intended to except sales under Act 104 of 1888, the exception also would have been formally expressed.
(Emphasis added.) Lewis, 244 La. at 1048, 156 So.2d at 434.
The Lewis opinion clarifies that there is no exception for sales or transfers of land under Act 104 of 1888 in La. Const. 1921, Art. IV, § 2. This appears in conflict with the Hyams II conclusion that Art. IV, § 2 applied to future sales of land and did not apply to property transferred under lieu warrants issued under Act 104. Both Hyams II and Lewis concern sales that resulted from the passage of Act 104 and the lieu warrants issued under the authority of that act. The seemingly contrary pronouncements in Hyams II and Lewis regarding the applicability of Art. IV, § 2 to sales stemming from Act 104 can be reconciled based on when the sale or transfer of land under the lieu warrants occurred. The facts of these cases show that no sale or transfer occurred until the holder of the lieu warrant applied for a patent on a specifically identified parcel of land. In Hyams II, patent applications were made in 1917, 1918, and 1919, all prior to enactment of the 1921 Constitution. It was the State's failure to act that prevented issuance of the patents prior to 1921. Thus, the court correctly determined that the property would be conveyed without reservation of mineral rights by the State. The rights of the Hyams heirs vested prior to 1921, when the initial patent applications were made to locate the lieu warrant on specific lands. In Lewis, supra, the fact that the lieu warrant had been issued under the authority of Act 104 was of no moment. Because the patent application had not been made *514 until many years past 1921, the court correctly found that the State retained the mineral rights by operation of Art. IV, § 2. In both cases, the mere issuance of the lieu warrant conveyed no property rights regardless of whether issuance occurred prior to 1921 or after. Finding that property rights vest at the time of the patent application is the very approach taken by the supreme court in Douglas, supra, and is considered by this court to be the correct approach.
Further support for our reasoning is found in Standard Oil Company of Louisiana v. Allison, 196 La. 838, 200 So. 273 (La.1941), another concursus proceeding to determine entitlement to proceeds from the sale of oil. After receiving land from the State in 1895, a levee district sold the land to a private party. However, no formal certificates of conveyance were issued at the time of the sale. It was not until after enactment of Art. IV, § 2 that certificates of conveyance covering all the land sold were issued. The State then claimed that it owned the mineral rights, but the court rejected the State's claim. The court reasoned that the failure to issue the conveyance certificates was the fault of the state officials who failed to perform their ministerial duties. Even though the certificates of conveyance were not issued until after 1921, the court found that the levee district had full power and authority to contract and to sell lands it owned and that it had done so in 1895, thereby conveying rights and interests in the land to the purchasers. The court noted that this was not a case where the parties through their own volition or indifference waited until after the adoption of the 1921 Constitution to demand issuance of the certificates of conveyance by the state officials.
In light of the foregoing cases, we find that issuance of a lieu warrant did not convey rights to any specific land. It simply authorized the holder, his heirs, or assignees to find at some indeterminate time in the future other state-owned lands of the same class for which a patent could be granted. To acquire vested property rights, the holder of the lieu warrant had to locate available land and obtain the issuance of a patent. Until land was specifically identified and a patent sought, the state had full authority to sell its land, to grant mineral leases, and to take any actions permitted a landowner. Where the state failed to act on the patent application as in Hyams II, supra, or wrongfully denied the patent application as in Douglas, supra, property rights vested when the application was made the same as though the patent had been issued. If the holder of a lieu warrant waited to apply for a patent locating the warrant on specifically identified land until after adoption of the 1921 Constitution, then he obtained a patent subject to the reservation of mineral rights in favor of the State as provided in Art. IV, § 2.
In this matter, the lieu warrant was granted in 1919. No property rights vested at that time. It was not until January 1935, when Joseph Clements applied for and obtained a patent for Lot 5 in DeSoto Parish, that he obtained property rights to that specific land. By that time, Art. IV, § 2 mandated reservation of the mineral rights on any and all property sold by the State. Accordingly, the mineral rights were reserved to the State by operation of law, and only the surface rights were conveyed to Clements and down the chain of title. We find that Justiss's reservation of mineral rights as pertaining to Lot 5 had no effect as there were no mineral rights to reserve.
CONCLUSION
For the reasons explained, summary judgment in favor of Justiss is hereby *515 reversed and vacated. Summary judgment in favor of the defendants is hereby granted, declaring the State of Louisiana to be the owner of 100% of the mineral rights attendant to Lot 5. This matter is remanded for further proceedings to disburse the proceeds deposited in the registry of the court. Costs of this appeal are assessed against Justiss.
REVERSED, RENDERED, and REMANDED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565475/ | 433 S.W.2d 530 (1968)
LA-REY, INC., Appellant,
v.
Fredericka Yates KOWALSKI (Leonard), Appellee.
No. 14713.
Court of Civil Appeals of Texas, San Antonio.
October 23, 1968.
*531 Marcel Notzon, II, Argentina Cronfel, Mann, Cronfel & Mann, Laredo, for appellant.
Hall & Juarez, Laredo, for appellee.
BARROW, Chief Justice.
The primary question presented by this declaratory judgment appeal is whether payment of a secured indebtedness with the proceeds of credit life insurance inured to the benefit of the insured debtor's widow or to the assuming grantee. The trial court determined that said payment inured to the benefit of the appellee widow who had subsequently remarried and entered judgment that she recover from appellant the sum of $4,718.54, with certain interest provisions. Appellant duly appealed from this judgment and appellee has asserted a cross-point urging that she is entitled to judgment for foreclosure of the chattel mortgage lien securing said indebtedness, together with reasonable attorney's fees.
All facts were stipulated to the trial court. On December 15, 1965, Louis Kowalski, Jr., husband of appellee, executed a conditional sales agreement whereby he agreed to purchase certain garage machinery and equipment from Jacobs Distributing Co., and in consideration thereof he executed a note in the amount of $9,436.94, payable *532 in 24 installments at the Brooks Field National Bank of San Antonio. This note was immediately assigned by Jacobs to said Bank. Included in said note was a premium of $165.20 for a credit life insurance policy which was issued by Three Americas Life Insurance Company on the life of Kowalski with the Brooks Field National Bank as credit beneficiary for the amount owed on the note, and with the estate of the insured being named as beneficiary for any excess.
On November 1, 1966, Kowalski entered into a letter agreement to sell his service station, together with all equipment, to three individuals for an estimated price of $29,623.74, pending actual inventory of the equipment. This agreement provided that the three contracting individuals would form a private corporation and, in accordance therewith, appellant, La-Rey, Inc., was created and succeeded to their rights. On November 28, 1966, Louis Kowalski executed a bill of sale to appellant to said station and equipment for the total price of $26,404.53. The note and lien to the Bank were expressly recognized therein and appellant assumed and agreed to pay said outstanding indebtedness in accordance with the terms and conditions of said note. There was no reference to the credit life insurance policy in the agreement. The parties stipulated that the equipment covered by this note was of the appraised value at this time of $7,914.77 after a 15% discount was given appellant, and appellant assumed, as a part of the agreed purchase price, payment of the remaining balance of $5,933.00 due the Bank on said note.
Although the original agreement between Kowalski and the three individuals provided that the owner of the note would consent to the assumption of the balance by appellant, the Bank never took any action whatsoever so as to relieve Kowalski of his primary obligation to the Bank on said note. Three payments were made on the note by appellant prior to Kowalski's death on February 9, 1967. In March, 1967, Three Americas paid the Bank the remaining indebtedness of $4,718.54 due on said note, and the Bank marked the note paid and returned it to appellee. No further payments were made by appellant, but in June, 1967, it filed this suit for declaratory judgment and in its petition alleged that it was willing to tender any amount that the court might require.
It is clear that as between Kowalski and appellant, the latter was primarily liable on this note with Kowalski liable as surety. Gunst v. Pelham, 74 Tex. 586, 12 S.W. 233 (1889); 9 Tex.Jur.2d Bills and Notes, § 123. Appellant concedes that where a surety is required to discharge an indebtedness or obligation of his principal, he is subrogated to the rights of the creditor. See Fox v. Kroeger, 119 Tex. 511, 35 S.W.2d 679, 77 A.L.R. 663 (1931); Halpenny v. Maldonado, 415 S.W.2d 16 (Tex.Civ.App.San Antonio 1967, no writ). It urges, however, that appellee was only a mere volunteer in making this payment and therefore not entitled to subrogation. Verschoyle v. Holifield, 132 Tex. 516, 123 S.W.2d 878 (1939); Small v. Brooks, 163 S.W.2d 236 (Tex.Civ.App. Austin 1942, writ ref'd w.o.m.).
Both parties state there is no Texas case in point on this question and we have found none in our own research. Each party relies, however, on conclusions stated in a review of Betts v. Brown, 219 Ga. 782, 136 S.E.2d 365 (1964) by Mr. William A. Thau, Jr., in 43 T.L.R. 580. Mr. Thau correctly reasons that as between the creditor and the insured debtor, credit life insurance is treated as collateral security and therefore payment of the debt with credit life insurance is payment by the insured debtor, just as payment with any collateral security is payment by the owner thereof. The presence of an assuming grantee who has no right to change the beneficiary under the policy, and therefore no claim of ownership, should not alter that result. Here there was no agreement between Kowalski and appellant relative to said insurance policy and therefore appellant has no claim of ownership of same.
*533 In Betts v. Brown, supra, the Georgia Supreme Court held that payment of the debt with proceeds of a credit life insurance policy was an involuntary payment by the insured resulting in a right of subrogation by the insured's estate against the assuming guarantee. It is seen that the note involved there was actually in default at the time of insured debtor's death although no foreclosure proceedings or other action had been instituted against the debtor. Mr. Thau questions whether in a situation where the note is not in default, as in our case, the payment will still be considered involuntary by the insured debtor.
We conclude that payment of this collateral security on the death of Kowalski was an involuntary payment insofar as he and his estate are concerned. The credit beneficiary had the right to such proceeds on his death without consent or agreement by insured's estate. Since neither the insured nor his estate had any control over the use of these funds or the time that they were used, we consider said payment as one other than that of a mere volunteer.
Similar results have been reached in cases from other jurisdictions. In Kincaid v. Alderson, 209 Tenn. 597, 354 S.W.2d 775 (1962), it was determined that to hold that the proceeds of the policy inured to the benefit of the assuming grantee would amount of an unjust enrichment of said grantee. Accordingly, grantee was required to reimburse the surety to the extent of the enrichment. Citing Restatement Security, § 104. Similar results were reached in Hatley v. Johnston, 256 N.C. 73, 143 S.E.2d 260 (1965), and Tighe v. Walton, 283 Miss. 781, 103 So. 2d 8 (1958). In Miller v. Potter, 210 N.C. 268, 186 S.E. 350 (1936), subrogation was denied, but in that case the creditor had purchased the policy and therefore was the owner of same.
Furthermore, Kowalski remained primarily liable to the Bank, since it did not consent to the assumption of the note or take any other action to recognize appellant as the primary debtor. In Verschoyle v. Holifield, supra, the following definition of a volunteer was quoted with approval from 25 Ruling Case Law 1325, § 11: "A stranger or volunteer, as those terms are used with reference to the subject of subrogation, is one who, in no event resulting from the existing state of affairs, can become liable for the debt, and whose property is not charged with the payment thereof and cannot be sold therefor. He is not necessarily one who has had nothing to do with the transaction out of which the debt grew. Anyone being under no legal obligation of liability to pay the debt is a stranger, and if he pays the debt, a mere volunteer. A person who is under no obligation whatever to pay the debt of another secured by a mortgage, and who has no interest in or relation to the property, is a volunteer, within the meaning of the rule." Neither Kowalski nor his estate can be called a "mere volunteer" under this definition. It has been said that a surety may protect himself by settling at any time, without prejudice to the principal, the indebtedness for which he is liable, payment before maturity not being deemed voluntary. 50 Am.Jur., Suretyship, § 238; 83 C.J.S. Subrogation § 48a(2).
The trial court did not error in concluding that appellant's obligation was not discharged as a result of payment of the note by the credit life insurer. Since appellant was legally a stranger to said policy, it is not in a position to urge or complain that the insurer was not obligated to make this payment under terms of the policy.
A more difficult question is presented as to appellee's right to attorney's fees and foreclosure of the lien, in that by filing this suit for declaratory judgment appellant indicated every willingness to carry out the terms of the judgment. However, three payments were overdue at the time this suit was filed and neither these, nor the other monthly payments were made or tendered into the registry of the court. There is no stipulation which would relieve appellant *534 of its obligation to make such monthly payments. It was stipulated that in the event attorney's fees were recoverable, a reasonable fee would be 20% of the principal balance owing on said note. It is seen that the entire note was due and payable by the time this judgment was entered. Since we have held that appellee was subrogated to the rights under said note and chattel mortgage lien, she therefore is entitled to recover her attorney's fees as stipulated and to have execution on this judgment through foreclosure under the terms of said chattel mortgage.
The judgment of the trial court is accordingly reformed to provide that appellee recover the sum of $943.70 as attorney's fees and that she have foreclosure of said chattel mortgage lien. In all other respects the judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565467/ | 433 S.W.2d 265 (1968)
Donald Dale HOLT, Appellant,
v.
STATE of Missouri, Respondent.
No. 53559.
Supreme Court of Missouri, Division No. 2.
November 12, 1968.
*266 Henry W. Westbrooke, Jr., Springfield, for appellant.
Norman H. Anderson, Atty. Gen., Arnold Brannock, Asst. Atty. Gen., Jefferson City, for respondent.
STOCKARD, Commissioner.
Donald Dale Holt was convicted by a jury of the offense of possessing an "apparatus, device or instrument for the unauthorized use of narcotic drugs," and was sentenced to imprisonment for a term of five years. Upon appeal to this court the judgment was affirmed. State v. Holt, Mo., 415 S.W.2d 761. He has now appealed from the denial, after hearing, of his motion pursuant to Supreme Court Rule 27.26, V.A.M.R., to vacate that sentence and judgment.
Appellant's first point is that the trial court was "clearly in error" in ruling that he "did not sustain his burden of establishing his grounds for relief by a preponderance of the evidence, for the record is replete with evidence that appellant was deprived of his constitutional right to be represented by able and adequate trial counsel." This point does not comply with the requirement of Civil Rule 83.05, V.A.M.R., that points relied on, in addition to stating briefly and concisely what actions and rulings of the court are claimed to be erroneous, shall also "briefly and concisely state why it is contended the court was wrong in any action or ruling sought to be reviewed." However, from the argument in appellant's brief we find that "the base of appellant's complaint is the fact that court-appointed trial counsel failed to file a motion to suppress evidence obtained in a search and also failed to object to the admissibility of that evidence during trial." He then asserts that failure to do so caused a waiver of his constitutional rights.
Court-appointed trial counsel was a highly respected member of the Greene County bar and a former assistant prosecuting attorney who had extensive experience in the trial of criminal cases. The evidence referred to constituted the apparatus, devices and instruments which appellant was charged with unlawfully possessing. Counsel did not file a written motion to suppress in advance of trial, but he did discuss the matter with the court in chambers. After an investigation of the facts by trial counsel, and in the exercise of his professional judgment as a lawyer experienced in the trial of criminal cases, he came to the conclusion *267 that the various items had not been unlawfully seized by the police. For that reason, and because in the pretrial conference the trial court had indicated that its ruling would be to overrule a motion to suppress, counsel did not file a written motion. The judgment on the part of trial counsel was certainly not without support under the circumstances, and the fact that subsequently appointed counsel or appellant with the benefit of hindsight might have a different opinion does not establish lack of effective representation by trial counsel.
In State v. Worley, Mo., 371 S.W.2d 221, in a proceeding under Supreme Court Rule 27.26, the appellant asserted that the failure of his court-appointed trial counsel to file a motion to suppress evidence and his failure to object to the admission of evidence resulted in the denial of effective representation by counsel. In that case, as in the pending case, the trial counsel was a well-known and respected member of the bar. In the Worley case this court assumed, for the purpose of disposing of the contention, that trial counsel adopted what later appeared to be unwise strategy in some respects. We shall so assume in this case, but we make it plain that we do not find that to be a fact. In the Worley case this court commented as follows: "This court `has consistently followed the rule that "negligence or want of skill of counsel affords no ground for the reversal of even a criminal case [State v. Dreher, 137 Mo. 11, 23, 38 S.W. 567, 569; State v. Selvaggi, 319 Mo. 40, 45, 2 S.W.2d 765, 767]." State v. Mason, 339 Mo. 874, 98 S.W.2d 574, 577.' State v. Childers, [Mo.] * * * 328 S.W.2d [43] 45. In cases under the federal statute (28 U.S.C.A. § 2255), which is similar to Rule 27.26, the courts have adopted the rule that `Lack of effective assistance of counsel in the trial of a criminal case constitutes impingement upon a constitutional right of the accused and lays the judgment and sentence open to collateral attack by motion under the statute. But the constitutional right to the effective assistance of counsel does not vest in the accused the right to the services of an attorney who meets any specified aptitude test in point of professional skill. And common mistakes of judgment on the part of counsel, common mistakes of strategy, common mistakes of trial tactics, or common errors of policy in the course of a criminal case do not constitute grounds for collateral attack upon the judgment and sentence by motion under the statute. It is instances in which resulting from the substandard level of the services of the attorney the trial becomes mockery and farcical that the judgment is open to collateral attack on the ground that the accused was deprived of his constitutional right to effective assistance of counsel. Mitchell v. United States, 104 U.S.App. D.C. 57, 259 F.2d 787, certiorari denied, 358 U.S. 850, 79 S. Ct. 81, 3 L. Ed. 2d 86; Black v. United States, 9 Cir., 269 F.2d 38, certiorari denied, 361 U.S. 938, 80 S. Ct. 379, 4 L. Ed. 2d 357.' Frand v. United States, 10 Cir., 301 F.2d 102, 103 (1962)."
We do not consider State v. Burton, 99 N.J.Super. 52, 238 A.2d 498, cited and relied on by appellant to require affirmative relief in this case. There trial counsel did not move to suppress evidence, and on direct appeal the court remanded the case for a determination of whether the evidence should have been suppressed. If so, a new trial was ordered; if not, the judgment was affirmed. However, the court stated that it was "not to be understood as holding that any failure of trial counsel (even where assigned) to make a pretrial motion to suppress can be overcome on appeal or post-conviction proceedings by a contention that the defendant is not bound by counsel's election or exercise of judgment in the matter." The ruling in the Burton case was "limited" to the facts of that case, one of which was that there was "no indication" that after adequate consideration of "all the implications of the question, [counsel] advisedly concluded there was inadequate merit in such a motion."
The burden was on appellant in the hearing on his motion to sustain his right to relief, which in this case required proof of ineffective representation by *268 counsel at his trial. State v. Warren, Mo., 344 S.W.2d 85. This he did not do. In fairness to his trial counsel we should point out that such evidence as was produced at the hearing on the motion under Rule 27.26, even when considered with the facts brought out at the trial, see State v. Holt, Mo., 415 S.W.2d 761, establishes that trial counsel was correct in his determination that a motion to suppress was not warranted by the facts. However, we make it plain that the correctness of his judgment, reviewed with the benefit of hindsight, is not the basis for our denial of relief in this proceeding under Rule 27.26.
In his motion appellant alleges five other matters which he apparently believed constituted evidence of failure of effective representation. Apparently, in the exercise of his professional judgment, appellant's counsel on this appeal is of the opinion that they are without merit because, although they are set out in the brief, there is no attempt to demonstrate their merit. We have examined them, and they are in fact frivolous and totally lacking in merit.
Appellant's remaining point is that the trial court erred in concluding that his right of appeal was not jeopardized as a result of the trial court's records failing to show the timely filing of a motion for new trial.
Certain background facts are helpful. On the appeal from the judgment of conviction the record before this court affirmatively showed that the motion for new trial was not timely filed. For that reason this court refused to rule the merits of a contention therein made pertaining to a voluntary statement by witness Jackie McDaris. See State v. Holt, Mo., 415 S.W.2d 761 at p. 765. As a matter of precaution, this court before so ruling inquired of the clerk of the circuit court where the trial occurred and was informed that there was no record of an extension of time within which to file the motion. It is now admitted by all parties that an extension was in fact granted by the trial court, although for some unexplained reason no record of the extension was made, and that the motion was timely filed. Therefore, when in the consideration of the original appeal this court ruled that it could not consider the assignment of error because the motion for new trial had not timely been filed, it was operating under a mistake of fact not appearing on the records, which error of fact was not known to appellant, and which if known to the court would have prevented the entry of the judgment which was entered if the assignment of error which was not ruled on its merits demonstrated prejudicial error. We shall consider the allegations in the motion under Rule 27.26 pertaining to this issue to be an application for a writ of error coram nobis, see Norman v. Young, Mo., 301 S.W.2d 820, and we shall review in this proceeding such matters as appellant contends should have been reviewed on the appeal from the judgment and conviction, but which were not ruled on their merits because of the mistake of fact pertaining to the timeliness of his motion for new trial.
The only issue now presented which appellant asserts should have been ruled on the previous appeal, and which was not ruled on its merits, pertained to a voluntary statement in an answer of witness Jackie McDaris. The point in appellant's brief on the previous appeal was as follows: "The trial court erred in overruling Appellant's motion for mistrial and discharge of the jury." This was insufficient to preserve any issue for appellate review, and the issue could now be disposed of on that basis. However, from the argument portion of the brief filed in the previous appeal it appears that reference was made to the following incident. Jackie McDaris, a witness for the state, was asked "how many times" she had seen appellant "go through this operation" of boiling paregoric, pouring the residue through cotton, and placing it in a hypodermic needle for injection in his arm. The witness answered, "Well, just once before, that's the first time he was arrested for it." The court sustained an objection and instructed the jury to disregard *269 "that voluntary statement," but refused to declare a mistrial. We note that at the close of all the evidence the court and counsel for appellant and for the state conferred in chambers about this incident. The court inquired of the state's counsel whether he had any reason to believe that the comment would be volunteered, and as the result of this inquiry the court was satisfied that the statement was strictly voluntary on the part of the witness. After the discussion the court stated that under all the circumstances it was of the opinion that it was proper to refuse the request for a mistrial.
We shall now review the merits of appellant's contention that the refusal of the trial court to declare a mistrial because of the voluntary remark of the witness requires a reversal of the judgment, and in doing so we will review this matter precisely the same as would have been done upon the original appeal from the judgment of conviction. We have read carefully the argument and cases cited pertaining to this point in the brief of appellant which was filed in his original appeal.
Appellant argued that the voluntary statement by Jackie McDaris constituting a showing that he was guilty of a separate offense, and we agree that that is not an unreasonable inference. We also agree that the objection to the statement was properly sustained by the trial court. State v. Atkinson, Mo., 293 S.W.2d 941. However, every error which might occur in the trial of a case does not necessarily require the granting of a mistrial. State v. Camper, Mo., 391 S.W.2d 926. The declaration of a mistrial is a drastic remedy, and the power of a trial court in this respect "should be exercised only in extraordinary circumstances." State v. James, Mo., 347 S.W.2d 211. Stated another way, "a mistrial should be granted only when the incident is so grievous that the prejudicial effect can be removed no other way." State v. Camper, supra. For this reason, the declaration of a mistrial necessarily and properly rests largely in the discretion of the trial court who observed the incident giving rise to the request for a mistrial, and who is in a better position than an appellate court to evaluate the prejudicial effect and possibility of its removal short of a mistrial. The proper function of an appellate court in the situation we have before us is to determine whether as a matter of law the trial court abused its discretion in refusing to declare a mistrial. State v. Smith, Mo., 431 S.W.2d 74, 83.
We have found two cases involving voluntary statements by a witness when the issue on appeal was whether it was an abuse of discretion on the part of the trial court to refuse a mistrial. In State v. Adamson, Mo., 346 S.W.2d 85, the witness volunteered the statement that he "passed some checks in St. Louis that came through" the defendant, which clearly indicated a separate offense by defendant. This court reviewed the rules above set out pertaining to the discretion vested in the trial court and our scope of review, and it then held that there was no abuse of discretion in refusing a mistrial. In State v. Statler, Mo., 331 S.W.2d 526, a similar situation was before this court and the same result was reached. The result of these two cases is that such voluntary statements as occurred in this case do not necessarily require a mistrial, but that the trial court, in its discretion, can determine that the prejudice can be removed by less drastic action, and that the issue on review is whether in its determination that the less drastic action was sufficient, the trial court abused its discretion.
When we consider all the circumstances in this case, the fact that the statement was unquestionably voluntary on the part of the witness, that the trial court immediately sustained the objection and instructed the jury to disregard the volunteered portion, and also that after the close of all the evidence the court again gave careful consideration to whether the remedial action taken was sufficient to remove the prejudice, we cannot, in the proper exercise *270 of our reviewing function, rule that the trial court abused its discretion.
Notwithstanding that by reason of an error of fact the assignment in the motion for new trial which was presented in a point in appellant's brief (although inadequately) was not considered on its merits on the original appeal, if it had been then so considered the decision of this court would have been the same as that entered. For that reason appellant's motion pertaining to this issue, which we have considered as an application for a writ of error coram nobis, is without merit.
The judgment is affirmed.
BARRETT and PRITCHARD, CC., concur.
PER CURIAM:
The foregoing opinion by STOCKARD, C., is adopted as the opinion of the Court.
FINCH, P. J., DONNELLY, J., and GODFREY, Special Judge, concur.
EAGER, J., not sitting. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565476/ | 34 So. 3d 1230 (2010)
In the Matter of the ESTATE OF Lura Foster CARPENTER, Deceased: Bobby Dean Carpenter, Individually and as Executor Appellant.
v.
Autumn COSBY, Appellee.
No. 2009-CA-00114-COA.
Court of Appeals of Mississippi.
May 18, 2010.
*1232 William L. Maxey, attorney for appellant.
Cliff R. Easley, Jr., attorney for appellee.
Before LEE, P.J., IRVING and BARNES, JJ.
BARNES, J., for the Court:
¶ 1. Following the death of Lura Foster Carpenter (Lura), her three surviving childrenBobby Dean Carpenter (Bobby), Jerry Wayne Carpenter, and Nancy Lynn Carpenter Dempseyfiled a petition to probate Lura's will, which contained several handwritten interlineations and markings. Autumn Cosby (Autumn), the daughter of Lura's deceased child, challenged the probate of the will claiming that the handwritten markings showed that Autumn was to receive a child's share of the estate. The chancellor found that, based upon the handwritten changes to the will, Lura's original will was totally revoked and that Autumn should inherit a child's share through the laws of intestacy. Bobby now appeals the chancellor's judgment. Finding error, we reverse and remand for further proceedings by the chancery court consistent with this opinion.
SUMMARY OF FACTS AND PROCEDURAL HISTORY
¶ 2. Upon her death on May 27, 2007, Lura left a last will and testament, which was dated February 26, 1999. The will contained numerous deletions and added language handwritten by Lura. Paragraph III of the will states:
I have three children now living; my son, Jerry Wayne Carpenter; my son, Bobby Dean Carpenter; and my daughter, Nancy Lynn Carpenter Dempsey. It is my specific intent that my deceased daughter, Sandra Gwyn Carpenter McSheffrey, and her daughter, Autumn Cosby, will will not inherit anything under my Last Will and Testament except as specified herein. Any references to my children shall mean my three living children or their issue.
(Emphasis added).[1] In paragraph VII, Lura bequeathed a bedroom suite to another granddaughter, Tammy Maycock; however, she marked through a small portion of the sentence. This marking did not affect the above-stated bequest. Paragraphs VIII, IX, X, and XI were completely marked through, rendering them illegible. Finally, in paragraph XIII, Lura made another handwritten addition. Paragraph XIII reads:
I will, devise and bequeath any real property, including my residence, in equal shares to my children, Jerry Wayne Carpenter, Bobby Dean Carpenter and Nancy Lynn Carpenter Dempsey. In order to accomplish this, it is my desire that my real property, including my residence, be sold and the net proceeds divided equally between Jerry Wayne Carpenter, Bobby Dean Carpenter and Nancy Lynn Carpenter Dempsey [and] Autumn Crosby. If one of my children wants the real property, then that child shall pay the fair market value as determined by a duly licensed appraiser, whose name will be drawn from three appraisers; and the proceeds will be distributed between the other two children.
(Emphasis added).[2]
¶ 3. A Petition for Probate of Will, Letters Testamentary and Other Relief in the *1233 Matter of the Estate of Lura Foster Carpenter was filed on June 20, 2007. The petition alleged that Lura's entire estate was to be devised to her three living children: Jerry, Nancy, and Bobby. A decree admitting the will to probate and granting letters testamentary and other relief was entered on the same day. On October 23, 2007, Autumn, the daughter of Sandra Carpenter Cosby[3] who was Lura's predeceased child, filed a petition to construe the will. The petition requested that the handwritten markings to Lura's will be construed in such a manner that Autumn would inherit a child's share. The executor, Bobby, filed an Answer to Petition to Construe Will, asserting that the handwritten deletions were a partial revocation of the will and that the handwritten additions were not legally effective. He later filed a motion for judgment on the pleadings pursuant to Mississippi Rule of Civil Procedure 12(c). Autumn filed an answer and a cross-motion for judgment on the pleadings requesting that the chancery court find that the will was partially revoked, including the paragraphs containing Lura's handwritten additions; she argued that the result would be that Autumn would receive her deceased mother's child's share through the laws of intestacy.
¶ 4. On September 25, 2008, an agreed order of the court for partial disbursement and other relief settled any claims among Autumn, Jerry, and Nancy.[4] Accordingly, Jerry and Nancy are no longer parties to this action. After a hearing on the motions, the chancellor entered a judgment on December 22, 2008, in favor of Autumn, ruling that the handwritten deletions and amendments resulted in a total revocation of Lura's will. Thus, Autumn was entitled to inherit a child's share through intestacy. Bobby now appeals claiming that the changes to Lura's will did not warrant a total revocation.
STANDARD OF REVIEW
¶ 5. Our review of a chancellor's decision is limited to an abuse of discretion standard. Deliman v. Thomas, 16 So. 3d 721, 724 (¶ 13) (Miss.Ct.App.2009) (citing Miller v. Pannell, 815 So. 2d 1117, 1119 (¶ 9) (Miss.2002)). We will only reverse if the chancellor's findings "are manifestly wrong or clearly erroneous or the court has applied an incorrect legal standard." Id. (citing In re Estate of Ladner v. Ladner, 909 So. 2d 1051, 1054 (¶ 6) (Miss. 2004)). However, questions of law are reviewed de novo. Alexander v. Gross, 996 So. 2d 822, 823 (¶ 4) (Miss.Ct.App.2008) (citing Morgan v. West, 812 So. 2d 987, 990 (¶ 8) (Miss.2002)). In an appellate review of a contest to a will, our "`polestar consideration' ... is to give effect to the intent of the testator." Costello v. Hall, 506 So. 2d 293, 297 (Miss.1987) (citations omitted).
I. Whether the writings on Lura's last will and testament, which were not witnessed pursuant to Mississippi Code Annotated section 91-5-1 (Rev. 2004), have any legal relevance.
¶ 6. Although Bobby addresses this issue last in his briefing, we find that this issue *1234 must be discussed at the outset in order to analyze the remaining issues appropriately. Bobby claims that the handwritten additions to Lura's will were invalid as they were not witnessed pursuant to Mississippi Code Annotated section 91-5-1 (Rev.2004). This section states that:
Every person eighteen (18) years of age or older, being of sound and disposing mind, shall have power, by last will and testament, or codicil in writing, to devise all the estate, right, title and interest in possession, reversion, or remainder, which he or she hath, or at the time of his or her death shall have, of, in, or to lands, tenements, hereditaments, or annuities, or rents charged upon or issuing out of them, or goods and chattels, and personal estate of any description whatever, provided such last will and testament, or codicil, be signed by the testator or testatrix, or by some other person in his or her presence and by his or her express direction. Moreover, if not wholly written and subscribed by himself or herself, it shall be attested by two (2) or more credible witnesses in the presence of the testator or testatrix.
(Emphasis added). However, as Autumn accurately contends, this argument is "misplaced" as the chancellor found the markings to be a violation of the statute and, therefore, invalid. At the hearing, the chancellor stated that the items where Lura scratched out the entire paragraph were properly revoked; however, "[Lura's] additions where she wrote in that Autumn is going to receive something, because she didn't have two witnesses sign on those amendments, then they basically are not valid." See, e.g., In re Will of Palmer v. Harpole, 359 So. 2d 752, 754 (Miss.1978) (provisions written on the testator's will and codicil were invalid as they were not signed by the testator). Consequently, we find no error in the chancellor's findings; thus, Bobby's argument on this issue is without merit.
II. Whether the chancellor erred in finding that Lura's last will and testament was totally revoked instead of partially revoked.
¶ 7. The total or partial revocation of a will "by either cancellation or obliteration" is statutorily authorized under Mississippi Code Annotated section 91-5-3 (Rev.2004). Will of Palmer, 359 So.2d at 753. "A testator who wishes to revoke a will may do so by either: (1) destroying, canceling, or obliterating the will, or (2) `by subsequent will, codicil, or declaration, in writing, made and executed.'" In re Estate of Woodfield, 968 So. 2d 421, 428 (¶ 16) (Miss.2007) (quoting Miss. Code Ann. § 91-5-3 (Rev.2004)). It is essential to the revocation that the testator "have the intent to revoke the will." Id. (citing McCormack v. Warren, 228 Miss. 617, 628, 89 So. 2d 702, 706 (1956)). "The intent of the testatrix [is] a question of fact." Estate of Lyles v. Howell, 615 So. 2d 1186, 1191 (Miss.1993).
¶ 8. Neither party disputes that Lura intended some sort of revocation; rather, the issue is the extent of the revocation. Bobby contends that the handwritten interlineations in Lura's will are merely evidence of her intent to partially revoke those portions of the will, not a complete revocation of the will. While Bobby admits that Lura made the additions in paragraphs III and XIII presumably to amend her will, Bobby contends that those changes were ineffectual; as such, they did not result in a revocation of those portions. Therefore, he submits that the chancellor committed reversible error in revoking Lura's will in toto.
¶ 9. The Mississippi Supreme Court has stated that the act of cancellation is "accomplished by the drawing of lines over or *1235 across words with the intent to nullify them and the form and extent of the lines are totally unimportant as long as they are a physical token of the intent to revoke." Estate of Lyles, 615 So.2d at 1188 (quoting Will of Palmer, 359 So.2d at 753). The parties agreed at the hearing on the motions that Lura intended to revoke all portions of paragraphs VIII, IX, X, and XI. Further, there appeared to be no issue with the partial revocation of paragraph VI. In fact, the record shows that Maycock had already received her bequest of the bedroom suite under the will. At the hearing on the motions for judgment on the pleadings, counsel for Autumn stated that it was not Autumn's position that the revocation of those paragraphs necessarily resulted in a total revocation of the will. Rather, Autumn's counsel argued that all of the paragraphs that contained interlineations and additions should be revoked, leaving Lura's real property and some small portions of personal property[5] to descend intestate. However, as the chancellor noted, the will contained a residuary clause. Paragraph XV states:
All the rest of my personal items and household contents may be divided between my children in equal shares. Any items other than the above mentioned items may be disposed of as necessary and the net proceeds divided as equally as possible among my surviving children, per stirpes.
There was no mention of Autumn in this paragraph. Consequently, the chancellor was concerned that if she found that all of the amended and deleted paragraphs were revoked, then the undesignated property would not descend by intestate law. Rather, Lura's real property and any remaining personal property would go to Bobby, Jerry, and Nancy under the residuary clause in paragraph XV.
¶ 10. The chancellor cited Estate of Lyles to support her finding of total revocation. In that case, the testatrix, Mrs. Lyles, left a will which originally devised 40 acres of her real property to Brodie Howell, a family friend, and 100 acres to her niece and closest remaining relative, Bennie Mothershed. However, when the will was found upon her death, the 40-acre devise to Howell had been scribbled out and the figure "100" in the latter part of the sentence had been marked out. Written above the "100" was the figure "140." Further, Howell's name had been written beside a later clause which contained a bequest of a certificate of deposit to a group of beneficiaries. However, these additions were not witnessed as required by statute; thus, they were ineffective. Applying the doctrine of dependent relative revocation, the chancellor held that the changes made were evidence of Mrs. Lyles's intent to amend her will rather than to revoke it. Estate of Lyles, 615 So.2d at 1188. On appeal, the Mississippi Supreme Court explained, in regard to the doctrine, that:
[I]f the testator by codicil or physical act, revokes a portion of a prior testamentary instrument and makes a substituted disposition under a mistake of fact or of law with the result that the later disposition is invalid, the prior disposition is revived on the theory that had the testator not been mistaken in his belief[,] he would not have revoked the original gift.
Id. at 1190 (quoting Crosby v. Alton Ochsner Med. Foundation, 276 So. 2d 661, 666 (Miss.1973)). "The basis for the doctrine of dependent relative revocation ... is that *1236 there was never any revocation of the earlier instrument, or real intention to revoke, because of a mental misconception of the effect of his act, on account of mistake, or ignorance, or some other error." Crosby, 276 So.2d at 666.
¶ 11. The supreme court in Estate of Lyles, 615 So.2d at 1191, further stated that "dependent relative revocation is a rule of presumed intent rather than a substantive rule of law." It also acknowledged that, at "the heart of the doctrine of dependent relative revocation is the idea that, given the option, the testator or testatrix would prefer the will as executed over intestacy. The wisdom of this concept is undeniable." Id. at 1191 (emphasis added). Nevertheless, "the presumption embodied in the doctrine may be rebutted by circumstances." Id. (citing Caine v. Barnwell, 120 Miss. 209, 227, 82 So. 65, 66 (1919)). In Estate of Lyles, 615 So.2d at 1191, the supreme court found that "the presumed intent embodied in the dependent relative revocation doctrine [was] rebutted by the specific circumstance that Mothershed [was] the sole heir-at-law of the testatrix." Accordingly, considering the "peculiar" facts of that case, the supreme court found that a total revocation of the will produced the result that Mrs. Lyles intended when she made her changes. Id. Therefore, it held that the chancellor's application of the doctrine of dependent relative revocation to Mrs. Lyles's will was error. Id.
¶ 12. In the present case, the chancellor seized upon the italicized language to find that the will was totally revoked in accordance with Estate of Lyles. We find this analysis misplaced. In Estate of Lyles, since the testatrix deleted the number of acres devised to both Howell and Mothershed, the effect of these cancellations was that the land passed by intestate succession because there was not a valid clause remaining in the will concerning the real property. In the case before us, however, when the cancellations are taken into account, there still exist both a valid devise of the land "in equal shares to my children, Jerry Wayne Carpenter, Bobby Dean Carpenter and Nancy Lynn Carpenter Dempsey" and a residuary clause reading, "[a]ny items other than the above mentioned items may be disposed of as necessary and the net proceeds divided as equally as possible among my surviving children, per stirpes." The revocation in this case, therefore, cannot result in intestate succession.[6] The language in Estate of Lyles relied upon by the chancellor, while appearing broad, was, in fact, case specific. Accordingly, we find that the chancellor erred in her holding that Lura revoked her entire will.
¶ 13. Proper application of the doctrine of dependent relative revocation would only result in re-inserting the cancelled clauses, which might have left certain items of the estate to Autumn. As the general doctrine states: "[I]f the testator by ... physical act, revokes a portion of a prior testamentary instrument and *1237 makes a substituted disposition under a mistake of fact or of law with the result that the later disposition is invalid, the prior disposition is revived[.]" Estate of Lyles, 615 So.2d at 1190 (quoting Crosby, 276 So.2d at 666). We do not agree with Bobby's contention that any claim by Autumn as a beneficiary under the original will may not be revived under the doctrine of dependent relative revocation. As noted, since Lura's additions to paragraphs III and XIII were not attested to by any witnesses, or by a holographic instrument, these changes were ineffectual. See Miss. Code Ann. § 91-5-1. It is not clear from the record whether the cancelled portions of the original will, paragraphs VIII through XI, devised any portion of Lura's estate to Autumn. Paragraph VIII mentions a granddaughter, and paragraph XI contains a name that begins with an "A," but for the most part, these paragraphs are illegible. However, paragraph III under the original will states that Autumn was not to inherit "except as specified herein," suggesting that there was a specific bequest to Autumn contained in the deleted provisions. Regardless, it is apparent that Lura revoked those paragraphs under the mistaken assumption that Autumn would receive a devise under the invalid amendments to paragraphs III and XIII.
¶ 14. Accordingly, we remand this case to the chancellor to determine whether Autumn would have received any bequests under the deleted portions of the original will, which should be reinstated under a proper application of the doctrine of dependent relative revocation.
¶ 15. THE JUDGMENT OF THE CHANCERY COURT OF GRENADA COUNTY IS REVERSED, AND THIS CASE IS REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLEE.
KING, C.J., LEE, P.J., IRVING, GRIFFIS, ISHEE, ROBERTS AND MAXWELL, JJ., CONCUR. MYERS, P.J., DISSENTS WITHOUT SEPARATE WRITTEN OPINION.
NOTES
[1] The italicized language represents Lura's handwritten addition to the paragraph.
[2] The italicized language represents Lura's handwritten addition to the paragraph.
[3] This Court notes that the name of Lura's deceased child, Sandra, is slightly different in paragraph III of her will. The record contains no explanation as to why; however, there appears to be no dispute that she is the same individual.
[4] Jerry and Nancy agreed to decrease their bequeathed share of one-third of the real estate devise so that Autumn might receive a one-fourth share of the proceeds from the sale of the real estate. The sale of Lura's home netted proceeds of $148,607.52, less attorney's fees of $2,365.12. One-third of the remaining amount is $47,795.75; one-fourth is $35,846.81. Therefore, Autumn has been awarded $23,897.88, two times the difference between the amounts. The remainder of the proceeds is being held by the court until the resolution of the proceedings.
[5] Paragraphs IV-VI of the will contained three bequests of small items of personal property that were not amended in any way.
[6] Further, as a result of the total revocation of Lura's will, Autumn would receive one-fourth of the entire estate, an outcome that we find to be clearly inconsistent with both the original will and Lura's handwritten changes. This is apparent when we look at ineffectual additions to paragraphs III and XIII, which express an intent for Autumn to inherit only a share of Lura's real property. Further, specific bequests of personal property to Lura's three children and, in paragraph VI, a specific bequest of bedroom furniture to her granddaughter, Maycock, would be cancelled if the entire estate were to descend by intestate succession. Autumn would own one-fourth interest in each item of personal property in her grandmother's estate. Furthermore, we find that the inclusion of a residuary clause in the will, which Lura left unaltered, bolsters the presumption against intestacy. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565473/ | 433 S.W.2d 911 (1968)
E. E. CONNER et al., Appellants,
v.
E. W. SMITH et al., Appellees.
No. 420.
Court of Civil Appeals of Texas, Corpus Christi.
October 17, 1968.
Rehearing Denied November 14, 1968.
*912 J. Toll Underwood, of Underwood & Holcombe, Houston, for appellants.
George P. Willis, of Willis & Willis, El Campo, for appellees.
OPINION
GREEN, Chief Justice.
This is an appeal from a judgment enjoining appellants, defendants in the trial court, from the continued construction and the operation of a proposed hide plant on their property just outside the city limits of Wharton, Wharton County, Texas. The case was tried without a jury, and no separate findings of facts or conclusions of law were requested. The following fact findings were contained in the decree:
"And it appearing to the Court that the operation of the proposed plant would produce odors disagreeable to persons of ordinary sensibilities which said odors would be recurring and would materially interfere with the enjoyment of their respective homes by those residing in the vicinity; thereby creating a public nuisance.
And it further appearing to the Court that the injury to the Plaintiffs and to those living and owning property in the vicinity of the proposed plant would not be slight (if the proposed plant was constructed and operated) in comparison to the injury to be caused the Defendants and the general public if the plant were not so constructed and operated and that such injury is one which could not be adequately compensated by damages in an action at law;
And it further appearing to the Court that the injunction sought herein by Plaintiffs should be granted."
The judgment proceeds in appropriate language to grant the injunction as above stated.
Appellants' first three points of error are (1) that there was no evidence and (2) insufficient evidence to support such judgment that a nuisance exists with that degree of certainty required by law, and (3) that such judgment is contrary to the great weight and preponderance of the evidence.
Appellees in their trial petition did not plead that the further construction and use by appellants of the property in question would necessarily produce a situation constituting a nuisance to them and other home owners in their position. (See Orsinger v. Schoenfeld, Tex.Civ.App., 269 S.W.2d 561, hereafter discussed). Their allegations were that "It is highly probable" and that they fear "that in all probability" the operations by appellants would create such a situation. As will hereafter be discussed, after a thorough study of all of the evidence it is our conclusion that the most that can be said in favor of the trial court's judgment is that the evidence indicates that defendants' proposed operation of the hide plant may prove to become a nuisance, but it is not shown that such operations will necessarily create a nuisance.
The evidence reflects that appellant Conner through corporations owned by him and under his control had operated a hide plant on property to the north of Wharton in a partially residential area for about 23 years. It is made clear that in his hide business, Conner did not operate a slaughtering house or rendering or packing plant. He bought beef hides and on occasion those of sheep and wild animals in quantities from slaughter houses and others, and the hides, salted down, were transported generally in railroad cars or trucks to his plant, where they were trimmed, some cleansing work performed, graded and sorted for weights, stored, and thereafter shipped to customers to whom they had been sold. It became necessary in 1967 for him to relocate his business, since a new highway was being built on and through the property where his old plant was situated. In 1965 he had purchased two acres of land with a building on it just south of Wharton outside of the city limits and less than a quarter of a mile from a residential *913 subdivision where plaintiffs and others whom they represented as a class had their homes. This property was near the railroad, and a siding was located along side of the building. In 1967 he purchased an adjoining two acres, and it was on this 4 acre tract that appellants were constructing and planning to operate the hide plant.
It was established by the evidence, and appellants do not seriously contest this, that conditions around the old plant were very poor, dirty and unsanitary. Because of the manner in which the hides were handled, in which filthy water was permitted to run in ditches, flies breed, and putried odors allowed to permeate the air, a nuisance in fact had been created. A great portion of appellees' evidence concerned this old plant and its operations.
At the time of the trial, the buildings at the new plant had not been completed nor had any operations been started. It was appellants' position that this plant was to be constructed along modern approved plans and specifications, and was to be operated in a sanitary, modern manner; that all dealings with the hides were to be in an enclosed air-conditioned building, with modern sanitary vats for storage and the best of sanitary methods of disposing of the waste materials, and that conditions were to be greatly improved so that the sensibilities of nearby residents would not be bothered by offensive odors or unsightly scenes. Outside of the evidence of their expert witness Dr. Quebedeaux, appellees appear to have relied in order to establish that this plant would in fact be a nuisance, upon the assumption that appellants would continue to operate as they had in the past, and on evidence that the value of appellees' property would be greatly reduced by reason of the construction and operation of this plant in the neighborhood.
In Storey v. Central Hide & Rendering Co., 148 Tex. 509, 226 S.W.2d 615, the court held the operation of a rendering plant to be a lawful business, and not a nuisance per se. This would also be true as to this new hide plant. However, as stated in that opinion, a lawful business may become a nuisance in fact when it is operated in such a place or manner as seriously to interfere with the enjoyment of life and property.
The rule has been definitely established by our Texas courts that before the construction of a building and the operation of a business not a nuisance per se will be enjoined it must appear that the proposed use of the building will necessarily create a nuisance. 41 Tex.Jur.2d p. 634, Nuisances § 66; Waggoner v. Floral Heights Baptist Church, Tex.Com.App., 116 Tex. 187, 288 S.W. 129, op. adopted; Robinson v. Dale, 62 Tex. Civ. App. 277, 131 S.W. 308, n.w.h.; Goose Creek Ice Co. v. Wood, Tex.Civ.App., 223 S.W. 324, n.w.h.; Boyd v. City of San Angelo, Tex.Civ.App., 290 S.W. 833, wr. ref.; Dickson v. Barr, Tex.Civ.App., 235 S.W. 977, n.w.h.; Assembly of God Church of Tahoka v. Bradley, Tex.Civ.App., 196 S.W.2d 696; Jones v. Highland Memorial Park, Tex.Civ.App., 242 S.W.2d 250; Orsinger v. Schoenfeld, Tex.Civ.App., 269 S.W.2d 561; Schulman v. City of Houston, Tex.Civ.App., 406 S.W.2d 219, 225, wr. ref. n.r.e., 412 S.W.2d 34. It is clear from the above authorities that an injunction will not properly issue before construction and operation where the parties only fear that a nuisance will be created, or where the evidence merely indicates that such nuisance may result from such construction and operations. In Jones v. Highland Memorial Park, supra, the court considered the question as to whether or not the building of a cemetery could be enjoined by nearby property owners who feared that a health hazard might arise in that their water wells might be contaminated. The court emphasized that the fear of an operation becoming a nuisance is not ground for an injunction, and said that "the burden is upon them (appellants) to show with definiteness and certainty that their wells will be contaminated if the proposed cemetery is opened and operated."
*914 Dr. Quebedeaux, Director of the Air and Water Pollution Control Section for the Harris County Health Department, testified as an expert witness for appellees. His qualifications were admitted by appellants. A plan of the plant under construction was placed in evidence, and under direct examination the witness found a number of flaws and inadequacies in these plans which in his opinion would cause bad odors to escape and interfere materially with appellees' enjoyment of their homes. However, he readily admitted that these faults could be remedied without much difficulty, and further stated that after the plant started operating, he would be in much better position to say "whether it was operating at the desired level."
Appellant Conner thereafter took the stand and testified that he did not intend to operate this plant in the same manner of the old plant, but that he desired to construct and maintain a modern business according to the most modernly accepted and approved sanitary plans, and that he had heard the criticisms of Dr. Quebedeaux, and intended to meet them. Other testimony was introduced by appellants to establish that the new plant when operated as Conner testified he intended to operate same would not constitute a nuisance to the surrounding property owners. Of course, as appellees argue, the trial court was the judge of the credibility of the witnesses and the weight to be given their testimony, and was under no obligations to believe Conner or his witnesses. However, the burden was on appellees to establish by evidence that appellants' plant, when constructed and in operation, would of a certainty constitute a nuisance. See authorities cited above. The evidence of the manner in which the old plant had deteriorated was not determinative of this point, especially in view of appellees' failure to show that appellants did intend to construct and operate the new plant in similar manner to the old. Robinson v. Dale, supra; Strieber v. Ward, Tex.Civ.App., 196 S.W. 720.
In Assembly of God Church of Tahoka v. Bradley, Tex.Civ.App., 196 S.W. 696, n. w.h., cited by appellees, in which the construction of a church building in a residential section was enjoined, it was expressly emphasized that the defendants expected to continue to operate in the same manner as before, a manner which the court held was sufficient to constitute a nuisance. See also O'Daniel v. Libal, Tex.Civ.App., 196 S.W.2d 211, 213, n.w.h.
In Orsinger v. Schoenfeld, Tex.Civ.App., 269 S.W.2d 561, wr.ref. n.r.e., special exceptions had been sustained to plaintiffs' petition which sought to enjoin the operations of a quarry. Justice Pope's opinion pointed out very clearly that the petition did more than allege that a nuisance "may" occur, but that it asserted positively and with certainty that "the establishment and operation of such quarry will necessarily cause and result in the situation and conditions hereinafter described" and the cause was remanded in order to give plaintiff an opportunity to show by evidence whether the things complained of will necessarily occur and produce a nuisance.
There was much evidence of a large loss in the value of appellees' real property due to the proposed location of appellants' hide house in the new place. Since there is an adequate remedy at law for such loss as may be caused by any wrongful operation of appellants' business this evidence, while admissible on the issue of balancing of equities, (Storey v. Central Hide & Rendering Co., 148 Tex. 509, 226 S.W.2d 615) will not suffice to serve as a basis for injunctive relief. Hill v. Brown, Tex.Com.App., 237 S.W. 252, cited with approval by Sup.Ct. in Storey, supra; Galveston, H. & S. A. Ry. Co. v. De Groff, 102 Tex. 433, 118 S.W. 134, 21 L.R.A.,N. S., 749; Bagley v. Higginbotham, Tex. Civ.App., 353 S.W.2d 868, wr.ref.n.r.e.
We have carefully read and considered all of the lengthy (495 pages) statement of facts, and are unable to find evidence which, when construed most favorably *915 to appellees, establishes that the things complained will necessarily produce a nuisance as that term is understood in law and equity. Appellants' points 1, 2, and 3 are sustained. It becomes unnecessary to pass upon the remaining points of error.
The judgment of the trial court is reversed, and judgment is here rendered dissolving the injunction, but without prejudice to appellees' right hereafter to relief in subsequent litigation either in damages or by injunction if in the actual operation of the hide plant, after same has been constructed, their rights should prove to be materially and adversely affected thereby.
Reversed and rendered. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565470/ | 68 F.2d 864 (1934)
IRVING TRUST CO.
v.
COMMERCIAL FACTORS CORPORATION.
In re NATHAN & COHEN CO., Inc.
No. 85.
Circuit Court of Appeals, Second Circuit.
January 15, 1934.
Krause, Hirsch & Levin, of New York City (Sydney Krause and George C. Levin, both of New York City, of counsel), for appellant.
Hughes, Schurman & Dwight, of New York City (Charles E. Hughes, Jr., Phillip *865 W. Haberman, Frank C. Fisher and Frederick W. P. Lorenzen, all of New York City, of counsel), for appellee.
Before MANTON, L. HAND, and SWAN, Circuit Judges.
SWAN, Circuit Judge.
Prior to adjudication upon an involuntary petition in bankruptcy filed April 20, 1931, Nathan & Cohen Company, Inc., was an old and favorably known silk and cotton converter doing business at 60 Leonard street, New York City. Its business consisted in purchasing greize goods from various mills, sending them to dyers and finishers for processing, which is known as "converting," and selling the finished goods. The business was financed by Commercial Factors Corporation under a factoring agreement dated August 16, 1926. In the latter part of March, 1931, when the bankrupt was concededly insolvent and when, as the trustee in bankruptcy contends, the factor knew or had reasonable cause to know of its insolvency, certain merchandise of the bankrupt was transferred to the factor as security for or payment of an indebtedness for prior advances. Such merchandise, or accounts receivable resulting from its sale, the trustee seeks to recover. Its bill of complaint contains two counts; one based on section 60b of the Bankruptcy Act (11 USCA § 96 (b), the other on section 15 of the New York Stock Corporation Law (Consol. Laws N. Y. c. 59). Only the former is relied upon on this appeal. After trial the District Court dismissed the bill, stating in its opinion that the factor had a valid lien upon much of the merchandise in question and that knowledge of the bankrupt's insolvency was not chargeable to the factor until after March 18th, the critical date now asserted by the plaintiff, although at the trial an earlier date was claimed.
As to the main part of the goods there was no preference because the factor proved a valid lien under section 45 of the New York Personal Property Law (Consol. Laws N. Y. c. 41). This section provides that liens upon merchandise, or the proceeds thereof, "created by agreement" for the purpose of securing advances made upon the security of the merchandise, shall be valid without delivery of possession, provided the conditions specified in the statute are complied with. These relate to displaying the factor's name conspicuously at the entrance of the building where the goods are located, and filing a notice of lien in the office of the register of the appropriate county. The purpose of the statute is to allow the intent of the parties to be effective, under the prescribed conditions of notoriety, without regard to questions of possession. It is conceded that a sufficient sign was displayed at 60 Leonard street and that a proper notice was filed in New York county. The dispute is whether the parties intended to create a lien by their factoring agreement. The agreement leaves no doubt about that; by the second paragraph the bankrupt agreed "to consign" to the factor at 60 Leonard street all goods dealt in by the bankrupt, and the eleventh paragraph provided that the factor should have a general lien upon all goods consigned to it by, or on behalf of, the bankrupt. It was, however, the practice of the bankrupt to send to the factor unpaid invoices of purchased merchandise and to rubber-stamp upon them an assignment of the bankrupt's interest in the merchandise represented thereby. The plaintiff contends that the assignment stamped upon the invoices was the agreement which created the lien. This contention cannot be sustained. It is plain that the goods were consigned to the factor irrespective of the stamped assignment and, in general, long before the invoices were so stamped, for usually the invoices were not delivered to the factor until just prior to their maturity, which might be 60 or 90 days after the goods had been delivered at 60 Leonard street. The factoring agreement provided elaborate machinery to secure to the factor control of merchandise from the moment of its receipt at the bankrupt's place of business. The bankrupt executed a formal lease of the premises to the factor at a nominal rental. Three of the factor's employees worked there daily; they were Ross, the receiving and shipping clerk, McAvoy, the stock room clerk, and Harris, the billing clerk. Ross had keys and testified to locking the building at night and opening it in the morning. All goods received at 60 Leonard street or shipped therefrom came under the control of one or more of these employees, and an elaborate procedure involving the use of printed forms was put into effect. Thus the factor obtained effective control of the goods as soon as they were delivered at the premises. This was the consignment contemplated by the factoring agreement, and the stamped assignment can be regarded as nothing more than an added and unnecessary precaution. In connection with all outshipments, printed forms were used which gave full notice that the factor, not the bankrupt, was the shipper or consignor. We *866 hold that upon all goods located at 60 Leonard street before March 18, 1931, the factor had a valid lien under the statute.
The District Court sustained the lien not only under the statute but also as a valid possessory lien. In adopting the former ground we are not to be understood as disapproving the latter. Upon that it is unnecessary to pass.
In addition to goods delivered at 60 Leonard street, there are three other classes of goods to be considered: (1) Goods shipped directly from the mills to the dyers before March 18, 1931, and delivered in their converted condition on or after that date at 60 Leonard street; (2) goods returned by Schreiber who held them on consignment for sale; and (3) goods purchased and delivered on or after March 18th. These will be discussed seriatim.
As to goods sent directly from the mill to the dyer, the factor could have no lien under section 45, since the statutory conditions were not complied with in respect to them. It is clear, however, from the factoring agreement that the parties intended the lien to cover such goods. The eleventh paragraph granted a general lien on all goods consigned to the factor by, or on behalf, or for the account of the bankrupt, "whether at dyers, finishers, selling offices, warehouses or elsewhere." In the case of goods going direct from the mill, the practice of the bankrupt was to send the dyer a "process sheet." This stated that the goods were consigned by the factor and were to "remain" its property. We see no reason why the intention of the parties to give the factor a lien upon goods in the hands of dyers should not be given effect. The chief reason for the rule requiring delivery of possession in order to create a valid pledge is to prevent possession by the pledgor from giving him a false credit. This reason ceases when the thing pledged is not in the possession of the pledgor but of a third party. Hence it has been held that property so situated may be pledged without any change of possession or control if notice of the fact of the pledge be given to the person in possession. Pierce v. Nat. Bank of Commerce, 268 F. 487 (C. C. A. 8), and cases therein cited. It is but a short step to the situation here presented: The delivery of goods to a bailee with instructions to hold them for the account of another (the factor). The New York cases indicate, although the precise situation has not been clearly passed upon, that such a deposit amounts to a pledge to the person for whom the goods are held and that the depositary becomes bailee for him. See First Nat. Bank v. Exchange Nat. Bank, 179 A.D. 22, 153 N. Y. S. 818, 164 N. Y. S. 1092, affirmed 226 N.Y. 633, 123 N.E. 368; Hickok v. Cowperthwait, 210 N.Y. 137, 103 N.E. 1111, Ann. Cas. 1915B, 1002. We hold that the factor had a valid lien upon goods delivered from the mill to the dyers and by them held as bailees of the factor. Therefore receipt of the goods by the factor after March 18 did not deplete the bankrupt's estate and could not be a preference, even if the factor was chargeable with knowledge of the insolvency. Israel v. Woodruff, 299 F. 454 (C. C. A. 2); Petition of Chattanooga Savings Bank, 261 F. 116 (C. C. A. 6).
The goods returned by Schreiber are governed by similar principles. Indeed, the factor's position is even stronger as to them, for they had been in stock at 60 Leonard street before shipment to Schreiber and so were subject to the factor's lien before being consigned to Schreiber for sale. They were packed for shipment to him upon "manipulation memos" which, like the "process sheets" above referred to, named the factor as consignor and declared that the goods covered thereby should "remain the property" of the factor. The bills of lading named only the factor as shipper. Under these documents it is clear that Schreiber was intended to receive and hold the goods as bailee of the factor, not of the bankrupt. The possession of goods on consignment may give the consignee a deceptive credit of which his creditors might conceivably complain, but as between the bankrupt and the factor there is no reason for not recognizing and giving effect to their intention to make Schreiber bailee for the factor. No creditors whom the plaintiff represents have been deceived by Schreiber's apparent possession. Although the factor seems to have had some doubt of the validity of its lien and sought to get an acknowledgment from Schreiber that he held the goods for it, this was an unnecessary precaution and does not affect the legal relations of the parties. There was no preference in receiving these goods from the factor's bailee.
The remaining goods are those purchased by the bankrupt on or after March 18th and so delivered after the date when, according to the plaintiff's contention, the factor had knowledge of the bankrupt's insolvency. The only proof as to the date of the purchase and delivery of this merchandise is found *867 in the dates of seven invoices. Three of these are dated March 17th, and as the goods may have been delivered on that date, these may be cast aside. There remain four invoices, aggregating $5,116.80, and bearing dates March 19, 20, and 21. The factor argues that the dates given on the invoices are insufficient proof of the dates of delivery of the merchandise; that the latter may have been delivered before its invoice date. Counsel points to the fact that Exhibit 1, containing a list of all invoices and covering more than 200 transactions, shows eight instances where the process sheets are earlier in date than the invoice relating to the same goods; hence he says the invoice dates are unreliable as a test of delivery dates. The difficulty with this argument is that so far as appears these eight instances may have related to merchandise sent direct from the mill to the dyer. In such a case we can easily imagine that the process sheet sent by the bankrupt might antedate the invoice sent by the mill; but it seems most unlikely that the mill would ship goods before it invoiced them. Consequently in the absence of contradictory evidence we believe that the invoices (admitted without objection) were sufficient proof of the delivery dates. It is therefore necessary to consider the evidence as to the factor's knowledge of insolvency on the 19th, 20th, and 21st of March.
The District Court's opinion finds that a condition of hopeless insolvency existed as early as January 1, 1931, but that the defendant had no knowledge of the insolvency until after the completion of the first inventory on March 17th. This conclusion is the result of conflicting testimony of witnesses seen by the judge, and we accept it. The opinion also states that "no unfavorable inference can properly be drawn against the defendant until March 25, 1931, when the first Touche Niven report was received." This conclusion necessarily rests largely on the testimony of Mr. Blumenthal and other witnesses testifying under 21-A examinations. Hence the District Court, like ourselves, has seen only the record of their testimony, and we are more free to differ from his conclusion. The facts which lead us to do so can be set out fairly briefly, although the record is most voluminous.
The inventory completed on March 17th showed a total value of about $230,000. This was some $40,000 less than it should have been according to the "theoretical inventory" kept by the factor from day to day on the so-called "advance card," and about $200,000 less than Mr. Nathan had predicted that it would be. The discrepancy caused the factor serious concern. Mr. Blumenthal says (fol. 1639) that he decided to put the factored account on a 50 per cent. basis (instead of continuing at 66 2/3 per cent.) and to ask Friedman, vice president of the bankrupt, what he intended to do about it. He summoned Friedman to a conference on the morning of March 18. Blumenthal testified (fol. 1640) as follows:
"Q. All right, what conversation did you have with Friedman, Henry Friedman on the 18th of March? A. We wanted to have his accountant go in and immediately and furnish us a balance sheet.
"Q. Did you tell him why? A. Yes, on account of the difference of inventory, we wanted to know the whole status of the company.
"Q. You then had doubts in your mind? A. Starting at that point."
That the factor was alarmed is further evidenced by its efforts to strengthen its security position. Under date of March 18th it wrote Schreiber for an acknowledgement that he was holding consigned goods as its agent, and it caused the bankrupt to write him on the same date. It requested from the bankrupt delivery of all unpaid invoices, stamped with the customary assignment. As previously indicated, both these precautionary measures were unnecessary to the validity of the lien, but they strongly corroborate Mr. Blumenthal's statement that his doubts started at that time. On March 20, 25, and 27 unpaid invoices were sent the factor aggregating $199,000. It is conceded that as soon as knowledge of these invoices came to the factor, the bankrupt's insolvency was beyond question. The plaintiff contends that the factor's employees must have learned of the invoices while taking the inventory. Mr. Blumenthal admits that they should have demanded all invoices whether due or not, but denies that he himself knew of them until they were delivered; nor does any other officer of the factor admit earlier knowledge. The men who actually made the inventory and might have seen the invoices at that time were not called to testify. But the essential question is not when the factor actually learned, but when its officers were put upon inquiry and could have learned. Concededly they were put upon inquiry as to the bankrupt's condition on the 18th, for Blumenthal then demanded that an accountant furnish a balance sheet. On the preceding day and before the pricing of the inventory was completed, *868 Mr. Becker had had luncheon with Mr. Nathan and was informed by him that the inventory was expected to show approximately $450,000, and that against it there were only debts of $37,000 to dyers and of $40,000 to $50,000 for merchandise delivered but not paid for. When Mr. Nathan's prediction fell so wide of the mark as to the inventory, we think the reasonable and natural thing to do was to check at once the accuracy of his statements as to unpaid bills. They were as essential as the inventory to determine the factor's position. We find nothing to indicate that such an inquiry of the bankrupt's employees would not have produced the information. Miss Schaffner testified that she kept the invoices and was accustomed to deliver them to the bankrupt for payment on Mr. Nathan's instructions. But she did not say that she would not even give information about them without Nathan's orders. There is no testimony that the factor was ever denied access to the bankrupt's records; indeed, Blumenthal admits that his men always had free access to the invoices (fol. 1655). It is true that not all the invoices were delivered at once when requested. This does not imply that information concerning them would have been concealed, but merely that Miss Schaffner would not deliver them except upon orders, according to her custom. No explanation is given as to why they were delivered in instalments. It is true also that on the 18th, Blumenthal demanded a balance sheet, and that the accountant got to work on the 20th and produced a report on the 23d, which was followed by the taking of the second inventory and the Touche Niven audit. Although the insolvent condition was not actually disclosed to the factor's officers before the 23d, they were put upon inquiry at least as early as the morning of the 18th. A prudent factor would immediately have sought information as to unpaid bills. Such an inquiry would, as it ultimately did, have disclosed the insolvency. The Bankruptcy Act does not permit a creditor who has been put upon inquiry to accept security for prior advances up to the very moment when he gets actual knowledge of what the inquiry will disclose. Accordingly the goods delivered after March 18th were received when the factor had reasonable ground to believe that a preference would result.
There remains to be considered the factor's argument that the factoring agreement created an equitable lien and that the taking of actual possession of the goods relates back to the date of the agreement which was more than four months before bankruptcy. The question must be determined by New York law. Finance & Guaranty Co. v. Oppenhimer, 276 U.S. 10, 12, 48 S. Ct. 209, 72 L. Ed. 443. With respect to a mortgage of after-acquired property, it is settled that while the mortgage will create an equitable lien upon the property, when it comes into existence, as against simple creditors or purchasers with notice, it will not prevail against the legal lien of an attaching or execution creditor, Rochester Distilling Co. v. Rasey, 142 N.Y. 570, 37 N.E. 632, 40 Am. St. Rep. 635; nor as against a trustee in bankruptcy, Zartman v. First National Bank, 189 N.Y. 267, 82 N.E. 127, 12 L. R. A. (N. S.) 1083. In the latter case the mortgagee had taken possession, but this did not save him since it occurred after the mortgagor's insolvency and within four months of bankruptcy. See, also, Corney v. Saltzman, 22 F. (2d) 268 (C. C. A. 2). It would seem that the New York rule is the same as to an agreement to pledge after-acquired property. Mathews v. Hardt, 79 A.D. 570, 80 N. Y. S. 462; see, also, Titusville Iron Co. v. City of New York, 207 N.Y. 203, 209, 100 N.E. 806; Diana Paper Co. v. Wheeler-Green Elec. Co., 228 A.D. 577, 240 N. Y. S. 108, 109. The factor, however, argues that the law recognizes a distinction between pledges and mortgages and that in the case of a defective pledge the date of the agreement rather than the date of the subsequent taking possession will be looked to. No New York authority directly supports the argument. Parshall v. Eggert, 54 N.Y. 18, and Goldstein v. Rusch, 56 F.(2d) 10 (C. C. A. 2), are particularly relied upon. In the former the chattels were in existence when the purported pledge was made and possession was taken before any rights of creditors intervened. Furthermore, the opinion states as one ground of decision that the situation may be viewed as though the property had been delivered to the pledgee and by him redelivered to the pledgor to be held as bailee according to the terms of the receipt. Cf. National Bank v. Rogers, 166 N.Y. 380, 59 N.E. 922; Sexton v. Kessler & Co., 225 U.S. 90, 32 S. Ct. 657, 56 L. Ed. 995; Hickok v. Cowperthwait, 210 N.Y. 137, 103 N.E. 1111, Ann. Cas. 1915B, 1002. In the Goldstein Case there was a valid assignment of accounts covering sold merchandise, and an agreement that any returned goods should be held for the assignee. The returned goods stood in the place of the validly assigned account, hence no preference resulted from taking possession of them with *869 knowledge of the assignor's insolvency. These cases are quite different from the case at bar, where no lien, legal or equitable, could be created until the goods were acquired by the bankrupt. At that time the bankrupt was insolvent and the factor was charged with knowledge of it. To take possession within the four months period under such circumstances is a preferential transfer. Mathews v. Hardt, 79 A.D. 570, 80 N. Y. S. 462.
For the foregoing reasons the decree of dismissal must be reversed. A decree should be entered for the plaintiff for the value of the goods covered by the invoices dated subsequent to March 18th, with interest. It is so ordered. Each party will bear its own costs of the appeal. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2472423/ | 137 F. Supp. 2d 1 (2001)
GENERAL ELECTRIC COMPANY
v.
AMERICAN ANNUITY GROUP, INC., AVX Corporation, and Windsor-Embassy Corporation
No. CIV. 00-069-B.
United States District Court, D. New Hampshire.
March 30, 2001.
As Amended, April 19, 2001.
Michael D. Ramsdell, Gallagher Callahan & Gartrell, Concord, NH, Thomas H. Hannigan, Jr., Ropes & Gray, Boston, MA, for General Elec. Co.
Byrne J. Decker, Pierce & Atwood, Portland, ME, for American Annuity Group, Inc.
Barry Needleman, McLane Graf Raulerson & Middleton, Concord, NH, Michael J. Quinn, McLane Graf Raulerson & Middleton, Portsmouth, NH, Thomas N. Griffin, Parker Poe Adams & Bernstein, Charlotte, NC, for AVX Corp.
Jeffrey B. Osburn, Wiggin & Nourie, Manchester, NH, Windsor-Embassy Corp.
MEMORANDUM AND ORDER
BARBADORO, Chief Judge.
General Electric Company brings this action pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9675, as amended, seeking contribution from the defendants for certain past and future response costs. Defendants argue in a motion to dismiss that General Electric's claims for past costs are barred by 42 U.S.C. § 9613(g)(3), CERCLA's three-year statute of limitations for contribution actions. General Electric responds *2 by contending that § 9613(g)(3) does not bar its claims because none of the subsection's triggering events have occurred. I reject both arguments and instead conclude that General Electric's claims are subject to 42 U.S.C. § 9613(g)(2), CERCLA's general statute of limitations for actions to recover response costs. Because I cannot determine on the present record whether General Electric's claims are barred by § 9613(g)(2), I deny defendants' motion without prejudice.
I. BACKGROUND[1]
The United States Environmental Protection Agency ("EPA") added the Fletcher's Paint Works Site to the National Priorities List of Superfund Sites in 1989. It executed removal actions at the site in 1988, 1991, and 1993. In 1991, the EPA filed suit to recover its removal costs from General Electric.[2] The suit alleged that General Electric was liable because it had generated some of the hazardous wastes that had been found at the site. General Electric ultimately settled with the EPA and signed a consent decree that required it to reimburse the EPA for its removal costs.
In 1995, the EPA issued a Unilateral Administrative Order ("UAO") to General Electric pursuant to 42 U.S.C. § 9606.[3] The UAO required General Electric to remove contaminated soil from several residential properties adjacent to the site and engage in other work. General Electric incurred substantial costs in complying with the UAO.
In 1996, General Electric voluntarily removed contaminated soil from other properties adjacent to the site. It also incurred additional costs while investigating the site and identifying other potentially responsible parties ("PRPs").[4]
General Electric commenced this contribution action against the American Annuity Group, Inc., the AVX Corporation, and the Windsor-Embassy Corporation on February 16, 2000. The suit alleges that Windsor is liable for contribution as the current owner of the site, and that American *3 Annuity Group and AVX are liable as the successor to the corporations that generated some of the hazardous materials that were found at the site. General Electric seeks contribution for both costs that it incurred in complying with the UAO and costs that it voluntarily incurred in the 1996 cleanup.[5] It also seeks a determination that the defendants are liable for their share of any cleanup costs that General Electric incurs in the future at the site.
II. STANDARD OF REVIEW
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) requires a court to accept the complaint's well-pleaded facts as true and draw all reasonable inferences in favor of the plaintiff. See Aybar v. Crispin-Reyes, 118 F.3d 10, 13 (1st Cir.1997); Wash. Legal Found. v. Mass. Bar Found., 993 F.2d 962, 971 (1st Cir.1993). I may dismiss a complaint, when viewed in this manner, only if it appears beyond doubt that the plaintiff can prove no set of facts that would entitle it to relief. See Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir.1988) (internal citation omitted).
The threshold for stating a claim under the federal rules "may be low, but it is real." Id. Although I must construe all well-pleaded facts in the plaintiff's favor, I need not accept a plaintiff's "unsupported conclusions or interpretations of law." Wash. Legal Found., 993 F.2d at 971.
I apply this standard in resolving defendants' motion to dismiss.
III. DISCUSSION
Section 9607 of CERCLA imposes liability on PRPs for response costs[6] incurred by the United States, a state, an Indian tribe, or any other person. See 42 U.S.C. § 9607. While § 9607 did not initially authorize a PRP to obtain contribution from other PRPs, courts interpreting CERCLA have routinely recognized that PRPs have an implied right to contribution based on § 9607. See Key Tronic Corp. v. United States, 511 U.S. 809, 816 n. 7, 114 S. Ct. 1960, 128 L. Ed. 2d 797 (1994) (collecting cases).
Congress amended CERCLA in the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Pub.L. No. 99-499, § 101 et seq., 100 Stat. 1613 (1986), to grant PRPs an express right to contribution in certain circumstances. Section 9613(f)(1) now provides that a PRP may maintain an action for contribution "during or following any civil action under section 9606 of this title or under section 9607(a) of this title." 42 U.S.C. § 9613(f)(1). Section 9613(f)(1) does not entirely displace the pre-existing implied private right to contribution derived from § 9607, however, as the subsection also states, "[n]othing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action for contribution under section 9606 of this title or section 9607 of this title." Id. The Supreme Court thus has explained that CERCLA "now expressly authorizes a cause of action for contribution in § 9613 and impliedly authorizes a similar and somewhat overlapping remedy in § 9607." *4 Key Tronic Corp., 511 U.S. at 816, 114 S. Ct. 1960.
General Electric bases its contribution claims on the implied right to contribution derived from § 9607.[7] Two different statutes of limitations potentially cover such claims. Subsection 9613(g)(3) expressly applies to contribution claims and establishes a three-year limitation period that is triggered by (1) a judgment in a cost recovery action; (2) an administrative settlement; or (3) a judicially approved settlement.[8]See 42 U.S.C. § 9613(g)(3). Subsection 9613(g)(2) covers "action[s] for the recovery of costs referred to in section 9607."[9] 42 U.S.C. § 9613(g)(2). This subsection provides different limitation periods for suits to recover removal action costs[10] and suits to recover remedial action costs.[11] The limitation period for suits to recover removal costs is three years and is triggered by the completion of the removal action. See § 9613(g)(2)(A). The limitation period for suits to recover remedial costs is six years and is triggered by the "initiation of physical on-site construction" of the remedial action.[12] § 9613(g)(2)(B).
General Electric incurred its response costs either pursuant to the UAO or on its own initiative. Because its claims did not arise from a judgment, an administrative settlement, or a judicially approved settlement, they are not expressly limited by § 9613(g)(3). Nor is it evident that its claims are subject to § 9613(g)(2) because that provision does not reference contribution claims. Accordingly, I must interpret CERCLA to determine which, if either, of *5 these two provisions limits General Electric's right to contribution.
The only two circuit courts that have directly addressed this issue have concluded that CERCLA contribution claims are governed by § 9613(g)(2) unless they are expressly limited by § 9613(g)(3). See Sun Co. v. Browning-Ferris, Inc., 124 F.3d 1187, 1193 (10th Cir.1997); Geraghty & Miller, Inc. v. Conoco Inc., 234 F.3d 917, 925 (5th Cir.2000); see also Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 355 (6th Cir.1998) (citing Sun Co., 124 F.3d 1187, with approval). Both parties argue, however, that courts in this circuit cannot follow these precedents because the First Circuit's opinion in United Technologies Corp. v. Browning-Ferris Industries, Inc., 33 F.3d 96 (1st Cir.1994), requires a different result.
While the parties agree that § 9613(g)(2) does not limit General Electric's claims, they unsurprisingly take differing positions concerning whether its claims are barred by § 9613(g)(3). General Electric argues that § 9613(g)(3) is the sole statute of limitations for CERCLA contribution claims. Citing precedents from other district courts, see United States v. Scott's Liquid Gold, Inc., 934 F. Supp. 362, 365 (D.Colo.1996); Gould Inc. v. A & M Battery & Tire Serv., 901 F. Supp. 906, 914-15 (M.D.Pa.1995), vacated by 232 F.3d 162 (3d Cir.2000); Reichhold Chems., Inc. v. Textron, Inc., 888 F. Supp. 1116, 1125 (N.D.Fla.1995); Ekotek Site PRP Comm. v. Self, 881 F. Supp. 1516, 1522-24 (D.Utah 1995), it then asserts that its claims are not time-barred because none of the triggering events specified in § 9613(g)(3) have occurred.
Defendants concede that § 9613(g)(3) does not expressly limit General Electric's claims. They argue, however, that I must "borrow" § 9613(g)(3)'s three-year limitation period and determine that it is triggered, with respect to voluntary costs, when the PRP incurs more than its fair share of such costs, and with respect to UAO costs, when a PRP signals its intention to comply with the UAO. Using this approach, defendants argue that General Electric's claims are time-barred.
As I explain in greater detail in the sections that follow, I reject both parties' arguments and instead follow the Tenth and Fifth Circuits in concluding that § 9613(g)(2) supplies the limitation periods for contribution claims that are not expressly limited by § 9613(g)(3). I reach this result for several reasons. First, the parties have misconstrued United Technologies. It does not hold that § 9613(g)(2) is inapplicable to contribution claims. Second, the parties overlook the fact that § 9613(g)(2) and § 9613(g)(3) reasonably can be read together to supply limitation periods for all CERCLA contribution and cost recovery claims. Third, General Electric's alternative interpretation, while linguistically plausible, produces absurd results that can be avoided if § 9613(g)(2) is construed to cover its contribution claims. Finally, defendants' interpretation depends upon an incorrect understanding of Supreme Court precedents that explain when a court may borrow a federal statute of limitation to supply a limitation period for an implied right of action.
A.
In United Technologies, the plaintiff was attempting to recover costs that it had incurred pursuant to a consent decree. See 33 F.3d at 97. Because the plaintiff was itself a PRP, the court determined that it could not maintain a private cost recovery claim pursuant to § 9607. See id. at 101, 103. Instead, the court characterized the plaintiff's claim as a contribution claim and determined that it was *6 barred by § 9613(g)(3). See id. In reaching this conclusion the court described the relationship between §§ 9613(g)(3) and 9613(g)(2) by stating that:
[T]he two statutes of limitations complement each other and together exhaust the types of actions that might be brought to recoup response costs. [T]he shorter prescriptive period, contained in 42 U.S.C. § 9613(g)(3), governs actions brought by liable parties during or following a civil action under 42 U.S.C. §§ 9606-9607(a), while the longer statute of limitations, contained in 42 U.S.C. § 9613(g)(2), addresses actions brought by innocent parties that have undertaken cleanups (say, the federal, state or local governments).
This reading fits especially well with the language of 42 U.S.C. § 9613(g)(2), which concerns actions for the "recovery of the costs." That phrase, reiterative of the subsection heading "Actions for recovery of costs," suggests full recovery; and it is sensible to assume that Congress intended only innocent parties not parties who were themselves liable to be permitted to recoup the whole of their expenditures."
Id. at 99-100. The parties rely on this language to support their argument that § 9613(g)(2) does not cover contribution claims.
The court's holding in United Technologies is more limited than the parties suggest. Because the claim at issue in that case arose from a consent decree, it was expressly subject to the three-year limitation period specified in 42 U.S.C. § 9613(g)(3). See United Techs. Corp., 33 F.3d at 103. Thus, once the court determined that a PRP could not maintain a private cost recovery claim against other PRPs, the court understandably concluded that the plaintiff's claim was barred by § 9613(g)(3). See id. The court did not have to determine whether a claim that is not subject to any of the triggering events specified in § 9613(g)(3) may nevertheless be limited by § 9613(g)(2). Moreover, the court expressly left open the possibility that an implied private right of action for contribution may be subject to § 9613(g)(2) if it is not expressly limited by § 9613(g)(3). See id. at 99 n. 8. The court observed in this regard that:
If, indeed, the law allows such an implied right of action for contribution to be maintained a matter on which we take no view it is unclear to us whether such a cause of action would be subject to the three-year [§ 9613(g)(3)] or the six-year [§ 9613(g)(2)] prescriptive period. Because this appeal does not pose that question, we leave it for another day.
Id. In view of the fact that United Technologies leaves open the possibility that § 9613(g)(2) may cover contribution claims that are not limited by § 9613(g)(3), I do not construe the opinion to foreclose such a result.
B.
Because the parties misconstrued United Technologies, they also failed to consider whether §§ 9613(g)(2) and 9613(g)(3) reasonably can be read together to supply the limitation periods for all CERCLA contribution and cost recovery claims. See King v. St. Vincent's Hosp., 502 U.S. 215, 221, 112 S. Ct. 570, 116 L. Ed. 2d 578 (1991) (invoking the rule that a court should consider the text of a statute as a whole). I now undertake that effort.
Section 9613(g)(3) plainly serves as the statute of limitations for contribution claims in which any of the triggering events specified in the subsection have occurred. Its text does not, however, preclude the possibility that another section of CERCLA may supply the limitation periods *7 for those contribution claims that are not limited by § 9613(g)(3). Thus, I must look to § 9613(g)(2) to determine whether it can be read to supply the limitation periods for contribution claims that are not expressly limited by § 9613(g)(3).
Subsection 9613(g)(2) reasonably can be construed to fill the gaps left by § 9613(g)(3). It applies broadly to any "initial action for recovery of the costs referred to in section 9607 of this title ...." 42 U.S.C. § 9613(g)(2). A contribution claim plainly is an action for the recovery of the costs referred to in § 9607 because it is a claim by a PRP against other PRPs to recover response costs. Such a claim differs from a private cost recovery claim only in that the plaintiff in a contribution action is itself a PRP and other PRPs are severally liable rather than jointly and severally liable. See Centerior Serv. Co., 153 F.3d at 348. Since both §§ 9613(g)(3) and 9613(g)(2) were added to CERCLA by SARA long after the implied private right of action for contribution based on § 9607 became widely recognized by the courts, it is reasonable to conclude that Congress intended both provisions to be construed together to establish the limitation periods for all contribution claims.[13]
Construing §§ 9613(g)(3) and 9613(g)(2) together also leaves CERCLA with a rational means of establishing time limits for all contribution claims. Under this construction, § 9613(g)(3)'s three-year limitation period is triggered if a PRP becomes liable for response costs as a result of a readily identifiable event of obvious significance, such as the entry of a judgment or a settlement that is subject to administrative or judicial approval. All other contribution claims are subject to the time periods prescribed in § 9613(g)(2)'s general statute of limitations for actions to recover response costs.
In summary, a reasonable reading of CERCLA as a whole supports the conclusion that § 9613(g)(2) should be construed to supply the limitation periods for those contribution claims that are not expressly limited by § 9613(g)(3).
C.
General Electric contends that § 9613(g)(3) is the only statute of limitations that governs contribution claims. In its view, there are no gaps in the subsection to be filled by reference to § 9613(g)(2). If a contribution claim is not limited by § 9613(g)(3), it argues, the claim is not subject to any statute of limitations. I reject this argument.
While General Electric's construction of § 9613(g)(3) is plausible if the subsection is construed in isolation, it makes little sense when the text of CERCLA is construed as a whole. Moreover, its interpretation would produce absurd results in which cost recovery claims brought by innocent parties and certain contribution claims brought by PRPs would be subject to strict statutes of limitations but contribution claims brought by other PRPs could be delayed indefinitely. For example, an innocent party's claim to recover cleanup costs would be subject to the limitation *8 period specified in § 9613(g)(2) whereas a PRP who voluntarily incurs the same costs could delay its cost recovery action indefinitely without fear that it would be barred by any statute of limitations. Further, a PRP who refuses to settle a cost recovery claim with the government and implements a cleanup only in response to a UAO could delay its contribution claim indefinitely but a PRP who agrees to incur the same costs pursuant to an administrative settlement would have only three years to bring its claim. Because General Electric cannot offer any rational justification for such distinctions and the alternative construction I propose avoids them, I decline to adopt General Electric's interpretation of § 9613(g)(3). See United States v. Sun-Diamond Growers of Cal., 526 U.S. 398, 406, 119 S. Ct. 1402, 143 L. Ed. 2d 576 (1999) (adopting a plausible construction of a statute in part because it avoids peculiar results produced by alternative interpretations); Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575, 102 S. Ct. 3245, 73 L. Ed. 2d 973 (1982) ("interpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the legislative purpose are available").
D.
Defendants acknowledge that § 9613(g)(3) does not expressly limit General Electric's claims. Nevertheless, they argue that I should "borrow" the provision's three-year limitation period and recognize new triggering events for the subsection that would bar General Electric's claims. I decline to follow this suggestion.
If Congress fails to provide a statute of limitation for a federal cause of action, courts often will borrow an analogous limitation period from state law. See Wilson v. Garcia, 471 U.S. 261, 266-67, 105 S. Ct. 1938, 85 L. Ed. 2d 254 (1985). In certain limited circumstances, a court may instead turn to federal law for the missing statute of limitation. See, e.g., DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151, 161-62, 103 S. Ct. 2281, 76 L. Ed. 2d 476 (1983). One such circumstance is where the claim at issue is based on a right of action implied under federal law. See Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 359, 111 S. Ct. 2773, 115 L. Ed. 2d 321 (1991). If the statute on which the implied right to relief is based contains an express cause of action with its own time limitations, "a court should look first to the statute of origin to ascertain the proper limitations period." Id. Defendants argue that I should follow this rule and borrow § 9613(g)(3) because it is the most analogous statute of limitations for contribution claims.
Defendants' argument is based upon a mistaken application of the borrowing doctrine. The Supreme Court has sometimes borrowed an otherwise inapplicable statute of limitation when Congress has failed to specify its own statute of limitation. The Court, however, has never suggested that it is appropriate to disregard an applicable statute of limitation and instead borrow a limitation period from another source. As I have already demonstrated, § 9613(g)(2) reasonably can be read to supply the limitation periods for General Electric's claims. Under these circumstances, I am not free to borrow another statute of limitation and judicially modify it to cover claims that are not encompassed by its text. Since I can reasonably construe § 9613(g)(2) to cover General Electric's claims, I decline to adopt defendants' proposal to borrow and modify § 9613(g)(3).
IV. CONCLUSION
For the foregoing reasons, I hold that § 9613(g)(2) establishes limitation periods for General Electric's contribution claims. *9 Because the parties have failed to fully brief the factual issues concerning the application of this statute of limitation to the claims before me, I deny the defendants' motion to dismiss (Doc. No. 17) without prejudice to defendants' right to raise the issue in a motion for summary judgment.
SO ORDERED.
NOTES
[1] Unless otherwise noted, I take the background facts from General Electric's complaint, (Doc. No. 1).
[2] The EPA also named the Windsor-Embassy Corporation as a defendant in the action. Windsor failed to respond to the complaint, and the court entered a default judgment against it.
[3] Section 9606 authorizes the EPA to issue a UAO when it determines that an "imminent and substantial endangerment to the public health or welfare or environment" exists because of an "actual or threatened release of a hazardous substance from a facility." 42 U.S.C. § 9606(a). The scope of a § 9606 UAO may be very broad, as the EPA "may secure such relief as may be necessary to abate such danger or threat." Id. In addition, the consequences for failing to comply with a § 9606 UAO are severe, as a non-complying party faces penalties of up to $25,000 per day. See § 9606(b)(1).
[4] PRPs may be liable for response costs incurred by governmental entities and certain private parties. See 42 U.S.C. §§ 9607(a)(4), 9613(f)(1). There are four categories of PRPs: (1) the current owner or operator of a hazardous waste facility; (2) any past owner or operator of a hazardous waste facility that owned or operated the facility during a time when hazardous substances were disposed there; (3) any person who arranged for disposal or treatment of hazardous substances at the hazardous waste facility (usually generators); and (4) any person who transported hazardous substances to a hazardous waste facility from which there is a release or a threatened release which causes a party to incur response costs. See § 9607(a)(1)-(4). A PRP may prove that it is not liable under CERCLA by establishing that the release of a hazardous substance was the result of: (1) an act of God; (2) an act of war; or (3) the actions of a third party over whom the PRP had no control. See § 9607(b).
[5] The complaint also includes a contribution claim for costs that General Electric incurred pursuant to the consent decree. General Electric concedes, however, that this claim is barred by § 9613(g)(3).
[6] Response costs include those costs incurred during removal and/or remedial actions. See 42 U.S.C. § 9601(25); infra notes 10-11 (defining removal and remedial actions).
[7] General Electric also asserts contribution claims pursuant to § 9613(g)(1). Because it has not brought its claims "during or following any civil action under Section 9606 ... or under Section 9607(a)," General Electric may not seek contribution pursuant to § 9613(f)(1). Therefore, it may only base its contribution claims on the implied right to contribution derived from § 9607.
[8] Subsection 9613(g)(3) provides:
No action for contribution for any response costs or damages may be commenced more than 3 years after: (A) the date of judgment in any action under this chapter for recovery of such costs or damages, or (B) the date of an administrative order under section 9622(g) of this title (relating to de minimis settlements) or 9622(h) of this title (relating to cost recovery settlements) or entry of a judicially approved settlement with respect to such costs or damages.
[9] Subsection 9613(g)(2) provides in pertinent part:
[a]n initial action for recovery of the costs referred to in section 9607 of this title must be commenced: (A) for a removal action, within 3 years after completion of the removal action...; and (B) for a remedial action, within 6 years after initiation of physical on-site construction of the remedial action....
[10] The term removal action "means [those actions taken to] cleanup or remov[e] released hazardous substances from the environment [or to dispose of the removed material] ... [and] such actions as may be necessary to monitor, assess, and evaluate the release or threat of release of hazardous substances." 42 U.S.C. § 9601(23).
[11] The term remedial action "means those actions consistent with [a] permanent remedy taken, instead of or in addition to removal actions, ... to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to [the] public health ... or the environment." 42 U.S.C. § 9601(24).
[12] Removal costs also may be included in a suit to recover remedial costs if the remedial action is commenced within three years after the completion of the removal action. See 42 U.S.C. § 9613(g)(2)(B). A subsequent cost recovery claim for either removal or remedial costs may be maintained at any time up to three years after the completion of all response actions at the site. See id. These limitations are inapplicable in the present case.
[13] Subsection 9613(g)(2) also could be construed to apply to cost recovery claims brought by innocent parties, leaving § 9613(g)(3) as the sole statute of limitations for contribution actions. To adopt this construction, however, I either would have to conclude that Congress arbitrarily left several kinds of contribution claims without any statute of limitations or that § 9613(g)(3) should be judicially modified to include triggering events that the provision does not contain. As I explain in the sections that follow, neither alternative is acceptable when the statute reasonably supports an alternative construction that avoids such results. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/408187/ | 688 F.2d 338
30 Fair Empl. Prac. Cas. (BNA) 11, 30 Empl. Prac.Dec. P 33,084EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-AppellantCross-Appellee,v.BROWN & ROOT, INC., Defendant-Appellee Cross-Appellant.
No. 82-4081
Summary Calendar.
United States Court of Appeals,Fifth Circuit.
Oct. 4, 1982.Rehearing and Rehearing En Banc Denied Nov. 3, 1982.
Justine Susan Lisser, Atty., Washington, D. C., Eugene W. Fuquay, E. E. O. C., Birmingham, Ala., for E. E. O. C.
Henry D. Grandberry, III, M. Curtiss McKee, Jackson, Miss., for Brown & Root, Inc.
Appeals from the United States District Court for the Southern District of Mississippi.
Before RUBIN, JOHNSON and WILLIAMS, Circuit Judges.
ALVIN B. RUBIN, Circuit Judge:
1
Summary judgment is a marvelous tool when used correctly. It can cut to the heart of disputed legal issues and resolve them, so long as the underlying material facts are undisputed. However, summary judgment is completely inappropriate when a law suit turns on a disputed question of material fact. Here, we must reverse because the district court granted summary judgment when there was a disputed issue of material fact that, if resolved in favor of the party against whom the judgment was rendered, might make the outcome completely different.
2
The following facts are undisputed: Sarah Joan Boyes was employed by Brown & Root as an electrician's helper. Brown & Root is a construction company and Ms. Boyes was assigned to work on an overhead steel beam that was part of a structure being erected at Escatawpa, Mississippi. She became paralyzed by fear and was unable to move, a condition known as "freezing." It was necessary physically to assist her to climb down. Brown & Root discharged Ms. Boyes from her job for the stated reason that she was "not capable of performing assigned work." After she was fired, another female worker was hired to fill the position of electrician's helper.
3
What is disputed is whether men who manifested the same acrophobia were also discharged. In opposition to the motion for summary judgment, the Equal Employment Opportunity Commission offered the affidavit of its investigator. To this were attached copies of statements taken from four male employees, each of whom stated that he or some other worker had at some prior time frozen on the beams, could not get down without help, and was not discharged. One statement referred also to a male worker who was kept on the ground because he was afraid of heights. There was also attached an "EEOC affidavit" from a male employee stating that he had "frozen" and had not been discharged.
4
While neither the pleadings nor the proof in opposition to the motion for summary judgment frame the issue as directly as would be desirable, the disputed issue was not whether Ms. Boyes was unable to work at heights, a fact that was, indeed, undisputed, or whether she was replaced by a male, another fact that was not disputed, but whether, had she been a man, she would have suffered dismissal as a result of her phobia. When an employment discrimination claim contends that a person was discharged from employment because of sex, race, age or some other reprobated reason, a prima facie case of discrimination is made if it is shown that (1) the person was a member of a protected minority; (2) the person was qualified for the job from which discharged; (3) the person was discharged; and (4) after the discharge, their employer filled the position with a nonminority. Marks v. Prattco, Inc., 607 F.2d 1153, 1155 (5th Cir. 1979). This showing, however, is not the only way to establish a prima facie case of discriminatory discharge. Jones v. Western Geophysical Co., 669 F.2d 280, 284 (5th Cir. 1982); Ramirez v. Sloss, 615 F.2d 163, 168-69 & n.9 (5th Cir. 1980). Moreover, we are not here concerned with whether a prima facie case was made out. That issue arises only when the plaintiff's case has been fully presented, and the question is whether the case can be dismissed for want of evidence. The issue presented by this case is whether there was a genuine dispute concerning a material fact. See Fed.R.Civ.P. 56(c).
5
If an employee is discharged under circumstances in which an employee of another sex would not have been discharged, an inference of discrimination arises irrespective of the gender of the employee's replacement. Punitive action against employees for violating work rules must not differentiate on the basis of sex or any of the other criteria reprobated by Title VII. McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273, 282-283, 96 S. Ct. 2574, 2579-80, 49 L. Ed. 2d 493 (1976).1
6
In a number of cases, we have held that employees discharged for violation of work rules can establish a prima facie case of unlawful discrimination by showing simply that they were discharged and that a person who did not belong to a minority was retained "under apparently similar circumstances." See, Davin v. Delta Airlines, Inc., 678 F.2d 567, 570 (5th Cir. 1982); Rohde v. K. O. Steel Casting, Inc., 649 F.2d 317, 322-23 (5th Cir. 1981); Green v. Armstrong Rubber Co., 612 F.2d 967, 968 (5th Cir.), cert. denied 449 U.S. 879, 101 S. Ct. 227, 66 L. Ed. 2d 102 (1980); Turner v. Texas Instruments, Inc., 555 F.2d 1251, 1254-55 (5th Cir. 1977). In Brown v. A. J. Gerrard Mfg. Co., 643 F.2d 273, 276 (5th Cir. 1981), we set out a four part test for demonstrating a prima facie case for discriminatory discharge due to unequal imposition of discipline:
7
(1) That plaintiff was a member of a protected group;
8
(2) That there was a company policy or practice concerning the activity for which he or she was discharged;
9
(3) That non-minority employees either were given the benefit of a lenient company practice or were not held to compliance with a strict company policy; and(4) That the minority employee was disciplined either without the application of a lenient policy, or in conformity with the strict one.
10
Id. at 276. Thus, a disputed issue of material fact remained when the district court granted summary judgment.
11
Brown & Root seeks to justify the summary judgment by contending that the factual dispute was not raised in affidavits made on personal knowledge as required by Fed.R.Civ.P. 56(e). The argument fails because the district court did not base the dismissal on appellant's failure to present the evidentiary dispute in proper form. Had formal deficiency been the basis, the failing might readily have been remedied.2
II.
12
The suit was filed by the EEOC. Brown & Root sought to compel joinder of Ms. Boyes. The district court having denied the motion, Brown & Root, as cross-appellant, contends that Rule 19(a)(2), Fed.R.Civ.P. requires joinder of Ms. Boyes as a person who "claims an interest relating to the subject of the action and is so situated that the disposition of the action in (her) absence may ... as a practical matter impair or impede (her) ability to protect that interest," and that her absence might leave the defendant "subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of (her) claimed interest." Id. Rule 21, Fed.R.Civ.P. permits the district court to add or drop parties upon motion or its own initiative.
13
We have consistently held that "the criteria set forth in Rule 19 (Fed.R.Civ.P.) are not to be applied mechanically nor are they to be used to override compelling substantive interests." Schutten v. Shell Oil Co., 421 F.2d 869, 873 (5th Cir. 1970). Accord, Fernandes v. Limmer, 663 F.2d 619, 636 (5th Cir. 1981), petition for cert. dismissed, --- U.S. ----, 103 S. Ct. 5, 73 L. Ed. 2d 1395, (1982). "Determinations of indispensability are bottomed on equitable principles." Toney v. White, 476 F.2d 203, 207 (5th Cir. 1973). Both Rule 19(a) and Rule 21 "provide wide discretion for the District Court to order joinder of parties ..." Moore v. Knowles, 482 F.2d 1069, 1075 (5th Cir. 1973).
14
Brown & Root has presented no adequate reason for us to overturn the district court's exercise of its discretion in failing to subject a discharged electrician's helper to the expense of hiring an attorney and to the payment of potential court costs in order to pursue her claim when her charge was already being prosecuted by the federal agency whose function it is to bring exactly such suits. There is certainly no danger of a later suit by Ms. Boyes. Section 706(f)(1) of Title VII, 42 U.S.C. 2000e-5(f)(1), provides that "the Commission may bring a civil action against any respondent." Only if 180 days has passed since the filing of a charge, or if the Commission has been unable to secure a conciliated settlement, and if the EEOC itself has not filed suit, may a charging party bring suit. Id. Thus, the statute does not envision duplicative suits on the same Title VII claim. See EEOC v. Huttig Sash & Door Co., 511 F.2d 453, 455 & n.1 (5th Cir. 1975). Brown & Root is, therefore, protected from liability for multiple back pay or other awards because Ms. Boyes cannot now receive the right-to-sue letter that is a procedural prerequisite to a private suit. Section 706(f)(1) expressly allows the aggrieved party to intervene as of right in any action involving her charge filed by the EEOC, but does not require that she do so. Id.
15
Nor is there any reason to question the EEOC's role as the primary enforcer of individual rights under Title VII. In enacting that legislation, Congress "hoped that recourse to the private lawsuit (would) be the exception and not the rule, and that the vast majority of complaints (would) be handled through the offices of the EEOC ..."3
16
Nothing in recent case law, including General Telephone Co. v. EEOC, 446 U.S. 318, 100 S. Ct. 1698, 64 L. Ed. 2d 319 (1980), suggests that the EEOC is in any way incapable of representing Ms. Boyes' interests. General Telephone ruled that the EEOC need not comply with Rule 23, Fed.R.Civ.P., because its suits are expressly permitted by section 706(f)(1) and it sues to further the public interest. 446 U.S. at 326, 100 S.Ct. at 1704, 64 L. Ed. 2d at 327. Notwithstanding this public interest, the Commission's suits are also "at the behest of and for the benefit of specific individuals...." Id. Additionally, as the magistrate found, once Ms. Boyes filed an affidavit acknowledging and waiving her right to intervene in the action, it was clear that she believed her rights were adequately protected.
17
Brown & Root did not demonstrate any way in which, in the absence of compulsory joinder, Ms. Boyes will be adversely affected. It claimed only that it will somehow be left facing inconsistent obligations, but the apprehension is groundless.
18
For these reasons the judgment denying joinder of Ms. Boyes is AFFIRMED. The summary judgment is REVERSED and the case is REMANDED for further proceedings consistent with this opinion.
1
Moreover, a showing that Brown & Root, Inc. discharged women unable to work at heights but not similarly qualified men would constitute discrimination under Welch v. University of Texas, 659 F.2d 531, 533 n.3 (5th Cir. 1981) and Harper v. Thiokol Chemical Corp., 619 F.2d 489 (5th Cir. 1980). These cases recognize that Title VII prohibits discrimination against subclasses of women. The fact that Ms. Boyes' replacement was female does not prevent a showing of discrimination under this theory
2
We also note that the affidavit submitted in support of the defendant's motion for summary judgment did not comply with Fed.R.Civ.P. 56(e). That affidavit, executed by defendant's counsel, states that the counsel was present at the deposition of an EEOC official and heard the official testify that Ms. Boyes was replaced by another female. With respect to the gender of Ms. Boyes' replacement, this affidavit was most certainly not based on personal knowledge. Rule 56(e) only requires the party opposing a motion for summary judgment to submit affidavits when the original motion is supported by proper affidavits
3
This statement is from a section-by-section analysis of the conference committee's version of H.R.1746 that was introduced in the Senate by Senator Williams, chairman of the Senate conferees, 118 Cong.Rec. 7, 168 (1972) and in the House by Mr. Perkins, chairman of the House conferees, 118 Cong.Rec. 7,565 (1972) | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/431821/ | 728 F.2d 643
20 ERC 1553
CITY OF ALEXANDRIA, a municipal corporation of Virginia,City Council of Alexandria, a body political ofVirginia, Appellees,v.J. Lynn HELMS, Administrator, Federal AviationAdministration; James H. Wilding, Director, MetropolitanWashington Airports, Federal Aviation Administration;Federal Aviation Administration, Appellants.CITY OF ALEXANDRIA and the County Arlington, Petitioners,v.FEDERAL AVIATION ADMINISTRATION, Respondent.
Nos. 83-1944, 83-1976.
United States Court of Appeals,Fourth Circuit.
Argued Nov. 4, 1983.Decided Feb. 28, 1984.
J. Carol Williams, Dept. of Justice, Washington, D.C. (Kenneth Weinstein, Dept. of Transp., Edward S. Faggen, Metropolitan Washington Airports, Federal Aviation Admin., F. Henry Habicht, II, Acting Asst. Atty. Gen., Gary B. Randall, Peter R. Steenland, Jr., Dept. of Justice, Washington, D.C., on brief), for appellants.
Abbe David Lowell, Washington, D.C. (Brand, Lowell, Nickerson & Dole, Washington, D.C., on brief), and Charles G. Flinn, County Atty., to the County Bd. of Arlington, Arlington, Va. (Cyril D. Calley, City Atty., for the City of Alexandria, Alexandria, Va., Eugene Gressman, Univ. of North Carolina School of Law, Chapel Hill, N.C., on brief), for appellees.
Before WINTER, Chief Judge, and PHILLIPS and ERVIN, Circuit Judges.
ERVIN, Circuit Judge:
1
In this consolidated case, the Federal Aviation Administration (FAA) appeals from a preliminary injunction entered by the United States District Court for the Eastern District of Virginia preventing the FAA from conducting flight pattern tests for flights departing Washington's National Airport. Additionally, the City of Alexandria and County Board of Arlington County petition for review of the FAA order to implement the flight pattern tests. In an order entered November 8, 1983, we reversed the judgment of the district court and remanded with directions to dismiss for want of jurisdiction. We also denied the petition for review and affirmed the FAA order. We now set forth the reasons for these rulings.
I.
2
In response to a May 19, 1981 request by the Metropolitan Washington Council of Governments, the FAA initiated plans to determine whether the flight paths of certain turbo jets departing Washington National Airport should be permanently altered. The flight plan under consideration by the FAA (also referred to as the scatter plan) calls for some departing turbo jets to turn off their flight route along the Potomac River earlier after take-off than they currently turn. The purpose of the plan is to distribute aircraft noise as equitably as possible among affected localities by permitting some jets to fly over previously unaffected areas of Alexandria and Arlington, thus relieving other localities from a concentration of noise. The FAA estimates that "the proposed test would increase the residential population subject to 30 seconds or more of 75 db aircraft noise per day from 551,000 to 871,000."1 The affected population would be spread over a larger geographic area.
3
In accordance with its regulations, the FAA prepared an environmental assessment of the test which it published on May 31, 1983, and distributed to 200 people, including the Alexandria City Manager. Public comment on the assessment was received through July 20 and a response to that comment was published in August. Because it concluded the test was not a major federal action significantly affecting the environment, the FAA did not prepare an Environmental Impact Statement.
4
On August 30, 1983, the Administrator of the FAA authorized testing of the scatter plan for 90 days between September 15, 1983 and January 15, 1984. The City of Alexandria and the County Board of Arlington County filed complaints challenging the FAA's conclusion that implementation of its test did not require preparation of an Environmental Impact Statement (EIS). The local governments additionally alleged that the FAA had acted arbitrarily and had violated the Administrative Procedure Act. They moved the district court for a preliminary injunction and at the same time petitioned for review of the FAA's order in this court.
5
On September 30, 1983, the district court temporarily enjoined the FAA from conducting the scatter plan test that was scheduled to begin on October 14. Pursuant to Federal Rule of Appellate Procedure 8(a), the FAA filed a motion before a single circuit judge to stay the district court injunction pending appeal. The motion to stay was granted, 719 F.2d 699. Alexandria and Arlington moved to vacate the stay, and we considered that motion together with the FAA's appeal from the district court's preliminary injunction. We also ruled on the local governments' petition for review of the FAA order.
II.
6
The threshold question is whether the district court properly exercised jurisdiction when it issued the preliminary injunction. 49 U.S.C. Sec. 1486(a) provides that
7
Any order, affirmative or negative, issued by the Board or Administrator [of the FAA] under this chapter ... shall be subject to review by the courts of appeals of the United States or the United States Court of Appeals for the District of Columbia ....
8
This provision vests review of FAA orders exclusively in the Courts of Appeals. E.g. City of Rochester v. Bond, 603 F.2d 927, 934-35 (D.C.Cir.1979); Oling v. Air Line Pilots Association, 346 F.2d 270 (7th Cir.), cert. denied, 382 U.S. 926, 86 S. Ct. 313, 15 L. Ed. 2d 339 (1965). However, "[a]ctions which are not (or not yet) orders but which are nonetheless reviewable may be raised in the district court...." City of Rochester v. Bond, 603 F.2d at 935. The Administrator's decision to authorize the scatter plan test is reviewable because of the extensive administrative record on which it was based. Alexandria and Arlington contend that the decision was not a final order.2
9
Although the FAA refers to the Administrator's decision as an order, the status of that decision must be defined by the circumstances in which it was made.3 Other circuits have held that an FAA action capable of review on the basis of an administrative record constitutes an order within the meaning of Sec. 1486(a). Sima Products Corp. v. McLucas, 612 F.2d 309, 312-13 (7th Cir.), cert. denied, 446 U.S. 908, 100 S. Ct. 1384, 64 L. Ed. 2d 260 (1980); Deutsche Lufthansa Aktiengesellschaft v. C.A.B., 479 F.2d 912 (D.C.Cir.1973). We agree that the existence of a reviewable administrative record is a determinative factor in defining the FAA decision as an order vel non, and we would add only that the agency action must be the final disposition of the matter it addresses. See California v. Department of Transportation, 654 F.2d 616, 620 (9th Cir.1981).
10
Alexandria and Arlington argue that the FAA action in this case was not final because "only a temporary test is involved." The duration of the FAA action, however, is not relevant to determining whether the action was final. The dispositive question is whether the agency action was the definitive statement on the subject matter it addressed. See generally, Abbott Laboratories v. Gardner, 387 U.S. 136, 149-51, 87 S. Ct. 1507, 1515-16, 18 L. Ed. 2d 681 (1967). Here, the matter under consideration was whether the scatter plan test should be implemented without further investigation. The Administrator's August 30, 1983, decision conclusively settled that matter. We conclude, therefore, that the Administrator's decision was final. Noting that it was also based on a reviewable administrative record, we hold that it constituted an order within the meaning of Sec. 1486(a).
11
Alexandria and Arlington additionally contend that the National Environmental Policy Act (NEPA) provides an independent basis for district court jurisdiction in this case. Cf. City of Irving v. Federal Aviation Administration, 539 F. Supp. 17, 34 (N.D.Tex.1981) (FAA's decision not to issue an EIS was subject to review in the district court when there was no order to review and only claim was under NEPA). However, when review of an agency order is at issue4 and when Congress has vested exclusive jurisdiction over that review in the Courts of Appeals, NEPA does not provide independent grounds for district court jurisdiction. City of Rochester v. Bond, 603 F.2d at 936; see also United States v. SCRAP, 412 U.S. 669, 696-97, 93 S. Ct. 2405, 2420-21, 37 L. Ed. 2d 254 (1978).
12
Because the Administrator's action implementing the scatter plan test was a final order and because NEPA does not provide an independent basis for jurisdiction in this case, we hold that the district court lacked jurisdiction to issue an injunction.
III.
13
On petition for review of the FAA order, Alexandria and Arlington argue that the FAA violated the National Environmental Policy Act by failing to issue an EIS before ordering implementation of the scatter plan test. Generally, the decision not to prepare an EIS is left to the informed discretion of the agency. Providence Road Community Ass'n v. EPA, 683 F.2d 80, 82 (4th Cir.1982). "Absent a showing of arbitrary action, we must assume that the agencies have exercised this discretion appropriately." Kleppe v. Sierra Club, 427 U.S. 390, 412, 96 S. Ct. 2718, 2731, 49 L. Ed. 2d 576 (1976).
14
The FAA's environmental assessment and summary of public comments indicate that careful consideration was given to the possible environmental consequences of the scatter plan test. The FAA noted that the test was of very limited duration, a maximum of 90 days, and that the potential noise levels compared favorably with Occupational Safety and Health Administration standards which allow noise exposure far exceeding noise exposure resulting from the proposed test.5 After comparing studies on the effects of airport and construction noise, the FAA reasonably concluded that the test "is unlikely to be of sufficient duration to cause lasting health effects." The FAA also carefully assessed the test's impact on energy consumption and air quality. We cannot say that the agency abused its discretion in concluding that preparation of an EIS was unnecessary given the abundant evidence in the record supporting the FAA's conclusion that the 90 day test was not a major federal action significantly affecting the environment. Cf. City of Irving v. FAA, 539 F. Supp. at 27 (60 day test of new departure path at airport was not a major action significantly affecting the environment because the test was only temporary and did not involve risk to human health or life).
15
Alexandria and Arlington also contend in their petition for review that the FAA violated the Administrative Procedure Act (APA) by failing to comply with the notice and comment procedures required by 5 U.S.C. Secs. 553(b) and (c).6 Sections 553(b) and (c) apply only to rule making. The APA defines rule as
16
the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency....
17
5 U.S.C. Sec. 551(4).
18
The FAA argues that its order to implement the scatter plan test is not a rule because it merely provides an alternative to air traffic controllers in formulating daily departure procedures from National Airport. Although we believe that the Administrator's order is an agency statement of particular applicability designed to implement agency policy and thus falls within the definition of a rule, we find that under Sec. 553(b)(A) the Administrator's order is exempt from the APA notice and comment requirements.
19
The rulemaking procedures of Sec. 553 do not apply "to interpretative rules, general statements of policy, or rules of agency organization, procedure or practice." 5 U.S.C. Sec. 553(b)(A). This court has previously discussed the application of Sec. 553(b)(A) and noted that:
20
To draw the line between substance and procedure in the context of administrative rulemaking, courts have generally held that notice and comment is required if the rule makes a substantive impact on the rights and duties of the person subject to regulation. If the rule does not have such an impact, it is exempt from the notice and comment requirements of the statute. See Pickus v. United States Board of Parole, 165 U.S.App.D.C. 284, 289, 507 F.2d 1107, 1112 (1974); Lewis-Mota v. Secretary of Labor, 469 F.2d 478, 481 (2d Cir.1972); Texaco, Inc. v. Federal Power Commission, 412 F.2d 740, 744 (3d Cir.1969); cf. EEOC v. Raymond Metal Products Co., 530 F.2d 590, 593 (4th Cir.1976).
21
Reynolds Metals Co. v. Rumsfeld, 564 F.2d 663, 669 (4th Cir.1977), cert. denied, 435 U.S. 995, 98 S. Ct. 1646, 56 L. Ed. 2d 84 (1978). In this case, the rule under consideration only authorized a temporary change in the FAA's regulation of airline flight patterns. As noted earlier, we found it reasonable for the FAA to determine that this short test was not a major action significantly affecting the environment. Because the 90 day test was of short duration and had no lasting effects, we now find that it did not make a substantive impact on the rights and duties of persons subject to regulation. We conclude, therefore, that the order implementing the scatter plan test was exempt under Sec. 553(b)(A) from the APA's notice and comment requirement.7
IV.
22
For the foregoing reasons, we have denied the petition for review, affirmed the Administrator's order, and remanded No. 83-1944 with instructions to dismiss for want of jurisdiction.
1
Federal Aviation Administration, Environmental Assessment: A Test of Amended Turbojet Departure Paths, May 31, 1983, p. ES-1
2
We find somewhat disingenuous Alexandria and Arlington's argument that the Administrator's decision to implement the scatter plan tests without issuing an Environmental Impact Statement was not an action taken under the Federal Aviation Act. The Administrator authorized implementation of the tests pursuant to his authority under the Federal Aviation Act, specifically 49 U.S.C. Sec. 1348. Although incident to this action was a decision not to prepare an Environmental Impact Statement under the National Environmental Policy Act, that incidental relation with another Act does not lift the Administrator's decision out from under the Federal Aviation Act
3
See, e.g., City of Rochester v. Bond, 603 F.2d at 935 n. 47 (citing cases)
4
The local governments did not limit their complaints before the district court to claims that NEPA had been violated. They also alleged that the FAA had violated the Administrative Procedure Act and had acted arbitrarily
5
The 90 day scatter plan test will result in intermittent exposure to noise in the 65 to 80 dBA range. Few, if any, local residents will face new exposure to aircraft noise for much longer than five minutes a day. OSHA standards allow a worker to spend eight hours per day exposed to 90 dBA or two hours per day at 100 dBA. 29 C.F.R. Sec. 1910.95
6
5 U.S.C. Sec. 553(b) provides that:
General notice of proposed rule making shall be published in the Federal Register, unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law....
Section 553(c) provides that:
After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose....
7
Alexandria and Arlington also contend that the FAA's own regulations require them to conduct formal notice and comment proceedings. 14 C.F.R. Sec. 11.61-11.75 (subpart D--Rules and Procedures for Airspace Assignment and Use). We note, however, that 14 C.F.R. Sec. 11.61(b) provides that "[t]his subpart does not apply to emergency cases and cases in which the procedures ... are found to be impractical, unnecessary, or contrary to the public interest." The FAA concluded that formal notice and comment procedures were unnecessary given the informal public notice and comment procedures employed. Because only a temporary test was the subject of notice and comment, we find the FAA's conclusion to be reasonable
We do not decide whether formal notice and comment procedures would be required, under either the APA or the FAA regulations, before the FAA made any decision to permanently change flight patterns at National Airport. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1567614/ | 10 So.3d 887 (2009)
Judie LUCAS, et al.
v.
BELLSOUTH TELECOMMUNICATIONS, INC., et al.
No. CA 09-90.
Court of Appeal of Louisiana, Third Circuit.
May 6, 2009.
Charles Shelby Norris, Jr., Attorney at Law, Vidalia, LA, for Plaintiff/Appellee, Judie Lucas.
James Michael Percy, Stafford, Stewart & Potter, Alexandria, LA, for Defendant/Appellant, BellSouth Telecommunications, Inc. William K. Burlew.
Andrew Parker Texada, Stafford, Stewart & Potter, Alexandria, LA, for Defendant/Appellant, BellSouth Telecommunications, Inc. William K. Burlew.
Bonita K. Preuett-Armour, Armour Law Firm, Alexandria, LA, for Intervenor/Appellee, State Farm Mutual Auto Ins. Co.
Court composed of JOHN D. SAUNDERS, MICHAEL G. SULLIVAN, and ELIZABETH A. PICKETT, Judges.
*888 SAUNDERS, Judge.
FACTS AND PROCEDURAL HISTORY:
The plaintiff, Judie Lucas (hereinafter "Lucas"), and her granddaughter, Savanna Carter (hereinafter "Carter"), were injured in an automobile accident on June 26, 2007 when William F. Burlew (hereinafter "Burlew"), rear-ended Lucas' car. At the time of the accident, Burlew was driving a truck owned by his employer, BellSouth Telecommunications, Inc. (hereinafter "BellSouth"). At trial, the parties stipulated and agreed that the accident was caused solely by the fault of Burlew, while he was in the course and scope of his employment with BellSouth. Lucas' and Carter's medical bills were also stipulated, leaving only the amount of general damages to be determined by the trial court.
After a hearing, the trial court awarded Lucas $17,500.00 in general damages and Carter $8,000.00 in general damages. BellSouth appeals, asserting two assignments of error.
ASSIGNMENTS OF ERROR:
1. Did the trial court err in awarding Judie Lucas $17,500.00 in general damages for injuries which resulted in six weeks of active medical treatment?
2. Did the trial court err in awarding Savanna Carter $8,000.00 in general damages for injuries which resulted in only two days of active medical treatment?
ASSIGNMENTS OF ERROR # 1 & 2:
BellSouth argues that the trial court abused its discretion in awarding Lucas $17,500.00 in general damages and Carter $8,000.00 in general damages. We disagree. Because the same law applies to both assignments of error, we shall address them both here.
It is well established that when rendering a judgment on quantum based on the merits, this court has a constitutional duty to review the law and facts and determine whether the trier of fact abused the "much discretion" that the law accords it in awarding damages. LSA-Const. art. 5, § 10(B); LSA-C.C. art.1999; Williams v. Exxon Corporation, 541 So.2d 910, 918 (La.App. 1st Cir.1989); Ard v. Samedan Oil Corporation, 483 So.2d 925 (La.1986); Carollo v. Wilson, 353 So.2d 249 (La.1977); Temple v. Liberty Mutual Ins. Co., 330 So.2d 891 (La.1976). In the absence of manifest error, a court of appeal may not set aside a trial court's finding of fact. Ryan v. Zurich American Insurance Company, et. al., 2007-2312 (La.7/1/08), 988 So.2d 214.
Wood v. American National Property & Casualty Insurance Co., 07-1589, p. 5 (La. App. 3 Cir. 12/23/08), 1 So.3d 764, 769.
In analyzing the trial court's findings of fact, an appellate court must review the record in its entirety and determine: (1) whether a reasonable factual basis exists for the finding, and (2) whether, based on the record, the fact finder is clearly wrong or manifestly erroneous. Id.; Rosell v. ESCO 549 So.2d 840, 844 (La.1989). Where there are two permissible views of the evidence, the court of appeal may not reverse and substitute its own discretion, even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Rosell v. ESCO 549 So.2d at 844. Thus, we will review the record to determine whether a reasonable factual basis does not exist for the trial court's damage awards and whether the trial court was manifestly erroneous.
On the day of the accident, Lucas sought treatment at the LaSalle General Hospital Emergency Room in Jena, Louisiana. La-Salle *889 General Hospital's records indicate that Lucas complained of neck pain and headaches and was given Toradol for pain. The emergency room physician thought Lucas may have suffered neck strain and directed her to follow up with her family physician.
About a month after the accident, Lucas followed up with her family physician, Dr. Meade, who gave Lucas medication for neck pain and headaches and instructed her to do range of motion exercises in the shower. When Lucas saw Dr. Meade again, two weeks later, he noted that her neck pain had not improved and that she had muscle spasms. Lucas was referred to a physical therapist, started on Flexeril, and directed to return in two weeks.
After starting physical therapy, Dr. Meade noted that her neck pain had improved, but that Lucas still had muscle spasms. At her final visit with Dr. Meade on October 3, 2007, Lucas' neck pain and muscle spasms had improved with physical therapy, and she was directed to continue with her medication. Lucas completed a total of twelve sessions of physical therapy over a period of six weeks, and her medical bills totaled $2,360.47.
Carter was also taken to LaSalle General Hospital on the day of the accident. Carter's medical records show an injury to her abdomen and that she complained of pain on her right side. Carter was diagnosed with a contusion to the abdomen and given Motrin for pain. The hospital also conducted a battery of CT tests, which, though normal, indicate the level of seriousness that the hospital attached to Carter's condition. The CT tests cost over $3,000.00. In addition, Lucas testified at trial that Carter had nightmares for six to seven months following the accident.
It is clear that both Lucas and Carter suffered actual injuries, underwent treatment, and incurred medical expenses as a result of the auto accident with BellSouth's employee. The injuries and medical expenses, as discussed above, indicate that the trial court was not manifestly erroneous and had a reasonable basis for its award of general damages to both Lucas and Carter.
CONCLUSION:
For the above-stated reasons, we affirm the decision of the trial court in all respects. All costs are to be taxed to the appellant, BellSouth.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565774/ | 40 F.2d 938 (1930)
T. C. WEYGANDT CO.
v.
VAN EMDEN.
District Court, S. D. New York.
May 14, 1930.
Munn, Anderson & Munn, of New York City (Leonard L. Kalish, of Philadelphia, Pa., of counsel), for plaintiff.
*939 S. Pearle Tinsler, of New York City (Francis A. McGurk, of New York City, of counsel), for defendant.
WOOLSEY, District Judge.
My decision in this case is for the plaintiff. It may have a decree for a permanent injunction, and an accounting of its damages and the defendant's profits, with costs.
For the purposes of this case the validity of the Siegert patent, No. 1,576,149, and the infringement thereof by the defendant, are admitted.
That leaves the following issues only to be determined here:
1. Whether the plaintiff can maintain this action as assignee without joining the patentee Siegert.
2. Whether the machines sold by the plaintiff under the patent in suit were appropriately marked with the customary patent notice required by statute.
3. Whether the defendant had notice of the patent prior to his acts of infringement by sale in this country of two machines infringing the patent herein but made in Germany.
Richard Siegert of Dresden, Germany, the patentee, owned a German patent, Deutsches Reichs patent, No. 414,293, for a process and apparatus, for the manufacture of hollow objects of chocolate.
On March 9, 1926, he was granted a United States patent, No. 1,576,149, for the same process and apparatus.
The machine is manufactured in Germany by Anton Reiche of Dresden, a maker of candy machines. The United States patent was taken out to protect the machine in this country where it is used to a considerable extent by candy makers.
For upwards of thirty years the plaintiff has been agent in this country of Anton Reiche. The agency agreement seems to have been somewhat informal until July 14, 1928, when it was reduced to writing as a continuance of the agency agreement theretofore existing, and provision was made that the agency should continue for five years with privilege of cancellation at the end of that period on six months' notice by either party.
The agency agreement was, therefore, in force when this suit was brought on June 5, 1928, and still continues.
On January 15, 1927, Richard Siegert, the patentee, and owner of the United States patent, No. 1,576,149, assigned the patent, with all rights thereto appertaining, to the plaintiff for the full term thereof, subject only, however, to the continuance of the agency agreement between Anton Reiche and the plaintiff, upon the termination whereof it was provided that the patent and all rights appertaining thereto should revert back to and revest in the patentee as though the assignment of the patent had not been made.
The plaintiff, therefore, when this suit was brought, had, and has now "the whole patent, comprising the exclusive right to make use and vend the invention throughout the United States," with the right to sue infringers in its own name. Cf. Waterman v. Mackenzie, 138 U.S. 252, 253, 11 S. Ct. 334, 34 L. Ed. 923; Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U.S. 24, 37, 43 S. Ct. 254, 67 L. Ed. 516.
The fact that its title was subject to being divested on the happening of a certain event does not affect its right to sue when that event has not happened.
There is a close analogy between the situation here and the situation of an owner of an estate in real property subject to a similar limitation. This was pointed out in Solomons v. United States, 21 Ct. Cl. 479, where Chief Justice Nott said, at page 483, of property rights in a patent: "This new form of property, the mind-work of the inventor, though its constitutional existence is now well nigh a century old, is still a novelty in the law. The wisdom of the common law gives neither maxims nor precedents to guide, and the American cases which deal with it, though numerous enough, run in a narrow, statutory groove. Though the most intangible form of property, it still, in many characteristics, is closer in analogy to real than to personal estate. Unlike personal property, it cannot be lost or found; it is not liable to casualty or destruction; it cannot pass by manual delivery. Like real property, it may be disposed of, territorially, by metes or bounds; it has its system of conveyancing by deed and registration; estates may be created in it, such as for years and in remainder; and the statutory action for infringement bears a much closer relation to an action of trespass than to an action in trover and replevin. It has, too, what the law of real property has, a system of user by license."
I hold, therefore, that there is not any defect of parties plaintiff, and that the T. C. Weygandt Company is entitled to maintain this action as the present owner of the patent in suit.
*940 The proofs show that the defendant had been in the plaintiff's employ as salesman from 1923 to the middle of 1927, although he was on part time only from about the end of 1926. I do not believe the defendant's evidence, but, on the contrary, I am satisfied that the defendant knew of the patent in suit as early as June, 1926. Indeed, at a candy maker's convention in Chicago during that month he challenged one Eppelsheimer, who had a machine like the machine of the patent, saying to him: "What are you trying to do, borrow trouble? Don't you know that machine is patented?"
The infringement charged to the defendant is his causing to be imported and selling two machines made under the German patent, but not marked with the American patent marks.
Van Emden took an order from one Beich for one of these machines on April 26, 1927, whilst he was still partially in the plaintiff's employ. This machine was delivered on July 20, 1927. The second machine was ordered by one Loft on October 1, 1927, and delivered on October 6, 1927. The reason why such a quick delivery was possible in the second case was that the defendant had imported this second machine and had it on hand when the order from Loft came. These two machines were bought by the defendant Van Emden from a candy machinery house through whom he found he could get them in a roundabout manner from Reiche.
On May 4, 1928, the plaintiff wrote the defendant in the following terms:
"We understand that you are offering the Reiche Hollow Moulding Machine to the trade in this country.
"Please note that we have recently secured the U. S. Patent rights on this machine and that we shall sue for discontinuance of the use of this machine any firm who buys same through you or other channels."
Though this letter was somewhat inartificially worded, it served its purpose. Van Emden, who knew that he had been infringing and saw that he had been caught, stopped his infringing practices at once, and advised prospective customers with whom he had been in negotiation for the sale of the Reiche machines that they must buy of the plaintiff. Admittedly the defendant has not infringed since the letter of May 4, 1928, was received.
I think that the plaintiff must rely on Van Emden's actual notice of the patent in 1926, rather than on the marking of its machines. For that marking, as shown by the exhibits in evidence, does not precisely comply with the requirements of title 35, U. S. Code, § 49 (Rev. St. § 4900), as amended by the Act of February 7, 1927 (35 USCA § 49). Such marking must comply strictly with the statute in order to constitute notice to the world that the article marked is patented. For a decision on an analogous situation under the Copyright Act, tit. 17, U. S. Code, §§ 9, 18, and 19 (17 USCA §§ 9, 18, 19), see United Thrift Plan, Inc., v. National Thrift Plan, Inc. (D. C.) 34 F.(2d) 300.
Oil Well Improvements Co. v. Acme Foundry & Machine Co., 31 F.(2d) 898, 900, 901 (C. C. A. 8), and Waite v. United States, 63 Ct. Cl. 438, are, however, authorities for holding the defendant for damages and profits on the ground of his actual notice of the patent and knowledge of the fact that his importation and sale of the two machines above referred to was an infringement thereof. In the Oil Well Improvements Company Case, just cited, the Circuit Court of Appeals for the Eighth Circuit summarized the situation as to notice in patent suits as follows, at page 901: "It is equally true, as impliedly conceded by appellee, that notice may be given otherwise than by the statutory method. The statutory method is merely supplemental amounting to `legal' notice, analogous to that of recordation statutes. The essential matter, where the statutory method is not used to supply the deficiency, is actual notice to the infringer that the product of the patentee is patented. Here the master and the court concurred in finding the existence of this actual notice. The evidence not only justifies, but it compels such a result. This actual notice existed before appellee began any manufacture or sale of the infringing device. Therefore it is liable for profits and damages, covering the entire period of the infringement."
Settle decree on five days' notice. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/8304515/ | CROWNOYER, J.
This cause is before us on petition of Mrs. Bragg to supersede an interlocutory order of the Chancellor appointing a receiver to take charge of a farm, claimed by her, that had been mortgaged by her son Sam E. Bragg to the defendants.
The petition for supersedeas must be denied, because we think the appointment of a receiver was within the discretionary power of the Chancellor, and is not subject to. review by this court.
If the chancery court had lawful power and jurisdiction to appoint a receiver upon any legitimate view of the facts of the record and the law applicable thereto, it is not proper for this court to supersede the order. Gibson’s Suits in Chancery, revised edition, secs. 1278 and 1295; Shannon’s Annotated Constitution of Tenn., 412 to 416; 23 R. C. L., 29-30; Pope v. Hazen, 4 Hig., 224; Cone v. Paute, 12 Heisk., 506.
The petitioner claims, the right of possession of the property by virtue of the will of her husband and by seven years adverse posses*467sion. Hho was given possession by her husband’s will until her children became of age, with remainder to her son, Sam E. Bragg. Later her son, Sam E. Bragg conveyed the remainder fee-simple title to her, and within a year, 1920, she reconveyed, by warranty deed, without reservation in the deed, the fee-simple title to said Sam E. Bragg, who thereafter mortgaged the property to the defendants. The defendants, V. I. Witherspoon, trustee, et al., after some litigation, obtained a decree against Sam E. Bragg foreclosing the mortgage and ordering a sale of the property, whereupon, his mother, petitioner herein, who was not a party to said suit, filed a bill to enjoin the sale claiming the title and right to possession both under the aforesaid will and by adverse possession, alleging that she had a verbal agreement with her son whereby she was to retain possession. She claims to have had seven years adverse possession against the trustee and mortgagee, and therefore the title and possession being in dispute the Chancellor had no jurisdiction to appoint a receiver.
After a careful review of the record and authorities, we are of the opinion that her contentions are not well made and that the appointment of the receiver was a matter within the discretion of the Chancellor.
Adverse possession under Shannon’s Code, sec. 4456, has no application to an action which merely seeks to subject the land to the burden of a debt or charge imposed either by contract or by statute in the absence of a disclaimer and of actual knowledge of hostile occupancy. 41 Corpus Juris 489-490, sec. 412; Curry v. Williams, 38 S. W. 278; 8 Michie’s Tenn. Ency. Dig., 601, 651-652; Gudger v. Barnes, 4 Heisk., 570; Lincoln v. Purcell, 2 Head., 143; 2 Corpus Juris, 156, sec. 279; also page 161, sec. 291.
As the case is before us on the interlocutory order we base our opinion on the record as it is, and express no opinion as to the facts of the case. It results that the petition must be denied.
Faw, P. J., and DeWitt, J., concur. | 01-03-2023 | 10-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/3036348/ | United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 04-1698
___________
Jessie Samuel Rufus Benford, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the Eastern
* District of Missouri.
Shell Oil (Motorcade, Inc.), *
* [UNPUBLISHED]
Appellee. *
___________
Submitted: October 26, 2004
Filed: November 4, 2004
___________
Before RILEY, McMILLIAN, and GRUENDER, Circuit Judges.
___________
PER CURIAM.
Jessie Samuel Rufus Benford appeals the district court’s1 adverse grant of
summary judgment in his action under Title VII of the Civil Rights Act of 1964, 42
U.S.C. § 2000e et seq. After careful de novo review of the record, we affirm for the
reasons stated by the district court. See 8th Cir. R. 47B.
______________________________
1
The Honorable Audrey G. Fleissig, United States Magistrate Judge for the
Eastern District of Missouri, to whom the case was referred for final disposition by
consent of the parties pursuant to 28 U.S.C. § 636(c). | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1565531/ | 40 F.2d 606 (1930)
UNION INDEMNITY CO.
v.
VETTER.
No. 5685.
Circuit Court of Appeals, Fifth Circuit.
May 6, 1930.
*607 Manning W. Heard and J. C. Henriques, both of New Orleans, La., Francis M. Miller, John G. McKay, and James A. Dixon, all of Miami, Fla., for appellant.
Robert J. Boone, of Miami, Fla. (Jack R. Kirchik, of Miami, Fla., on the brief), for appellee.
Before BRYAN and FOSTER, Circuit Judges, and GRUBB, District Judge.
GRUBB, District Judge.
This is an appeal from a judgment of the District Court of the United States for the Southern District of Florida in favor of plaintiff (appellee) against the Miami Real Estate & Building Company and the appellee (defendants) upon a verdict of a jury in the sum of $10,990. The action was brought on a bond executed by the defendants to secure the performance of a contract between the appellee and the Miami Real Estate & Building Company to construct an apartment in Coral Gables. The contract price was $35,000, of which $10,000 was paid upon the execution of the contract and bond. The contract provided for the payment of the total cost of labor done and 90 per cent. of the material furnished upon certificate of the superintendent each week during the progress of the work. Work was begun upon the building, and only one other payment was made the contractor. It was paid $15,000 January 2, 1926. The contractor continued the work until about March 6, 1926, and then abandoned it while incomplete. The appellee finished the building at his expense. The Miami Real Estate & Building Company never appeared, and was adjudicated a bankrupt.
There is a motion to dismiss the appeal, based on the absence of the Miami Real Estate & Building Company as a party to the appeal; there having been no summons and severance as to it. The Miami Real Estate & Building Company has entered its appearance in this court and has submitted itself to the jurisdiction of this court. In this state of the record the motion to dismiss the appeal is denied.
There is also a motion to strike the bill of exceptions from the record because it was presented and signed by the District Judge and filed with the clerk after the appeal had been sued out. The motion to strike is denied upon the authority of Lyons v. U. S. Shipping Board (C. C. A.) 278 F. 144-146 (Fifth Circuit).
On the Merits.
The appellant contends that the amended declaration was bad, and it was entitled to judgment because it showed a deviation of payments actually made by appellee *608 to the contractor from those prescribed to be made by the contract. The contract prescribed weekly payments of the total cost of labor done and 90 per cent. of the material furnished on certificate of the superintendent. Two payments in all were made; one of $10,000, when the contract was signed; one of $15,000 on January 2, 1926, thereafter. The ninth section of the contract provided that appellee was to advance the contractor $10,000 immediately, and did, in fact, do so. The appellant is charged with knowledge of the terms of the contract, the performance of which the bond was given to secure. It is evident that the provision for weekly payments as stated in the third section of the contract is inconsistent with the payment of $10,000 provided for by the ninth section. The ninth section, being subsequent in order and having been actually performed, should be held to be a waiver on the part of appellant of the prior provision for weekly payments, and the appellant cannot rely upon the failure to make weekly payment as such a deviation of the terms of the contract as would avail to release it, as surety.
2. Appellant asked leave to file a number of additional pleas, which the court denied, stating that it would permit the appellant to prove the subject-matter set out in the additional pleas under the pleas already filed by appellant. The appellant suffered no injury from the denial of leave, in view of the offer of the court to admit the proof.
3. The appellee introduced in evidence certain notices of liens, over the objection and exception of appellant, claiming them as part of his damages. The condition of the bond is: "If the said Principal shall well and truly indemnify and save harmless the said Obligee from any pecuniary loss resulting from the breach of any of the terms, covenants and conditions of the said contract on the part of the said Principal to be performed, then this obligation shall be void; otherwise to remain in full force and effect in law. * * *"
The undertaking of the principal, which was secured by the surety, being to indemnify the obligee against pecuniary loss, in order for the obligee (appellee) to recover for a breach of the bond, he must show that he sustained a pecuniary loss by a breach of the contract. 31 Corpus Juris, pp. 416-439. It was the duty of the contractor to complete the building and deliver it to the appellee free of valid liens within the time specified in the contract. In order for the appellee to establish a loss, by reason of a breach of this kind, he would be required to show a loss incurred or paid because of liens fastened on the building or which the appellee was liable for. Introduction of the "Notices of Liens," unsupported by evidence that the liens were perfected on the building or that the appellee had, in fact, paid them, were insufficient to show that appellee suffered or paid a loss on that account. The appellee testified that he had paid none of the claims which were the basis of the liens. The debts were contracted by the Miami Real Estate & Building Company, and appellee was not personally liable for them. In any event, the lien against either appellee or his building could extend no further than there existed a balance due the contractor from appellee, and there was no such balance; the contractor having abandoned the building and appellee having completed it at his own expense.
There is no support in the record that appellee suffered any loss from any lien claims which the contractor failed to satisfy, Revised General Statutes of Florida, 1920, §§ 3517, 3518, 3519, 3520, and 3530. None were enforced against him or against his property. He testifies that he paid them by letting his mother have the property for $35,000 when it was worth $50,000. There is no evidence that his mother assumed or paid any of the liens or that any of them were enforced against the property after she acquired it. If he voluntarily reduced the purchase price his mother paid him on account of unenforceable claims against it, this payment by him would be voluntary, and the loss not recoverable against the surety. 31 Corpus Juris, pp. 434, 440, 441, 557. So far as the record indicates, after a lapse of three years from the completion of the building, neither appellee or his property have been called upon to satisfy the liens, the jury were left to determine his damage from, and it is consistent with the record that appellee may have recovered the amount of the claims as part of his damages, and yet may never suffer a loss by having to pay them. This is not the rule in cases of indemnity. 31 Corpus Juris, pp. 426, 427, 439. We think the District Court erred in permitting the jury to consider the "Notices of Liens" as elements of appellee's damages, in the absence of proof that either he or his property had been compelled to respond to the claims on which they were based.
4. The District Court permitted evidence of attorneys' fees to be introduced and the jury awarded damages on that account. Attorneys' fees can be recovered only when authorized by contract or statute. 15 Corpus Juris, § 248, p. 114. Section 4263 of the *609 Revised General Statutes of Florida 1920 provides for the allowance of attorneys' fees in favor of a beneficiary "under any policy or contract of insurance." Such statutes are strictly construed, as the imposition is in the nature of a penalty. 33 Corpus Juris, p. 150, § 888. 15 Corpus Juris, p. 115, § 249. We do not think the indemnity bond on which the suit is brought is a policy or a contract of insurance within the meaning of the Florida statute.
Eliminating the elements of damage consisting of alleged lien claims and attorneys' fees, the appellee is entitled to what he actually and reasonably expended in finishing the building after the contractor had abandoned it. The cause is reversed and remanded for further proceedings in conformity herewith.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565535/ | 34 So. 3d 2 (2010)
SALAS
v.
STATE.
No. SC08-333.
Supreme Court of Florida.
March 29, 2010.
Decision Without Published Opinion Review denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565579/ | 34 So. 3d 952 (2010)
Byron MITCHELL
v.
DEPARTMENT OF POLICE.
No. 2009-CA-0724.
Court of Appeal of Louisiana, Fourth Circuit.
March 17, 2010.
Raymond C. Burkart III, Burkart & Associates, L.L.C., Covington, Louisiana, for Plaintiff/Appellant.
Penya Moses-Fields, City Attorney of Orleans Parish, Nolan P. Lambert, Chief Deputy City Attorney of Orleans Parish, Shawn Lindsay, Victor L. Papai, Jr., Assistant City Attorney of Orleans Parish New Orleans, Louisiana, for Defendant/Appellee.
(Court composed of Judge CHARLES R. JONES, Judge JAMES F. McKAY III, Judge EDWIN A. LOMBARD).
*953 JAMES F. McKAY III, Judge.
Sergeant Byron Mitchell appeals from the Civil Service Commission's ("the Commission") dismissal of his appeal following the Commission's affirming the New Orleans Police Department's appointing authority's decision to suspend him for five days for a violation of neglect of duty. For reasons that follow, we affirm.
On August 28, 2008, Officer Calvin Prevost attended an Accident Review Board Hearing concerning his involvement in a traffic accident. He was accompanied by his supervisor Sergeant Byron Mitchell. During the hearing, Deputy Chief Lawrence Weathersby (then Major Weathersby) noticed that Officer Prevost was wearing a gold bracelet, a dress code violation. Deputy Chief Weathersby verbally reprimanded Officer Prevost and ordered him to remove the bracelet. Officer Prevost complied with the order. Deputy Chief Weathersby also verbally reprimanded Sergeant Mitchell for allowing his subordinate, Officer Prevost, to attend the formal hearing while wearing the bracelet. When the hearing was over, Sergeant Mitchell and Officer Prevost left the building. At that time, Deputy Chief Weathersby witnessed from his vantage point in a second story window, Sergeant Mitchell assisting Officer Prevost in putting the bracelet back on. As a result of this action, disciplinary proceedings for neglect of duty were filed against the appellant.
On October, 31, 2007, a hearing was held before Captain Louis Colin. Captain Colin recommended a penalty letter of reprimand for the violation. On December 3, 2007, Superintendent Warren J. Riley held that Sergeant Mitchell was in violation of Neglect of Duty, Chapter 13:28 relative to personal appearance. Superintendent Riley also found Sergeant Mitchell's conduct to be contrary to the standards prescribed by Rule IX, Section 1 paragraph 1.1 of the Rule of the Civil Service Commission for the City of New Orleans regarding maintaining standards of service. Superintendent Riley increased the penalty from a letter of reprimand to a five day suspension, effective on December 16, 2007.
On February 12, 2008, the matter came before the Commission. Hearing Examiner Harry Tervalon found that the appointing authority met its burden of proof and that Sergeant Mitchell's actions rose to the level of discipline given in the matter.
On March 17, 2009, the Commission dismissed Sergeant Mitchell's appeal finding the appointing authority carried its burden of proving the offense was committed and that Sergeant Mitchell continued to allow Office Prevost to violate uniform rules immediately after they were both reprimanded for their actions.
The applicable legal precepts in this case are as follows: an employee who has gained permanent status in the classified city civil service cannot be subjected to disciplinary action by his employer except for cause expressed in writing. The employee may appeal from such disciplinary action to the City Civil Service Commission. The burden of proof on appeal, as to the facts, shall be on the appointing authority. La. Const. art. X, § 8 (1974); Walters v. Department of Police of City of New Orleans, 454 So. 2d 106, 112-113 (La. 1984). The Commission's decision is subject to review on any question of law or fact upon appeal to the appropriate court of appeal. La. Const. art. X § 12(B).
The Commission has a duty to independently decide, from the facts presented, whether the appointing authority had good or lawful cause for taking disciplinary action and, if so, whether the punishment imposed was commensurate with the dereliction. Walters, 454 So.2d at 113. Legal cause for disciplinary action exists *954 whenever an employee's conduct impairs the efficiency of the public service in which that employee is engaged. Cittadino v. Department of Police, 558 So. 2d 1311, 1315 (La.App. 4 Cir.1990). The appointing authority has the burden of proving, by a preponderance of the evidence, that the complained of activity occurred, and that such activity bore a real and substantial relationship to the efficient operation of the public service. Id., at 1315.
In reviewing the Commission's exercise of its discretion in determining whether the disciplinary action is based on legal cause and the punishment is commensurate with the infraction, this Court should not modify the Commission's order unless it is arbitrary, capricious or characterized by an abuse of discretion. Walters, 454 So.2d at 114. "Arbitrary or capricious" means that there is no rational basis for the action taken by the Commission. Bannister v. Department of Streets, 95-0404, p. 8 (La.1/16/96), 666 So. 2d 641, 647.
At the hearing, Sergeant Mitchell testified that he was Officer Prevost's supervisor and that he was aware that it was a violation to wear jewelry other than a watch and personal rings while in uniform. He also testified that he was present at the accident review hearing on August 28, 2007, and heard Major Weathersby admonish Officer Prevost for wearing the gold bracelet while in uniform. Based on the record, Major Weathersby testified that almost immediately after this admonition occurred he observed Sergeant Mitchell assisting Officer Prevost in putting the gold bracelet back on his wrist. Although, this accounting was refuted by appellant, claiming that he was merely showing Officer Prevost how to convert the bracelet to a medical alert bracelet, the Commission agreed with Major Weathersby's rendition. Clearly this decision was based upon a credibility call and the Commission believed Major Weathersby's version of what transpired. Curiously, the Commission stated it "cannot confirm that the two were actually engaged in reattaching the bracelet", but yet dismissed the appellant's appeal. However, we cannot conclude that the Commission acted arbitrary and capricious in its conclusion.
Based upon the record before this Court, we affirm the decision of the Commission.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566686/ | STATE OF LOUISIANA,
v.
JEFFERY JOSEPH LOUP.
No. 2009 KA 1047.
Court of Appeals of Louisiana, First Circuit.
March 30, 2010.
Not Designated for Publication
HILLAR C. MOORE, III, District Attorney, JACLYN C. CHAPMAN, Assistant District Attorney, Baton Rouge, LA, Attorneys for State of Louisiana.
M. MICHELE FOURNET, Baton Rouge, LA, Attorney for Defendant-Appellant Jeffery Joseph Loup.
Before: PARRO, KUHN, and McDONALD, JJ.
PARRO, J.
The defendant, Jeffery Joseph Loup, was charged by bill of information with attempted second degree murder, a violation of LSA-R.S. 14:27 and 14:30.1.[1] He pled not guilty and waived his right to a jury trial. Following a bench trial, the trial court found the defendant guilty of the responsive offense of attempted manslaughter, a violation of LSA-R.S. 14:27 and 14:31. The defendant filed motions for post-verdict judgment of acquittal and new trial, which were denied. The defendant was sentenced to 18 months of imprisonment at hard labor. The defendant then filed a motion to reconsider sentence, which was granted. The defendant was resentenced to thirty days of imprisonment in the parish prison. The defendant now appeals, designating three assignments of error. We affirm the conviction and sentence.
FACTS
The defendant and his wife, Kristen Roth, had been having marital problems for some time. Kristen testified at trial that the defendant was physically abusive, and it was decided that she and the defendant should separate. The first day of their trial separation was on January 16, 2007. On that day, the defendant stayed at a friend's house. That night, Kristen called the defendant and told him he needed to come pick up his medication and that she would leave it outside the door for him. When the defendant arrived, Kristen opened the door, and she and the defendant spoke briefly. The defendant then left. Kristen felt the defendant had acted strangely during their conversation. Frightened, Kristen called her friend, Alan McGlynn, who lived close by and with whom she had developed a relationship, to come stay with her. According to the trial testimony of both Kristen and Alan, their relationship was not sexual at that point.
Alan went to Kristen's house and, sometime after 11:00 p.m. that night, Alan saw a small light, which he mistook for fireflies moving around in the carport. Kristen got up to investigate. As she approached the door to the carport, the defendant opened that door and yelled, "Are y'all ready to die?" The defendant had a camera in one hand and a loaded semi-automatic handgun in the other hand. The gun had a magazine with five live rounds and a live round in the chamber. Kristen grabbed for the defendant's hand that held the gun. Alan also tried to grab the gun, and all three of them went to the ground. Kristen was able to remove herself from the fracas and called 911. As the defendant and Alan wrestled over the gun, Kristen retrieved her own gun and told the defendant to leave. Alan told her to put the gun away, which she did. While they continued to struggle on the floor, Alan kept his hands on the gun. Alan managed to get his fingers on either side of the trigger to prevent the defendant from pulling the trigger. After about fifteen minutes of struggling, the police arrived and restored order. Alan sustained cuts to his fingers and the back of his head, which the defendant had bitten. Alan was unarmed. The gun was never discharged. The defendant did not testify at trial.
ASSIGNMENT OF ERROR NO. 1
In his first assignment of error, the defendant argues that the evidence was insufficient to support the conviction for attempted manslaughter. Specifically, the defendant contends the state failed to prove he had the specific intent to kill.
When issues are raised on appeal both as to the sufficiency of the evidence and as to one or more trial errors, the reviewing court should first determine the sufficiency of the evidence. The reason for reviewing sufficiency first is that the accused may be entitled to an acquittal under Hudson v. Louisiana, 450 U.S. 40, 101 S. Ct. 970, 67 L. Ed. 2d 30 (1981), if a rational trier of fact, viewing the evidence in accordance with Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979), in the light most favorable to the prosecution, could not reasonably conclude that all of the essential elements of the offense have been proved beyond a reasonable doubt. When the entirety of the evidence, including inadmissible evidence which was erroneously admitted, is insufficient to support the conviction, the accused must be discharged as to that crime, and any discussion by the court of the trial error issues as to that crime would be pure dicta, since those issues are moot. State v. Hearold, 603 So. 2d 731, 734 (La. 1992).
A conviction based on insufficient evidence cannot stand, as it violates due process. See U.S. Const, amend. XIV; LSA-Const. art. I, § 2. The standard of review for the sufficiency of the evidence to uphold a conviction is whether or not, viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson, 443 U.S. at 319, 99 S.Ct. at 2789. See also LSA-C.Cr.P. art. 821(B); State v. Ordodi, 06-0207 (La. 11/29/06), 946 So. 2d 654, 660; State v. Mussall, 523 So. 2d 1305, 1308-09 (La. 1988). The Jackson standard of review, incorporated in Article 821, is an objective standard for testing the overall evidence, both direct and circumstantial, for reasonable doubt. When analyzing circumstantial evidence, LSA-R.S. 15:438 provides that, in order to convict, the fact finder must be satisfied that the overall evidence excludes every reasonable hypothesis of innocence. See State v. Patorno, 01-2585 (La. App. 1st Cir. 6/21/02), 822 So. 2d 141, 144.
The defendant was charged with attempted second degree murder. The trial court adjudged the defendant to be guilty of the responsive offense of attempted manslaughter. See LSA-C.Cr.P. art. 814(A)(4). Manslaughter is a homicide which would be first degree murder or second degree murder, but the offense is committed in sudden passion or heat of blood immediately caused by provocation sufficient to deprive an average person of his self-control and cool reflection. LSA-R.S. 14:31(A)(1). Any person who, having a specific intent to commit a crime, does or omits an act for the purpose of and tending directly toward the accomplishing of his object, is guilty of an attempt to commit the offense intended; and it shall be immaterial whether, under the circumstances, he would have actually accomplished his purpose. LSA-R.S. 14:27(A). Further, mere preparation to commit a crime shall not be sufficient to constitute an attempt; but lying in wait with a dangerous weapon with the intent to commit a crime, or searching for the intended victim with a dangerous weapon with the intent to commit a crime, shall be sufficient to constitute an attempt to commit the offense intended. LSA-R.S. 14:27(B)(1).
In order for an accused to be guilty of attempted murder, a specific intent to kill must be proven beyond a reasonable doubt. Although a specific intent to inflict great bodily harm may support a conviction of murder, the specific intent to inflict great bodily harm will not support a conviction of attempted murder. State in Interest of Hickerson, 411 So. 2d 585, 587 (La. App. 1st Cir.), writ denied, 413 So. 2d 508 (La. 1982). See State v. Butler, 322 So. 2d 189 (La. 1975); see also State v. Fauchetta, 98-1303 (La. App. 5th Cir. 6/1/99), 738 So. 2d 104, 108, writ denied, 99-1983 (La. 1/7/00), 752 So. 2d 176. Attempted manslaughter also requires the presence of specific intent to kill. State v. Brunet, 95-0340 (La. App. 1st Cir. 4/30/96), 674 So. 2d 344, 347, writ denied, 96-1406 (La. 11/1/96), 681 So. 2d 1258.
The testimony and evidence presented at trial, when viewed pursuant to the Jackson standard in the light most favorable to the prosecution, was sufficient to support the conviction of attempted manslaughter. Officer Kevin Istre, with the Baton Rouge City Police Department, testified at trial that when he arrived at Kristen's home, he observed Alan and the defendant on the floor, both struggling over the gun. Officer Istre testified that Alan was bleeding onto the gun and that both men appeared to be "near exhaustion." After separating the two men, Officer Istre Mirandized the defendant and asked him what had happened. Officer Istre testified the defendant told him the following information. It was the first night of a trial separation with his wife. After picking up items from his house that night, the defendant left in his vehicle. However, he drove only around the block and parked, because he suspected Kristen was cheating on him. The defendant then returned to his house and hid in the garage. When the defendant observed Alan go inside the residence, the defendant returned to his car and retrieved a camera and a gun. When the defendant observed Alan and Kristen become intimate, he attempted to take pictures. As Alan approached the defendant, the defendant took out the gun to protect himself, at which time a struggle ensued.
It is clear in its finding of guilt that the trial court discounted the testimony suggesting that the defendant pulled out his gun only after Alan began moving toward him. Obviously, the trial court found the testimony of Alan and Kristen to be more credible and found such testimony established that the defendant threw open the door and, with a gun in his hand, yelled, "Are y'all ready to die?" Kristen immediately grabbed the defendant's hand with the gun. Within moments, Alan grabbed the defendant. According to Alan's testimony, he and the defendant struggled over the gun for about fifteen to twenty minutes. The defendant weighed 230 pounds, and Alan weighed 170 pounds. As Alan held onto the gun, the defendant was on Alan's back. Alan was face down on a slippery floor with no traction. During the struggle, the defendant continually attacked Alan. According to Alan, the defendant "was on top of me, kneeing me in the head, in the back, hitting me, elbowing me, biting me, kicking, scratching, whatever he could." Alan managed to hold onto the gun during the melee. Alan placed his finger between the back of the trigger and the trigger guard to prevent the trigger from being pulled. After the men were separated, Alan's finger that was behind the trigger was bloody and somewhat jammed in the trigger guard. According to Alan, the officer nudged it off of his hand with his boot. However, Officer Istre testified that the gun came off of his finger without assistance from him.
The trier of fact is free to accept or reject, in whole or in part, the testimony of any witness. Moreover, when there is conflicting testimony about factual matters, the resolution of which depends upon a determination of the credibility of the witnesses, the matter is one of the weight of the evidence, not its sufficiency. The trier of fact's determination of the weight to be given evidence is not subject to appellate review. An appellate court will not reweigh the evidence to overturn a fact finder's determination of guilt. State v. Taylor, 97-2261 (La. App. 1st Cir. 9/25/98), 721 So. 2d 929, 932. We are constitutionally precluded from acting as a "thirteenth juror" in assessing what weight to give evidence in criminal cases. See State v. Mitchell, 99-3342 (La. 10/17/00), 772 So. 2d 78, 83. The fact that the record contains evidence which conflicts with the testimony accepted by a trier of fact does not render the evidence accepted by the trier of fact insufficient. State v. Quinn, 479 So. 2d 592, 596 (La. App. 1st Cir. 1985).
The evidence was sufficient to infer from the circumstances that the defendant intended to kill Alan. The defendant hid in the garage to spy on Kristen. Alan's arrival clearly angered the defendant to the point where he went back to his car and retrieved a loaded gun. The defendant returned to the house with the gun, threatened to kill, engaged in a struggle with Alan, then repeatedly beat Alan to regain control of the gun. It would seem the only reason the defendant did not fire the gun was because Alan prevented it. When reviewed in a light most favorable to the prosecution, these acts manifest a specific intent to kill. Any rational trier of fact could have found beyond a reasonable doubt, and to the exclusion of every reasonable hypothesis of innocence, that the defendant was guilty of attempted manslaughter.
This assignment of error is without merit.
ASSIGNMENT OF ERROR NO. 2
In his second assignment of error, the defendant argues the trial court erred in considering a non-element of attempted manslaughter. Specifically, the defendant contends the trial court, in its determination of whether he was guilty or not, incorrectly considered the element of intent to commit great bodily harm.
The defendant was charged with attempted second degree murder and convicted of the responsive offense of attempted manslaughter. As noted in the discussion of assignment of error number one, in order for an accused to be guilty of attempted second degree murder or attempted manslaughter, a specific intent to kill must be proven beyond a reasonable doubt.[2]
There was a bench trial in the instant matter. The trial court did not read aloud the charges. It does not appear from the record that a charge conference was held. The trial court may have used charges submitted by both counsel or used its own boilerplate jury charge language. See LSA-C.Cr.P. art. 781. Before rendering its decision, the trial court simply stated: "The court will note for the record that it has reviewed the law, as well as the jury charges applicable to this case. The court has self-imposed the jury instructions upon the court, as the court has reviewed those instructions in reaching its verdict."
The trial court then rendered its judgment:
The court having had the opportunity to read the facts submitted into evidence finds beyond a reasonable doubt that the defendant is in fact guilty of attempted manslaughter. There is sufficient evidence to support a finding of an attempt of the crime of manslaughter attempted in sudden sudden passion, the heat of blood, immediately caused by provocation sufficient to deprive an average person of self-control and cool reflection. The court finding all elements of that offense having been satisfied pursuant to the burden, that of being beyond a reasonable doubt.
Following the conviction in the instant matter, a hearing was held on September 24, 2008, on the defendant's motions for post-verdict judgment of acquittal and new trial. At the hearing, defense counsel noted that the argument for both motions was essentially the same. Defense counsel argued the evidence did not prove attempted manslaughter, because the defendant never fired his gun. Defense counsel further argued the state did not prove the defendant "had the intent to kill anybody, that he had the intent to hurt anybody, harm anybody with a deadly weapon." The trial court took the defendant's motions under advisement.
At the hearing about a month later on October 23, 2008, the trial court denied the defendant's motions for post-verdict judgment of acquittal and new trial. The trial court then provided its reasons for the denial of the motions. The trial court stated, in pertinent part:
In the defendant's motion for post-verdict judgment of acquittal the central issue to [sic] which this court finds controlling is whether this court was justified in finding the defendant [had] the necessary requisite of specific intent to kill or inflict great bodily harm as such is a necessary element in the crime of attempted manslaughter.
* * * * *
The court sat in judgment of this case as the trier of fact. I listened to the evidence, I observed the witnesses very closely during the course of that trial and I affirmed by verdict by finding that the evidence proved beyond a reasonable doubt that the defendant had a specific intent to kill or to inflict great bodily harm when he entered the room with a loaded handgun and uttered the words, "Are you ready to die", [sic] to the victims. If the victims had not taken the defensive action they took, then possibly there would have been an actual firing of the weapon that would have either resulted in a death or a wounding of one or both of the victims.
* * * * *
Based on what was presented and being that the court may find specific intent by inference from the defendant's actions and circumstances, I find that the defendant acted with the specific intent to kill or inflict great bodily harm while in a state of sudden passion or heat of blood immediately caused by provocation that deprived him of his self[-]control and cool reflection.
By referring to the element of intent to "inflict great bodily harm" along with the element of intent to kill, it appears that the trial court misspoke about the proper elements of attempted manslaughter when ruling on the motion for new trial and postverdict judgment of acquittal. However, the error at issue is not structural, but rather a trial error which may or may not have prejudiced the defendant and thus is subject to harmless error analysis. See State v. Hongo, 96-2060 (La. 12/2/97), 706 So. 2d 419, 422. In a jury trial, an invalid instruction on the elements of an offense is harmless, if the evidence is otherwise sufficient to support the jury's verdict, and the jury would have reached the same result if it had never heard the erroneous instruction. The determination is based upon "whether the guilty verdict actually rendered in this trial was surely unattributable to the error." Sullivan v. Louisiana, 508 U.S. 275, 279, 113 S. Ct. 2078, 2081, 124 L. Ed. 2d 182 (1993). See Hongo, 706 So.2d at 421.
At the October 23, 2008 hearing, the trial court, in its reasons for its ruling, noted several times that the defendant had the specific intent to kill or to inflict great bodily harm in committing the crime of attempted manslaughter. The defendant's trial was held February 25, 2008. The October 23, 2008 hearing was almost eight months later. It appears the trial court, having been so far removed from when the trial took place, was merely reciting the text of the second degree murder statute. Moreover, when the trial court rendered its judgment of guilty, there is nothing in the transcript of the trial to suggest the trial court applied the improper "inflict great bodily harm" element in determining the defendant's guilt at the time of the defendant's trial. The trial court noted at the October 23 hearing that it had "reviewed exhaustively the law and the evidence and the arguments of counsel." A judge in a bench trial is not required to give reasons in support of his verdict, nor is he required even to charge himself on the applicable law, since he is presumed to know it. State v. Pizzalato, 93-1415 (La. App. 1st Cir. 10/7/94), 644 So. 2d 712, 714, writ denied, 94-2755 (La. 3/10/95), 650 So. 2d 1174.
Furthermore, there was no argument or evidence presented to support a finding that the defendant had the intent only to inflict great bodily harm. See Hongo, 706 So.2d at 422. The evidence at trial established that the defendant, very upset that his wife was seeing another man, burst into his house with a loaded gun and asked Alan and Kristen if they were ready to die. Following the ensuing struggle over the gun between the defendant and Alan, it seems clear the defendant would have shot Alan but for Alan having lodged his fingers in the trigger guard, preventing the defendant from firing his gun. Deliberately pointing and firing a deadly weapon at close range are circumstances that support a finding of specific intent to kill. State v. Broaden, 99-2124 (La. 2/21/01), 780 So. 2d 349, 362, cert. denied, 534 U.S. 884, 122 S. Ct. 192, 151 L. Ed. 2d 135 (2001). As we concluded in our discussion of assignment of error number one, the state presented sufficient evidence to show the defendant came to the house with the intent to kill the victims, but failed to complete his plans.
Based on this evidence, no reasonable jury or trier of fact could have concluded that the defendant merely intended to inflict great bodily harm on Alan. Accordingly, we conclude the judgment of guilty of attempted manslaughter rendered in this trial was surely not attributable to the erroneous reference made eight months later. See Hongo, 706 So.2d at 421-22. Therefore, because the improper reference was not a structural error mandating reversal and because we conclude there was harmless error, this assignment of error is without merit.
ASSIGNMENT OF ERROR NO. 3
In his third assignment of error, the defendant argues the trial court erred in accepting his purported jury waiver. Specifically, the defendant contends that, while the record purports to reflect a waiver, the trial court did not have sufficient information for a knowing and intelligent waiver.
The defendant's argument is meritless. Both the United States Constitution and the Louisiana Constitution expressly guarantee a criminal defendant the right to a jury trial. U.S. Const. amend. VI; LSA-Const. art. I, § 17. However, some criminal defendants may, pursuant to statute, waive this constitutionally guaranteed right, provided the waiver of the right is knowingly and intelligently made. LSA-C.Cr.P. art. 780(A). A valid waiver of the right to a jury trial must be established by a contemporaneous record setting forth an apprisal of that right followed by a knowing and intelligent waiver by the accused. Waiver of this right is never presumed. However, prior to accepting a jury trial waiver, the trial court is not obligated to conduct a personal colloquy inquiring into the defendant's educational background, literacy, and work history. State v. Hebert, 08-0003 (La. App. 1st Cir. 5/2/08), 991 So. 2d 40, 47, writs denied 08-1526 (La. 4/13/09), 5 So. 3d 157, and 08-1687 (La. 4/13/09), 5 So. 3d 161.
Several months after being arraigned,[3] the following exchange between the court, defense counsel, and the defendant took place:
Mr. Messina [defense counsel]: Your Honor, before we actually get into this, we thought today was going to be a possible plea today, but it appears that that's not going to happen. This is to put the court on notice that of now that Mr. Loup has agreed or would like to waive his constitutional right to a jury trial and be tried by judge on this matter.
The Court: All right, sir. Raise your right hand and be sworn. [The defendant was sworn].
Q. All right. Your name, sir?
A. Jeffery Joseph Loup.
Q. All right, Mr. Loup. Mr. Messina has advised you of your rights and your constitutional rights to have your case tried by a jury?
A. Yes, sir.
Q. All right. Do you understand that right?
A. Yes.
Q. And you wish to waive that right and have your case tried by the court?
A. Yes, your Honor.
Q. All right. . . . Court finds that the defendant's waiver of a jury trial is a knowing and intentional and free and voluntary act.
On the day of trial, prior to the first witness being called, the trial court again went over the defendant's waiver of his right to a jury trial:
The Court: Mr. Loup, you are charged by felony bill of information with one count of attempted second degree murder. It is my understanding that you have previously acknowledged your desires to waive your right to a trial by jury prior to proceeding forward to your waived jury trial. The court wants to ensure that you understand your rights to a trial by jury as well as your current desires to go forward with a bench trial in this case. Second degree murder is I'm sure you have gone over the elements of that crime with your lawyer. And the possible penalty as an attempt is is a quite severe offense. And before I proceed with the granting of your request for a bench trial, the court wants to make certain that is exactly what you choose to do at this time: That you do not wish to have this case tried by a jury of twelve members.
Mr. Loup: Yes, your Honor.
The Court: That's what you wish to do?
Mr. Loup: To proceed in the way that we set forth.
The record indicates that the trial court twice advised the defendant of his right to have or waive a trial by jury. The record further indicates that defense counsel advised the defendant of his right to have his case tried by a jury, that the defendant understood this right, and that he wished to waive the right. The right to a jury trial was validly waived in this matter. See Hebert, 991 So.2d at 47.
This assignment of error is without merit.
SENTENCING ERROR
Under LSA-C.Cr.P. art. 920(2), which limits our review to errors discoverable by a mere inspection of the pleadings and proceedings without inspection of the evidence, we have discovered a sentencing error. Following a hearing on a motion to reconsider sentence, the defendant was resentenced to 30 days of imprisonment in the parish prison. Since a conviction for attempted manslaughter requires the defendant to be sentenced at hard labor, the defendant's sentence in parish prison is illegally lenient. See LSA-R.S. 14:31(B) and 14:27(D)(3). However, since the parish prison sentence is not inherently prejudicial to the defendant, and this issue has not been raised by either party, we decline to exercise our discretion to correct the error. See State v. Price, 05-2514 (La. App. 1st Cir. 12/28/06), 952 So. 2d 112 (en banc), writ denied, 07-0130 (La. 2/22/08), 976 So. 2d 1277.
CONVICTION AND SENTENCE AFFIRMED.
McDONALD, J. agrees in part and dissents in part:
I believe the majority is correct in denying the first and third assignments of error. Any rational trier of fact could have found beyond a reasonable doubt, and to the exclusion of every reasonable hypothesis of innocence, that the defendant was guilty of attempted manslaughter. Additionally, the majority is correct that the defendant validly waived his right to a jury trial.
However, I respectfully disagree with the finding on defendant's second assignment and find it was not harmless error. In finding the defendant guilty the trial court did not state for the record the specific law it relied on or what charges he considered in his deliberations. Therefore, the defense could not make a contemporaneous objection to whatever was considered by the judge. At the hearing on the motion for postverdict judgment of acquittal and new trial the court noted three times that he had found and the evidence had proven that the defendant had a "specific intent to kill or to inflict great bodily harm." It is clear to me that the trial court determined the defendant's guilt based on an erroneous understanding of the law. In examining the record it seems that the trial court, the prosecutor, and the defense counsel were all unclear on the law regarding the issue of the elements of attempted manslaughter. The error was so often repeated that it does not seem to have been a mere oversight. State v. Holmes, 620 So. 2d 436 at 440 (La. App.3rd Cir.), writ denied, 626 So. 2d 1166 (La. 1993).
I do not believe the use of the wrong elements is harmless error as found by the majority. I cannot say that the finding of guilt was unattributable to the trial court error. The court's understanding of the law was that a finding of either specific intent to kill or to inflict great bodily harm would satisfy the definition of attempted manslaughter. The defendant never fired his gun. While he may have intended to kill someone, the evidence could also suggest the defendant may have intended to scare Alan and Kristen, or to inflict a beating on Alan, possibly with the gun. It is not unreasonable that the trial court could have concluded the defendant did not have specific intent to kill, but did have intent to inflict great bodily harm. Because it is questionable that the trial court would have found the defendant guilty of attempted manslaughter, much less attempted second murder, had it known that it had to find a specific intent to kill, I cannot say that the erroneous instruction was harmless error. See Hickerson, 411 So.2d at 586-587.
Therefore, I would reverse the conviction, vacate the sentence, and remand the case to the trial court for a new trial on the charge of attempted manslaughter.
NOTES
[1] The defendant was also charged with battery. The battery charge was severed and ultimately non-prossed.
[2] After the state rested, defense counsel moved for a directed verdict. Defense counsel argued the state did not establish the defendant committed attempted second degree murder because it failed to prove he had the specific intent to kill or inflict great bodily harm. The prosecutor responded that the state did meet its burden. The trial court denied the motion.
[3] The defendant was arraigned May 3, 2007. The waiver of jury trial colloquy was held October 4, 2007. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1567665/ | 450 S.W.2d 530 (1970)
John W. HORD, Appellant,
v.
COMMONWEALTH of Kentucky, Appellee.
Court of Appeals of Kentucky.
February 13, 1970.
*531 John W. Hord, pro se.
John B. Breckinridge, Atty. Gen., Joseph L. Famularo, Asst. Atty. Gen., Frankfort, for appellee.
EDWARD P. HILL, Jr., Chief Justice.
The question on this appeal from a judgment denying appellant's RCr 11.42 motion to modify the punishment imposed in an order revoking probation is whether the trial court may impose a greater punishment in its order revoking probation than was fixed in the original judgment of conviction.
Appellant was arraigned May 6, 1968, on a charge of breaking and entering a storehouse, at which time he entered a plea of guilty. The court, on this date, entered judgment finding him guilty as charged and fixed his punishment at one year in prison. On June 15, 1968, appellant was placed on probation. On January 6, 1969, the trial court entered an order finding that appellant had violated the conditions of his probation, revoked it and fixed his punishment at two years in prison.
Clearly the trial court had the power to revoke appellant's probation, but its authority to increase the punishment once it has been fixed by judgment, and that judgment becomes final, presents another more complex problem. By KRS 439.300(1), the procedure for revocation of probation is outlined in this language:
"* * * Thereupon, or upon arrest by warrant as herein provided, the court shall cause the defendant to be brought before it and may continue or revoke the probation, and may cause the sentence imposed to be executed, or may impose any sentence which might have been imposed at the time of conviction." (Our emphasis.)
Under a literal interpretation of the above statute it may be said that the circuit judge may increase the punishment on revocation of probation, and by some reasoning perhaps it would be well that he have that power. However, such power at first blush is repugnant to the spirit, if not the letter, of the Federal and State Constitutions on former jeopardy, speedy trials, and due process.
When appellant entered a plea of guilty and waived trial by jury he was entitled to a speedy trial and final determination of his fate. Sections 11 and 14 of the Constitution of Kentucky. If he was tried and judgment entered fixing his punishment at one year, he has been once placed in jeopardy for the offense charged. He cannot be again placed in jeopardy for the same offense. Constitution of Kentucky, § 13.
Due process of law (Constitution of the United States, Amend. 14, § 1 and Constitution of Kentucky, § 14) must be followed to insure a valid conviction of his felonious charge. Due process does not *532 contemplate that months or years later his "trial" may be opened and a greater punishment imposed. See also North Carolina v. Pearce, 395 U.S. 711, 89 S. Ct. 2072, 23 L. Ed. 2d 656.
Judgments in criminal cases, as in civil cases, must by necessity have some finality. The reasons therefor are obvious without detailing them here. By CR 59.04 judgments in civil cases become final ten days after properly signed by the judge. By RCr 13.04 of the Criminal Rules, the Civil Rules apply to criminal cases.
The judgment dismissing and overruling appellant's motion for the correction of the order of January 6, 1969, imposing a two-year sentence on appellant is reversed with directions to set it aside and reinstate the judgment of May 6, 1968.
So far as we know, appellant has been in prison since January 6, 1969 over one year. Consequently the mandate shall issue immediately.
MILLIKEN, NEIKIRK, PALMORE, STEINFELD, and REED, JJ., concur.
OSBORNE, J., not sitting. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1646145/ | 57 Wis.2d 436 (1973)
204 N.W.2d 503
E____, Plaintiff,
v.
E____, Respondent:
E____ by Guardian ad litem, Appellant.[*]
No. 46.
Supreme Court of Wisconsin.
Argued January 30, 1973.
Decided February 27, 1973.
*441 For the appellant there was a brief by Stephen W. Hayes, attorney and guardian ad litem, and von Briesen, Redmond & Schilling of counsel, all of Milwaukee, and oral argument by Mr. Hayes.
For the defendant-respondent there was a brief by Kivett & Kasdorf of Milwaukee, and oral argument by Werner E. Scherr of Milwaukee.
HANLEY, J.
Two issues are presented on this appeal.
1. Was the question of the child's paternity res judicata because the defendant failed to challenge it at the original divorce proceeding; and
2. Assuming the question of paternity was not res judicata, should the defendant be estopped from denying that he is the natural father of the child?
This court is faced with the unique situation of a person initially claiming in court and under oath that a child is his, and then some eight months later challenging this child's legitimacy when he decides that it is no longer to his advantage to pay the child's support. The child contends that the question of his paternity was res judicata and that this should have acted to bar the trial court from vacating judgment. Nowhere in his brief does defendant address himself to the question of whether the issue of the child's paternity is res judicata; being content to rely solely on whether the trial court abused its discretion in vacating the February 2, 1970, judgment. It is clear not only from rulings of this court, but also from the numerous other jurisdictions which have considered the question, that the issue of the *442 paternity of minor children becomes res judicata between the parties under the original divorce decree and that it is error for a trial court to subsequently either vacate or modify the original judgment on the grounds that one of the alleged parents, who heretofore stood mute on the question of paternity, has now had a change of heart.
This court was faced with a similar situation in the case of Limberg v. Limberg (1960), 10 Wis. 2d 63, 102 N. W. 2d 103. In Limberg, just like in the case at bar, the trial court made a finding that the child which the plaintiff wife was pregnant with was a child of the marriage. Two years after the judgment for divorce, the defendant moved the court to order blood tests for his former wife, the child and himself, and the court granted his motion. In reversing the action of the trial court in ordering the blood tests, this court, at pages 67 and 68, stated:
"... The order of January 2, 1958, referring to the children of the parties necessarily included Brian and is an indication that the trial court had so determined by the findings and judgment.
"Since there was a prior adjudication of the issue raised upon the trial, the defendant is now estopped from attempting to relitigate the same issue. Whether it be res judicata or estoppel by judgment is unnecessary for us to determine... Since the defendant is estopped by the prior adjudication of the issue, the trial court was in error in issuing the order. Judgments of divorce will have no finality if parties are permitted to attempt to retry issues two years after a judgment has been entered.
". . .
"The defendant had ample opportunity during the trial to ask for an adjournment thereof until the child had been born and then to request blood tests.... He is too late now to attempt to try a new approach to the old problem that was determined by the judgment."
Although the question of paternity was contested in the original trial in Limberg, cases from other jurisdictions *443 hold that regardless of whether the issue was contested, the result is nevertheless the same.
The case of Baum v. Baum (1969), 20 Mich. App. 68, 173 N. W. 2d 744, represents a case much like the one at bar. In Baum the wife sued her husband for divorce alleging that the parties had a child born of the marriage. The husband appeared, consented to the judgment of divorce which provided that the wife was to have custody of the child together with support. When the wife sought back support payments, the defendant answered, alleging that his wife had falsified their marriage date in her complaint, and that the child was really that of her former husband. The trial court vacated the judgment and the Michigan court reversed on appeal stating:
"The defendant raises the question of parenthood in this cause. Res judicata bars him from disestablishing his paternity. The support order, although uncontested, constitutes an adjudication of paternity in regard to defendant's duty of support....
"It becomes apparent to this Court that he now seeks to avoid support responsibility by this new stand; and it also appears through his claim of fraud, which he was part of, that he seeks to invalidate not only his parental obligations, but also his second marriage, which would be void if the trial court here is affirmed. He had an opportunity to litigate the issue and was clearly aware of the infirmity in the complaint; and, therefore should not now be allowed to complain." (Emphasis added.)
The rule which denies a party the opportunity to relitigate issues of paternity after he has passively sat by throughout the original divorce proceeding likewise finds support in the numerous other courts which have considered the question. Adoption of Stroope (1965), 232 Cal. App. 2d 581, 43 Cal. Rptr. 40; Sorenson v. Sorenson (1963), 254 Iowa 817, 119 N. W. 2d 129; Johns v. Johns (1964), 64 Wash. 2d 696, 393 Pac. 2d 948; Arnold v. Arnold (1952), 207 Okla. 352, 249 Pac. 2d 734; Washington *444 v. Washington (1959), 170 Cal. App. 2d 652, 339 Pac. 2d 169.
From the record, it would appear that the trial court's conclusion that there was not a complete finding as to the paternity of the child at the first hearing is without factual foundation. Plaintiff's complaint specifically provided that there was one child of the marriage. Both parties personally appeared at the hearing and on at least three occasions during the examinations of the parties by plaintiff's counsel and the family court commissioner, it was stated by both parties that the child was the natural child of the parties and born to the marriage. Based upon this, Judge MOSER made a clear and unambiguous finding of fact that the child was "issue of said marriage" and the subsequent judgment provided that the husband was to pay for the child's support.
Also without factual support is defendant's assertion and the trial court's conclusion that the defendant was not aware of the ramifications which followed his recognition that the child was his. Pursuant to an order filed at the very outset of the action, the defendant had been, with reasonable regularity, paying child support prior to the actual divorce proceeding. At the original hearing, Judge MOSER specifically informed the defendant of his continuing liability to pay child support and also ordered him to continue the child as a beneficiary on both his life and health insurance and as a contingent beneficiary of his pension rights until he reaches the age of twenty-one. The conscious choice not to be represented by counsel in a divorce proceeding has never been considered by this court as a tenable excuse for "sleeping on one's rights." Holschbach v. Holschbach (1966), 30 Wis. 2d 366, 371, 141 N. W. 2d 214; Wesolowski v. Wesolowski (1966), 30 Wis. 2d 15, 19, 139 N. W. 2d 660.
Although the trial judge did not specifically cite the statutory authority he was relying on to vacate the judgment, defendant argues that his motion to vacate was *445 brought pursuant to sec. 247.37 (2), Stats.[1] As this section clearly indicates, however, the trial court's discretion is limited solely to matters affecting "the marital status of the parties" and the question of paternity is not embraced within the meaning of the statute. As the language of sec. 247.25[2] has been interpreted, it, too, is of little help to defendant. This statute allows judgments to be modified indefinitely but only for consideration of the care, custody, maintenance and education of the children. It does not provide for modification of the judgment as to the paternity of the children.
"The very language of the statute presupposes that the children referred to are the children of the parties. Revisions under that statute are based upon a change in the circumstances of the parents or of their children. The continuing jurisdiction of the trial court is limited to the purposes therein stated, ..." Limberg v. Limberg, supra, at page 68.
The only statutory provision upon which the defendant could have petitioned the court for vacation of its judgment was sec. 269.46 (1), Stats.[3] We think that the *446 defendant's failure to raise the issue of the child's paternity at the original divorce hearing was in no way "excusable neglect" which is defined as "`... neglect through being misled or in spite of reasonable precautions or due to circumstances beyond control of the party. It does not include neglect which consists in a total sleeping on one's rights.'" Padek v. Thornton (1958), 3 Wis. 2d 334, 338, 88 N. W. 2d 316.
We conclude that the issue of paternity of the minor child is res judicata [and that]* no grounds for vacating the divorce judgment were presented by defendant which were sufficient to justify a reopening of the original judgment. Therefore, the order of January 11, 1971, and that part of the judgment appealed from must be reversed and the cause remanded.
By the Court.The order and that part of the judgment appealed from is reversed. Cause remanded with directions to reinstate the original judgment of February 2, 1970.
* The word "since" substituted for bracketed words. See, infra.
The following memorandum was filed on May 3, 1973.
PER CURIAM. (on motion for rehearing.)
At page 446 of our original opinion, it is stated:
"We conclude that the issue of paternity of the minor child is res judicata and that no grounds for vacating the divorce judgment were presented by defendant which were sufficient to justify a reopening of the original judgment." (Emphasis added.)
For purposes of clarification only, the word "since" is substituted for the words "and that."
The motion for rehearing is denied, without costs.
NOTES
[*] Motion for rehearing denied, without costs, on April 20, 1973.
[1] In material part, sec. 247.37 (2), Stats., provides:
"So far as said judgment affects the marital status of the parties the court has the power to vacate or modify the same for sufficient cause shown, upon its own motion, or upon the application of either party to the action, at any time within one year from the granting of such judgment, provided both parties are then living." (Emphasis added.)
[2] "247.25 Revision of judgment. The court may from time to time afterwards, on the petition of either of the parties and upon notice to the family court commissioner, revise and alter such judgment concerning the care, custody, maintenance and education of any of the children, and make a new judgment concerning the same as the circumstances of the parents and the benefit of the children shall require."
[3] "269.46 Relief from judgments, orders and stipulations; review of judgments and orders. (1) The court may, upon notice and just terms, at any time within one year after notice thereof, relieve a party from a judgment, order, stipulation or other proceeding against him obtained, through his mistake, inadvertence, surprise or excusable neglect and may supply an omission in any proceeding." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/502487/ | 841 F.2d 38
Debra BADER, an infant by her father and natural guardian,Allan BADER, and Allan Bader, Plaintiffs,v.Robert PURDOM and Beverly Purdom, Defendants-Third-PartyPlaintiffs-Appellants,v.Allan BADER and Fran Bader, Third-Party Defendants-Appellees.
No. 190, Docket 87-7331.
United States Court of Appeals,Second Circuit.
Argued Nov. 6, 1987.Decided March 3, 1988.
James M. Kaplan (Bernard C. Byrnes, Wilson, Elser, Moskowitz, Edelman & Dicker, New York City, of counsel) for defendants-third-party plaintiffs-appellants.
David P. Franks (Frank L. Amoroso, Miriam E. Villani, Rivkin, Radler, Dunne & Bayh, Uniondale, N.Y., of counsel) for plaintiffs-third-party defendants-appellees.
Before LUMBARD, PIERCE and MINER, Circuit Judges.
MINER, Circuit Judge:
1
Appellants Robert and Beverly Purdom appeal from a judgment entered in the United States District Court for the Eastern District of New York (Korman, J.), granting summary judgment in favor of appellees Allan and Fran Bader and dismissing the Purdoms' third-party complaint. We reverse on the ground that Ontario, not New York, law applies to the Purdoms' third-party complaint, and remand for further proceedings.
BACKGROUND
2
In August and early September of 1982, Allan and Fran Bader and their three children, all United States citizens residing in New York, visited Robert and Beverly Purdom and their two children, Canadian citizens, at the Purdoms' farm in Ontario, Canada. According to the Purdoms, the Bader children, especially four-year old Debra, were overly attentive to the Purdoms' dog, Happy. The Purdoms assert that after observing the Baders' constant attention to Happy, Mrs. Purdom warned the Bader family to leave the dog alone and instructed them not to let the dog into the house during mealtimes.
3
On the morning of September 1, 1982, the Baders were seated at the kitchen table eating breakfast. Debra, who was sitting on her mother's lap, was trying to play with Happy, who was under the table. Mrs. Purdom alleges that immediately before the accident, she saw Mrs. Bader set Debra on the floor underneath the table, presumably to play with the dog. Moments later, Debra screamed. Unhappily, Happy had attacked and injured Debra.
4
In March 1984, Allan Bader, on behalf of himself and his daughter, Debra, commenced this action against the Purdoms in the United States District Court for the Eastern District of New York, seeking money damages for Debra's personal injuries and loss of Debra's services. In June 1984, the Purdoms answered, and in July 1984, they filed a third-party complaint against Allan and Fran Bader, seeking indemnification and contribution for the Baders' negligence and negligent supervision of Debra. The Purdoms' claims were based generally on the laws of the Province of Ontario, Canada, and specifically upon an Ontario statute, The Dog Owner's Liability Act, Ont.Rev.Stat. ch. 65 (1980).
5
The Baders moved to dismiss the Purdoms' third-party complaint, pursuant to Fed.R.Civ.P. 12(b)(6), on the grounds that New York law applied to the third-party action, and that New York did not recognize a claim against parents for the negligent supervision of their children. The district court agreed. The court found that the lex loci delecti rule ordinarily employed by New York did not apply to the third-party action because New York's strong policy interest in barring negligent parental supervision suits constituted "extraordinary circumstances," justifying departure from the lex loci delecti rule. By order dated April 29, 1985, the court (Bramwell, J.) therefore dismissed the third-party claims that were grounded in negligent parental supervision.
6
After discovery, the Baders moved for summary judgment and dismissal of the remainder of the third-party complaint. By order dated March 27, 1987, the court granted these motions, finding that the only tortious acts allegedly committed by the Baders sounded in negligent parental supervision. On March 30, 1987, judgment was entered accordingly.
DISCUSSION
7
As a threshold matter, the district court was bound to apply New York choice of law rules to the third-party action because New York was the forum state. See Machleder v. Diaz, 801 F.2d 46, 51 (2d Cir.1986), cert. denied sub nom. Machleder v. CBS, Inc., --- U.S. ----, 107 S.Ct. 1294, 94 L.Ed.2d 150 (1987).
8
New York employs an "interest analysis" to resolve choice of law conflicts: " '[T]he law of the jurisdiction having the greatest interest in the litigation will be applied and ... the [only] facts or contacts which obtain significance in defining State interests are those which relate to the purpose of the particular law in conflict.' " Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 197, 491 N.Y.S.2d 90, 95, 480 N.E.2d 679, 684 (1985) (citations omitted). "Under this formulation, the significant contacts are, almost exclusively, the parties' domiciles and the locus of the tort." Id. (citations omitted).
9
If New York law applies to the present case, the third-party plaintiffs will not be able to recover on the negligent supervision claim, because New York does not permit third parties under such circumstances to recover against a parent for negligent supervision of his child. The New York rule derives from the doctrine of intrafamily tort immunity, which prohibits a child from recovering damages for his parents' negligent supervision. As a corollary to this doctrine, New York law does not permit a nonparent tortfeasor, whose negligence has injured a child, to recover contribution from the child's parents under a theory of negligent supervision because (1) parents who are vulnerable to suits for contribution might be reluctant to assert their children's rights against third parties; (2) family tensions may increase in the event that parents do sue, and are subsequently held liable for contribution; (3) requiring contribution from the negligent parent may effectively reduce the child's compensation, given that the typical family is a "single economic unit;" and (4) the state should preserve a sphere of parental autonomy. Holodook v. Spencer, 36 N.Y.2d 35, 46-48, 364 N.Y.S.2d 859, 868-69, 324 N.E.2d 338, 344-45 (1974). Thus, the New York rule purports to protect the interests of New York children and their parents over the interests of nonparent tortfeasors.
10
On the other hand, the Ontario statute at issue in this case, the Ontario Dog Owners' Liability Act, holds dog owners strictly liable for injuries caused by their dogs, but mitigates the harshness of strict liability by permitting dog owners to sue for contribution and indemnification "from any other person in proportion to the degree to which the other person's fault or negligence caused or contributed to the damages." Ont.Rev.Stat. ch. 65 at 379. In other words, Ontario law would permit the third-party plaintiffs herein to recover under a theory of negligent parental supervision. See, e.g., Sgro v. Verbeek, 28 O.R.2d 712, 719 (1980), and cases cited therein. Thus, in the present case a "true conflict" exists because application of the New York rule would undermine Ontario's interest, while application of the Ontario rule would undermine New York's interest.
11
As a general rule, New York courts resolve true conflicts in tort cases by applying the law of the place of injury, unless "special circumstances" warrant a departure from the lex loci delicti rule. See, e.g., Neumeier v. Kuehner, 31 N.Y.2d 121, 128, 335 N.Y.S.2d 64, 70, 286 N.E.2d 454, 458 (1972) (third rule). In our view, no such special circumstances are present in the case before us to warrant such a departure. In a case involving similar facts, the New York Appellate Division held that Nova Scotia law governed when Canadian defendants, whose alleged negligence had injured the infant plaintiff, cross-claimed against the infant's parents (residents of New York) under a theory of negligent parental supervision. See Hotaling v. Smith, 63 A.D.2d 219, 406 N.Y.S.2d 627 (3d Dep't 1978). Moreover, those cases in which New York courts have resolved true conflicts in favor of applying New York law, such as Rakaric v. Croatian Cultural Club, 76 A.D.2d 619, 430 N.Y.S.2d 829 (2d Dep't 1980), and Scharfman v. National Jewish Hosp., 122 A.D.2d 939, 506 N.Y.S.2d 90 (2d Dep't 1986), are readily distinguishable. In both cases, the nonresident defendants had undertaken substantial activities within New York, such as the solicitation in Manhattan of volunteers to assist in clearing some land in New Jersey, Rakaric, 76 A.D.2d at 632, 430 N.Y.S.2d at 838, or the renting of office space in New York, Scharfman, 122 A.D.2d at 941, 506 N.Y.S.2d at 92. We believe that under interest analysis, as applied by the courts of New York, Ontario law must govern in the present case.
12
The district court nonetheless concluded that New York's strong public policy interest in barring negligent parental supervision cases justified departure from the lex loci delecti rule normally applicable in this type of situation. We do not agree. First, the public policy doctrine is considered "only after the court has determined that the applicable substantive law under relevant choice-of-law principles is not the forum's law." Schultz, 65 N.Y.2d at 202, 491 N.Y.S.2d at 98, 480 N.E.2d at 687. Here, the district court never determined which law should apply under New York's choice-of-law principles. Second, the party seeking to invoke the public policy doctrine has the "heavy burden" of showing "that to enforce the foreign law 'would violate some fundamental principle of justice, some prevalent conception of good morals, [or] some deep-rooted tradition of the common weal' " as expressed in New York's Constitution, statutes and judicial decisions. Id. at 202, 491 N.Y.S.2d at 99, 480 N.E.2d at 688 (citations omitted). Although, as discussed above, New York bars claims for negligent parental supervision, we cannot say that allowing such suits would violate fundamental principles of justice, particularly when, as here, the New York domiciliaries voluntarily entered and vacationed in Ontario, and where all allegedly tortious conduct took place outside the borders of New York State.
CONCLUSION
13
Based on the foregoing, the judgment is reversed and this action is remanded to the district court for further proceedings consistent with this opinion.
PIERCE, Circuit Judge, concurring:
14
I agree with the majority that the case before this court presents a "true conflict" between the law of New York and the law of Ontario, and that under the choice of law principles developed by the New York Court of Appeals this conflict should be resolved in favor of applying Ontario law. I write separately, however, because I disagree with the majority's view that true conflicts are governed by the third rule set forth in Neumeier v. Kuehner, 31 N.Y.2d 121, 286 N.E.2d 454, 335 N.Y.S.2d 64 (1972). In conflicts terminology, the so-called "unprovided-for" or "no-interest" case arises when no state has a vital interest in having its own law apply. See, e.g., R. Cramton, D. Currie & H. Kay, Conflict of Laws 303-09 (3d ed. 1981). The third Neumeier rule applies to the unprovided-for case. See Korn, The Choice-of-Law Revolution: A Critique, 83 Colum.L.Rev. 772, 879 (1983) (third Neumeier rule governs unprovided-for cases, and certain types of true conflicts not governed by the second rule and not present in the instant case); Sedler, Interstate Accidents and the Unprovided for Case: Reflections on Neumeier v. Kuehner, 1 Hofstra L.Rev. 125, 136 (1973) (third Neumeier rule governs unprovided-for cases). See also Schultz v. Boy Scouts of America, 65 N.Y.2d 189, 201-02, 480 N.E.2d 679, 687, 491 N.Y.S.2d 90, 98 (1985) (applying third Neumeier rule to an unprovided-for case in which defendant's domicile was Ohio, plaintiff's domicile was New Jersey, and tort occurred in New York); Neumeier, 31 N.Y.2d at 128-29, 286 N.E.2d at 458, 335 N.Y.S.2d at 70 (applying third rule to an unprovided-for case). The second Neumeier rule, which governs true conflicts, applies by analogy to the case now before us, and compels us in the absence of "special circumstances" to apply the law of the place of injury, Ontario. Since the result in the present case is the same, however, whether the second or third rule applies, I respectfully concur in the judgment. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1919785/ | 660 So.2d 633 (1995)
Elaine FROHMAN, etc., et al., Petitioners,
v.
Stella BAR-OR, et al., Respondents.
No. 84038.
Supreme Court of Florida.
June 29, 1995.
Rehearing Denied September 20, 1995.
*634 Michael B. Solomon of Michael B. Solomon, P.A., Hallandale, for petitioner.
H. Taylor White, Fort Lauderdale, for respondent.
HARDING, Justice.
We have for review the following question certified to be of great public importance:
DOES FLORIDA RULE OF CIVIL PROCEDURE 1.420(e) APPLY TO A POST-TRIAL PROCEEDING SUCH AS A MOTION FOR A DEFICIENCY JUDGMENT IN A MORTGAGE FORECLOSURE SUIT?
Frohman v. Bar-Or, 637 So.2d 369 (Fla. 4th DCA 1994). We have jurisdiction. Art. V, § 3(b)(4), Fla. Const.
Irwin and Anna Frohman and Sid and Dorothy Birken (Frohman) loaned $55,000 to Jacob and Stella Bar-Or (Bar-Or). To secure the loan, Bar-Or gave a second mortgage on his property to Frohman. As further collateral to Frohman, Bar-Or signed a repurchase agreement that encumbered and assigned three mortgages held by Bar-Or on other properties. Bar-Or defaulted on the loan in 1987. Elaine Frohman,[1] as personal representative of the estates of Irwin and Anna Frohman, and Sid and Dorothy Birken *635 filed a complaint for foreclosure of the second mortgage, including a request for a deficiency judgment. The trial court appointed a receiver to collect rents from the property, to be used for payments on the first mortgage. On January 3, 1989, the trial court ordered the mortgagors of the collateralized mortgages to pay rents to the receiver, instead of to Bar-Or.
Following a contested trial, the court entered a final judgment of mortgage foreclosure on April 10, 1989. The final judgment set the amounts due, ordered the property with the second mortgage sold at a foreclosure sale if judgment was not paid, appointed a receiver for the properties involved, and conditionally foreclosed the collateral mortgages. Additionally, the final judgment provided that the collateral mortgages were free and clear of Frohman's claims if there was no deficiency, but the property with the collateral mortgages would be sold at a foreclosure sale in the event of a deficiency. The court also retained jurisdiction to hear any subsequent deficiency application.
Three years later, in April 1992, the mortgagors paid off the collateral mortgages. Six months later, on October 12, 1992, Bar-Or filed a motion to dismiss for failure to prosecute. Eight days later, Frohman filed a statement of good cause detailing two reasons why the action should not be dismissed for lack of record activity: 1) it was impossible to determine the amount of deficiency until the collateral mortgages were paid off; and 2) the personal representative of Frohman's estate had to seek reinstatement before Frohman could act. Additionally, Frohman requested that a portion of the final judgment be set aside as inequitable because it would allow Bar-Or to recover the mortgages free and clear of any claim or lien by Frohman.[2]
On October 27, 1992, fifteen days after Bar-Or filed the motion to dismiss, Frohman filed an application for deficiency. The trial court issued an order dismissing the case for failure to prosecute. The court also denied Frohman's motion to set aside part of the final order and motion for rehearing.
On appeal, the Fourth District Court of Appeal affirmed the trial court's order, citing Financial Security Savings & Loan Ass'n v. Espana River Partnership, 537 So.2d 683 (Fla. 4th DCA 1989), and Florida Rule of Civil Procedure 1.420(e). Additionally, the district court certified conflict with Riesgo v. Weinstein, 523 So.2d 752 (Fla. 2d DCA 1988), disapproved on other grounds, Searcy, Denney, Scarola, Barnhart & Shipley, P.A. v. Poletz, 652 So.2d 366 (Fla. 1995), and Ravel v. Ravel, 326 So.2d 223 (Fla. 2d DCA 1976), and certified the question as one of great public importance. Frohman, 637 So.2d at 370.
We reword the certified question to address only the circumstances presented in this case:
DOES FLORIDA RULE OF CIVIL PROCEDURE 1.420(e) APPLY POST-TRIAL TO A MORTGAGE FORECLOSURE SUIT?
We answer the reworded question in the affirmative.
The Fourth District Court's opinion in the instant case contains little reasoning, but instead cites Financial Security for the proposition that Florida Rule of Civil Procedure 1.420(e) applies post-judgment and that it was correctly applied in this instance. In Financial Security, the district court held that rule 1.420(e) was applicable to a motion for a deficiency judgment following a foreclosure sale where no record activity had occurred for more than one year. 537 So.2d at 685. The court reasoned that rule 1.420(e) applied post-judgment because the rule makes no distinction between pre- and post-judgment application and that there was no merit to the argument that it would nullify an otherwise valid judgment in mortgage foreclosure proceedings. Id. at 684-85. In reaching this conclusion, the district court relied on Barnes v. Escambia County Employees Credit Union, 488 So.2d 879 (Fla. 1st DCA 1986), and Withers v. Flagship Peoples Bank, 473 So.2d 789 (Fla. 1st DCA 1985), *636 and certified conflict with Ravel and Riesgo. The district court accordingly affirmed the trial court's order dismissing Financial Security's motion for a deficiency decree. Financial Security, 537 So.2d at 685.
In the instant case, the district court certified conflict with the Second District Court of Appeal's decisions in Ravel and Riesgo, both of which held that rule 1.420(e) does not apply after final judgment has been entered. In Ravel, the court reasoned that "[o]nce final judgment has been entered the rule no longer applies." 326 So.2d at 224. Riesgo relied upon Ravel in reaching the same conclusion. We find that the Fourth District Court correctly determined that rule 1.420(e) applies to post-trial proceedings in mortgage foreclosure actions such as the motion for deficiency judgment at issue here.
Rule 1.420(e) was applied post-judgment to mortgage foreclosure actions in both Barnes and Withers. In Barnes, the district court affirmed a deficiency granted by the trial court, even though there had been no record activity for more than one and one-half years. 488 So.2d 879. The court held that while rule 1.420(e) could apply under these circumstances, the rule had not been invoked by the appellant. Id. at 881. In Withers, one party moved for dismissal under rule 1.420(e) after more than one year had passed from the date the other party had filed for a deficiency following a mortgage foreclosure sale. 473 So.2d 789. Because the trial court denied the motion without a proper hearing, the district court remanded the case for an evidentiary hearing as to the reasons for the lack of record activity. Id. at 790-91.
In both Barnes and Withers, the First District Court of Appeal measured the one-year period of inactivity as running from the entry of final judgment. The one-year period should instead be measured backwards from the time preceding the filing of the motion to dismiss for lack of prosecution. See Chrysler Leasing Corp. v. Passacantilli, 259 So.2d 1, 3-4 (Fla. 1972) (holding that a motion to dismiss for lack of prosecution should be denied when the plaintiff showed record activity within the year preceding the motion to dismiss, even though there had previously been a year of inactivity in the case).
Before rule 1.420(e) can be applied post-judgment in a mortgage foreclosure suit, the following events must occur: 1) entry of final judgment of foreclosure; 2) sale of the foreclosed property pursuant to the judgment; 3) issuance of a certificate of title for the property; and 4) a reservation of jurisdiction by the trial court for later determination of a deficiency judgment. If more than one year has elapsed after a certificate of title was issued or since the last record activity moving the case forward has occurred, such as a petition for a deficiency judgment, then the action is subject to dismissal upon motion filed pursuant to rule 1.420(e). Upon the filing of such motion, the court should determine whether any record activity has occurred during the one-year period prior to the filing of the motion to dismiss. Chrysler Leasing, 259 So.2d at 4. If no good cause is shown for the lack of record activity, the motion should be granted. If a deficiency cannot be determined within one year after the certificate of title has been issued, then the plaintiff is always free to file for a stay of proceedings under rule 1.420(e).[3]
In the instant case, Bar-Or filed a motion to dismiss for lack of prosecution under rule 1.420(e) on October 12, 1992. On October 27, 1992, fifteen days later, Frohman filed an application for deficiency. There was no record activity for the year prior to the filing of Bar-Or's motion to dismiss. The trial court granted the motion to dismiss for lack of prosecution after an evidentiary hearing. However, in the instant case, Frohman stated two reasons for the inactivity and the record does not indicate that the trial judge made any determination that these were not good cause reasons.
Prior to a dismissal under rule 1.420(e), the trial court must determine whether the party opposing dismissal had good cause for the failure to prosecute during *637 the year preceding the filing of the motion to dismiss. Chrysler Leasing, 259 So.2d at 4. Therefore, on remand, the trial court shall conduct an evidentiary hearing to determine whether Frohman had good cause for failure to prosecute.
Accordingly, we answer the reworded certified question in the affirmative. We approve in part and quash in part the district court's decision in Frohman. We also disapprove Riesgo and Ravel to the extent that they prohibit application of rule 1.420(e) to mortgage foreclosure actions. We remand this case for determination of whether good cause existed for Frohman's lack of record activity for the year preceding the motion to dismiss.
It is so ordered.
OVERTON, SHAW, KOGAN and WELLS, JJ., concur.
GRIMES, J., dissents with an opinion.
ANSTEAD, J., recused.
GRIMES, Chief Justice, dissenting.
Florida Rule of Civil Procedure 1.420(e) contemplates the timely prosecution of actions. I do not believe that the rule was intended to be applicable to any proceedings after final judgment. Riesgo v. Weinstein, 523 So.2d 752 (Fla. 2d DCA 1988), disapproved on other grounds, Searcy, Denney, Scarola, Barnhart & Shipley, P.A. v. Poletz, 652 So.2d 366 (Fla. 1995); Ravel v. Ravel, 326 So.2d 223 (Fla. 2d DCA 1976).
At the very least, if this rule is to be applied after judgments of mortgage foreclosure, the point from which the one year begins to run should not be the mere reservation of jurisdiction. The rule should only be employed to dismiss postjudgment petitions for relief which have been pending for over a year without record activity. In the instant case, the motion to dismiss was filed before Frohman even applied for the deficiency judgment.
This opinion will create unnecessary and unforeseen mischief. I respectfully dissent.
NOTES
[1] Elaine Frohman is the personal representative of the estate of Anna Frohman, who was in turn the surviving tenant of her deceased husband Irwin Frohman.
[2] The trial court's final judgment contained the following sentence: "In the event that no deficiency is adjudged then in that event the effect of this Order shall be that said mortgages shall be free of any liens or claims of Plaintiffs."
[3] Florida Rule of Civil Procedure 1.420(e) provides that the court can approve a stipulation staying the action or file a stay order in the action. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919792/ | 91 B.R. 238 (1988)
In re ELSINORE SHORE ASSOCIATES, d/b/a The Atlantis Casino Hotel, Elsinore of Atlantic City, Elsinore of New Jersey, Inc., Elsub Corporation, and Elsinore Finance Corporation, Debtors.
Bankruptcy No. 85-06058.
United States Bankruptcy Court, D. New Jersey.
March 24, 1988.
*239 Crummy, Del Deo, Dolan, Griffinger & Vecchione by Michael R. Griffinger, Karen A. Giannelli, David M. Hyman, Newark, N.J., Weill, Gotshal & Manges by Marvin E. Jacob, Jay M. Goffman, New York City, for debtors.
Mairone, Biel, Gould, Zlotnick, Feinberg & Griffith by Alan I. Gould, Eric A. Browndorf, Atlantic City, N.J., for Unsecured Creditors' Committee.
McCarter & English by Amelia H. Boss, Cherry Hill, N.J., for Playboy Enterprises, Inc.
Fried, Frank, Harris, Shriver & Jacobson by Brad E. Scheler, New York City, for the Unofficial Committee of Senior Bondholders.
Lashner, Victor & Maschmeyer by Melvin Lashner, William Lashner, Philadelphia, Pa., Meranze & Katz by Michael N. Katz, Cherry Hill, N.J., for H.E.R.E. Intern. Pension Plan, H.E.R.E. Welfare Fund, H.E.R.E. Local 54 Severance Fund ("Funds").
Leonard J. DiGiacomo, Asst. Counsel, State of N.J., Casino Control Com'n, John E. Adams, Jr., Robert Latimer, Deputies Atty. Gen., State of N.J., Div. of Gaming *240 Enforcement, United States Attorneys Office by Paul A. Blaine, Asst. Atty. for the I.R.S., Ober, Kaler, Grimes & Shriver by George J. Koelzer, Edison, N.J., for Maryland Nat. Leasing Services Corp.
Riker, Danzig, Scherer, Hyland & Perretti by Karen B. Bezner, Gabriel Del Virginia, Morristown, N.J., for Casino Reinvestment Development Authority.
OPINION
ROSEMARY GAMBARDELLA, Bankruptcy Judge.
Before the Court is the Debtors' Third Amended Joint Plan of Reorganization under Chapter 11 of the United States Bankruptcy Code ("the Plan") dated December 7, 1987 submitted by Elsinore Shore Associates, d/b/a The Atlantis Casino Hotel ("ESA"), Elsinore of Atlantic City ("EAC"), Elsinore of New Jersey, Inc. ("ENJ"), Elsub Corporation ("Elsub"), and Elsinore Finance Corporation ("EFC"), all debtors herein (collectively referred to as "Debtors"), together with Elsinore Corporation, Hyatt Tahoe, Inc., and Four Queens, Inc. (collectively referred to as the "Proponents").
Objections to confirmation of the plan have been filed by H.E.R.E. International Pension Plan, H.E.R.E. Welfare Fund and H.E.R.E. Local 54 Severance Fund ("the Funds"), the Internal Revenue Service ("IRS"), and Stein's Food Service Equipment, Inc. ("Stein's Food Service"). Hearings on confirmation of the plan were conducted on February 8, 9 and 18, 1988. The following constitutes this court's findings of fact and conclusions of law.
On November 14, 1985 ESA filed a voluntary petition under Chapter 11 of the Bankruptcy Reform Act of 1978, as amended by the Bankruptcy Amendments and Federal Judgeship Act of 1984 ("Bankruptcy Code"). On July 24, 1987, EFC, ENJ, EAC and Elsub filed voluntary petitions for reorganization under Chapter 11. On July 24, 1987, this court entered an order consolidating the debtor proceedings for administrative purposes. ESA is in the business of operating the Atlantis Casino Hotel on the Boardwalk in Atlantic City, New Jersey.
Stein's Food Service filed an Objection to Confirmation of Plan of Reorganization on the basis that Stein's Food Service holds two claims against the debtors: an administrative priority claim in the amount of $3,994.88 and an unsecured claim in the amount of $6,936.44. Stein's Food Service asserts that the plan recognizes the unsecured claim but makes no provision for payment of the administrative claim.
Counsel for the debtors at the February 8, 1988 confirmation hearing stated that the debtors recognized a valid reclamation claim of Stein's Food Service to the extent previously ordered by the court, which will be paid as an administrative expense under the plan. (See Tr. of 2/8/88 at 40). This court finds that Stein's Food Service's claim is adequately treated under the plan.
The IRS objects to payment of its unsecured priority claims on any basis other than with statutory interest as provided by 26 U.S.C. §§ 6621 and 6622. The IRS takes the position that the present value of the taxes owed by the debtors and to be paid in deferred payments pursuant to 11 U.S.C. § 1129(a)(9)(C) includes the statutory interest rate set by the Secretary under §§ 6621 and 6622 of the Internal Revenue Code.
The United States of America, Internal Revenue Service, on January 22, 1988 filed an "Objection to Confirmation of the Amended Plan of Reorganization." By its objection the IRS asserts that it has the following claims: (1) administrative claims in the amount of $8,893.29; (2) unsecured priority claims in the sum of $485,360.17, and (3) unsecured general claims of $2,149.51. The IRS asserts that the plan only provides for payment of interest on its priority claims at the rate specified in 26 U.S.C. §§ 6621 and 6622 as an alternative method of payment. (See Art. 4 of Plan).
Counsel for the debtors and the IRS at the February 8, 1988 confirmation hearing agreed to preserve the issue of the calculation of the present value of the IRS' claim, pending a determination of confirmation of the plan. (See Tr. of 2/8/88 at 37-39).
*241 The Funds filed objections to confirmation of the plan as follows:
(1) The Plan reflects the non-confirmability of said Plan since the Plan requires participating creditors to waive claims against non-debtor, third parties and the consummation of said Plan discharges non-debtor, third parties. The Funds assert that such release and discharge of non-debtor, third parties violates Section 524(e) of the Bankruptcy Code.
(2) The Plan provides for a release to be signed by counsel for the Unsecured Creditors' Committee on behalf of all unsecured creditors. The Funds assert that this provision is illegal and invalid and cannot be part of a confirmable plan.
(3) The Plan should not be confirmed since the acceptances thereto were obtained by a false and misleading Disclosure Statement, the approval of which is on appeal. The Funds assert that no order of confirmation should be entered until that appeal is decided.
(4) The Plan should not be confirmed in that it is not fair and equitable in that said Plan is a constructive fraud on unsecured creditors since the Debtors propose paying off guaranteed debts of their parent, Elsinore, in full, before unsecured creditors are paid.
(5) The Bankruptcy Court has scheduled a hearing on confirmation of the Plan without deciding various litigation that has been filed with this Court and has not been heard by the Court or if heard, has not been decided by the Court, including but not limited to:
(a) a motion filed by the Funds for the appointment of a trustee, and
(b) a motion by ESA for rescission of a certain real estate transaction which has been full tried and briefed.
(6) Until the issues brought before this Court on marshalling and equitable subordination of Elsinore's unconditional guarantee of certain bonds of the debtor are decided by the Bankruptcy Court, no confirmation hearing should be held.
(7) The Plan should not be confirmed in that it is not fair and equitable in that the Plan is a constructive fraud on unsecured creditors since the debtors propose paying off the guaranteed debts of their parent corporation which would eventually insure that the parent corporation is relieved of responsibility for all of its debts while the unsecured creditors are being paid only a small portion of their debt under the Plan.
(8) The Plan violates the absolute priority of payment rule in that the unsecured creditors have not been paid in full and other creditors who are lower in priority than the unsecured creditors are being paid various sums of money including but not limited to the debts of the parent corporation of the debtors, Elsinore, and debtor's ex-partner, Playboy Enterprises, Inc.
The Funds originally sought to argue that the plan violates the absolute priority rule and is not fair and equitable. The absolute priority rule and the fair and equitable standard come into play under the cram-down provisions of § 1129(b). The general principal of the subsection requires that a plan must provide either that an impaired non-accepting class of creditors be paid in full with respect to their claims, or that no interest junior to that class of creditors receive any distribution under the Plan with respect to the junior claimant's claim or interest. See In re Toy & Sports Warehouse, Inc., 37 B.R. 141, 152 (Bankr.S.D.N. Y.1984).
At the February 18, 1986 confirmation hearing Melvin Lashner, Esquire, counsel for the Funds stated:
We've included our fair and equitable into the principle, the concept of not made in good faith, and the absolute priority is not applicable.
(See Tr. of 2/18/86 at 247).
The plan before the court contains twelve classes of claims and interests, with varying payment provisions as follows:
Class 1 consists of priority non-tax claims. These claims are to be paid in cash on the Effective Date or upon such terms as may be agreed to by the holder of any such claim.
Class 2A consists of secured claims arising under the Senior Mortgage Bonds and *242 Indenture. These claims arise as a result of a certain indenture, dated as of November 1, 1984 among EFC, Elsinore, as guarantor, and Manufacturers Hanover Trust Company, as Indenture Trustee, pursuant to which 15½% Senior Mortgage Bonds, in the original principal amount of $115,000,000.00 due 1999, were issued by EFC.
The Senior Mortgage Bonds are secured primarily by a $90 million promissory note of ESA (the "ESA note") and a mortgage on the Atlantis Casino Hotel (the "ESA mortgage"), which is owned by ESA, and a $25 million promissory note of Hyatt Tahoe and a mortgage on the Hyatt Lake Tahoe. Both the notes and mortgages have been assigned to the Indenture Trustee for the benefit of the holders of Senior Mortgage Bonds.
Under the plan, on or prior to the Effective Date, Elsinore shall deposit with the Indenture Trustee by wire transfer an amount sufficient to pay or reimburse the Indenture Trustee for its costs and expenses. Elsinore shall also pay or cause to be paid to the New Indenture Trustee, United States Trust Company of New York, Trustee under the New Indenture, for payment ratably to the holders of Allowed Class 2A Claims, the sum of $45,000,000.00 for application to the principal of the Senior Mortgage Bonds. Interest that has accrued on the bonds prior to the Effective Date shall be satisfied either by cash payments by Elsinore, or EFC pursuant to New Indenture Coupons or by Elsinore Common Stock.
On the Effective Date, pursuant to the New Indenture, EFC will execute and cause the New Indenture Trustee to authenticate and deliver new Senior Mortgage Bonds, with attached Coupons, to holders of Class 2A claims. Elsinore, on the Effective Date shall execute and deliver to the New Indenture Trustee a New Elsinore Guarantee. Obligations under the New Elsinore Guarantee shall be payable only in Elsinore Common Stock in accordance with a Common Stock Formula.
No holder of a Senior Mortgage Bond shall be entitled to any payment or distribution under the plan unless and until it shall have surrendered its Senior Mortgage Bond to the New Indenture Trustee, except that payments and distributions may be made without such surrender upon presentation to EFC and the New Indenture Trustee of evidence sufficient under 2.07 of the Indenture, together with the indemnity contemplated therein, to warrant issuance of a replacement security.
Under the plan, on the Effective Date, ESA will reimburse EFC and EFC will reimburse Elsinore for its payments of interest accrued from and after January 1, 1987 on the Senior Mortgage Bonds to the extent secured under the ESA Note and ESA Mortgage, provided that such reimbursement does not reduce ESA's cash and cash equivalents below $10,000,000.00 as of the Effective Date. Interest accrued on the Senior Mortgage Bonds prior to January 1, 1987, and paid or satisfied by Elsinore on or prior to the Effective Date and any interest not reimbursed in cash shall constitute part of the Elsinore Subrogation Claim and shall be included in the principal amount of a promissory note to be issued by EFC to Elsinore ("Elsinore Note").
The Elsinore Suborgation Claims consist of any payments made by Elsinore under the terms of the Georgia Avenue Mortgages after October 1, 1985 and on or prior to the Effective Date, plus the subrogation claims arising from the making of payments of principal and interest by or on behalf of Elsinore to the Indenture Trustee for the benefit of Class 2A claims on or prior to the Effective Date, excluding any payments made on account of indebtedness of Hyatt Tahoe. The Elsinore subrogations claims shall be evidenced by the Elsinore Note.
Class 2B consists of secured claims arising under a certain promissory note dated as of November 1, 1984 from ESA to EFC in the original principal amount of $90,000,000.00, which was assigned to the Indenture Trustee to secure EFC's obligations under the Indenture and an indenture of mortgage, assignment of leases and rents, security agreement and related instruments, each dated as of November 1, 1984 between ESA and EFC, encumbering the *243 Atlantis Casino Hotel in Atlantic City, New Jersey and related properties, which were assigned to the Indenture Trustee to secure EFC's obligations under the Indenture. On the Effective Date ESA will deliver to EFC, in substitution and exchange for Allowed 2B Claims, a promissory note in the amount of $70,000,000 together with and including the coupon annexed thereto providing for payments in an amount equal to the aggregate amount of all payment to be made under the Coupons to be issued by ESA and delivered to EFC on the Effective Date, or any renewal, extension, refinancing or replacement thereof ("New Atlantis Note"); and a promissory note to be issued by ESA to EFC having a principal amount equal to that of the Elsinore Note ("EFC Note").
ESA shall also pay to EFC an amount, in cash, equal to the reimbursement paid by EFC to Elsinore for Elsinore's payment of accrued interest in the Senior Mortgage Bonds accrued from and after January 1987. ESA shall also execute and deliver to EFC a New Senior Mortgage and other Security Documents, which in turn shall assign same to the New Indenture Trustee and Elsinore as collateral security for obligations under the New Indenture and the Elsinore Note. The security interests related to the additional collateral shall be subordinate to liens and security interests granted to secure payments of up to $5,000,000.00 in principal amount of ESA's obligations outstanding at any time, up to an aggregate of $10,000,000.00 in principal, to persons making loans to ESA for working capital. ("Working Capital Loan").
Class 3 consists of secured claims of lessors arising under lease agreements. These claimants shall have defaults under the lease agreements cured and the lease agreements shall be reinstated. The liens and security interests of these creditors in property of the Debtors shall be retained subsequent to confirmation.
Class 4 consists of secured claims arising under mortgages on property located at Georgia Avenue, Atlantic City, New Jersey. These mortgages consists of a certain mortgage, dated February 1, 1979, securing a note in the original principal amount of $497,000.00 executed by F & M Properties and delivered to Frank L. and Lydia E. Kearns, which was assumed by Playboy-Elsinore Associates, now known as ESA, on or about September 28, 1982 and a mortgage dated September 28, 1983, securing a note in the original principal amount of $7,048,100.00, executed on behalf of Playboy-Elsinore Associates, now known as ESA, and delivered to Fabi Concrete Corp., Jeddo Corp., F & M Properties, Frank Abramoff and the Hebrew Old Age Center of Atlantic City, which mortgage was subsequently assigned to Midlantic National Bank/South on or about July 19, 1984.
Under the plan these mortgages shall be reinstated subject to certain modifications in the maturity dates of the notes and the payment of interest. Under the plan ESA's motion, dated January 21, 1986, seeking in part, rescission of a certain contract of sale dated October 11, 1985 of the properties known as Georgia and Bellevue Avenue from ESA to Elsinore shall be deemed granted upon confirmation and any and all claims asserted or assertable against the proponents which arose under or in connection with the sale or closing and consummation thereof shall be released effective as of the Effective Date. Under the plan Class 4 claimants shall retain their liens against the property. Any secured claim in favor of Elsinore arising as a result of the granting of the rescission motion shall be deemed a Class 7 claim, which claim will be a contribution to capital and which claimholders shall not receive or retain any property of value on account of their claims.
Class 5A consists of non-priority unsecured claims. Under the plan the Class 5A claimants shall receive on the Effective Date or "as soon as practicable thereafter" an amount in cash equal to its ratable share of the sum of $1,000,000.00, if such allowed claims do not exceed $9,500,000.00. If the claims exceed that amount, the amount of cash distributed shall be increased by 10% of such excess, but in no event by more than an additional $100,000.00.
*244 ESA shall also execute a non-recourse promissory note in the principal amount of $1,000,000.00 for the ratable benefit of 5A claimants ("Trade Note"). The Trade Note is subordinate and junior in payment to any obligations arising under the New Atlantis Note and Working Capital Loan, on a parity in right to payment with the New Playboy Priority Note and Fidelity Priority Note, and senior and prior to the Fidelity Parity Note, the New Playboy Parity Note and the EFC Note.
Class 5B claims consists of the non-priority, unsecured claims of First Fidelity Bank, N.A., New Jersey ("First Fidelity"). Under the plan, on the Effective Date ESA shall execute and deliver to First Fidelity a non-recourse promissory note in the amount of $2,150,000.00 ("Fidelity Priority Note").
On the Effective Date ESA shall also execute and deliver to First Fidelity a non-recourse promissory note in the amount of $2,100,000.00 ("Fidelity Parity Note").
The Fidelity Priority Note shall be subordinate and junior in right of payment to any and all obligations arising under the New Atlantis Note and the Working Capital Loan, on a parity in right to payment with Trade Note and New Playboy Priority Note and senior and prior in right to payment to the Fidelity Parity Note, the New Playboy Parity Note and the EFC Note.
The Fidelity Parity Note shall be subordinate and junior in right of payment to any obligation arising under the New Atlantis Note and the Working Capital Loan, the Trade Note, the Fidelity Priority Note and the New Playboy Priority Note, and on a parity in right of payment with the EFC Note and the New Playboy Parity Note.
In the event of a sale of the Atlantis Casino Hotel, First Fidelity, Playboy and EFC shall share in the proceeds of sale otherwise distributable to EFC on the basis of $.80 of each dollar of such proceeds is paid to EFC, $.10 of each dollar to Playboy, $.10 of each dollar to First Fidelity until satisfaction of ESA's obligation to Playboy. Thereafter $.90 of each dollar is paid to EFC, $.10 each dollar to First Fidelity until satisfaction of ESA's obligation to First Fidelity or EFC.
Class 6 consists of the claims of Playboy Enterprises, Inc. and its subsidiaries ("Playboy"). Under the plan Playboy shall receive on the Effective Date in exchange for their Allowed Class 6 Claims arising from ESA's promise to pay management fees: (a) the sum of $442,000.00 plus interest earned thereon that has been deposited in the registry of the Bankruptcy Court and is the subject of an adversary proceeding entitled Elsinore Shore Associates v. Saiber, Schlesinger, Satz & Goldstein, and Playboy Enterprises, Inc. (Adversary No. 86-0069) ("Playboy Escrow"); (b) a non-recourse promissory note in the amount of $750,000.00 executed by ESA ("New Playboy Priority Note"); and (c) a non-recourse promissory note in the amount of $750,000.00 executed by ESA ("New Playboy Parity Note"). In exchange for Allowed Class 6 claims consisting of the balance of management fees, and a certain promissory note, dated April 3, 1984 from Elsub to Playboy in the original principal amount of $45,384,000.00, Playboy shall receive common stock of Elsub to be issued in accordance with the plan ("New Elsub Common Stock") which when added to other shares of Elsub Common Stock issued and outstanding on the Effective Date constitute 15% of the shares of Elsub.
The plan further provides that except as permitted by the gaming authorities of the State of New Jersey, a disinterested trustee, not affiliated with Playboy, who is approved by the Bankruptcy Court shall hold the New Playboy Priority Note, the New Playboy Parity Note and the New Elsub Common Stock distributed under the plan and shall exercise voting rights attendant to the New Elsub Common Stock.
Class 7 consists of non-priority unsecured claims of insiders of the Debtors, other than Administration Expenses, Elsinore Subrogation Claims and Class 2B Claims. The holders of Allowed Class 7 Claims shall contribute such claims to capital and shall not receive or retain any property of value on account of such claims.
*245 Class 8 consists of non-priority unsecured claims against Elsub arising under an indenture, dated as of January 15, 1980 by and among Elsinore, and First Fidelity, as successor trustee, and Elsub, Four Queens, and Hyatt Tahoe, as guarantors, as in effect on the date hereof, which provided for the issuance by Elsinore of $25,000,000.00 principal amount of Subordinated Debentures ("Elsinore Subordinated Indenture"), and certain 14% subordinated debentures, due 1997, issued by Elsinore pursuant to the Elsinore Subordinated Indenture and guaranteed by, inter alios Elsub ("Subordinated Debentures").
Under the plan, on or before the Effective Date, the trustee for holders of Allowed Class 8 claims shall be paid an amount equal to the principal of and accrued interest of the Subordinated Debentures, without premium or penalty.
On the Effective Date or such other date as may be agreed, Elsinore shall deposit with the successor trustee for Elsinore Subordinated Indenture an amount sufficient to pay (or reimburse the successor trustee for its payment of) reasonable costs and expenses incurred by such successor trustee that are payable under the Elsinore Subordinated Indenture. No holder of a Subordinated Debenture shall be entitled to any payment or distribution under the plan unless and until it shall have surrendered its Subordinated Debenture to the successor trustee therefore, except that payments and distributions may be made without such surrender upon presentation to Elsinore and such successor trustee of evidence sufficient under § 306 of the Elsinore Subordinated Indenture together with the indemnity requirement therein, to warrant issuance of a replacement security.
Class 9 claims consist of all unsecured claims against Elsub and EAC, as general partners of ESA, and ENJ, as general partner of EAC, which arose solely by virtue of their status as general partners.
Holders of Class 9 claims shall receive only the distributions to which they are entitled pursuant to other provisions of the plan as holders of allowed claims against ESA and shall not receive or retain any other property of value on account of their Allowed Class 9 Claims.
Class 10 consists of all Equity Interests in the Debtors. Equity Interests shall be preserved, subject to such dilution as may occur as a result of distribution of new equity interests under the plan.
In consideration for contribution of Elsinore's Administration Expenses in the Chapter 11 case of ESA and Allowed Class 7 Claims of Elsinore and contribution of same to Elsub, the contribution by Elsub of 54.3% of such claims and expenses to ENJ, and thereafter by ENJ to EAC and EAC to ESA and the contribution of 45.7% of such Claims and Expenses, as well as its Allowed Class 7 Claims, directly by Elsub to ESA, and like contributions by ENJ to EAC and EAC to ESA of their Allowed Class 7 Claims, as well as other good and valuable consideration set forth in the plan, on the Effective Date, all Equity Interests shall be preserved, subject, however, to dilution as set forth in the plan.
At the hearing on confirmation, counsel for the debtors filed a "Certification of Voting Procedures" which indicated that of the ten (10) impaired classes of creditors (Class 2A, 2B, 4, 5A, 5B, 6, 7, 8, 9, 10) Class 2A creditors (Secured Claims Under Senior Mortgage Bonds) voted 24 claims aggregating $100,527,000.00 to accept the plan as against 3 creditors holding claims aggregating $20,000.00 voting to reject the plan. The sole Class 2B creditor (Secured Claims Under ESA Note and Mortgage), EFC, voted its claim in the amount of $115,000,000.00 to accept the plan. Class 4 creditors (Claims Under Georgia Avenue Mortgage) voted 1 claim in the amount of $6,070,000.00 to accept the plan. This was the only claim voted in that class. Class 5A creditors (General Unsecured Creditors) voted 321 claims aggregating $5,762,900.58 (or 88.2% of the total claims voted), as against 33 claims aggregating $773,969.84 rejecting the plan. The sole Class 5B creditor (First Fidelity), First Fidelity voted its claim of $5,522,696.92 to accept the plan. The sole Class 6 creditor (Playboy), Playboy, voted its claim of $46,189,993.00 as a conditional acceptance of the plan. Counsel *246 for Playboy at the February 9, 1988 confirmation hearing stated that Playboy withdrew any condition to its acceptance of the plan, and that its acceptance was unconditional (See Tr. of 2/9/88 at 34). Class 7 creditors (General Unsecured Claims of Insiders) voted 6 claims aggregating $155,374,046.00 to accept the plan. No other ballots were cast. Class 8 creditors (Unsecured Claims Against Elsub as Guarantor of the Subordinated Debentures) voted 30 claims aggregating $10,828,000.00 to accept the plan as against 1 creditor holding a claim in the amount of $5,000.00 voting to reject the plan. Class 9 creditors (Unsecured Claims Against Elsub, ENJ, and EAC as General Partners), voted 338 claims aggregating $178,610,690.20 to accept the plan, as against 33 claims aggregating $773,969.34 voting to reject the plan. Class 10 (Equity Interests) voted 2 claims to accept the plan. No other ballots were cast.
Before discussing the plan in the context of § 1129 requirements, the court must deal with the Funds' objection to confirmation of the plan based upon the proposed release and discharge provisions of the plan.
The substance of the requested releases in ESA's Third Amended Joint Plan of Reorganization provides, in pertinent part:
25.4 Discharge. Except as otherwise provided herein, in accordance with section 1141 of the Bankruptcy Code the rights afforded in the Plan shall be in exchange for and in complete satisfaction, discharge and release of all Claims against or Equity Interests in the Debtors of any nature whatsoever . . . all such Claims against or Equity Interests in the Debtors shall be satisfied, discharged and released in full . . . all Creditors and holders of Equity Interests shall be precluded from asserting against the Debtors or their respective assets or properties any other or further claim based upon any act or omission, transaction or other activity of any kind or nature that occurred prior to the Effective Date. . . . In addition, on the Effective Date, in consideration for past and future services and other valuable consideration, Elsinore, Hyatt Tahoe and Four Queens, and all present and former employees, officers, directors and stockholders thereof, and all employees, officers, directors, stockholders and partners of the Debtors, shall be deemed discharged and released from any and all claims.
Article 25.4 Debtors' Third Amended Joint Plan of Reorganization.
25.5 Effect of Voting. By voting to accept the Plan, each holder of a Claim of Equity Interest shall be deemed, as of the Effective Date, to release and discharge Elsinore, Hyatt Tahoe, Four Queens, and all present and former employees, officers, directors and stockholder thereof, and all present and former employees, officers, directors, stockholders and partners of the Debtors from any and all claims.
Article 25.5 Debtors' Third Amended Joint Plan of Reorganization.
25.6 Retention of Distributions. By accepting any payment or distribution under the Plan, each holder of a Claim or Equity Interest shall be deemed, as of the Effective Date, to release and discharge Elsinore, Hyatt Tahoe, Four Queens, and all present and former employees, officers directors and stockholder thereof, and all present and former employees, officers, directors, stockholders and partners of the Debtors from any and all claims.
Article 25.6 Debtors' Third Amended Joint Plan of Reorganization.
Article 24 of the Plan entitled "Conditions Precedent to Effective Date" provides:
The following shall be conditions precedent to the closing and consummation of the Plan and the transactions contemplated under the Plan:
24.3 Releases and Discharges. The Confirmation Order shall direct the Indenture Trustee to execute and deliver, effective as of the Effective Date, and it shall have executed and delivered to Hyatt Tahoe a release and discharge of the Hyatt Tahoe Note and Mortgage, which shall be in a recordable *247 form, and Hyatt Tahoe shall be released from any all other obligations under the Indenture. In addition, the Confirmation Order shall direct that each of First Fidelity and Playboy shall execute and deliver mutual general releases to Elsinore on the Effective Date, and the Committee [Official Committee of Unsecured Creditors] by its counsel shall execute and deliver a general release to Elsinore on the Effective Date.
Section 524(e) of the Bankruptcy Code provides:
(e) Except as provided in subsection (a)(3) of this section, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt.
When a bankruptcy court discharges a debtor, it does so by operation of the bankruptcy laws, not by contractual consent of the creditors. Underhill v. Royal, 769 F.2d 1426, 1432 (9th Cir.1985); Union Carbide Corp. v. Newboles, 686 F.2d 593, 595 (7th Cir.1982).
In Union Carbide, the plan of reorganization provided for the "settlement, satisfaction and discharge" against third party guarantors in exchange solely for distribution of proceeds from property of the debtor. Subsequently, a creditor sued the guarantors on the guaranty. The guarantors contended that creditors' approval of the plan of reorganization worked an accord and satisfaction under Indiana law and thereby erased their liability on the guaranty.
Relying on Section 16 of the Bankruptcy Act of 1898 which provided that "[T]he liability of a person who is co-debtor with, or guarantor or in any manner a surety for, a bankrupt shall not be altered by the discharge of such bankrupt," the court held that the statute specifically prohibited the purported discharge of the guarantors, regardless of the provision in the plan to the contrary. The court reasoned that the purpose of Section 16 was to prevent a creditor from being forced to lose his claim against a third party involuntarily and without consideration:
A bankruptcy discharge arises by operation of federal bankruptcy law, not by contractual consent of the creditors. . . . A creditor's approval of the plan cannot be deemed an act of assent having significance beyond the confines of the bankruptcy proceedings, simply because the gamesmanship imported by state contract law into the bankruptcy proceedings would be intolerable. Since a majority of the creditors must approve the debtor's plan for the debtor to be discharged, in many instances one creditor's approval or disapproval will have no effect even in the bankruptcy proceeding. . . . Similarly, the payment which effects a discharge is not consideration for any promise by the creditors, must less for one to release non-party obligors.
Id. at 595. Accord at R.I.D.C. Industrial Development Fund v. Snyder, 539 F.2d 487, 490, n. 3 (5th Cir.1976), cert. denied 429 U.S. 1095, 97 S.Ct. 1112, 51 L.Ed.2d 542 (1977).
In the case of Underhill v. Royal, 769 F.2d 1426 (9th Cir.1985), after National Mortgage Exchange of Southern California ("NMESC") filed for reorganization under Chapter 11 of the Bankruptcy Code, investor Underhill (an unsecured creditor who held an investment interest in promissory notes executed by NMESC) filed a class action alleging securities fraud on the part of Carlos Royal, the principal shareholder of NMESC.
The proposed plan of reorganization provided that NMESC would exchange the promissory notes in which Underhill and the prospective class members held an interest for property held by a third-party financial institution. NMESC was to use the property obtained in the exchange to secured a loan intended to satisfy creditors' claims. Attached to the proposed exchange transaction was a release by investors in the promissory notes of all claims against NMESC, its affiliates and insiders. Underhill v. Royal, supra, 769 F.2d at 1429-30.
Eighty-nine percent of the creditors approved the plan; Underhill, however, raised objections to the release provision. The bankruptcy court confirmed the plan, explicitly *248 leaving to the district court hearing the class action a ruling on the scope and enforceability of the release provision. Id. at 1430. The Ninth Circuit rendered its opinion on appeal of, among other matters, the district court's ruling that the claims release was unenforceable.
Generally, discharge of the principal debtor in bankruptcy will not discharge the liabilities of co-debtors or guarantors. 11 U.S.C. § 524(e) provides: "Except as provided in subsection (a)(3) of this section, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt." This section of the 1978 Bankruptcy Reform Act was a reenactment of Section 16 of the 1898 Act which provided that "[t]he liability of a person who is a co-debtor with, or guarantor or in any manner a surety for, a bankrupt shall not be altered by the discharge of such bankrupt." Act of July 1, 1898, ch. 541 § 16, 30 Stat. 550 (formerly codified at 11 U.S.C. § 34 (1976)).
In addition, the Bankruptcy Act of 1898, as amended, provided that a corporation's discharge in bankruptcy "shall not release its officers, the members of its board of directors or trustees or of other similar controlling bodies, or its stockholders or members, as such, from any liability under the laws of a State or of the United States." Act of June 22, 1938, ch. 575, § 4(b), 52 Stat. 845 (formerly codified at 11 U.S.C. § 22(b)(1976)). Thus, under the old Act, stockholders or directors could remain liable for substantive violations despite discharge of the corporate entity. 1A J. Moore Collier on Bankruptcy Para. 16.14, at 1551 (14th ed. 1978).
The above statutory provisions underscore the limitations on the bankruptcy court. When a bankruptcy court discharges the debtor, it does so by operation of the bankruptcy laws, not by consent of the creditors. Union Carbide Corp. v. Newboles, 686 F.2d 593, 595 (7th Cir.1982) (per curiam). See also In re Kornbluth, 65 F.2d 400, 401 (2d Cir. 1933). "The import of Section 16 [of the 1898 Act] is that the mechanics of administering the federal bankruptcy laws, no matter how suggestive, do not operate as a private contract to relieve co-debtors of the bankrupt of their liabilities." Union Carbide, 686 F.2d at 595 (citing R.I.D.C. Industrial Development Fund v. Snyder, 539 F.2d 487, 490 n. 3 (5th Cir.1976), cert. denied, 429 U.S. 1095, 97 S.Ct. 1112, 51 L.Ed.2d 542 (1977)); Beconta, Inc. v. Schneider, 41 B.R. 878, 879 (D.C. E.D.Mich.1984). Consequently, "the payment which effects a discharge is not consideration for any promise by the creditors, much less for one to release non-party obligors." Union Carbide, 686 F.2d at 595.
Underhill v. Royal, supra, 769 F.2d at 1432.
In the case of In re Future Energy Corporation, 83 B.R. 470 (S.D.Ohio 1988), Future Energy Corporation ("Future") was engaged in the business of oil and gas exploration and development. Future operated the wells under arrangements with limited partnerships or other entities involved in drilling and completion programs. By early 1986, Future had incurred large losses and owed substantial sums to its trade creditors. In late 1986 and early 1987, Krutex Energy Corporation ("Krutex") commenced negotiations with the principals of Future regarding the acquisition of 100% of the outstanding shares of Future. The deal between Future and Krutex was consummated, thereby making Future a wholly-owned subsidiary of Krutez prior to the filing for Chapter 11 relief.
In January 1987, Canyon Development Corporation ("Canyon"), a corporation which had been formed for the purpose of acquiring control of Future, purchased several claims of Future's creditors in an attempt to obtain Future's assets. At this time, Canyon was acting independently of Krutex in attempting to gain control of Future's assets.
Prior to the filing of Future's Chapter 11 petition on February 10, 1987, Krutex engaged in several transactions which were intended to facilitate the formulation of a plan of reorganization and the ultimate rehabilitation *249 of Future. These transactions consisted of receiving assignments of claims held against Future by creditors, and cash infusion into Future to satisfy several claims held by BancOhio. Subsequent to the filing of Future's Chapter 11 petition, Krutex continued to negotiate with various creditors of Future in an attempt to obtain assignments of their claims. It was during this time that Krutex first became aware that Canyon was also purchasing the claims of Future's creditors. Canyon planned to acquire Future's assets by obtaining the secured positions of Future's creditors and then proceeding with state court foreclosure actions. Thus, a bidding war had developed between Krutex and Canyon over the control of Future's assets.
Krutex determined that the time and expense involved in attempting to successfully reorganize Future would be increased unnecessarily if the competition between Krutex and Canyon continued. Accordingly, Krutex and Canyon commenced a series of negotiations which culminated in an August 19, 1987 sale by Krutex to Canyon of 80% of the outstanding common shares of Future. The three entities; Future, Krutex, and Canyon, jointly proposed a Chapter 11 plan of reorganization.
Two creditors of Future objected to the proposed plan on the basis that it improperly provided for the release of potential claims against third parties, i.e., Krutez and Canyon in violation of § 524(e). The release provision objected to purports to release Krutez and Canyon from all claims and causes of actions held by third parties receiving distributions under the plan. The release provision provides in relevant part as follows:
Any creditor receiving distributions pursuant to this plan shall be conclusively presumed to have fully released Future, Krutez, Canyon and their affiliates for any debt for which such distributions are received. Such release shall be given in consideration of the funding of this plan by Krutez and Canyon and shall be enforceable against any claimant receiving distributions as a matter of contract. Acceptance of distributions pursuant to this plan of reorganization by any holder of an allowed claim or allowed interest shall constitute, except as set forth herein, a full, complete, final and binding release of any and all claims, actions or causes of actions, now or heretofore existing, whether asserted or unasserted, as to Future, Krutez, Canyon and their affiliates.
In re Future Energy Corporation, 83 B.R. 470 (S.D.Ohio 1988). The bankruptcy court held that since the release provision purported to release Krutez and Canyon from liability on Future's debts, and from all other potential claims and causes of action, that aspect of the plan violated § 524(e) and, thereby, caused the plan to run afoul of § 1129(a)(1). In re Future Energy Corporation, supra, citing, Union Carbide Corp. v. Newboles, 686 F.2d 593, 595 (7th Cir.1982); Underhill v. Royal, 769 F.2d 1426, 1432 (9th Cir.1985); In re Eller Brothers, Inc., 53 B.R. 10, 12 (Bkrtcy.M.D. Tenn.1985); In re L.B.G. Properties, Inc., 72 B.R. 65, 66 (Bkrtcy.S.D.Fla.1987). See also In re Sanders, 81 B.R. 496, 499 (Bank. W.D.Ark.1987); In re Scranes, 67 B.R. 985, 989 (Bank.N.D.Ohio 1986); In re Sago Palms Joint Venture, 39 B.R. 9 (Bank.S.D. Fla.1984).
In Stoll v. Gottlieb, 305 U.S. 165, 59 S.Ct. 134, 83 L.Ed. 104, reh'g denied, 305 U.S. 675, 59 S.Ct. 250, 83 L.Ed. 437 (1938), the United States Supreme Court was faced with an issue regarding the conclusiveness of a reorganization plan which released the guarantor from his obligation, assuming the bankruptcy court did not have jurisdiction of the subject matter of the order, the release in reorganization of a guarantor from his guarantee of the debtor's obligations. The Supreme Court stated:
A court does not the power, by judicial fiat, to extend its jurisdiction over matters beyond the scope of the authority granted to it by its creators. There must be admitted, however, a power to interpret the language of the jurisdictional instrument and its application to an issue before the court. Where adversary parties appear, a court must have the power *250 to determine whether or not it has jurisdiction of the person of a litigant, or whether its geographical jurisdiction governs the place of the occurrence under consideration. Every court in rendering a judgment, passively, if not expressly, determines its jurisdiction over the parties and the subject matter. An erroneous affirmative conclusion as to the jurisdiction does not in any proper sense enlarge the jurisdiction of the court until passed upon by the court of last resort, and even then the jurisdiction becomes enlarged only from the necessity of having a judicial determination of the jurisdiction over the subject matter. When an erroneous judgment, whether from the court of first instance or from the court of final resort, is pleaded in another court or another jurisdiction the question is whether the former judgment is res judicata.
Stoll v. Gottlieb, supra, 59 S.Ct. at 137.
The Supreme Court went on to hold that the order of the bankruptcy court confirming the plan of reorganization which provided for the releases of guarantees was res judicata in a subsequent action to recover on the guarantees. Stoll v. Gottlieb, supra, 59 S.Ct. at 139-40. Accord, Republic Supply Co. v. Shoaf, 815 F.2d 1046 (5th Cir.1987).
In the case at bar, the plan provides that in consideration for past and future services and other valuable consideration, Elsinore, Hyatt Tahoe, and Four Queens, and all present and former employees, officers, directors and stockholders thereof, and all employees, officers, directors, stockholders and partners of the debtor shall be deemed discharged and released from any and all claims. (Article 25.4 of Debtors' Third Amended Plan).
The provisions of the plan also requires the Unsecured Creditors' Committee by its counsel execute and deliver a general release to Elsinore on the Effective Date. These releases are not voluntary releases given in favor of non-debtor plan funders, but are sought over the objections of dissenting creditors. Such releases have no basis in existing bankruptcy law.
In the case of Monroe Well Service, Inc., 80 B.R. 324 (Bankr.E.D.Pa.1987), there were five inter-related debtors that were in the business of putting together limited partnerships for oil drilling ventures. Once the investors were obtained and the limited partnership formed, one of the debtors would undertake oil exploration, drill oil wells, and operate them. Other debtors would provide equipment, own some of the wells and act as general partners. When oil prices declined during the 1980's, the debtors were forced to seek protection under Chapter 11 of the United States Bankruptcy Code.
The debtors' financial problems had significant consequences for those financially connected to the debtor entities. Continental Bank, who was involved in financing the debtors' operations, found itself the target of a multi-million dollar lawsuit brought by a class of limited partners in the debtors' ventures. Sheldon S. Somerman, the principal of the debtor entities, had personally guaranteed corporate obligations and some creditors anxious to collect on those guarantees initiated an involuntary petition against him. Oil wells, of which the limited partnerships owned the mineral rights or their working interests, were subject to the liens of mechanics and materialmen. The mechanics and materialmen were unsecured creditors of the debtors but secured creditors of the nondebtor limited partnerships.
Continental Bank, the official committee of limited partnerships, and Somerman had joined forces in an attempt to resolve most, if not all, of their respective disputes surrounding the affairs of the debtors within the context of the Chapter 11 proceedings. They proposed a plan which, upon confirmation, was designed to put an end to various claims and litigation involving nondebtors. Each of these nondebtor entities provided funds to implement the plan. The plan itself placed all unsecured creditors into one class for voting purposes. Creditors could opt into one or more voluntary nonvoting classes in exchange for granting releases to the nondebtors. Funds provided by the nondebtors would be distributed *251 only to members of the optional classes. Electing unsecured creditors would receive about 7% of their claims, while non-electing creditors would only receive .4%.
Objections to the plan were raised in the context of objections to the disclosure statement submitted by the debtors and the plan proponents. Since virtually all of the structural objections were dependent upon the distributions to be made to creditors, the court deferred ruling upon these objections until the confirmation hearing. All parties to the proceedings, however, believed that the question whether a plan of reorganization can provide for voluntary releases of nondebtors could be determined by the court. The dispute surrounding this issue was deemed purely a legal issue by the parties to the proceeding, which was both capable of being addressed at hearing on disclosure and that, in the interest of economy, should be addressed. The court stated that this issue was somewhat connected with the question of claim classification which can be addressed prior to a confirmation hearing. In re Monroe Well Service, Inc., 80 B.R. 324, 333 (Bkrtcy.E.D. Pa.1987); Bankruptcy Rule 3013. Thus, the bankruptcy court deemed this issue ripe for determination. Id.
The court in Monroe Well relied upon In re AOV Industries, Inc., 792 F.2d 1140 (D.C.Cir.1986), which upheld, in part, an order confirming a plan of reorganization which provided for voluntary releases by creditors in favor of nondebtor plan funders. The Monroe Well court agreed with the objectors to the proposed plan, in that, under § 524(e) the debtors could not obtain confirmation of a plan which would attempt, over their objection, to discharge the obligations of nondebtors, such as guarantors. In re Monroe Well Service, Inc., supra, 80 B.R. at 334. The court further stated:
As with the plan here, the plan in AOV Industries made no attempt to release any claim held by a creditor against a nondebtor over the wishes of that individual creditor. Each creditor was permitted to render an individual decision whether to provide a release to a nondebtor in return for payment provided by a nondebtor plan funder. In AOV Industries, the District Court concluded that, so long as the release is purely voluntary and the will of the majority of creditors cannot force dissenting creditors to provide releases, compare Union Carbide v. Newboles, the nondebtor plan funders will not receive a discharge and the debtor's discharge did not, by itself, affect the rights of creditors vis-a-vis those plan funders. In re AOV Industries, Inc., 31 B.R. 1005, 1010-1011 (D.D.C.1983) aff'd in part 792 F.2d 1140 (D.C. Cir.1986). I agree; a plan provision permitting individual creditors the option of providing a voluntary release to nondebtor plan funders does not violate 11 U.S.C. § 524(e).
In re Monroe Well Service, Inc., supra 80 B.R. at 334-35.
Even though both the District of Columbia Circuit in AOV and the bankruptcy court in Monroe Well would permit voluntary releases of nondebtor funders of the plan, such release provisions must also meet the requirements of § 1123(a)(4). In re Monroe Well Service, Inc., supra, 80 B.R. at 335. Section 1123(a)(4) provides:
(a) Notwithstanding any otherwise applicable nonbankruptcy law, a plan shall
. . . .
(4) provide the same treatment for each claim or interest of a particular class, unless the holder of a particular claim or interest agrees to a less favorable treatment of such particular claim or interest.
The Monroe Well court noted that the Court of Appeals for the District of Columbia Circuit in AOV concluded that equality of treatment of members of a class as contemplated by § 1123(a)(4) is not provided by permitting each creditor of that class to opt to provide a release and receive the same pro rata distribution on its claim. In re Monroe Well Service, Inc., supra, 80 B.R. at 335. Rather, the Court of Appeals stated:
*252 Even though neither the Code nor the legislative history precisely defines the standards of equal treatment, the most conspicuous inequality that § 1123(a)(4) prohibits is payment of different percentage settlements to co-class members. The other side of the coin of unequal payment, however, has to be unequal consideration tendered for equal payment. It is disparate treatment when members of a common class are required to tender more valuable consideration be it their claim against specific property of the debtor or someother cignizable chose in action in exchange for the same percentage of recovery.
In re AOV Industries, Inc., supra, 792 F.2d at 1152. See also, In re Monroe Well Service, Inc., supra, 80 B.R. at 335.
This is not to be interpreted as requiring precise equality of treatment, but rather, some approximate measure since there is no statutory obligation upon plan proponents to quantify exactly what each class member is relinquishing by a release. In re Monroe Well Service, Inc., supra, 80 B.R. at 335. As the Court of Appeals stated in AOV:
We do not hold that all class members must be treated precisely the same in all respects. Nothing in this opinion restricts the bankruptcy court's broad discretion to approve classification and distribution plans, even though some class members may have disputed claims, or a stronger defense than others.
In re AOV Industries, Inc., supra, 792 F.2d at 1154. See also, In re Monroe Well Service, Inc., supra, 80 B.R. at 335.
Although Monroe Well and AOV purport to allow releases of non-debtors, both decisions involve releases which were voluntarily given by creditors. The district court's decision in AOV Industries, Inc., 31 B.R. 1005 (D.C.1983), aff'd in part 792 F.2d 1140 (D.C.Cir.1986) noted the following:
. . . the debtor argues that there has been no "discharge" of Steag or Sleigh [non-debtor plan funders] as that term is defined under the Bankruptcy Code, 11 U.S.C. § 524, and, that therefore, the principle set forth in [First Nat. Bank of Herkimer v. Poland Union [109 F.2d 54] is inapposite to the present case. Rather than granting a discharge, the plan provides that any creditor may individually and voluntarily release Steag and Sleigh of any alleged liability in return for the extremely valuable consideration tendered by Steag and Sleigh. Hawley and Bruce [objecting creditors] are completely free to pursue any rights they may have against these entities. Release of these rights was not even tied to acceptance or rejection of the planl, although the debtors argue that it might legally have been.
31 B.R. at 1010.
A voluntary election to release non-debtors is not present in the present plan before the court. The release provisions require that Elsinore, Hyatt Tahoe, Four Queens, among others, shall be deemed discharged and released from any and all claims. See Article 25.4 of the Debtors' Third Amended Joint Plan of Reorganization. Additionally, as a condition precedent to effective date, the official committee of unsecured creditors, by its counsel, shall execute and deliver a general release to Elsinore on the effective date. See Article 24.3 of the Debtors' Third Amended Joint Plan of Reorganization.
Because the plan provisions in the instant case are distinguishable from the plan provisions involved in Monroe Well and AOV, those cases are inapposite to the proceedings presently before this court, and, accordingly, the release provisions in the Plan are prohibited by the Bankruptcy Code and relevant case law.
The debtors urge that this court adopt the reasoning of the court in MacArthur Co. v. Johns-Manville Corporation, 837 F.2d 89 (2d Cir.1988) and In re Johns-Manville Corporation, 801 F.2d 60 (2d Cir. 1986), to the case at bar.
In the case of MacArthur Co. v. Johns-Manville Corporation, 837 F.2d 89 (2d Cir. 1988), MacArthur Company and Western MacArthur Company ("MacArthur"), a distributor of Manville's asbestos products, was a coinsured under some of Manville's insurance policies pursuant to "vendor endorsements." *253 MacArthur objected to the Bankruptcy Court's approval of the insurance settlements on the ground that the proposed injunctions would impair its rights under the vendor endorsements. Nonetheless, the Bankruptcy Court dismissed MacArthur's objections, approved the settlements and enjoined all suits against the insurers. MacArthur appealed, contending primarily that the Bankruptcy Court lacked jurisdiction and authority to enjoin suits against Manville's insurers. MacArthur argued that the injunctive orders constitute a de facto discharge in bankruptcy of nondebtor parties not entitled to the protection of Chapter 11. See MacArthur Co. v. Johns-Manville Corp., supra, 837 F.2d at 91.
Johns-Manville filed for Chapter 11 relief largely in response to its potential liability to persons with latent asbestos-related disease caused by Manville's asbestos products. This liability has the potential to reach more than two billion dollars. The Second Circuit noted:
At the time of its Chapter 11 filing, Manville was engaged in extensive litigation with its insurance carriers concerning its coverage for asbestos-related liabilities. In order to avoid the uncertainty of the insurance litigation and to provide funding for its plan of reorganization, Manville endeavored to settle its insurance claims. Between 1984 and 1986, the insurers agreed to settle with Manville for approximately $700 million. The settlements provided that, in exchange for cash payments, the insurers would be relieved of all obligations related to the disputed policies and the insurers would be protected from claims based on such obligations by injunctive orders of the Bankruptcy Court. The insurers are entitled to terminate the settlements if the injunctive orders are not issued or if they are set aside on appeal. Since the insurance settlements are a cornerstone of Manville's proposed plan of reorganization, see Johns-Manville Corp. v. Asbestos Litigation Group (In re Johns-Manville), 33 B.R. 254, 267 (Bankr.S.D. N.Y.1983), the Bankruptcy Court's orders are a critical part of the entire reorganization.
In re Johns-Manville Corp., supra, 837 F.2d at 90.
The Second Circuit Court of Appeals held that any rights MacArthur had in Manville's insurance policies as an insured vendor are completely derivative of Manville's rights as the primary insured. MacArthur Co. v. Johns-Manville Corp, supra, 837 F.2d at 92. Such derivative rights are no different from those of asbestosis victims who have already been barred from asserting direct actions against the insurers. Id. MacArthur seeks to collect out of proceeds of Manville's insurance policies on the basis of Manville's conduct, just as asbestosis victims. Id. at 92-93. In both cases, plaintiffs' claims are inseparable from Manville's own insurance coverage and are consequently well within the bankruptcy court's jurisdiction over Manville's assets, namely the insurance policies, under § 541. Id. at 93, citing, In re Davis, 730 F.2d 176, 183 (5th Cir.1984). The Second Circuit determined that the bankruptcy court properly exercised jurisdiction over the insurance policies and further held that the bankruptcy court did not exceed its authority in approving settlements thereby channeling claims arising under the policies to the proceeds of the settlement. MacArthur Co. v. Johns-Manville, supra, 837 F.2d at 93.
ESA contends that if a bankruptcy court has the power to enjoin suits against non-debtor third parties, as in Johns-Manville, it has the power to order the release of claims. Such an interpretation and extension of the Second Circuit's holding is inappropriate. The bankruptcy court in Johns-Manville was dealing with claims against property of the estate under § 541, which are subject to the court's jurisdiction. The Second Circuit stated:
Numerous courts have determined that a debtor's insurance policies are property of the estate, subject to the bankruptcy court's jurisdiction. During earlier proceedings in the present case, the Bankruptcy Court held that the automatic stay provisions of the Code, 11 U.S.C. *254 § 362(a) (1982 & Supp. IV 1986), which prevents suits against the debtor or his property after a petition is filed, authorized an injunction that barred claims by asbestos victims against Manville's insurers in jurisdictions allowing direct actions against the insurers. Johns-Manville Corp. v. Asbestos Litigation Group (In re Johns-Manville), supra, 26 B.R. [420] at 435-36 (on rehearing), aff'd, 40 B.R. [219] at 230-31. The Court found that Manville's insurance policies and their proceeds were "substantial property of the Manville estate which will be diminished if and to the extent that third party direct actions against the insurance carriers result in plaintiffs' judgments." 26 B.R. at 435. The Fifth Circuit has followed this analysis, enjoining suits against Manville's insurers in Louisiana, a state that permits direct actions. See In re Davis, 730 F.2d 176, 184 & n. 25 (5th Cir.1984). Other courts are in agreement. E.g., A.H. Robbins Co. v. Piccinin (In re A.H. Robbins Co.), 788 F.2d 994, 1001-02 (4th Cir.), cert. denied, 479 U.S. 876, 107 S.Ct. 251, 93 L.Ed.2d 177 (1986); Pearl-Wick Corp. v. John Hancock Mutual Life Insurance Co. (In re Pearl-Wick Corp.), 15 B.R. 143, 148 (Bankr.S.D.N.Y.1981), aff'd, 26 B.R. 604 (S.D.N.Y.), aff'd, 697 F.2d 295 (2d Cir. 1982); In re Moskowitz, 13 B.R. 357, 360 (Bankr.S.D.N.Y.1981); Brenham v. Deerfield Organization, Inc. (In re Norman Industries), 1 B.R. 162, 166 (Bankr. W.D.La.1979).
MacArthur Co. v. Johns-Manville Corp., supra, 837 F.2d at 92.
The injunctive orders issued by the bankruptcy court were necessary to effectuate the court's channeling authority, that is, to make sure that claims to Manville's insurance proceeds were, in fact, channeled to the settlement fund and could not be asserted directly against the insurers. MacArthur Co. v. Johns-Manville Corp., supra, 837 F.2d at 93. As additional authority for the injunctions, the Second Circuit cited § 105(a), which permits the bankruptcy court to "issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title." 11 U.S.C. § 105(a). The bankruptcy court in Manville found as a fact that to permit actions against Manville's insurers arising from Manville's policies would adversely affect property of the estate and would interfere with the reorganization. MacArthur Co. v. Johns-Manville, supra, 837 F.2d at 93, citing, Johns-Manville Corp. v. Asbestos Litigation Group, 26 B.R. 420, 435-36 (Bankr.S.D.N.Y.1983), aff'd, 40 B.R. 219 (S.D.N.Y.1984). Thus, the injunctions issued were warranted.
In the instant case, ESA requests, in the alternative, an injunction by this court against creditors of ESA enjoining them from pursuing actions against third party plan funders. To extend the holding in Johns-Manville to this situation is based neither in law nor logic. This court may properly invoke its jurisdiction over creditors of ESA when these creditors' actions may effect property of the estate. However, for this court to delve into the rights of these creditors against third parties not before this court is an over-extension of this court's jurisdiction. Additionally, to cloak such action under the guise of this court's equitable power under § 105 would result in an exercise of unfounded judicial fiat.
ESA further urges this court that it may use its equitable powers under § 105 to enjoin proceedings in other courts to insure the efficient administration of the estate, citing In re Johns-Manville Corporation, 801 F.2d 60, 64 (2d Cir.1986). In that case, the debtor and the Legal Representative of future tort claimants came to terms in formulating a plan that would earmark billions of dollars for payment to present and future asbestos is victims as well as other creditors. The proposed plan would dilute the equity in the debtor by 90% or more. Displeased with that prospect, the Equity Committee brought an action in Delaware state court seeking to compel Manville to hold a shareholders' meeting with the avowed purpose of replacing Manville directors so that new directors might reconsider submitting the proposal plan.
*255 On Manville's motion, the bankruptcy court issued an injunction prohibiting the Equity Committee from pursuing the Delaware action on the ground that the holding if the shareholders' meeting would obstruct Manville's reorganization. The district court affirmed. On appeal, the Equity Committee argued, among other things, that the district court erred in finding that the bankruptcy court had jurisdiction to issue the injunction.
In finding that the bankruptcy court had jurisdiction to issue the injunction, the Second Circuit stated:
Injunctions are authorized under 11 U.S.C. § 105(a) (1982), which empowers the bankruptcy court to issue any order necessary or appropriate to carry out the provisions of the Code, including orders restraining actions pending elsewhere. See In re Davis, 730 F.2d 176, 183-84 (5th Cir.1984) ("[A] bankruptcy court is authorized, once jurisdiction is established, to `issue any order, process, or judgment that is necessary to appropriate to carry out the provisions of this title.' This provision includes the authority to enjoin litigants from pursuing actions pending in other courts that threaten the integrity of a bankrupt's estate."). Section 105(a) does not, however, broaden the bankruptcy court's jurisdiction, which must be established separately under 28 U.S.C. § 157 (Supp. II 1984) 11 U.S.C. § 105(c) (Supp. III 1985).
In re Johns-Manville Corp., supra, 801 F.2d at 63. The bankruptcy court found that the request for an injunction was a core proceeding, encompassing "`[m]atters concerning the administration of the estate.'" Id. at 63-4, citing, In re Johns-Manville Corp., 52 B.R. 879, 890 (Bankr.S. D.N.Y.1985). The Equity Committee contended that such proceedings were non-core and therefore, the bankruptcy court was without jurisdiction. The Second Circuit stated:
if the bankruptcy court may ever use its equitable powers under section 105(a) to enjoin actions pursued in other courts as "concerning the administration of the estate" under section 157(b)(2)(A), it may exercise that power where there is a basis for concluding that rehabilitation, the very purpose for the bankruptcy proceedings, might be undone by the other action. We therefore conclude that the bankruptcy court had jurisdiction to issue the injunction.
In re Johns-Manville Corp., supra, 801 F.2d at 64.
The Manville court properly invoked jurisdiction because the matter was a core proceeding under 28 U.S.C. § 157(b)(2)(A). To extend this jurisdiction over non-debtor third parties by granting a release, regardless of its effect on the administration, is beyond this court's jurisdiction grant of authority. In the case of In re A.J. Mackay Company, 50 B.R. 756, 762-63 (D.Utah 1985), the court noted:
In a Chapter 11 case, the only properly invoked jurisdiction is that over the debtor himself and his property. To hold that the bankruptcy court also has jurisdiction over anyone that might "pressure" the debtor or over any property that might "assist" the debtor in reorganizing is to expand jurisdiction beyond limit. Jurisdiction exists only over the debtor and his property, and no further.
. . . . .
Some courts have identified 11 U.S.C. § 105 as a source of jurisdictional power to stay creditor actions against non-bankrupt codebtors. See, e.g., In re Landmark Air Fund II, 19 B.R. 556, 599 (Bankr.N.D.Ohio 1982). While that may be true for temporary stays that terminate when a plan is confirmed, it is not true for a stay which is embodied in a confirmed plan or which extends beyond confirmation. A bankruptcy court judgment must be based on either in rem or in personam jurisdiction that has been properly invoked. Section 105 does not supplant that requirement. Instead, the broad, rather vague, jurisdictional powers of § 105 are constrained by that fundamental jurisdictional requirement.
As long as the protection ends at confirmation, the power to stay creditors is similar to the power to subpoena non-party witnesses or to impose sanctions *256 against non-party witnesses who are in civil contempt. Such powers are necessary to enable a court to properly conduct the adjudicatory process. They are procedural powers, not substantive powers. They must be used only to properly proceed to a final judgment, and can have no effect on the final judgment or after the final judgment. Consequently, while a stay may be an appropriate exercise of power in extraordinary cases to enable a proposed plan to be prepared, it cannot be a part of a confirmed plan. Cf. In re Larmar Estates, Inc., 5 B.R. 328, 331 (Bankr.E.D.N.Y.1980) (noting that the issue was whether a stay could issue until a plan was confirmed or the case was converted to a Chapter 7 case).
50 B.R. at 762-63.
The present release and discharge provisions of the plan stand as an obstacle to confirmation of the plan as presently constituted. In the event that the plan is capable of amendment consistent with this court's ruling the court will rule upon the other elements of § 1129(a).
The debtors seek in this matter confirmation under § 1129(a). Accordingly, the court must examine the various other requirements of that subsection.
Section § 1129(a)(1) provides:
(a) The court shall confirm a plan only if all of the following requirements are met:
(1) The plan complies with the applicable provisions of this title.
As set forth above, the present release and discharge provisions of the amended plan violate § 524(e) of the Bankruptcy Code and accordingly violate § 1129(a)(1). This court must also here determine whether the plan complies with other applicable provisions.
Section 1122 of the Bankruptcy Code requires:
(a) Except as provided in subsection (b) of this section, a plan may place a claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interest of such claims.
(b) A plan may designate a separate class of claims consisting only of every unsecured claim that is less than or reduced to an amount that the court approves as reasonable and necessary for administrative convenience.
Section 1122 of the Code requires that all claims which are classed together be substantially similar. Such a requirement insures that large claims of a differing legal natures do not dictate the other claims within a class. Matter or Rochem, Ltd., 58 B.R. 641, 642 (Bankr.D.N.J.1985).
As set forth at length above the plan consists of twelve classes of claims and interests, with varying payment provisions. The court finds that the claims of each class are substantially similar to meet the requirements of § 1122(a).
A plan must also comply with the requirements of § 1123 which provides:
(a) Notwithstanding any otherwise applicable nonbankruptcy law, a plan shall
(1) designate, subject to section 1122 of this title, classes of claims, other than claims of a kind specified in section 507(a)(1), 507(a)(2), or 507(a)(7) of this title and classes of interests;
(2) specify any class of claims or interests that is not impaired under the plan;
(3) specify the treatment of any class of claims or interests that is impaired under the plan;
(4) provide the same treatment for each claim or interest of a particular class, unless the holder of a particular or interest agrees to a less favorable treatment of such particular claim or interest;
(5) provide adequate means for the plan's implementation, such as
(A) retention by the debtor of all or any part of the property of the estate;
(B) transfer of all or any part of the property of the estate to one or more entitles, whether organized before or after the confirmation of such plan;
(C) merger or consolidation of the debtor with one or more persons;
*257 (D) sale of all or any part of the property of the estate, either subject to or free of any lien, or the distribution of all or any part of the property of the estate among those having an interest in such property of the estate;
(E) satisfaction or modification of any lien;
(F) cancellation or modification of any indenture or similar instrument;
(G) curing or waiving of any default;
(H) extension of a maturity date or a change in an interest rate or other term of outstanding securities;
(I) amendment of the debtor's charter; or
(J) issuance of securities of the debtor, or of any entity referred to in subparagraph (B) or (C) of this paragraph, for cash, for property, for existing securities, or in exchange for claims or interests, or for any other appropriate purpose;
(6) provide for the inclusion in the charter of the debtor, if the debtor is a corporation, or of any corporation referred to in paragraph (5)(B) or (5)(C) of this subsection, of a provision prohibiting the issuance of nonvoting equity securities, and providing, as to the several classes of securities possessing voting power, an appropriate distribution of such power among such classes, including, in the case of any class of equity securities having a preference over another class of equity securities with respect to dividends, adequate provisions for the election of directors representing such preferred class in the event of default in the payment of such dividends; and
(7) contain only provisions that are consistent with the interests of creditors and equity security holders and with public policy with respect to the manner of selection of any officer, director, or trustee under the plan and any successor to such officer, director, or trustee.
11 U.S.C. § 1123(a).
Claims and interests are classified in Article 5 of the plan.
Article 19 identifies claims and equity interests not impaired by the plan. Articles 7, 8, and 10 through 17, inclusive, specify the treatment of impaired classes. Each claim or interest of a particular class is afforded the same treatment under the plan. Adequate means for the plan's implementation are set forth as follows:
The means for execution of the Plan are further set forth in Article 2. Specifically, as contemplated under section 1123(a)(5), the Plan provides that new financing will be obtained through the mortgaging of the Western properties. The debtor entities shall be restructured in the manner provided in Article 2, § 2.2 of the Plan. The Elsinore Subrogation Claims shall be evidenced by the delivery of the Elsinore Note to Elsinore and the assignment of the EFC Note to Elsinore as collateral for EFC's obligations under the Elsinore Note. All rights under the Elsinore Note shall be subordinate to the rights under the New Indenture and the New Senior Mortgage Bonds (Article 2, § 2.3 of the Plan). Additionally, ESA shall enter into a Parent Services Agreement with Elsinore (Article 2, § 2.4 of the Plan).
Certain conditions precedent to the closing and consummation of the Plan have been enumerated in Article 24 of the Plan. Section 24.1 provides that ESA obtain all the requisite regulatory and gaming approvals in the State of New Jersey and Nevada. Section 24.2 requires the dismissal with prejudice on confirmation of certain litigation commenced by the Indenture Trustee against Elsinore and all other litigation by or on behalf of Senior Mortgage Bondholders and Indenture Trustee against the Proponents. Section 24.2 provides for execution and delivery of the Rescission Agreement to Elsinore. Section 24.3 provides for the execution and delivery of various releases and discharges. Section 24.4 requires the affirmative vote with respect to adoption of the Plan by 95 percent in principal amount of the Senior Mortgage Bonds and of the Subordinated Debentures. All conditions precedent to the Western Refinancing must be completed pursuant to section 24.5. All necessary consents and approvals under the Elsinore Subordinated *258 Indenture for the transactions contemplated by the Plan shall be completed pursuant to section 24.6. Certain Charter and ESA Partnership Agreement amendments must be executed pursuant to sections 24.10 through 24.12. The Playboy District Court Action, Bankruptcy Court Action and the Elsub involuntary chapter 11 case shall be dismissed with prejudice by Playboy under section 24.8. The New Indenture must be duly executed and delivered into escrow under section 24.9.
In accordance with section 1123(a)(6), amendments of the charters of the corporate Debtors to prohibit the issuance of non-voting equity securities are required under section 24.7. Finally, in compliance with section 1123(a)(7), the Plan contains only provisions consistent with the interests of creditors and equity security holders as well as public policy with respect to the manner of selection of any officer, director or trustee under the Plan.
Section 1123(b) specifies five permissive provisions that may be included in the Plan. Subsection (1) provides that a plan may impair or leave unimpaired any class of secured or unsecured claims or interests. As noted above, Article 19 of the Plan identifies two unimpaired classes; all other classes are impaired, the treatment of which is set forth in Articles 7, 8 and 10 through 17, inclusive.
The plan identified two unimpaired classes, leaving all other classes impaired, as allowed by § 1123(b)(1); Article 20 of the plan provides for the assumption of executory contracts and unexpired leases, as allowed by § 1123(b)(2); the plan provides for settlement of a certain land sale rescission, as allowed by § 1123(b)(3). Accordingly, the plan satisfies § 1122 and § 1123 of Title 11.
Section § 1129(a)(2) requires that "the proponent of the plan complies with the applicable provisions of this title. In the case at bar this Court on December 23, 1987 entered an order approving the adequacy of the Disclosure Statement relating to the plan before this court, pursuant to 11 U.S.C. § 1125(b). Affidavits of mailing have been filed with ths court on February 8, 1988 indicating that a copy of the Disclosure Statement, debtor's third amended joint plan, and ballots were mailed to each known holder of an impaired claim or interest as required by § 1125. Accordingly, the requirements of § 1129(a)(2) are met.
11 U.S.C. § 1125(b) provides:
(b) An acceptance or rejection of a plan may not be solicited after the commencement of the case under this title from a holder of a claim or interest with respect to such claim or interest, unless, at the time of or before such solicitation, there is transmitted to such holder the plan or a summary of the plan, and a written disclosure statement approved, after notice and a hearing, by the court as containing adequate information. The court may approve a disclosure statement without a valuation of the debtor or an appraisal of the debtor's assets.
The Funds assert herein as an objection to confirmation that "the said plan of Reorganization should not be confirmed since the acceptances thereto were obtained by a false and misleading Disclosure Statement, the approval of which is on appeal. No order of confirmation should be entered until that appeal is decided", and that the bankruptcy court has set a hearing on confirmation without deciding various litigation that has been filed with the said court and has not been heard by the court, or if heard, has not been decided by the court, including, but not limited to: (a) a motion originally filed by the Funds for appointment of a trustee, and; (b) a motion filed by ESA for rescission of a real estate transaction which has been fully tried and briefed.
This court by an oral decision made of record on December 1, 1987 directed certain amendments to the Disclosure Statement, which were complied with, and subsequently by order of December 23, 1987 approved that Disclosure Statement, with further modifications made on the record that date. That order was appealed to the United States District Court.
The United States District Court by a written opinion dated February 3, 1988 ruled that the order approving the Third *259 Amended Disclosure Statement was an interlocutory order from which the Funds had no right of appeal. While the Funds have a right to seek a further appeal of that decision, this court finds no grounds for a stay of enforcement of its December 23, 1987 order approving the debtors' disclosure statement and setting the matter down for a confirmation hearing, or a suspension of proceedings under § 305. This court may stay enforcement of an order or stay proceedings generally. The issuance of a stay pending appeal is governed by Bankruptcy Rule 8005. Stays pending appeal are in the nature of a preliminary injunction and the standard is similar:
(1) The applicant must make a strong showing that he is likely to succeed on the merits of the appeal;
(2) The applicant must show that unless the stay is granted, he will suffer irreparable injury;
(3) The applicant must show that no substantial harm will be suffered by other uninterested parties;
(4) The granting of the stay will not harm the public interest.
See In re Great Barrington Fair & Amusement Inc., 53 B.R. 237, 239 (Bank. D.Mass.1985). The first prong puts the court in the position of reviewing its own order. The standards for approval of a disclosure statement and what constitutes adequate information was set forth at length in this court's opinion rendered on the record on December 1, 1987. The court will incorporate those findings in this record. The district court on appeal found no right to appeal, based upon a finding that the order at issue of December 23, 1987 was interlocutory. On a review of both those opinions this court finds that the Funds have failed to make a sufficient showing that they will succeed on appeal. More critically the Funds have failed to show that they will be irreparably harmed by a denial of the stay. The issues raised by the Funds in its motion and its objection to approval of the disclosure statement are addressed by the confirmation process. On the other hand, if a stay is granted, the other interested parties, including the debtors, its other creditors and the public will suffer harm by the delay caused by such a stay. See e.g. In re Great Barrington Fair & Amusement Inc., 53 B.R. at 240.
A delay of proceedings will substantially harm creditors and the debtors alike. The harm to the Funds is much less. The Funds, through the confirmation process, will be heard as a creditor and party in interest on the discrete confirmation issues implicated by § 1129.
This court having found the Disclosure Statement to contain adequate information, and finding no basis for a stay of proceedings, finds that acceptances were not obtained by false and misleading information and accordingly, that the acceptances to that plan are valid.
Nor does this court believe that it must decide the Funds' motion for the appointment of a trustee before ruling on confirmation. The discrete confirmation issues are and will continue to be addressed by this court. The court, by a separate written opinion, has granted ESA's motion for rescission of the land sale agreement and and includes those findings in this record. Accordingly, the requirements of § 1129(a)(2) are met.
Section § 1129(a)(3) requires that "the plan has been proposed in good faith and not by any means forbidden by law."
In the case at bar the Funds assert that the plan violates the absolute priority of payment rule in that the unsecured creditors have not been paid in full and other creditors who are lower in priority than the unsecured creditors are being paid various sums of money including but not limited to the debts of the parent corporation of the debtor [Elsinore] and Debtors' ex-partner, Playboy, and that the said plan is not fair and equitable in that said plan is a constructive fraud on unsecured creditors since the debtor proposes paying off the guaranteed debts of its parent corporation, Elsinore, in full before unsecured creditors are paid.
The Funds, in its "Brief in Support of the Funds' Objections to Confirmation", filed on February 16, 1988, assert that the plan *260 should not be confirmed because it is a constructive fraud on unsecured creditors because marshalling and equitable subordination are appropriate.
The Court will address the issues of good faith and constructive fraud in terms of the doctrines of marshalling and equitable subordination seriatum.
"Bad faith" is not defined by the bankruptcy code, however, bad faith has been broadly defined as:
The opposite of `good faith,' generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive. Term `bad faith' is not simply bad judgment or negligence, but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity; it is different from the negative idea of negligence in that it contemplates a state of mind affirmatively operating with furtive design or ill will.
Black's Law Dictionary 127 (5th ed. 1979). The existence of bad faith is determined by an examination of the totality of the factors at issue. See, Camelot, Inc. v. Hayden, 30 B.R. 409, 411 (E.D.Tenn.1983).
In the context of reorganization under Chapter 11, a plan is proposed in good faith if there is a reasonable likelihood that the plan will achieve a result consistent with the standards prescribed under the Code. In re Toy & Sport Warehouse, Inc., 37 B.R. 141, (Bankr.S.D.N.Y.1984); In re Nite Lite Inns, 17 B.R. 367 (Bankr.S.D.Cal. 1982). Thus, the court may consider a debtor's pre-filing conduct as well as the feasibility of the plan itself. In re Toy & Sport Warehouse, Inc., supra, 37 B.R. at 149, citing In re Madison Hotel Associates, 29 B.R. 1003, 1009 (D.C.W.D.Wis. 1983).
In the case before the court, the debtors have acted diligently throughout the course of these proceedings to negotiate with the various creditor classes, to obtain a consensual plan of reorganization. Jeanne Hood, the president of Elsinore and its subsidiaries including the debtors before this court testified that she has over the course of these proceedings met for approximately two years with creditor constituencies, including the two bondholder constituencies, the official unsecured creditors' committee, the Class 4 secured creditors, First Fidelity Bank, and Playboy, with the aim to organize the capital structure and the operation of the Atlantis so that it can be put on a more secure financial basis and can operate as a going concern and service its debts after Chapter 11. (See Tr. of 2/9/88 at 54-61). Ms. Hood also testified to the institution of cost saving by the Atlantis, including cuts in employees from in excess of 3,100 people to between 1,800 and 1,900 (See Tr. of 2/9/88 at 12), the cutting down of junket programs and headliner entertainment and the institution of different market and advertising programs aimed at middle-level players. (See Tr. of 2/9/88 at 13).
Stephen Cooper, a member of the firm of Zolfo, Cooper & Co. testified regarding the debtors' projections of operations. Zolfo, Cooper & Co. was retained by Elsinore Corporation to render consulting and accounting services. (See Tr. of 2/8/88 at 44-45).
The projected operations for the debtors for 1988, the debtors' first post-confirmation fiscal year, reflects a book loss of $13,489,000.00 on revenues of $113,840,000.00. (Unaudited Projected Consolidated Statements of Operations of Elsub Corporation and Subsidiaries, D-8). The actual numbers on an unaudited basis for 1987 reflect a book loss of $24,316,000 on revenues of $98,979,000.00. The projected operations for the debtors for 1989 reflect a book loss of $19,407,000.00 on revenues of $103,000,000.00. Notwithstanding the book loss of $13,489,000.00 for 1988, Cooper testified that depreciation and amortization charge of $7,782,000.00 and interest charge of $17,276,000.00 was included in that computation. If these figures aggregating $25,058,000.00 are added back, a positive cash flow of $11,569,000.00 is projected. (See Tr. of 2/8/88 at 104-105). *261 Similarly, notwithstanding the book loss of $19,407,000.00 for 1989, if the depreciation and amortization charge of $7,547,000.00 and the interest charge of $18,548,000.00 aggregating $26,095,000.00 are added back, a positive cash flow of $6,688,000.00 is achieved. (See Tr. of 2/8/88 at p. 106, D-8). Cooper also testified that the losses for tax purposes in addition to the existing NOLS are sufficient to assure that the Atlantis Casino will have little or no exposure to federal or state income taxes in the new term so that there is no provision for the payment of income taxes through December 31, 1989. (See Tr. of 2/8/88 at 105).
Cooper further explained that a nonrecurring book gain of $28,287,000.00 is projected for 1988 based upon a gain of $42,000,000.00 from reorganization where equity is swapped for debt. The projections of operations of the debtor project an increase in revenues in 1988 or 1987 from $98,979,000.00 to $113,840,000.00. This projected increase was satisfactorily explained. Cooper testified that the 1987 revenues were analyzed with the impact of a labor strike in 1987 plus an increment in market growth projected for 1988, including specific programs the management at the Atlantis Casino intended to introduce in 1988. This analysis produced total revenues of $118,000,000.00. Each profit generating funds, casino, food and beverage and hotel, was analyzed on a day-by-day and month-by-month build-up. This method produced $114,000,000.00, the approximate number that was utilized in the projections.
Cooper further explained that the 1988 and 1989 projections do not take into account any continued financial impact of the ongoing strike at the Atlantis, but assume that the Atlantis will as of January 1, 1988 returned to normalcy in terms of its providing service to its customers. (See Tr. of 2/8/88 at 102). Cooper further explained that of approximately 600 members of Local 54 that striked, 500 have been replaced or returned to work, and services have been reconfigured so that 550 represent full staffing, so that the hotel is presently back to 90% normalcy. (See Tr. of 2/8/88 at 102).
As will be further discussed below, this court finds that the debtors' financial projections and assumptions are reasonable, and that the plan will achieve a result consistent with the standards prescribed under the Bankruptcy Code. Accordingly, this court finds that the requirement of § 1129(a)(3) is met.
The Funds argue that Elsinore, as an unconditional guarantor of the senior mortgage bonds should be responsible for the claims of the senior mortgage bondholders, and subordinated to the claims of the unsecured creditors. The Funds rely upon the application of the marshalling doctrine and the principle of equitable subordination.
[T]he equitable doctrine of marshalling rests upon the principle that a creditor having two funds to satisfy his debt may not, by his application of them to his demand, defeat another creditor, who may have resort to only one of the funds.
Meyer v. United States, 375 U.S. 233, 84 S.Ct. 318, 11 L.Ed.2d 293 (1963).
The doctrine of marshalling "is not bottomed on the law of contracts or liens. It is founded instead in equity, designed to promote fair dealings and justice. Its purpose is to prevent the arbitrary action of a senior lienor from destroying the rights of a junior lienor or a creditor having less security. It deals with the rights of all who have an interest in the property involved and is applied only when it can be equitably fashioned as to all of the parties." Meyers v. United States, supra, 375 U.S. at 237, 84 S.Ct. at 321. The Meyers court nonetheless recognized that state "courts have refused to apply [the doctrine of marshalling] where state-created homestead exemptions would be destroyed." Id.
In the absence of independent and separate equities, the doctrine of marshalling does not apply unless the litigants are (1) creditors of the same debtor, (2) the funds are assets [the rights to which are sought to be controlled by marshalling] in the hands of or owned by such common debtor and, (3) that one of them alone has the right to resort to both funds. See Matter *262 of Multiple Services Industries, Inc., 18 B.R. 635, 636 (Bankr.E.D.Wis.1982); In re Computer Room Inc., 24 B.R. 732, 734 (Bank.N.D.ala.1982); In re Beacon Distributors, Inc., 441 F.2d 547, 548 (1st Cir.1971); Johnson v. Lentini, 66 N.J.Super. 398, 409-10, 169 A.2d 208 (Ch.Div.1961).
In the case of Farmers and Merchants Bank v. Gibson, 7 B.R. 437 (Bankr.N.D. Fla.1980), vacated and remanded 81 B.R. 79 (N.D.Fla.1981), the bankruptcy court made findings that the plaintiff bank loaned $150,000.00 to the corporation debtor, an automobile dealership. The corporation's promissory note was guaranteed by its president and principal stockholder, individually and also by his wife. The loan, which was obtained by working capital was secured by a second mortgage on the corporation's real estate and certain real estate, including a residence, titled in the name of the president and his wife, individually as tenants by the entirety. The mortgage encumbering both the corporate and individual property was executed by the president in his official capacity and by he and his wife as individuals. 7 B.R. at 438. The court also made a finding that when the original balance of the initial loan had been paid down to $75,000.00, a further advance of $50,000.00 was made by and a second promissory note in that sum executed not only by the corporation as maker, but the president and his wife as co-makers. Id.
The court held that the Bank's lien should be paid to the extent of proceeds available from the property titled in the corporate name, less a reasonable minimum reserve to be determined, and its lien instead of being diminished by the amount of said payment should be preserved by order of the court and transferred to the defendant trustee under his right to be equitably subrogated to the Bank's lien. 7 B.R. at 443.
In finding such relief, the court stated: Here, the foreseeable and likely result of obtaining such working capital, partly on the strength of the guarantor's personal liability and any property which the guarantor may have specifically pledged to secure such guaranty, is the inducement of others to innocently commence or continue to extend supplies or services to the principal on credit.
Upon the failure of the business and in a marshaling context, the balance of equities tips in favor of the creditors of the principal as against the guaranty claimant with respect to any individually owned property which was specifically pledged to secure the guaranty and obtain working capital. Unlike the ordinary nonbusiness related guaranty case, here, the court, in view of the "additional equitable consideration", conclude that the individually owned property must be regarded in equity as a contribution to capital. Moser Paper Co. v. North Shore Publishing Co., 83 Wis.2d 852, 266 N.W.2d 411 (1978); Gotzian & Co. v. Shakman, 89 Wis. 52, 61 N.W. 304 (1894).
7 B.R. at 441.
The district court, on appeal, vacated the bankruptcy court's order and remanded the case for further findings on whether the individuals were the makers of the second note, and whether the mortgages were contributions to capital. 81 B.R. at 80. On remand, the bankruptcy court determined that the remaining individual property mortgaged to the Bank was homestead property and that the right of the homestead claimant was superior or at least equal to the rights of the junior lienholders to have the assets marshaled. Farmers and Merchants Bank v. Gibson, 81 B.R. 81 (Bankr.N.D.Fla.1984). By subsequent decision the bankruptcy court explained that the foreclosure sale of remaining non-homestead property was still pending. However, the court found that a deficiency would exist on the Bank's debt to force foreclosure on the homestead property. Accordingly, the court held that a junior creditor could not directly through marshaling by injunction or by indirectly through marshaling by way of subrogation nullify the protections of law provided a homesteader. Farmers and Merchants Bank v. Gibson, 81 B.R. 83 (Bankr.N.D. Fla.1984), aff'd 81 B.R. 84 (N.D.Fla.1986).
*263 In In re Jack Green's Fashions, 597 F.2d 130 (8th Cir.1979) the real estate of two corporate officers was marshalled where the Eighth Circuit affirmed a decision of the district court requiring a secured creditor to proceed against certain parcels of real estate owned by the debtor corporation's officers, also in bankruptcy, prior to proceeding against the business assets of the bankrupt corporation. In that case the secured creditor, Centennial Bank & Trust of Mission, Kansas, held a lien on the business assets of the debtor corporation and an additional lien on three parcels of real estate owned by two of the debtor's principal officers and their wives as tenants by the entirety. The trustee of all three estates filed an application with the bankruptcy court to require a marshalling of assets which would require the Bank to proceed gainst the parcels of real estate before proceeding against the business assets of the corporation.
This decision has been the subject of criticism. Most recently, in bankruptcy court this this district in the case of In re Corso Stein Enterprises, Inc., 79 B.R. 584, 587 (Bankr.D.N.J.1987), in an opinion by Bankruptcy Judge William Gindin, stated:
More troubling is the chief case relied upon by the trustee, In re Jack Green's Fashions for Men Big and Tall, Inc., 597 F.2d 130 (8th Cir.1979). The court simply relied on equitable principles and extended the doctrine of marshaling. No specific finding of fraud was made and the court did not argue that it was piercing the corporate veil. No other cases have gone as far as the Eighth Circuit in Jack Green's. Judge Wright in In re The Computer Room, supra, rejected the case as being inconsistent with the historical background of the doctrine. Judge Elliott in In re United Medical Research, Inc., 12 B.R. 941 (Bankr.C.D. Cal.1981) likewise considered Jack Green's to be an anomalous result.
In the absence of some law pursuant to which this court has authority to pierce the corporate veil, this court must also reject the Jack Green's reasoning as having no support in history or in law. The burden of proof for one seeking to go beyond the corporation is a heavy one. There must be some basis upon which the court relies.
The circumstances under which the court should disregard the corporate fiction are not always clear and it is difficult, if not impossible, to formulate a precise and categorical definition applicable to all situations, . . . each case being sui generis. The burden, however, in each case rests upon the plaintiff to establish that there is a basis which serves for disregard of the corporate form . . .
79 B.R. at 588, citing Brunswick Corp. v. Waxman, 459 F.Supp. 1222, 1229 (D.N.Y. 1978) aff'd, 599 F.2d 34, (2d Cir.1979).
In the case at bar, the Funds have not met any of the standards for marshalling. First, as argued by debtors' counsel, this is not a situation of a junior lienor asserting marshalling as against a senior lienor. At most, the debtor-in-possession, ESA, could assert a claim against its parent, Elsinore, on behalf of the unsecured creditor class. Secondly, there are not two funds owned by the debtor. Elsinore's guaranty is not property of ESA or any of the other debtor entities. The only fund of the debtor, ESA, is the casino property which secures the mortgage. Thirdly, this court finds that to compel the secured bondholders to marshall an unsecured guarantee of Elsinore, and forego proceeding against the mortgage on the debtor's property would be so prejudicial as to result in the inapplicability of this equitable doctrine.
The Funds also argue that Elsinore Corporation should be subordinated to the claims of the unsecured creditors of ESA under the principal of equitable subordination found in § 510(c)(1) of the Bankruptcy Code.
11 U.S.C. § 510(c) provides:
(c) Notwithstanding subsections (a) and (b) of this section, after notice and a hearing, the court may
(1) under principles of equitable subordination, subordinate for purposes of distribution all or part of an allowed *264 claim to all or part of another allowed claim or all or part of an allowed interest to all or part of another allowed interest; or
(2) order that any lien securing such a subordinated claim be transferred to the estate.
The Supreme Court in the case of Pepper v. Litton, 308 U.S. 295, 60 S.Ct. 238, 84 L.Ed. 281 (1939) recognized that equitable power and duty of the bankruptcy court when passing upon allowance of claims against an estate to see that injustice or unfairness is not done in the administration of the debtor's estate. In that case the court stated:
That equitable power also exists in passing on claims presented by an officer, director, or stockholder in the bankruptcy proceedings of his corporation. The mere fact that an officer, director, or stockholder has a claim against his bankrupt corporation or that he has reduced that claim to judgment does not mean that the bankruptcy court must accord it pari passu treatment with the claims of other creditors. Its disallowance or subordination may be necessitated by certain cardinal principles of equity jurisprudence. A director is a fiduciary. Twin-Lick Oil Company v. Marbury, 91 U.S. 587, 588, 23 L.Ed. 328. So is a dominant or controlling stockholder or group of stockholders. Southern Pacific Company v. Bogert, 250 U.S. 483, 492, 39 S.Ct. 533, 537, 63 L.Ed. 1099. Their powers are powers in trust. See Jackson v. Ludeling, 21 Wall, 616, 624, 22 L.Ed. 492. Their dealings with the corporation are subjected to rigorous scrutiny and where any of their contracts or engagements with the corporation is challenged the burden is on the director or stockholder not only to prove the good faith of the transaction but also to show its inherent fairness from the viewpoint of the corporation and those interested therein. Geddes v. Anaconda Copper Mining Company, 254 U.S. 590, 599, 41 S.Ct. 209, 212, 65 L.Ed. 425. The essence of the test is whether or not under all the circumstances the transaction carries the earmarks of an arm's length bargain. If it does not, equity will set it aside. While normally that fiduciary obligation is enforceable directly by the corporation, or through a stockholder's derivative action, it is, in the event of bankruptcy of the corporation, enforceable by the trustee. For that standard of fiduciary obligation is designed for the protection of the entire community of interests in the corporation creditors as well as stockholders.
As we have said, the bankruptcy court in passing on allowance of claims sits as a court of equity. Hence these rules governing the fiduciary responsibilities of directors and stockholders come into play on allowance of their claims in bankruptcy. In the exercise of its equitable jurisdiction the bankruptcy court has the power to sift the circumstances surrounding any claim to see that injustice or unfairness is not done in administration of the bankrupt estate.
308 U.S. at 306-08, 60 S.Ct. at 245-46.
The court in Pepper v. Litton went on to note those instances where claims of officers, directors and stockholders in bankrupt corporations may be disallowed or subordinated:
Thus, salary claims of officers, directors, and stockholders in the bankruptcy of "one-man" or family corporations have been disallowed or subordinated where the courts have been satisfied that allowance of the claims would not be fair or equitable to other creditors. And that result may be reached even though the salary claim has been reduced to judgment. It is reached where the claim asserted is void or voidable because the vote of the interested director or stockholder helped bring it into being or where the history of the corporation shows dominancy and exploitation on the part of the claimant. It is also reached where on the facts the bankrupt has been used merely as a corporate pocket of the dominant stockholder, who, with disregard of the substance or form of corporate management, has treated its affairs as his own. And so-called loans or advances by the dominant or controlling *265 stockholder will be subordinated to claims of other creditors and thus treated in effect as capital contributions by the stockholder not only in the foregoing types of situations but also where the paid-in capital is purely nominal, the capital necessary for the scope and magnitude of the operations of the company being furnished by the stockholder as a loan.
Though disallowance of such claims will be ordered where they are fictitious or a sham, these cases do not turn on the existence or non-existence of the debt. Rather they involve simply the question of order of payment. At times equity has ordered disallowance or subordination by disregarding the corporate entity. That is to say, it has treated the debtor-corporation simply as a part of the stockholder's own enterprise, consistently with the course of conduct of the stockholder. But in that situation as well as in the others to which we have referred, a sufficient consideration may be simply the violation of rules of fair play and good conscience by the claimant; a breach of the fiduciary standards of conduct which he owes the corporation, its stockholders and creditors. He who is in such a fiduciary position cannot serve himself first and his cestuis second. He cannot manipulate the affairs of his corporation to their detriment and in disregard of the standards of common decency and honesty. He cannot by the intervention of a corporate entity violate the ancient precept against serving two masters.
308 U.S. at 308-11, 60 S.Ct. at 246-47.
A stockholder's loans to his company will be treated as capital contributions when under the equities, a company is deemed undercapitalized. Matter of Multiponics, Inc., 622 F.2d 709, 717 (5th Cir. 1980), citing Pepper v. Litton, supra, Taylor v. Standard Gas Co., 306 U.S. 307, 59 S.Ct. 543, 83 L.Ed. 669 (1939). The mere fact of an insider loan may be insufficient to warrant subordination. Matter of Multiponics, Inc., supra, 622 F.2d at 717. In Pepper v. Litton, supra the Supreme Court stated that, for the purpose of determining whether claims of officers, directors or stockholders of a bankrupt corporation should be subordinated to claims belonging to other creditors, the dealings of fiduciaries with their corporation
are subjected to rigorous scrutiny and where any of their contracts or engagements is challenged the burden is on the director or stockholder not only to prove the good faith of the transaction but also to show its inherent fairness from the viewpoint of the corporation and those interested therein.
308 U.S. at 306, 60 S.Ct. at 245.
The Fifth Circuit in Matter of Mobile Steel Co., 563 F.2d 692 (5th Cir.1977) set forth a three-prong test providing that equitable subordination is appropriate where the following elements are established:
(1) the claimant must have engaged in some inequitable conduct;
(2) The misconduct must have resulted in injury to the creditors of the bankrupt or conferred an unfair advantage on the claimant;
(3) equitable subordination of the claim must not be inconsistent with the provisions of the Bankruptcy Act. 563 F.2d at 700. See also, Matter of Multiponics, Inc., 622 F.2d 709 (5th Cir.1980).
The court in Matter of Mobil Steel Company, 563 F.2d 692 (5th Cir.1977) set forth the applicable burden of proof:
To constitute the type of challenge contemplated by the [Pepper v. Litton] Court, an objection resting on equitable grounds cannot be merely formal, but rather must contain some substantial factual basis to support its allegation of impropriety. Absent such a requirement, the wide-ranging inquiry authorized by the Kansas City Journal-Post case [144 F.2d 791 (8th Cir.1944] would place an unwarranted burden on fiduciaries by requiring them to prove the good faith and fairness of every one of their actions with respect to their corporation at the pleasure of the Trustee. This would be tantamount to the adoption of a rule that claims advanced by fiduciaries are invalid simply because of the nature *266 of the relation existing between the claimant and the bankrupt. For reasons that should be obvious among them, a desire not to discourage those most interested in a corporation from attempting to salvage it through an infusion of capital we have steadfastly refused to endorse such a principle. . . . The proper rule is that the claimant's verified proof of claim obliges the objecting trustee to come forward with enough substantiations to overcome the claimant's prima facie case and thus compel him to actually prove the validity and honesty of his claim.
563 F.2d at 701 (citations omitted). [emphasis in original]
The Third Circuit in the case of United States v. Pisani, 646 F.2d 83 (3d Cir.1981) in fashioning a federal rule on the alter ego theory set forth the relevant factors:
DeWitt Truck Brokers v. W. Ray Flemming Fruit Co., 540 F.2d 681 (4th Cir. 1976), sets out in detail the relevant factors:
First is whether the corporation is grossly undercapitalized for its purposes. Other factors are
". . . failure to observe corporate formalities, non-payment of dividends, the insolvency of the debtor corporation at the time, siphoning of funds of the corporation by the dominant stockholder, non-functioning of other officers or directors, absence of corporate records, and the fact that the corporation is merely a facade for the operations of the dominant stockholder or stockholders."
Id. at 686-87 (footnotes omitted). Also, the situation "must present an element of injustice or fundamental unfairness," but a number of these factors can be sufficient to show such unfairness. Id. at 687.
646 F.2d at 88.
In the case of Federal Deposit Insurance Corp. v. Sea Pines Company, 692 F.2d 973 (4th Cir.1982), cert. denied, 461 U.S. 928, 103 S.Ct. 2089, 77 L.Ed.2d 299 (1983), the Federal Deposit Insurance Company ("FDIC") appealed from a decision of the district court which declined to pierce the corporate veil where the FDIC alleged that Sea Pines Company, the parent, guaranteed a particular indebtedness of its subsidiary, Point South Inc. to the American Bank & Trust Company, ("AB & T") predecessor in interest to FDIC. In that case Sea Pines Company, the parent, utilized a number of subsidiary corporations. One of its subsidiaries, Point South, Inc. was initially capitalized with $1,000.00 by two of the three-person executive committee of the parent company. The subsidiary issued one hundred shares of capital stock and later 10% of its stock was transferred to Continental Mortgage Investors and the remaining 90% of the stock was assigned to the parent company. In February 1973 Point South Inc. obtained a construction loan mortgage to build a reception center on commercial property that the subsidiary owned. In August 1973 the subsidiary desired to sell the property to Points South Associates, a limited partnership, and lease it back. The rent, payable to Point South Inc., the subsidiary, to Point South Associates, the limited partnership, was guaranteed by Sea Pines Company, the parent, by a formal guarantee. This transaction was finalized on September 7, 1973. In October 1974 the subsidiary, Points South Inc. and Sea Pines Company, acting through the common directors mortgaged the equity of Point South Inc. in a 76 acre tract, as collateral for the loans of Sea Pines Company, the parent. The parent credited the debts which the subsidiary owed to the parent as alleged consideration for the subsidiary mortgaging its property and allowing the proceeds to go to the parent. In May 1975 the common directors of the corporations caused the sale and leaseback between Point South Inc. and Point South Company to be cancelled and Point South Inc. repurchased the property. Point South Inc. cancelled the note and mortgage owed to it by Point South Associates, which was originally in the sum of $55,000.00. Sea Pines Company was released by its guarantee of rent payments on the reception center. In February 1973 Point South Inc. the subsidiary had a balance sheet showing properties or assets in excess of *267 $2.5 million with a total net worth of $65,000.00, of which $1,000.00 was capital stock and $64,000.00 was retained earnings. The subsidiary lost $242,000.00 between February 1973 and February 1974. In February 1974, Point South Inc. was insolvent, with a negative net worth of $177,000.00. From February 1974 until February 1975, the subsidiary continued to lose money so that by February 1975 the total insolvency or negative net worth of Point South Inc. was $1,949,000.00. The Fourth Circuit reversed the decision of the district court, finding that the actions of Point South, Inc. and Sea Pines Company were fundamentally unfair to AB & T, a creditor of Point South Inc. and predecessor in interest to FDIC, 692 F.2d at 976, and remanded the matter in order that the district court might enter a judgment for the FDIC against Sea Pines Company. The court in so holding stated:
Each of these transactions clearly shows that the board of directors of the insolvent corporation was using that corporation and its assets for the benefit of the parent, Sea Pines Company, and not for the subsidiary. The parent, through the interworking boards of directors, manipulated the assets, property and liabilities of the subsidiary. The directors voilated the fiduciary duty owed to the creditors of the insolvent Point South Inc. These two transactions clearly indicate fundamental unfairness and injustice.
692 F.2d at 977.
In the case at bar, while Elsinore and ESA had common directors and officers, ESA and Elsinore adhered to corporate formalities. Elsinore's infusion of operating funds into ESA did occur. This record does not support the application of alter ego theories to pierce the corporate veil of Elsinore. Nor does this record support a finding that Elsinore engaged in inequitable conduct in connection with the affairs of its subsidiary, ESA. There was no evidence presented that ESA was under-capitalized. Accordingly, this court rejects the theories of equitable subordination raised by the Funds herein.
The Funds maintain that Jeanne Hood cannot impartially evaluate the claims of the debtor against Elsinore and that pervasive conflicts of interest exist to render the debtors as debtors-in-possession, incapable of functioning as trustees, for creditors. As noted above, the relationship of a parent to its subsidiaries is subject to scrutiny in the context of reorganization proceedings. The same standards that courts apply to support equitable subordination or alter ego theories apply here. This court finds, on this record, that Elsinore has not engaged in inequitable conduct toward its subsidiaries and their creditors. This court has fully examined the proposed motion of ESA to rescind a certain land sale agreement involving the sale of properties by ESA to Elsinore. By separate opinion, that motion for rescission has been granted. As discussed later in this opinion, the debtors have asserted defenses to the alleged preference action that a debtor-in-possession or a Chapter 7 trustee might bring against Elsinore.
The Funds assert herein that Jeanne Hood acted on the advice of Charles Evans Gerber, Esquire "who was employed by Elsinore Corporation as general counsel and as special counsel and who was listed in the service sheets as general counsel to the debtor. Charles Gerber at all times during the proceeding was general counsel for Elsinore Corporation." See Brief in Support of the Funds' Objections to Confirmation" at p. 21.
Charles Evans Gerber, Esquire has been the Secretary of Elsinore since February 1986 and a Director of Elsinore since October 1985. This court notes that an order was entered on February 7, 1986 authorizing ESA to employ the law firm of Friedman & Koven, of which Charles Evans Gerber was a member, and the firm of Neal, Gerber & Eisenberg, then a newly formed firm with which Charles Evans Gerber became affiliated, as special counsel to ESA, in the area of partnership and securities law. The facts as set forth by the Funds are inaccurate and not sustainable. Accordingly, the requirements of 1129(a)(3) are met.
Section 1129(a)(4) requires that "Any payment made or to be made by the proponent, *268 by the debtor, or by a person issuing securities or acquiring property under the plan, for services, or for costs and expenses in or in connection with the case, or in connection with the plan and incident to the case, has been approved by or is subject to the approval of the court as reasonable."
No payment for services or costs and expenses in connection with these cases, other than payments already approved by this court, have been made. Under Article 3 of the Plan only "allowed" administrative expenses shall be paid. Such payments are subject to court approval. Accordingly, the requirements of § 1129(a)(4) is met.
At the February 9, 1988 confirmation hearing, Jeanne Hood testified that certain payments were made by Elsinore to or on behalf of or for the benefit of ESA from November 13, 1984 to December 31, 1987 in the aggregate amount of $12,830,000.00. (D-16 and D-17). This court is satisfied that full disclosure has been made in this case in regard to these third-party payments.
Section 1129(a)(5) requires that "(i) The proponent of the plan has disclosed the identity and affiliation of any individual proposed to serve, after confirmation of the plan, as a director, officer, or voting trustee of the debtor, an affiliation of the debtor participating in a joint plan with the debtor, of a successor to the debtor under the plan, and, (ii) the appointment to, or continuance in, such office of such individual, is consistent with the interests of creditors and equity security holders and with public policy; and
(B) the proponent of the plan has disclosed the identity of any insider that will be employed or retained by the reorganized debtor, and the nature of any compensation for such insider."
Appendix C of the Disclosure Statement sets forth the "Officers and Directors of Elsinore and Debtors." Jeanne Hood testified at the February 9, 1988 confirmation hearing to the accuracy of Appendix C. The Post-Reorganization Salaries of Officers of the Debtors was also supplied to the court as follows:
ESA:
Jeanne Hood President $150,000.00
Richard LeVasseur V.P. Marketing $120,000.00
Edward Fasulo V.P. Operations $120,000.00
Harry Levin V.P. General Counsel $ 90,000.00
R. Bruce McKee V.P. Finance $ 92,800.00
Dennis Leong V.P. Casino Manager $127,000.00
Elsub, ENJ, EAC, EFC:
No compensation paid to Officers.
(D-18).
Accordingly, the requirements of § 1129(a)(5) are met.
Section 1129(a)(6) requires that "Any governmental regulatory commission with jurisdiction after confirmation of the plan, over the rates of the debtor has approved any rate change provided for in such plan, or such rate change is expressly conditioned on such approval.
Jeanne Hood testified at the February 9, 1988 confirmation hearing that no governmental regulatory commission sets rates for any of the debtors. (See Tr. of 2/9/88 at 88). This provision is not inapplicable to the case at bar. The court here notes that the plan acknowledges as a condition precedent to the closing and consummation of the plan and the transactions contemplated under the plan, the following:
24.1 Gaming Approvals. All regulatory and other approvals required to be obtained in the States of New Jersey or Nevada in order for ESA to be licensed to own and operate the Atlantis as a casino hotel in Atlantic City, New Jersey, in order for the Plan and all transactions contemplated hereunder to be authorized, valid, binding and enforceable without civil or criminal penalty in such States (including, without limitation, the Western Refinancing) shall have been obtained, *269 subject only to conditions which do not impact upon or affect the standards for confirmation set forth in section 1129 of the Bankruptcy Code, and which would not interfere or conflict with observance or performance of the Confirmation Order or other Final Orders of the Bankruptcy Court or the Plan.
On January 25, 1988 the State of New Jersey Casino Control Commission approved that portion of the debtors' plan that involves the proposed distribution of Elsub stock and ESA notes to Playboy subject to nine (9) conditions as follows:
First, Playboy must not have the ability to vote the Elsub stock. The Elsub stock and the ESA notes must be held by a trustee suitable to the Commission.
Second, restriction of the flow of information and communication between Playboy and all Elsinore entities and the trustee.
Third, all Playboy interests must be extinguished within ten years of the bankruptcy court signing an order confirming a plan or reorganization that contains the proposed distributions of stock and notes to Playboy. Whatever proceeds, if any, are derived from the stock sale, up to the maximum described in condition # 4, shall be transferred to Playboy, and thereafter its rights in the Elsub stock shall terminate.
Fourth, the aggregate of any payments that Playboy may receive on account of the stock (including dividends), the notes (including any interest thereon), and the Escrow Account as defined in the Plan, shall not exceed the amount of the proofs of claims filed in the bankruptcy court for the note and the accrued management fees.
Fifth, any transfer, by the trustee, of the stock or the notes shall be subject to Commission approval.
Sixth, in the event Elsinore intends to transfer its interest in the Elsub stock prior to Playboy transferring its interest in said stock, provision shall be made to cause the contemporaneous transfer of Playboy's Elsub stock.
Seventh, the trustee shall immediately notify the Commission and the Division of any dividend payments or any payments it receives on the notes or any proceeds of any sale of the Elsub stock.
Eighth, any dividends paid on the Elsub stock shall be transferred to the trustee for distribution to Playboy only after Playboy either qualifies or no longer holds any legal, equitable or beneficial interest in the stock, at which time the trustee may transfer any such dividends to Playboy.
Ninth, the cost of the trusteeship shall be paid in full by Playboy.
(D-14).
Jeanne Hood testified that these conditions are not inconsistent with the plan, and that ESA and its affiliates will be able to met these conditions and go forward with the plan. (See Tr. of 2/9/88 at 63).
Section 1129(a)(7) requires that "With respect to of each impaired class of claims or interests [sic]
(A) each holder of a claim or interest of such class
(i) has accepted the plan; or
(ii) will receive or retain under the plan on account of such claim or interest property of a value, as of the effective date of the plan, that is not less than the amount that such holder would so receive or retain if the debtor were liquidated under chapter 7 of this title on such date; or
(B) if section 1111(b)(2) of this title applies to the claims of such class, each holder of a claim of such class will receive or retain under the plan on account of such claim property of a value, as of the effective date of the plan, that is not less than the value of such holder's interest in the estate's interest in the property that secures such claims."
As set forth above, all impaired classes have voted to accept the plan. Subsection (7) focuses upon each holder of a claim, as distinguished from the class in which the claim is placed. Pursuant to clause (A)(i), the standard is satisfied with respect to each holder of a claim or interest which has accepted the plan pursuant to *270 § 1126(f). See In re Toy & Sports Warehouse Inc., 37 B.R. 141, 150 (Bankr.S.D.N. Y.1984). The Funds, as holders of unsecured claims have objected to confirmation of the plan and have raised objection to the accuracy of the debtors' liquidation analysis. Although the requisite majority of unsecured claim holders in Class 5A have accepted the plan, such acceptance was not unanimous. As to the dissenting unsecured claim holders, the so-called best interests test, incorporated in § 1129(a)(7) must be met to achieve confirmation. In re Toy & Sport Warehouse, Inc., supra, 37 B.R. at 150.
The debtors presented Stephen Cooper to testify regarding the liquidation analysis of the debtors' assets. The liquidation analysis of ESA as of December 31, 1987 stated projected liquidation proceeds of ESA of $139,172,000.00 (D-1 Evd.) and a projected deficit of $33,537,000.00 before distribution to unsecured creditors. (D-7).
Cooper testified that the value assigned to the land, building, improvements, furniture, fixtures and equipment, consisting of all the physical and land assets of ESA was the going concern value established by an October 1986 appraisal by Ackley O. Elmer, the appraiser for the Official Unsecured Creditors' Committee (See Tr. of 2/8/88 at 76). Cooper testified that the book value of these assets, depreciated to December 31, 1987 was $121,290.00, and that he was "conservative on the upside" in using the Elmer appraisal. (See Tr. of 2/8/88 at 176-77). (D-1). In computing the liquidation analysis allowed secured claims included the mortgage on the Georgia Avenue property in the amount of $6,568,000.00 and the claims of the senior bondholders in the amount of $130,499,000.00. (D-7). Cooper testified that the Georgia Avenue property was not included as a separate valuation on the basis that Elmer's going concern value incorporated the going concern value of the parking spaces utilized by ESA on the Georgia Avenue property. (See Tr. of 2/8/88 at 77-78).
A review of the Elmer appraisal filed with this court on November 21, 1986, and dated November 20, 1986, supports this analysis. Ackley Elmer appraised the Atlantis Casino property at its "highest and best use" as "improved" for a "casino hotel complex" in the sum of $127,000,000.00. The "Property Synopsis" portion of the written appraisal included under the item "number of parking spaces available" 1,103, which included the Georgia Avenue parking lot. (Appraisal at p. 135). In analyzing the square feet of casino floor per parking space the parking spaces located at the Georgia Avenue parking lot were included. (Appraisal at p. 177).
In analyzing the parking situation the appraisal states:
PARKING:
The Atlantis Casino/Hotel currently has 1,103 parking spaces of which 44 in the Theater Building and 559 at Georgia Avenue are not utilized for patron vehicles. This leaves the 500 + / - parking spaces in Stetson Hall for patron parking. It should be further noted that the available Stetson Hall spaces may vary from day to day depending upon Atlantic City Convention Hall management. The preceding chart shows 45.80 square feet of casino floor per parking space. However, by using the current 500 patron parking spaces would indicate 101.03 square feet of casino floor per parking space. This cuts drastically into the market of patrons who prefer having their own automobiles and leaves the Atlantis very dependent on bus trade and walk-in trade. All the other ten opened, licensed casino/hotels have their own parking garages or are in the process of constructing their own garages.
It is the opinion of your appraiser that lack of patron parking is a major economic problem with the Atlantis Casino/Hotel.
Appraisal at p. 178.
In analyzing the "conclusion of highest and best use" the appraiser consider inter alia the following:
In the opinion of your appraiser the major problem with the Atlantis Casino/Hotel complex is the lack of an abundance of parking spaces. Through a lease dated September 16, 1977 between the City *271 of Atlantic City as Sublessor and the Housing Authority of Atlantic City as Sublessee the Atlantis is to lease approximately 500 parking spaces within the garage area of the West or Stetson Hall of the Atlantic City Convention Hall. The garage floor lease area is approximately 134,000 square feet. Additionally, there is space for approximately 44 automobiles on the roof of the Theater Building which parking spaces are predominantly utilized by the Casino Control Commission and the Division of Gaming Enforcement. In addition to the Convention Hall parking for the Atlantis Casino/Hotel there is off-site surface parking just off the incoming lanes of the Atlantic City Expressway. This surface parking lot can accomodate 559 automobiles. At one time the Atlantis provided shuttle buses for patrons utilizing this parking area. However, this Georgia Avenue parking lot is now utilized for employee parking only which has greatly decreased patron parking facilities. It is the opinion of your real estate appraiser that the Atlantis Casino/Hotel has insufficient on-site or nearby parking.
Appraisal at p. 215.
The final value conclusion was set forth as follows:
Final Value Conclusion:
In the final conclusion valuing the Atlantis Casino/Hotel which is located on both the Northeast and Northwest corners of South Florida Avenue and the Atlantic City Boardwalk in the City of Atlantic City, County of Atlantic, State of New Jersey and which property is also known as lot 157 in block 43 and lots 95, 96, 97 and 177 in block 44 on the tax map of the City of Atlantic City along with the 2,650 square feet of ground covered elevated easements, as of October 1, 1986, in fee simple titlel, values the real estate in use as a "casino hotel complex" for $93,000,000. and the furniture, fixtures and equipment has been taken from the financial statements as of October 1, 1986 of the Atlantis Casino Hotel project which totals $33,814.984. which again your appraiser has rounded to the nearest million dollars or $34,000,000. as of October 1, 1986. When the value estimate of the real estate in use of $93,000,000. is added to the value of the furniture, fixtures and equipment of $34,000,000. the resultant value estimate of the Atlantis Casino Hotel complex, as of October 1, 1986, valuing the property "in use" at its "highest and best use" which is for a "casino hotel complex", subject to the included contingent and limiting conditions, is the sum of:
ONE HUNDRED TWENTYSEVEN MILLION ($127,000,000.) DOLLARS
Appraisal at p. 226-227.
The Funds argue that the unsecured creditor class would receive more than the amount proposed under the plan if the debtors commenced a marshalling action and subordinated Elsinore's claim. Having already concluded that the record does not support marshalling or equitable subordination, this argument is not sustainable.
The debtors, by their disclosure statement provided:
As noted above, various theories have been asserted by certain creditors seeking to impose liability upon Elsinore including those described under "Legal Proceedings." These theories include equitable subordination, marshalling and fraudulent conveyances. The debtors have investigated the factual and legal bases of these claims and believe they lack merit. In view of the foregoing, the liquidation analysis attributes no value to claims against, or other potential recoveries from, Elsinore.
(See Disclosure Statement at p. 58).
The debtors further state in the Disclosure Statement:
On or about November 13, 1984, approximately $7,564,000 in proceeds of the Senior Mortgage Bonds were paid by ESA to EAC and Elsub in partial satisfaction of pre-existing indebtedness. EAC made a partial payment of an existing indebtedness to Elsub on that date. The total of such payments was $7,564,000. Elsub, in turn, paid approximately $7,564,000 to Elsinore on that date, in partial satisfaction of a pre-existing indebtedness. *272 The pre-existing indebtedness arose as a result of the making of mandatory "partner's loans" in accordance with the 1979 partnership agreement between subsidiaries of Playboy and Elsinore. These payments were proper and lawful.
Nevertheless, Playboy has charged that Elsub's payment to Elsinore constitutes an avoidable preference. Elsub and Elsinore contend that no all of the elements of a preference exist and that, in any event, after the date of the transfer, Elsinore gave new value in excess of the amount of the alleged preference which would constitute a complete defense under section 547(c)(4) of the Bankruptcy Code.
The Proponents have not conducted an investigation to determine whether any other transfers are avoidable, and have provided in the Plan that any right to avoid such transfers of property pursuant to any provisions of the Bankruptcy Code or other applicable law shall be deemed waived and released as of the Effective Date.
(Disclosure Statement at p. 57).
Jeanne Hood testified that the debtor placed no value on this alleged preference claim based upon consideration of funds advanced by Elsinore Corporation to or for the benefit of ESA from November 13, 1984 through December 31, 1987, totalling $12,830,000.00. (D-17). (See Tr. of 2/9/88 at 76).
This court believes that the valuation of litigation in the context of a Chapter 7 litigation is not suseptible of sufficient certainty. The liquidation analysis of ESA, as of December 31, 1987 projected a deficit of $33,537,000.00 before distribution to unsecured creditors. Thus, even if a Chapter 7 trustee were successful in avoiding the $7,564,000.00 transfer to Elsinore pursuant to § 547(b), unsecured creditors would, nonetheless, receive no distribution in a liquidation.
Stephen Cooper testified that he did not evaluate claims ESA might have against Elsinore. (See Tr. of 2/8/88 at 111). Cooper also excluded from the Disclosure Statement any litigation in progress because of its uncertainty. (See Tr. of 2/8/88 at 155).
This court is satisfied that all the unsecured claimholders will receive under the plan on account of their claims, as of the effective date of the plan "not less than the amount that such holder would so receive or retain if the debtor were liquidated under Ch. 7. . . ." 11 U.S.C. § 1129(a)(7)(A)(ii). Therefore, the best interests test has been met with respect to the unsecured claimholders in Class 5A under the plan.
Section 1129(a)(8) requires that "with respect to each class of claims or interests
(A) such class has accepted the plan, or
(B) such class is not impaired under the plan."
As set forth above, the plan designates twelve classes of claims and interest. Classes 1 and 3 are not impaired. Under 11 U.S.C. § 1126(c) "a class of claims has accepted a plan if such plan has been accepted by creditors . . . that hold at least two-thirds in amount and more than one-half in number of the allowed claims of such class held by creditors . . . that have accepted or rejected such plan." Classes 2A, 2B, 4, 5A, 5B, 6, 7, 8, 9 and 10 are impaired and have accepted the plan by the requisite majorities. Accordingly, the requirements of § 1129(a)(8) are met.
Title U.S.C. § 1129(a)(9) requires that:
(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
(A) with respect to a claim of a kind specified in section 507(a)(1) or 507(a)(2) of this title, on the effective date of the plan, the holder of such claim will receive on account of such claim cash equal to the allowed amount of such claim;
(B) with respect to a class of claims of a kind specified in section 507(a)(3), 507(a)(4), 507(a)(5) or 507(a)(6) of this title, each holder of a claim of such class will receive
*273 (i) if such class has accepted the plan, deferred cash payments of a value, as of the effective date of the plan, equal to the allowed amount of such claim; or
(ii) if such class has not accepted the plan, cash on the effective date of the plan equal to the allowed amount of such claim; and
(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.
Under § 1129(a)(9)(A) administrative claims and expenses entitled to priority under § 507(a)(1) must be satisfied in cash on the effective date of the plan. Article 3 of the plan provides:
Each holder of an Allowed Administration Expense shall be paid the full amount of such Allowed Administration Expense in cash on the Effective Date, or upon such other terms as may be agreed between such holder and the Debtor liable therefor; provided, however, that Allowed Administration Expenses representing indebtedness or other obligations which are not due and payable until after the Effective Date shall be paid or performed in accordance with the terms and conditions of any agreements relating thereot, and provided further, that Administration Expenses owed to Elsinore (other than any Administration Expenses to be reimbursed pursuant to Article 7 of the Plan) shall be contributed by Elsinore to Elsub, 54.3% of the Administration Expenses owed to Elsub (i.e., those contributed to Elsub) shall be contributed by Elsub to ENJ, and, thereafter, by ENJ to EAC and EAC to ESA and 45.7% of the Administration Expenses owed to Elsub (i.e., those contribured to Elsub) shall be contributed by Elsub directly to ESA.
Under § 1129(a)(9)(B) the holder of claims specified in § 507(a)(3), (4), (5), or (6) are entitled to cash on the effective date equal to the allowed amount of such claim unless the class has voted to accept deferred payment.
Article 6 of the plan provides:
Each allowed priority non-tax claim shall be paid in full in cash on the Effective Date or upon such other terms as may be agreed to in writing by the holder of any such allowed priority non-tax claim.
Under § 1129(a)(9)(C) each holder of a tax claim entitled to priority in accordance with § 507(a)(7) is entitled to receive deferred cash proceeds 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.
Article 4 of the plan provides:
Each holder of an Allowed Priority Tax Claim shall be paid the full amount of such Allowed Priority Tax Claim in cash on the Effective Date, or, at the election of the Debtor liable therefor, in equal quarterly installments over a period commencing at the end of the first calendar quarter after the Effective Date, and continuing at the end of each calendar quarter thereafter until the date that is six years after assessment, with interest at a fixed rate per annum equal to the Prime Rate as in effect on the day of Confirmation plus a risk factor component equal to 0.5%, from and after the Effective Date, in the manner set forth in section 1129(a)(9)(C) of the Bankruptcy Code. Notwithstanding the foregoing, each holder of an Allowed Priority Tax Claim may be paid upon such other terms as may be agreed by the holder of such Claim including, without limitation, interest on Allowed Priority Tax Claims for federal income taxes at a rate per annum fixed by the Secretary of the Treasury or the Internal Revenue Service acting under authority of section 6621 of title 26, United States Code. The terms and provisions of any and all such agreements shall be filed with the Bankruptcy Court *274 prior to Confirmation. Each Debtor will maintain cash or cash equivalents in amounts sufficient to pay all Allowed Priority Tax Claims owed by it when due.
Jeanne Hood testified at the February 9, 1988 confirmation hearing that the debtor had the following administrative and priority claims.
Undisputed Administrative Claims $2,241,759.18
Disputed Administrative Claims 1,007,099.68
Undisputed Priority Wage and Employee Benefits 770,201.85
Claims
(subject to offset for
reserves and excess premiums
estimated at $500,000.00)
Disputed Priority Wage and Employee Benefits 47,500.00
Claims
Miscellaneous Disputed Priority Claims 57,747.71
Undisputed Priority Tax Claims 9,312,137.33
Disputed Priority Tax Claims 168,800.93
(D-19).
The undisputed claims are subject to payment either on the Effective Date or according to a schedule of payments agreed to by certain holders of these claims. (D-19). Jeanne Hood testified that the debtors had reached an agreement with both the Casino Reinvestment Development Authority and the City of Atlantic City regarding a schedule of payments for those respective claims. (See Tr. of 2/9/88 at 96). (D-19).
Jeanne Hood testified that in order to consummate the plan the following payments by ESA on the Effective Date are required:
Cash Payments by ESA on the Effective Date:
Assumed Executory Contracts $ 139,943.00
Maryland National 35,000.00
Stein's Food Service 3,994.00
Professionals estimated 1,921,000.00
Maria Scavello-Biebel (employee claim) 1,242.00
Prudential Insurance net of offset 233,903.00
Prudential/Southshore (employee claim) 27,973.00
Unsecured Creditors 1,000,000.00
____________
$3,363,055.00
(D-20).
Jeanne Hood testified that ESA is required under the plan to keep at least $10,000,000.00 in working capital at the Atlantis Casino upon consummation of the plan. (See Tr. of 2/9/88 at 100).
Jeanne Hood further testified that Elsinore has agreed to lend ESA sufficient funds under a $5 million line of credit to supply sufficient cash on the effective date as follows:
ESA projected cash balance pre-consummation; 3-31-88 $ 9,438,000.00
Estimated cash payments on effective date (3,363,000.00)
Cash draw on working capital loan from Elsinore Corp. to bring
cash balance to $10,000,000.00 in accordance with the plan 3,925,000.00
______________
ESA projected cash balance post-consummation; 3/31/88 $10,000,000.00
(D-20). (See Tr. of 2/8/88 at 100).
The court is satisfied that based upon the foregoing, § 1129(a)(9) has been complied with.
Section 1129(a)(10) requires that "If a class of claims is impaired under the plan, *275 at least one class of claims that is impaired under the plan has accepted the plan, determined without including any acceptance of the plan by any insider."
As set forth above, Classes 2A, 2B, 4, 5A, 5B, 6, 7, 8, 9 and 10 are impaired and have all accepted the plan by the requisite majorities. Accordingly, the requirements of § 1129(a)(10) are met.
Section 1129(a)(11) requires that "Confirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor or any successor to the debtor under the plan, unless such liquidation or reorganization is proposed in the plan."
Title 11 U.S.C. § 1129(a)(11) requires a feasibility test. It must appear that confirmation of the plan is not likely to be followed by the liquidation or need for further financial reorganization of the debtor. In the case of In re Landmark at Plaza Park, Ltd., 7 B.R. 653 (Bankr.D.N.J. 1980) the court observed that the following facts should be considered: (1) the adequacy of the capital structure; (2) the earning power of the business; (3) economic conditions; (4) the ability of management; (5) the probability of the continuation of the same management, and; (6) any other related matters which determine the prospects of a sufficiently successful operation to enable performance of the provisions of the plan. 7 B.R. at 659. See also In re Toy & Sports Warehouse, Inc., 37 B.R. 141, 151 (Bankr.S.D.N.Y.1984).
Availability of prospective credit, both capital and trade, adequacy of funds for equipment replacement and provisions for adequate working capital are other factors examined. See e.g. In re Jartan, Inc., 44 B.R. 331, 393 (Bankr.N.D.Ill.1984).
Insofar as it is possible to forecast feasibility, the elimination of debt together with the infusion of funds in light of the market that exists must be considered. See In re Landau Boat Co., 13 B.R. 788, 791 (Bankr.W.D.Mos.1981).
The plan provides for financing to be obtained by the mortgaging of certain properties identified as the casino hotel owned by Hyatt Tahoe located in the north shore of Lake Tahoe at Incline Village, Nevada, and the casino hotel owned by Four Queens located in Las Vegas, Nevada ("Western Properties"). The plan specifically provides:
On or before the Effective Date, as more fully set forth in the First Interstate Commitment Letter, (a) Four Queens will borrow $40,000,000, to be secured under a first deed of trust and security agreement on certain real and personal property commonly known as the Four Queens Hotel and Casino in Las Vegas, Nevada, (b) Hyatt Tahoe, together with Four Queens as co-maker, will borrow $30,000,000, to be secured under first deeds of trust and security agreements on certain real and personal property commonly known as the Hyatt Lake Tahoe in Incline Village, Nevada, and the Four Queens Hotel and Casino in Las Vegas, Nevada, and (c) Hyatt Tahoe will execute and deliver an additional promissory note in the principal amount of $5,000,000, to be secured by, inter alia, the liens and security interests referred to in subparagraphs (a) and (b). Elsinore and its subsidiaries will use the net proceeds to simultaneously make the payments of principal on the Senior Mortgage Bonds required to be made on or prior to the Effective Date in accordance with section 7.1 of the Plan and the payments of principal on the Subordinated Debentures required to be made on or prior to the Effective Date in accordance with section 15.2 of the Plan.
Article 2.1 of the Plan.
Jeanne Hood testified at the February 9, 1988 confirmation hearing that Elsinore had received a commitment letter dated June 15, 1987 from First Interstate Bank of Nevada N.A. ("First Interstate Bank") setting forth the terms and conditions under which First Interstate Bank would loan to Four Queens, Inc. and Hyatt Tahoe, Inc. up to $75,000,000.00. (See Tr. of 2/9/88 at 35). (D-12).
The commitment letter, dated June 15, 1987 provides in pertinent part:
*276 1. Loan Type and Collateral
The loan shall be comprised of three notes hereinafter referred to as Notes "A", "B", and "C" as follows:
Note A shall be in the principal amount of $40,000,000 and shall be evidenced by a Promissory Note executed by Four Queens, Inc. as Borrower. Note A shall be secured by First Deed of Trust and Security Agreement on the real and personal property known as the Four Queens Hotel and Casino ("Deed of Trust A"). Deed of Trust A shall encumber the fee and leasehold interest in the real property to include the parking garage, together with all furniture, fixtures, and equipment.
Note B shall be in principal amount of $30,000,000 and shall be evidenced by a Promissory Note executed by Hyatt Tahoe, Inc. Note B shall be secured by a First Deed of Trust and Security Agreement on the real and personal property known as the Hyatt Lake Tahoe ("Deed of Trust B") and Deed of Trust A.
Note C shall be executed by Hyatt Tahoe, Inc. to evidence the indebtedness which will become due and owing Bank upon the funding of the Hyatt Letter of Credit, as hereinafter defined, which Note C shall be in the principal amount of $5,000,000 and shall be secured by Deed of Trust A and Deed of Trust B.
Borrowers agree to remit the sum of $2,500,000 by the end of the second loan year and thereafter shall remit annually to Bank the additional sum of $1,250,000 as additional security for Note C until the sum of all such remittances totals $5,000,000. Bank shall place each remittance in a Certificate of Deposit which shall be pledged to Bank as additional security for Note C (the "Letter of Credit Fund").
Notes A, B, and C shall be further secured by such additional security instruments and assignments deemed necessary by Bank's counsel. (The rents and revenues due, and to become due to Hyatt Tahoe, Inc., as owner under the terms of the Hyatt Management Agreement, shall be assigned to Bank as additional security for Notes A and B.)
2. Participation Requirements
Bank's commitment to lend hereunder is subject to Bank receiving participation commitments in a form and from lenders acceptable to Bank in the aggregate amount of $55,000,000.
3. Purpose
The proceeds from Notes A and B shall be utilized to retire the $25,000,000 principal balance of the Elsinore Corporation, 14.0% subordinated debentures, to reduce by $20,000,000 the 15.5% senior mortgage bonds which are secured by the Atlantis Casino Hotel, and to retire the principal balance of the $25,000,000 senior mortgage bonds which are secured by the Hyatt Lake Tahoe Hotel Casino.
A Letter of Credit ("Hyatt Letter of Credit") shall be issued by Bank in favor of Hyatt Corporation and shall be payable in accordance with the terms and conditions of a tri-party agreement between Hyatt Corporation, Hyatt Tahoe, Inc., and Bank. The agreement shall set forth the terms under which Hyatt Corporation shall subordinate to Deed of Trust B, the Management Agreement dated March 30, 1979, between Hyatt Tahoe Management Corporation and Hyatt Tahoe, Inc. Note C shall evidence the indebtedness owing Bank upon the funding of the Hyatt Letter of Credit after crediting against such indebtedness the amount of the Letter of Credit Fund.
4. Guarantors
Note A shall be guaranteed by Hyatt Tahoe, Inc. and Elsinore Corporation. Note B shall be guaranteed by Four Queens, Inc. and Elsinore Corporation. Note C shall be guaranteed by Four Queens, Inc. and Elsinore Corporation.
The obligation of First Interstate Bank to disburse any funds is subject to numerous conditions, including the following:
(4) During the life of the Commitment and Loan, Borrowers and/or Elsinore Corporation shall not make any loans, advances, or equity contributions to any affiliate, except for advances made in conjunction with this loan closing as approved by Bank. Nothing herein shall *277 prevent Borrowers from advancing funds to Elsinore Corporation to satisfy Elsinore Head Office expense. Borrowers and/or Elsinore Corporation shall be allowed to loan a maximum of $5,000,000 to the Atlantis Casino Hotel pursuant to a condition of the Atlantis Gaming License.
(D-12).
Jeanne Hood testified that a syndicate of participating banks have been assembled and participation commitments obtained in the amount of $55,000,000. (See Tr. of 2/9/88 at 37). Jeanne Hood also testified that Elsinore Corporation, Hyatt Tahoe, Inc. and Four Queens intend to take the appropriate corporate action to guarantee the note obligations in accordance with the commitment letter. (See Tr. of 2/9/88 t 38). Jeanne Hood further testified that the terms and conditions of the commitment letter have been met and the commitment which by its terms expired on December 31, 1987 unless extended by the Bank, in writing, has been extended by the Bank to April 30, 1988. (See Tr. of 2/9/88 at 38-51). (D-13).
In the instant case, feasibility also depends upon the debtors' ability to increase revenues while maintaining the cost-cutting it has instituted over the course of these proceedings. The operations of the first post-confirmation year, while producing a book loss, should also produce a positive cash flow to allow operations to continue. The continuation of the debtors' management under the direction of its president, Jeanne Hood, assures an uninterrupted management policy in the post-confirmation period.
The Objectors, Funds, presented the testimony of Al Glasgow, who is engaged as a consultant in the gaming industry. Glasgow testified that from historical revenue data the gaming revenues of Atlantis for 1987 were 29% lower than 1986. (See Tr. of 2/18/88 at 116). (O-6). Based on the same historical revenue figures the casino revenues as reflected by "total win", "total drop", "table win", "slot win", "slot handle" showed decreases for the period September 1987 through January 1988 as compared to the period September 1986 to January 1987. (O-7).[1] Glasgow attributed this decrease to the strike period at the Atlantis and "an acceleration of an already existing loss." (See Tr. of 2/18/88 at 123). Glasgow further opined that low-limit games would not support a loyal customer base to allow the casino to make money (See Tr. of 2/18/88 at 151); that a proposed "token" program at the Atlantis was an "excellent idea" (See Tr. of 2/18/88 at 154); but that its ability to increase revenues depends upon the number of people bussed to the casino and the areas from which they are bussed. (See Tr. of 2/18/88 at 159). Glasgow also testified that the debtors' projections of casino revenues, specifically $85,000,000.00 for 1988 was not "realistic" in view of an $11,000,000.00 increase in casino revenues with a concomitant $3,000,000.00 increase in expenses. (See Tr. of 2/18/88 at 161-163). Glasgow based this conclusion in part on two findings that the Atlantis in January 1988 had a total win decrease of 13.8% over January 1987. "Total win" is the amount of money won by the casino by its games and slots. (See Tr. of 2/18/88 at 135). Glasgow predicted an increase in gaming revenues for the Atlantis of $3,000,000.00 for 1988. (See Tr. of 2/18/88 at 165). Glasgow testified that for the next year the Atlantis would suffer continued losses from the casino operations, (See Tr. of 2/18/88 at 169) and that "if the same patterns of operations continue," the "Atlantis can't make it" (See Tr. of 2/18/88 at 174), "unless there's a dramatic turn-around in gaming revenues that are realistically put into the plan" that being a *278 long-range marketing plan." (See Tr. of 2/18/88 at 176).
In assessing Mr. Glasgow's testimony this court considers the fact that Glasgow examined no marketing plan of the Atlantis, and was unaware of what it consisted of. (See Tr. of 2/18/88 at 178). Glasgow neither conducted nor examined any studies of low-limit games at the Atlantis, no study of repeat customers to the Atlantis, any internal operating reports, departmental analysis or bus information since August 1987. (See Tr. of 2/18/88 at 213-216). Glasgow's "prediction" of a $3 million increase in gaming revenues was not based on any calculations (See Tr. of 2/18/88 at 185); Glasgow undertook no analysis of complementaries (See Tr. of 2/18/88 at 188); the Atlantis casino performance statistics utilized by Glasgow (O-5) did not take into account the number of table games operating for the relevant periods, but only the numer of authorized table games. (See Tr. of 2/18/88 at 201-203).
Except for the historical data presented by Glasgow on reported gaming revenues, his testimony and the conclusions derived therefrom are devoid of any analysis of operations at the Atlantis to represent a reliable indicator of performance. At best, Mr. Glasgow's testimony represents an unreliable "prediction" that cannot displace the extensive analysis conducted by the debtors on their projections of future operations. Accordingly, the requirements of § 1129(a)(11) are met.
Section 1129(a)(12) requires that "all fees payable under section 1930, as determined by the court at the hearing on confirmation of the plan, have been paid or the plan provides for the payment of all such fees on the effective date of the plan."
Jeanne Hood testified that the debtor was current with respect to all required fees. (See Tr. of 2/9/88 at 106).
Based upon the foregoing, confirmation of the Third Amended Plan of Reorganization shall be and the same is hereby denied.
An order shall be submitted in accordance with this decision.
NOTES
[1] At the confirmation hearing Glasgow explained some of the relevant terms as follows. "Table drop" represents sales, or the amount of money purchased by a patron in cash or markers in exchange for chips. (See Tr. of 2/18/88 at 75). "Table win" is the amount of money that the casino retains based upon a hold percentage from its customers. (See Tr. of 2/18/88 at 75). "Slot handle" is coinage that goes into the coin acceptor of the slot machine. (See Tr. of 2/18/88 at 75). "Slot win" is the gross revenue from slot machines before the casino's expenses are deducted. (See Tr. of 2/18/88 at 76). "Total win" is the amount of money won by games and slots. (See Tr. of 2/18/88 at 135). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565633/ | 433 S.W.2d 713 (1968)
Joe B. CRAIG et ux., Appellants,
v.
STATE of Texas et al., Appellees.
No. 336.
Court of Civil Appeals of Texas, Tyler.
October 17, 1968.
Rehearing Denied November 21, 1968.
*714 Phenix & Wilder, Bill Wilder, Henderson, for appellants.
Colley & Lloyd, Paul S. Colley, Henderson, for appellees.
MOORE, Justice.
Appellants, Joe B. Craig and wife, condemnees in the court below, perfected this appeal from an order of the County Court of Rusk County sustaining the condemnors' motion to dismiss a condemnation suit for want of prosecution.
The record reveals that the state originally instituted condemnation proceedings against appellants seeking to condemn a portion of appellants' land for highway purposes. Not being satisfied with the award of the special commissioners, appellants duly perfected an appeal therefrom to the County Court of Rusk County. The state did not appeal. The appellee, State of Texas, filed a motion to dismiss the appeal for want of prosecution, alleging that appellants had failed to exercise reasonable diligence in the prosecution of their claim and had therefore abandoned the suit.
After a hearing, the trial court granted the condemnors' motion to dismiss and rendered a judgment carrying into effect the award theretofore entered by the special commissioners. Appellants excepted to the ruling and duly perfected this appeal, seeking a reversal of the judgment on the ground that the trial court erred in dismissing the suit for want of prosecution.
The facts bearing on the question are these: Appellants, together with several other landowners along Highway 79, agreed that in order to save time and expense in the defense of the various condemnation suits filed by the State that they would employ the same firm of attorneys to represent them. After the attorneys were employed, a hearing was conducted before the special commissioners and appellants were awarded the sum of $4,000.00 in damages. The State promptly deposited such sum into the Registry of the Court and took possession of appellants' land. Subsequently, appellants were granted permission to withdraw the funds from the Registry of the Court. The appellants duly perfected an appeal from the award by filing their objections and exceptions thereto in the County Court of Rusk County on January 23, 1959. Citation was promptly issued and the State filed an answer. The proceedings which took place in the County *715 Court are reflected by the docket sheet which was introduced in evidence upon the hearing of the motion to dismiss. The docket entries are as follows:
"DATE OF ORDERS: ORDER OF COURT
4-28-59 Set for hearing June 18, 1959 at 9:30 A.M.
Charlie M. Langford
5-28-59 Continued indefinitely.
Charlie M. Langford
11-18-59 Set for hearing Jan. 25, 1960.
C.M. Langford
1-8-60 Defendant's Amended Exceptions to Commissioners
Report filed
1-15-60 Continued on Courts own Motion
2-23-60 Set for hearing March 29th, 1960
3-29-60 Re-set for Tuesday, June 7, 1960
C.M. Langford
5-8-67 Motion on hearing to Dismiss set for 5/17/67 at
10: A.M.
F. R. Files
5/16/67 Motion of Rex Houston and Firm to be dismissed
as Attorneys is granted as per order.
F. R. Files
-- Hearing on Motion to Dismiss set for 10:00 A.M.
June 14, 1967.
F. R. Files"
The evidence offered upon the hearing to dismiss shows that the Honorable Paul S. Colley represented the State of Texas in the original condemnation proceedings and continued to represent the state until January 1, 1963, when he was elected and qualified as County Judge of Rusk County. Upon assuming his duties as County Judge, he turned the file over to his law partners with the understanding that they would represent the State of Texas. Judge Colley served as County Judge until November 30, 1966, when he resigned and was succeeded by the present County Judge, F. R. Files.
A review of the docket entries will reveal that the appellants exercised some diligence in bringing their case to trial prior to June 7, 1960. While the docket entries do not indicate any activity during the tenure of Judge Charlie M. Langford subsequent to June 7, 1960, until he was succeeded by Judge Colley on January 1, 1963, Mr. Craig testified that he was continually in contact with his attorney urging some action in the matter. He testified that he did not attempt to employ other attorneys because of his agreement with his neighbors agreeing to retain the same firm of attorneys. During the approximate three year period in which Judge Colley occupied the office of County Judge, appellant testified that he contacted Judge Colley on numerous occasions in his office requesting assistance in bringing the case to trial. Judge Colley admitted that appellant *716 had called on him frequently with regard to the case and that in each instance he advised appellant that he was disqualified and suggested that he see his attorney. Appellant testified that in response to Judge Colley's suggestion, he contacted his attorneys requesting that some action be taken. There is evidence in the record showing that during this period of time the attorneys representing the parties made an effort to agree upon the selection of some local attorney who would be willing to act as trial judge. At one time they were able to agree upon an attorney, but he refused to accept the appointment. Thereafter, the parties were never able to agree upon any other attorney. There is no evidence showing that appellants ever made a formal request to Judge Colley asking him to disqualify himself. Nor is there any evidence in the record showing that Judge Colley ever certified his disqualifications to the Governor or requested the appointment of another judge under the provisions of Arts. 1930, 1931 and 1933, Vernon's Ann.Tex. Civ.St.
After Judge Colley resigned on November 30, 1966, he returned to the private practice of law and resumed his duties as counsel for the State of Texas in this cause.
While it does not appear that appellants made any effort to secure a trial between the time Judge Files assumed the duties of County Judge on December 1, 1966, until the motion to dismiss was filed on May 8, 1967, it will be observed that the period of time involved only about four months, excluding the Christmas holiday season.
The evidence further shows that when the motion to dismiss was filed, appellants' attorneys promptly withdrew from the case and returned the file to the appellants. Shortly thereafter, on May 16, 1967, appellants employed another firm of lawyers who immediately addressed a letter to the County Judge advising of their employment and requesting a setting for the first available jury week. The hearing on the motion to dismiss was originally set by the court for May 17, 1967, but, at the request of appellants' new counsel, was reset for June 14, 1967. The trial judge conducted a full hearing and at the conclusion thereof entered the order dismissing the cause for want of prosecution, from which this appeal resulted.
The rule governing the decision of this case, supported by abundant authority, is that even without statutory authority, a court has the right to dismiss a suit for failure to prosecute it with due diligence. The matter rests in the sound discretion of the trial court. It is not an unbridled discretion but a judicial discretion subject to review. Upon review, the question is whether there was a clear abuse of discretion by the trial court. That is a question of law. Bevil v. Johnson, 157 Tex. 621, 307 S.W.2d 85; 20 Tex.Jur. 2d 214, Par. 33.
Before a court is authorized to dismiss the cause for want of prosecution, the trial judge must reach the conclusion that plaintiff has intentionally abandoned the prosecution thereof, or that the facts are such that the law will imply an intent to abandon the prosecution. Loftus v. Beckmann et al. (Tex.Com.App.), 1 S.W.2d 268, 270; Johnson v. Campbell et al. (Tex.Civ.App.), 154 S.W.2d 878. It has been said that a case should not be dismissed on the ground of abandonment unless such abandonment clearly appears. Loftus v. Beckmann, supra.
Each case is controlled by its own conditions. 20 Tex.Jur.2d 215, Par. 33.
Upon applying the foregoing rules to the facts of the present case, we believe the trial court was in error in dismissing the cause. As we view the record, the evidence is factually insufficient to show that the appellants intended to abandon the prosecution of their suit. As stated before, appellants timely appealed from the award of the special commissioners and promptly issued citation in the case. Thereafter, they caused the case to be set for *717 trial on several occasions. While we recognize that the evidence discloses an unexplained delay between June 7, 1960 and January 1, 1963, when Judge Colley took office as County Judge, in view of appellants' subsequent conduct showing an intent to prosecute the case, we do not believe it can be inferred that they intended to abandon their suit. The evidence shows that during the time that Judge Colley was disqualified, appellants made an effort to agree with opposing counsel for some other attorney to serve as trial judge, but were unsuccessful. While they did not go further and formally petition Judge Colley to disqualify himself and request the Governor to appoint a special judge, we do not believe this fact alone is sufficient to show an intent to completely abandon the cause. Nor do we believe that the inaction by appellants for the relatively short period of time between the time Judge Colley resigned until the motion to dismiss was filed was sufficient to show abandonment. It must be remembered that the circumstances surrounding this particular situation present a rather unusual chain of events which was not brought about by the appellants and which was not entirely subject to their control. The fact that the attorney representing the State subsequently became the trial judge constitutes a circumstance which is calculated to cause delay in the orderly process of the litigation. Had this situation not occurred, who can say that the cause would not have been tried or settled during the three year period while he occupied the bench. All in all, we do not believe that the facts here present a situation where it can be said that the evidence clearly shows that the appellants intended to abandon the prosecution of their case.
There is no showing and no attempt to show that appellees have been injured by the delay. Although we recognized that such proof was not essential, nevertheless, we believe this facet of the case is entitled to some weight in determining whether or not the order of dismissal was grounded upon the exercise of sound judicial discretion. Loftus v. Beckmann et al., supra.
While appellants may not have exercised the utmost diligence in the prosecution of their suit, we believe the peculiar facts and circumstances presented here are sufficient to explain the reason for the greater part of the delay, and are likewise sufficient to show that the appellants never actually intended to abandon their suit.
For the reasons stated, the judgment is reversed and the cause remanded for trial upon the merits. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1735211/ | 913 So. 2d 379 (2005)
Daniel George KELLEY a/k/a Daniel G. Kelley, Appellant,
v.
STATE of Mississippi, Appellee.
No. 2003-CP-02172-COA.
Court of Appeals of Mississippi.
April 19, 2005.
*381 Daniel George Kelley, Appellant, pro se.
Office of the Attorney General by W. Daniel Hinchcliff, attorney for appellee.
Before BRIDGES, P.J., GRIFFIS and ISHEE, JJ.
BRIDGES, P.J., for the Court.
¶ 1. After entering a guilty plea in the Yalobusha County Circuit Court to a charge of statutory rape, Daniel Kelley was sentenced to seventeen years imprisonment as an habitual offender pursuant to Mississippi Code Annotated § 99-19-81 (Rev.2000). He filed a motion for post-conviction relief which was denied without an evidentiary hearing. He appeals to this Court asserting thirty suggestions of error, eleven issues going to the substance of his sentence and nineteen issues going to ineffective assistance of counsel. Finding no error, we affirm.
SUBSTANTIVE ISSUES
¶ 2. In order to defeat summary dismissal under Mississippi Code Annotated § 99-39-11(2) (Rev.2000), a request for post-conviction relief must be pled with specificity. Ford v. State, 708 So. 2d 73, 75(¶ 8) (Miss.1998). When reviewing a lower court's decision to deny a motion for post-conviction relief, an appellate court *382 will not disturb the trial court's factual findings unless they are clearly erroneous. Brown v. State, 731 So. 2d 595, 598(¶ 6) (Miss.1999).
¶ 3. A valid guilty plea admits all elements of a formal charge and operates as a waiver of all non-jurisdictional defects contained in an indictment against a defendant. Brooks v. State, 573 So. 2d 1350, 1352 (Miss.1990). Kelley contends that he was apprehended in Louisiana and returned to Mississippi without being properly extradited. As the circuit court found, it appears from the record that extradition did in fact take place, but regardless of the legality of Kelley's return to Yalobusha County, the circuit court had personal and subject matter jurisdiction of him at the time he entered his guilty plea. See, e.g., Roberts v. State, 186 Miss. 732, 191 So. 823, 823 (Miss.1939). Therefore, whether or not he was properly extradited, the legality of his guilty plea cannot be attacked for lack of jurisdiction. This issue is without merit, and the circuit court did not err in summarily dismissing it.
¶ 4. Kelley additionally contends that his sentence was illegally imposed and exceeded the maximum allowed under law, in that the indictment charging him as an habitual offender was fatally flawed, both because he had been under the age of twenty-one when he committed the underlying felonies, and because he served one eighteen month sentence in a Louisiana parish jail rather than in a federal or state penitentiary. Mississippi Code Annotated § 99-19-81 (Rev.2000) does not require that underlying felonies have been committed after the age of twenty one. Further, the venue where a convicted felon actually served his sentence is not relevant, so long as the felon served two sentences of one or more years. Davis v. State, 680 So. 2d 848, 851 (Miss.1996). These issues are without merit, and the circuit court did not err in summarily dismissing them.
¶ 5. Kelley additionally contends that his plea was not freely and voluntarily entered. In determining whether a plea is freely and voluntarily entered, we look to see if "the defendant knows what the elements are of the charge against him including an understanding of the charge and its relation to him, what effect the plea will have, and what the possible sentence might be because of his plea." Wilson v. State, 577 So. 2d 394, 397 (Miss.1991). Specifically, the defendant must be told "that a guilty plea involves a waiver of the right to a trial by jury, the right to confront adverse witnesses, and the right to protection against self-incrimination." Alexander v. State, 605 So. 2d 1170, 1172 (Miss.1992). An appellate court will only overturn a trial court's finding of a knowing and voluntary guilty plea if that finding is clearly erroneous. State v. Tokman, 564 So. 2d 1339, 1341 (Miss.1990). In this case, the record clearly shows that Kelley was advised of the elements of the charge, the maximum sentence he could face, and what he waived in entering the plea. The circuit court did not err in finding Kelley's plea was knowing and voluntary. This issue is without merit, and the circuit court did not err in summarily dismissing it.
¶ 6. Kelley additionally contends that the habitual offender statute, Mississippi Code Annotated § 99-19-81 (Rev. 2000), infringes upon his rights under due process and equal protection, as secured under the Fourteenth Amendment to the United States Constitution and Article 3, Section 14 of the Mississippi Constitution. Kelley's argument is that one of the underlying felonies committed in Louisiana would have been punishable for only a term of under one year imprisonment had it been committed in Mississippi. This issue is procedurally barred. See, e.g., *383 Brooks, 573 So.2d at 1352. Moreover, even if this Court were to assume the bar did not preclude addressing this issue, the constitutionality of this statute has been repeatedly tested. See e.g. Sutherland v. State, 537 So. 2d 1360, 1362 (Miss.1989). This issue is without merit, and the circuit court did not err in summarily dismissing it.
¶ 7. Kelley additionally contends that he was denied due process, as secured by the Fourteenth Amendment to the United States Constitution as well as Article 3, Section 14 of the Mississippi Constitution, when the State failed to disclose both the name of the person whom the State initially suspected was the perpetrator of the crime, as well as evidence that could have been used to impeach a witness who might have been called by the State had the indictment proceeded to trial. Kelley also contends he was denied due process because: the circuit court should have held a hearing to determine the admissibility of evidence of a paternity test showing him to be the likely father of the child born to the victim; the circuit court should have granted him a trial, despite his guilty plea, when the victim recanted her identification of him as the perpetrator; and he should have been able to raise defenses of consent and the "unchaste character of the victim" in any hypothetical trial. A guilty plea operates as a waiver to all defenses that could have been presented except for those defenses going to the jurisdiction of the sentencing court. Brooks, 573 So.2d at 1352. Therefore, these issues are barred, and the circuit court did not err in summarily dismissing them.
INEFFECTIVE ASSISTANCE OF COUNSEL ISSUES
¶ 8. Claims of ineffective assistance of counsel require the defendant to satisfy the two-prong test of Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984), which was adopted by the Mississippi Supreme Court in Stringer v. State, 454 So. 2d 468, 476-77 (Miss.1984). Under the two-part test of Strickland, the defendant must first show that counsel's performance was deficient. This requires showing that counsel made errors so serious that counsel was not functioning as the "counsel" guaranteed the defendant by the Sixth Amendment. Second, the defendant must show that the deficient performance prejudiced the defense. This requires showing that counsel's errors were so serious as to deprive the defendant of a fair trial. Unless a defendant makes both showings, it cannot be said that the conviction resulted from a breakdown in the adversary process that renders the result unreliable. Strickland, 466 U.S. at 687, 104 S. Ct. 2052. The Strickland standard is applied under the strong but rebuttable presumption that counsel is competent and conduct at trial is reasonable, and appellate review of counsel's performance requires considering the totality of the circumstances for determining whether counsel's actions were both deficient and prejudicial. Leatherwood v. State, 473 So. 2d 964, 969 (Miss.1985).
¶ 9. Kelley contends his counsel was ineffective for failing to present defenses that his extradition was illegal and the indictment was defective because it charged him as an habitual offender. As discussed earlier in this opinion, there is no merit to the substantive basis of these issues going to the jurisdiction of the circuit court and the legality of his sentence. Therefore, there can be no showing that counsel's performance was deficient. These issues are without merit, and the circuit court did not err in summarily dismissing them. Kelley also contends his counsel was ineffective for failing to correctly *384 inform him of the maximum sentence because counsel did not ascertain that the habitual offender statute was not applicable to him. Counsel was not ineffective, because the habitual offender statute was correctly applied, and Kelley was correctly apprised.
¶ 10. Kelley additionally contends that his counsel was ineffective for failing to develop defenses which his pleading fails to specifically identify. In order to defeat summary dismissal of the ineffective assistance of counsel claim under Mississippi Code Annotated § 99-39-11(2) (Rev.2000), the allegation must be alleged with specificity. Ford, 708 So.2d at 75. There is no merit to this assignment of error, and the circuit court did not err in summarily dismissing it.
¶ 11. Kelley additionally contends that his counsel was ineffective for failing to object to the statement of the victim going to his identification. He contends that the statement was not voluntary and contained hearsay. However, the statement was not introduced as evidence, as Kelley had pleaded guilty. Consequently, there could be no deficient performance by counsel.
¶ 12. Kelley additionally contends that his counsel was ineffective for failing to be present when blood and saliva were collected for a paternity test. Kelley cites no legal authority suggesting counsel had grounds to prevent the test from taking place. Moreover, Kelley admits his counsel secured an agreed court order setting forth what testing would be allowed. Kelley additionally contends that his counsel was ineffective for failing to object to expert testimony concerning the paternity testing results, and to discover documents going to the validity of the testing. Kelley entered a knowing and voluntary guilty plea, and no expert testimony was introduced against him. There can be no showing of deficient performance. Additionally, Kelley contends his counsel's performance was deficient when counsel failed to investigate a possible conflict of interest because the son of Sheriff of Yalobusha County was employed by the private company, Reliagene, Inc., that performed the paternity test. Kelley admits that Reliagene is commonly used throughout Mississippi for paternity testing, but fails to state any specifics of how this relationship might have impacted upon him individually. There is no showing of deficient performance concerning any of the above discussed issues, and the circuit court did not err in summarily dismissing them.
¶ 13. Kelley additionally contends that his counsel was ineffective for failing to interview the victim and uncover her previous statement naming another male with whom she had sexual intercourse, and stating that Kelley had not engaged in penetration with her. Even assuming such statement existed, there is no showing of deficient performance, because counsel explicitly stated when the plea was entered that he had engaged in discovery and reviewed the paternity testing, and it was his professional judgment that the State could get the case to a jury. Counsel's performance was well within the Strickland standard. This issue is without merit, and the circuit court did not err in summarily dismissing it.
¶ 14. Kelley additionally contends that his counsel was ineffective for failing to secure a better plea. This assertion is plainly contradicted by Kelley's own statements that he was aware the maximum penalty was thirty years imprisonment, and in his pleadings he admits he discussed whether the offer was preferable than proceeding to trial with "an insanity defense." There is no showing of deficient performance. This issue is without merit, *385 and the circuit court did not err in summarily dismissing it.
¶ 15. Kelley additionally contends that his counsel was ineffective for failing to secure a mental evaluation. Again this assertion is contradicted by Kelley's own pleadings, in which he states he instructed counsel to discuss the possibility of a plea prior to securing a mental evaluation, and he instructed counsel to abandon that theory and accept the State's plea offer. Moreover, the record contains records of previous mental examinations, and in the plea colloquy, Kelley affirmatively stated that he had no mental impairment preventing him from understanding the nature of the proceedings and what he forfeited in entering his plea. There is no showing of deficient performance. This issue is without merit, and the circuit court did not err in summarily dismissing it.
¶ 16. Kelley additionally contends that his counsel was ineffective for "attempting to place on Kelley the burden of proving insanity." Kelley admits in his pleadings that he instructed his counsel to abandon the insanity issue. It appears that Kelley misunderstands the law applicable to his case. A defendant is presumed sane and therefore has the burden of producing a reasonable doubt as to his sanity at the time of the crime. White v. State, 542 So. 2d 250, 252 (Miss.1989). Kelley may believe that the copies of records of previous mental examinations that he and his counsel had in their possession met this threshold burden. That may be, but Kelley freely and knowingly chose to abandon this defense. There is no showing of deficient performance. This issue is without merit, and the circuit court did not err in summarily dismissing it.
¶ 17. Kelley additionally contends that his counsel was ineffective for failing to advise him to accept or decline the State's plea offer. Kelley admits that counsel informed him of the plea offer and instructed him to decide whether to accept or to instruct counsel to request a mental examination. The decision to accept or decline a plea offer is for the defendant to make. Bolton v. State, 831 So.2d 1184(¶ 17) (Miss.Ct.App.2002). There is no showing of deficient performance. This issue is without merit, and the circuit court did not err in summarily dismissing it.
¶ 18. Lastly, Kelley contends that his counsel was ineffective because the son of the Sheriff of Yalobusha County worked in counsel's office. A petitioner must plead with specificity how an asserted conflict of interest caused his counsel's decision to fall below the threshold of presumed competence. Tolliver v. State, 802 So.2d 125(¶ 11) (Miss.Ct.App.2001). There is no showing of deficient performance. This issue is without merit, and the circuit court did not err in summarily dismissing it.
¶ 19. THE JUDGMENT OF THE CIRCUIT COURT OF YALOBUSHA COUNTY DENYING POST-CONVICTION RELIEF IS AFFIRMED. ALL COSTS ARE ASSESSED TO YALOBUSHA COUNTY.
KING, C.J., LEE, P.J., IRVING, MYERS, CHANDLER, GRIFFIS, BARNES AND ISHEE, JJ., CONCUR. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2472053/ | 29 F.Supp.2d 379 (1998)
DESIGN-RITE, INC., Plaintiff,
v.
J.V. MANUFACTURING, INC., Defendant.
No. Civ.A. 96-CV-75699-DT.
United States District Court, E.D. Michigan, Southern Division.
July 23, 1998.
*380 John A. Van Ophem, Angela M. Brunetti, VanOphem, Meehan & Vanophem P.C., Troy, MI, for Plaintiff.
Robert L. Kelly, Dykema Gossett, Bloomfield Hills, MI, Robert Keegan, Trent Keisling, Head, Johnson & Kachigian, Fayetteville, Arkansas, for Defendant.
OPINION
DUGGAN, District Judge.
Introduction
Plaintiff brings this action seeking a judgment that defendant has infringed plaintiff's patent, U.S. Patent No. 4,953,109. Defendant asks the Court to rule as a matter of law that plaintiff's patent, is not infringed, either literally or under the doctrine of equivalents, by any of defendant's industrial trash compactor and baler products. The Court held a hearing on defendant's motion for summary judgment on February 5, 1998, and subsequently, held a Markman hearing on April 6, 1998. For the reasons that follow, the Court enters judgment in favor of defendant and dismisses plaintiff's complaint.
*381 Background
The present action involves a claim by plaintiff Design-Rite against defendant J.V. Manufacturing for defendant's products' alleged infringement of U.S. Patent No. 4,953,109 ("109") issued on August 28, 1990 to Stephen A. Burgis. The application for the '109 patent was filed by Stephen Burgis on October 16, 1989. The Burgis patent describes a compactor system having a hydraulic cylinder for displacing a ram to compact trash in a mobile trash container. The hydraulic cylinder is manipulated by an electronic control unit capable of independently calibrating and subsequently automatically controlling the displacement of the ram. Plaintiff owns the '109 patent and provides its electronic control units to manufacturers of automated trash compactors. Defendant is a corporation that manufactures and sells trash compactors and balers utilized in waste management. Plaintiff alleges in its complaint that virtually all of defendant's compactors and balers infringe the '109 patent.
Infringement
The claimed invention of the Burgis '109 patent is essentially an electronic control unit ("ECU") which, along with an operator control panel, controls the hydraulic cylinder and the ram. In the automatic mode, the ECU only requires actuation of the start button on the operator control panel to begin compactor operation. In automatic operation, the ECU receives only one other input from the compactor electro-mechanical and hydraulic system. That input is a signal which represents the value of the motor current from a conventional motor current sensor. The ECU first determines how much motor current the motor draws when it is not working against a load and then it "remembers" this value for future reference. The ECU can be set to automatically have the compactor make two or more strokes on each operation.
Assuming the trash container is not full, the ECU controls the forward and reverse valve for the hydraulic cylinder and the motor on/off switch to make the prescribed number of forward and reverse strokes during normal operation. The forward stroke is terminated at the full stroke time or by an excess current signal generated as a result of compacting trash. The reverse stroke follows the forward stroke, and it is terminated when the cylinder reaches the fully retracted position when the resulting load on the hydraulic cylinder produces a high motor current and the solenoid valve is put in neutral. If more forward and reverse strokes are required by the operator control setting, a forward stroke promptly follows the reverse stroke until the number of cycles have been completed.
In order to establish infringement of a patent, every limitation set forth in a patent claim must be found in an accused product or process exactly or by a substantial equivalent. Corning Glass Works v. Sumitomo Elec. U.S.A., Inc., 868 F.2d 1251, 1259 (Fed.Cir.1989). Stated differently, a court cannot find either a literal infringement or infringement by the doctrine of equivalents, if one limitation of a particular claim is not found in the accused product. The burden of proof in a patent infringement case is on the patentee to prove infringement by a preponderance of the evidence. Amstar Corp. v. Envirotech Corp., 823 F.2d 1538, 1545 (Fed. Cir.1987).
In the present case, plaintiff claims infringement of the independent claims 1, 19, and 35 of the Burgis '109 patent. The parties to the present dispute acknowledged at the April 6, 1998 Markman hearing that the present dispute concerns a critical limitation present in independent claims 1, 19, and 35.
THE COURT: Do you agree that if claims 1, 19 and 35 are not infringed, there's no infringement of the patent?
MR. MEEHAN: That's correct.
THE COURT: And let me ask defense counsel, do you agree that if those claims are infringed I'm not saying liability, but that there is infringement?
MR. KEISLING: Yes, Your Honor.
(4/6/98 Hrg. at 8). The final clause of independent claims 1, 19, and 35 contains the following limitation, "an electronic control unit having ... means for terminating said reverse signal when said current signal exceeds a stop value." At the Markman hearing, counsel for both parties acknowledged *382 that the interpretation of the phrase "means for terminating said reverse signal when said current signal exceeds a stop value" is the critical limitation at the heart of the present dispute. The parties consider the language of the limitation significant because defendant alleges that its products do not contain the requisite limitation.
It is undisputed that the limitation "an electronic control unit having ... means for terminating said reverse signal when said current signal exceeds a stop value" refers to the mechanism by which the reverse movement of the ram is terminated.
Plaintiff's position is that any use of motor current sensing to stop the reverse ram movement constitutes an infringement of the '109 patent. Stated differently, plaintiff argues that the critical limitation is broadly worded so as to refer to termination of the reverse movement of the ram whether in the "normal" mode of operation of the trash compactor or whether the trash compactor performs in an error mode. Conversely, defendant's position is that the "means for terminating said reverse signal when said current signal exceeds a stop value," as it is utilized in the patent, refers exclusively to the mechanism by which reverse ram movement is terminated in the "normal" mode of operation of the trash compactor.
Defendant asserts that in the normal mode of operation of its compactors and balers, the termination of the reverse movement of the ram is accomplished by employing conventional timers and limit switches. However, defendant does acknowledge that its products employ current sensor monitoring to terminate the reverse movement of the ram when the machine malfunctions and is operating in an "error" mode. The sole issue for the Court's resolution is whether the limitation "an electronic control unit having ... means for terminating said reverse signal when said current signal exceeds a stop value" refers to the termination of the reverse movement of the ram in the normal mode of operation, or if such language encompasses an error mode as well.
Literal Infringement of the Burgis '109 Patent
Infringement analysis involves a two-step process. First, the meaning and the scope of the patent claims must be determined. Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed.Cir.1995), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). This first step is commonly referred to as "claim construction" or "claim interpretation." In Markman, the Federal Circuit held that the Court has the "power and obligation to construe as a matter of law the meaning of language used in the patent claim." Id. at 979.[1] The second step, generally an issue of fact appropriate for resolution by the jury, involves a comparison of the properly construed claim to the allegedly infringing product. Id. As such, it is amenable to summary judgment where, inter alia, no reasonable fact finder could find infringement. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 117 S.Ct. 1040, 1053 n. 8, 137 L.Ed.2d 146, 41 USPQ2d 1865, 1875 n. 8 (1997).
In order to properly construe the claims of a patent, a court should consider: (1) the language of the claim; (2) the specification contained in the patent; and (3) the prosecution history. Markman, 52 F.3d at 979-80. After considering the language of the claim, the text of the patent specification and the drawings, the court may also look to the patent historythe "undisputed public record of proceedings in the Patent and Trademark Office." Id. Finally, the Court has the discretion to consider extrinsic evidence, i.e., evidence external to the patent and the prosecution history. Extrinsic evidence may be utilized to improve a court's understanding of the patent; however, it may not be used to vary or contradict the terms of a claim. With the foregoing in mind, the Court turns to a construction of the relevant limitation and a comparison of the limitation to the accused devices.
There appears to be considerable agreement between the parties that defendant's devices utilize conventional timers or *383 limit switches to terminate the reverse movement of the ram in the normal mode of operation of its compactors and balers. It is only when defendant's machines function in the error mode, that the processes outlined in the plaintiff's patent are implicated. Thus, the Court must determine the precise import of the critical limitation contained in independent claims 1, 19, and 35.
At the April 6, 1998 hearing on the meaning of the claims, the Court requested counsel for plaintiff to identify and describe the precise means employed by the patented device for terminating the reverse movement of the ram in an "error" mode. Counsel for plaintiff stated:
The error mode for the retraction cycle is described in the patent at column 12, beginning at line 11. If the return time is greater than two minutes, it indicates that the ram has hung up in its extended forward position and the sub-routine will generate an error signal as indicated by termination block 370 terminating the ram reverse sub-routine.
(Tr. 21, ¶¶ 14-20). Indeed, the patented device's function in an error mode is detailed at column 12, line 11 of the patent specification and reads as follows: "If the return time is greater than two minutes, it indicates that the ram has hung up in its extended forward position and the subroutine will generate an error signal as indicated by termination block 370, terminating the Ram Reverse subroutine." (Burgis '109 patent, column 12, lines 11-15).
The aforementioned language detailing the patented device's function in an error mode is set forth in the patent specification and is not set forth in the claims portion of the patent specification. It is only in the claim limitation portion of the patent specification that the language "electronic control unit having ... means for terminating said reverse signal when said current signal exceeds a stop value" is present. The limitational language of the claims of the '109 patent does not contain any reference to trash compactor function in an "error" mode.
Plaintiff argues that the language of the limitation does not contain any suggestion that the "means for terminating said reverse signal when said current signal exceeds a stop value" is limited to the "normal use" of the trash compactor. Therefore, plaintiff urges this Court to broadly read the limitational language of the independent claims of the '109 patent to encompass any use of current sensor monitoring in a trash compactor. Defendant claims that such a broad reading of the claims is not supported by the plain language of the claim limitation. Second, defendant avers that such an interpretation is contrary to the terms of the patent specification and the corresponding drawings and figures.
In this Court's opinion, it is reasonable to infer from a reading of the language of the independent claims, that the limitation "electronic control unit having ... means for terminating said reverse signal when said current signal exceeds a stop value" refers to the mechanism by which reverse ram travel is terminated in the normal operation of the trash compactor. The Court believes this is a proper interpretation of the claim because the patent specification clearly details a separate and distinct mechanism by which reverse ram travel is terminated in the error mode. The patented device's mechanism for termination in the error mode employs a process that utilizes an "error signal" which will in turn terminate the ram's return movement when the return time is greater than two minutes. In light of the patented device's specification which contains a separate mechanism for terminating reverse travel in the error mode, the Court does not believe that it is reasonable to infer that the limitational language contained in claims 1, 19, and 35 contemplates anything other than current sensing to determine the termination of the reverse ram travel in the normal mode of the patented device.
Moreover, Figure 13 of the '109 patent details a flow chart illustrating the reverse operation of the ram. The flow chart depicted in Figure 13 demonstrates that the current signal monitored in block 360 determines whether the ram has returned to the start point or whether it should continue its retraction. The current signal monitored in block 360 does not determine whether a fault or error condition exists. Instead, the function *384 of determining whether a fault or error condition exists is performed by a conventional timer indicated by block 368. In block 368, if the time exceeds two minutes, then an error code results. Therefore, based upon an analysis of the patented device's reverse ram operation as illustrated in Figure 13, the Court believes that the limitation "electronic control unit having ... means for terminating said reverse signal when said current signal exceeds a stop value" refers to reverse ram travel in the "normal" operation of the trash compactor.
The parties have agreed that defendant's accused products, i.e. its balers and compactors, use limit switches or timers to determine when the ram has reached the expected end of a reverse cycle in its normal operation. It is also undisputed that current sensor monitoring is utilized only to detect an error or fault condition in the accused products. As a result, defendant's products lack at least one element of each independent claim, i.e. a "means for terminating said reverse signal when said signal exceeds a stop value" in the normal operation of its compactors and balers. Therefore, defendant's products cannot literally infringe the Burgis '109 patent.
Moreover, the Court does not believe that infringement of the Burgis '109 patent has occurred under the doctrine of equivalents. If literal infringement is not present, infringement under the doctrine of equivalents still may be shown "if the differences between the claimed and accused products or processes are insubstantial." Hilton Davis Chemical Co. v. Warner-Jenkinson Co., Inc., 62 F.3d 1512, 1517 (Fed.Cir.1995). Insubstantial differences can be proved both through evidence that the accused and claimed products "include substantially the same function, way and result" and through other evidence that is relevant to the substantiality of differences between the products. Id. at 1518. Finally, if all the elements of the claim are present in the accused product, the existence of extra features will not defeat a claim of infringement. Uniroyal, Inc. v. Rudkin-Wiley Corp., 837 F.2d 1044, 1057-58 (Fed.Cir.1988).
The Court does not believe that plaintiff can succeed on its claim of infringement under the doctrine of equivalents. For the reasons previously discussed, the Court does not believe that all of the elements of claims 1, 19, and 35 are present in the accused devices. The Court is satisfied that any current sensor monitoring in defendant's products is exclusively utilized to detect the presence of an error or fault condition. As the Court has construed the relevant limitation of claims 1, 19, and 35 to relate to the reverse ram travel in the "normal" operation of the trash compactor, the Court does not believe plaintiff can succeed on a claim of infringement under the doctrine of equivalents.
Plaintiff objects to the entry of a judgment in favor of defendant based on non-infringement, contending that the claim interpretation which is the basis for a judgment of non-infringement, i.e. the meaning of the claim limitation "electronic control unit ... having a means for terminating said reverse signal when said current signal exceeds a stop value" and whether such limitation is present in the accused devices, was previously decided by this Court at a summary judgment motion hearing on Feb. 5, 1998. At that hearing, the Court was not persuaded that it could rule, as a matter of law, that defendant's products did not infringe plaintiff's patent.
Subsequent to this ruling, defendant requested a Markman hearing. Plaintiff concurred in this request stating:
Plaintiff concurs in the decision of the Court to attempt to resolve conflicting theories of claim interpretation in advance of the start of trial in this matter, and presumably, therefore, in advance of a final pretrial conference, because Markman does make it clear that these issues are legal issues that must be resolved by the Court even in a case that otherwise will be tried to a jury.
(Letter from Thomas Meehan, Esq. to the Honorable Patrick J. Duggan of 3/4/98, at 1).
On March 11, 1998, plaintiff filed a "Markman hearing" brief "in support of its position on the scope of claims." In such brief, plaintiff clearly "reargued" the issues which the Court addresses in this Opinion. At the Markman hearing on April 6, 1998, plaintiff *385 agreed that the issue to be resolved is the meaning of the limitation "electronic control unit ... having means for terminating said reverse signal when said current exceeds a stop value" and whether such limitation is present in the accused devices. Plaintiff argued in essence that defendant's products contain the relevant limitation, and therefore, infringe plaintiff's patent.
In sum, plaintiff concurred in defendant's request that the Court conduct a Markman hearing, the purpose of which is to ascertain the meaning of the contested claim limitation and determine its presence in the defendant's accused products. In this Court's opinion, plaintiff cannot, having availed itself of the opportunity to present arguments on claim interpretation, now contend that the Court may not properly "decide" the meaning of the limitation because the Court already implicitly ruled on that issue at a previous hearing. If plaintiff wished to raise an objection of this nature, the appropriate time would have been before the Court held the Markman hearing and entertained oral argument from both parties on the interpretation of the claim.
It is apparent that the Court, at the summary judgment hearing, was not satisfied, based on the arguments presented by the parties at that time, that it should rule as a matter of law on the issue. However, having been requested to conduct a Markman hearing and having received plaintiff's concurrence, the Court exercised its "power" and interpreted the claim at issue. The Court does not believe that its prior decision should preclude the Court, with the benefit of the Markman briefs and oral argument, to rule on the issues before it, even if, arguably, the Court previously declined to make such a ruling.
Based on the rulings set forth above, this Court is satisfied that plaintiff cannot prevail on its claim of infringement. Therefore, the Court shall enter judgment in favor of defendant and dismiss plaintiff's complaint.
A judgment consistent with this Opinion shall issue forthwith.
NOTES
[1] The language utilized by the Federal Circuit demonstrates the mandatory nature of the Court's duty to construe the meaning of the claims of a patent as a matter of law. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/231991/ | 205 F.2d 242
UNITED STATES ex rel. NUKK,v.DISTRICT DIRECTOR OF IMMIGRATION AND NATURALIZATION AT PORTOF NEW YORK et al.
No. 201, Docket 22601.
United States Court of Appeals Second Circuit.
Argued April 9, 1953.Decided June 17, 1953.
Myles J. Lane, U.S. Atty. for Southern District of New York, New York City, William J. Sexton, Asst. U.S. Atty., New York City, Louis Steinberg, New York City, District Counsel, Immigration and Naturalization Service, Lester Friedman, New York City, Attorney, Immigration and Naturalization Service, Max Blau, New York City, Attorney, Immigration and Naturalization Service, of counsel, for respondent-appellee.
Ira Gollobin, New York City, Harry Sacher, New York City, of counsel, for relator-appellant.
Before SWAN, Chief Judge, and CHASE and CLARK, Circuit Judges.
CHASE, Circuit Judge.
1
This appeal presents issues as to the right of an alien, lawfully ordered deported, to be released on bail pending the execution of the deportation warrant. They are much like those recently dealt with in United States ex rel. Yaris v. Esperdy, 2 Cir., 202 F.2d 109.
2
The appellant is an alien, a native of Estonia, who was lawfully admitted to this country for permanent residence in 1939. He has been lawfully ordered deported on the ground that after his entry he became a member of the Communist Party of the United States, and no question as to his deportability now survives. However, after he had been admitted to bail and while the proceedings for his deportation were still pending, the Attorney General directed that he be retaken into custody and held without bail. The deportation order became final on December 8, 1952, and the sole question now is whether the appellant has been unlawfully detained pending the execution of the deportation warrant.
3
The Internal Security Act of 1950 was in effect when the deportation proceedings were commenced and until December 24, 1952, when it was superseded by the Immigration and Nationality Act. As the lawfulness of the appellant's detention is to be determined in accordance with the law now applicable rather than that at the time the order on review was made,1 the appellee insists that the controlling statute is § 242(c) of the Immigration and Nationality Act, 8 U.S.C.A. § 1252(c), rather than § 23 of the Internal Security Act of 1950, 8 U.S.C. 156. Both statutes provide that the Attorney General shall have six months from the date the deportation order becomes final to effect the alien's departure from this country and that during such period he may, at the Attorney General's discretion, be detained or released on bond in such amount and on such conditions as the Attorney General may fix. Sec. 23 provides also for release on conditional parole and § 242(c) for release on such conditions as the Attorney General may prescribe. The only difference between the two sections which is of present significance is that the following provision for judicial review appears only in Sec. 242(c):
4
'Any court of competent jurisdiction shall have authority to review or revise any determination of the Attorney General concerning detention, release on bond, or other release during such six-month period upon a conclusive showing in habeas corpus proceedings that the Attorney General is not proceeding with such reasonable dispatch as may be warranted by the particular facts and circumstances in the case of any alien to effect such alien's departure from the United States within such six-month period.'
5
Now, as it did with respect to § 242(a) in United States ex rel. Yaris v. Esperdy, supra, 202 F.2d at page 112, the Government contends that the above quoted language confines judicial review of the Attorney General's exercise of discretion in denying bail to an alien to the ground therein expressly stated. Consequently, we are urged to affirm the order dismissing the writ for failure to make such a conclusive showing of lack of reasonable dispatch in deporting the relator.
6
In the Yaris case we did not agree with the Government's construction of the statute; but in this instance we do not reach that question because of the saving provisions in § 405(a) of the Immigration and Nationality Act, 8 U.S.C.A. § 1101 note, which reads in pertinent part that, 'Nothing contained in this Act, unless otherwise specifically provided therein shall be construed to affect the validity of any * * * proceeding which shall be valid at the time this Act shall take effect, or to affect any * * * proceedings, civil or criminal, brought * * * at the time this Act shall take effect; but as to all such * * * proceedings * * * the statutes or parts of statutes repealed by this Act are, unless otherwise specifically provided therein, hereby continued in force and effect. * * * '
7
The action of the Attorney General was taken in 'proceedings brought' at the time the Immigration and Nationality Act took effect and that Act is not to be construed 'to affect' that proceeding since it is not 'otherwise specifically provided therein.' See Murphy v. Utter, 186 U.S. 95, 111, 22 S.Ct. 776, 46 L.Ed. 1070. Consequently, there has for present purposes been no change in the applicable statute since the writ was dismissed.
8
This brings us to the matter which is decisive on this appeal. The action of the Attorney General in determining that the appellant should be detained is presumptively a lawful exercise of his discretion and the burden is on the alien to show the contrary. Carlson v. Landon, 342 U.S. 524, 72 S.Ct. 525, 96 L.Ed. 547; United States ex rel. Yaris v. Esperdy, supra; United States ex rel. Potash v. District Director, 2 Cir., 169 F.2d 747. At the deportation hearing he did not testify in his own behalf and refused to testify when called as a witness by the Government, claiming a Fifth Amendment privilege against self-incrimination. He made no attempt to show that his membership in the Communist Party had terminated or that he had not been, or was not continuing to be, active in supporting or extending that party's now well known unlawful objectives. He offered no evidence in support of the writ of habeas corpus. He was content to rest on his unsupported assertion in his traverse to the Government's return that there is no 'reasonable basis for anticipating that he would so conduct himself in aid of the world Communist movement as to constitute a menace to public interest if permitted to be at large, and any conclusion predicated upon such assumption is false and unfounded.' Far from being sufficient to carry the burden of proof resting upon the alien, this allegation is nothing but a futile attempt to put the Government to its proof of what was already prima facie established by the presumptive lawfulness of the Attorney General's determination.
9
Order affirmed.
1
United States ex rel. Yaris v. Esperdy, supra; United States ex rel. Wiczynski v. Shaughnessy, 2 Cir., 185 F.2d 347; United States ex rel. Pizzuto v. Shaughnessy, 2 Cir., 184 F.2d 666 | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/400999/ | 673 F.2d 242
In re NINE MILE LIMITED, d/b/a Serco Administrators andAmerican Warranty Corporation, Petitioner.
No. 82-1236.
United States Court of Appeals,Eighth Circuit.
March 23, 1982.
Timothy S. White and J. Richard Johnson, White & Warbasse, Cedar Rapids, Iowa and Kevin P. Tighe, Daniel J. Piliero, II, and Myrrel C. Hendricks, Jr., Washington, D. C., for petitioner.
Richard C. Garberson, Cedar Rapids, Iowa, and William F. Halligan, Columbia, S. C., for Philip Carnes.
Before HEANEY, BRIGHT and HENLEY, Circuit Judges.
PER CURIAM.
1
On February 18, 1982, the petitioner1 filed a petition for a writ of mandamus in this Court which requested that we order the United States District Court for the Northern District of Iowa to "temporarily stay its order" which granted a motion to change the venue of the underlying diversity lawsuit2 from the Northern District of Iowa to the District of South Carolina. The petitioner also requested this Court to order the United States District Court Clerk for the Northern District of Iowa to "request (the clerk for the District of South Carolina) that the physical custody of the original papers and filings" in the underlying lawsuit be returned to the Northern District of Iowa so that review could be had in that district court or in the Eighth Circuit. For the reasons discussed below, we grant the petition and order the district court to request the clerk for the District of South Carolina to return the original file and documents in this case to the clerk for the Northern District of Iowa. Upon return of the file and documents to the Northern District of Iowa, we direct the district court to promptly entertain and rule upon petitioner's motion to reconsider his transfer order. Following a ruling on petitioner's motion to reconsider, review may then, if so desired, be pursued in this Court.
2
The petitioner filed a diversity action3 against defendant Philip Earl Carnes in the Northern District of Iowa. Defendant Carnes filed a motion for a change of venue on November 23, 1981, which was resisted by the petitioner. On February 2, 1982, the district court, pursuant to 28 U.S.C. § 1404(a), granted Carnes' motion for change of venue and ordered the case transferred to the District of South Carolina, Columbia Division. Nine Mile Limited v. Carnes, No. C 81-130 (N.D.Ia. Feb. 2, 1982) (order).
3
On the same day the transfer order was entered, February 2, 1982, the clerk of the United States District Court for the Northern District of Iowa transferred the case's records to the District of South Carolina, Columbia Division.4
4
On February 5, 1982, the petitioner filed an application to stay the transfer order and request for extension of time to file motion to reconsider. On February 18, 1982, the district court denied the motion, holding that the federal district court in the Northern District of Iowa lost all jurisdiction when the clerk for the District of South Carolina received the file of the underlying action. Nine Mile Limited v. Carnes, supra. See also n.4.
5
The petitioner correctly argues that in order to permit adequate and orderly review of one federal district court's decision to transfer a case to another federal district court, physical transfer of the file should be delayed for a period of time after entry of the transfer order so that review may be sought in the transferor circuit. See Starnes v. McGuire, 512 F.2d 918, 924, 935 (D.C.Cir.1974) (en banc). Indeed, this Court previously observed that "the better procedure" is to "hold up the transfer for a reasonable time pending possible petition for reconsideration or review." Technitrol, Inc. v. McManus, 405 F.2d 84, 86 (8th Cir. 1968), cert. denied, 394 U.S. 997, 89 S.Ct. 1591, 22 L.Ed.2d 775 (1969). See also 15 Wright, Miller & Cooper, Federal Practice and Procedure § 3846 p. 229 (1976) (because appellate review, if available, "is more appropriate in the circuit in which the transferor court sits than in the circuit to which the case is transferred, the better practice, often codified in local rules, is routinely to stay grants of transfer for a sufficient period for appellate review to be sought").
6
The reason that physical transfer of a case file from the transferor court to the transferee court should be delayed for a reasonable time is that "physical transfer of the original papers in a case to a permissible transferee forum deprives the transferor circuit of jurisdiction to review the transfer." Starnes v. McGuire, supra, 512 F.2d at 924. Accord, 15 Wright, Miller & Cooper, Federal Practice and Procedure § 3846 pp. 228-229 (1976).
7
In this case, the clerk for the Northern District of Iowa transferred the case file to the District of South Carolina on the same day that the district court ordered the case transferred there. The case file was received by the District of South Carolina clerk on February 4, 1982-two days after the transfer order was filed in the Northern District of Iowa. Under the principles set forth above, we have no alternative but to grant the petition for a writ of mandamus.
8
Because the case file has been physically transferred to the clerk for the District of South Carolina, we lack jurisdiction to the transfer order. Nevertheless, and pursuant to our inherent authority over the district judges in this Circuit, we order the district court to request the clerk for the District of South Carolina to return the files in Nine Mile Limited v. Carnes, supra, to the Northern District of Iowa.5 When the files are returned to the Northern District of Iowa, the district court is to promptly consider and rule upon petitioner's motion for reconsideration of his transfer order. After the ruling on petitioner's motion, review may be pursued in this Court. Finally, we direct that future transfer orders be effectuated in accordance with the teachings of Starnes and Technitrol.
9
The petition for a writ of mandamus is granted and the cause is remanded to the district court for proceedings consistent with this opinion.
10
So ordered.
1
Nine Mile Limited, d/b/a Serco Administrators and American Warranty Corporation
2
Nine Mile Limited v. Carnes, No. C 81-130 (N.D.Ia.). See also n.3, infra
3
The petitioner's three-count complaint made various allegations charging breach of contract, tortious interference with business opportunities and misrepresentation
4
The district court stated in its February 18, 1982, order denying petitioner's application to stay transfer and request for extension of time to file motion to reconsider that the case file was received by the clerk of the District of South Carolina on February 4, 1982. Nine Mile Limited v. Carnes, No. C 81-130 (N.D.Ia. Feb. 18, 1982) (order)
5
Although this Court and the district court lack power to compel the District of South Carolina to return the case files to the Northern District of Iowa, we direct the district court and the clerk for the Northern District of Iowa to take every reasonable action possible in asking the District of South Carolina to return the files. Of course, we cannot predict whether the files will be returned; but in the event the District of South Carolina declines the requests by the district court and the clerk for the Northern District of Iowa, the petitioner has another avenue available: it may initiate a new proceeding seeking retransfer in the transferee court-here, the District of South Carolina-which may be reviewed in the transferee circuit. E.g., Starnes v. McGuire, 512 F.2d 918, 925 (D.C.Cir.1974) (en banc); 15 Wright, Miller & Cooper, supra, § 3846 pp. 230-231 | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/2027818/ | 463 N.E.2d 1087 (1984)
Garry G. REYNOLDS, Appellant (Defendant below),
v.
STATE of Indiana, Appellee (Plaintiff below).
No. 1182S410.
Supreme Court of Indiana.
May 21, 1984.
Calvin K. Hubbell, Valparaiso, for appellant; W. Jonathan Forker, Valparaiso, of counsel.
Linley E. Pearson, Atty. Gen., John D. Shuman, Deputy Atty. Gen., Indianapolis, for appellee.
PRENTICE, Justice.
This case is before us upon Defendant's (Appellant's) Petition for Rehearing, his appeal having resulted in an affirmance of the judgment of the trial court by decision and opinion published at 460 N.E.2d 506.
Defendant's first assignment of error was the trial court's having communicated with a member of the jury during deliberations and in the absence of Defendant or his counsel. Upon that issue, we held that there had been no error preserved for appeal. Unfortunately, we stated in our opinion that "the attorneys and the Defendant" were informed of the improper communications prior to the time the verdict was announced and made no indication of dissatisfaction with the action of the trial judge. In reality, the Defendant had not been informed of the improper occurrence, *1088 although his attorney had been so informed. Defendant now asserts that our opinion that error had not been preserved was predicated upon the erroneous belief that he had been aware of the communication personally prior to the time the verdict was announced. However, such is not the case, our decision having been dictated by virtue of his counsel's knowledge and inaction.
Courts have consistently held that notice or information given to an attorney constitutes notice to his client. See Link v. Wabash R. Co., (1962) 370 U.S. 626, 82 S. Ct. 1386, 8 L. Ed. 2d 734; Logal v. Cruse, (1977) 267 Ind. 83, 368 N.E.2d 235, cert. denied 435 U.S. 943, 98 S. Ct. 1523, 55 L. Ed. 2d 539; State ex rel. Brubaker v. Pritchard, (1956) 236 Ind. 222, 138 N.E.2d 233; Lovko v. Lovko, (1978) 179 Ind. App. 1, 384 N.E.2d 166.
Defendant further argues that our mistaken belief that he had been personally present when counsel was informed of the Judge's communications with the jury also controlled our decision that the error was not reviewable, as "fundamental error," notwithstanding that no objection had been made until after the verdict had been announced, but he is in error. Notwithstanding the different circumstances present in Decker v. State, (1979) 179 Ind. App. 472, 386 N.E.2d 192, where Decker had been present, the error assigned does not rise to the level of "fundamental error," as defined in our initial opinion and the cases there cited.
Defendant also argues that in determining that the trial court did not err in refusing to give his tendered instruction No. 8, which would have advised the jury that the crime of "assisting a criminal" was an offense of which it could find him guilty, we failed to consider his argument that the court did, in fact, give his tendered instruction No. 9 which defined the crime of "assisting a criminal." Defendant cited no authority and made no cogent argument supportive of the proposition that the giving of instruction No. 9 mandated the giving of instruction No. 8. As we see it, the court erred in giving No. 9, but it was not withdrawn following the court's refusal to give No. 8, and, in any event, we perceive no harm arising therefrom. We are aware of no proposition of law that the giving of one instruction not warranted by the charge or the evidence warrants or necessitates the giving of an erroneous instruction to compound the error.
The Petition for Rehearing is denied.
GIVAN, C.J., and HUNTER, DEBRULER and PIVARNIK, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1541061/ | 260 Pa. Super. 137 (1978)
393 A.2d 1050
Anthony BANDES and Margaret Bandes, his wife
v.
Joseph KLIMOSKI, Appellant
v.
Oswald BERRIOS and Brownsville General Hospital.
Superior Court of Pennsylvania.
Argued November 14, 1977.
Decided November 8, 1978.
*138 Behrend and Aronson, Pittsburgh, for plaintiffs.
William D. Phillips, Washington, for appellant.
William M. Radcliff, Uniontown, for appellees.
Before WATKINS, President Judge, and JACOBS, HOFFMAN, CERCONE, PRICE, VAN der VOORT and SPAETH, JJ.
*139 VAN der VOORT, Judge:
Suit was instituted in Fayette County by plaintiffs on July 18, 1975, for alleged personal injuries arising out of medical malpractice. The defendant-appellant, Joseph Klimoski, was served on July 25, 1975. Plaintiffs, in September, 1975, instituted a separate action in the same county against Brownsville General Hospital[1] (hereinafter referred to as the "Hospital") as well as an action in the United States District Court for the Western District of Pennsylvania against Oswald Berrios, M.D. (also spelled "Berios" at some places in the record and hereinafter referred to as "Berrios").
On September 24, 1975, the defendant-appellant filed a praecipe for a writ to join additional defendants Berrios and the Hospital. The writ was issued by the Prothonotary on the same day. It had not been served by January 19, 1976, when a praecipe to reissue the writ was filed. The Hospital was served with the reissued writ on January 20, 1976, and Berrios was served on January 30, 1976.
On February 13, 1976, the Hospital filed a motion to quash[2] the writ to join additional defendants based upon the failure of defendant-appellant to serve within thirty (30) days and/or the failure of defendant-appellant to make an application to the court to extend the time for cause shown. See Pennsylvania Rule of Civil Procedure 2254(b).[3] On *140 February 18, 1976, Berrios filed preliminary objections raising similar contentions. On March 26, 1976, the defendant-appellant filed a motion for extension of time to join additional defendants nunc pro tunc.
The various motions came before the lower court, and by Opinion and Order dated May 17, 1976, the lower court ruled in favor of the Hospital and Berrios. The Order of the lower court provided:
"AND NOW, May 17, 1976, the motion to quash the writ joining Brownsville General Hospital as an additional defendant is hereby granted and the preliminary objections of A. Berios, M.D. are hereby sustained. The complaint as to Brownsville General Hospital and A. Berios, M.D., as additional defendants, is hereby dismissed.
"The motion to join the additional defendant nunc pro tunc made by the plaintiffs, Anthony Bandes and Margaret Bandes (sic),[4] is hereby denied."
The defendant, on May 21, 1976, filed exceptions to the parts of the lower court order granting the motion of the Hospital and the preliminary objections of Berrios. The exceptions did not mention the denial of defendant-appellant's motion to proceed nunc pro tunc, so that we must hold that defendant-appellant's contentions on appeal as to that denial have not been properly preserved for appellate review. Thus, the sole issue before us is the propriety of the action by the lower court in granting the preliminary objections and motion to quash filed by Berrios and the Hospital.
In our review in the instant circumstances, we must be mindful that the lower court's decision should not be disturbed unless an abuse of discretion is shown. See Zakian v. Liljestrand, 438 Pa. 249, 264 A.2d 638 (1970); Marnell v. Cross, 372 Pa. 82, 92 A.2d 688 (1952). We cannot discern any such abuse of discretion in this case. Rule 2254(b) *141 clearly requires service upon an additional defendant ". . . within thirty (30) days of commencement of the action to join, unless the time be extended by the court upon cause shown". In the instant case, the appellant caused the issuance of writs to join Berrios and the Hospital in the case, on September 24, 1975. The writs were reissued almost four months later on January 19, 1976, without leave of court, and were thereafter served. In his own brief, appellant admits that the writs ". . . were reissued by praecipe and served without the permission of Court as contemplated by Pa.R.C.P. Rule 2254(b)". In a comparable situation, in Lamp v. Heyman, 469 Pa. 465, 477, 366 A.2d 882, 888 (1977), our Supreme Court recently held that analogous violations of the Rules of Civil Procedure would not be condoned or excused in the future:
"Nevertheless, we now conclude that there is too much potential for abuse in a rule which permits a plaintiff to keep an action alive without proper notice to a defendant merely by filing a praecipe for a writ of summons and then having the writ reissued in a timely fashion without attempting to effectuate service. In addition, we find that such a rule is inconsistent with the policy underlying statutes of limitation of avoiding stale claims, and with that underlying our court rules of making the processes of justice as speedy and efficient as possible. (Footnotes omitted.)
While Lamp v. Heyman, id., did not involve additional defendants, and was concerned with a different Rule of Civil Procedure, we find the rationale of that decision applicable and persuasive in our resolution of the instant appeal.
The defendant-appellant argues that the breach of the Rule was merely a technical one and should be excused because it is an exceedingly complex case in which ". . . the ultimate pursuit of a joinder to the point of service is not easily or cavalierly undertaken." This artful phrasing, however, is not accompanied by any facts to explain why service, a relatively simple procedure to place in *142 motion, was not attempted until months after the time period required by the Rule. In that regard, we must distinguish this case from the factual situation presented in Lamoree v. Penn Central Transportation Co., 238 Pa.Super. 380, 357 A.2d 595 (1976), where we reversed the lower court and permitted the joinder of an additional defendant some eight and a half months beyond the 60-day period permitted in Rule of Civil Procedure 2253.[5] In Lamoree, the defendants first filed a petition for leave to join an additional defendant nunc pro tunc. In reversing the lower court's granting of the proposed additional defendant's preliminary objection to the joinder in Lamoree, we found that the defendant had clearly shown valid cause to support a late joinder. In the instant case, where the joinder itself was timely accomplished within the time limits set forth in Rule 2253, but service was not made within the time limits of Rule 2254, no prior request was made, as in Lamoree, for the court's permission to comply with the Rule nunc pro tunc. Moreover, the appellant failed totally to evidence to the lower court, or to our court, compelling reasons to excuse the obvious violation of the Rule. Lamoree therefore does not provide support for the defendant-appellant's position in the instant case.
Based upon all of the above, we cannot hold that the lower court abused its discretion in dismissing the joinder of the proposed additional defendants in this case.
Affirmed, and the record remanded for further proceedings in the case.
WATKINS, former P.J., and HOFFMAN, J., did not participate in the consideration or decision of this case.
NOTES
[1] At Fayette County: No. 147 September Term, 1975.
[2] The lower court noted in its opinion that the Hospital should have filed preliminary objections rather than a motion to quash in these circumstances. No objection was raised to the procedure used, however, and the lower court therefore treated the merits of the issue. No contention is raised on the instant appeal that the lower court's action in this regard was in error.
[3] Rule 2254(b) provides: "The writ, or a copy of the complaint of the defendant or the additional defendant, if the joinder is commenced by complaint, shall be served by the sheriff in the same manner as a writ of summons within thirty (30) days of commencement of the action to join, unless the time be extended by the court upon cause shown. Copies of all pleadings theretofore filed in the action shall also be served by the sheriff with the complaint, if the joinder is commenced by complaint. If the joinder is commenced by writ, copies of all pleadings shall be served with the complaint when filed thereafter, in the manner provided by Rule 1027.
[4] It is obvious that the lower court meant, in this sentence, to refer to the defendant-appellant, and not the plaintiffs, Anthony Bandes and Margaret Bandes.
[5] Rule 2253 provides: "Neither praecipe for a writ to join an additional defendant nor a complaint if the joinder is commenced by a complaint, shall be filed by the original defendant or an additional defendant later than sixty (60) days after the service upon the original defendant of the initial pleading of the plaintiff or any amendment thereof unless such filing is allowed by the court upon cause shown." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2694772/ | [Cite as Adae v. Univ. of Cincinnati, 2012-Ohio-3855.]
Court of Claims of Ohio
The Ohio Judicial Center
65 South Front Street, Third Floor
Columbus, OH 43215
614.387.9800 or 1.800.824.8263
www.cco.state.oh.us
CYNTHIA A. ADAE, et al.
Plaintiffs
v.
UNIVERSITY OF CINCINNATI, et al.
Defendants
Case No. 2007-08228
Judge Alan C. Travis
DECISION
{¶ 1} Plaintiffs brought this action alleging medical negligence and loss of
consortium. The issues of liability and damages were bifurcated. After a trial on the
issue of liability, the court rendered judgment in favor of plaintiffs. The case then
proceeded to trial on the issue of damages.
{¶ 2} As an initial matter, regarding the deposition transcript of Jeffrey
Strakowski, M.D., which was admitted into evidence as Defendants’ Exhibit N, all
evidentiary objections set forth therein are OVERRULED.
{¶ 3} Plaintiffs alleged that Jennifer Bain, M.D., an employee of defendant
University of Cincinnati, was negligent in failing to timely diagnose and treat the spinal
epidural abscess suffered by plaintiff Cynthia “Cindy” A. Adae, and that such failure
resulted in her sustaining permanent neurological deficits. After trying the issue of
liability, the court concluded that Dr. Bain deviated from the standard of care in failing to
investigate the symptoms associated with Cindy’s condition and that Bain’s negligence
was the sole proximate cause of Cindy’s outcome. Judgment was entered in favor of
plaintiffs in an amount to be determined at the trial on the issue of damages.
{¶ 4} At the damages trial, Cindy and her husband of 33 years, plaintiff Howard
“Rau” Adae, Jr., testified as to the nature of Cindy’s condition subsequent to the spinal
injury and how it has affected them. According to Cindy, she has no function in her right
foot, little function in her right leg, “pretty good” function in her left leg, weak grip
strength in her hands, she requires catheterizing four or five times a day in order to pass
urine, and she requires digital stimulation of the bowel once or twice a day in order to
pass stool. She noted that she also suffers from occasional muscle spasms in her legs,
and that she takes medication to subdue them when they occur, but that Rau is able to
stop them immediately by applying pressure to her legs. She wears an orthotic brace
on her right foot and ankle which allows her to perform therapeutic walking for a short
time each day, but she is otherwise wheelchair-bound. Notwithstanding her
neurological deficits, Cindy stated that she believes her health is good overall. Though
she was diagnosed with type-1 diabetes as a child, she related that this condition has
remained under control for several years, and she noted that she has a family history of
individuals living to their 80s and 90s.
{¶ 5} Cindy stated that she sleeps in a hospital bed in the first-floor living room of
the family’s two-story home. Rau testified that at 7:00 a.m. each morning, he assists
Cindy in getting from the bed to her bedside commode chair. Cindy related that she
wears diapers in order to capture urine that leaks once her bladder has filled, and that
the diapers often become soaked overnight, especially during the periods in which she
takes Lasix, a water pill, to control the bodily swelling that she has suffered on and off
since her injury. Rau stated that when leaks occur, he puts on surgical gloves to clean
and sanitize the affected area, lubricates and inserts a catheter to drain the bladder, and
then removes the catheter and sanitizes the area once more. Cindy stated that she is
unable to catheterize herself.
{¶ 6} Rau testified that on most mornings, he gives Cindy a sponge bath, then
retrieves her clothes and provides some assistance as she dresses. Cindy stated that
she is capable of dressing herself for the most part, but that it requires a great deal of
effort and she tires quickly, particularly when it comes to putting on pants, which takes
several minutes and requires her to rock side to side in her bed. After she is dressed,
Cindy then performs exercises in bed, and Rau stated that he assists her with range of
motion exercises by raising her legs and bending her knees. When this is done, Rau
puts Cindy’s orthotic device on her right foot and ankle, which she stated that she
cannot do herself, and he then prepares breakfast and gives Cindy her medications.
Cindy related that they both prepared meals before her injury, but that she is unable to
do so now inasmuch as their kitchen lacks wheelchair accommodations. Rau also
related that Cindy can administer her own medications, including the insulin injections
she takes four times each day for her diabetes, but that he usually administers the first
and last injections because she is fatigued at those times.
{¶ 7} Rau stated that after finishing breakfast at about 8:00 a.m., he leaves the
house to work on the family farm, where they raise fruit, field crops, and cattle, and from
late May through the autumn, they operate a retail farm market open to the public. Rau
stated that Cindy worked on the farm with him since 1978, and that before her injury she
performed all manner of jobs, such as bailing hay and pruning trees in the apple
orchard; she also managed the sales room when it was open, including supervising the
part-time seasonal employees. Rau recalled that he and Cindy used to both work on
the farm from about 8:00 a.m. until dusk, year round.
{¶ 8} Cindy explained that after her injury, her role on the farm has been limited
to working a few hours a day when the sales room is open, where she answers
telephones, converses with customers, and supervises the seasonal employees. Rau
stated that Cindy’s inability to perform the work that she used to do on the farm has hurt
the business in that much of the work, such as pruning, is not being done, and that this
has had a negative effect on the quality of the produce. He stated that he cannot afford
to hire someone to perform all the work that she used to do, and that it is difficult to find
employees who will work under the tough hours and conditions.
{¶ 9} Rau testified that on the days when Cindy can work in the sales room, he
drives her there in a golf cart at about 8:00 a.m., when he leaves the house for work;
otherwise, Cindy stays in the house and can contact him by mobile phone if she needs
assistance, typically after a bladder or bowel accident. Rau stated that at 10:00 a.m.,
he takes a short break to check on Cindy and assist her with a therapeutic standing
exercise, which requires removal of her orthotic brace and getting out of her wheelchair.
Rau further stated that he takes a lunch break at noon, at which time he helps Cindy
onto her commode chair so that he can help empty her bowel, which he does by laying
on the floor, putting on a lubricated glove, and inserting a finger into the rectum to
digitally stimulate the bowel until a movement occurs, which may take up to ten minutes.
Cindy stated that she is unable to perform this task on her own. Rau stated that he then
prepares lunch, and when they are finished, he puts Cindy’s orthotic brace back on so
that she can use a walker to therapeutically ambulate for a few minutes around the first
floor of the home.
{¶ 10} According to Rau, he returns to work around 1:30 p.m., and during the
sales season he drives Cindy back to the sales room via golf cart, but outside the sales
season she remains in the house. He stated that he takes a short break at 3:00 p.m. to
check on her if she is in the house, and that at 5:00 p.m., he returns to catheterize her
bladder. He explained that on most evenings, he pushes her wheelchair outdoors and
around the house to the walk-in basement doors so that she can access a shower stall
that he constructed for her there; he related that the original shower is on the second
floor. He noted that during inclement weather, in lieu of going outdoors to access the
basement, he helps her scoot down the stairs. Cindy stated that she is unable to
transfer herself into the shower and requires assistance. According to Rau, when Cindy
is finished, he helps her put on her put on pajamas and then wheels her outside and
back to the first floor, where they have a supper that he prepares. Rau stated that
Cindy gets tired much more easily than she used to, usually retiring to bed around 7:30
p.m., at which time he performs more farm work or household chores such as laundry or
cleaning, which Cindy can no longer perform. He catheterizes her again before he goes
to bed, and may also stimulate another bowel movement at that time.
{¶ 11} Cindy and Rau both testified that the care provided by Rau is necessary,
and that they fear Cindy would have to move to a nursing home if she could no longer
receive that level of care. As for their living arrangements, Rau testified he built ramps
and added the basement shower stall to make their home more accessible for Cindy,
but that he does not believe the house can practically accommodate other items such
as an elevator or first-floor shower, and he noted that he served as the general
contractor for the original construction of the home. He related that instead of
attempting any other modifications to the existing home, he and Cindy would like to
build a handicapped accessible home on the farm property. Cindy testified that she
would also like to have a vehicle equipped for the mobility-impaired so that she could
more easily leave the house and regain some independence. She stated that she and
Rau currently leave the house for church every week, for doctor’s appointments, and for
an occasional meal at a restaurant, but that she and Rau no longer dine out or travel to
the degree they would like.
{¶ 12} Plaintiffs offered expert testimony, by way of deposition, from Carolyn
Miller, M.D., a board-certified neurosurgeon practicing at the Ohio State University
Medical Center. Dr. Miller reviewed Cindy’s medical records and saw her for an
examination. Dr. Miller testified that as a result of the spinal cord injury, Cindy has
tetraparesis, or weakness in all four limbs, most pronounced in her legs, including no
function at all in the right foot; reduced grip strength and some lack of sensory ability in
both hands; muscle spasms in her legs; inability to empty her bladder without a catheter
and urine leakage when the bladder becomes filled; and, inability to pass stool without
digital stimulation of the bowel. According to Dr. Miller, Cindy’s injuries are
probably permanent and she will thus never be able to functionally ambulate for the rest
of her life, and she will require a caregiver for the rest of her life to assist with tasks such
as catheterizing, changing of diapers and sanitizing after bladder, bowel stimulation and
occasional extraction of hard stool, and therapeutic exercises. Dr. Miller testified that
Cindy should not be left alone for more than a few hours at a time, and that she needs
to have someone available to respond quickly when she has bowel or bladder issues,
particularly because staying sanitary is key to avoiding infections and skin breakdown.
Dr. Miller opined that Cindy’s life expectancy is dependent upon the level of care she
receives, and that if she is properly cared for she should have a normal life expectancy.
{¶ 13} Defendants offered expert testimony, by way of deposition, from Jeffrey
Strakowski, M.D., a physician at Riverside Methodist Hospital in Columbus who is
board-certified in physical medicine and rehabilitation. (Defendants’ Exhibit N.) Dr.
Strakowski, who reviewed Cindy’s medical records and performed an independent
medical evaluation of her, testified that her spinal cord injury resulted in an assymetric
incomplete tetraparesis, meaning that she has incomplete motor function in all four
limbs, and that she also has incomplete bowel and bladder function. He related that his
examination demonstrated that Cindy has some weakness in her hands, but that they
remain substantially functional; that she has right leg strength of 2 or 3 on a scale of 5,
as opposed to Dr. Miller’s finding of 0/5 strength; that she has left leg strength of 3 or 4
on a scale of 5; and, that she has thoracic back pain and loss of sexual function.
{¶ 14} Dr. Strakowski testified that Cindy requires a caregiver to assist her in
passing urine and stool, and in transferring to and from her wheelchair. Concerning the
need for assistance in emptying the bladder, Dr. Strakowski explained that it is
important to keep Cindy from soiling herself so that she does not develop a skin
infection. Dr. Strakowski acknowledged that the therapeutic walking that Cindy
engages in while wearing her foot and ankle brace is beneficial for both exercising the
lower limbs and avoiding osteoporosis. In Dr. Strakowski’s opinion, Cindy needs a
caregiver to perform much of the same kind of assistance that Rau now provides,
particularly in regard to the bowel and bladder issues and transferring to and from the
wheelchair.
{¶ 15} Defendants also presented expert testimony from Michael Yaffe, M.D.,
who is board-certified in internal medicine and practices in Columbus at the McConnell
Heart Hospital and the Ohio State University Medical Center. Based upon his review of
Cindy’s medical records, Dr. Yaffe opined that Cindy has less than a normal life
expectancy as a result of co-morbid conditions, specifically hypertension and diabetes.
He explained that hypertension causes both hypertrophy of the heart muscle and renal
dysfunction, and that Cindy has exhibited a manifestation of hypertrophy inasmuch as
she suffered a flash-pulmonary edema, and has also exhibited symptoms of kidney
disease. He further explained that diabetes may cause damage to organs, especially
the heart, and that most diabetes patients do not reach normal life-expectancy even if
their blood sugar is well-controlled. He acknowledged, though, that Cindy takes
hypertension medication and that her diabetes has been under control for several years.
{¶ 16} Plaintiffs and defendants both offered testimony from professional life care
planners regarding the costs associated with Cindy’s care and well-being. William
Burke, Ph.D., a rehabilitation counselor who develops long-term plans of care for the
disabled and performs vocational assessments, testified for plaintiffs. Burke developed
a life care plan for Cindy based upon his review of her medical records, as well
evaluations that he performed at her home in 2008 and by telephone in 2011.
(Plaintiffs’ Exhibit 9A.) Burke’s plan places the cost of Cindy’s medical care,
medication, medical supplies and equipment, orthotics, therapy, mobility and
transportation equipment, and support services (e.g. a live-in personal care attendant)
at $89,637 annually for the remainder of her life. Burke’s plan does not include the cost
of architectural renovations to the existing home or construction of a wheelchair-
accessible new home, but he has been to plaintiffs’ home and found that it lacked
appropriate accommodations for Cindy’s needs. Burke testified that he coordinates with
contractors and architects to modify and build homes, and that he believes $75,000 is a
reasonable cost estimate for making the appropriate accommodations in a new home.
Burke also opined that as a result of her injuries, Cindy can no longer perform the type
of labor that she once performed on the farm.
{¶ 17} The most significant areas of disagreement between the life care planners
who testified in this case concerns the amount of time that a caregiver will be present
and the compensation of that caregiver. To that end, Burke testified that his
recommendation is for Cindy to have what Rau essentially now serves as, a live-in
caregiver who would be available at all times, but could leave the home for short
periods. Burke stated that the caregiver is needed to perform essentially the same work
that Rau is currently doing, although he acknowledged that Cindy might be able to
perform some meal preparation in a handicapped-accessible kitchen.
{¶ 18} He explained that the primary caregiver would work 260 days a year, and
a back-up caregiver would work 134 days a year while the primary is off-duty. Burke
concluded in his report that in order to hire a quality, trustworthy individual to serve in
this role, which entails the sensitive quasi-medical duties described earlier, an hourly
wage of $12 is appropriate. He stated that the plan offered by defendants’ life care
planner, which provides for 40 hours of care per week, is impractical in that it is difficult
to find someone to work that amount of hours spread across seven days a week, that
hiring an agency to provide this care would not be cost-effective, that the plan does not
allow time for the caregiver to buy groceries or run other errands, and that it would not
allow Cindy to remain at home if Rau were no longer able to care for her.
{¶ 19} Defendants presented the testimony of Dorene Spak, a rehabilitation
counselor who prepares lifecare plans and performs vocational assessments. Based
upon her review of Cindy’s medical records, Spak prepared a life care plan.
(Defendants’ Exhibit K.) She testified that her plan has much in common with Burke’s,
but she noted some differences such as her recommendations of a dietician, a
knee/foot orthotic in place of the ankle/foot orthotic that Cindy currently uses, occasional
psychological counseling for Cindy’s depression rather than the ongoing counseling
recommended by Burke, and, most significantly, her recommendation of part-time rather
than full-time care.
{¶ 20} Regarding that level of care, Spak stated that Cindy needs assistance with
her bowel and bladder issues, transferring to and from the wheelchair, therapeutic
ambulation, and performing household chores, and that this all amounts to less than six
hours of work per day; she explained that the weekly 40 hours of care called for in her
plan can be allocated throughout the week as needed. She acknowledged that the
need for care can arise at any time, that her plan leaves Cindy without a caregiver other
than Rau most of the time, and that she is unsure how long Cindy could live on her own
if Rau were no longer able to care for her. According to Spak, figures published by the
United States Bureau of Labor Statistics show that a home health aide in southern Ohio
earns an average $9.57 per hour, and in her opinion, this is a reasonable wage for the
caregiver contemplated in her plan.
{¶ 21} Lastly, plaintiffs offered the deposition testimony of David Boyd, Ph.D., an
economist at Denison University. Boyd testified that, based upon generally accepted
economic principles and methodologies, the life care plan prepared by Burke has a
present-day value of $2,452,277, assuming that Cindy enjoys the normal life
expectancy for a Caucasian woman her age, as established by the Bureau of Labor
Statistics, being 82.7 years. Boyd further testified as to Cindy’s lost earning capacity for
her work at the family farm, explaining that he used the standard methodology for
individuals such as Cindy who are not paid a wage for their work. He stated that if
Cindy worked 10 hours per day, 5 days per week, prior to her injury, as related in
Burke’s life care plan, for 50 weeks per year until age 67, and if the value of such work
is equivalent to the Bureau of Labor Statistics’ average hourly wage of $10.43 for
workers and laborers at Ohio farms, nurseries, and greenhouses, then the estimated
present value of her pre-injury earning capacity is $471,031.30. He stated that if after
her injury, Cindy now works an average of 4.5 hours per day, 5 days per week, for 50
weeks per year until age 67, at the same $10.43 hourly wage, the estimated present
value of her post-injury earning capacity is $186,571.57. Finally, he stated that if
Cindy’s post-injury earning capacity is subtracted from her pre-injury earning capacity,
this results in a total lost earning capacity of $284,459.73.
{¶ 22} Upon review of the evidence adduced at trial, the court finds that the life
care plan prepared by Burke more accurately reflects the care that Cindy requires in
order to lead a quality life than does the plan prepared by Spak. Drs. Miller and
Strakowski offered substantially similar descriptions of the nature, extent, and
permanency of Cindy’s injuries. The life care plans offered by Burke and Spak have
much in common as well, differing most significantly in terms of the hours and wages
associated with the caregiver that each of them agrees is needed. The court finds that
the type of care that Cindy needs is essentially the care that Rau currently provides,
including several bladder catheterizations daily, cleanup and sanitization of bladder
accidents at any time of the day, bowel stimulations once or twice daily, therapeutic
exercise, massaging of leg spasms at any time of the day, attiring, placement of the
right ankle brace, transfers to and from the wheelchair, and various household tasks.
The need for such care is spread throughout the day, can arise at anytime, and requires
that someone be available to quickly respond at all times. The importance of minimizing
the exposure of urine to Cindy’s skin is undisputed; under Rau’s care, she has not been
forced to remain in urine-soaked diapers or bedsheets, and she should not have to do
so if he were no longer around.
{¶ 23} Although defendants argue that Burke’s opinion on an appropriate wage
for the caregiver is inadmissible because Burke stated that he relied in part upon data
furnished by the Mid-Ohio Independent Living Center, which was not admitted into
evidence, his opinion is indeed admissible in that it is based upon his perception that
$12.00 an hour is reasonable. See Evid.R. 703; R.C. 2317.36. Further, Burke and
Spak both used similar methodology in gathering data for the preparation of their
reports.
{¶ 24} Boyd’s testimony establishes that the present value of the life care plan
developed by Burke is $89,637 annually for the remainder of Cindy’s life. The court
finds that plaintiffs have demonstrated that the most reasonable estimate of Cindy’s life
expectancy is the Bureau of Labor Statistics’ figure of 82.7 years. Dr. Miller credibly
stated that if Cindy continues to receive appropriate care, she should have a normal life
expectancy, and the court finds Dr. Miller’s opinion on this issue to be more persuasive
than Dr. Yaffe’s. Thus, as set forth in Boyd’s calculations, the present value of Cindy’s
life care plan for the period from 2011 to 2038 is $2,452,277.11. (Plaintiffs’ Exhibit 11.)
{¶ 25} Related to the life care plan, the court also finds that plaintiffs are entitled
to damages in the amount of $75,000 for the cost of either incorporating handicapped
accessible features into the construction of a new home or modifying their existing
home. Burke testified that this was a reasonable figure for such work, based upon his
experience working with contractors to perform this type of work, and the court finds his
testimony to be credible.
{¶ 26} It is clear that Cindy’s injuries will prevent her from ever performing the
type of farm work that she once performed, and she will be limited to the type of
customer service role that she now fulfills in the farm market. Based upon the totality of
the evidence, the court finds that Cindy has a reduced earning capacity as a result of
her injury, and based upon Boyd’s calculations, the value of her resultant lost income is
$284,459.73. Moreover, the court finds that plaintiffs are each entitled to damages for
pain and suffering in the amount of $250,000.
{¶ 27} The court notes that at the time of trial, the parties contemplated that any
award of damages would be reduced, pursuant to R.C. 3345.40(B)(2), by the amount of
a settlement that plaintiffs reached with Clinton Memorial Hospital. R.C. 3345.40(B)(2)
provides that any award against a state university or college shall be reduced by the
amount of “benefits” a plaintiff receives or is entitled to receive “for injuries or loss
allegedly incurred from a policy or policies of insurance or any other source * * *.”
However, in a recent decision, the Tenth District Court of Appeals determined that the
word “benefits,” as it appears in R.C. 3345.40(B)(2), refers to “‘[f]inancial assistance
received in time of sickness, disability, unemployment, etc., either from insurance or
public programs, such as social security.’” See Aubry v. Univ. of Toledo Med. Ctr., 10th
Dist. No. 11AP-509, 2012-Ohio-1313, ¶22, quoting Black’s Law Dictionary 158 (6th
Ed.1990). In the instant case, inasmuch as plaintiffs’ settlement with Clinton Memorial
Hospital does not constitute a benefit under the definition set forth in Aubry, the court
concludes that the statute does not operate to reduce plaintiffs’ award by the amount of
that settlement.
{¶ 28} In light of the foregoing, the court finds that plaintiffs are entitled to recover
total damages in the amount of $3,311,761.84, which includes the $25 filing fee paid by
plaintiffs. Accordingly, judgment shall be entered in that amount.
Court of Claims of Ohio
The Ohio Judicial Center
65 South Front Street, Third Floor
Columbus, OH 43215
614.387.9800 or 1.800.824.8263
www.cco.state.oh.us
CYNTHIA A. ADAE, et al.
Plaintiffs
v.
UNIVERSITY OF CINCINNATI, et al.
Defendants
Case No. 2007-08228
Judge Alan C. Travis
JUDGMENT ENTRY
{¶ 29} This case was tried to the court on the issue of plaintiffs’ damages. The
court has considered the evidence and, for the reasons set forth in the decision filed
concurrently herewith, judgment is rendered in favor of plaintiffs in the amount of
$3,311,761.84, which includes the $25 filing fee paid by plaintiffs. Court costs are
assessed against defendants. The clerk shall serve upon all parties notice of this
judgment and its date of entry upon the journal.
_____________________________________
ALAN C. TRAVIS
Judge
cc:
Anne B. Strait Kenneth S. Blumenthal
Naomi H. Maletz Michael J. Rourke
Assistant Attorneys General 495 South High Street, Suite 450
150 East Gay Street, 18th Floor Columbus, Ohio 43215
Columbus, Ohio 43215-3130
Michael R. Thomas
4 Sycamore Creek Drive
Springboro, Ohio 45066
001
Filed April 6, 2012
To S.C. reporter August 24, 2012 | 01-03-2023 | 08-02-2014 |
https://www.courtlistener.com/api/rest/v3/opinions/2694782/ | [Cite as State ex rel. Dann v. Tabacalera Nacional, S.A.A., 2012-Ohio-5300.]
Court of Claims of Ohio
The Ohio Judicial Center
65 South Front Street, Third Floor
Columbus, OH 43215
614.387.9800 or 1.800.824.8263
www.cco.state.oh.us
STATE OF OHIO, ex rel. ATTORNEY GENERAL MARC DANN
Plaintiff/Counter Defendant
v.
TABACALERA NACIONAL, S.A.A.
Defendant/Counter Plaintiff
Case No. 2008-09848-PR
Judge Clark B. Weaver Sr.
Magistrate Lewis F. Pettigrew
DECISION OF THE MAGISTRATE
{¶ 1} On May 20, 2011, the court granted summary judgment in favor of
defendant/counter plaintiff, Tabacalera Nacional, S.A.A. (Tanasa) on its counterclaim
against plaintiff/counter defendant, State of Ohio, ex rel. Attorney General Marc Dann
(the State). On March 12, 2012, this case was tried to a magistrate on the issue of
damages.
{¶ 2} This case concerns a settlement agreement between the State and Tanasa
relating to the sale of cigarettes in Ohio. Tanasa is a Peruvian tobacco manufacturer
which was engaged in the sale of cigarettes in Ohio. As such, Tanasa was required by
R.C. 1346.02 either to participate in a 1998 Master Settlement Agreement (MSA) or to
make deposits into a “qualified escrow fund” (escrow fund). Tanasa elected not to
participate in the MSA and began making deposits into the escrow fund. On June 20,
2003, the State brought suit against Tanasa alleging that Tanasa had failed to make
sufficient deposits. That suit was ultimately settled and dismissed by the parties
pursuant to the terms of a March 1, 2004 settlement agreement whereby Tanasa
Case No. 2008-09848-PR -2- DECISION
promised to make the appropriate deposits into the escrow fund and the State agreed to
dismiss the action and release Tanasa from further liability.
{¶ 3} On December 10, 2007, the State filed a complaint in the Franklin County
Court of Common Pleas alleging that Tanasa failed to deposit the required amount into
the escrow fund in violation of R.C. 1346.02. On August 29, 2008, Tanasa filed a
counterclaim seeking a declaratory judgment and alleging breach of contract. The
subsequent filing of a petition for removal effected the removal of the entire case to this
court. On December 3, 2008, the State filed an amended complaint seeking damages
for breach of settlement agreement.
{¶ 4} On May 20, 2011, the court granted Tanasa’s motion for summary judgment
as to the claim for breach of contract. Therein the court stated: “In short, the court
concludes that the language of the agreement does not require Tanasa to make 2003
escrow deposits beyond April 15, 2004. Accordingly, Tanasa cannot be held liable to
the State, as a matter of law, for its failure or refusal to make any such deposits. * * *
Turning to Tanasa’s claim, ‘“[w]hen a party breaches a settlement agreement to end
litigation and the breach causes a party to incur attorney fees in continuing litigation,
those fees are recoverable as compensatory damages in a breach of settlement claim.”’
Tejada-Hercules v. State Auto. Ins. Co., Franklin App. No. 08AP-150, 2008-Ohio-5066,
¶9, quoting Shanker v. Columbus Warehouse Ltd. Partnership (Mar. 31,1997), Franklin
App. No. 96APE09-1269. Having determined that the settlement agreement is valid
and enforceable as a matter of law, there is no question but that the State has breached
the agreement by filing suit herein.”
{¶ 5} The damages for breach of contract are those that “‘naturally flow from the
breach of contract, or such as may fairly be supposed to have been within the
contemplation of the parties, at the time the contract was made.’” Western Union Tel.
Co. v. Sullivan (1910), 82 Ohio St. 14, 21, quoting First Natl. Bank of Barnesville v.
Western Union Tel. Co. (1876), 30 Ohio St. 555. See also Patrick v. Western Union
Tel. Co. (1949), 86 Ohio App. 365; Rhodes v. Baird (1866), 16 Ohio St. 573; R & H
Case No. 2008-09848-PR -3- DECISION
Trucking, Inc. v. Occidental Fire & Cas. Co. (1981), 2 Ohio App.3d 269. As a general
rule, in an action upon a contract, a prevailing party who does not have the benefit of a
contractual right to attorney fees, is not entitled to such fees as costs in the absence of
a statute or bad faith on the part of the party against whom fees are to be taxed. See,
e.g., State ex rel. Durkin v. Ungaro (1988), 39 Ohio St.3d 191, 193; Gahanna v.
Eastgate Prop., Inc. (1988), 36 Ohio St.3d 65, 66.
{¶ 6} However, an exception to the general rule has been carved out for actions
alleging the breach of a settlement agreement. In Tejada-Hercules, supra, the Tenth
District Court of Appeals stated: “‘When a party breaches a settlement agreement to
end litigation and the breach causes a party to incur attorney fees in continuing
litigation, those fees are recoverable as compensatory damages in a breach of
settlement claim. Because defendant’s attorney fees are attributable to and were
incurred as the result of plaintiffs’ breach of the settlement agreement, defendant is
entitled to recover those fees in order to make whole and compensate him for losses
caused by plaintiffs’ breach.’” Id. at ¶9, quoting Shanker, supra. See also Dehoff v.
Veterinary Hosp. Operations of Cent. Ohio, Inc., Franklin App. No. 02AP-454, 2003-
Ohio-3334. (Recovery of attorney fees as compensatory damages for the breach of a
settlement agreement is limited to those circumstances where the agreement ends
pending litigation.)
{¶ 7} Accordingly, under the common law, Tanasa is entitled to attorney fees
inasmuch as the State has breached a settlement to end litigation and Tanasa has
incurred fees attributable to the breach. Western Union v. Sullivan, supra.
{¶ 8} In support of its claim for attorney fees and litigation expenses, Tanasa
presented the testimony of trial counsel Kimberly Doucher and its expert witness,
attorney John Mazza. Tanasa seeks to recover the fees and expenses generated by
local counsel, the law firm of Doucher & Doucher, LPA (Doucher firm) as well as those
generated by attorney J. Weis of Levin & Ginsburg, a Chicago based law firm.
Case No. 2008-09848-PR -4- DECISION
{¶ 9} Defendant objected to the expert testimony of attorney Mazza, pursuant to
L.C.C.R. 7(E), inasmuch as Tanasa had failed to timely provide a supplemental expert
report setting forth Mazza’s additional opinions regarding the legal fees generated by
Weis. The State also objected to opinion testimony regarding fees generated by the
Doucher firm subsequent to the issuance of Mazza’s report.
{¶ 10} L.C.C.R. 7(E) provides in relevant part:
{¶ 11} “(E) Expert witnesses.
{¶ 12} “Each trial attorney shall exchange with all other trial attorneys, in advance
of the trial, written reports of medical and expert witnesses expected to testify. The
parties shall submit expert reports in accordance with the schedule established by the
court.
{¶ 13} “A party may not call an expert witness to testify unless a written report
has been procured from said witness. It is the trial attorney's responsibility to take
reasonable measures, including the procurement of supplemental reports, to insure that
each such report adequately sets forth the expert's opinion. However, unless good
cause is shown, all supplemental reports must be supplied no later than thirty days prior
to trial. The report of an expert must reflect his opinions as to each issue on which the
expert will testify. An expert will not be permitted to testify or provide opinions on issues
not raised in his report.” (Emphasis added.)
{¶ 14} Tanasa acknowledges that a supplemental report was not provided to the
State. Therefore, the court sustains the State’s objection and shall not consider any
expert testimony regarding such fees.1 However, inasmuch as the Doucher firm has
continued to generate compensable legal fees and expenses in this case, up to and
including the day of trial, the court finds that strict compliance with L.C.C.R. 7(E) is
impractical and, accordingly, the court will consider Mazza’s opinions regarding such
fees in the absence of a supplemental expert report.
1
To preserve the record for review, Tanasa proffered both the trial testimony of attorney Weis and
the excluded expert testimony of attorney Mazza.
Case No. 2008-09848-PR -5- DECISION
{¶ 15} The State also objected to the presentation of any evidence by Tanasa on
the issue of attorney fees and litigation expenses on the grounds that Tanasa has
willfully failed to comply with both the Rules of Civil Procedure and the orders of this
court with regard to discovery. Tanasa has admitted that an itemized invoice regarding
the legal fees and expenses generated by attorney Weis was not provided to the State
until several months beyond the date when such discovery was due under the Rules of
Civil Procedure and the State maintains that such information was not made available
within the time required by the court’s September 26, 2011 order compelling such
discovery. Although the court has permitted Tanasa to supplement discovery with
respect to the Doucher fees and expenses, without penalty, Tanasa’s failures with
respect to the Weis fees are more egregious.2 The fact that two law firms in different
cities are representing a single client in one litigation raises the possibility of
redundancy. Tanasa has provided the court with no reasonable excuse for its failure to
timely provide such discovery and the court finds that Tanasa’s late production of a
Weis’ itemized invoice has unfairly prejudiced the State in its defense of Weis’ fees.
Thus, to the extent that a reviewing court may consider an award to Tanasa for the
Weis fees, without the aide of a corroborating expert opinion,3 the court finds that
2
On September 26, 2011, the court granted the State’s motion to compel production of
documents and ordered Tanasa to provide the State with complete and un-redacted responses to
pending discovery requests “within 10 days of the date of this entry.” Although itemized fee invoices from
the Doucher firm were provided, Tanasa did not timely provide discoverable information regarding Weis
fees.
3
“Although courts are deemed to be experts on the question of the reasonableness of an
attorney's fee and able to draw on their own knowledge and experience in determining a reasonable fee,
the testimony of duly qualified witnesses, given as expert opinion evidence, is admissible on the issue of
the value of an attorney's services. Generally the testimony of expert witnesses is not essential, but at
times a fair and reasonable compensation for the professional services of a lawyer can only be
ascertained by the opinion of members of the bar who have become familiar by experience and practice
with the character of such services; practicing lawyers occupy the position of experts on questions of this
nature. * * *
“The opinion evidence of expert witnesses as to the value of an attorney's services is not
conclusive or binding * * * on the court * * *. The services of an attorney, when rendered in litigation
before the same court that is passing on the value of such services, may, of themselves, constitute
evidence from which the court alone, unaided by opinion of others as to value, or even contrary to opinion
evidence, may reach a conclusion.” 7 American Jurisprudence 2d, Attorneys at Law, Sections 306-307.
Case No. 2008-09848-PR -6- DECISION
Tanasa’s failure to comply with both the Rules of Civil Procedure regarding discovery
and the spirit of the court’s orders regarding such discovery precludes an award of
Weis’ fees to Tanasa.
{¶ 16} With respect to the fees and expenses billed to Tanasa by the Doucher
firm, Kim Doucher testified that her firm agreed to represent Tanasa in this litigation in
2008 and that Tanasa and the Doucher firm entered into a fee agreement whereby she
would provide legal services at an hourly rate of $195. Although there are
correspondence regarding the arrangement, there is no written agreement.
{¶ 17} Attorney Doucher testified that the vast majority of the legal fees generated
by her firm were the result of her own work on the file at the rate of $195 per hour and
that a small amount of fees are attributable to a legal assistant whose services are billed
at a lower rate. Doucher testified that her work on this case began in 2008 when the
State filed its complaint against Tanasa in Franklin County Common Pleas Court and
that her work on the case has continued periodically through the date of trial. Doucher
identified and authenticated a number of invoices reflecting both the fees and expenses
generated by her firm on this case. (Defendant/Counter Plaintiff’s Exhibits B-K.)
Doucher estimated that an additional $5,850 in fees and expenses would be incurred by
Tanasa in connection with her work concerning the trial on the issue of damages.
{¶ 18} According to Doucher, the charges reflected in Defendant/Counter
Plaintiff’s Exhibits B through H have been paid by Tanasa in full, with the single
exception of an invoice which was reduced by $995 due to some duplication of effort.
Doucher testified that a total of $18,991.55 has been paid to date, that she fully expects
Tanasa to pay the remaining $13,211.75 in full, and that she intends to hold her client
responsible for the estimated $5,850 in fees and expenses which have yet to be
invoiced.
{¶ 19} John Mazza is an attorney licensed to practice law in Ohio since 1977.
According to Mazza, his legal practice has consisted almost exclusively of civil litigation.
Mazza reviewed the record in this case, the itemized invoices submitted by the Doucher
Case No. 2008-09848-PR -7- DECISION
firm, and some research produced by the firm. Based upon his knowledge, skill and 35
years of experience as a litigation attorney, Mazza opined that the hourly rate of $195
was reasonable and that legal work and expenses reflected in the invoices were
necessary in the competent prosecution of Tanasa’s case.
{¶ 20} Other than the State’s blanket objection to the presentation of any
testimony on the issue of damages, the State offered no evidence to rebut Mazza’s
opinions. Based upon the evidence submitted, the court finds that Tanasa has incurred
reasonable and necessary legal fees and expenses in the total amount of $38,053.30,
both in the defense of the complaint and in prosecution of its counterclaim. The State’s
contention that an unidentified third party has paid the legal fees and that such payment
constitutes a collateral source pursuant to R.C. 2743.02(D), is unsupported by the law
and the evidence.
{¶ 21} “It is axiomatic that a settlement agreement is a contract designed to
terminate a claim by preventing or ending litigation and that such agreements are valid
and enforceable by either party. * * * Further, settlement agreements are highly favored
in the law.” Continental W. Condominium Unit Owners Assn. v. Howard E. Ferguson,
Inc., 74 Ohio St.3d 501, 502, 1996-Ohio-158. (Citations omitted.) The award of
attorney fees against the state where the state has breached a settlement agreement is
consistent with both the policy favoring settlement and the waiver of state’s waiver of
immunity pursuant to R.C. Chapter 2743.
{¶ 22} Based upon the foregoing, judgment is recommended in favor of
defendant/counter plaintiff on its counterclaim in the total amount of $38,053.30.
{¶ 23} A party may file written objections to the magistrate’s decision within 14
days of the filing of the decision, whether or not the court has adopted the decision
during that 14-day period as permitted by Civ.R. 53(D)(4)(e)(i). If any party timely files
objections, any other party may also file objections not later than ten days after the first
objections are filed. A party shall not assign as error on appeal the court’s adoption of
any factual finding or legal conclusion, whether or not specifically designated as a
Case No. 2008-09848-PR -8- DECISION
finding of fact or conclusion of law under Civ.R. 53(D)(3)(a)(ii), unless the party timely
and specifically objects to that factual finding or legal conclusion within 14 days of the
filing of the decision, as required by Civ.R. 53(D)(3)(b).
_____________________________________
LEWIS F. PETTIGREW
Magistrate
cc:
Angela M. Sullivan Christopher P. Conomy
Assistant Attorney General Assistant Attorney General
Tobacco Enforcement Section 150 East Gay Street, 18th Floor
30 East Broad Street, 16th Floor Columbus, Ohio 43215-3130
Columbus, Ohio 43215
Kimberley A. Doucher
6385 Shier Rings Road, Suite 100
Dublin, Ohio 43016
006
Filed March 16, 2012
To S.C. Reporter November 15, 2012 | 01-03-2023 | 08-02-2014 |
https://www.courtlistener.com/api/rest/v3/opinions/236407/ | 221 F.2d 524
95 U.S.App.D.C. 244
RED STAR MANUFACTURING CO., Inc., Manati Pearl Works, Inc.,Petitioners,v.F. Granville GRIMES, Jr., Acting Administrator, Wage andHour Division, United States Department of Labor,Respondent.
No. 11949.
United States Court of Appeals, District of Columbia Circuit.
Argued Oct. 18, 1954.Decided Dec. 23, 1954.
[95 U.S.App.D.C. 245] Mr. Erwin Feldman, New York City, for petitioners.
Miss Bessie Margolin, Chief of Appellate Litigation, Washington, D.C., with whom Messrs. Stuart Rothman, Solicitor, and Joseph M. Stone, Attorney, Washington, D.C., all of the United States Department of Labor, were on the brief, for respondent.
Before PRETTYMAN, BAZELON and WASHINGTON, Circuit Judges.
BAZELON, Circuit Judge.
1
This is a petition to review an order of the Acting Administrator of the Wage and Hour Division of the Department of Labor under the Fair Labor Standards Act of 1938, as amended.1 The order raised the minimum wage for the Puerto Rican pearl button and buckle industry from 46 to 54 cents an hour. Petitioners, Red Star Manufacturing Co., Inc., and Manati Pearl Works, Inc., are prominent manufacturers of ocean pearl buttons in Puerto Rico,2 and are persons 'aggrieved' within the meaning of the judicial review provisions of the Act.3
2
By a 1949 amendment to § 6(a) of the Act, Congress established a 75 cent minimum hourly wage.4 Under § 6(c), as amended, that minimum is inapplicable in Puerto Rico and the Virgin Islands where pre-existing minimum wages were to remain in force until superseded by wage orders issued by the Administrator pursuant to the recommendations of a special industry committee.5 The mechanics for appointing such an industry committee are set out in § 5(a) which provides that such committees shall be subject to the provisions of § 8.6 Section 8(a) declares:
3
'The policy of this Act with respect to industries in Puerto Rico [95 U.S.App.D.C. 246] and the Virgin Islands engaged in commerce or in the production of goods for commerce is to reach as rapidly as is economically feasible without substantially curtailing employment the objective of the minimum wage (of 75 cents an hour).'7
4
Section 8(b) directs industry committees to recommend to the Administrator
5
'* * * the highest minimum wage rates for the industry which it determines, having due regard to economic and competitive conditions, will not substantially curtail employment in the industry, and will not give any industry in Puerto Rico * * * a competitive advantage over any industry in the United States outside of Puerto Rico * * *.'8
6
Section 10(a), which provides for judicial review, declares that 'findings of fact by the Administrator when supported by substantial evidence shall be conclusive.'9
7
In May 1952 the Administrator of the Wage and Hour Division appointed Industry Committee No. 12 for the Button, Buckle and Jewelry Industry in Puerto Rico.10 As authorized by § 8(b), public hearings were held in Puerto Rico in June 1952, at which time witnesses were heard and pertinent exhibits, including a comprehensive economic study prepared by the Wage and Hour Division,11 were submitted. On July 1, 1952, the Committee voted unanimously to recommend a 54 cent minimum wage,12 and in August its formal report was filed with the Administrator. Thereafter in October 1952, in accordance with § 8(d), a hearing was held before a Department of Labor Hearing Examiner in Washington, D.C.13 Witnesses, including representatives of the petitioners, presented objections to the 54 cent rate, and the Economic Report prepared by the Wage and Hour Division was resubmitted together with supplemental data brining it up to date. The Administrator's findings and opinion approving the 54 cent rate were issued in April 1953.
8
Two principal grounds are advanced for setting aside the order: I. The Administrator's finding that the proposed increase would not 'substantially curtail employment' is not supported by substantial evidence; and II. No full and fair hearing was accorded because the identity of mainland firms whose wage costs were listed in the Economic Report was not disclosed.14
I.
9
From the Administrator's findings and opinion, it appears that the conclusion that the proposed 8 cent an hour increase would not substantially curtail [95 U.S.App.D.C. 247] employment was predicated upon (1) a generally favorable evaluation of the Puerto Rican industry's current market position; and (2) an estimate that the proposed increase would effect an increase in total production costs of only about two per cent.
10
Petitioners contend that these subsidiary propositions are not supported by substantial evidence. Our consideration of this contention is governed by the following principles: '(we are not) to substitute our judgment of the weight of the evidence and the inferences to be drawn from it for that of the Administrator * * *';15 the Administrator is required to consider 'over all' economic factors but is not required to make a specific finding on every 'conceivable relevant item';16 and where the administrative process is 'fair and complete', we 'should hesitate long before nullifying the resultant * * *' order.17
11
(1) The generally favorable market position of the Puerto Rican firms. Petitioners argue that the evidence establishes sharply declining employment and profitability which have reduced the industry to such a 'low economic state' that it cannot sustain the proposed increase without substantial curtailment of employment.
12
Regarding employment, they urge that it is unrealistic to include the approximately 200 workers who were hired by Manati when it commenced its Puerto Rican operations in 1948 and that, accordingly, there has been a decline from a peak employment of more than 600 in 1936-37 to 'only some 200 employees' in 1952. But the Manati employment, while 'new,' is nonetheless employment, and the Administrator could properly so consider it. The resulting total for 1952 of 428, while less than the high of 600, is substantially greater than the low of 238 reported for 1945.18
13
Petitioners also assert that during the preceding year, 1951, two of the three firms were losing money and the third, Red Star, was earning a return on its $400,000 investment of only 2.5 per cent. But (1) 1951 was Red Star's poorest year of a four-year period during which its average net income after taxes was about $46,000, for a return of approximately 12.5 per cent on its investment;19 and (2) Manati, established in 1948, had, according to its own spokesman, 'anticipated a loss to start with.'20 Moreover, the Administrator did not disregard the recent 'downward trend' in 'the profitability of the firms in Puerto Rico * * *,' but found it to be a factor limiting the amount of the permissible increase.21 By thus taking the profit data into account, he has complied with the statutory directive to consider 'economic and competitive conditions.'
14
Finally, in finding that the unimposing recent profit record did not entirely preclude an increase in the minimum wage, the Administrator relied, in part, [95 U.S.App.D.C. 248] on statistics regarding shipments of pearl buttons to the mainland. These figures, which are contained in the Economic Report, show that in recent years shipments from Puerto Rico have been stable in volume and greater in value than at any time in the past, and that from 1948 to 1952 the proportion of the mainland market supplied by Puerto Rican manufacturers had increased in both quantity and value.22
15
We find no error in the subsidiary finding that the Puerto Rican industry currently enjoys a generally favorable market position.
16
The estimated two per cent increase in total costs. The Administrator found that the 8 cent increase would cause an increase in total costs of only about 2 per cent. The underlying figures for this computation are contained in the Economic Report, and petitioners do not seriously contest their accuracy.23 They do, however, challenge vigorously the premise accepted by the Administrator that an increase in the minimum wage would not appreciably affect wages already at or above the proposed minimum. It is petitioners' position that substantial wage increases will 'flow indirectly from the imposition of a higher minimum wage.'
17
At an Industry Committee hearing, the Secretary of Red Star explicitly stated that there 'wouldn't be any appreciable effect' on wages above the minimum. He qualified this statement to the extent that piecework rates, applicable to all pieceworkers, would have to be raised in order to preserve incentives. The witness estimated that a 10 cent increase in the minimum wage rate would mean a 10 to 25 per cent curtailment in employment, and hazarded, 'again * * * purely (as) a guess,' that a 5 cent increase would cause a 10 to 15 per cent reduction in employment. But the witness made no concrete showing that, in fact, productivity would suffer unless adjustments in the piecework rates were made; nor did he present evidence indicating that previous increases in the minimum wage had had this concomitant effect.
18
At the Administrator's hearing, petitioners presented more concrete evidence on this issue and sought to establish that the increase in the minimum would result in corresponding increases for all employees, straight-time as well as pieceworkers. A payroll analysis was introduced purporting to show that this effect followed the increase from 37 1/2 cents to 46 cents which became effective on August 21, 1950. These figures are meaningless and the Administrator could properly disregard them. (1) As of September 12, 1950, three weeks after the increase went into effect, the payroll had increased by an amount attributable only to raising wages formerly below 46 cents. (2) The 'indirect' effects are purportedly shown by increases reflected in the payroll for the week ended June 10, 1952, nearly two years later. (3) Those increases were the result of wage raises above the minimum which were set by union contracts negotiated during the intervening years.24 (4) It clearly [95 U.S.App.D.C. 249] appears from the record that factors other than the higher minimum wage accounted for such above-minimum increases, most notably 'the extraordinary increase in the cost of living * * *' and the unusually profitable business conditions that prevailed after the increase went into effect.
19
We hold that the Administrator's finding that an 8 cent an hour increase in the minimum wage would not necessitate substantial curtailment of employment is supported by substantial evidence.
II.
20
The Economic Report included, among other statistical data, a comparison of production costs of Puerto Rican firms with those of two unidentified mainland firms. At the Administrator's hearing, petitioners' request for disclosure of the names of these firms was denied, and petitioners now claim this limited their right of cross-examination and thus deprived them of a fair hearing. We do not agree.
21
These mainland cost data were relevant only to the determination of the Committee and the Administrator, pursuant to § 8(b), that the minimum wage proposed here does not give the Puerto Rican industry a competitive advantage over the industry on the mainland. Under our view of the statutory scheme, however, the validity of the proposed minimum does not rest upon this determination, but rests upon the determination, approved in our earlier discussion, that it 'is the highest minimum rate which can be established without substantially curtailing employment.' This determination executes the primary mandate of § 8(a), which declares that the policy of the Act with regard to industries in Puerto Rico is to reach the minimum wage of 75 cents an hour 'as rapidly as is economically feasible without substantially curtailing employment.' The proviso in § 8(b)-- that the minimum wage to be fixed under the Act for workers in Puerto Rico shall not be so low as to give a competitive advantage to Puerto Rican industry over mainland industry-- was introduced into the law in 1949 solely for the protection of mainland industry, and was not intended to confer rights upon industrial firms in Puerto Rico.25 In the light of this purpose of the proviso, petitioners have no basis here for claiming that they are entitled to inspect confidential data gathered by the respondent in support of his findings that the minimum wages fixed by him are not so low as to create an undue competitive advantage over mainland industry. Such finding in no way aggrieves the petitioners. Limitation upon cross-examination with regard to the data at issue was not therefore 'of such a prejudicial character as to make the hearing unfair.'26
22
Furthermore, in Opp Cotton Mills v. Administrator, the Supreme Court declared the Administrator's wage order function to be legislative in character, similar to that exercised by the President, with the aid of the Tariff Commission, in raising or lowering tariff duties.27 And in Norwegian Nitrogen Products Co. v. United States, the Court made clear that, in proceedings before the Tariff Commission, interested parties have no unrestricted right of access to even very relevant information in the Commission's files. To invalidate such a proceeding, the Court said, the nondisclosure 'must be shown to be arbitrary.'28 Here we find no arbitrary action: as in the Norwegian Nitrogen case, the 'information was obtained on a confidential basis'; and, for the reasons already discussed, [95 U.S.App.D.C. 250] the information in question was not of substantial importance in this proceeding.
23
The order of the Administrator is affirmed.
1
Act of June 25, 1938, 52 Stat. 1060, as amended by Fair Labor Standards Amendments of 1949, 63 Stat. 910, 29 U.S.C.A. § 201 et seq
2
A third firm, Porto Rican American Button Company, Inc., was operating in the ocean pearl button filed at the time these proceedings were instituted. It did not participate actively in the administrative hearings and is not a party here, probably because it has since switched to the manufacture of plastic buttons
3
29 U.S.C.A. § 210(a)
4
63 Stat. 912, 29 U.S.C.A. § 206(a)
5
63 Stat. 912, 29 U.S.C.A. § 206(c)
6
29 U.S.C.A. § 205(a)
7
29 U.S.C.A. § 208(a). Emphasis supplied
8
29 U.S.C.A. § 208(b). Emphasis supplied
9
29 U.S.C.A. § 210(a)
10
The Committee, as required by the statute, consisted of representatives of the public, and of employers and employees in the industry. 29 U.S.C.A. § 205(b)
11
This study, entitled 'The Button, Buckle and Jewelry Industry in Puerto Rico,' will be referred to as the 'Economic Report.'
12
This rate applied only to the buckle and button division of the industry, the Committee having decided that jewelry should be treated as a separate division
13
Under § 8(d), 29 U.S.C.A. § 208(d), the Administrator must consider the same factors 'required to be considered by the industry committee,' and has authority only to approve the Committee's recommendations, or to disapprove and refer the matter back to the Committee for further consideration
14
A third contention advanced by petitioners is that the report of the Industry Committee was improperly submitted to the Administrator because two of the Committee members-- from among the full membership of nine who considered, approved and signed the report-- had resigned prior to the date of signing. Clearly their resignations do not affect the validity of the report since § 5(c) of the Act provides that 'two-thirds of the members * * * shall constitute a quorum,' and that only a 'majority of all its members' is required for a Committee decision. 29 U.S.C.A. § 205(c)
15
Opp Cotton Mills v. Administrator, 1941, 312 U.S. 126, 156, 61 S.Ct. 524, 538, 85 L.Ed. 624
16
Andree & Seedman, Inc., v. Administrator, 1941, 74 App.D.C. 240, 243, 122 F.2d 634, 637
17
Southern Garment Mfrs. Ass'n v. Fleming, 1941, 74 App.D.C. 228, 238, 122 F.2d 622, 632
18
Petitioners also contend that the employment total of 428 is misleadingly high because the industry was working a short week, but statistics submitted by petitioners fail to indicate any significant decline in total man-hours worked
19
This average is somewhat inflated due to the unusual earnings in 1950 of more than $99,000, after taxes. But earnings after taxes in 1948 and 1949 averaged approximately $18,650, for a respectable return of about 4.7 per cent on a $400,000 investment
20
In 1950 Manati earned over $45,000 after taxes, an amount sufficient to offset its losses for the other three years and leave a net profit after taxes of over $10,000 for the four years of its operations
21
Another factor having a limiting effect was the competition to which the industry was subject from plastic buttons and imports from Japan and the Philippine Republic
22
The figures show, inter alia, that while prior to 1950 the value of all shipments (finished and unfinished) had never reached $1,000,000, in that year the value of total shipments amounted to $1,700,000, and continued in excess of $1,600,000 in 1951 and 1952; and that from 1948 to 1951 the proportion of the mainland market supplied by Puerto Rican manufacturers increased quantitatively from 13 to 17.2 per cent and value-wise from 8.2 to 14.2 per cent
23
Table 28 of the Economic Report shows that an increase to 54 cents would directly affect 59.5 per cent of the workers and would result in a percentage increase in the wage bill of 6.8 per cent. Labor costs in the Puerto Rican industry were assumed throughout the proceeding to amount to approximately 29 per cent of total costs
24
'Q. Does that (union) contract give specific minima over the various operations? A. (Secretary of Red Star) It provides a blanket minimum of 46 cents an hour and it specifies hourly rates of certain specific operations, such as polisher, mechanics--
'Q. Those on the hourly rate are specified in the contract? A. If there are any different rates than 46 cents they are specified in the contract.'
25
H.R.Rep. No. 5856, 81st Cong., 1st Sess., 63 Stat. 915 (1949); see Conference Rep. No. 1453, Oct. 17, 1949
26
Cia Mexicana de Gas v. Federal Power Commission, 5 Cir., 1948, 167 F.2d 804, 807
27
1941, 312 U.S. 126, 146, 61 S.Ct. 524, 85 L.Ed. 624
28
1933, 288 U.S. 294, 321, 53 S.Ct. 350, 360, 77 L.Ed. 796 | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/3040140/ | United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 05-3467
___________
Douglas W. Thompson, *
*
Appellant, *
*
v. * Appeal from the United States
* District Court for the
J. Booker, Warden, USP Leavenworth, * Eastern District of Missouri.
*
Appellee. * [UNPUBLISHED]
___________
Submitted: April 20, 2006
Filed: April 27, 2006
___________
Before WOLLMAN, MURPHY, and COLLOTON, Circuit Judges.
___________
PER CURIAM.
Douglas Thompson appeals the denial of his Federal Rule of Civil Procedure
60(b) motion. Thompson sought relief for the third time, this time relying on
Gonzalez v. Crosby, 125 S. Ct. 2641 (2005), from a March 2002 order denying his 28
U.S.C. § 2254 petition. Following careful review, we find no abuse of the district
court’s1 discretion. Accordingly, we affirm. See 8th Cir. R. 47B.
______________________________
1
The Honorable Carol E. Jackson, Chief Judge, United States District Court for
the Eastern District of Missouri. | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/3040145/ | Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
1-22-2008
Krensavage v. Bayer Corp
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-4302
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Recommended Citation
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http://digitalcommons.law.villanova.edu/thirdcircuit_2008/1722
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-4302
PAULA KRENSAVAGE,
Appellant
v.
BAYER CORPORATION and BAYER
CORPORATION WELFARE BENEFITS PLAN,
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil No. 04-01476)
District Judge: Honorable Terrence F. McVerry
Submitted Pursuant to Third Circuit LAR 34.1(a)
October 30, 2007
Before: RENDELL and NYGAARD, Circuit Judges,
and VANASKIE*, District Judge
(Filed January 22, 2008)
OPINION OF THE COURT
VANASKIE, District Judge.
*
The Honorable Thomas I. Vanaskie, United States District Judge for the Middle
District of Pennsylvania, sitting by designation.
Appellant Paula Krensavage appeals a District Court decision granting summary
judgment in favor of her employer, Bayer Corporation (“Bayer”), and Bayer Corporation
Welfare Benefits Plan, on her claims of violations of the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1101, et seq., and the Americans with Disabilities
Act (“ADA”), 42 U.S.C. § 12101, et seq. For the reasons that follow we will affirm the
grant of summary judgment.
I.
As we write only for the parties, we will set forth only those facts necessary to our
analysis. The Bayer Disability Plan (“the Plan”) designates Bayer as the Plan Sponsor
and Plan Administrator. The Plan Administrator is explicitly accorded discretion to make
final determinations of facts necessary or appropriate for claims under the Plan, interpret
the terms and provisions of the Plan, and decide any and all questions under the Plan.
Disability benefits are paid from a trust funded by periodic contributions from Bayer and
participants’ payroll contributions.
Kemper Services, Inc. (“Kemper”) is the third party Claims Administrator for the
Plan. Kemper considers participants’ applications for long-term disability (“LTD”)
benefits and makes the initial determination whether to grant or deny an application. A
plan participant may appeal an adverse determination to the Bayer ERISA Review
Committee.
Krensavage applied for LTD benefits in August of 2003. Along with her
2
application she submitted the opinion of her treating physician, James Kang, M.D., who
had concluded that she could not return to work at Bayer as an Administrative Assistant
due to continuing neck spasms, but could perform sedentary work for an eight (8) hour
day. On August 26, 2003, Krensavage filed an application for Social Security Disability
Income (“SSDI”) benefits, in which she represented that she was incapable of doing any
kind of work on a regular basis.
On October 10, 2003, Kemper denied Krensavage’s claim, basing its decision on
Dr. Kang’s opinion that Krensavage was able to perform sedentary work, as well as on a
medical review conducted by James Wallquist, M.D., an independent orthopedic surgeon.
By the time of Kemper’s decision, Krensavage’s short term disability leave had expired
and her continued absence from work was not excused. Bayer, however, granted
Krensavage a thirty-day “personal leave” while she appealed Kemper’s decision.
On November 3, 2003, Krensavage submitted a report of Thad C. Schrickel, D.C.,
who opined that she was unable to return to work. Two days later, however, she reported
to work, but was sent home because she had not been medically cleared to return to work
and Bayer’s policy does not permit an employee to work without medical clearance. The
only accommodation she requested at that time was an indefinite leave of absence.
On November 10, 2003, because her thirty-day leave had expired before her
ERISA appeal had been decided, Krensavage’s employment was terminated.
Krensavage, however, was informed that her employment would be reinstated if the LTD
appeal was decided in her favor.
3
On February 13, 2004, the ERISA Review Committee upheld the denial of LTD
benefits. It based it decision on the opinions of several independent doctors who either
had examined Krensavage or her medical records, as well as a report and surveillance
videotape from a private investigative service that showed Krensavage engaged in
activities inconsistent with her claim of total disability.
Krensavage commenced a civil action in the United States District Court for the
Western District of Pennsylvania, asserting claims under ERISA of wrongful denial of
LTD benefits and retaliatory discharge, as well as a discrimination claim under the ADA.
After a thorough review of the record and well-supported analysis of the law, the District
Court granted Defendants’ motion for summary judgment on all counts. Krensavage v.
Bayer Corp., No. 02:04cv1476, 2006 WL 2794562 (W.D. Pa. Sept. 27, 2006). This
appeal followed.
II.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review
over the District Court’s grant of summary judgment. Torre v. Casio, Inc., 42 F.3d 825,
830 (3d Cir. 1994).
III.
It is undisputed that Bayer, the plan administrator, has discretionary authority to
interpret and apply the plan. Accordingly, we review the denial of benefits under the
arbitrary and capricious standard. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101, 115 (1989); Vitale v. Latrobe Area Hosp., 420 F.3d 278, 281-82 (3d Cir. 2005).
4
Under this standard, the denial of benefits “will be overturned only if it is ‘clearly not
supported by the evidence in the record or the administrator has failed to comply with the
procedures required by the plan.’” Orvosh v. Program of Group Ins. for Salaried
Employees of Volkswagen of Am., Inc., 222 F.3d 123, 129 (3d Cir. 2000) (quoting
Abnathya v. Hoffman-La Roche, Inc., 2 F.3d 40, 41 (3d Cir. 1993)). Where, however, a
plan administrator with discretionary authority to determine eligibility for benefits
operates under a conflict of interest, we intensify the arbitrary and capricious review on a
sliding-scale approach in direct relation to the degree of that conflict. See Pinto v.
Reliance Standard Life Ins. Co., 214 F.3d 377, 393 (3d Cir. 2000).
Concluding that Bayer, which partially funded the plan, may have had a financial
incentive to deny claims, the District Court determined that there was a conflict of interest
sufficient to warrant a level of review more rigorous than the deferential arbitrary and
capricious standard. Citing our opinion in Stratton v. E.I. DuPont De Nemours & Co.,
363 F.3d 250 (3d Cir. 2004), the District Court also found that any conflict of interest was
tempered by Bayer’s retention of Kemper as an independent third party claims
administrator with responsibility to make initial benefits determinations. Accordingly,
the District Court applied only a “slightly heightened” version of arbitrary and capricious
review.
Krensavage contends that the District Court erred in determining the appropriate
standard of review, arguing that Bayer not only operated under a conflict of interest, but
also interfered with the initial evaluation of her application by Kemper, thus destroying
5
any neutrality in the decision-making process. She asserts that the denial of benefits must
be examined with a “‘high degree of skepticism.’” (Appellant’s Br. at 38, quoting Pinto,
214 F.3d at 394.)
Contrary to Krensavage’s assertions, there is no basis for scrutinizing the benefits
denial at a level more intense than that employed by the District Court. Indeed, it is
doubtful that even a “slightly heightened” standard of review should have been applied
here.
“[W]e have noted that a situation in which the employer establishes a plan, ensures
its liquidity, and creates an internal benefits committee vested with the discretion to
interpret the plan’s terms and administer benefits does not typically constitute a conflict
of interest.” Stratton, 363 F.3d at 254-55 (internal quotations and alterations omitted). In
this case, benefits are paid from a trust, not from Bayer’s operating budget. It has created
an internal benefits committee, and added the intercession of an independent claims
administrator, who has no financial incentive to deny claims. It is thus doubtful that there
was any financial conflict of interest burdening the consideration of Krensavage’s LTD
application. Moreover, the so-called interference with Kemper’s initial review of
Krensavage’s application would not warrant increasing the level of review as it is the
final decision of the ERISA Review Committee that is at issue. See Hanna v. Delta
Family-Care Disability and Survivorship Plan, No. 3:04CV1333, 2006 WL 1885181, at
*1 n.2 (M.D. Fla. July 7, 2006).
We need not decide, however, whether the District Court’s slight heightening of
6
the arbitrary and capricious standard was error. It is sufficient to find that no greater than
a slight heightening was appropriate.
Applying the “slightly heightened” standard of review, we agree with the District
Court that the ERISA Review Committee acted well within its discretion in denying
Krensavage’s application. The Committee was presented with substantial evidence that
Plaintiff was not totally disabled, including the opinions of several physicians. Although
Krensavage offered opinions that she was unable to perform any work, the dispute among
health care professionals does not make the Committee’s decision arbitrary and
capricious. Stratton, 363 F.3d at 258.
IV.
As to her ADA employment discrimination claim, Krensavage contends that the
District Court erred in applying judicial estoppel to find that plaintiff could not show that
she was a “qualified individual with a disability.” The District Court held that
representations made by Krensavage in her SSDI application and LTD benefits appeal
that she was “totally disabled” precluded her from showing that she could perform the
duties of her job at Bayer.
A threshold requirement in a disability discrimination case under the ADA is that
the plaintiff be a “qualified individual with a disability.” To satisfy this requirement, the
plaintiff must show, inter alia, that she can perform the essential functions of her job,
with or without reasonable accommodation. 42 U.S.C. § 12111(8). A “totally disabled”
person, by definition, cannot perform the essential functions of her job, regardless of the
7
accommodation.
We are satisfied that the District Court properly found that Krensavage was
estopped from showing that she was qualified to perform the essential duties of her
employment position with Bayer. “[A] plaintiff’s sworn assertion in an application for
disability benefits that she is, for example, ‘unable to work’ will appear to negate an
essential element of her ADA case–at least if she does not offer a sufficient explanation.”
Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 806 (1999). In fact, “an ADA
plaintiff cannot simply ignore the apparent contradiction that arises out of the earlier
SSDI total disability claim. Rather, she must proffer a sufficient explanation.” Id. Such
an inconsistency was present here, and the record contains no explanation for the
inconsistency.1
V.
Claiming that she was terminated “for no reason other than having asserted a
disability from performing the requirements of her job in support of her claim for LTD
Krensavage argues that it was error to apply judicial estoppel here because the
possibility of a “reasonable accommodation” is not addressed in the applications she
made for SSDI or LTD benefits. The only accommodation Krensavage suggested,
however, was extended unpaid leave, which certainly does not suggest an ability to
perform the essential functions of her job. Furthermore, it has been recognized that an
open-ended disability leave is not a reasonable accommodation under the ADA where, as
here, the plaintiff does not present evidence of the expected duration of her impairment.
See, e.g., Byrne v. Avon Products, Inc., 328 F.3d 379, 380-81 (7th Cir. 2003); Rascon v.
U.S. West Communications, Inc., 143 F.3d 1324, 1334 (10th Cir. 1998). Thus, the failure
to grant her indefinite leave could not constitute a failure to make a reasonable
accommodation of her disability.
8
benefits,” (Appellant’s Br. at 56), Krensavage argues that the District Court erred in
granting summary judgment on her ERISA retaliatory discharge claim. We are satisfied
that the record lacks any direct or circumstantial evidence of retaliatory intent on the part
of Bayer. The undisputed facts are that Krensavage did not receive medical clearance to
return to work and had exhausted all available leave time when her employment was
terminated. Moreover, the termination was made conditional, so that her employment
would be reinstated if her appeal of the denial of LTD benefits was successful. Under
these circumstances, no reasonable fact-finder could draw an inference of an intent to
retaliate against Krensavage for having pursued LTD benefits.
VI.
For the foregoing reasons, we will affirm the District Court’s grant of summary
judgment for Defendants.
9 | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2454479/ | 250 P.3d 993 (2011)
241 Or. App. 724
TURNER
v.
HOWTON.
A142372
Court of Appeals of Oregon.
March 30, 2011.
Affirmed without opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565721/ | 284 S.W.2d 440 (1955)
Marilyn BUNCH, an Infant by Elmer Loren Bunch, her Next Friend, Appellant,
v.
Erwin MUELLER, Respondent.
No. 45057.
Supreme Court of Missouri. En Banc.
November 14, 1955.
Rehearing Denied December 12, 1955.
*441 Lyng, MacLeod & Davidson, Russell N. MacLeod and F. Daley Abels, St. Louis, for plaintiff-appellant.
Jones, Hocker, Gladney & Grand, H. C. Gaebe, Jr., and Harold B. Bamburg, St. Louis, for respondent.
DALTON, Judge.
Action for damages for personal injuries sustained by plaintiff, a ten year old *442 child, when she was struck by defendant's automobile as she was crossing a public street in the city of St. Louis. The cause was submitted on defendant's alleged humanitarian negligence in failing to stop or warn. Verdict and judgment were for defendant and plaintiff appealed. Since the amount sued for was $5,000, the appeal was taken to the St. Louis Court of Appeals, where that court would have affirmed the judgment [Bunch v. Mueller, Mo.App., 278 S.W.2d 25], but on application of plaintiff-appellant the cause has been transferred to this court. We shall review the record as if on original appeal to this court. Art. V, Sec. 10, Const. of Mo.1945, V.A.M.S.
Plaintiff-appellant contends that the court erred in giving Instruction No. 5, on sole cause, at the request of defendant. Defendant-respondent, however, insists (1) that the instruction correctly declares the law; (2) that, in any event, it was not prejudicially erroneous; and (3) that, even if the instruction is erroneous, the error is immaterial because the plaintiff-appellant failed to make a submissible case of humanitarian negligence for the jury on the grounds submitted. Respondent says there was "no evidence to show where the defendant was at the time the plaintiff first came into a position of imminent peril." If plaintiff failed to make a case for the jury, the error, if any, in the giving of Instruction No. 5 was harmless and immaterial. O'Dell v. Dean, 356 Mo. 861, 204 S.W.2d 248; Coleman v. Ziegler, Mo.Sup., 248 S.W.2d 610, 617. Accordingly, we must determine whether plaintiff made a case for the jury on the grounds submitted.
The evidence favorable to plaintiff tended to show that on September 19, 1952, plaintiff was residing with her parents at 4158 McRee Street in the city of St. Louis. About 5 p. m. in the afternoon of that day, she started to go to a drug store south of Lafayette Avenue to get a paper for her mother. Lafayette is 30 to 35 feet in width and runs east and west. It intersects, at right angles, Tower Grove Avenue which is 50 to 55 feet in width. The intersection was marked for "a four-way stop." There were four lines of traffic, two each way on Tower Grove, and two lines of traffic, one each way on Lafayette. Plaintiff was walking south on the east side of Tower Grove. She stepped off the sidewalk into Lafayette to cross it at the corner and she walked straight across from the sidewalk. While on the curb, she looked both right and left before she started to cross and she saw no automobile approaching that would interfere with her crossing. She then started walking south and "never did run." When she reached the center of Lafayette she looked again to her right and saw "nothing coming." She continued walking south, until she was struck and knocked down by defendant's eastbound automobile. The front part of the automobile, the radiator, hit her. The automobile came from her right. She never saw it, until it struck her. She was knocked down and fell in the street in front of the automobile. After she was down and the automobile had been stopped, it was so close to her she could touch it. Her evidence does not otherwise show how far she had walked beyond the center of Lafayette, nor how far she was moved eastwardly from her original position by the impact of the automobile. The skin of her right hip was broken and the hip was bruised. Both knees were cut and plaintiff suffered other injuries.
There was evidence that, shortly after the collision, defendant told two police officers that, as he reached the crosswalk, the child started crossing the street from north to south; that the child "walked in front of" his automobile; that he saw her when she was about 10 feet ahead; that he didn't see her until he struck her; that the front bumper of his automobile struck her; that, at the instant of the collision, he was traveling about 10 miles per hour; and that he had not exceeded 15 miles per hour in crossing Tower Grove.
Plaintiff also offered parts of defendant's prior deposition testimony to the effect that he was going east on the south side of Lafayette; that he had had to creep through the traffic on Tower Grove; that his maximum speed was 5 or 8 miles per hour; that plaintiff was on his (south side) of *443 Lafayette, when he saw her; that he was looking straight ahead, when he saw her; that he didn't see anyone crossing Lafayette before he saw plaintiff; that he had looked to the left before he reached the crosswalk and saw no one crossing the street; and that the range of his vision included the crosswalk to his left.
Defendant's testimony favorable to plaintiff at the trial tended to show that there was very heavy traffic in each of the four lanes of traffic on Tower Grove; that he had had to inch his way across; that he had to stop and start, and to hesitate and then go a little farther; that he had had to stop and let automobiles pass in front of him in each of the two northbound lanes (east lanes) on Tower Grove; that, when the traffic cleared in the furtherest east lane, he looked to his left, looked at the crosswalk, and saw no one; that he never saw plaintiff, until she was crossing the center line of Lafayette and coming into his side of the street; that she must have passed in front of a westbound automobile on Lafayette, "as she appeared right out of nowhere in front of" him; that he saw her "just as she bumped into" him and "diagonally cut across in front of" him; that his speed, after the last northbound cars on Tower Grove had passed in front of him, did not exceed 5-8 miles per hour, but that it could have been 2 or 3 miles per hour; that his speed during the first 5 feet did not exceed 2 miles per hour; that at 5 miles per hour, he could have stopped in one foot, including reaction time, and in about 1½ feet at 8 miles per hour; that at no time did he sound his horn; that, after the last northbound car had passed in front of him on Tower Grove, there was nothing to obstruct his view of the crosswalk across Lafayette; that, when he started up after the last car had passed, he was more than 10 feet west of the east line of Tower Grove; that his automobile was in good condition and the streets dry and level; and that, when he saw plaintiff, he stepped on the brakes and "stopped dead" and there were no skid marks.
Other evidence favorable to plaintiff included a part of the testimony of defendant's witnesses, Mr. and Mrs. Jacques. They both saw the plaintiff cross the north half of Lafayette going south. She crossed in front of their westbound automobile. She looked only to the east. There was nothing between plaintiff and the defendant's automobile (as the defendant was coming east through the east line of northbound traffic on Tower Grove) to have prevented defendant from seeing the plaintiff as she moved across Lafayette to the point of collision.
Plaintiff offered no direct testimony as to how fast she walked in crossing Lafayette to the point of collision. She said she did not run and her evidence indicates that she was proceeding in the usual and ordinary manner of a child of her age. No reasons for haste or delay appear. In such case the rate at which she traveled was a matter of common knowledge. Jurors are presumed to know of such matters. "This court has taken judicial notice of the fact that the ordinary walking speed of the average man is two or three miles per hour or 2.9 to 4.4 feet per second." De Lay v. Ward, Mo.Sup., 262 S.W.2d 628, 635, and cases cited. A ten year old child would walk at approximately the same speed. Further, her testimony tends to show she had reached the approximate center of the eastbound traffic lane in the south half of Lafayette, and that she was oblivious of her peril when she was struck by the radiator of defendant's automobile. The distance of defendant's automobile from plaintiff's line of travel at any particular time, as plaintiff moved across Lafayette, was a mere matter of computation by the jury, dependent upon what speed the jury might believe and find the plaintiff to have been walking and the defendant to have been traveling as he moved from his stopped position in Tower Grove to the point of collision. Where plaintiff was when she came into a position of imminent peril of being struck by defendant's automobile was a fact question for the jury to determine under all of the circumstances in evidence. Wofford v. St. Louis Public Service Co., Mo.Sup., 252 S.W.2d 529, 533; Kelley v. St. Louis *444 Public Service Co., Mo.Sup., 248 S.W.2d 597, 601.
In view of the evidence in the record as to the speed at which defendant operated his automobile and the distance within which he could stop it at stated speeds, it is clear that there was evidence from which a jury could find that, after plaintiff came into a position of definite and certain peril from the approach of defendant's automobile, the defendant was a sufficient distance away from her, and from her line of travel, that he could have stopped his automobile or sounded a warning and have avoided striking and injuring her. The jury could find that plaintiff had stepped off the sidewalk at the north curb of Lafayette and had walked directly south along a proper crossing at a speed of 2 to 3 miles per hour; that she traveled some 18 to 20 feet in Lafayette and, after she had passed the center of Lafayette, she was struck and knocked down by the front bumper and radiator of defendant's automobile; that at 2.9 to 4.4 feet per second it took her some 4 to 7 seconds to walk from the north curb of Lafayette to the point of collision; that the front of defendant's automobile had moved from a stopped position west of the easternmost northbound traffic lane on Tower Grove to the point of collision at from 2 to 3 or 5 to 8 miles per hour; that his speed did not exceed 2.9 feet per second during the first 5 feet; that it took defendant some 3 or more seconds to move from his stopped position to the point of collision; that during all of such time there was nothing to obstruct defendant's view of plaintiff and her movements; that defendant could have stopped his automobile within a foot to a foot and a half, including reaction time; and that he neither stopped, nor sounded a warning, but drove his automobile directly into and against the plaintiff. The court did not err in refusing to direct a verdict for defendant. See De Lay v. Ward, supra, 262 S.W.2d 628, 634; Anderson v. Prugh, Mo.Sup., 264 S.W.2d 358, 363.
Appellant contends that the court erred in giving Instruction No. 5, "for the reason (a) that the factual situation precluded a sole cause defense; and (b) that as a result thereof the instruction did not and could not hypothesize a set of facts justifying a sole cause defense." Of course there must be facts in evidence which will sustain a sole cause defense before a defendant may properly have a sole cause instruction. Johnson v. Cox, Mo.Sup., 262 S.W.2d 13, 16; Bootee v. Kansas City Public Service Co., 353 Mo. 716, 183 S.W.2d 892, 896; Long v. Mild, 347 Mo. 1002, 149 S.W.2d 853, 860. In other words, the evidence must be such that the sole cause instruction may hypothesize a sufficient state of facts and circumstances to necessarily exclude the defendant's humanitarian negligence as a possible concurring cause of plaintiff's injury by demonstrating that defendant was free from such negligence and showing that plaintiff's conduct was the sole cause.
Instruction No. 5 is as follows: "The Court instructs the jury that if you find and believe from the evidence that the plaintiff, Marilyn Bunch, while crossing Lafayette Avenue near its intersection with Tower Grove Avenue from the north curb to the south curb of said Lafayette Avenue, looked only toward her left, that is to say, east on Lafayette Avenue, and that plaintiff failed to look to her right, if you so find, and in so failing she was negligent, and thereupon plaintiff suddenly and unexpectedly ran from the north curb of Lafayette Avenue toward and directly into the path of defendant's automobile, and that in so running she was negligent, and that such failure, if any, to look toward her right before plaintiff suddenly and unexpectedly ran into the path of defendant's automobile, if you so find, was the sole cause of the collision; and if you further find that when plaintiff came into a position of imminent peril of being struck by defendant's automobile, the automobile of defendant was then so close to plaintiff that in the exercise of the highest degree of care defendant could not have avoided the collision by stopping said automobile, or giving a signal or warning of his proximity and approach, if you so find, then and in that *445 event you are instructed that the defendant was not guilty of any negligence, and your verdict should be in favor of defendant, Erwin Mueller."
In determining the sufficiency of the evidence to sustain the giving of the instruction we must consider the evidence favorably to defendant. Bootee v. Kansas City Public Service Co., supra, 183 S.W.2d 892, 896; Rothe v. Hull, 352 Mo. 926, 180 S.W.2d 7, 9; Ferguson v. Betterton, Mo. Sup., 270 S.W.2d 756, 761.
In addition to defendant's testimony, hereinbefore reviewed, defendant testified that, when the front of his automobile was about 8 feet clear of the intersection, he saw the plaintiff for the first time near the center line of Lafayette apparently running diagonally across the street toward the path of his automobile. At that time he was going at a speed of from 5 to 8 miles an hour. He applied his brakes at once and his automobile was stopped almost immediately. Plaintiff ran into the left front fender of his automobile after it was stopped, but her momentum carried her forward and she fell down on both knees in front of his left headlight. He also said that the front of his automobile was about 8 feet east of the crosswalk on Lafayette when the collision occurred. Defendant said he was driving south of the center line of Lafayette. Automobiles were parked on each side of the street. He had about one foot of clearance on the right and not over 2½ on the left between him and an approaching automobile.
Defendant's witnesses, Jacques and wife, who were in the automobile going west on the north side of Lafayette testified that there were cars parked on the north side of the street; and that the automobile in which they were riding was being brought to a stop, in compliance with the stop sign at the intersection, when Mrs. Jacques noticed plaintiff and directed her husband's attention to her. He stopped his automobile and the plaintiff put her head down and ran across the street. He said that the defendant's automobile stopped immediately and that the plaintiff threw out her hands against the hood of defendant's automobile and fell to a sitting position in front of it. One of these witnesses said plaintiff was in front of and at the edge of a car parked at the north curb, the other said plaintiff was standing in the street on the north side of Lafayette, "just down from the curb," in front of a parked car; and that plaintiff looked east, but not west, and "put her head down and darted across the street." The front of the car parked at the north curb was at the stop sign on Lafayette, which sign was 12 or 14 feet east of the east edge of Tower Grove. There was testimony that plaintiff ran from the north curb to a point beyond the center of the street where the collision occurred. On the basis of the testimony of defendant's witnesses, plaintiff ran some 18 feet or more to the point of collision. Defendant's Instruction No. 5, as indicated, submitted that plaintiff "ran from the north curb of Lafayette Avenue toward and directly into the path of defendant's automobile." Defendant offered no evidence tending to show that plaintiff walked to the center of Lafayette apparently conscious of the approach of his automobile and then suddenly darted against or in front of his automobile, nor did defendant's evidence fix the speed at which plaintiff ran, but we think the jury, within limits, could determine that issue of fact as a matter of common knowledge at around 5 or 6 miles per hour. The speed indicated would be 7.3 to 8.8 feet per second. If plaintiff ran diagonally, as defendant and his witnesses testified, it would have taken her two seconds or more to move from the north curb to the point of collision.
Since there was a collision, it is apparent that defendant was also approaching the point of collision. Defendant said he moved forward (from a complete stop at a point about one foot west of the easternmost northbound lane on Tower Grove) some 10 feet from the east curbline of Tower Grove to the point of collision, which he said was 8 feet beyond the crosswalk on Lafayette. While defendant repeatedly referred to the crosswalk on Lafayette, he at no time indicated its *446 width, nor did any other witness. However, the stop sign, as stated, was 12 or 14 feet east of the east line of Tower Grove. Defendant said that at the end of the first 5 feet his speed was less than 2 miles per hour; and that his highest speed was 5-8 miles per hour before the collision. On the basis of defendant's evidence defendant moved 18 feet (exclusive of the width of the crosswalk) at an increasing speed from 2 to 8 miles per hour to the point of collision. During this time, defendant and his witnesses agree that there was nothing to obstruct defendant's view to his left from the curb to the center of the street, where defendant first saw the plaintiff. At 2 miles per hour, defendant was moving 2.9 feet per second, at 5 miles per hour 7.3 feet per second and at 8 miles per hour, he would have moved 11.7 feet per second. It is apparent that defendant was in excess of 20 feet away, when plaintiff started to run. Further, defendant's evidence is that plaintiff was apparently oblivious, since she only looked to her left.
We think that a consideration of all the evidence favorable to defendant fails to show a sole cause situation for the reason that, if we assume the truth of all of the evidence favorable to defendant, the facts established do not exclude defendant's negligence as a possible concurring cause of plaintiff's injuries, nor establish as a matter of law that defendant was not negligent as charged and submitted under the humanitarian doctrine in failing to stop or warn after the plaintiff came into imminent peril. The matter of when plaintiff came into a position of imminent peril and whether defendant, thereafter, could have avoided striking her by stopping or warning were the issues which should have been submitted to the jury. Plaintiff made a submissible case on those issues and defendant's evidence did not show that plaintiff appeared suddenly and in close proximity to defendant's automobile from a place where she could not have been seen. Instead, his evidence shows that she came from a place in full view of defendant, and had crossed more than half of the street to reach the point of collision. His view, as he approached, was unobstructed. Therefore, the only issues were whether defendant could have avoided a collision by stopping or warning, after plaintiff came into a position of imminent peril from his approaching automobile. The giving of Instruction No. 5, constituted prejudicial error.
In view of the conclusions reached, we do not reach appellant's further contention that Instruction No. 5 is erroneous "for the reason that it failed to negate defendant's negligence," and in that "no facts were hypothesized from which the jury could find defendant not guilty of the negligence submitted by plaintiff," nor do we reach appellant's contention that "the instruction was misleading and self-contradictory" and misled the jury into considering plaintiff's antecedent negligence. Clearly, the instruction is not in an approved form and it unnecessarily submitted to the jury a required finding that the acts of plaintiff relied upon by defendant as constituting sole cause were in fact negligent acts, although such characterization and finding was unnecessary to a sole cause defense.
Whether or not the instruction, if it had been based upon substantial evidence, would have constituted reversible error in view of the particular facts and circumstances and other instructions in this case is a matter we need not determine.
For the error in giving Instruction No. 5 in the absence of substantial evidence to sustain a sole cause submission, the judgment is reversed and the cause remanded.
All concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/399488/ | 671 F.2d 279
BURLINGTON NORTHERN, INC., Appellant,v.HUGHES BROS., INC., a corporation, Appellee.
No. 81-1229.
United States Court of Appeals,Eighth Circuit.
Submitted Dec. 14, 1981.Decided Feb. 16, 1982.
Rodney M. Confer, argued, Knudsen, Berkheimer, Beam, Richardson & Endacott, Lincoln, Neb., for Burlington Northern Inc., appellant.
Kevin, Colleran, argued, Cline, Williams, Wright, Johnson & Oldfather, Lincoln, Neb., for Hughes Brothers, Inc., appellee.
Before LAY, Chief Judge, and HENLEY and ARNOLD, Circuit Judges.
LAY, Chief Judge.
1
This case involves interpretation of an industrial or side track agreement providing for indemnification by the industry for any loss or damage paid by the railroad to any of its employees when the latter's injuries are caused by the act or omission of the industry. After settling with its injured employee, Burlington Northern (BN) sued Hughes Brothers (Hughes) claiming indemnity under its agreement; BN now appeals from a jury verdict denying indemnification.
2
Facts.
3
On October 29, 1953, Hughes and BN's predecessor, the Chicago, Burlington and Quincy Railroad, entered into an industrial or side track agreement. The railroad agreed to serve Hughes' plant in Seward, Nebraska under certain conditions. The relevant conditions are described in portions of paragraphs five, nine, and ten of the agreement:
4
5. Industry to Keep Siding Free from Obstructions:
5
The Industry shall, at its own expense, and in a manner satisfactory to the Railroad Company, keep said siding clear of snow, ice, weeds, or other obstructions. Upon failure so to do, the Railroad Company may perform said service and collect the entire expense thereof from the Industry.
6
9. Clearances, Use, and Safety Requirements:
7
The Industry agrees not to place or construct an elevator nearer than eight (8) feet from the nearest rail of any track of said siding or to construct, place, or permit any other building, excavation, or obstruction nearer than six (6) feet from the nearest rail.
10. Liability Provisions:
8
....
9
The Industry also agrees to indemnify and hold harmless the Railroad Company for loss, damage, or injury from any act or omission of the Industry, its employees, or agents, to the person or property of the parties hereto and their employees, and to the person or property of any other person or corporation, while on or about said track; and if any claim or liability other than from fire shall arise from the joint or concurring negligence of both parties hereto it shall be borne by them equally.
10
On February 2, 1976, Richard Coatman, a BN employee, was injured during switching operations at the plant. As the track enters the Seward facility, it descends to approximately three feet below ground level. On both sides of the track as it descends are brick retaining walls. The walls are less than six feet from the nearest rail. Before the walls begin, there is a sign stating, "WARNING STRUCTURES WILL NOT CLEAR MAN ON SIDE OF CAR." Witnesses testified that BN erected the sign and that its employees knew the walls were too close to the track to allow a person riding on the side of a car to pass safely.
11
Coatman was riding on the side of a box car which was being pushed into the plant by a locomotive. He knew that he could not pass between the car and the wall. But when he attempted to dismount, first onto the ground before the wall and then onto the wall itself, his feet slipped on accumulated snow and ice. Evidence revealed that Hughes' employees were aware that railroad employees often walked on the retaining walls. Coatman's calf was squeezed between the wall and car causing a compound fracture and soft tissue injury. He was unable to work for 14 months and thus lost $27,038 in wages. BN paid his medical bills of $8,533.
12
Coatman asserted a claim against BN under the Federal Employers Liability Act (FELA), 45 U.S.C. § 51 et seq. BN notified Hughes of the claim, asserting that Hughes was obligated to indemnify BN under the industrial track agreement and offering Hughes an opportunity to defend or negotiate the claim. Hughes denied any obligation. Hughes was notified on several other occasions and continued to deny responsibility. BN settled with Coatman for $55,726.
13
BN then sued Hughes for indemnification under the side track agreement. A jury trial was held. At the close of the evidence, BN moved for a directed verdict of full indemnity or, alternatively, of one-half the settlement amount. The trial court denied the motion. The trial court instructed the jury that BN had acquiesced in the placement of the wall and therefore if the jury found that its placement was a proximate cause of the injury, BN could only recover one-half the settlement amount. The jury thereafter found that Hughes had no obligation to indemnify BN. BN brings this appeal. We reverse and remand for a new trial.
14
BN urges: (1) it was reversible error for the trial court to instruct the jury that BN had to establish its liability for the injury; (2) it was reversible error for the court to instruct the jury that if BN was negligent, it had to prove Hughes' negligence under common law standards in order to recover; (3) the court should have directed a verdict in favor of BN for one-half its liability; (4) the court should not have granted Hughes' request for a partial directed verdict on the issue of BN's concurrent negligence; and (5) there was insufficient evidence to support the jury's verdict.
15
Reasonableness of Settlement.
16
The railroad argues that the trial judge erroneously required it to prove that it was liable for its employee's injury. The court instructed the jury that it should determine whether BN's settlement agreement with Coatman was "reasonable and in good faith." The court told the jury that if it found the settlement was unreasonable or entered into in bad faith, the jury should render a verdict for Hughes. The court instructed that the jury had to determine whether BN "reasonably thought it would be liable to Mr. Coatman" and then stated the standards of liability under the FELA as well as the rules governing reduction of an employee's damages based on his or her contributory negligence.
17
A party seeking indemnity after settling a claim upon notice to the indemnitor must show that its settlement was reasonable and made in good faith. The fact finder generally must evaluate the reasonableness of the settlement by comparing the nature of the injury and the damages incurred to the size of the settlement. The fact finder should also review the good faith of the settlor by evaluating the probability that it would have been held liable. See Chicago, R.I. & P.R. Co. v. Dobry Flour Mills, Inc., 211 F.2d 785, 788 (10th Cir.), cert. denied, 348 U.S. 832, 75 S.Ct. 55, 99 L.Ed. 656 (1954). When liability under an indemnity contract has been denied by the indemnitor, proof of actual legal liability to the injured party is not a requirement. As this court recently observed, "the indemnitee need not prove its legal liability to the injured party when its indemnitor denies liability under a contract and refuses to assume defense of the claim or to otherwise hold the indemnitee harmless for any loss." Missouri Pac. R.R. Co. v. International Paper Co., 618 F.2d 492, 497 (8th Cir. 1980) (quoting Missouri Pac. R.R. Co. v. Arkansas Oak Flooring Co., 434 F.2d 575, 580 (8th Cir. 1970)); see also Central Nat'l Ins. Co. v. Devonshire Coverage Co., 565 F.2d 490, 495-96 (8th Cir. 1977).
18
BN notified Hughes of the claim and requested that it assume responsibility. BN also kept Hughes informed about the settlement negotiations. Hughes refused to participate in any manner.
19
In the present case, BN's potential liability under the FELA was established as a matter of law. See International Paper, 618 F.2d at 497; Arkansas Oak Flooring Co., 434 F.2d at 580. Under the FELA, BN possessed a "nondelegable duty to provide its employees with a safe place to work." Shenker v. Baltimore & Ohio R.R. Co., 374 U.S. 1, 7, 83 S.Ct. 1667, 1671, 10 L.Ed.2d 709 (1963). Additionally, BN was liable for its employee's injury if its negligence "played any part, even the slightest, in producing the injury." Rogers v. Missouri Pac. R.R. Co., 352 U.S. 500, 506, 77 S.Ct. 443, 448, 1 L.Ed.2d 493 (1957). The placement of the wall and the failure to remove the snow and ice were undisputably contributory factors in Coatman's injury. Thus the likelihood that the railroad would be held liable was clearly established and the only issue which should have been submitted to the jury was the reasonableness of the amount of the settlement.
20
In determining whether BN's settlement was reasonable, the trial court also instructed the jury to consider whether the employee was guilty of contributory negligence which might have diminished the damages BN may have been required to pay. We find this erroneous. In the trial of an FELA case, the jury may diminish an employee's recovery "in proportion to the amount of negligence attributable to such employee." 45 U.S.C. § 53. Diminution requires comparing proof of the employer's and employee's negligence. Requiring a railroad in an indemnity suit to prove the exact nature and consequences of its negligence, to allow comparison with the employee's alleged negligence, undermines the policy in favor of settlement after due notice to the indemnitor. A showing of reasonableness in an indemnity suit should not involve a plenary trial of the underlying FELA issues. Nor does BN have an obligation to prove its employee's actual damages. To show the settlement was reasonable, the railroad need only prove its potential liability, a relatively simple showing under the strict FELA standards, and that the settlement amount was reasonably related to its employee's injuries. On remand, BN is required to show only that the size of the settlement was reasonably related to the damages which Coatman suffered. If the jury finds the amount paid was not reasonable, then it should determine what amount would be reasonably related to the employee's injuries. If such findings are made, the latter amount is BN's loss for purposes of indemnification.
21
Hughes' Obligation Under Indemnity Agreement.
22
BN asserts that the trial court should have directed the jury that Hughes had an obligation to indemnify BN. BN also urges that it was error for the trial judge to instruct the jury that in order to recover one-half of its claim, BN had to prove that Hughes was guilty of common law negligence.
23
Paragraph 10 of the agreement reads in part:
24
The Industry also agrees to indemnify and hold harmless the Railroad Company for loss, damage, or injury from any act or omission of the Industry, its employees, or agents, to the person or property of the parties hereto and their employees, and to the person or property of any other person or corporation, while on or about said track; and if any claim other than from fire shall arise from the joint or concurring negligence of both parties hereto it shall be borne by them equally.
25
The court told the jury that it should find that Hughes had a duty to fully indemnify BN if it was established that: (1) Hughes' act or omission caused the injury in question and (2) no negligence on the part of BN caused or contributed to the injury. Alternatively, the court instructed that if the railroad was negligent, it could recover one-half of its claim only if it could prove that the joint or concurring negligence of BN and Hughes caused the injury.
26
We find these instructions to be erroneous. The trial court's interpretation of the indemnity agreement attempts to separate the two clauses contrary to this court's construction of industrial indemnity agreements.
27
In International Paper, this court held that an industry's obligation to indemnify a railroad under an industrial track agreement is a contractual duty and not a duty arising under the common law of tort. 618 F.2d at 496. These contracts are made in contemplation of the railroad's liability under the FELA. The phrase "act or omission" includes any act or omission which constitutes a violation of the railroad's duty to provide a safe work place and thus subjects it to liability under the act. Id.; Steed v. Central of Ga. Ry. Co., 529 F.2d 833, 837 (5th Cir.), cert. denied, 429 U.S. 966, 97 S.Ct. 396, 50 L.Ed.2d 334 (1976); Schiller v. Penn Cent. Transp. Co., 509 F.2d 263, 269 (6th Cir. 1975); Dobry Flour Mills, 211 F.2d at 788. The obvious purpose of the agreement is to provide for indemnification of the railroad when the industry's act or omission violates the railroad's nondelegable duty to furnish a safe place for its employees to work.
28
Paragraph 10 of the agreement should be read as a whole. Under our previous cases, the jury must first determine if an act or omission of the industry caused the injury. If the jury makes an affirmative finding, the railroad is entitled to indemnity under the agreement. In the event the industry can prove the railroad was negligent and its negligence contributed to the injury, then the railroad may only recover one-half its liability. See International Paper, 618 F.2d at 497 (after the district court determined that industry's act or omission created unsafe condition which caused injury, "only remaining issue ... was whether (industry) was liable for the full amount of the settlement or only half under the final clause ... in the event of 'joint or concurrent negligence.' ").
29
In the present case, we find the district court should have granted BN's motion for a directed verdict as to Hughes' obligation to indemnify BN for one-half its loss (as explained below). Construing the facts in favor of the defendant, Hughes, we conclude that an act or omission of Hughes was a cause of the injury. In Rouse v. Chicago, Rock Island and Pacific Railroad Co., 474 F.2d 1180, 1184 (8th Cir. 1973), this court sustained the grant of a directed verdict in favor of the railroad under an industrial track agreement on facts virtually identical to those of this case. We have already found that BN faced potential liability to its employee for failure to furnish a safe place to work. It is undisputed that Hughes' construction of the retaining walls and its failure to remove or otherwise alter the walls so that a man riding on the side of a car would not be caught between the car and the walls were a cause of the injury. These undisputed facts compel a finding that Hughes had an obligation under paragraph 10 of the contract to indemnify BN for at least one-half of its loss, assuming the amount paid is shown to be reasonably related to the employee's injury. See pp. 283-284, supra.
30
BN's Concurring Negligence.
31
Once Hughes' obligation is established, the only remaining jury question is whether BN is entitled to full indemnity or one-half of its claim. The answer depends on whether BN was guilty of negligence which was a proximate cause of the injury.
32
The burden of proof on this issue should have been on Hughes. BN stated a complete cause of action under the first clause of paragraph 10 of the contract without pleading its own freedom from negligence. In its answer, Hughes raised the issue of BN's negligence. Hughes, in essence, raised a contractual defense which it should have borne the burden of proving. The district court erred in placing this burden on the railroad.
33
The district court submitted the question of BN's negligence to the jury, but instructed the jury that if it found that the presence of the retaining wall was a proximate cause of BN's liability, it could only allow BN to collect one-half its liability from Hughes. The court ruled that BN, as a matter of law, had acquiesced in the presence of the wall. BN argues that this was error.1
34
A preliminary question, suggested above, is what standards govern the determination of whether the railroad was "negligent" under the joint negligence clause. Some courts, finding that the entire indemnity provision was written in contemplation of the railroad's duty under the FELA, have held that joint negligence means joint violation of the Act's standards. See, e.g., Wanser v. Long Island R.R. Co., 238 F.2d 467, 470 (2d Cir. 1956), cert. denied, 353 U.S. 911, 77 S.Ct. 668, 1 L.Ed.2d 665 (1957). Other courts read the term negligence to mean common law negligence. See, e.g., Colonial Stores, Inc. v. Central of Ga. Ry. Co., 279 F.2d 777, 780 (5th Cir. 1960). This court and others have not explicitly ruled on the standard of conduct implicit in the joint negligence clause, but have stated that the railroad's fault must be serious and distinct from that of the industry in order to bar full recovery. See, e.g., Missouri Pac. R.R. Co. v. Winburn Tile Mfg. Co., 461 F.2d 984, 989 (8th Cir. 1972).
35
While indemnification is predicated on the railroad being liable to an employee under the FELA, it does not follow that mere proof of the railroad's liability under the FELA can be enough to constitute negligence. Booth-Kelly Lumber Co. v. Southern Pac. Co., 183 F.2d 902, 907 (9th Cir. 1950). As has been stated, the railroad may be liable for failing to furnish a safe place to work when the sole cause of the injury is an act or omission of the industry. It would be coherent to construe the joint negligence clause to bar full recovery when an act or omission of the railroad, which was distinct from that of the industry, was a cause of the injury. But use of the term "negligence" in the second clause as compared to "any act or omission" in the first clause indicates that the parties intended to require more than a violation of the strict standards created by the FELA to bar the railroad from full recovery. We conclude if the industry cannot prove that the railroad was negligent under common law standards, the railroad is entitled to full indemnity.
36
The district court directed the jury if it found the wall was a proximate cause of the injury, to find BN jointly negligent because BN had acquiesced in the presence of the wall. In supporting this action, defendant relies on the Rouse decision in which this court upheld a directed verdict on acquiescence in similar circumstances. 474 F.2d at 1182-83. The Rouse court relied on Arkansas Oak Flooring, 434 F.2d at 576-81. The decision in Arkansas Oak Flooring, in turn, rested on the Restatement of Restitution § 95 (1937). Section 95 provides:
37
Where a person has become liable with another for harm caused to a third person because of his negligent failure to make safe a dangerous condition of land or chattels, which was created by the misconduct of the other or which, as between the two, it was the other's duty to make safe, he is entitled to restitution from the other for expenditures properly made in the discharge of such liability, unless after discovery of the danger, he acquiesced in the continuation of the condition.
38
Noteworthy, however, is the comment following § 95 which states:
39
The fact that the payor knew of the existence of the dangerous condition is not of itself sufficient to bar him from restitution. In many cases it is only because he had knowledge of the condition that he is liable to the person harmed. If, however, the payor not only knew of the condition but acquiesced in its continuance, he becomes in effect, a joint participant with the other in the tortious conduct and hence is barred from indemnity.
40
Without discussion, the Rouse and Arkansas Oak Flooring courts import the tort law concept of acquiescence into a set of contractual duties. In this case, the railroad and industry specifically contracted that BN would be fully indemnified unless its negligence was a proximate cause of the injury. Thus the question is not simply whether BN acquiesced in the placement of the wall, but whether, considering all the circumstances, proof that the railroad knew of the placement of the wall is sufficient to show that it acted negligently. In answering this question, we must view the evidence in the light most favorable to the party against whom the verdict was directed. Koch v. Secretary of HEW, 590 F.2d 260, 261 (8th Cir. 1978). In evaluating a similar claim, the Third Circuit wrote, "One hallmark of such acquiescence is long continued awareness of a dangerous situation by the indemnitee without either taking any corrective measure or calling upon the indemnitor to do so." Pennsylvania R.R. Co. v. Erie Ave. Warehouse Co., 302 F.2d 843, 848 (3rd Cir. 1962). The evidence shows BN took several actions to reduce the danger created by the walls. It erected a warning sign and, apparently, implemented switching procedures designed to avoid injuries. Under the circumstances, we find the question of BN's negligence should have been submitted to the jury. See Pennsylvania R.R. Co. v. M.K.W. Corp., 301 F.Supp. 991, 994-95 (N.D.Ohio 1969) (finding railroad negligent under similar circumstances).
41
We reverse and remand for a new trial.
1
BN asserts that if it was negligent in acquiescing in the existence of the wall, Hughes must be found negligent in maintaining it. See Arkansas Oak Flooring, 434 F.2d at 581. We agree, but as we have discussed, Hughes' liability is premised simply on its act or omission causing the injury | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/997594/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 98-7438
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
CLARA MARSHALL LATTIN,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Albert V. Bryan, Jr., Senior
District Judge. (CR-94-508, CA-98-435-AM)
Submitted: December 17, 1998 Decided: January 11, 1999
Before WILKINS, NIEMEYER, and TRAXLER, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Clara Marshall Lattin, Appellant Pro Se. Bernard James Apperson,
III, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia,
for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Clara Marshall Lattin filed an untimely notice of appeal. We
dismiss for lack of jurisdiction. The time periods for filing
notices of appeal are governed by Fed. R. App. P. 4. These periods
are “mandatory and jurisdictional.” Browder v. Director, Dep’t of
Corrections, 434 U.S. 257, 264 (1978) (quoting United States v.
Robinson, 361 U.S. 220, 229 (1960)). Parties to civil actions have
sixty days within which to file in the district court notices of
appeal from judgments or final orders. See Fed. R. App. P.
4(a)(1). The only exceptions to the appeal period are when the
district court extends the time to appeal under Fed. R. App. P.
4(a)(5) or reopens the appeal period under Fed. R. App. P. 4(a)(6).
The district court entered its order on July 7, 1998;*
Lattin’s notice of appeal was filed on September 23, 1998, which is
beyond the sixty-day appeal period. Her failure to note a timely
appeal or obtain an extension of the appeal period leaves this
court without jurisdiction to consider the merits of Lattin’s ap-
peal. We therefore deny a certificate of appealability and dismiss
the appeal. We deny Lattin’s motion for production of transcripts
*
Although the district court’s order is marked as “filed” on
July 1, 1998, the district court’s records show that it was entered
on the docket sheet on July 7, 1998. Pursuant to Rules 58 and
79(a) of the Federal Rules of Civil Procedure, it is the date that
the order was entered on the docket sheet that we take as the
effective date of the district court’s decision. See Wilson v.
Murray, 806 F.2d 1232, 1234-35 (4th Cir. 1986).
2
at government expense, and we dispense with oral argument because
the facts and legal contentions are adequately presented in the ma-
terials before the court and argument would not aid the decisional
process.
DISMISSED
3 | 01-03-2023 | 07-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565814/ | 284 S.W.2d 804 (1955)
Chas Wm. AYDELOTTE, Appellant,
v.
Aubrey R. ANDERSON, Appellee.
No. 6542.
Court of Civil Appeals of Texas, Amarillo.
December 5, 1955.
Campbell & Brock, Lubbock, for appellant.
Howard & Tucker, Lubbock, for appellee.
NORTHCUTT, Justice.
Aubrey R. Anderson as plaintiff, hereinafter referred to as appellee, brought suit against defendant, Chas. Wm. Aydelotte, hereinafter referred to as appellant, to recover upon a promissory note. Appellant, by his attorneys, filed an answer on December 24, 1954 acknowledging the execution *805 and delivery of the note in question but pleaded at such time Aubrey R. Anderson represented that Aydelotte was indebted to him for a large sum of money but that, after the execution and delivery of said note, Aydelotte determined that the claims of Aubrey R. Anderson were not true in fact. Anderson filed his first supplemental petition, in reply to said answer of Aydelotte, setting out a contract of settlement between them and setting out that they had theretofore been associated in the construction and sale of houses, lots and related real estate matters and that such association had been over a period of years and that there had never been a final adjustment or accounting of the funds which each party was entitled to receive. The contract provided there was and had been a bona fide dispute and difference between Anderson and Aydelotte and provided that, in settling this dispute, Aydelotte would execute and deliver certain notes to Anderson and then each release the other of all other claims as to their association.
On February 3, 1955, the attorneys that had filed the original answer for appellant informed him that they were withdrawing from the case and contacted the attorney representing the appellant herein and told him the case was set for trial the next day, February 4, 1955. The attorney now representing the appellant was in the actual trial of another case on February 3, 1955 when he talked to the former attorney of appellant. On the morning of February 4, 1955, the appellee's attorney went to the courtroom where appellant's attorney herein was still in the trial of the case to learn if the attorney had been employed in this case and, after learning that he had not been employed by appellant, informed said attorney that he was taking judgment that morning which he did. On February 12, 1955, appellant filed his motion to set aside the judgment rendered on February 4, 1955 and the appellee filed his answer to said motion on February 24, 1955 and among other pleadings set up the agreements between the appellant and the appellee surrounding the execution and delivery of the notes. The matter was set down for hearing on March 10, 1955 and, after hearing the pleadings and the evidence of both parties, the trial court overruled the motion for the reason that appellant failed to show a meritorious defense. From this judgment, appellant has perfected his appeal.
Appellant presents this appeal upon one point of error as follows:
"The Trial Court erred in overruling defendant's Motion to Set Aside Default Judgment and Grant a New Trial for the sole reason that the defendant, Aydelotte, `failed to show a meritorious defense' since the defendant Aydelotte by verified pleading and evidence raised the prima facie defense of want of consideration for the note sued upon."
In connection with the settlement between appellant and appellee, they agreed to have Mr. Vernon Behner, a certified public accountant, make an audit of the books of appellant and appellee, which he did. After the audit was made and appellant considered it and discussed the matter with his attorney, he executed the notes and settlement agreement. The notes and settlement agreement were signed by appellant in his attorney's office and neither appellee nor his attorney were present.
If appellant had shown a good defense to the note in question under the facts above set out, undoubtedly, the trial court would have set the judgment aside and granted him a new trial. But under this record, this note with others was given in settlement of a bona fide dispute and difference between the appellant and appellee and by the execution and delivery of said notes, it was agreed to be in full and final accounting and settlement of all matters between them. According to this record and as found by the trial court, the appellant had no defense to the note even if a new trial should have been granted. The record herein conclusively establishes that, at the time of the execution of the note, there was a bona fide controversy between appellant and appellee and the notes, *806 including the note here in controversy, were executed and delivered by appellant to settle the controversy and appellant would be liable even though it later developed that the claim of appellee was without merit. Potter v. Standard Investment Co., Tex. Civ.App., 190 S.W.2d 161; Citizens Garage Co. v. Wilson, Tex.Civ.App., 252 S.W. 186. We do not find that the trial court abused its discretion in refusing appellant a new trial herein.
Appellant's assignment of error is overruled. Judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565834/ | 34 So. 3d 18 (2010)
CHEVRIER
v.
STATE.
No. 5D10-947.
District Court of Appeal of Florida, Fifth District.
April 20, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565747/ | OUR LADY OF THE LAKE HOSPITAL, INC.
v.
LOUISIANA CARPENTER'S REGIONAL COUNSEL, UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, JASON B. ENGELS AND CHARLIE MANNING.
No. 2009 CA 1769.
Court of Appeals of Louisiana, First Circuit.
April 1, 2010.
Not Designated for Publication
MURPHY J. FOSTER, III, JOHN T. ANDRISHOK, MICHAEL R. HUBBELL, Baton Rouge, Louisiana, Attorneys for Plaintiff/Appellee, Our Lady of the Lake Hospital, Inc.
LOUIS L. ROBEIN, Jr., KEVIN R. MASON, Metairie, Louisiana Attorneys for Defendants/Appellants Louisiana Carpenters Regional Council, Jason B. Engels and Charlie Manning.
Before: PARRO, KUHN, and McDONALD, JJ.
McDONALD, J.
On March 19, 2009, Our Lady of the Lake Hospital, Inc. (OLOL) filed a petition for preliminary and permanent injunction, temporary restraining order, and damages against the Louisiana Carpenters Regional Council,[1] Jason B. Engels, and Charlie Manning (defendants), asserting that in February of 2009 the defendants began a campaign to organize the work force of carpentry craft workers performing work for Lloyd N. Moreau, L.L.C., a subcontractor of Milton J. Womack, Inc. Womack was the general contractor working on multiple projects at OLOL. OLOL asserted that the defendants had been hindering access to its facilities, distributing leaflets to its patients, employees, and visitors, and erecting and suspending large banners on OLOL property. OLOL asserted that the defendants violated several Baton Rouge City/Parish Ordinances and were trespassing on OLOL property. A temporary restraining order was signed by the district court judge on March 20, 2009, prohibiting defendants from carrying on their conduct on OLOL property. The defendants filed a motion to dissolve the temporary restraining order.
After a hearing, the district court granted OLOL's motion for preliminary injunction and issued a judgment prohibiting, restraining, and enjoining the defendants from engaging in picketing, loitering, having banners, or handing out handbills anywhere on OLOL property, including utility servitude areas, and from obstructing or interfering with ingress and egress to OLOL property. The district court also denied the motion to dissolve the temporary restraining order. The defendants are appealing the judgment, asserting that the district court erred in granting the preliminary injunction.
The issuance of a preliminary injunction addresses itself to the sound discretion of the trial court and will not be disturbed on review unless a clear abuse of discretion has been shown. Concerned Citizens for Proper Planning, LLC v. Parish of Tangipahoa, 04-0270, p. 5 (La. App. 1 Cir. 3/24/05), 906 So. 2d 660, 663.
The district court had the following reasons for judgment:
The court having had the opportunity to take the matter under advisement and review the evidence as submitted, the court will note that there has been no evidence introduced that there is or ever has been a labor dispute between the plaintiff and the defendant as defined by Title 23 or the Norris-Laguardia Act. Furthermore, there is no evidence of any employer/employee relationship between the parties nor is there a collective bargaining agreement. Therefore, in the court's opinion this is a matter concerning property rights in a property right dispute as opposed to a labor dispute.
The evidence as viewed by the court clearly establishes specifically by exhibits 22 and 24 the property boundaries of the plaintiff, Our Lady of the Lake. The servitudes depicted in exhibits 22 and 24 clearly are public servitudes for drainage and utilities and are not servitudes or passages granted in favor of any designated person or the general public. Therefore, plaintiff, Our Lady of the Lake, retains ownership of the servitudes in question and may lawfully prohibit any activity that it deems undesirable in those designated areas.
After a thorough review of the record, we find no abuse of discretion in the issuance of the preliminary injunction and we affirm the district court judgment. Costs of this appeal are assessed against the defendants. This memorandum opinion is rendered in accordance with the Louisiana Uniform Rules-Courts of Appeal, Rule 2-16.1.B.
AFFIRMED.
NOTES
[1] The Louisiana Carpenters Regional Council was incorrectly named "Louisiana Carpenter's Regional Counsel, United Brotherhood of Carpenters and Joiners of America" in the petition. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565761/ | 40 F.2d 577 (1930)
CLAIBORNE PARISH SCHOOL BOARD
v.
FIDELITY & DEPOSIT CO. OF MARYLAND et al.
No. 5796.
Circuit Court of Appeals, Fifth Circuit.
May 6, 1930.
E. P. Lee and S. L. Herold, both of Shreveport, La. (Lee & Gilmer, of Shreveport, La., on the brief), for appellant.
P. M. Milner, of New Orleans, La., and E. Wayles Browne, of Shreveport, La., for appellees.
Before BRYAN and FOSTER, Circuit Judges, and GRUBB, District Judge.
GRUBB, District Judge.
This was an action by the appellee (plaintiff) against the appellant and others as defendants, for the recovery of amounts paid by the appellee to certain laborers and materialmen upon the construction of school buildings of the appellant under a building contract with one Casey; the performance of the contract having been secured by a bond issued by the appellee. The contractor, Casey, completed the work and there was due him in the hands of the appellant an amount of approximately $12,000, for which he gave an order to the Planters' Bank of Haynesville, and which the appellant paid to the bank on April 3, 1924. The appellee claimed to be entitled to said fund to reimburse itself for amounts it was compelled to and did pay on judgments rendered against it as surety for the contractor, Casey, aggregating $10,202.54. The plaintiff claimed that the payment to the bank by the appellant *578 on the order of the contractor was an unlawful diversion of the fund as to it by the appellant and this was the basis of the suit.
A question as to the federal jurisdiction was presented. The plaintiff after paying off the judgments obtained by the laborers and material furnishers had taken conventional assignments of their claims, and this was alleged in its petition. If the basis of the suit was the conventional assignments taken by the plaintiff, the assignors, being citizens of Louisiana, and the defendants being citizens of the same state, under section 24 of the Judicial Code (28 USCA § 41), federal jurisdiction would be lacking. The District Judge sustained the federal jurisdiction (11 F.(2d) 404) upon the ground that the right of action was not derived through the conventional assignments of the Louisiana citizens but was an independent, equitable right of the appellee's in the fund, which was charged to have been unlawfully diverted by appellant, through the building contract and the bond securing its performance. The question on the plea to the jurisdiction, as well as upon the merits, is whether the plaintiff had a cause of action against the defendants without the need to resort to the conventional assignments through a lien created by the original transaction between the appellant, Casey, and the appellee, upon the fund that was paid the bank. All the defendants, except appellant were dismissed from the case, and the judgment of the District Court, the case having been tried without a jury on stipulated facts, was against appellant alone.
The contract for the erection of the school building and the bond to secure its performance were executed under Act No. 224 of 1918 of the Legislature of Louisiana. The bond was twofold. It secured to appellant the performance of the contract, and it also secured in favor of subcontractors, laborers, and materialmen the payment by the original contractor of amounts due them. The building contract provided that on or about the first day of each month, 85 per cent. of the value of labor and material then incorporated in the work should be paid the contractor, less previous payments; that on substantial completion of the building, 95 per cent. less previous payments should be paid him, and that forty-five days thereafter, provided the work was fully completed and the contract fully performed, the balance due under the contract should be paid him. It is the unpaid balance due Casey from appellant and paid the bank by appellant on Casey's order which is in controversy. Casey owed the bank for money loaned to him during the progress of the work. The public building act provided for the record in the mortgage office of the certificate of completion of the building and its acceptance by the authority, and that all claims against the contractor should be filed within forty-five days thereafter, that if claims were filed during that period, the claimants should be brought into court by a concursus proceeding; if none were filed, the authority was authorized to pay the balance to the contractor. In this case, the certificate of completion and its acceptance were filed for record and recorded, but in the record of conveyances instead of mortgages. No claims were filed within the forty-five day period thereafter, but claims were filed after the forty-five day period, and were brought to the notice of appellant before appellant paid the balance of the fund to the bank. It did so upon the reliance that it had the right to do so, as advised by counsel, no claims having been filed within the forty-five days. If the appellee had an equitable lien on the fund, representing the retained percentage, to which it had the right to look for reimbursement for amounts due and unpaid subcontractors and others from the original contractor, and which the appellee was compelled to pay and did in fact pay, under the requirement of the bond, and if the appellant with knowledge of the fact that materialmen and laborers of Casey were unpaid in excess of the amount of the retained percentage, which the appellant knew the law required the appellee to pay, though the claims had not been filed within the forty-five days, paid the balance to the bank on Casey's order, the bank having no lien on the fund, the payment would be in derogation of appellee's rights in the fund and an unlawful conversion of it, of which appellee would have a legal right to complain.
We think this was the effect of the tripartite transaction between appellant, Casey, and appellee. The bond not only secured in favor of the obligee the performance of the building contract, it also secured in favor of subcontractors, laborers, and materialmen the payment of their claims, if not paid by the contractor, and this obligation was absolute as to appellee, though the claims were not filed within forty-five days from the recordation of the completion and acceptance of the work. The retention of the percentage was both for the purpose of securing reimbursement to the appellee, if *579 it was compelled to pay such unpaid claims, and for the purpose of securing to the appellant performance of the building contract. The appellee would have had a right of subrogation, without having taken assignments from such claimants to their rights in the retained fund, under articles 3052 and 3053 of the Louisiana Civil Code and under the general principles of equity. Prairie State Nat. Bank v. U. S., 164 U.S. 227, 17 S. Ct. 142, 41 L. Ed. 412; Henningsen v. U. S. Fidelity & Guaranty Co., 208 U.S. 404, 28 S. Ct. 389, 52 L. Ed. 547. Nor could the fact that claimants did not timely file their claims, and so lost their rights against the retained fund, prevent the appellee from relying on its equitable right to be subrogated, since the Louisiana statute under which the bond was given, made the appellee liable to the claimants in spite of such neglect on their part. Not only did appellee have a right of subrogation, but it had a direct interest and equitable lien in the fund itself. Its bond required it to pay claimants and the construction of the statute made this obligation absolute. The retained percentage was for the purpose of securing from the original contractor performance of the building contract, one term of which was the payment of the claims of laborers and materialmen. It was to the interest of appellee that these claims be paid, to relieve it of liability therefor, under its bond. The appellee had the right to insist upon the retention and application of this fund to respond to one of its intended purposes, viz., the payment of claimants, so long as the appellee stood to suffer loss by such breach of the building contract by the contractor. If no such claims were filed within the forty-five days and appellant had no actual knowledge of the existence of any which would entail liability on the appellee, a payment of the fund to the contractor or its nominee might not be in derogation of appellee's rights. On the contrary, a payment of the balance to the contractor or to the bank, with actual knowledge that there were claims outstanding and unpaid, which the appellee would be compelled to pay, and that it would have to resort to the fund to be reimbursed therefor, would be a wrongful payment as to appellee. The fund was in the possession of appellant for the joint protection of itself and appellee, and it could not lawfully part with the fund to the bank which had no prior right in it, to the detriment of the appellee, which it knew would have occasion to resort to it, to secure reimbursement for amounts appellee would be compelled to pay out under the terms of its bonds by the terms of which the fund was provided for its security in that respect. The bank's rights in the fund, if any, did not arise until the acceptance of Casey's orders or until the payment to the bank. Appellee's rights arose upon the giving of its bond to secure appellant in the performance of Casey's contract. Prairie State Nat. Bank v. U. S. (U. S. v. Hitchcock), 164 U.S. 227, 17 S. Ct. 142, 41 L. Ed. 412.
We think the District Court had jurisdiction and that the case was correctly ruled upon the merits.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565823/ | 34 So. 3d 15 (2010)
KNIGHT
v.
STATE.
No. 4D08-4709.
District Court of Appeal of Florida, Fourth District.
April 21, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565822/ | 34 So. 3d 307 (2010)
STATE of Louisiana
v.
Phillip KNIGHT.
No. 09-KA-359.
Court of Appeal of Louisiana, Fifth Circuit.
February 9, 2010.
*310 Paul D. Connick, Jr., District Attorney, Terry M. Boudreaux, Andrea F. Long, Michael D. Smith, Jr., Jacqueline F. Maloney, Assistant District Attorneys, Twenty-Fourth Judicial District, Parish of Jefferson, State of Louisiana, Gretna, Louisiana, for Plaintiff/Appellee.
Katherine M. Franks, Attorney at Law, Louisiana Appellate Project, Abita Springs, Louisiana, for Defendant/Appellant.
Phillip Knight, In Proper Person, Louisiana State Penitentiary, Angola, Louisiana, Defendant/Appellant.
Panel composed of Judges MARION F. EDWARDS, CLARENCE E. McMANUS, and JUDE G. GRAVOIS.
MARION F. EDWARDS, Judge.
Defendant/appellant, Phillip Knight, appeals his conviction of the second degree murder of his father, Bobby Knight, and the life sentence imposed as a result of that conviction. We affirm both the conviction and the sentence.
Knight was charged with the murder that occurred on October 26, 2000. He pled not guilty at the arraignment. On December 5, 2000, Knight withdrew his plea of not guilty and entered a plea of not guilty by reason of insanity. Knight also filed a motion to appoint a sanity commission to determine his competency to stand trial. The trial court appointed the Jefferson Parish Human Services Authority to examine Knight and to report on his mental condition and his competency to stand trial. The trial court held a competency hearing on February 1, 2001, and found Knight competent to stand trial.
On August 24, 2001, the trial court heard and denied Knight's motion to suppress evidence. A jury trial began on May 7, 2002. Following jury selection, defense counsel challenged Knight's competency to proceed. After hearing medical testimony on the matter, the trial court declared a mistrial and ordered that Knight be placed in the Feliciana Forensic Facility for a complete psychological evaluation. The trial court held another competency hearing on October 22, 2003, and found Knight competent to stand trial.
Knight's case proceeded to trial a second time on August 19, 2004, at which time he withdrew his plea of not guilty and not guilty by reason of insanity. On the following day, out of the jury's presence, defense counsel moved for a mistrial. Counsel argued that Knight was a diagnosed *311 paranoid schizophrenic, that he did not understand the proceedings, and that he was unable to assist in his defense. The trial court declared a mistrial and ordered that the prison's medical staff monitor Knight's medication.
The trial court held another competency hearing on October 20, 2004, and found that Knight was not competent to proceed to trial. The court held another competency hearing on April 20, 2005. This time, the trial court found Knight was competent to stand trial. Knight again entered a plea of not guilty and not guilty by reason of insanity. On March 21, 2007, following another competency hearing, the trial court again found Knight was incompetent to stand trial. On October 31, 2007, the court held another competency hearing, and found Knight competent to proceed to trial.
On June 30, 2008, Knight again withdrew his plea of not guilty and not guilty by reason of insanity, and entered a plea of not guilty. After a jury trial, Knight was found guilty as charged. In due course, the trial court imposed a mandatory life sentence at hard labor without benefit of parole, probation, or suspension of sentence. Knight moved for and was granted an appeal.
FACTS
Herman Duchman, Jr., a real estate developer, purchased a house at 2221 Claire Avenue on August 31, 2000. He inspected the interior of the house that day, and found it to be satisfactory. He locked up the house when he left. Mr. Duchman returned to the house the following morning at about 8:00 in order to start cleaning it. He found his key would not work in the door lock. It looked as if someone had tried to kick in the door and/or "jimmy" the lock. Mr. Duchman decided to stay outside and start cleaning up the yard. When he picked up a large branch lying beside the porch, he discovered a suspiciously shaped bundle under it. The bundle consisted of a blanket and garbage bags wrapped around something with a human-like shape. It was bound by a lightweight extension cord. Mr. Duchman called police from a neighbor's telephone to report the suspect package.
Detective Ronald Still, who at that time was a general assignment detective with the Gretna Police Department, arrived at 2221 Claire Avenue at about 9:30 a.m. on September 1, 2000. The scene had already been cordoned off by other officers. Detective Still testified he saw a bundle consisting of a blue comforter and trash bags wrapped around something he later learned was a body. An extension cord and some black nylon rope were tied around the outside of the package. A human foot was sticking out of the bundle.
Residents in the area expressed concern that an elderly man, named Bobby Knight, normally sat outside of his residence in the mornings, but he had not been seen that morning. They were worried that the body discovered next to the vacant house might be Mr. Knight's body. Based on the information he had gathered, Detective Still went to the residence at 2303 Claire Avenue to check on Mr. Knight. The door to the house was unlocked, and there were no signs of forced entry or burglary. Detective Still went inside, and, in the front room, he saw trash bags and some black nylon rope similar to those wrapped around the abandoned body. In one bedroom, the officer found a bare mattress with what appeared to be blood stains.
Detective Still testified that he had officers secure Mr. Knight's house while he applied for a search warrant. Once he obtained the search warrant, he returned to the house. Detectives Russell Lloyd and Wayne Lawrence executed the search of the residence.
*312 Detective Still interviewed Roderick Bristo, one of the concerned neighbors, and, based on what he learned, obtained an arrest warrant for Bobby Knight's son, Phillip Knight, who lived with his father. He later received word that Phillip Knight had been apprehended in the "Mary Poppins" area. Phillip Knight was brought to Detective Still's office, and the officer advised him of his Miranda[1] rights. Detective Still testified that Phillip Knight did not seem at all surprised when he was told he was under arrest for his father's murder. However, he told officers that he did not kill his father.
Roderick Bristo testified that, in September 2000, he was homeless and was sleeping at night in the carport of a friend, Rosie Valentine, at 2312 Claire Avenue in Gretna. At that time, Phillip Knight lived with his father, Bobby Knight, at 2303 Claire Avenue. Mr. Bristo described Bobby Knight as an odd-looking man who could barely walk, even with the assistance of a cane. Mr. Bristo was very friendly with Mr. Knight, who spent most of his days sitting in his house or on his front porch.
Mr. Bristo testified that the relationship between Bobby Knight and his son, Phillip, was strained. Mr. Bristo heard Phillip and Bobby arguing about money on four or five occasions during the six months prior to September 2000. One night, Mr. Bristo encountered Phillip and Bobby standing on the corner of Claire Avenue and 23rd Street, arguing about money. Phillip hit Bobby, knocking the older man's cane out from under him and causing him to fall on the ground. Mr. Bristo testified that, about two months prior to September 2000, Phillip told Mr. Bristo he was going to get money from Bobby's life insurance policy and that he was going to get Bobby's Social Security benefits "in the wrong way."
During the night of August 31, 2000 and the early morning hours of September 1, 2000, Mr. Bristo was waiting outside of 2312 Claire Avenue for his ex-wife to bring him some beer and cigarettes. He expected her to arrive sometime after midnight, when she got off work. While he was waiting, he saw Phillip come out of the back door of Mr. Knight's house carrying something on his shoulder. Phillip put the bundle on the ground and dragged it across the street to a vacant house on Claire Avenue. He laid the object on the ground and tried, unsuccessfully, to kick in the door of the house. Phillip then attempted to shove the object under the house, but it was too big to fit there. He covered the object with twigs and other debris, and then he returned to Mr. Knight's house. Mr. Bristo testified that he saw all of this from a distance of about 25 feet. Phillip did not appear to notice him.
About ten minutes later, Phillip exited Mr. Knight's house again. He saw Mr. Bristo and walked over to him. Mr. Bristo testified there was nothing unusual about Phillip's demeanor. Phillip asked for a cigarette, and Mr. Bristo replied that he did not have any. Mr. Bristo asked Phillip what he was doing at the vacant house, and Phillip said he was just looking around. Phillip then went back to the Knight residence.
Mr. Bristo testified that he did not go to the vacant house to investigate because he did not want to be caught trespassing. His ex-wife did not show up as promised, and he went to sleep at about 1:30 a.m. He woke up at about 5:00 a.m., and saw Phillip carrying a box of clothes in the direction of a nearby canal. Phillip returned without *313 the box and went back inside Mr. Knight's house. Then he left the house again between 6:00 and 6:30 a.m. and went back toward the canal. He returned to Mr. Knight's house carrying the box. Phillip left the house again, and Mr. Bristo decided to follow him. He saw Phillip go across the canal to an apartment complex commonly known as "Mary Poppins."
Following his arrest, Phillip Knight's clothing was seized. Among the items of clothing was a pair of blue jeans. Detective Still explained that spots on the jeans that appeared to be blood were cut out for analysis. Detective Still obtained a search warrant for a sample of Phillip Knight's blood.
Detective Wayne Lawrence was the crime scene technician who assisted in executing the search warrant at the Knight residence. He testified that he videotaped the inside of the residence as he walked through it. The videotape was played for the jury. He collected several items of evidence from the scene, including pieces of the mattress from the first bedroom, a piece of blood-stained carpet, a piece of black rope, some plastic garbage bags, and two kitchen knives.
Detective Lawrence also collected evidence at Mr. Knight's autopsy, including the items in which the body was wrapped, the victim's clothing, and a vial of the victim's blood. Detective Lawrence took custody of the clothing seized from Phillip Knight, and the vial of his blood taken pursuant to a search warrant. The detective took the blood to the crime lab for processing. Detective Lawrence took several photographs at the scene, including some that depicted what appeared to be drag marks on the ground outside of the home.
Detective Russell Lloyd testified that he assisted in executing the search warrant at the Knight residence. He received information that the murder weapon might have been discarded in a canal located about one-half block from the victim's house. He and other officers put on boots and went into the canal to search for a weapon, but they did not find anything of evidentiary value.
Detective Still identified an exhibit presented by the State as a photograph of writing found on the wall in Phillip Knight's bedroom. The writing included the statement "Bobb 6 Knight dies becaus [sic] he is the devil...."[2]
Pamela Williams, an expert in serology, testified she works at the Jefferson Parish Crime Lab screening evidence for biological fluids such as blood, saliva, and urine. She tested numerous pieces of evidence in this case. Of the items she examined, she detected the presence of blood on the comforter and sheet the victim was wrapped in, the black garbage bag removed from the victim's body, the pants and T-shirt the victim wore, pieces of a mattress, a piece of carpet, and Phillip's blue jeans. She noted there was no blood detected on the knives seized in this case. Ms. Williams testified she sent some pieces of Phillip Knight's blue jeans that tested positive for the presence of human blood for DNA (deoxyribonucleic acid) testing at the Jefferson Parish DNA lab. Ms. Williams' report was admitted as evidence.
Bonnie Dubourg, an expert in molecular biology and forensic DNA analysis, testified she is employed by the Jefferson Parish Sheriffs Office and is assigned to the DNA lab at the Jefferson Parish Forensic Center. She is a forensic DNA analyst. *314 Ms. Dubourg received reference blood samples of both Phillip and Bobby Knight. She also received fingernail scrapings and nail clippings from both men and cuttings from the legs of Phillip's blue jeans. Ms. Dubourg determined that Bobby Knight's fingernail scrapings were consistent with his reference blood sample, and there were no additional DNA donors in those scrapings. She found that Phillip Knight's fingernail scrapings were consistent with his reference blood sample, but there was not enough DNA in the sample for her to do further testing on those scrapings.
DNA test results for the cutting from the left leg of Phillip's jeans were consistent with a mixture of blood from both Bobby and Phillip Knight. Ms. Dubourg testified that neither Phillip nor Bobby Knight could be excluded as donors as to that cutting. The DNA test results for the cutting of the right leg of Phillip's jeans were also consistent with a mixture of the victim's and defendant's blood.
Dr. Susan Garcia, an expert in forensic pathology, testified she is an assistant coroner with the Jefferson Parish Forensic Center. She performed an autopsy on the body of the victim, Bobby Knight. Dr. Garcia testified that Mr. Knight had five stab wounds and evidence of blunt trauma to the face. His jaw was fractured, and his eye was swollen and bruised. There was scleral hemorrhaging, i.e., bleeding into the whites of the eyes that is often associated with manual or ligature strangulation. The doctor did not note any defensive wounds on the victim's body.
Dr. Garcia testified that lividity fixes about twelve to twenty-four hours after death. In this case, the lividity was not fixed at the time she examined the body. The doctor further explained that rigor mortis is usually apparent in four to twelve hours after death and can fix between twelve and twenty-four hours. Dr. Garcia estimated the victim died between twelve and twenty-four hours before her office was notified.
The doctor determined the cause of death in this case to be multiple stab wounds. The manner of death was homicide, and Bobby Knight bled to death.
LAW AND ANALYSIS
SUFFICIENCY OF EVIDENCE
Defense counsel has presented three errors for our review. In addition, Phillip Knight has filed a pro se brief with this Court in which he assigns two errors. Because one of the counseled errors is insufficient evidence to support the conviction, that issue will be discussed first. When the issues on appeal relate to both the sufficiency of evidence and one or more trial errors, the reviewing court should first determine the sufficiency of the evidence by considering the entirety of the evidence.[3] If the reviewing court determines that the evidence was insufficient, then the defendant is entitled to an acquittal, and no further inquiry as to trial errors in necessary. Alternatively, when the entirety of the evidence, both admissible and inadmissible, is sufficient to support the conviction, the defendant is not entitled to an acquittal, and the reviewing court must consider the assignments of trial error to determine whether the accused is entitled to a new trial.[4]
Knight maintains the evidence at trial was insufficient to identify him as the murderer or to prove he had the specific intent to kill or inflict great bodily harm. He argues there was no eyewitness to the offense; and Roderick Bristo, the State's *315 central witness, was an unreliable alcoholic and a convicted burglar. The State responds that the evidence at trial overwhelmingly pointed to defendant's guilt.
The constitutional standard for testing the sufficiency of the evidence requires that a conviction be based on proof sufficient for any rational trier-of-fact, viewing the evidence in the light most favorable to the prosecution, to find the essential elements of the crime beyond a reasonable doubt.[5] The rule as to circumstantial evidence is "assuming every fact to be proved that the evidence tends to prove, in order to convict, it must exclude every reasonable hypothesis of innocence."[6]
The Louisiana Supreme Court has explained its standard of review where the State relies on circumstantial evidence to prove its case:
In circumstantial evidence cases, this court does not determine whether another possible hypothesis suggested by a defendant could afford an exculpatory explanation of the events. Rather, this court, evaluating the evidence in the light most favorable to the prosecution, determines whether the possible alternative hypothesis is sufficiently reasonable that a rational juror could not have found proof of guilt beyond a reasonable doubt.[7]
Ultimately, all evidence, both direct and circumstantial, must be sufficient to support the conclusion that the defendant is guilty beyond a reasonable doubt.[8]
Second degree murder is defined as the killing of a human being when the offender has specific intent to kill or to inflict great bodily harm, or is engaged in the perpetration or attempted perpetration of one of several enumerated felonies even though he has no intent to kill or to inflict great bodily harm.[9] In addition to proving the statutory elements of the charged offense at trial, the State is required to prove the defendant's identity as the perpetrator.[10] As a general matter, when the key issue is the defendant's identity as the perpetrator, rather than whether the crime was committed, the State is required to negate any reasonable probability of misidentification.[11]
As Phillip Knight points out, there was no direct evidence at trial that he killed Bobby Knight. But there was strong circumstantial *316 evidence to support the conviction. DNA testing showed that blood on Phillip's blue jeans was consistent with the victim's blood. Also, the evidence showed that the plastic garbage bags and cords used to wrap the victim's body were consistent with bags and cords found in the house the victim shared with his son.
Mr. Bristo testified that he witnessed Phillip's attempts to hide the body. Mr. Bristo stated that he saw Phillip drag a large object from the victim's house to the vacant house across the street. Mr. Bristo's description was consistent with Detective Wayne Lawrence's testimony that there appeared to be drag marks on the ground outside of the victim's home. Mr. Bristo further testified that Phillip attempted to kick in the door of the vacant house. That testimony was consistent with that of the home's new owner, Mr. Duchman, who arrived there on the morning of September 1, 2000, to find that someone had tried to break into the house.
Defendant characterizes Mr. Bristo as an alcoholic, but there is nothing in the evidence at trial to support that assertion. Mr. Bristo did testify he was waiting for his ex-wife to bring him beer on the night of the incident, but he also testified that she never arrived with those items. There was nothing in the evidence at trial that showed Mr. Bristo drank alcohol on the night of August 31, 2000, or the early morning of September 1, 2000.
Mr. Bristo testified he was convicted of burglary in 1983 and shoplifting in 1999. However, the jury seemingly did not find that the witness's criminal record rendered his testimony unreliable.
The appellate court is required to consider the whole record and determine whether a rational trier-of-fact could have found the defendant guilty beyond a reasonable doubt.[12] It is not the function of the appellate court to re-evaluate the credibility of witnesses, reweigh the evidence, or to overturn the factual determination of guilt.[13] Absent internal contradiction or irreconcilable conflict with the physical evidence, a single witness's testimony, if believed by the fact finder, is sufficient to support a factual conclusion.[14]
In the instant case, the State proceeded under the "specific intent" theory of second degree murder. Specific intent is "that state of mind which exists when the circumstances indicate that the offender actively desired the prescribed criminal consequences to follow his act or failure to act."[15] Specific intent need not be proven as a fact, but may be inferred from the circumstances surrounding the offense and the conduct of the defendant.[16] Whether a defendant possessed the requisite intent in a criminal case is a question for the trier-of-fact, and a review of the correctness of this determination is guided by the Jackson standard.[17]
Given the evidence produced at trial, the jury could have reasonably inferred Phillip Knight had specific intent to kill or inflict great bodily harm. Dr. Garcia *317 testified that the victim in this case sustained five stab wounds and that the two "lethal" wounds went six to seven inches into the victim's chest cavity. The doctor determined that the victim bled to death. Specific intent to kill can be inferred from the intentional use of a deadly weapon such as a knife or a gun.[18] There were also indications that the victim had been strangled.
Also indicative of specific intent was the portion of the writing on the wall in the victim's house that read, "Bobb 6 Knight dies becaus [sic] he is the devil...." Knight does not suggest that anyone else lived in that room. Rather, in his brief, Knight conceded the back bedroom of the residence where the writing was found on the wall was considered his.
Also significant was Mr. Bristo's testimony that he had seen Phillip Knight hit his father in the past and that he had heard Knight argue with the victim on four or five occasions in the six months leading up to the murder.
Knight argues the State failed to produce a murder weapon or the box of clothing Mr. Bristo saw Knight carrying on the morning of September 1, 2000. Detective Russell Lloyd testified he and other officers searched a canal near the murder scene, and they did not find anything of evidentiary value. Given the testimony, it was possible for the jury to infer that Knight disposed of the murder weapon somewhere other than the canal, or that he threw it into the canal and the officers simply failed to locate it. In any case, there is nothing in the second degree murder statute that requires the State to produce the murder weapon in order to meet its burden of proof at trial.
Based on the foregoing, we find that a rational trier-of-fact could have found Phillip Knight guilty beyond a reasonable doubt. This assignment of error lacks merit.
ADMISSION OF PHOTOGRAPH
Knight maintains the trial court erred in admitting the photograph that depicts writing on a wall in the house he shared with his father. He argues officers took the photograph sometime after they executed the search warrant and that they entered the house without a warrant or valid consent. In his supplemental brief, Knight argues that it was error for the trial court to admit the photograph when the State did not offer any evidence to show the handwriting on the wall was his.
The State responds that the search was valid because the police officers obtained consent from the victim's brother, David Phillips, and from the landlord. The State further argues that if the trial court erred in admitting the evidence, the error was harmless.
A warrantless search is per se unreasonable unless justified by one of the narrowly drawn exceptions to the Fourth Amendment's warrant requirement.[19] If evidence is derived from an unreasonable search or seizure, the proper remedy is to exclude the evidence from trial.[20] In a hearing on a motion to suppress, the State bears the burden of proving that such an exception applies.[21]
*318 Trial courts are vested with great discretion in ruling on a motion to suppress, and, consequently, the ruling of a trial judge on a motion to suppress will not be disturbed absent an abuse of that discretion.[22] To determine whether the trial court's denial of a motion to suppress is correct, the appellate court may consider the evidence adduced at the suppression hearing as well as the evidence presented at trial.[23]
In arguing this assignment of error, both Knight and the State refer to facts found in a supplemental police report dated September 15, 2000. The parties do not include record citations for the report in their briefs. Although the report is included in the appeal record among documents the State turned over to the defense in pre-trial discovery, it was not entered into evidence at either the hearing on Knight's motion to suppress evidence or at trial. Thus, the trial court did not consider it in ruling on the admissibility of the photograph. Since this Court may only consider the evidence introduced at the suppression hearing and at trial in reviewing the trial court's ruling, the contents of the police report are not before us. Thus, any references to that report will not be considered by this Court.
At the suppression hearing in this case, Detective Russell Lloyd testified he reported to the Claire Avenue scene after the victim's body was discovered. He learned that several neighbors had expressed concern about Bobby Knight, since he usually sat in front of his house, and no one had seen him that morning. Detective Lloyd approached Mr. Knight's house and shouted, but he got no response. He then knocked on the front door, and the door swung open. Detective Lloyd saw plastic bags lying on the floor inside the house. Another officer pointed out some black nylon rope that looked like the rope that was used to tie up the body that had been found. Detective Lloyd thought there might be someone inside the house who was injured or dead. He notified Detective Still, who then entered the house by himself.
Detective Still testified at the motion hearing that he entered the Knight residence sometime between 9:05 and 10:00 a.m., although he did not obtain the warrant to search the house until 11:00 or 11:30 a.m. He initially entered the home without a warrant because Mr. Knight's neighbors were concerned about his wellbeing. Detective Still testified he was in the house for about five minutes. He went inside through the front door and walked through the house. Seeing there was no one inside, he turned around and exited the way he had entered.
Detective Still testified the Knight residence was videotaped during the execution of the search warrant. Some days after the search warrant was executed, Detective Still returned to the house to take photographs of a wall in one of the bedrooms. On the wall was written, "I love Ginger. Bobby Knight must die."[24] Detective Still testified that the words appeared to have been written with a marker, and that one of the letters was drawn to look like a devil's pitchfork. Before entering the house this time, Detective Still obtained permission of the property *319 owner, Mr. Knight's landlord. The owner informed the detective that he had rented the residence to Bobby Knight, and that Mr. Knight was not current in his rent payment at the time of his death. The attorneys briefly argued the matter, and the trial judge denied the motion to suppress without reasons.
The photograph at issue here was introduced at trial during Detective Still's testimony. Defense counsel objected to its admission, arguing:
"Your Honor, the last photo that was shown, published to the jury, I'm going to object to that photo because, although it was Bobby Knight's bedroom, we don't know if anyone else ever lived in that bedroom right before this incident, within a year before this incident. And we don't have any kind of handwriting samples. I just don'tI don't believeI think it's more prejudicial to my client than it is, you know, beneficial to the State to prove its case."
The State responded that the probative value of the photograph outweighed any prejudicial effect it would have. The State further argued that defense counsel's objection went to the weight of the evidence rather than its admissibility. The trial court overruled defendant's objection and allowed the photograph to be admitted.
One of the recognized exceptions to the warrant requirement is a search based on consent.[25] Consent to search is valid when it is freely and voluntarily given by the defendant or by a person who possesses "common authority over or other sufficient relationship to the premises or effects sought to be inspected."[26] The State bears the burden of proving there was valid consent.[27]
In order to show that a third party had actual authority to consent to a search, the State must show "mutual use of the property by persons generally having joint access or control for most purposes."[28] The Fourth Amendment does not permit a landlord to consent to a search in an area leased exclusively to a tenant.[29] But a search consented to by a third party without actual authority over the premises is nonetheless valid if the officers could reasonably, albeit erroneously, conclude from the available facts that the third party had apparent authority to consent to the search.[30]
In United States v. Green,[31] defendant Kenneth Green and co-defendants Campbell and Lynce were arrested after federal agents seized 116 pounds of marijuana from Green's nightclub. Agents later learned from a confidential informant that additional contraband could be found at Campbell's apartment. Following the arrests, the officers obtained a search warrant for Campbell's apartment. When they arrived to execute the warrant, *320 Campbell's girlfriend told them that, prior to their arrival, several people had moved a number of items from Campbell's apartment to an allegedly vacant apartment above.[32] The manager of the apartment building told the officers that the upstairs apartment had previously been rented to Robert Green, Kenneth Green's brother, but that Robert had moved out a month earlier, and the upstairs apartment was now vacant.[33] The owner of the apartment complex testified at the motion hearing that he recognized defendant, Kenneth Green, as the tenant of the upstairs apartment.[34] The officers entered the apartment and seized evidence after receiving verbal permission from the owner of the apartment.
The district court denied the defendant's motion to suppress the evidence, holding that the owner had the apparent authority to consent to the search. The court reasoned the agents' belief that the upstairs apartment was vacant was "objectively reasonable" based on the facts provided to them and that any mistake made by the agents was a mistake of fact and not of law.[35]
On appeal, the United States Sixth Circuit Court of Appeals affirmed the district court's denial of the motion to suppress evidence, stating, "The district court did not clearly err in finding that agents reasonably believed that they had been given consent to search the apartment by individuals with apparent authority to give such consent. Therefore, the search of the upstairs apartment did not violate the Fourth Amendment."[36]
In this case, the evidence at the suppression hearing and at trial was insufficient to determine whether the landlord had actual authority over the Knight residence at the time the officers returned to photograph the writing on the wall. But, based on the foregoing cases, we find the landlord at least had apparent authority to consent to the officers' entry. When the officers returned to the victim's house days after the search warrant was executed, they knew Mr. Knight, the lessee of the residence, was dead. They also knew that Phillip Knight, who also lived at the house, was in jail. We find there is a basis for finding the officers believed that authority over the residence had reverted to the owner/lessor and that the owner was authorized to consent to their entry. Based on the foregoing, we find the officers' warrantless entry of the Knight residence to take photographs not in violation of Knight's Fourth Amendment right to be free from unreasonable searches and seizures.
In his supplemental brief, Knight argues that the photograph depicting the writing on his bedroom wall was inadmissible because the writing was not authenticated. Specifically, he complains that the State should have produced either expert or lay testimony identifying the handwriting on the wall as his before attributing the writing to him.
Generally, all relevant evidence is admissible.[37] "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations *321 of undue delay, or waste of time."[38] Before demonstrative evidence can be admitted at trial, it must be properly authenticated.[39] The authentication of evidence refers to the process by which the proponent of the evidence proves that it is what he claims it to be.[40]
The initial determination regarding admissibility is made by the trial court, based upon La. C.E. art. 901(A), which provides, "The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims."
La. C.E. article 901(B), in pertinent part, provides:
Illustrations. By way of illustration only, and not by way of limitation, the following are examples of authentication or identification conforming with the requirements of this Article:
(1) Testimony of witness with knowledge. Testimony that a matter is what it is claimed to be.
(2) Nonexpert opinion on handwriting. Nonexpert opinion as to the genuineness of handwriting, based upon familiarity not acquired for purposes of the litigation.
(3) Comparison by trier or expert witness. Comparison by the trier of fact or by expert witnesses with specimens which have been authenticated.
This Court has recognized that, under La. C.E. art. 901(B)(3), authentication of handwriting may be made by nonexpert opinion or by comparison with authenticated specimens by the trier-of-fact or by an expert witness.[41] Although the photograph at issue was simply a likeness of a wall in Knight's bedroom, and the State did not hold the writing out to be Knight's, its clear intention was to create an inference that the writing was Knight's. The photograph had seemingly little relevance otherwise.
The State did not offer any testimony, expert or otherwise, to show whose writing was pictured. Nor did the State present any known handwriting exemplars so that the jurors could make their own comparisons to the writing in the photograph.
In State v. Guillard,[42] this Court held that a letter allegedly written by the defendant to the mother of the victim in an aggravated burglary case was not properly authenticated for admission at trial. In that case, the State purported to authenticate the letter solely through the testimony of its recipient and did not present handwriting exemplars from the defendant, expert witnesses to compare exemplars with the letter, or witnesses familiar with the defendant's writing to vouch for the authenticity of letter.[43] This Court found, however, that the trial court's error in admitting the letter was harmless because the evidence, which included eyewitness testimony, was substantial.
*322 In the instant matter, the photograph of the writing on Knight's bedroom wall was direct evidence of his specific intent to kill or inflict great bodily harm in what was principally a circumstantial evidence case. Knight suggests the writing appeared after the officers executed the search warrant at the house. It is possible to draw such an inference, since Detective Still did not testify at the suppression hearing or at trial that he saw the writing when he entered the house before obtaining the search warrant. Detectives Lloyd and Lawrence, who executed the search warrant, gave no testimony about the writing. Moreover, the videotape of the victim's residence made during the execution of the search warrant, does not show the part of the wall where the writing appears to be positioned in the photograph. Thus, it is impossible to tell from a viewing of the videotape whether the phrase "Bobb 6 Knight dies becaus [sic] he is the devil..." was written on the wall at the time of the search.
We find that, although the photograph was improperly admitted into evidence, the error is harmless. The Louisiana Supreme Court has held that "[a]n error is harmless if it is unimportant in relation to the whole and the verdict rendered was surely unattributable to the error."[44] We believe that is the case in this matter.
Mr. Bristo saw Knight leave the house he shared with the victim in the middle of the night, carrying a bundle that was later determined to be the victim's body. Knight abandoned the body at the vacant house across the street. Mr. Bristo further testified that Knight often argued with the victim and that Knight had threatened to harm him. Additionally, as discussed under our review of the evidence for sufficiency to convict, the seriousness of the victim's injuries was evidence of specific intent to kill or inflict great bodily harm. Based on the foregoing, we find no merit in this assignment of error.
INEFFECTIVE ASSISTANCE OF COUNSEL
In the final counseled assignment of error, Knight argues his trial counsel was ineffective in several respects: 1) she waived opening statement; 2) she did not use all of the available peremptory challenges during jury selection; 3) she did not adequately cross-examine State witnesses; 4) she failed to utilize documents obtained in discovery to present an effective defense; and 5) she failed to demonstrate that the writing on the bedroom wall was not there when the wall was videotaped during the search on September 1, 2000.
The State responds that the record does not support Knight's contentions, and that he fails to meet his two-part burden under Strickland v. Washington.[45] A criminal defendant is entitled to effective assistance of counsel under the Sixth Amendment to the United States Constitution and Article I, § 13 of the Louisiana Constitution. To prove ineffective assistance of counsel, a defendant must show both that (1) his attorney's performance was deficient; and (2) the deficiency prejudiced him.[46] An *323 error is considered prejudicial if it was so serious as to deprive the defendant of a fair trial, or "a trial whose result is reliable."[47] To prove prejudice, the defendant must demonstrate that, but for counsel's unprofessional conduct, the outcome of the trial would have been different.[48]
In order to prevail, the accused must overcome a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance; specifically, the defendant must overcome the presumption that, under the circumstances, the challenged action "might be considered sound trial strategy."[49] An alleged error that is within the ambit of trial strategy does not establish ineffective assistance of counsel, because "opinions may differ on the advisability of such a tactic."[50]
An ineffective assistance of counsel claim is best addressed through an application for post-conviction relief filed in the trial court where a full evidentiary hearing can be conducted. But when the record contains sufficient evidence to rule on the merits of the claim and the issue is properly raised by an assignment of error on appeal, it may be addressed in the interest of judicial economy.[51]
Upon review of Knight's individual claims of ineffective assistance of counsel, we find that, while the record is sufficient to address some of Knight's claims, it is not sufficient to address all of the claims. When there is sufficient evidence to consider some, but not all, of the allegations of ineffectiveness of counsel, this Court has declined to address any of the claims, reasoning that the claims are more properly addressed together on post-conviction at an evidentiary hearing.[52] Accordingly, we find the claims of ineffective assistance of counsel made in this appeal by Knight are more properly addressed by the trial court on post-conviction relief and will not be determined herein.
PRO SE ASSIGNMENTS OF ERROR
In addition to the assignments of error briefed by Knight's appellate counsel, there are two additional errors assigned by Knight in a pro se brief to this Court. In the first assignment, Knight asserts that the prosecutor allowed perjured testimony. This assignment of error consists of three parts. Knight first complains that his trial was fundamentally unfair because the prosecutor allowed witnesses to give perjured testimony at trial. Specifically, Knight notes that Detective Still described the blanket in which the victim's body was wrapped as a "blue comforter, quilt-type thing," while Dr. Garcia described it in her testimony as a "green and beige quilt." Knight further complains that Detective Still testified the object that was discovered to be the victim's body was lying on its stomach, and that "the object's legs were *324 sticking up in the air." Knight points out that the initial police report by Officer Thomas Thompson showed the left side of the object was sticking up in the air. Dr. Garcia testified that she surmised the victim was lying on his back.
Knight states that Mr. Bristo's testimony at trial, that he saw Knight exit the back door of the victim's residence and drag the bundle across the street, was contradicted by photographic evidence that showed drag marks near the victim's front porch.
Knight points to internal contradictions in the testimony rather than newly discovered, extraneous evidence to support his argument. The discrepancies he cites were known to him at the time of trial, but he failed to make timely objections and allow the trial court to rule on his perjury claim. Since Knight failed to object during trial to the testimony as perjury, he waived his right to assert the error on appeal.[53] Accordingly, we decline to review this claim.
Knight further argues his trial was unfair in that the State was allowed to introduce two knives that were determined not to be murder weapons. He maintains that the introduction of weapons that were not proven to be associated with the murder misled the jury and, thereby, prejudiced his case. Again, Knight raises an issue he did not preserve for appellate review. The record shows the knives were admitted at trial without a defense objection. Because Knight failed to make a contemporaneous objection, the issue is not properly before this Court.[54]
In his final pro se claim, Knight makes a general argument that his trial was fundamentally unfair because the trial court 1) refused to appoint a different attorney to represent him; 2) declared two mistrials; 3) ordered that he be committed to a mental hospital and medicated; 4) allowed the prosecutor to proceed unchecked; 5) refused to allow the jury to view the murder scene at night; 6) refused to address his speedy trial motion; 7) excused a juror who asked a key question; and 8) allowed eight years to elapse before proceeding to trial.
Defendant makes the above conclusive statements without offering any supporting authority. All specifications or assignments of error must be briefed, and the appellate court may consider as abandoned any specification or assignment of error that has not been briefed.[55] Restating an assigned error in brief without argument or citation of authority does not constitute briefing.[56] There is nothing in Knight's list of arguments for this Court to review.
For the reasons stated herein, Phillip Knight's conviction and sentence are affirmed.
AFFIRMED.
NOTES
[1] Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966).
[2] Although it was not revealed at trial, Detective Still testified at the pre-trial hearing on defendant's motion to suppress evidence that he took the photograph (State's Exhibit 42) sometime after the search warrant was executed.
[3] State v. Hearold, 603 So. 2d 731, 734 (La. 1992).
[4] Id.
[5] Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979); State v. Ortiz, 96-1609 (La. 10/21/97), 701 So. 2d 922, 930, cert. denied, 524 U.S. 943, 118 S. Ct. 2352, 141 L. Ed. 2d 722 (1998).
[6] La. R.S. 15:438.
[7] State v. Davis, 92-1623 (La.5/23/94), 637 So. 2d 1012, 1020.
[8] State v. McFarland, 07-26 (La.App. 5 Cir. 5/29/07), 960 So. 2d 1142, 1146, writ denied, 07-1463 (La. 1/7/08), 973 So. 2d 731.
[9] La. R.S. 14:30.1(A). La. R.S. 14:30.1 A(3) and (4) were amended in the recent legislative session by 2009 La. Acts No. 155, § 1. The Louisiana State Legislature's website (http:// www.legis.state.la.us) shows the effective date of the amendment as August 15, 2009. The amendments modify the definition of second degree murder to include the unlawful distribution of controlled dangerous substances and, thus, do not affect this case. State v. Kirkland, 01-425 (La.App. 5 Cir. 9/25/01), 798 So. 2d 263, 268, writ denied, 01-2967 (La. 10/14/02), 827 So. 2d 415.
[10] State v. Draughn, 05-1825 (La. 1/17/07), 950 So. 2d 583, 593, cert. denied, 552 U.S. 1012, 128 S. Ct. 537, 169 L. Ed. 2d 377 (2007); State v. Weatherspoon, 06-539 (La.App. 5 Cir. 12/12/06), 948 So. 2d 215, 220, writ denied, 07-0462 (La. 10/12/07), 965 So. 2d 398.
[11] State v. Draughn, supra (quoting State v. Neal, 00-0674 (La.6/29/01), 796 So. 2d 649, 657, cert. denied, 535 U.S. 940, 122 S. Ct. 1323, 152 L. Ed. 2d 231 (2002)).
[12] State v. Watson, 02-1154 (La.App. 5 Cir. 3/25/03), 844 So. 2d 198, 205, writ denied, 03-1276 (La.5/14/04), 872 So. 2d 506.
[13] State v. Wallace, 00-1745 (La.App. 5 Cir. 5/16/01), 788 So. 2d 578, 584, writ denied, 01-1849 (La.5/24/02), 816 So. 2d 297.
[14] State v. Marshall, 04-3139 (La. 11/29/06), 943 So. 2d 362, 369.
[15] La. R.S. 14:10(1).
[16] State v. Graham, 420 So. 2d 1126, 1127 (La.1982).
[17] State v. Gonzalez, 07-449 (La.App. 5 Cir. 12/27/07), 975 So. 2d 3, 8, writ denied, 08-228 (La.9/19/08), 992 So. 2d 949.
[18] See, State v. Templet, 05-2623 (La.App. 1 Cir. 8/16/06), 943 So. 2d 412, 421.
[19] Schneckloth v. Bustamonte, 412 U.S. 218, 219, 93 S. Ct. 2041, 2043, 36 L. Ed. 2d 854 (1973).
[20] State v. Boss, 04-457 (La.App. 5 Cir. 10/26/04), 887 So. 2d 581, 585.
[21] La.C.Cr.P. art. 703(D); State v. Addison, 05-378 (La.App. 5 Cir. 12/27/05), 920 So. 2d 884, 891, writ denied, 06-1087 (La.11/9/06), 941 So. 2d 36.
[22] State v. Long, 03-2592 (La.9/9/04), 884 So. 2d 1176, 1179, cert, denied, 544 U.S. 977, 125 S. Ct. 1860, 161 L. Ed. 2d 728 (2005).
[23] State v. Addison, 920 So.2d at 890.
[24] A photograph of the wall introduced at trial focuses on the words "Bobb 6 Knight dies becaus [sic] he is the devil...." But the photograph, as well as the videotape taken at the house, shows there was additional writing on the wall.
[25] Schneckloth v. Bustamonte, supra.
[26] United States v. Matlock, 415 U.S. 164, 171 94 S. Ct. 988, 993, 39 L. Ed. 2d 242 (1974).
[27] State v. Green, 376 So. 2d 1249, 1250 (La. 1979).
[28] Matlock, 415 U.S. at 171, n. 7, 94 S.Ct. at 993.
[29] Chapman v. United States, 365 U.S. 610, 616-17, 81 S. Ct. 776, 780, 5 L. Ed. 2d 828 (1961).
[30] Illinois v. Rodriguez, 497 U.S. 177, 188, 110 S. Ct. 2793, 2801, 111 L. Ed. 2d 148 (1990); State v. Gettridge, 08-786 (La.6/6/08), 987 So. 2d 247 (per curiam); State v. Veals, 07-605 (La.App. 5 Cir. 1/22/08), 977 So. 2d 1030, 1039, writ denied, 08-0571 (La. 11/26/08), 997 So. 2d 543.
[31] 102 F. Supp. 2d 904 (S.D.Ohio, 2000).
[32] Id. at 906.
[33] Id.
[34] Id. at 908.
[35] Id. at 911-12.
[36] Id. at 906.
[37] La. C.E. art. 402.
[38] La. C.E. art. 403.
[39] La. C.E. art. 901; State v. Cosey, 97-2020 (La. 11/28/00), 779 So. 2d 675, 678, cert. denied, 533 U.S. 907, 121 S. Ct. 2252, 150 L. Ed. 2d 239 (2001).
[40] State v. Taylor, 04-90 (La.App. 5 Cir. 5/26/04), 875 So. 2d 962, 969, writ denied, 04-1649 (La. 11/19/04), 888 So. 2d 193.
[41] Kid Gloves, Inc. v. First Nat'l Bank of Jefferson Parish, 600 So. 2d 779, 781 (La.App. 5 Cir.1992). See also, State v. Juniors, 03-2425 (La.6/29/05), 915 So. 2d 291, 329-30, cert. denied, 547 U.S. 1115, 126 S. Ct. 1940, 164 L. Ed. 2d 669 (2006).
[42] 04-899 (La.App. 5 Cir. 4/26/05), 902 So. 2d 1061, writ denied, 05-1381 (La.1/13/06), 920 So. 2d 233.
[43] Id., 902 So.2d at 1081-88.
[44] State v. Leger, 05-0011 (La.7/10/06), 936 So. 2d 108, 140, cert. denied, 549 U.S. 1221, 127 S. Ct. 1279, 167 L. Ed. 2d 100 (2006) (quoting State v. Koon, 96-1208 (La.5/20/97), 704 So. 2d 756, 763, cert. denied, 522 U.S. 1001, 118 S. Ct. 570, 139 L. Ed. 2d 410 (1997)).
[45] 466 U.S. 668, 687, 104 S. Ct. 2052, 2064, 80 L. Ed. 2d 674 (1984).
[46] Strickland v. Washington, supra; State v. Soler, 93-1042 (La.App. 5 Cir. 4/26/94), 636 So. 2d 1069, 1075, writs denied, 94-0475 (La.4/4/94) 637 So. 2d 450 and 94-1361 (La.11/4/94), 644 So. 2d 1055.
[47] Strickland v. Washington, 466 U.S. at 687, 104 S.Ct. at 2064; State v. Serio, 94-131 (La. App. 5 Cir. 6/30/94), 641 So. 2d 604, 607, writ denied, 94-2025 (La.12/16/94), 648 So. 2d 388.
[48] Strickland v. Washington, 466 U.S. at 694, 104 S.Ct. at 2068; State v. Soler, 93-1024, 636 So.2d at 1075.
[49] Strickland v. Washington, 466 U.S. at 689, 104 S.Ct. at 2065.
[50] State v. Singleton, 05-634 (La.App. 5 Cir. 2/14/06), 923 So. 2d 803, 811, writs denied, 06-1208 (La. 11/17/06), 942 So. 2d 532, 08-2386 (La. 1/30/99), 999 So. 2d 753.
[51] State v. Taylor, 04-346 (La.App. 5 Cir. 10/26/04), 887 So. 2d 589, 595.
[52] See, State v. Allen, 06-778 (La.App. 5 Cir. 4/24/07), 955 So. 2d 742, 751-52, writ denied, 08-2432 (La. 1/30/09), 999 So. 2d 754; State v. Cambre, 05-888 (La.App. 5 Cir. 7/25/06), 939 So. 2d 446, 460-61, writ denied, 06-2121 (La.4/20/07), 954 So. 2d 158.
[53] State v. Singleton, 05-634 (La.App. 5 Cir. 2/14/06), 923 So. 2d 803, 809, writs denied, 06-1208 (La. 11/17/06), 942 So. 2d 532, 08-2386 (La. 1/30/09), 999 So. 2d 753.
[54] La.C.Cr.P. art. 841.
[55] Rule 2-12.4 of the Uniform Rules, Courts of Appeal.
[56] State v. Lauff, 06-717 (La.App. 5 Cir. 2/13/07), 953 So. 2d 813, 819. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565876/ | 159 F.2d 125 (1946)
UNITED STATES
v.
KANSAS CITY, KAN. et al.
No. 3339.
Circuit Court of Appeals, Tenth Circuit.
December 6, 1946.
*126 *127 Dwight D. Doty, of Washington, D. C. (David L. Bazelon, of Washington, D. C., Peter F. Caldwell, of Topeka, Kan., and Roger P. Marquis, of Washington, D. C., on the brief), for appellant.
William Drennan and Alton H. Skinner, both of Kansas City, Kan. (Joseph A. Lynch and Charles W. Lowder, both of Kansas City, Kan., on the brief), for appellees.
Before PHILLIPS, Circuit Judge, and BROADDUS and CHANDLER, District Judges.
BROADDUS, District Judge.
This proceeding was brought in the United States District Court for the District of Kansas at the request of the Secretary of War, to condemn a perpetual easement for construction, operation, maintenance and control of an electric transmission line over the strip of land from a power plant in the State of Missouri to the Sunflower Ordnance Works in Johnson County, Kansas. A portion of the way sought by the action was over the streets, byways and other property of the City of Kansas City, Kansas. The taking was pursuant to Title II of the Second War Powers Act, authorizing the Secretary of War to acquire by condemnation any interest in real estate that might be deemed necessary for war purposes and to dispose of such property by sale or otherwise.[1]
The procedure of the action conformed to the practice in the District Courts of the State of Kansas, courts of record of such state, as directed by the Act of August 1, 1888, 25 Stat. 357, 40 U.S.C.A. § 258. Under such procedure upon the filing of the petition the judge shall determine the petitioner's power of eminent domain and the necessity for the taking. Upon an affirmative finding on those issues, the judge must appoint appraisers to assess the damage to the owner and other interested parties. The appraisers are required to give adequate notice to all interested parties and at the time and place fixed therein, to view the property and assess the damage caused by the taking. Within thirty days after the filing of appraisement, the petitioner must pay the amount thereof into court, and when such amount is paid, the title and possession vests in the condemnor. G.S.Kan. 26-101. If any interested party be dissatisfied with the appraisement, such party may within thirty days file a notice of appeal with the clerk of the court, and the proceeding is then docketed and tried the same as any other case. G.S.Kan. 26-102.
This appeal involves the right of way secured over the streets and property of the City of Kansas City, Kansas. The substantive question presented is whether, when the designated public authority has *128 determined the necessity of condemning a perpetual easement for specific public use, the perpetual nature of the easement may be limited to the duration of its use by the condemnor, in this case the United States of America. The City of Kansas City, Kansas challenges the right to consider the question, asserting that the Government has failed to perfect a timely appeal from a ruling of the trial court decisive of such issue in the giving of supplemental instructions to the appraisers, and other rulings of the same tenor.
In the course of the action the City applied for, and received, on October 3, 1944, supplemental instructions to the appraisers to the effect that in acquiring the easement the Government secured no assignable interest; that the easement terminated when the Government's use ceased, and that the City therefore was not entitled to any damages. Complying with the ruling it had secured, the City disclaimed any right to damages by reason of the easement sought. Upon a subsequent motion of the Government to set aside the order embracing such instructions, another judge sitting in the case on November 13, 1944 refused to reconsider the supplemental instructions given. There was no appeal from either order. It is urged that the failure to appeal is a bar to consideration of the question though the ruling is embraced within the final entry of judgment from which an appeal was duly perfected.
The appraisers, pursuant to the supplemental instructions and sensible of the City's disclaimer, on August 23, 1945, filed an appraisement in which no damages were allowed the City. The Government filed notice of appeal from the appraisement within the time allowed by the Kansas statute. Upon that appeal, the Government presented in advance of trial the issue of the assignability by the Government of the easement and the court adhered to its former ruling. Thereafter, on March 25, 1946, on a hearing for the ascertainment of the amount of damages, the court found the issues of law to have been determined by its prior order upon the motion for such purpose heard in advance of trial, and that, as the City had disclaimed any right to compensation, there was no question of fact for decision, thereby with due consistency approving its former ruling. From such order this appeal resulted.
We believe the City failed to understand the nature and effect of the supplemental instructions for the appraisers and the subsequent refusal to withdraw such instructions. Under the Kansas Statute, to which the Government was required to conform as nearly as practical, all proceedings prior to appraisers' assessment of damages from the taking are preliminary to the final action of the appraisers. No appeal is allowed from the determination of the condemnor's power to take or the necessity of taking and it is not until the result or affirmative ruling upon these issues are reflected in the final ascertainment by the appraisers of the damages that any of these preliminary rulings may be reviewed. The aggrieved party's only remedy is from and after the appraiser's award. It is equally sound that any related steps not specifically mentioned in the statute and taken to aid in a correct decision upon the ultimate question of the damages suffered, such as instructions to appraisers upon the measure of damages they must apply, do not become final until reflected in the appraisers' final assessment. That such is the force of the Kansas statute is borne out by the further provision that upon service of notice of appeal from the action of the appraisers the case is docketed and tried as any other action that is anew. Missouri, K. & N. W. R. Co. v. Schmuck, et al., 79 Kan. 545, 100 P. 282; Chicago K. & N. R. Co. v. Broquet, 47 Kan. 571, 28 P. 717; Searcy v. State Highway Comm., 145 Kan. 709, 67 P.2d 534. All issues and rulings were as much before the court after appeal as before. Thus the final judgment upon trial de novo embraced the same issues, and as no appeal to a reviewing tribunal may be had until the final judgment on a trial de novo, there could have been no appeal until such judgment here. The duration of the proceedings or the steps occurring therein prior to the final judgment on the trial de novo are of no consequence in determining the time in which an appeal must be had.
*129 Likewise, the City's contention is in conflict with the federal and controlling rule on appealable orders. To prevent repeated appeals in the same litigation only final decisions are appealable. 28 U.S. C.A. § 225; Federal Rules of Civil Procedure, rule 54(a), 28 U.S.C.A. following section 723c; Saterlee v. Harris, 10 Cir., 60 F.2d 490; Demulso Corp. v. Tretolite Co., et al., 10 Cir., 74 F.2d 805; Crutcher v. Joyce, 10 Cir., 134 F.2d 809; Hopkins v. McClure, 10 Cir., 148 F.2d 67; Skirvin v. Mesta, 10 Cir., 141 F.2d 668. It is only when the judgment disposes of the case in its entirety that an appeal will lie; and an order entered upon a declaration of taking and a subsequent refusal to vacate such order in a condemnation proceeding are not appealable orders. The right of appeal in such proceedings does not depend upon and vary with the local rule in such respect. Catlin v. United States, 324 U.S. 229, 243, 65 S. Ct. 631, 89 L. Ed. 911; see Hopkins v. McClure, supra, 148 F.2d 70. The Catlin case presented substantially the same statutory law as considered here, and the ruling there charts the course to be followed. There was no disposal of this case in its entirety in the trial court until the final judgment of the court of March 25, 1946, in the trial de novo, and this court may review all issues, whether of law or of fact, included in that judgment.
This brings us to the question of whether the court may limit the duration of the easement or confine its use to the condemnor; or more specifically, to the right of the Secretary of War to sell or assign the right of way of the sort described in the Declaration of Taking and Petition of Condemnation. There is no question of the propriety to exercise the right of eminent domain and no question may be reasonably raised of the extent of the estate sought by the Government. The right of way is to be perpetual that is, everlasting. That is what the Government asks for and that is what it should have unless limited by law, for the right of eminent domain is an attribute of sovereignty and is inherent in the Government. Kohl, et al. v. United States, 91 U.S. 367, 23 L. Ed. 449; Boom Co. v. Patterson, 98 U.S. 403, 25 L. Ed. 206. The power may be employed in the aid of any of its constitutional activities and should in the event of war be employed in the National defense. Const. Art. I, Sec. 8; see United States v. Gettysburg Electric R. Co., 160 U.S. 668, 16 S. Ct. 427, 40 L. Ed. 576; Kohl v. United States, supra.
The use being a public one, the quantity which should be taken (Shoemaker v. United States, 147 U.S. 282, 13 S. Ct. 361, 37 L. Ed. 170; United States v. Gettysburg Electric Co., supra) and the extent or sort of the estate to be acquired (Sweet v. Rechel, 159 U.S. 380, 395, 16 S. Ct. 43, 40 L. Ed. 188; United States v. Meyer, 7 Cir., 113 F.2d 387; Carmack v. United States, 8 Cir., 135 F.2d 196) are legislative questions and are not subject to judicial review. The decision of the officer designated to enforce the legislative will is also immune from judicial review. The court below, therefore, was in error in intervening to decree a different estate than the one determined as necessary by such designated officer.
It is true the easement sought is perpetual only as long as devoted to the use for which it may be condemned but the use is not limited to the condemnor. On the contrary, it is of such nature that it may be assigned and may be continued in another. Lewis on Eminent Domain, (2d Ed.) Vol. 2, Sec. 859. This result is in complete accord with the provisions of the Second War Powers Act, supra, authorizing sale by the Secretary of War.[2] The federal statute declaring the substance of the law in defining the rights of the Government and the power of designated officers is controlling and may not be affected by the local law. United States v. Miller, 317 U.S. 369, 63 S. Ct. 276, 87 L. Ed. 336, 276, 87 63 S.Ct. However, there is no conflict here with the local law. An easement is an interest in land under the Kansas law (Schaff v. Roberts, 113 Kan. 423, 215 P. 447), and consequently subject to sale.
We are not passing upon the effect on the easement should it not be used for the purposes as defined by the Declaration of *130 Taking or the rights of a purchaser to use it for purposes other than those defined in the Declaration should the United States dispose of it. Neither of those questions is presented in this appeal. The easement defined in the Declaration of Taking may be sold and will continue after sale so long as used for the purposes for which it is sought to be condemned.
Reversed and remanded with instructions to proceed in accord with this opinion.
PHILLIPS, Circuit Judge (concurring).
Under 50 U.S.C.A.Appendix, § 632, the Secretary of War was authorized to acquire by condemnation the right-of-way here involved and to dispose of it by sale, lease, or otherwise, in accordance with § 1(b) of the Act of July 2, 1940, 54 Stat. 712, 50 U.S.C.A.Appendix, § 1171(b).
Section 1(b), supra, provides: "(b) The Secretary of War is further authorized, with or without advertising, to provide for the operation and maintenance of any plants, buildings, facilities, utilities, and appurtenances thereto constructed pursuant to the authorizations contained in this section and section 5, either by means of Government personnel or through the agency of selected qualified commercial manufacturers under contracts entered into with them, and, when he deems it necessary in the interest of the national defense, to lease, sell, or otherwise dispose of, any such plants, buildings, facilities, utilities, appurtenances thereto, and land, under such terms and conditions as he may deem advisable, and without regard to the provisions of section 321 of the Act of June 30, 1932 (47 Stat. 412)."
Under these sections, the United States was authorized to acquire the right-of-way and to retain it itself, or to dispose of it by lease, sale, or otherwise, when the Secretary of War deemed such sale or disposition necessary in the interest of the national defense. The power of the United States to acquire property by condemnation and transfer it to others in aid of the national defense cannot be doubted. United States v. Marin, 9 Cir., 136 F.2d 388, and cases there cited; City of Oakland v. United States, 9 Cir., 124 F.2d 959. See, also, Brown v. United States, 263 U.S. 78, 44 S. Ct. 92, 68 L. Ed. 171.
What would be the effect on the easement if the United States should cease to use the easement itself, or should undertake to dispose of it to others for use other than in the interest of the national defense, is not here presented and need not be decided. It suffices to say that it was error to limit the life of the easement to the period it should be used by the United States and foreclose its right to dispose of the easement to another in the interest of the national defense.
CHANDLER, District Judge, concurs.
NOTES
[1] The pertinent part of the Act provides: "The Secretary of War, the Secretary of the Navy, or any other officer, board, commission, or governmental corporation authorized by the President, may acquire by purchase, donation, or other means of transfer, or may cause proceedings to be instituted in any court having jurisdiction of such proceedings, to acquire by condemnation, any real property, temporary use thereof, or other interest therein, together with any personal property located thereon or used therewith, that shall be deemed necessary for military, naval, or other war purposes, such proceedings to be in accordance with the Act of August 1, 1888 (25 Stat. 357), or any other applicable Federal statute, and may dispose of such property or interest therein by sale, lease, or otherwise, in accordance with section 1 (b) of the Act of July 2, 1940 (54 Stat. 712). * * *" Act of August 18, 1890, c. 797, 26 Stat. 316, as amended by the Acts of July 2, 1917, c. 35, 40 Stat. 241, April 11, 1918, c. 51, 40 Stat. 518, 50 U.S.C.A. § 171, and March 27, 1942, c. 199, 56 Stat. 177, 50 U.S.C.A. § 171a, 50 U.S.C.A.Appendix, § 632.
[2] See Statute, Note 1. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/997597/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 97-4951
RONNIE LEWIS GIBSON,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
James C. Fox, District Judge.
(CR-97-42-F)
Argued: December 4, 1998
Decided: January 11, 1999
Before MURNAGHAN and WILLIAMS, Circuit Judges, and
HERLONG, United States District Judge for the District of
South Carolina, sitting by designation.
_________________________________________________________________
Dismissed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Robert Lonnie Cooper, COOPER, DAVIS & COOPER,
Fayetteville, North Carolina, for Appellant. Thomas B. Murphy,
Assistant United States Attorney, Raleigh, North Carolina, for Appel-
lee. ON BRIEF: Janice McKenzie Cole, United States Attorney,
Anne M. Hayes, Assistant United States Attorney, Raleigh, North
Carolina, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Ronnie Lewis Gibson pleaded guilty to conspiracy to make, utter,
and possess a forged security with the intent to deceive another per-
son or organization in violation of 18 U.S.C.A.§ 513(a) (West Supp.
1998) and was sentenced to 51 months imprisonment. On appeal,
Gibson argues that the district court erred in departing upward from
criminal history category V to criminal history category VI. Finding
that Gibson knowingly waived his right to appeal his sentence in his
plea agreement, we dismiss his appeal.
I.
While on probation for forgery and uttering, Ronnie Lewis Gibson
defrauded numerous victims of over $114,000. In particular, Gibson
either stole or forged business checks, and then cashed those checks
using false identification cards that he produced on an official drivers
license camera stolen from the North Carolina Department of Motor
Vehicles. In addition, Gibson opened fraudulent business checking
accounts, passed bad checks drawn from those accounts, and recruited
others to cash the fraudulent or stolen checks while using fictitious
identification cards that he provided.
On March 18, 1997, Gibson was indicted by a federal grand jury
on one count of conspiracy to make, utter, and possess a forged secur-
ity with the intent to deceive another person or organization in viola-
tion of 18 U.S.C.A. § 513(a) (West Supp. 1998). On July 7, 1997,
Gibson pleaded guilty to the sole count of the indictment.* During the
Rule 11 hearing, the district court determined that Gibson was compe-
tent to plead guilty. The district court also determined that Gibson had
received a copy of the indictment, discussed it with his attorney,
_________________________________________________________________
*Pursuant to his plea agreement, Gibson waived his right to appeal.
2
understood his right to a jury trial and the consequences of pleading
guilty, and that he was satisfied with the performance of his attorney.
Of particular importance here, the district court also specifically
advised Gibson that he had waived "all right to appeal whatever sen-
tence is imposed." (Hearing Transcript (H.T.) at 17.)
On November 10, 1997, Gibson was sentenced pursuant to the
fraud guideline. See U.S. Sentencing Guidelines Manual § 2F1.1
(1997). Due to the amount of money involved, Gibson's base offense
level was set at twelve. See U.S.S.G. § 2F1.1(a) & (b)(1)(G). Because
the offense involved more than minimal planning, Gibson's base
offense level was increased an additional two levels. See U.S.S.G.
§ 2F1.1(b)(2)(A) & (B). In addition, because Gibson was an organizer
and leader of a criminal conspiracy involving more than five partici-
pants, his base offense level was increased an additional four levels.
See U.S.S.G. § 3B1.1(a). Finally, because Gibson accepted responsi-
bility for the instant offense, his base offense level was reduced by
three levels. See U.S.S.G. § 3E1.1. With an adjusted offense level of
15 and a criminal history category of V, Gibson's guideline range was
37-46 months. See U.S.S.G. Ch.5, Pt.A.
Believing that Gibson's criminal history category did not ade-
quately reflect either the seriousness of Gibson's past criminal history
or the likelihood that he would commit further crimes, the district
court determined that an upward departure from criminal history cate-
gory V to criminal history category VI was warranted. See U.S.S.G.
§ 4A1.3. With an adjusted offense level of 15 and a criminal history
category of VI, Gibson's guideline range was 41-51 months. See
U.S.S.G. Ch.5, Pt.A. The district court then sentenced Gibson to 51
months imprisonment. After sentencing, the district court advised
Gibson of his appellate rights. This appeal followed.
II.
On appeal, Gibson argues that the district court erred in departing
upward from criminal history category V to criminal history category
VI. Although Gibson concedes that he waived his right to appeal his
sentence in his plea agreement, he contends, based on a decision of
the Ninth Circuit, see United States v. Buchanan , 59 F.3d 914 (9th
Cir. 1995), and a dissent in an unpublished opinion from this Court,
3
see United States v. One Male Juvenile, 117 F.3d 1415 (4th Cir. 1997)
(unpublished), cert. denied, 118 S. Ct. 1191 (1998), that the district
court's statement during the sentencing hearing that he could appeal
his sentence overrides his waiver of his right to appeal in the plea
agreement. Specifically, Gibson argues that where there is a conflict
between what the district court orally pronounces in open court and
what is written in a plea agreement, the oral pronouncement creates
a reasonable expectation and, therefore, is controlling. For the reasons
that follow, we disagree with Gibson's argument.
It is well established that a waiver of a criminal defendant's right
to appeal contained in a valid plea agreement "is enforceable against
the defendant so long as it is `the result of a knowing and intelligent
decision to forgo the right to appeal.'" United States v. Attar, 38 F.3d
727, 731 (4th Cir. 1994) (quoting United States v. Wessells, 936 F.2d
165, 167 (4th Cir. 1991)). In determining whether a defendant's
waiver is "knowing and intelligent," we consider "the particular facts
and circumstances surrounding [the] case, including the background,
experience and conduct of the accused." United States v. Davis, 954
F.2d 182, 186 (4th Cir. 1992) (internal quotation marks omitted).
Considering the particular facts and circumstances of this case, we
conclude that Gibson's waiver of his right to appeal his sentence, as
contained in the plea agreement, was knowing and intelligent. During
the Rule 11 colloquy, the district court specifically questioned Gibson
about his decision to waive his right to appeal. Gibson stated that he
understood the consequences of the plea agreement, and he reaffirmed
his decision to plead guilty. Gibson was represented by counsel dur-
ing the hearing, and there is no evidence that he was incapable of
understanding the consequences of his decision.
Gibson argues, however, that the district court's subsequent oral
pronouncement during sentencing nullified the earlier waiver, such
that it was no longer knowing and intelligent. At sentencing, the dis-
trict court advised Gibson of his appellate rights as follows:
You can appeal your conviction, Mr. Gibson, if you believe
that your guilty plea was somehow unlawful or involuntary,
or if there is some other fundamental defect in the proceed-
ings that was not waived by your guilty plea. You also have
4
a statutory right to appeal your sentence under certain cir-
cumstances, particularly if you think the sentence is contrary
to law.
However, a defendant may waive those rights as part of a
plea agreement, and you have entered into a plea agreement
which waives some or all of your rights to appeal the sen-
tence itself. Such waivers are generally enforceable, but if
you believe the waiver is unenforceable, you can present
that theory to the appellate court.
(J.A. at 23-24.) At no point during sentencing did the district court
inform Gibson that he could appeal as a right. Rather, the district
court simply informed Gibson that he could appeal if his guilty plea
was involuntary or if his sentence was contrary to law. Although a
general waiver of the right to appeal is valid, it is well established that
such a waiver does not preclude a defendant from arguing on appeal
that his sentence was contrary to law, e.g., imposed in excess of the
maximum penalty provided by statute, see United States v. Marin,
961 F.2d 493, 496 (4th Cir. 1992), or was involuntary, see United
States v. Wiggins, 905 F.2d 51, 53 (4th Cir. 1990). Thus, the district
court's statement concerning Gibson's rights to appeal was simply a
correct statement of the law. In fact, the district court explicitly
informed Gibson that he had entered into a plea agreement that
waived his right to appeal, and that such waivers are generally
enforceable. Indeed, a general waiver precludes the very type of claim
raised by Gibson in his appeal: that the district court improperly
applied the sentencing guidelines when imposing sentence. See Attar,
38 F.3d at 732. Because Gibson knowingly and intelligently waived
his right to appeal, the waiver must be enforced.
In any event, even had the district court erroneously stated during
sentencing that Gibson had a right to appeal his sentence, such a state-
ment would not nullify the valid waiver contained in his plea agree-
ment. As support for his theory, Gibson relies principally on the Ninth
Circuit's decision in Buchanan, 59 F.3d 914 (9th Cir. 1995), and on
the dissent in One Male Juvenile, 117 F.3d at 1415. In Buchanan, the
defendant entered into a plea agreement in which he waived his right
to appeal his sentence. See id. at 916. He subsequently confirmed that
he understood both the plea agreement and its consequences during
5
the Rule 11 hearing. See id. When the defendant later appeared for
sentencing, however, the district court erroneously told the defendant
that he "could appeal the sentencing findings." Id. On appeal, the
Ninth Circuit concluded that the defendant's waiver of his right to
appeal, albeit entered into knowingly and intelligently, was unen-
forceable because of the subsequent erroneous statements by the dis-
trict court to the effect that the defendant had a right to appeal. See
id. at 917-18.
Over a dissent, this Court recently rejected the Ninth Circuit's anal-
ysis:
We are not persuaded by the holding in Buchanan that a
waiver of a right to appeal contained in a plea agreement
that has been entered into knowingly and intelligently may
be held unenforceable because of subsequent erroneous and
apparently inadvertent statements by the district court to the
effect that the defendant has a right to appeal. Once a defen-
dant has knowingly and intelligently waived his right to
appeal and that waiver is confirmed during a Rule 11 hear-
ing, the requirements for an effective waiver of appeal have
been satisfied, and the waiver should be enforced. See Attar,
38 F.3d at 731; Marin, 961 F.2d at 496. To hold otherwise
ignores the purpose and implication of a Rule 11 hearing,
which is to establish, on the record, the knowing and intelli-
gent nature of each guilty plea. See United States v. Taylor,
984 F.2d 618, 621 (4th Cir. 1993). Therefore, we disagree
with the Ninth Circuit and hold that once an appeal waiver
is established to be knowing and intelligent pursuant to Rule
11, the waiver may not be held unenforceable because of a
district court's erroneous statements at a subsequent pro-
ceeding that the defendant has a right to appeal.
One Male Juvenile, 117 F.3d at 1415 (unpublished). Here, Gibson's
appeal waiver was knowing and intelligent. Moreover, that fact was
confirmed during a Rule 11 hearing. Accordingly, the appeal waiver
should be enforced even if the district court stated at sentencing that
Gibson had a right to appeal his sentence.
6
III.
For the foregoing reasons, we will not consider whether the district
court erred in departing upward from criminal history category V to
criminal history category VI and dismiss this appeal.
DISMISSED
7 | 01-03-2023 | 07-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/997611/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SHANEIKA HOBBS, By and through
her parent and guardian, Jacqueline
Hughes; JACQUELINE CAMPER,
Plaintiffs-Appellants,
v.
TOWN OF HURLOCK; WENDELL C.
TRAVERS, individually, and in his
No. 97-2152
official capacity as Hurlock Police
Chief; DONALD BRADLEY, in his
capacity as Mayor of the Town of
Hurlock; JAMES C. CAMPER,
individually and in his official
capacity as Hurlock Police
Sergeant; JAMES A. CAMPER,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Alexander Harvey II, Senior District Judge.
(CA-94-2610-H, CA-95-3688-H)
Submitted: November 30, 1998
Decided: January 11, 1999
Before MURNAGHAN and MOTZ, Circuit Judges, and
BUTZNER, Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Elliott Denbo Andalman, Daniel A. Katz, SILBER, ANDALMAN,
PERLMAN & FLYNN, P.A., Takoma Park, Maryland; Deborah A.
Jeon, AMERICAN CIVIL LIBERTIES UNION FOUNDATION OF
MARYLAND, Centreville, Maryland, for Appellants. Daniel Karp,
Denise Ramsburg Stanley, ALLEN, JOHNSON, ALEXANDER &
KARP, Baltimore, Maryland, for Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Shaneika Hobbs appeals from the district court's final order enter-
ing judgment in favor of the Defendants on her 42 U.S.C.A. § 1983
(West Supp. 1998) complaint. For the reasons that follow, we affirm.
Hobbs, a minor, filed suit in 1994 against the Town of Hurlock,
Maryland, its Police Chief (Wendell Travers), and its Mayor (Donald
Bradley), in which she claimed that she was arrested and strip-
searched in violation of her constitutional rights, and claimed false
imprisonment under state law.* In a 29-page memorandum opinion
entered on November 27, 1995, the district court granted summary
judgment in favor of all defendants on all counts except as to Hobbs'
claim against Travers in his individual capacity asserted in Count I of
_________________________________________________________________
*In Count I, Hobbs alleged that she was arrested without probable
cause and was subjected to an unreasonable search and seizure in viola-
tion of her rights under the Fourth and Fourteenth Amendments;
Count II claimed a violation of the Equal Protection Clause by arresting,
detaining, and strip searching her on the basis of her gender; Count III
claimed that she was arrested, detained, and strip searched on account of
her race; Count IV claimed false imprisonment under state law.
2
the complaint (Supervisor Liability). Travers appealed to this court
which affirmed the judgment of the district court, finding that "be-
cause there was a dispute of facts concerning the conduct and reason-
ableness of the search of Hobbs rendering summary judgment
inappropriate, we affirm." See Hobbs v. Travers, No. 95-3207, 1996
WL 680727 (4th Cir. Nov. 26, 1996) (unpublished).
Meanwhile, in December 1995, Hobbs filed a second complaint,
based on the same facts, naming Sergeant Camper as the only defen-
dant (Hobbs II). In Count I, Hobbs sought recovery from Camper
under § 1983 for the allegedly illegal arrest and strip search. In
Count II, Hobbs asserted a claim for false imprisonment under Mary-
land common law. Hobbs and Camper filed motions for summary
judgment.
Based on additional evidence before the court (exhibits and deposi-
tion testimony of experts which were not before the court in Hobbs
I), and because Camper was not a party in Hobbs I, the district court
"re-examine[d] on the basis of the expanded record here its previous
determination that as a matter of law Camper did not have probable
cause to arrest . . . Hobbs on March 15, 1994." The court concluded
that neither Hobbs nor Camper was entitled to summary judgment on
the probable cause issue. Further, the court denied Camper's motion
for summary judgment on his claim of qualified immunity because
"[w]hether or not Camper's decision to arrest plaintiff Hobbs was
objectively reasonable raises questions of disputed fact which cannot
be finally determined by way of a motion for summary judgment."
All other findings made in the district court's first order were re-
affirmed. Specifically, the court found that Hobbs was not arrested
and detained on account of either her race or gender and, therefore,
all of the Defendants were entitled to summary judgment on
Counts II and III of the complaint. The cases were consolidated for
trial by jury on Hobbs' Fourth Amendment claims against Camper
and Travers in their individual capacities only.
At trial, the following evidence was introduced. On the evening of
March 15, 1994, Travers had just gone off-duty and was on his way
home when he noticed a red car parked at the corner of Main and
Poplar Streets. Travers testified that he noticed several individuals
cross the street, approach the passenger side of the vehicle, and then
3
quickly return to the other side of the street. Earlier in the day,
Travers had been informed by a member of the Narcotics Task Force
of the Maryland State Police that Derrick Wongus was under surveil-
lance for suspected drug dealing and that "if I saw Derrick Wongus
in the red Oldsmobile at that location, or anywhere in the town of
Hurlock, there was a probability that drugs were being dealed out of
his car." Travers then called Officer Camper to"make a check."
Camper testified that, when he arrived at the scene, he immediately
recognized Wongus in the driver's seat. Hobbs was seated in the front
passenger seat. Another police officer, Officer Miller, arrived shortly
after Camper and asked Wongus for permission to search his vehicle
and Wongus agreed. Camper asked Hobbs to exit the vehicle and
stand near his police car while the search was conducted.
The search uncovered .2 grams of cocaine in a glass vial on the
floor of the driver's side and a .45 caliber magazine. Wongus was
arrested and a search incident to his arrest revealed a bag of marijuana
and $899 in cash in his pocket. Camper then asked Hobbs to get into
the police car. The only information she gave him was that she was
fifteen years old. Camper informed Travers and Hobbs that he was
going to take her to headquarters to call her parents. Camper testified
that his purpose in taking her to the station was, because there were
drugs found in the car, "I had to either charge her with a charge or
release her in the custody of her parents, and at the present time the
arrest was just to get her to headquarters to, you know, find out what
involvement she had in drugs, if any, and to do a pat down on her to
make sure that she had no drugs on her." Although all the males pres-
ent at the scene were frisked and released, Camper stated that he did
not frisk Hobbs because there were no female officers present and "I
did not want to be accused of touching any kind of way that they
could say that something was wrong with what I did." Wongus was
handcuffed and taken to the station by Officer Pritchard where he was
strip-searched.
Once she and Camper arrived at the police station, Hobbs was
allowed to call her mother. When Hobbs informed Camper that she
needed to go to the bathroom, he told her that she would have to be
strip searched before she could use the bathroom. A female officer
conducted a full-body visual search and observed Hobbs use the rest-
4
room. No drugs were found and Hobbs was released to the custody
of her mother--no charges were brought against her.
At the close of the evidence, the parties each moved for judgment
as a matter of law, which the district court denied. The jury found for
both Defendants. This appeal followed.
Hobbs claims that the district court erred by (1) denying her
motion for judgment as a matter of law on her claims of illegal search
and seizure; (2) failing to reject, as a matter of law, Camper's claim
of qualified immunity; and (3) summarily dismissing her discrimina-
tion and municipal liability claims.
a. Denial of motion for judgment as a matter of law. This court
reviews the denial of a motion for judgment as a matter of law
(JAML) de novo, examining the evidence in the light most favorable
to Camper and Travers, the non-moving parties. See Brown v. CSX
Transp., Inc., 18 F.3d 245, 248 (4th Cir. 1994). A motion for JAML
should be granted with respect to an issue if "there is no legally suffi-
cient evidentiary basis for a reasonable jury to find for [the nonmov-
ing] party on that issue." Fed. R. Civ. P. 50(a). Accordingly, this court
must determine whether "there is substantial evidence in the record to
support the jury's findings." Wilhelm v. Blue Bell, Inc., 773 F.2d
1429, 1433 (4th Cir. 1985). When determining whether substantial
evidence exists supporting the jury's verdict, this court:
[M]ay not weigh the evidence, pass on the credibility of the
witnesses, or substitute our judgment of the facts for that of
the jury. That deference to the jury's findings is not, how-
ever, absolute: A mere scintilla of evidence is insufficient to
sustain the verdict, and the inferences a jury draws to estab-
lish causation must be reasonably probable.
Charleston Area Med. Ctr., Inc. v. Blue Cross & Blue Shield, 6 F.3d
243, 248 (4th Cir. 1993) (quotations and citations omitted).
Probable cause to arrest exists when the facts and circumstances
within an officer's knowledge, and of which they had reasonably
trustworthy information, are "sufficient to warrant a prudent man in
5
believing that the [individual] had committed or was committing an
offense." Beck v. Ohio, 379 U.S. 89, 91 (1964); United States v.
Manbeck, 744 F.2d 360, 376 (4th Cir. 1984). Here, the facts known
to Camper at the time of Hobbs' arrest were sufficient to support the
jury's finding that probable cause existed. Given her proximity to the
drugs that were found in the car and the appearance that drug dealing
was being conducted from her side of the car, Camper had reasonable
grounds to suspect that Hobbs was involved in illegal drug activity.
Accordingly, the district court did not err in submitting this issue to
the jury.
There was also sufficient evidence to support the jury's finding
with respect to Hobbs' challenge to the strip search. Strip searches of
detainees are constitutionally constrained by due process require-
ments of reasonableness under the circumstances. See Bell v. Wolfish,
441 U.S. 520, 558-59 (1979). In each case, the need for the particular
search must be balanced against the invasion of personal rights that
the search entails. Courts must consider the scope of the particular
intrusion, the manner in which it is conducted, the justification for ini-
tiating it, and the place in which it is conducted. Id. at 559. Here, a
visual body cavity search for drugs and bathroom surveillance, con-
ducted by an officer of the same gender, in private, was reasonable
given that Camper had grounds to believe that Hobbs may have been
hiding drugs. We find that the evidence was sufficient to support the
jury's verdict in favor of the Defendants; therefore, the district court
did not err in denying Hobbs' motion for JAML on this claim either.
See Justice v. City of Peachtree City, 961 F.2d 188, 193 (11th Cir.
1992).
b. Qualified immunity. Hobbs claims that the district court erred in
refusing to find as a matter of law that Camper should be deprived of
qualified immunity. Because the qualified immunity of government
officials depends at the outset on the existence of a constitutional
right, "[a] necessary concomitant to the determination of whether the
constitutional right asserted by a plaintiff is`clearly established' at the
time the defendant acted is the determination of whether the plaintiff
has asserted a violation of a constitutional right at all." Siegert v.
Gilley, 500 U.S. 226, 232 (1991). Because the jury's verdict found
that Hobbs' constitutional rights were not violated, Camper was enti-
6
tled to qualified immunity as a matter of law. Therefore, the district
court's decision to submit the issue to the jury was not improper.
c. Summary judgment on race and gender discrimination claims.
Hobbs alleged that she was unlawfully arrested and strip-searched on
account of her gender (Count II) and her race (Count III). The dis-
trict court granted summary judgment to the Defendants on both
claims. The district court concluded that, with respect to Hobbs' gen-
der discrimination claim, it was "entirely reasonable for Officer
Camper to decline to pat down [Hobbs] at the scene even though
males were searched in this manner. Persuasive justification existed
for the different treatment afforded [Hobbs] from that afforded the
male persons at the scene." Hobbs failed to provide any evidence that
Camper acted toward her with a discriminatory intent or purpose. See
Washington v. Davis, 426 U.S. 229, 238-40 (1976); see also Sylvia
Dev. Corp. v. Calvert County, 48 F.3d 810, 819 (4th Cir. 1995) ("A
violation [of Equal Protection] is established only if the plaintiff can
prove that the state intended to discriminate."). Accordingly, sum-
mary judgment was properly entered in favor of the Defendants on
this claim.
With respect to Hobbs' racial discrimination claim, the court con-
cluded that, based in part on the fact that Camper was also African-
American, "[n]othing in the record suggests that his actions were
motivated by racial animus." Again, Hobbs offered no evidence at the
summary judgment stage to demonstrate that Camper's action toward
her was motivated by an intent to discriminate against her on account
of her race. Summary judgment was properly entered in favor of the
Defendants on this claim as well.
d. Summary judgment on municipal liability claim. Under Monell
v. Department of Social Servs., 436 U.S. 658 (1978), municipalities
may not be held liable under § 1983 simply because they employed
the tortfeasor acting within the scope of his or her employment.
Rather, municipal liability attaches under § 1983 only "when execu-
tion of a government's policy or custom, whether made by its law-
makers or by those whose edicts or acts may fairly be said to repre-
sent official policy, inflicts the injury." Id. at 694. Furthermore, a
plaintiff cannot claim municipal liability unless she can demonstrate
that the enforcement of its policy was the "moving force" behind the
7
constitutional violation. See City of Oklahoma City v. Tuttle, 471 U.S.
808, 823 (1985) (plurality opinion). There can be no award of dam-
ages under § 1983, however, against a municipal official or against a
corporation based on the actions of one of the municipality's officers
when that officer has inflicted no constitutional harm. See City of Los
Angeles v. Heller, 475 U.S. 796, 799 (1986). Because Hobbs suffered
no constitutional deprivation, summary judgment was properly
entered in favor of the Town of Hurlock.
For these reasons, we affirm. We dispense with oral argument
because the facts and legal contentions are adequately presented in the
materials before the court and argument would not aid the decisional
process.
AFFIRMED
8 | 01-03-2023 | 07-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/997622/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 97-4420
DONTE JAVON PITT,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Alexander Williams, Jr., District Judge.
(CR-96-36-AW)
Argued: December 4, 1998
Decided: January 22, 1999
Before HAMILTON and LUTTIG, Circuit Judges, and
MICHAEL, Senior United States District Judge
for the Western District of Virginia,
sitting by designation.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Kenneth Michael Robinson, William Jackson Garber,
Washington, D.C., for Appellant. Odessa Palmer Jackson, Assistant
United States Attorney, Greenbelt, Maryland, for Appellee. ON
BRIEFS: Dennis M. Hart, Washington, D.C., for Appellant. Lynne
A. Battaglia, United States Attorney, Stephen S. Zimmerman, Assis-
tant United States Attorney, Greenbelt, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Donte Pitt challenges his conviction for conspiracy to distribute
and possess with intent to distribute cocaine and for related offenses.
We affirm.
I.
On the evening of March 25, 1995, Corporal Milton Crump and
two other officers from the Prince George's County Police Depart-
ment responded to a burglar alarm at a house in Temple Hills, Mary-
land. Upon arriving at the scene, the officers detected the smell of
natural gas. Crump reported the smell to his supervisor, who called
the local fire department. Members of the fire department confirmed
the smell of natural gas and turned off the gas supply to the house.
Having obtained no response after knocking on the front door, the
firefighters broke down the door. The police officers then entered the
house to search for a burglar or for any occupants of the house in need
of assistance. Upon entering the house, the officers observed a white
powdery substance and several crystallized rocks that appeared to be
crack cocaine. The officers also saw a gun, an electronic scale, and
several boxes of baking soda, which is used in the production of crack
cocaine.
Having determined that there was no one in the house, Crump
relayed the results of the search to his supervisor, who asked that a
narcotics officer be sent to the scene. In the meantime, the officers
secured the premises. Approximately 15 to 20 minutes later, Detec-
tive Richard Herbert, a narcotics expert, arrived. Crump escorted Her-
bert into the house, where he pointed out the items he had seen.
Herbert then performed a field test on the white powdery substance
that the officers had observed, and determined that the substance was
cocaine. On the basis of the information obtained by the officers, Her-
2
bert sought and procured a search warrant for the house. Officers exe-
cuted the warrant that night and discovered approximately 500 grams
of cocaine, paper wrappers and plastic bags, a number of boxes of
baking soda, two semi-automatic handguns, approximately $2,000 in
currency, and a safe. Three days later, officers executed a further
search warrant on the safe and found approximately two kilograms of
cocaine, three more semi-automatic handguns, and approximately
$300,000 in currency. The house was leased in the name of "Robert
Watson"; however, extensive fingerprint and handwriting evidence
linked Donte Pitt to the property. In addition, police connected evi-
dence seized from an apartment elsewhere in Temple Hills, including
a further amount of cocaine, with Pitt.
On February 5, 1996, Pitt was indicted on two counts of possession
with intent to distribute cocaine and possession of a firearm by a con-
victed felon. On March 25, Pitt was charged, in a superseding indict-
ment, with five further counts of conspiracy to distribute and possess
with intent to distribute cocaine, distribution of cocaine, and use of a
firearm during a drug trafficking offense. Pitt entered a plea of not
guilty.
Pitt's trial began on October 15. As its first witness, the prosecu-
tion called Richard Herbert, the narcotics detective who conducted the
search of the house. On cross-examination, defense counsel asked
Herbert about a photograph given to him and another officer by David
Hughes, the rental agent for the house that Herbert searched. Herbert
testified that Hughes had said that the photograph was of the person
who had rented the house and that the last name of the person was
Allen. Defense counsel contended that the photograph was of Norman
Allen, whom they claimed was actually the "Robert Watson" whose
name appeared on the lease of the house. On re-direct examination,
the government sought to introduce testimony by Herbert that Hughes
told the agents that Pitt had given him the photograph and had identi-
fied the person in the photograph as Allen. The trial judge admitted
the evidence on the ground that it was being offered not for the truth
of the matter asserted, but rather to rebut the implication that the offi-
cers erred by focusing their investigation on Pitt, rather than on Allen.
Defense counsel then indicated their intention to introduce an affida-
vit signed by Hughes, but they appear never to have actually
attempted to do so.
3
The prosecution subsequently called Richard Eisenbarth, whom the
prosecution claimed had engaged in a guns-for-drugs trade with a
man named Daniel Brown. Eisenbarth testified that Brown told him
that he was acting on behalf of an individual named"Don" -- alleg-
edly Donte Pitt. Defense counsel objected to Eisenbarth's testimony.
The trial judge admitted the testimony, however, on the ground that
it was a statement made by a co-conspirator of the defendant. Defense
counsel subsequently sought to introduce a deposition of Brown taken
by defense counsel prior to trial. The trial judge, however, excluded
this testimony on the grounds that Brown was available to testify in
person and that the deposition testimony conflicted with Brown's ear-
lier testimony before the grand jury and therefore was unreliable.
In the course of presenting its case, the defense sought to call
Michael Bell, who had been charged, along with Pitt, with participa-
tion in a drug conspiracy in 1990. Defense counsel wanted to call Bell
in order to rebut evidence introduced by the prosecution that Pitt had
spent hundreds of thousands of dollars on cars, travel, and jewelry
during the course of the conspiracy at issue in the instant case.
Defense counsel contended that Bell would testify that Pitt had made
a substantial amount of money as a result of the 1990 conspiracy,
which he then used to fund his spending at the time of the subsequent
conspiracy. The trial judge, however, excluded Bell's testimony on
the grounds that it would have minimal probative value and that it
would also be cumulative, confusing, and prejudicial.
On October 30, after the close of the prosecution's case-in-chief,
the foreman of the jury, Juror No. 1, informed the trial judge that
Juror No. 8 had made improper comments in front of other jurors
regarding whether the prosecution had proven its case. Upon being
summoned to the courtroom, Juror No. 8 admitted that she had said
something like, "I haven't seen any proof yet." However, she also
asserted that she remained "open-minded." On the way out of the
courtroom, Juror No. 8 asked the courtroom clerk if the clerk could
get her "off this case," and said that she lived close to the area in
which the events at issue occurred. The clerk then relayed these state-
ments to the trial judge. On the basis of Juror No. 8's original state-
ment to her fellow jurors and her later statements to the deputy clerk,
the trial judge dismissed her and replaced her with an alternate juror.
4
The trial concluded on Friday, November 1. The trial judge permit-
ted the jury to return home for the weekend before beginning deliber-
ations the following Monday. When the jury returned on Monday,
jurors reported to the trial judge a number of incidents that had
occurred over the weekend. Juror No. 2 reported that an individual
had visited his job site and inquired about his jury service; Juror No.
3 reported that she had received a telephone call at 1 a.m. from a
woman who said, "B----, watch your back"; and Juror No. 12
reported that she had been followed to the grocery store by a man
with long, stringy hair and a mustache, who resembled a police offi-
cer who had been watching the trial. Upon receiving these reports, the
trial judge spoke ex parte with each of the jurors who reported the
incidents and then questioned all of the jurors individually in the
courtroom about the reported incidents. Although a number of jurors
expressed concern about the incidents, and some alluded to other inci-
dents, none said that he or she was scared as a result of them, and all
of the jurors said that they would continue to be fair and impartial.
During and after the poll of the jury, defense counsel moved for a
mistrial. The trial judge denied the motions.
Later that afternoon, the jury found Pitt guilty on all counts. On
May 28, 1997, the district court sentenced Pitt to 300 months in
prison. Pitt now appeals.
II.
Appellant first contends that the district court should have sup-
pressed the evidence seized as a result of the execution of search war-
rants against the house in Temple Hills.
As a threshold matter, the initial entry of the house, by Corporal
Milton Crump and other police officers, was clearly justified by exi-
gent circumstances, for the purposes both of determining if a burglar
was inside and of rescuing any individuals inside from the suspected
gas leak.1 See, e.g., Minnesota v. Olson, 495 U.S. 91, 100 (1990)
_________________________________________________________________
1 At trial, appellant did argue that there were no exigent circumstances
at the time of the initial entry on the ground that firefighters entered the
house before any of the police officers did, thus dissipating any exi-
5
(holding that warrantless entry is justified by"the need to prevent a
suspect's escape, or the risk of danger to the police or to the other per-
sons inside or outside the dwelling" (internal quotation omitted));
Mincey v. Arizona, 437 U.S. 385, 392 (1978) (holding that warrant-
less entry is justified when police officers "reasonably believe that a
person within is in need of immediate aid"). Further, as appellant
appears to concede, once Crump and the other officers were inside the
house, they could have seized any contraband they saw in plain view.
See, e.g., id.; Michiganv. Tyler, 436 U.S. 499, 509 (1978); Coolidge
v. New Hampshire, 403 U.S. 443, 465-66 (1971) (plurality opinion).
Appellant contends, however, that the subsequent warrantless entry
by Crump and Detective Richard Herbert was unconstitutional
because any exigent circumstances present at the time of the original
entry had dissipated. We disagree on the ground that the second entry
was "no more than an actual continuation of the first." Tyler, 436 U.S.
at 511. In entering the house, Crump and Herbert were not conducting
any further search: instead, as the district court found, Herbert was
simply verifying what Crump, a junior officer, had seen in the course
of his search minutes earlier, in order to aid in preparing an applica-
tion for a search warrant. J.A. at 201. The only additional step that
Crump and Herbert took was to conduct a field test of the suspected
cocaine: however, Crump could easily have conducted such a test
himself during the original entry, or, in the alternative, could have
seized the suspected cocaine, removed it from the house, and tested
it there.
Even were we to conclude that the subsequent warrantless entry
was unconstitutional, we would nevertheless rule that the evidence
seized pursuant to the search warrants was admissible. Appellant con-
tends that the evidence was inadmissible under the"fruit of the poi-
_________________________________________________________________
gency. However, in support of this theory, appellant could introduce only
the testimony of a witness, Bethel Hunley, who was"not sure" as to
whether the firefighters or police officers entered the house first. J.A. at
197. Crump, on the other hand, testified that the police officers entered
the house first. Id. at 164a. To the extent that appellant raises the issue
on appeal, we find that the district court properly credited Crump's testi-
mony over Hunley's. Id. at 197.
6
sonous tree" doctrine. See, e.g., Wong Sun v. United States, 371 U.S.
471, 487-88 (1963). Even on the basis of only the evidence discov-
ered in plain view during the original warrantless entry, however, the
officers would easily have been able to obtain a warrant. See, e.g.,
United States v. Walton, 56 F.3d 551, 554 (4th Cir. 1995) (holding
that affidavit submitted in support of application for search warrant
stated probable cause even without information obtained through
unlawful entry); United States v. Gillenwaters, 890 F.2d 679, 681-82
(4th Cir. 1989) (same); see generally Franks v. Delaware, 438 U.S.
154, 171-72 (1978) (examining affidavit submitted in support of
application for search warrant for probable cause after discounting
false statement). The original warrantless entry therefore constituted
an "independent source" for the evidence used to obtain the warrant.
See, e.g., Murray v. United States, 487 U.S. 533, 537 (1988); Segura
v. United States, 468 U.S. 796, 813-16 (1984); Silverthorne Lumber
Co. v. United States, 251 U.S. 385, 392 (1920). Because the officers
would have been able to obtain a warrant even without the second
warrantless entry, and because the second warrantless entry was con-
stitutional in any event, we conclude that the district court correctly
denied appellant's motion to suppress.
III.
Appellant next challenges the district court's decisions regarding
the admission of certain evidence under the hearsay rules. We con-
sider each of appellant's arguments in turn.
First, appellant challenges the district court's decision to admit the
testimony of Detective Richard Herbert that David Hughes, the lessor
of the Temple Hills house, told him that appellant had given him the
photograph of the person who purportedly leased the house, and had
identified the person in the photograph as Allen. Appellant contends
that this testimony was hearsay. Appellant's contention fails, how-
ever, because this testimony was not offered into evidence in order to
prove the truth of the matter asserted. See Fed. R. Evid. 801(c).
Instead, as the district court correctly noted, the prosecution offered
Herbert's testimony, which indicated that appellant had given Hughes
the photograph, in order to rebut the implication that, because the
investigating officers had a photograph suggesting that Norman Allen
was the lessee of the Temple Hills house, the officers erred by focus-
7
ing their investigation on appellant, rather than on Allen. Indeed, by
questioning the motives of the officers in investigating appellant,
defense counsel opened the door to such rebuttal evidence. We thus
conclude that the district court properly admitted Herbert's testimony.2
Second, appellant argues that the district court should have admit-
ted the affidavit signed by Hughes and produced by defense counsel.
As a threshold matter, although defense counsel repeatedly asserted
its intention to introduce the affidavit, they appear never to have actu-
ally attempted to do so. Even if they had, however, the affidavit
would not have been admissible. See Fed. R. Evid. 804(b)(5).3 First,
defense counsel failed to make known their intention to offer the affi-
davit, and the particulars of the affidavit, "sufficiently in advance of
the trial or hearing," as is required by Rule 804(b)(5). Although
defense counsel made the affidavit available to the court in camera
in advance of the trial, the prosecution learned of the affidavit, and
obtained a copy of it, only once the trial was underway. Second,
Hughes' affidavit lacks "circumstantial guarantees of trustworthi-
ness," as is also required by Rule 804(b)(5). In determining whether
a statement has sufficient guarantees of trustworthiness, we examine
the totality of circumstances surrounding the making of the statement.
See United States v. McHan, 101 F.3d 1027, 1038 (4th Cir. 1996). In
view of Hughes' prior relationship with appellant, the mysterious cir-
cumstances in which the affidavit was delivered to defense counsel,
and Hughes' decision to leave the country during appellant's trial,
Hughes' affidavit lacks any such guarantees. Because Hughes' affida-
vit does not fall into any of the other hearsay exceptions, and does not
meet the requirements of the catch-all provision in Rule 804(b)(5), we
conclude that, if it had been offered into evidence, it would have been
inadmissible.4
_________________________________________________________________
2 Appellant contends that he was entitled to a limiting instruction that
the testimony was not offered to prove the truth of the matter asserted.
Defense counsel, however, failed to seek such a limiting instruction.
3 Since appellant's trial, Rule 804(b)(5) has been recodified as Rule
807. For purposes of this appeal, however, the relevant text is identical.
4 Appellant contends, in the alternative, that Hughes' affidavit could
have been admitted under Rule 806. See Fed. R. Evid. 806. However,
this contention also fails on the ground that, notwithstanding the fact that
8
Third, appellant challenges the district court's decision to admit the
testimony of Richard Eisenbarth regarding Daniel Brown's identifica-
tion of "Don" as the individual on whose behalf he was engaging in
a guns-for-drugs trade. Specifically, appellant contends that there was
no evidence, other than Brown's alleged statement, that Brown was
a co-conspirator for purposes of invoking the co-conspirator excep-
tion to the hearsay rules. See Fed. R. Evid. 801(d)(2)(E). Admittedly,
Brown was not a named co-conspirator in any of the conspiracy
charges against appellant: however, the statement of an unnamed co-
conspirator can still be admitted under Rule 801(d)(2)(E). See United
States v. Portsmouth Paving Corp., 694 F.2d 312, 323 n.16 (4th Cir.
1982). In order to invoke the co-conspirator exception, it is not neces-
sary for the prosecution to demonstrate either that the declarant was
unavailable to testify at trial or that declarant's statement was reliable.
Instead, the prosecution need only show, by a preponderance of the
evidence, that the declarant was a co-conspirator and that the declar-
ant's statement was made in the course of and in furtherance of the
conspiracy. See Bourjaily v. United States, 483 U.S. 171, 176 (1987).
Contrary to appellant's assertion, we find that ample evidence in the
record establishes Brown as a co-conspirator of appellant.5 First, the
guns that were obtained in the guns-for-drugs trade were demon-
strated to be the same guns recovered from the Temple Hills house,
which was linked to appellant. Second, Brown leased several vehicles
in his own name on behalf of appellant, apparently including a green
van that he used during the guns-for-drugs trade with Eisenbarth. In
_________________________________________________________________
appellant never actually tried to introduce the affidavit, appellant could
not have introduced the affidavit to attack the credibility of the declarant
in a previously admitted hearsay statement because Herbert's testimony
was not hearsay. See supra at 7-8. Even assuming that Herbert's testi-
mony could be construed as hearsay because of the lack of a limiting
instruction, despite defense counsel's failure to request one, Hughes'
affidavit still could not have been introduced to attack his credibility
because the affidavit does not even mention the photograph that was the
subject of the alleged hearsay.
5 Appellant claims that Brown was not a co-conspirator because he
stood in a mere buyer-seller relationship with Eisenbarth. For purposes
of Rule 801(d)(2)(E), however, the relevant inquiry is into the relation-
ship between the declarant and the defendant, not the declarant and the
witness testifying to the declarant's statement.
9
view of this evidence, we agree with the district court that Eisen-
barth's testimony was admissible under the co-conspirator exception.6
Finally, appellant argues that the district court should have admit-
ted the transcript of Brown's deposition. At trial, appellant sought to
introduce the transcript, like the Hughes affidavit, under Rule
804(b)(5). As with the Hughes affidavit, however, the district court
found, and we agree, that the transcript of the Brown deposition
lacked sufficient guarantees of trustworthiness to be admissible under
Rule 804(b)(5). Specifically, the deposition testimony directly contra-
dicted previous statements made by Brown both to police officers and
before the grand jury.7 In the alternative, appellant now contends that
the transcript should have been admissible for the purpose of
impeaching the credibility of the statement of Brown reported by
Eisenbarth and admitted under the co-conspirator exception. See Fed.
R. Evid. 806. Assuming arguendo that the transcript was admissible
for this purpose under Rule 806, we conclude that any failure to admit
it was harmless. If the transcript were admissible, Brown's contradic-
tory grand jury testimony, which the district court had also kept out
under Rule 804 as unreliable, would also have been admissible in
order to support Brown's credibility. See id. In light of the over-
whelming other evidence of defendant's guilt, and the minimal proba-
tive value of the transcript in light of the conflicting grand jury
_________________________________________________________________
6 At trial, appellant noted that Eisenbarth's testimony involved a state-
ment allegedly made by Brown on December 26, 1994, whereas the
indictment against appellant charged that the conspiracy began only "on
or about January 1995." J.A. at 16. Appellant therefore contended that
the testimony, even if not hearsay, would not be admissible because it
involved uncharged conduct occurring prior to the start of the charged
conspiracy. See Fed. R. Evid. 404(b). Even assuming that December 26,
1994, cannot be said to be "on or about January 1995," appellant's argu-
ment fails because the guns-for-drugs trade was not consummated until
March 9, 1995. In any event, a district court has discretion to admit evi-
dence of uncharged conduct if it arose out of the same series of transac-
tions as the charged offense or if it is necessary to complete the story of
a crime. See United States v. Kennedy , 32 F.3d 876, 885 (4th Cir. 1994).
7 In addition, although defense counsel made the Brown deposition
transcript, like the Hughes affidavit, available to the court in camera in
advance of the trial, the prosecution learned of the deposition, and
obtained a copy of the transcript, only once the trial was underway.
10
testimony, the district court's decision not to admit the transcript,
even if erroneous, was harmless. We therefore reject appellant's
claim.
IV.
Appellant next asserts that the district court abused its discretion by
refusing to permit him to call Michael Bell in order to testify that he
had made a substantial amount of money as a result of a previously
charged conspiracy. We disagree.
The district court based its refusal to allow Bell to testify on Rule
403, which states:
Although relevant, evidence may be excluded if its proba-
tive value is substantially outweighed by the danger of
unfair prejudice, confusion of the issues, or misleading the
jury, or by considerations of undue delay, waste of time, or
needless presentation of cumulative evidence.
Fed. R. Evid. 403. As the district court correctly noted, Bell's testi-
mony was excludable under Rule 403 on several grounds. First, Bell's
testimony would have had only minimal, if any, probative value:
although appellant claims Bell's testimony was necessary to rebut the
government's implication that his lavish spending was a direct result
of his involvement in the conspiracy charged in the present case, the
mere fact that appellant made a substantial amount of money from an
earlier drug conspiracy hardly demonstrated that he possessed a "cash
hoard" at the time of the charged conspiracy nearly five years later.
Second, Bell's testimony would have been cumulative, since evidence
of appellant's earlier charge had already been introduced. Third,
Bell's testimony could have been confusing to the jury. Fourth, Bell's
testimony could have been prejudicial to appellant's own case:
because of Bell's testimony that appellant played a major role in an
earlier drug conspiracy, the jurors could easily have concluded that
appellant was likely to have played a major role in the charged con-
spiracy as well. For all of these reasons, we conclude that the district
court did not abuse its discretion by excluding Bell's testimony.
11
V.
Appellant next contends that the trial judge improperly dismissed
Juror No. 8 and replaced her with an alternate juror. We disagree.
A trial judge may replace jurors with alternate jurors whenever
they, "prior to the time the jury retires to consider its verdict, become
or are found to be unable or disqualified to perform their duties." Fed.
R. Crim. P. 24(c). A trial judge's decision to substitute an alternate
juror is reviewed for abuse of discretion. See , e.g., United States v.
Nelson, 102 F.3d 1344, 1349 (4th Cir. 1996).
We conclude that the trial judge in this case did not abuse his dis-
cretion because he had two legitimate bases for dismissing Juror No.
8. First, Juror No. 8 admitted she had made a comment regarding
whether the prosecution had proven its case, in contravention of the
trial judge's specific instructions. Failure to abide by a trial judge's
instructions is in itself a sufficient basis for removal. See, e.g., United
States v. Vega, 72 F.3d 507, 512 (7th Cir. 1995). In addition, Juror
No. 8 told the courtroom clerk that she wanted to get "off this case."
At least under the circumstances here, this comment likewise consti-
tutes a sufficient basis for removal.
Appellant contends that Juror No. 8 should not have been dis-
missed because of her assurances to the trial judge that she remained
"open-minded" about the case. A juror's representations regarding his
or her ability to perform fairly and impartially, however, are not dis-
positive. See Murphy v. Florida, 421 U.S. 794, 800 (1975). Instead,
it is the responsibility of the trial judge to make his or her own deter-
mination as to a juror's ability to remain fair and impartial. See, e.g.,
United States v. Barone, 114 F.3d 1284, 1307 (1st Cir.), cert. denied,
118 S. Ct. 614 (1997). In view of Juror No. 8's comments to her fel-
low jurors and to the courtroom clerk, we conclude that the trial judge
did not abuse his discretion by discounting Juror No. 8's own repre-
sentations about her ability to continue as a juror. We therefore reject
appellant's challenge.8
_________________________________________________________________
8 Even assuming arguendo that the district court abused its discretion
by removing Juror No. 8, appellant must establish that the substitution
of an alternate juror was prejudicial. See, e.g., Nelson, 102 F.3d at 1349.
Appellant makes no such claim, much less a colorable one.
12
VI.
Appellant next contends that the trial judge should have declared
a mistrial because of jury contamination arising from the incidents
involving Jurors No. 2, 3, and 12 over the weekend of November 2-3.
We disagree.
"In a criminal case, any private communication, contact, or tamper-
ing directly or indirectly, with a juror during a trial about the matter
pending before the jury is . . . deemed presumptively prejudicial . . . ."
Remmer v. United States, 347 U.S. 227, 229 (1954). The presumption
of prejudice, however, is rebuttable. See id. Upon a showing of an
external contact that may have been prejudicial, a trial judge should
hold a hearing to evaluate the prejudicial impact of the external con-
tacts on the affected jurors. See id. at 229-30.
As required by Remmer, the trial judge in this case held a hearing
at which not only the jurors involved in the external contacts, but all
of the other jurors as well, were individually questioned about the
possible prejudicial impact of the contacts. All of the jurors said that
the external contacts would not affect their ability to remain fair and
impartial. In addition, the trial judge individually questioned each of
the jurors involved in the external contacts ex parte. We conclude that
the trial judge properly determined, based on his assessment of the
jurors' assertions that they could remain fair and impartial, that no
prejudice occurred from the external contacts, and therefore that a
mistrial was not warranted.
Appellant further contends that the trial judge improperly granted
the government's post-trial motion for leave to interview jurors and
denied his own. A trial judge may allow a post-trial inquiry into the
validity of a verdict only for the purpose of assessing "whether extra-
neous prejudicial information was improperly brought to the jury's
attention or whether any outside influence was improperly brought to
bear upon any juror." Fed. R. Evid. 606(b). The trial judge in this case
was justified in granting the government's motion because it was for
the specific purpose of investigating whether the external contacts
with certain jurors gave rise to possible charges of obstruction of jus-
tice. J.A. at 100 n.1. The appellant's motion, on the other hand, was
in no way limited to the question of the external contacts, but sought
13
carte blanche to interview all of the jurors"to develop evidence in
support of [appellant's] motion for a new trial." Id. at 95. Such a
broad motion runs afoul of the limitations of Rule 606(b), which for-
bids inquiry into the mental impressions or emotional reactions of
jurors during deliberations. See Fed. R. Evid. 606(b). Consequently,
the trial judge correctly granted the government's motion and denied
appellant's.9
VII.
Finally, appellant contends that there was insufficient evidence to
convict him of conspiracy to distribute and possess with intent to dis-
tribute cocaine because the prosecution failed to identify any other
individuals with whom he was acting in concert.
"[A] conspiracy generally is proved by circumstantial evidence and
the context in which the circumstantial evidence is adduced." United
States v. Burgos, 94 F.3d 849, 857 (4th Cir. 1996) (en banc) (citation
omitted). Provided that sufficient circumstantial evidence of the exis-
tence of a conspiracy, and of the defendant's involvement in that con-
spiracy, is introduced, it is not necessary that other members of the
conspiracy be named in the indictment or otherwise identified. "At
least two persons are required to constitute a conspiracy, but the iden-
tity of the other member of the conspiracy is not needed, in as much
as one person can be convicted of conspiring with persons whose
names are unknown." Rogers v. United States, 340 U.S. 367, 375
(1951).
Having reviewed the record, we conclude that there was ample evi-
_________________________________________________________________
9 Appellant argues, in the alternative, that he was entitled to an "equal
opportunity to participate" in the government's investigation of possible
jury tampering. However, appellant points to no authority for such an
entitlement. Further, in granting the government's motion for leave to
interview members of the jury, the trial judge assured appellant that he
would review the results of the investigation in camera and turn over any
information that would be relevant to appellant in preparing his motion
for a new trial. J.A. at 104. However, because the investigation turned up
no evidence of jury tampering, the trial judge simply had no information
to turn over to appellant. Id. at 636-40.
14
dence for the jury to conclude that appellant was acting as part of a
conspiracy. First, contrary to appellant's assertion, the prosecution
identified a number of individuals with whom appellant may have
been conspiring, even if none of the individuals was named in the
indictment. As noted above, the prosecution introduced a substantial
amount of evidence linking appellant with Daniel Brown, whom the
prosecution alleged carried out the guns-for-drugs trade with Richard
Eisenbarth on appellant's behalf. Further, the prosecution introduced
evidence indicating that the telephone and alarm systems in the Tem-
ple Hills house were registered in the names of appellant's brother
and sister, and in the address of a family member of appellant's girl-
friend. Second, the prosecution presented the testimony of a narcotics
expert, Jehru Brown, who indicated that the amount of cocaine found
in the Temple Hills house suggested that appellant was a wholesale
or retail distributor, not an individual acting alone. J.A. at 455. In
view of all of this evidence, we conclude that a rational factfinder
could have found appellant guilty of conspiracy, and therefore reject
appellant's sufficiency challenge.
CONCLUSION
The judgment of the district court is affirmed.
AFFIRMED
15 | 01-03-2023 | 07-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/494873/ | 829 F.2d 1125
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.In re JACKSON LOCKDOWN/MCO CASES.Harry Arthur HOSACK, et al., Class-Action/Plaintiffs-Appellees,Lindsey Pearson; Gerald O. Gratton; Joseph Thomas; WilliamBennett, Jr.; Elmer I'Ron; Joseph Dials; ChesterShepard; K.C. McCarry; William Irby;Michael Conner-El, Plaintiffs-Appellants,v.Barry Mintzes; Gerald Fryte; Michigan CorrectionsOrganization; Michael Huey; David Bokanowski; JeffreySchoendorf; Robert Squires; David Arnold; Charles Hagle;William Schnarrs; Perry Johnson, Defendants-Appellees.
No. 86-1310
United States Court of Appeals, Sixth Circuit.
September 25, 1987.
ORDER
Before BOYCE F. MARTIN and KRUPANSKY, Circuit Judges, and BAILEY BROWN, Senior Circuit Judge.
1
This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the record and briefs, this panel agrees unanimously that oral argument is not needed. Fed. R. App. P. 34(a).
2
Ten prisoners filed notices of appeal from two district court orders. These plaintiffs were proceeding pro se at the time. Initially, plaintiffs filed a notice of appeal on November 26, 1985 from a district court consent judgment concerning claims brought in the aftermath of a prison riot. This notice of appeal was late; however, we remanded the case to the district court to consider whether to extend the appeal time. The district court declined to do so. Thereafter, on September 12, 1986, plaintiffs filed a notice of appeal contesting the denial of the extension. Both notices of appeal were assigned the same appellate case number, 86-1310.
3
One defendant, the Michigan Department of Corrections (MDOC), filed motions to dismiss both of the appeals. MDOC moved to dismiss the appeal because the November 26, 1985 notice of appeal was filed late, the district court had not granted an extension of time in which to file the notice of appeal, and there was no showing of excusable neglect or good cause for failing to file a timely appeal. The second motion to dismiss was filed on April 22, 1987. In this motion, MDOC argued that the appeal should be dismissed because technical defects in both notices of appeal deprived this court of jurisdiction as to all would-be appellants, except for Lindsay Pearson. MDOC argued that the court was deprived of jurisdiction over the other plaintiffs because they were not specifically named in the notice of appeal; rather, they were designated simply by an 'et al.' Further, MDOC reasserted that the November 26, 1985 notice of appeal was filed late.
4
The grant or denial of an extension of time for appeal is an appealable order reviewed under the abuse of discretion standard. Gooch v. Skelly Oil Co., 493 F.2d 366 (10th Cir.), cert. denied, 419 U.S. 997 (1974); National Indus., Inc. v. Republic Nat'l Life Ins. Co., 677 F.2d 1258 (9th Cir. 1982). A reviewing court will not reverse for abuse of discretion unless it has a definite and firm conviction that the court below committed error. Maddox v. City of Los Angeles, 792 F.2d 1408 (9th Cir. 1986).
5
In this case, the district court did not err in concluding that plaintiffs had ample time to file a notice of appeal. Even if plaintiffs did not receive notice of the September 30, 1985 consent judgment until October 7, 1985 (as they claimed), they still had 23 days in which to file their notice of appeal. Second, the loss of Gratton's legal papers did not justify filing a late notice of appeal. Plaintiffs did not explain why this affected their ability to appeal, nor did Gratton sign an affidavit to support that assertion. The district court declined to extend the time for filing a notice of appeal because plaintiffs did not establish excusable neglect nor show good cause to justify that action. There being no abuse of discretion, the denial of an extension of time is affirmed.
6
We also conclude, however, that the court lacks jurisdiction to review the underlying consent judgment because the November 26, 1985 notice of appeal was filed late. On September 30, 1985, the district court entered its opinion and order approving the consent judgment. The notice of appeal was due within 30 days of entry thereof--on October 30, 1985. See Fed. R. App. P. 4(a) and 26(b). Plaintiffs did not file their notice of appeal until November 26, 1985, 27 days late. The district court denied the motion for extension of time within which to file the notice of appeal. Because the notice of appeal was untimely filed and the motion for extension of time was denied, this court is deprived of jurisdiction. Compliance with Rule 4(a) is a mandatory and jurisdictional prerequisite which this court can neither waive nor extend. Peake v. First Nat'l Bank & Trust Co., 717 F.2d 1016 (6th Cir. 1983).
7
Accordingly, the district court order denying plaintiffs' motion for an extension of time to appeal is hereby affirmed. Rule 9(b)(5), Rules of the Sixth Circuit. To the extent this appeal is brought from the underlying consent judgment, it is hereby ORDERED dismissed for lack of jurisdiction. Rule 9(b)(1), Rules of the Sixth Circuit. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/997696/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CHARLES ALBERT HARRIS,
Petitioner-Appellant,
v.
No. 98-6662
JAMES RIVER CORRECTIONAL CENTER,
WARDEN,
Respondent-Appellee.
Appeal from the United States District Court
for the Eastern District of Virginia, at Richmond.
James R. Spencer, District Judge.
(CA-97-722-R)
Submitted: December 15, 1998
Decided: January 29, 1999
Before LUTTIG and WILLIAMS, Circuit Judges, and
PHILLIPS, Senior Circuit Judge.
_________________________________________________________________
Vacated and remanded by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Charles Albert Harris, Appellant Pro Se. Linwood Theodore Wells,
Jr., Assistant Attorney General, Richmond, Virginia, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Charles Albert Harris appeals the district court's order denying his
28 U.S.C.A. § 2254 (West 1994 & Supp. 1998) petition as untimely
under 28 U.S.C.A. § 2244(d) (West Supp. 1998). A Richmond Circuit
Court jury convicted Harris of four counts of grand larceny in June
1991, and Harris executed his first state habeas corpus petition on
March 26, 1997. After the denial of his state petition, Harris filed his
§ 2254 petition with the district court on September 8, 1997.
In denying the § 2254 petition as untimely, the district court did not
have the benefit of our recent decision in Brown v. Angelone, 150
F.3d 370 (4th Cir. 1998). In Brown, we held that prisoners such as
Harris whose convictions became final prior to the effective date of
the Antiterrorism and Effective Death Penalty Act of 1996, Pub. L.
No. 104-132, 110 Stat. 1214, had a full year, until April 23, 1997, to
file § 2254 petitions. Id. at 375-76. In addition, the one-year limitation
period is tolled during the pendency of a properly filed state post-
conviction proceeding. See 28 U.S.C.A. § 2244(d)(1), (2) (West Supp.
1998). Here, then, since Harris properly filed his state habeas corpus
petition twenty-eight days prior to April 23, 1997, he was accorded
until September 10, 1997, to timely file his § 2254 petition with the
district court--twenty-eight days from the August 13, 1997, denial of
his state habeas petition. Because the § 2254 petition was filed on
September 8, 1997, we conclude the petition was timely.
Accordingly, we grant a certificate of appealability, vacate the dis-
trict court's order denying the petition as untimely, and remand the
matter for further proceedings. We dispense with oral argument
because the facts and legal contentions are adequately presented in the
materials before the court and argument would not aid the decisional
process.
VACATED AND REMANDED
2 | 01-03-2023 | 07-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/997757/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
STEVEN BIEGLER, C.P.A.; STEVEN
BIEGLER & ASSOCIATES, PC; KEITH
L. PHILLIPS, Trustee,
Plaintiffs-Appellants,
and
No. 97-2765
JOHN P. GIRARDI; JANET E. GIRARDI,
Plaintiffs,
v.
HATSY HEEP,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Virginia, at Richmond.
Robert E. Payne, District Judge.
(CA-96-637)
Argued: December 3, 1998
Decided: February 2, 1999
Before MURNAGHAN and MICHAEL, Circuit Judges, and
HERLONG, United States District Judge for the
District of South Carolina, sitting by designation.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Leonard Edward Starr, III, LEONARD E. STARR, III,
P.C., Sandston, Virginia, for Appellants. John Dinshaw McIntyre,
WILLCOX & SAVAGE, P.C., Norfolk, Virginia, for Appellee. ON
BRIEF: Bruce H. Matson, LECLAIR RYAN, Richmond, Virginia,
for Appellants. Gary A. Bryant, WILLCOX & SAVAGE, P.C., Nor-
folk, Virginia, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
The instant case is an appeal by certain creditors of Hatsy Heep
("Heep"), who filed for bankruptcy, from a ruling that the spendthrift
clauses in four trusts in which Heep had a contingent remainder inter-
est operate to preclude the trusts' inclusion in Heep's estate for the
purposes of her bankruptcy proceedings. The creditors maintain that
a deferred inclusion, rather than an outright exclusion is the proper
result under bankruptcy law. However, we affirm because the district
court's conclusions are correct, as they are supported by the applica-
ble bankruptcy laws.
I.
At issue in this case are four trusts created by Herman F. Heep
("Herman"). Herman created the trusts in Texas and was domiciled
there for all periods relevant to the instant litigation. Hatsy Heep, Her-
man's granddaughter, had a contingent interest in all four trusts,
which were also subject to spendthrift clauses. She is also the debtor,
having filed her bankruptcy petition in September, 1994. One of the
contingencies -- the death of Heep's mother -- occurred in 1998,
between the submission of briefs to us and oral argument before us.
Because the question of whether the interests are included in the
estate depends on the nature of the interests at the time Heep filed her
petition, we recount the facts as they stood immediately prior to the
death of Heep's mother.
2
The four trusts can be placed into two categories: the two "Houston
Trusts," which are inter vivos trusts, and the two "Austin Trusts,"
which are testamentary trusts. Both the Houston Trusts and the Austin
Trusts have been administered by a Texas trustee, since Herman has
already passed away.
Under the first Houston trust ("Houston Trust Number I"), Heep's
mother, Mary Lou Heep Henderson ("Henderson"), is the sole income
beneficiary, but Heep will receive a share of the corpus if Henderson
dies and Heep is living at her death. The spendthrift provision in
Houston Trust I reads as follows:
Neither the corpus nor the income of the Trust Estate shall
ever, under any circumstances, be liable for or charged with
the or any of the debts, contracts, liabilities, engagements,
torts or obligations, present or future, of any beneficiary
hereof, nor shall the same be ever subject to seizure by a
claimant or creditor of any beneficiary under any writ or
proceeding of any character at law or in equity, and no bene-
ficiary thereof shall have the right or power to give, grant,
sell, transfer, assign, convey, mortgage, pledge, charge or
otherwise encumber or in any manner anticipate or dispose
of her interest or proportionate interest in, or any part of, the
property held in Trust under this Trust so long as such prop-
erty or any undistributed portion thereof is held in Trust. No
right of any disposition of any such property shall vest in
any beneficiary unless and until the same shall have been
actually transferred, conveyed or paid over to her.
Houston Trust I, ¶ 15.
Heep is a discretionary income beneficiary under Houston Trust II,
but shares that designation with Henderson and Henderson's other
children. Income distributions to Heep are at the sole discretion of the
trustee. Moreover, Heep's interest in the trust is subject to the same
contingencies as listed in Houston Trust I, namely, Henderson must
die and Heep must be living at Henderson's death. Like the first
Houston trust, Houston Trust II contains a spendthrift provision that
reads as follows:
3
Neither the corpus nor the income of any Trust Estate, nor
any interest therein, under any circumstances shall ever be
liable for or charged with any of the debts, contracts, liabili-
ties, torts or obligations, present or future, of any beneficiary
thereof, nor shall the same be ever subject to seizure by any
claimant or creditor of any beneficiary under any writ or
proceeding of any character; and no beneficiary thereof shall
have the power to give, sell, assign, convey, pledge, charge
or otherwise encumber or in any manner anticipate or dis-
pose of his or her interest in such Trust Estate, or the income
therefrom, until the same shall have been actually trans-
ferred, conveyed, or paid over to him or her free and clear
of such Trust.
Houston Trust II, ¶ 14.
Herman also provided for Heep in the Austin Trusts. Under Austin
Trust I, Henderson receives a life estate and the remainder is vested
in her issue, including Heep. Moreover, the will vests the trustee with
the authority to make discretionary income distributions to Henderson
and her issue. However, Heep's interest in the corpus of the trust is
subject to the two conditions in the Houston Trusts, namely that Hen-
derson dies and Heep is alive at Henderson's death, and an additional
requirement that she is at least thirty-five years old.
Heep receives her full share of Austin Trust II only if Henderson
dies and Heep is alive and at least fifty years old at Henderson's
death. If Henderson dies before Heep reaches fifty, but Heep is at
least forty-five, Heep still receives half of her interest in the trust cor-
pus. Heep would receive the other half when she attains fifty years of
age.
Finally, Herman's will contained a spendthrift provision that is
applicable to both Austin Trusts:
Spendthrift Provision: No part of any Trust Estate, under
any circumstances, shall ever be liable for or charged with
any of the torts or obligations of any beneficiary or subject
to seizure by any creditor of any beneficiary; no beneficiary,
under any circumstances, shall have the power to anticipate
4
or dispose of his or her interest in any Trust Estate in any
manner until the same shall have been actually distributed
to him or her free and clear of such Trust.
Last Will of Herman Heep, ¶ 13.
As we noted, Henderson passed away in 1998, after the briefs were
submitted but before oral argument was heard. Heep is alive and is
at least forty-five years old, but not yet fifty. Therefore, Heep is now
entitled to a one-third share of both Houston Trusts and Austin Trust
I. She is also entitled to one-sixth of Austin Trust II, and will receive
the other one-sixth (which makes a total of one-third of the entire
trust) when she turns fifty.
II.
The district court's conclusions of fact are reviewable for clear
error. See Jiminez v. Mary Washington College , 57 F.3d 369, 379 (4th
Cir. 1995). Its conclusions of law are reviewable de novo. See Bunch
v. Thompson, 949 F.2d 1354, 1367 (4th Cir. 1991).
Both the bankruptcy court and the district court concluded that 11
U.S.C. § 541(c)(2) (1994) operated to exclude Heep's contingent
interests in the four trusts from her estate for the purposes of the
bankruptcy. We find no error in that conclusion.
As a general rule, Congress intended that as much of the debtor's
property as is practicable be included in the bankruptcy estate. See 11
U.S.C. § 541(a)(1) (1994). In fact, § 541(a)(1) specifically includes in
the bankruptcy estate "all legal or equitable interests of the debtor in
property as of the commencement of the case." Id. (emphasis added).
However, in § 541(c)(2), Congress provided an exception to the
general rule of inclusion of property in the bankruptcy estate. That
exception applies to beneficial interests that contain restrictions on
transfers. See id. The statute states that"[a] restriction on the transfer
of a beneficial interest of the debtor in a trust that is enforceable under
applicable nonbankruptcy law is enforceable in a case under this sec-
tion." Id.
5
Appellants concede that Texas law applies here, 1 and that under
Texas law, the spendthrift clauses are valid.2 The only question left
for our review then is whether § 541(c)(2) excludes from the bank-
ruptcy estate trust property subject to a valid spendthrift clause.
Appellants argue that § 541(c)(2) does not bar their recovery here.
They argue that the trust assets are not permanently excluded from the
estate but are included subject to the restrictions of the spendthrift
trust. Moreover, they assert, such a reading is consistent with the stat-
ute because there really is no "exclusion" in§ 541(c)(2). Finally, they
argue, if Congress wanted to exclude spendthrift trusts, it would have
done so in § 541(b), where it specifically states that certain property
is "excluded." Id.
However, appellants' arguments ignore not only our precedent, but
Supreme Court precedent. In Patterson v. Shumante, 504 U.S. 753,
758 (1992), the Supreme Court recognized that § 541(c)(2) operates
as an exclusion of property defined therein from the bankruptcy
estate. See id. ("The natural reading of[§ 541(c)(2)] entitles a debtor
to exclude from property of the estate any interest in a plan or trust
that contains a transfer restriction enforceable under any relevant non-
bankruptcy law."). We have previously recognized that same princi-
ple. See In re Moore, 907 F.2d 1476, 1477 (4th Cir. 1990) ("Thus, if
`applicable non bankruptcy law' enforces a restriction on the transfer
of a debtor's interest in a trust, that interest will not be considered part
of the bankrupt's estate."). Notably, in both Patterson and Moore, the
trustees unsuccessfully argued that § 541(c)(2) applied only to state
law. See Patterson, 504 U.S. at 757-58; Moore, 907 F.2d at 1477-79.
_________________________________________________________________
1 Texas law applies because we are required to apply the choice of law
rules of the forum state when we review bankruptcy proceedings. See In
re Merritt Dredging Co., Inc., 839 F.2d 203, 206 (4th Cir. 1988). The
forum state of the bankruptcy court was Virginia. Under Virginia law,
wills and trusts are interpreted under the law of the state in which the tes-
tator was domiciled. Here, the testator was domiciled in Texas.
2 Under TEX. PROP. CODE § 112.035 (West. 1994), the settlor may "pro-
vide in the terms of the trust that the interest of a beneficiary in the
income or in the principal or in both may not be voluntarily or involun-
tarily transferred before payment or delivery of the interest to the benefi-
ciary by the Trustee." Id.
6
In fact, the trustee in Moore argued that§ 541(c)(2) only excluded
spendthrift trusts from the bankruptcy estate.3 See id. Both courts
rejected that reading of § 541(c)(2) in favor of the literal reading of
the statute, which is broader. In light of the above precedents, the
Appellants' argument must fail.
Appellants' other arguments also are not persuasive. They argue
that even before her mother's death, Heep's interests in the trusts
were legal, not beneficial, and the district court erred in finding them
to be beneficial interests. Since § 541(c)(2) only covers beneficial
interests, they argue that Heep's interests were never covered. That
argument fails for several reasons. First, in three of the trusts, Heep
was an income beneficiary who did not become entitled to the corpus
until Henderson's death. Income interests are beneficial, not legal
interests. See BLACK'S LAW DICTIONARY 156 (6th ed. 1990) (defining
beneficial interests). Thus, at the time that the case commenced, and
at the time that the district court heard the Appellants' appeal from
the bankruptcy court, the interests were beneficial. Her interest in the
other trust (Houston Trust I) was also beneficial because the legal title
was not given to her but to the trustee, who distributed the income to
Henderson and the principal to Henderson's issue (including Heep).
Thus, the district court did not err in finding that the interests were
beneficial.
Finally, Henderson's death does not entitle the Appellants to
Heep's interests. Under § 541(a)(1), the only interests includable are
those owned or controlled by the debtor "as of the commencement of
the case." Id. The bankruptcy code also permits trustees to recover
any interests acquired by the debtor within 180 days of the filing of
the bankruptcy petition if that interest would have been considered
property of the estate if owned by the debtor at the time of filing. See
11 U.S.C. § 541(a)(5) (1994). In addition, according to
§ 541(c)(1)(A), property upon which restrictions of transfer have been
placed may become property of the estate, "except as provided in
_________________________________________________________________
3 At the time, many circuits viewed § 541(c)(2) as applying only to
state spendthrift trust law. See, e.g., In re Daniel, 771 F.2d 1352, 1360
(9th Cir. 1985); In re Lichstrahl, 750 F.2d 1488, 1490 (11th Cir. 1985);
In re Graham, 726 F.2d 1268, 1271 (8th Cir. 1984); Matter of Goff, 706
F.2d 574, 587 (5th Cir. 1983).
7
paragraph (2) of this subsection" -- i.e. , § 541(c)(2). Therefore, Con-
gress intended that property falling within the ambit of § 541(c)(2)
remains excluded from the bankruptcy estate.
Moreover, the property would not be includable even if subsection
(c)(2) were not excluded from subsection (c)(1). Since the trust prop-
erty was not includable at the commencement of the bankruptcy, it
could only be included if the contingencies had occurred within the
180 day window provided in § 541(a)(5). See In re Moody, 837 F.2d
719, 722-23 (5th Cir. 1988) (holding that interests subject to spend-
thrift trusts are not recoverable under § 541(a)(5) unless the debtor
receives his interest within the 180 day period); In re Baydush, 171
B.R. 953, 958-59 (E.D. Va. 1994). Here, Heep filed her bankruptcy
petition on September 8, 1994. Thus, the trust property would have
been includable until March 7, 1995. However, at that time, Heep still
had a contingent interest subject to the spendthrift clauses. Her inter-
ests did not vest until shortly before oral argument before us in 1998.
Therefore, Heep's interests are not includable in her bankruptcy
estate.
CONCLUSION
In conclusion, we affirm the district court's ruling that under 11
U.S.C. § 541(c)(2), Hatsy Heep's contingent interests are not included
in her estate for the purposes of her bankruptcy petition. Our decision
comports with Supreme Court and circuit precedent. Moreover, as
Heep's interest in each of the trusts remained contingent well beyond
the 180 day recovery period granted to the trustee under 11 U.S.C.
§ 541(a)(5), the income distributions now due her also are not a part
of the bankruptcy estate.
AFFIRMED
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https://www.courtlistener.com/api/rest/v3/opinions/501727/ | 839 F.2d 203
1988 A.M.C. 2339, 5 UCC Rep.Serv.2d 900
In re MERRITT DREDGING COMPANY, INC., Debtor.COMPLIANCE MARINE, INC., Plaintiff--Appellant,v.Kevin CAMPBELL, Trustee--Appellee.
No. 87-2065.
United States Court of Appeals,Fourth Circuit.
Argued Nov. 5, 1987.Decided Feb. 12, 1988.
Frederick Albert Gertz (Gertz, Kastanes & Moore, Columbia, S.C., on brief), for plaintiff-appellant.
Kenneth Arthur Campbell, Jr. (Bell, Campbell, Chard & McNeill, Mount Pleasant, S.C., on brief), for trustee-appellee.
Before RUSSELL, WILKINSON, and WILKINS, Circuit Judges.
WILKINSON, Circuit Judge:
1
In 1983, Merritt Dredging Company entered into an agreement with Compliance Marine, Inc. for the use of a barge. When Merritt filed for bankruptcy in 1984, a trustee took possession of all of Merritt's personal property, including the barge. Compliance sought to recover the barge or the proceeds from its sale, but the bankruptcy court found Compliance's interest in the barge to be subordinate to that of the trustee. The district court affirmed the bankruptcy court's decision, and Compliance appeals. We affirm.
I.
2
Compliance is a Louisiana corporation with its principal place of business in Louisiana. Merritt is a South Carolina corporation with its principal place of business in that state. In the spring of 1983, Merritt sought from Compliance a barge for use at a project in Mississippi. Compliance prepared and executed a "charter party," which it mailed to Merritt in Charleston, South Carolina. Merritt made certain changes to the charter party, executed it, and returned it to Compliance, asking Compliance to accept the changes by initialing. Compliance did so and delivered the barge to Merritt in Louisiana.
3
The final agreement between the parties called for Merritt to hire the barge for three months at the rate of $2,500 per month. It also gave Merritt the "right and option" to renew the agreement at the same rate on a month-by-month basis after the initial three-month period. The charter party was written on a standard form contract, to which the parties added a clause which stated, "[i]f barge is purchased within the term of this Charter Party Agreement, 100% of Charter Hire shall apply to the purchase price of $30,000." The agreement also required Merritt to insure the barge at its expense. Merritt purchased insurance on the barge which contained navigational limits confining the use of the barge to Louisiana, Mississippi, and Texas. The charter party required Merritt to abide by the provisions of the insurance policy. Unlike our dissenting brother, however, we do not read the agreement itself to impose any navigational limits.
4
Merritt exercised its option to renew after the initial three-month period, and made payments under the charter party for five months, through October, 1983. In March, 1984, Merritt filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. The proceeding was converted in September, 1984 to a Chapter 7 proceeding, and a trustee was appointed. The trustee took possession of all of Merritt's personal property, including the barge, which was then located in Charleston, South Carolina.
5
The trustee moved to sell the barge for $20,000 in October, 1984, and Compliance objected to the sale. When the parties agreed that Compliance's interest in the barge would be transferred to the proceeds of the sale, the barge was sold. After the sale, Compliance moved for payment of its claim, and the trustee objected to the claim. The bankruptcy court sustained the trustee's objection and denied Compliance's motion for payment, holding that Compliance's interest in the barge was subordinate to that of the trustee. The district court affirmed, and Compliance brought this appeal.
6
Here, as below, the contentions center chiefly on the question of choice of law. The trustee asserts that Merritt's interest in the barge is governed by South Carolina law. Under South Carolina law, the trustee argues, the charter party represents a security agreement, and Compliance's failure to perfect its interest in the barge by filing rendered its interest subordinate to that of the trustee. Compliance argues that Louisiana's law, which does not recognize conditional sales, governs the determination of the interests conveyed by the charter party. Compliance contends that under Louisiana law the charter party represents a lease which conveyed no ownership interest to Merritt, and that the barge is therefore not part of the debtor's estate.
II.
A.
7
The determination of property rights in the assets of a bankrupt's estate is generally a matter of state law. Butner v. United States, 440 U.S. 48, 54, 99 S.Ct. 914, 917-18, 59 L.Ed.2d 136 (1979). Because the property right at issue in this case grows out of a transaction having significant contacts to two states, we must first decide whether the law of South Carolina or that of Louisiana determines the extent of Merritt's interest in the barge. We conclude that South Carolina law is applicable.
8
In Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941), the Supreme Court held that a federal court sitting in diversity must apply the choice of law rules of the state in which it sits. The Klaxon rule rested on the rationale that a federal court, in determining state law issues which arise in federal court only by the accident of diversity, must apply state law, including state conflict of law rules, to those issues. Id.; Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). That same principle applies where a federal court addresses state law claims under its pendent jurisdiction. Colgate Palmolive Co. v. S/S Dart Canada, 724 F.2d 313, 316 (2d Cir.1983), cert. denied, 466 U.S. 963, 104 S.Ct. 2181, 80 L.Ed.2d 562 (1984); System Operations, Inc. v. Scientific Games Development Corp., 555 F.2d 1131, 1136 (3d Cir.1977).
9
The question of what choice of law rules should be applied by a bankruptcy court presents another wrinkle. Although bankruptcy cases involve federal statutes and federal questions, a bankruptcy court may, as here, face situations in which the applicable federal law incorporates matters which are the subject of state law. It is clear that a federal court in such cases must apply state law to the underlying substantive state law questions. Whether a court in such a situation must apply the conflicts rule of the forum state in determining which state's law to apply or may choose the applicable state law as a matter of independent federal judgment, however, has remained an open question. See 1A Moore's Federal Practice p 0.325 (2d ed. 1985). We believe, however, that in the absence of a compelling federal interest which dictates otherwise, the Klaxon rule should prevail where a federal bankruptcy court seeks to determine the extent of a debtor's property interest.
10
The argument for applying the Klaxon rule to state law questions arising in bankruptcy cases is compelling. A uniform rule under which federal bankruptcy courts apply their forum states' choice of law principles will enhance predictability in an area where predictability is critical. Most important, such a rule would accord with the model established by Erie and Klaxon. Both those cases make clear that federal law may not be applied to questions which arise in federal court but whose determination is not a matter of federal law: "[e]xcept in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State." Erie, 304 U.S. at 78, 58 S.Ct. at 822. Such is the case with questions regarding the extent of a bankruptcy debtor's property interests. "Property interests are created and defined by state law. Unless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interested party is involved in a bankruptcy proceeding." Butner, 440 U.S. at 55, 99 S.Ct. at 918. It would be anomalous to have the same property interest governed by the laws of one state in federal diversity proceedings and by the laws of another state where a federal court is sitting in bankruptcy. Because no overwhelming federal policy requires us to formulate a choice of law rule as a matter of independent federal judgment, we adopt the choice of law rule of the forum state, South Carolina.
B.
11
South Carolina has adopted the Uniform Commercial Code, including its choice of law provision, Sec. 1-105. That statute provides, in relevant part:
12
[W]hen a transaction bears a reasonable relation to this State and also to another state or nation the parties may agree that the law either of this State or of such other state or nation shall govern their rights and duties. Failing such agreement this act applies to transactions bearing an appropriate relation to this State.
13
S.C. Code Ann. Sec. 36-1-105(1) (Law.Co-op.1976). Under Sec. 36-1-105, South Carolina law will be applied in determining the extent of the property interest in the barge conveyed to Merritt by the charter party if the charter party bears an "appropriate relation" to that state.1
14
The term "appropriate relation" is not defined in Sec. 36-1-105, and South Carolina's courts have not interpreted it. The UCC's Official Comments provide little guidance, stating only that "the question what relation is 'appropriate' is left to judicial decision," and that, in defining the term, courts are "not strictly bound by [choice of law] precedents established in other contexts [because the UCC] is in large part a reformulation and restatement of the law merchant and of the understanding of a business community which transcends state and even national boundaries." U.C.C. Sec. 1-105 official comment 3 (1978).
15
The majority of courts, however, has defined "appropriate relation" in accord with the dominant trend in modern conflict of laws analysis, under which the law of the state with the "most significant relationship" to the matter at issue is applied. Golden Plains Feedlot, Inc. v. Great Western Sugar Co., 588 F.Supp. 985, 990 (D.S.D.1984). In some cases courts have defined "appropriate relation" by incorporating the forum state's general contract choice of law rule, but these cases typically involve forum states whose general choice of law rule adopts the "most significant relationship" test.2 See, e.g., Bunge Corp. v. Biglane, 418 F.Supp. 1159 (S.D.Miss.1976); General Electric Credit Corp. v. R.A. Heintz Construction Corp., 302 F.Supp. 958, 961-62 (D.Or.1969). Because the most significant relationship test best promotes the UCC's policies of uniformity and predictability, see Note, Conflicts of Laws and the "Appropriate Relation" Test of Section 1-105 of the Uniform Commercial Code, 40 Geo.Wash.L.Rev. 797, 804-07 (1972), and thereby most effectively facilitates interstate commercial relations, we use it to determine whether the charter party bears an "appropriate relation" to South Carolina. See Restatement (Second) of Conflict of Laws Sec. 6 comment d (1971) [hereinafter Restatement ] ("[c]hoice-of-law rules, among other things, should seek to further harmonious relations between states and to facilitate commercial intercourse between them").
C.
16
The Restatement directs that the effect of a conveyance of an interest in a chattel be determined by the law of the state which has the most significant relationship to the parties, the chattel, and the conveyance, as determined with reference to the following factors:
17
(a) the needs of the interstate and international systems,
18
(b) the relevant policies of the forum,
19
(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
20
(d) the protection of justified expectations,
21
(e) the basic policies underlying the particular field of law,
22
(f) certainty, predictability and uniformity of result, and
23
(g) ease in the determination and application of the law to be applied.
24
Restatement Secs. 6, 244. Application of these factors shows that South Carolina has the most significant relationship to the charter party, and therefore an appropriate relation to it under Sec. 36-1-105.
25
The needs of the interstate system, the relevant policies of the forum, the basic policies underlying the particular field of law, and the need for certainty, predictability, and uniformity of result all clearly call for the application of South Carolina law. The policy of encouraging commercial intercourse through the application of laws which are uniform across jurisdictions is fundamental to the field of commercial law. See U.C.C. Sec. 1-102(2)(c) (1978). South Carolina adopts this policy. See S.C. Code Ann. Sec. 36-1-102(2)(c). Louisiana, on the other hand, is the one state which has not adopted the Uniform Commercial Code. While Louisiana is under no obligation to adopt the UCC, it is a basic principle that choice of law rules must be applied with an eye to facilitating the operation of the interstate system: "[c]hoice-of-law rules, among other things, should seek to further harmonious relations between the states and to facilitate commercial intercourse between them." Restatement Sec. 6 comment d. The application of South Carolina law in this case will lead to greater certainty, predictability, and uniformity, and will facilitate the smooth operation of the interstate commercial system.
26
We do not dismiss Louisiana's interest out of hand, however. We must also address the relative interests of the states involved in this dispute. Louisiana has a valid interest in the application of its own commercial law, particularly where one of the parties to a transaction is a Louisiana corporation, and where the property conveyed by the transaction was located, at least initially, in Louisiana. The fact that Louisiana has not adopted the UCC does not mean that Louisiana may never possess the most significant relation to a particular transaction. Nor is a Louisiana corporation invariably governed by the laws of another state each time it deals with the citizens of that state.
27
Here the relative interests of the states may be judged by comparing the relationships of the states to the parties, the conveyance, and the chattel conveyed. See Restatement Sec. 244 comment d. Although the barge was located in Louisiana at the time of delivery, the fact that the parties intended it to leave that state immediately after delivery lessens Louisiana's interest.3 "[W]hen it is understood that the chattel will be kept only temporarily in the state where it was located at the time of the conveyance ... it is more likely that ... some other state will have the most significant relationship to the parties, the chattel and the conveyance and be the state of the applicable law." Restatement Sec. 244 comment f. The relationships between the states and the parties, and between the states and the conveyance, are of equal significance: while Compliance executed the charter party in Louisiana, it then mailed it to Merritt in South Carolina, where the latter executed it.
28
Finally, the justified expectations of the parties must be considered. "[I]t would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state." Restatement Sec. 6 comment g. Compliance argues that it was entitled to rely on Louisiana law, but Compliance knew that the conveyance of the barge had important contacts with South Carolina and that the barge was not intended to remain in Louisiana after the execution of the contract. Compliance, for example, knew that Merritt had possession of the barge for months after it had ceased to make payments under the charter party and before it filed for bankruptcy. The barge remained in South Carolina during the period after Merritt's default. The logical place for the filing of a bankruptcy petition was South Carolina, the debtor's state of residence. While Merritt's default and bankruptcy occurred after execution of the contract, Compliance was not justified in relying on Louisiana law to excuse its failure to take any steps to protect its interests, particularly where perfecting its interest in South Carolina posed no serious inconvenience or risk to Compliance.
29
The Restatement factors in combination4 lead us to conclude that South Carolina bears the most significant relationship to the charter party. While some of those factors argue equally for the application of South Carolina or Louisiana law, all of the factors that point toward the application of one state's law argue strongly in favor of South Carolina's. The charter party therefore bears an "appropriate relation" to that state under Sec. 36-1-105. We in turn apply South Carolina law in determining the extent of the property interests conveyed by the charter party.
III.
30
The district court found that Merritt and Compliance intended the charter party as a security agreement. We agree with this characterization of the interests conveyed by the charter party.
31
Whether a putative lease actually represents a security agreement depends primarily upon the intent of the parties. S.C. Code Ann. Sec. 36-1-201(37). The intent of the parties must be measured by the application of an objective standard to the facts of each case. 1 G. Gilmore, Security Interests in Personal Property Sec. 11.2 at 338 (1965). The parties' characterization of the charter party as a lease is not controlling, e.g., Percival Construction Co. v. Miller & Miller Auctioneers, Inc., 532 F.2d 166, 171 (10th Cir.1976), and we accordingly look to "the true relationships and economic realities created by the agreement" to determine the interests conveyed by it. Sight & Sound of Ohio, Inc. v. Wright, 36 B.R. 885, 889 (S.D. Ohio 1983).
32
South Carolina's Commercial Code defines a "security interest" as "an interest in personal property or fixtures which secures payment or performance of an obligation." S.C. Code Ann. Sec. 36-1-201(37). It continues:
33
Whether a lease is intended as security is to be determined by the facts of each case; however, (a) the inclusion of an option to purchase does not of itself make the lease one intended for security, and (b) an agreement that upon compliance with the terms of the lease the lessee shall become or has the option to become the owner of the property for no additional consideration or for a nominal consideration does make the lease one intended for security.
34
Id. The trustee argues that the charter party allowed Merritt to purchase the barge for no additional consideration after twelve monthly "rental" payments, and that it is therefore a security agreement. Compliance, on the other hand, contends that Merritt was required to make only three payments under the charter party, that Merritt was therefore not obligated to pay the full purchase price, and that as a result the charter party does not represent a security agreement.
35
While it is true that a lease may be found to be a security agreement only if it places an obligation on the lessee, S.C. Code Ann. Sec. 36-1-201(37); In re Peacock, 6 B.R. 922, 924 (Bankr.N.D.Tex.1980), the district court did not err in finding that the charter party was intended as a security agreement. An obligation to purchase may be found even where an agreement does not explicitly require the putative lessee to make sufficient payments to allow the exercise of a purchase option with no further consideration. See In re Joe Necessary and Son, Inc., 475 F.Supp. 610, 612 (W.D.Va.1979); United Rental Equipment Co. v. Potts & Callahan Contracting Co., 231 Md. 552, 558-59, 191 A.2d 570, 573-74 (1963). The terms of the charter party created significant economic compulsion to purchase the barge, and the facts of this case indicate that the parties intended a conditional sale.
36
The charter party was written on a standard form. It required payments for an "initial term" of three months, after which Merritt had the unqualified "right and option" to renew on a month-to-month basis. Monthly payments were $2,500. The parties added to the form agreement the clause, "[i]f barge is purchased within the term of this Charter Party Agreement, 100% of Charter Hire shall apply to the purchase price of $30,000," giving Merritt the opportunity to acquire the barge with no additional consideration after twelve monthly payments.
37
Merritt exercised its renewal option, making five monthly payments of $2,500. Neither Merritt nor Compliance ever indicated a desire to terminate the charter party, and Merritt remained in possession of the barge for more than twelve months before Compliance acted to regain possession of the barge. In short, the parties treated the charter party as if it were a conditional sale. While these acts and failures to act occurred after execution of the contract, the parties' actions with regard to the executed contract are some evidence of their intent in executing it. Szabo Food Service, Inc. v. Balentines, Inc., 285 N.C. 452, 462, 206 S.E.2d 242, 250 (1974).
38
The monthly "rent" paid by Merritt represented exactly one-twelfth of the purchase price of a barge with a useful life of many years. The charter party required Merritt to pay at least 25% of the purchase price. The obligation of a "lessee" to pay the full purchase price need not be express; a security agreement may be indicated where it can reasonably be anticipated that an option to purchase will be exercised. Sight & Sound, 36 B.R. at 889; In re Peacock, 6 B.R. at 925-26. Because its payments were all credited toward the purchase price, Merritt acquired substantial "equity" in the barge, which would be lost if it failed to exercise its purchase option. See In re Joe Necessary and Son, Inc., 475 F.Supp. at 614 & n. 8. The pressures to purchase indicate that the parties intended the charter party as a conditional sale. Finally, the charter party placed on Merritt several of the incidents of ownership. For example, Merritt bore the risk of loss or damage, and was required to insure the barge. See Sight & Sound, 36 B.R. at 890.
39
South Carolina's Commercial Code provides that that state's version of Article 9 applies:
40
(1) ... so far as concerns any personal property and fixtures within the jurisdiction of this State
41
(a) To any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures ...
42
S.C. Code Ann. Sec. 36-9-102(1)(a). The charter party bears sufficient earmarks of a security agreement to support the district court's finding that the parties intended it as such. We therefore determine the parties' relative interests in the barge with reference to South Carolina's law of secured transactions.
IV.
43
Because the charter party represented a security agreement, Compliance's failure to perfect its interest in the barge rendered its interest subordinate to that of the trustee. South Carolina's Commercial Code provides:
44
If the chief place of business of a debtor is in this State, this chapter governs the validity and perfection of a security interest and the possibility and effect of proper filing with regard to general intangibles or with regard to goods of a type which are normally used in more than one jurisdiction ... if such goods are classified as equipment ...
45
S.C. Code Ann. Sec. 36-9-103(2). Merritt's chief place of business is in South Carolina. The barge is a good normally used in more than one jurisdiction and, as a good used primarily in business, is classified as equipment. S.C. Code Ann. Sec. 36-9-109(2). South Carolina's Article 9 therefore governs the validity and perfection of Compliance's security interest in the barge.
46
In order to perfect, Compliance was required to file a financing statement. S.C. Code Sec. 36-9-302(1). Compliance concedes that it did not take this simple and customary step, and its interest is therefore subordinate to that of a lien creditor. S.C. Code Sec. 36-9-301(1)(b). Because the trustee has the rights of a lien creditor, 11 U.S.C. Sec. 544(a)(1) (1982), Compliance's interest in the barge is subordinate to that of the trustee.
V.
47
This case presents both legitimate claims of diversity among the laws of several states and claims for uniformity of practice in interstate commercial transactions. Louisiana is entitled to adopt its own laws in this area, and its citizens are entitled to rely upon them in appropriate cases. Had the facts of this particular transaction tilted toward Louisiana, the law of that state would govern. Here, however, South Carolina's own substantial connection with this transaction and this court's obligation to resolve choice of law questions with an eye toward the ends of uniform commercial practice persuades us that South Carolina law must control.
48
Compliance argues that the barge's connection to South Carolina is fortuitous, but its connection to Louisiana is equally so. While the barge was delivered in Louisiana, the parties intended it to leave that state immediately. The charter party was executed and negotiated in both Louisiana and South Carolina. Compliance knew of Merritt's and the barge's connection to South Carolina. Filing a financial statement in that state was neither an obscure nor onerous requirement and would have posed no serious risk or inconvenience to Compliance. The perfection of security interests through appropriate filings serves important commercial purposes. Here Compliance had an obligation to perfect its interest in order to place Merritt's future creditors on notice, an obligation that took on added force when Merritt defaulted on its obligations under the charter party.
49
The judgment of the district court is hereby
50
AFFIRMED.
51
DONALD RUSSELL, Circuit Judge, dissenting.
52
The dispositive issue in this case is one of jurisdiction. If the transaction is treated as controlled by Louisiana law, then Compliance Marine is entitled to an order fixing ownership of the barge in it; should the transaction be resolved under South Carolina law, it is equally clear that the trustee in bankruptcy must prevail. The issue is to be decided by applying the "most significant relationship" test to the transaction.
53
The transaction under which Merritt acquired possession of the barge was represented by a written agreement, dated May 24, 1983, drafted and agreed on by the parties in Louisiana. Since Merritt's corporate headquarters were located in South Carolina, the contract was sent to South Carolina for formal signature by Merritt. All payments under the contract whereby Merritt had possession of the barge were received in Louisiana.
54
The barge was leased to Merritt for use in work on the Mississippi River under a contract with the federal Corps of Engineers. The work itself was controlled from New Orleans. The lease contract expressly limited the use and location of the barge for the life of the agreement to the Mississippi River basin. The contract for the use of the barge, however, was cancelled by the Corps of Engineers. After this cancellation, Merritt, without the knowledge of Compliance and contrary to the express language of the agreement under which it had secured possession of the barge, sailed the barge to South Carolina and shortly thereafter this bankruptcy proceeding ensued.
55
In my view, the "most significant relationship" of the transaction was to Louisiana and not to South Carolina and, under accepted conflict-of-laws principles, the contract between Compliance and Merritt was to be treated as controlled by Louisiana law. Restatement (Second) of Conflict of Laws Secs. 6, 244 (1969). Under Louisiana law, a lease which binds the putative lessee to make "rental" payments equal to the purchase price of the item leased is considered a sale. Lee Constr. Co. v. L.M. Ray Constr. Corp., 219 La. 246, 52 So.2d 841 (1951). A lease without this obligation to make payments for the full amount, but with only an option to do so is considered merely a lease with an option to purchase. Id., 52 So.2d at 842.
56
Under the contract, Merritt was obligated to make only three monthly payments for the barge. The total value of these three payments, $7,500.00, is not even close to the purchase price of the barge as stated in the contract, $30,000.00. Merritt also had an option to continue making the payments, and after making twelve could have purchased the barge for no additional consideration. But, it was under no obligation to do so. It appears, therefore, that under Louisiana law the contract must be construed as a true lease with an option to purchase, and not a sale.
57
The fact that Merritt took the barge into South Carolina without the knowledge and approval of Compliance and against the express terms of the contract cannot defeat Compliance's rights under what I conceive to be its Louisiana agreement and render the validity of Compliance's title subject to the South Carolina recordation statutes, e.g., S.C. Code Ann. Sec. 27-23-80 (Law.Co-op.1976) as a South Carolina contract. I would, therefore, sustain the claim of Compliance to the barge and dissent from the contrary holding of the majority opinion herein.
1
In bankruptcy proceedings, the extent of a debtor's property interest in a given asset is a matter of state law. Butner v. United States, 440 U.S. 48, 54, 99 S.Ct. 914, 917-18, 59 L.Ed.2d 136 (1979). The UCC and South Carolina's Commercial Code govern contractual transactions, and not property interests per se. The property interest involved in this case, however, grows out of such a transaction, and Sec. 1-105 governs the choice of the law to be applied in determining the rights of parties to such a transaction
2
While South Carolina's general contract choice of law rule calls for the application of the law of the place of contracting, Cantey v. Philadelphia Life Ins. Co., 166 S.C. 181, 187, 164 S.E. 609, 611 (1932), the South Carolina Reporter's Comments to Sec. 36-1-105 indicate that South Carolina, in adopting that provision, intended the "appropriate relation" test to differ from its traditional rule. See S.C. Code Ann. Sec. 36-1-105, South Carolina Reporter's Comments (1976)
3
Section 244(2) of the Restatement provides that greater weight will normally be given to the location of a chattel at the time of conveyance than to any other contact in determining the applicable law. The Restatement goes on to say, however, that where, as here, the parties to a conveyance do not intend a chattel to remain in the state where it is located at the time of conveyance, the weight to be given to location is significantly lessened. Restatement Sec. 244 comment f
4
The Restatement also directs us to consider "ease in the determination and application of the law to be applied." Restatement p 6(g). While this consideration "should not be overemphasized," Restatement Sec. 6 comment j, the UCC's uniformity and common acceptance makes it easiest for this court to determine and apply South Carolina's law | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/758489/ | 157 F.3d 914
159 L.R.R.M. (BNA) 2385, 332 U.S.App.D.C. 321,136 Lab.Cas. P 10,261
Sebastian C. SIMMONS, Appellant,v.HOWARD UNIVERSITY and Metropolitan Special Police OfficersFederation, Appellees.
No. 97-7207.
United States Court of Appeals,District of Columbia Circuit.
Argued Sept. 10, 1998.Decided Oct. 2, 1998.
Appeal from the United States District Court for the District of Columbia (No. 96cv02879).
David W. Brown argued the cause and filed the briefs for appellant.
Anita Barondes argued the cause for appellees. With her on the brief were Michael F. Kleine and Mose Lewis, III.
Before: GINSBURG, SENTELLE, and ROGERS, Circuit Judges.
D.H. GINSBURG, Circuit Judge:
1
Plaintiff Sebastian Simmons sued his former employer and the union that represented him when he was employed by that employer, both under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a). According to Simmons, the employer wrongfully fired him and the union failed adequately to represent him in his effort to get his job back. The district court granted summary judgment for both defendants, and Simmons now appeals. We affirm because Simmons' claim is untimely as a matter of law.
I. Background
2
Simmons was employed by Howard University as a Special Police Officer from 1989 until October, 1995, when he was fired for "unprofessional conduct." As a member of the Metropolitan Special Police Officers Federation, Simmons asked Gregory Burroughs, the Union's Business Representative, to prosecute a wrongful termination grievance on his behalf. Burroughs tried to do so but was repeatedly stymied by the Union's Vice President. As a result, the Union took no action on Simmons' complaint within the time limit for initiating the grievance process established by the applicable collective bargaining agreement.
3
Burroughs, who believed that the grievance procedure could be re-opened, continued to press Simmons' grievance with both Union and management officials. Burroughs also kept Simmons abreast of his actions.
4
Simmons did not, however, rely exclusively upon the possibility that Burroughs would persuade the Union to relent. In January, 1996 he asked a lawyer to file suit on his behalf. The lawyer apparently agreed but, for reasons that are not in the record, failed to follow through. On March 20, 1996 Simmons himself filed an unfair labor practice charge with the National Labor Relations Board alleging that the Union had "refus[ed] to provide fair representation to him" in connection with his termination. In April, 1996, however, allegedly after being told by an NLRB agent that the agency does not seek monetary damages, Simmons withdrew the charge.
5
Meanwhile, Burroughs' attempts to persuade the Union to take up Simmons' grievance continued until October, 1996, when he was succeeded as Business Representative by Vincent Westmoreland. Westmoreland, too, promised Simmons that he would try to re-open the grievance, but after one such attempt gave up the cause. Simmons filed this action on December 31, 1996.
6
Both defendants moved for summary judgment on the ground that Simmons' complaint was time-barred. The district court granted defendants' motion, and for the following reasons, we affirm.
II. Analysis
7
Simmons brings what the Supreme Court has referred to as a "hybrid § 301/fair representation claim," so named because the plaintiff simultaneously charges the employer with breach of the collective bargaining agreement and the union with a breach of its statutory duty of fair representation. DelCostello v. International Bhd. of Teamsters, 462 U.S. 151, 165, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). Such claims are subject to the six-month statute of limitations provided in § 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b), see 462 U.S. at 155, 103 S.Ct. 2281, which begins to run when "the claimant discovers, or in the exercise of reasonable diligence should have discovered, the acts constituting the alleged violation." Vadino v. A. Valey Eng'rs, 903 F.2d 253, 260 (3rd Cir.1990) (quoting Metz v. Tootsie Roll Indus., 715 F.2d 299, 304 (7th Cir.1983)); see also Cohen v. Flushing Hosp. and Med. Ctr., 68 F.3d 64, 67 (2d Cir.1995); Adams v. The Budd Co., 846 F.2d 428, 431 (7th Cir.1988); Proudfoot v. Seafarer's Int'l Union, 779 F.2d 1558, 1559 (11th Cir.1986).
8
As Simmons points out, application of this standard often leads to fact-intensive disputes not amenable to resolution through summary judgment. Not so in this case, however. An unbroken string of precedent supports the proposition that when a plaintiff accuses his union of a breach of the duty of fair representation in a charge filed with the NLRB, he has by then, as a matter of law, "discovered" the grounds for his hybrid § 301 claim. See Washington v. Service Employees Int'l Union, Local 50, 130 F.3d 825, 826 (8th Cir.1997) (hybrid § 301 claim accrued when plaintiff filed NLRB charge); Livingstone v. Schnuck Mkt., Inc., 950 F.2d 579, 583 (8th Cir.1991) (same); Adams, 846 F.2d at 431 (same); Arriaga-Zayas v. International Ladies' Garment Workers' Union, 835 F.2d 11, 13 (1st Cir.1987) (claim accrued when plaintiffs filed "informative motion" with Puerto Rico Labor Relations Board detailing union's alleged failure adequately to represent them); Gustafson v. Cornelius Co., 724 F.2d 75, 79 (8th Cir.1983) (claim accrued when plaintiff filed NLRB charge); see also Cohen, 68 F.3d at 67 (claim accrued when plaintiff wrote letter to Anti-Defamation League complaining of union's failure to represent him).
9
Simmons contends that the "discovery" rule is inapplicable to his claim in view of his reliance upon the efforts of Burroughs and Westmoreland, the Business Representatives, to re-open his grievance. Because a rational juror could find Simmons reasonably believed that they would ultimately succeed, he suggests, such a juror could also find that he was unaware of the acts constituting the Union's alleged breach. The latter proposition, however, does not follow from the former. Burroughs' and Westmoreland's representations did not render Simmons unaware of the factual basis of his claim; neither, therefore, did they prevent its accrual. See Cohen, 68 F.3d at 68 (any hope plaintiff had that union would change its position is immaterial for statute of limitations purposes once plaintiff has articulated the grounds for his § 301 claim); Arriaga-Zayas, 835 F.2d at 15 (arbitration between union and employer did not prevent plaintiffs' hybrid § 301 claim from accruing when it was unclear whether union's representation of plaintiffs in arbitration proceeding would be adequate). Moreover, even if there was some possibility after June 30, 1996 (six months before Simmons filed this suit) the Union would reopen his grievance--indeed, even if there is still such a possibility--that would not mean that the Union had not already breached its duty of fair representation; reopening Simmons' grievance after the deadlines provided in the collective bargaining agreement had passed might have remedied, but it could not prevent, the Union's breach.
10
Simmons' argument can be recast in terms not of when his claim accrued but of whether the statute of limitations was tolled by his reliance upon the representations of Burroughs and Westmoreland. The statute of limitations for a hybrid § 301 claim may be tolled when the plaintiff is fraudulently induced to delay filing his suit, see Demchik v. General Motors Corp., 821 F.2d 102, 105 (2d Cir.1987) or in good faith attempts to exhaust grievance procedures, see Lucas v. Mountain States Tel. & Tel., 909 F.2d 419, 421-22 (10th Cir.1990). Neither ground is available to Simmons, however. He does not claim that any officer of the Union misled him in any way. Nor was his delay in filing suit occasioned by the need to exhaust the grievance procedure, as to which he had done all he could when he asked Burroughs to pursue his grievance. Thus, as Simmons testified at his deposition, he went to his first attorney "to file a lawsuit," not to help him pursue his grievance. Indeed, Simmons was at a loss to explain why the attorney did not file a suit. Therefore, while Simmons may have believed that Union action was still possible in the Fall of 1996, it was not because he had yet to exhaust the grievance procedure; hence the statute of limitations was not tolled.
III. Conclusion
11
For the foregoing reasons, the judgment of the district court is
12
Affirmed. | 01-03-2023 | 04-18-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1565870/ | 159 F.2d 291 (1946)
ROCKTON & RION RY.
v.
DAVIS et al.
No. 5514.
Circuit Court of Appeals, Fourth Circuit.
December 12, 1946.
*292 Robert W. Hemphill and Paul Hemphill, both of Chester, S.C. (John M. Hemphill, of Chester, S.C., on the brief), for appellant.
W. K. Charles, of Greenwood, S.C., for appellees.
George M. Szabad, Atty., United States Department of Labor, of Washington, D.C. (William S. Tyson, Sol., and Morton Liftin, Asst. Sol., both of Washington, D.C., George A. Downing, Regional Atty., of Atlanta, Ga., and Frederick U. Reel, Atty., United States Department of Labor, of Washington, D.C., on the brief), for Administrator of Wage and Hour Division, United States Department of Labor, amici curiæ.
Before PARKER, SOPER, and DOBIE, Circuit Judges.
DOBIE, Circuit Judge.
Cortez Davis and others, as plaintiffs, employees of the Rockton & Rion Railway, a corporation (hereinafter called Rockton) brought civil actions against Rockton, as defendant, to recover alleged unpaid minimum wages, overtime compensation, liquidated damages and attorney's fees under the provisions of the Fair Labor Standards Act, 29 U.S.C.A. §§ 201-219. From judgments in the District Court of the United States for the Western District of South Carolina, in favor of plaintiffs, Rockton has duly appealed.
Only two questions are presented in this appeal. (1) Is Act 221 of the General Assembly of South Carolina for 1945, 44 Stat. at Large, p. 377, applicable to the claims of plaintiffs so as to bar these claims save as to such sums as might be due and owing within one year next preceding the institution of these actions? (2) Are the liquidated damages provided in Section 16(b) of the federal Fair Labor Standards Act a "penalty or forfeiture" under Section 389, Code of Laws of South Carolina, 1942, so as to be barred unless an action therefor be instituted within the period of three years prescribed by this South Carolina statute? The District Court answered both these questions in the negative and we think answered them both correctly.
The first of the statutes of South Carolina, Act No. 221 of 1945, provides in part: "All suits, or actions * * * relating to wages claimed under a federal statute * * * must be begun within a year from the time of the accrual of the demand."
The second of these South Carolina statutes, § 389, Code of Laws of South Carolina, 1942, provides in part: "An action upon a statute for a penalty or forforfeiture *293 * * *" is barred if not instituted within three years.
It is admitted that since no period of limitations for suits by employees under the Fair Labor Standards Act is prescribed by this or any other federal statute, these suits here are governed by the applicable state statutes of limitations, provided, of course, these statutes are valid. Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S. Ct. 65, 51 L. Ed. 241; Campbell v. Haverhill, 155 U.S. 610, 15 S. Ct. 217, 39 L. Ed. 280; Culver v. Bell & Loffland, 9 Cir., 146 F.2d 29; Hall v. Ballard, 4 Cir., 90 F.2d 939. We proceed, then, to discuss the applicability of the two statutes of South Carolina, and the validity of the one first mentioned.
The effective date of the first mentioned South Carolina statute of limitations, No. 221 of 1945, was May 25, 1945; the instant civil actions were commenced on June 22, 1944. It is a familiar rule of law that retroactive legislation is not favored and that statutes are to be construed as operating not retroactively but only prospectively, unless a contrary intention is manifest in either the express language of the statute or the clear and unmistakable purport of the legislature. Hassett v. Welch, 303 U.S. 303, 58 S. Ct. 559, 82 L. Ed. 858; Miller v. United States, 294 U.S. 435, 439, 55 S. Ct. 440, 79 L. Ed. 977; Claridge Apartments Co. v. Commissioner of Internal Revenue, 7 Cir., 138 F.2d 962; Colgate-Palmolive-Peet Co. v. United States, D.C., 37 F. Supp. 794; 59 C.J. 1175. And quite clear on this subject are the words of the Supreme Court of South Carolina, in Barnes v. Bell, 10 Rich. 376:
"Statutes should be construed so as to operate in futuro, unless a retroactive effect be clearly intended. It is a general rule that no statute shall be construed to have a retrospective operation without express words to that effect. Nor does the law favor a repeal by implication, it never being allowed unless the repugnancy be plain. But these are familiar principles that call for no authorities to sustain them the question is do they reach the case.
"When this action was commenced rights attached, and it is clear upon principle, that the relation of litigant parties should not be varied without some clearly expressed purpose."
We agree with the District Court: "There is nothing in the Act to indicate that the Legislature of South Carolina intended to make it retroactive in effect. Therefore, the statute establishes rules for the future and does not change the status of claims pending on its effective date."
This statute, therefore, has no application whatever to the claims set out by the plaintiffs in the instant case.
We think, too, that this statute is invalid. The statute is directed solely at claims "relating to wages claimed under a federal statute." It is a fair inference that the statute was purposively aimed at the Fair Labor Standards Act. The law seems well settled that a statute of limitations of a State is unconstitutional when the statute is directed exclusively at claims arising under a federal law. And particularly is this true when the State statute of limitations is discriminatory in its effect in favor of State claims and against Federal claims; for the ordinary wage claims arising in South Carolina would not be barred in less than six years under the South Carolina statute of limitations. Republic Pictures Corporation v. Kappler, 66 S. Ct. 523, affirming 8 Cir., 151 F.2d 543, 162 A.L.R. 228; Miles v. Illinois Central R. Co., 315 U.S. 698, 62 S. Ct. 827, 86 L. Ed. 1129, 146 A.L.R. 1104; McKnett v. St. Louis & San Francisco R. Co., 292 U.S. 230, 234, 54 S. Ct. 690, 78 L. Ed. 1227; Campbell v. Haverhill, 155 U.S. 610, 15 S. Ct. 217, 39 L. Ed. 280. And see, E. H. Clarke Lumber Co. v. Kurth, 9 Cir., 152 F.2d 914; Fullerton v. Lamm, Or., 163 P.2d 941. Cf. Swick v. Glenn L. Martin Co., U.S.D.C.Md. 1946, 68 F. Supp. 863.
We think it is unnecessary to consider and pass upon the other grounds upon which the validity of the one-year statute is attacked.
Next, as to the second South Carolina statute of limitations, § 389, Code of Laws of 1942. The liquidated damages provided by the Fair Labor Standards Act are not a "penalty or forfeiture" as those terms are used in the South Carolina statute. *294 This statute is, therefore, inapplicable to claims for liquidated damages under the Act.
The United States Supreme Court has indicated in no uncertain terms that liquidated damages under the Act "are compensation, not a penalty or punishment by the Government." Overnight Motor Co. v. Missel, 316 U.S. 572, 583, 584, 62 S. Ct. 1216, 1223, 86 L. Ed. 1682. To the same effect are Schulte v. Gangi, 1946, 66 S. Ct. 925, 928, 929; Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 707, 65 S. Ct. 895, 89 L.Ed 1296. See, also, Northwestern Yeast Co. v. Broutin, 6 Cir., 133 F.2d 628, 630; Forsyth v. Central Foundry Co., 240 Ala. 277, 198 So. 706; Emerson v. Mary Lincoln Candies, 287 N.Y. 577, 38 N.E.2d 234.
It has generally been held that statutes of limitations applicable to penalties or forfeitures do not control suits under the Fair Labor Standards Act. Culver v. Bell & Loffland, 9 Cir., 146 F.2d 29; Smith v. Continental Oil Co., D.C., 59 F. Supp. 91, 93; Reliance Storage & Inspection Co. v. Hubbard, D.C., 50 F. Supp. 1012; Abram v. San Joaquin Cotton Oil Co., D.C., 46 F. Supp. 969; Divine v. Levy, D.C., 45 F. Supp. 49; Walsh v. 515 Madison Avenue Corporation, 293 N.Y. 826, 59 N.E.2d 183. And see note, Limitation of Actions under Section 16(b) of the Fair Labor Standards Act, 45 Col.Law Rev. 444. Cf. Southern Package Corporation v. Walton, 196 Miss. 786, 18 So. 2d 458, 459, certiorari denied, 323 U.S. 762, 65 S. Ct. 93, 89 L. Ed. 609.
The authoritative interpretation of the words "penalty or forfeiture" in this South Carolina statute of limitations is the task of the Supreme Court of South Carolina. It seems a fair inference, though, that this court, in so doing, will follow the decisions of the United States Supreme Court and conclude that liquidated damages provided by the Fair Labor Standards Act are not a "penalty or forfeiture" under § 389, Code of Laws of South Carolina, 1942.
Indeed, the Supreme Court of South Carolina has gone very far in giving a limited scope to the provisions relating to penalties and forfeitures in the statutes of limitations of that State. In Lipscomb v. Seegers, 19 S.C. 425, 433-444, the defendant had hired convicts from the State penitentiary under a contract made pursuant to a State statute, that if any convicts escaped due to negligence he would pay a penalty or forfeiture of $50 for each year of the unexpired term of the escaping convicts. It was held, even though the statute relative to the escaped convicts used the words "penalty or forfeiture", the recovery there provided was more in the nature of liquidated damages and was not a "penalty or forfeiture" as those terms were used in the statute of limitations. In the light of this decision, we are not disturbed by the cases, relied on by appellant, of Frick Co. v. Tuten, 204 S.C. 226, 29 S.E.2d 260 (forfeiture for usury); and Sturkie v. Southern Railway, 71 S.C. 208, 50 S.E. 782 (penalty for violation of the separate coach law).
The judgment of the District Court is affirmed.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565880/ | 34 So. 3d 797 (2010)
Luis J. DIAZ, Appellant,
v.
STATE of Florida, Appellee.
No. 4D09-543.
District Court of Appeal of Florida, Fourth District.
May 19, 2010.
*798 Carey Haughwout, Public Defender, and Timothy D. Kenison, Assistant Public Defender, West Palm Beach, for appellant.
Bill McCollum, Attorney General, Tallahassee, and Mitchell A. Egber, Assistant *799 Attorney General, West Palm Beach, for appellee.
TAYLOR, J.
The defendant entered a plea of no contest to trafficking in heroin and possession of drug paraphernalia, reserving the right to appeal the denial of his motion to suppress evidence. He argues that the police officers' warrantless entry into his home after the arrest of an individual outside his home was unlawful. We agree. Because the trial court erred in denying the defendant's motion to suppress, we reverse.
At the motion to suppress hearing, Detective Vincent Campos of the Broward Sheriff's Office testified that in July 2008 he was engaged in an on-going narcotics investigation of the defendant, based on complaints that the defendant was selling narcotics. While conducting undercover surveillance, Campos observed a white female, later identified as Alexis Russell, leave the defendant's residence and make contact with an unknown white male, later identified as Steadham. The officer saw Russell reach into Steadham's pocket and deposit something, which he believed to be narcotics. After Russell and Steadham parted ways, Campos made contact with Steadham. Steadham admitted that Russell delivered narcotics to him and agreed to fully cooperate with the police. He told the officer that he had contacted the defendant to buy the narcotics and explained that they had a code for drug transactions. Once Steadham learned that he would not be released for a felony charge, however, he refused to cooperate any further.
After Steadham was placed in custody, Campos informed his supervisors about the hand-to-hand drug transaction he witnessed. He told them that Steadham said there were probably more drugs inside the defendant's home and that the defendant was there with his girlfriend. Campos also told the sergeant about his prior interaction with the defendant in January 2008, when the defendant was arrested for possession of heroin after dropping narcotics to the ground when approached by police at his residence.
Members of Detective Campos's selective enforcement team continued surveillance on the defendant's home from unmarked police vehicles. Campos stayed in contact with them by radio. At that time, he did not believe he had probable cause to apply for a search warrant.
Detective Gregory Eglund arrived on the scene to assist the take-down team with the arrest of Alexis Russell, who was believed to be inside the defendant's home. Eglund was informed about her delivery of heroin and the officers' plan to wait for her to come out. Russell eventually came out and was arrested outside the defendant's home, about five feet from the front door. The front door remained open. Eglund said he could tell that there were other people inside because from the front door he could see some movement in the back bedroom. Five officers entered the home with guns drawn and performed a protective sweep. Eglund explained that the protective sweep was "for our well being, making sure nobody was armed," and that they "went inside and detained the other people that were inside the house."
Eglund went to the back bedroom, where he found the defendant and the defendant's girlfriend, Stephanie Scott, sitting on the bed. Containers of what appeared to be heroin were lying next to them. The defendant and Scott were detained and brought outside the house. Eglund did not see the defendant or Scott try to destroy any evidence. They did not resist; they were handcuffed and brought outside, where they remained calm and cooperative.
*800 Sergeant Edward Grant testified that both the defendant and Scott were detained and that they were not free to leave. They were read their Miranda rights, given BSO consent forms, and advised of their right to refuse consent. After determining that both the defendant and Scott lived in the house, the officers obtained their signed consents to search the home. The defendant's handcuffs were removed to allow him to sign the consent from. This occurred within ten to fifteen minutes after the protective sweep. The police did not threaten or coerce the defendant and Scott into signing the consent forms. Neither the defendant nor Scott yelled or resisted; the defendant appeared to sign under his own free will. When Scott signed the consent form, however, she gave a false name.
Scott testified that she did not know the police were in the house until they came into the bedroom. She admitted giving a false name on the consent form, because she "didn't want to have any responsibility to sign anything, you know, because I didn't want any part of it." She testified the officers told her if she did not sign the consent to search form, she would face the same charges as the defendant. She said that she signed it because she was a little scared.
After consent was given, the officers re-entered the home to conduct a search. Heroin was found in the bedroom on the bed, on the floor, at the foot of the bed, and around the room. Eglund stated that the heroin that they recovered was only what they had seen during the protective sweep, in addition to heroin out in the open on the floor.
Campos, who described the entry into the defendant's home as a protective sweep, explained that there are safety concerns with narcotics investigations, and that "[t]ypically, with narcotics investigations, there's an unknown. You don't know if there's going to be weapons inside, if there's going to be booby traps inside. You are walking into, you know, some type of ambush, maybe, you know, and we have to take precautions for ourselves and for the public.... [I]t's dangerous business. Typically, there's guns and drugs." On cross-examination, however, Campos acknowledged that, although he knew there were occupants inside the residence, he did not know whether or not they were armed. He recalled that the defendant did not resist arrest or pose any threat during his arrest in January 2008. Further, he did not remember any weapons being recovered from the defendant's home at that time. Campos acknowledged that in January 2008 the officers performed a protective sweep of the defendant's home after his arrest outside the home and afterwards obtained his consent to search in the same way as they did in July 2008.
At the end of the suppression hearing, the defendant argued that the officers had no right to enter his home to conduct a protective sweep since Russell's arrest occurred outside the home and the officers had no reasonable belief, based on specific and articulable facts, that the home harbored individuals that posed a danger to them. As such, he argued, any consents given after the illegal entry were invalid.
The court denied the motion. It reasoned that because the officers could see from the front door that there were other individuals inside the home, they were authorized to conduct a protective sweep for their safety and to protect them "from the possibility of any type of harm coming to them." The court further found that the consent given by the defendant's girlfriend was valid and that the defendant did not have standing to attack her consent.
The defendant ultimately pled no contest to the charges and reserved the right *801 to appeal the trial court's ruling on the motion to suppress. He was sentenced concurrently to three years for trafficking in heroin, and 364 days for possession of drug paraphernalia.
The state first argues that the defendant's motion to suppress was not properly preserved for appeal because, although the defendant indicated at his plea hearing that he intended to appeal the denial of the motion to suppress, the court did not rule, nor did the parties stipulate, that the ruling was dispositive.
Florida Rule of Appellate Procedure 9.140(b)(2)(A)(i) permits a defendant to appeal from a guilty or nolo contendere plea when the defendant "expressly reserve[s] the right to appeal a prior dispositive order of the lower tribunal, identifying with particularity the point of law being reserved." "An issue is dispositive only when it is clear that regardless of the outcome of the appeal, there will be no trial." Fuller v. State, 748 So. 2d 292, 294 (Fla. 4th DCA 1999) (citing Vaughn v. State, 711 So. 2d 64, 65 (Fla. 1st DCA), rev. denied, 722 So. 2d 195 (Fla.1998)). It is the trial court's duty "to determine the dispositive nature of the reserved question." Everett v. State, 535 So. 2d 667, 669 (Fla. 2d DCA 1988). The court errs if it "merely acknowledges that the defendant has reserved an issue for appellate review." Id.
However, "where a motion tests the suppression of contraband which the defendant is charged with possessing, the motion is usually considered dispositive in the case." J.J.V. v. State, 17 So. 3d 881, 883 (Fla. 4th DCA 2009) (citing Brown v. State, 376 So. 2d 382, 385 (Fla.1979); Howard v. State, 515 So. 2d 346 (Fla. 1st DCA 1987)). "Thus, the lack of an express finding that the issue is dispositive is not fatal." Id. (citing Hawk v. State, 848 So. 2d 475, 478 (Fla. 5th DCA 2003)).
Here, the defendant was charged with trafficking in heroin. The information alleged that the defendant "did then and there unlawfully and knowingly have in his actual or constructive possession a controlled substance" contrary to sections 893.135(1)(c)1a and 893.03(1)(b)(11), Florida Statutes. Because the defendant was charged with trafficking through possession, the possession cases that hold that the lack of a dispositiveness finding is not fatal apply in this case. We thus find that the issue was properly preserved.
On the merits, the state argues that the trial court correctly denied the motion to suppress because the officers clearly articulated facts, based on the circumstances of this case, which justified a protective sweep of the defendant's home.
A protective sweep is "`a quick and limited search of the premises, incident to an arrest and conducted to protect the safety of police officers or others.'" Vasquez v. State, 870 So. 2d 26, 30 (Fla. 2d DCA 2003) (quoting Maryland v. Buie, 494 U.S. 325, 327, 110 S. Ct. 1093, 108 L. Ed. 2d 276 (1990)). It may only extend to those places where a person may be hiding. Runge v. State, 701 So. 2d 1182, 1183 (Fla. 2d DCA 1997) (citing Buie, 494 U.S. at 335, 110 S. Ct. 1093).
Without extraordinary circumstances, "government agents have no right to search a dwelling when an arrest is effectuated outside it." Klosieski v. State, 482 So. 2d 448, 450 (Fla. 5th DCA 1986) (citing Vale v. Louisiana, 399 U.S. 30, 90 S. Ct. 1969, 26 L. Ed. 2d 409 (1970)). The threshold to the entrance of a house "may not reasonably be crossed without a warrant" absent exigent circumstances. Id. (citing Payton v. New York, 445 U.S. 573, 100 S. Ct. 1371, 63 L. Ed. 2d 639 (1980)).
*802 Regardless of whether the initial arrest is made inside or outside the home, "`police officers have a right to conduct a quick and cursory check of a residence when they have reasonable grounds to believe that there are other persons present inside the residence who might present a security risk.'" Newton v. State, 378 So. 2d 297, 299 (Fla. 4th DCA 1979) (quoting U.S. v. Bowdach, 561 F.2d 1160 (5th Cir.1977)). The officers must have a reasonable, articulable suspicion that the protective sweep is necessary due to a safety threat or the destruction of evidence. United States v. Thompson, No. 08-60264-CR-COHN, 2009 WL 302037, at *1 (S.D.Fla. Feb. 6, 2009). Further, "a protective sweep of the inside of a residence incident to an arrest made outside the residence is not per se unlawful, and is proper if the arresting officer has (1) a reasonable belief that third persons are inside, and (2) a reasonable belief that the third persons were aware of the arrest outside the premises so that they might destroy evidence, escape or jeopardize the safety of the officers or the public." United States v. Flores, No. 2:08-cr-108-FtM-29SPC, 2009 WL 55022, at *2 (M.D.Fla. Jan.7, 2009) (citing United States v. Oguns, 921 F.2d 442, 446 (2d Cir.1990)).
In Klosieski v. State, 482 So. 2d 448, 449 (Fla. 5th DCA 1986), the police conducted a protective sweep of the house after the two defendants were arrested and secured outside the home. The fifth district reversed the denial of the motion to suppress, holding that "the police had no reason to believe that other individuals, dangerous to their safety, were inside the house.... The fact that the police did not know, as an absolute certainty, whether more people were in the house ... cannot justify entry into the house." Id. at 450 (emphasis supplied).
Here, the officers had a reasonable belief that third persons were inside. Not only did Steadham tell Campos that the defendant and Scott were in the house, but Eglund testified he saw some movement in the back bedroom. However, no evidence was adduced at the hearing to establish the required "reasonable, articulable suspicion" that these individuals posed a danger and might jeopardize the officers' safety or destroy evidence. The officers testified only about their general safety concerns with narcotics investigations. Their testimony suggests that they entered the residence as part of a routine practice, rather than on the basis of any articulable facts which would warrant a reasonable belief that the occupants posed a threat to officer safety. See Mestral v. State, 16 So. 3d 1015, 1018 (Fla. 3d DCA 2009) (holding that a protective sweep of the defendant's home was impermissible where no exigent circumstances existed).
Moreover, exigent circumstances did not exist to support a warrantless entry to search the defendant's house. Warrantless searches are considered, under the Fourth Amendment, per se unreasonable, subject to certain exceptions. Hornblower v. State, 351 So. 2d 716, 717 (Fla.1977) (citing Katz v. United States, 389 U.S. 347, 357, 88 S. Ct. 507, 19 L. Ed. 2d 576 (1967)). The state bears the burden to demonstrate that "procurement of a warrant was not feasible because `the exigencies of the situation made that course imperative.'" Id. (citing McDonald v. United States, 335 U.S. 451, 456, 69 S. Ct. 191, 93 L. Ed. 153 (1948)). Even if they have probable cause, "police officers may not enter a dwelling without a warrant, absent consent or exigent circumstances." Levine v. State, 684 So. 2d 903, 904 (Fla. 4th DCA 1996) (citing Payton v. New York, 445 U.S. 573, 100 S. Ct. 1371, 63 L. Ed. 2d 639 (1980)). The measure of reasonableness *803 is totality of the circumstances. Wright v. State, 1 So. 3d 409, 412 (Fla. 2d DCA 2009) (citing Lee v. State, 856 So. 2d 1133, 1136 (Fla. 1st DCA 2003)).
The state must prove that the police lacked sufficient time to obtain a warrant; "if time to get a warrant exists, [then] the enforcement agency must use that time to obtain the warrant." Hornblower, 351 So.2d at 718. The Florida Supreme Court explained that "[l]aw enforcement officers may not sit and wait... (when they could be seeking a warrant), then utilize their self-imposed delay to create exigent circumstances." Id. at 719. In this case, the state failed to present evidence of any exigent circumstances that would have made procurement of a warrant not feasible. Campos had sufficient probable cause to apply for a search warrant, based on his observations of the hand-to-hand transaction, Steadham's statements and admissions, and the defendant's arrest for heroin possession six months earlier. Yet, rather than obtain a warrant, the police continued surveillance, waited for Russell to re-emerge from the house, and then arrested her just a few feet from the front door. The state failed to establish that sufficient time did not exist during this interim to procure a search warrant. In Hornblower, the court held that forty-five minutes was an unreasonable length of time and that the warrantless search was unjustified. State v. Moyer, 394 So. 2d 433, 435 (Fla. 2d DCA 1980) (citing Hornblower, 351 So.2d at 717, and Wilson v. State, 363 So. 2d 1146 (Fla. 2d DCA 1978)) (stating "[t]he courts held that 45 minutes in Hornblower and six hours in Wilson were unreasonable lengths of time and thus the warrantless searches were unjustified").
Further, the state presented no evidence that the defendant or Scott knew of the police presence outside their home or that the officers perceived them doing anything to indicate that they were attempting to destroy evidence or to escape. See Gilbert v. State, 789 So. 2d 426, 428 (Fla. 4th DCA 2001) (explaining an exigent circumstance includes "where the possessor of contraband is aware that the police are on his or her trail"). In Lee v. State, 856 So. 2d 1133, 1138 (Fla. 1st DCA 2003), the court explained that "in order to justify a warrantless entry into a residence to prevent the imminent destruction of evidence, the police must have an objectively reasonable fear that the evidence will be destroyed before a warrant can be obtained." The Florida Supreme Court in Benefield v. State, 160 So. 2d 706 (Fla.1964), also held that "exigent circumstances exist where the occupants of the house are aware of the presence of someone outside, and are engaged in activities that justify the officers in the belief that the occupants are actually trying to escape or destroy evidence." Lee, 856 So.2d at 1138 (citing Benefield, 160 So. 2d 706). Fears based on generalizations about drugs and guns are not enough to create an exigent circumstance. Id. at 1139-40.
In Rebello v. State, 773 So. 2d 579, 579-80 (Fla. 4th DCA 2000), the defendant was supplying cocaine from his motel room. When an officer knocked on his door and announced he was a police officer, the defendant ran to the bathroom. The officer could hear the toilet flushing and the shower running, so he kicked in the door. Id. at 580. We reversed the trial court's denial of the defendant's motion to suppress, concluding that the officer's actions triggered the excitement that led to insufficient time to obtain a warrant. Id. at 581. The police "may not create exigent circumstances by their own conduct." Id. at 580 (citing Levine, 684 So.2d at 904).
Because the police were not justified in entering the defendant's house *804 without a warrant and conducting a protective sweep, the consents to search given by the defendant and Scott were invalid. It is well-settled law that "where ... a `consent [to search] is obtained after illegal police activity such as an illegal search or arrest, the unlawful police action presumptively taints and renders involuntary any consent to search.'" Gonzalez v. State, 578 So. 2d 729, 734 (Fla. 3d DCA 1991) (quoting Norman v. State, 379 So. 2d 643, 646-47 (Fla.1980)). We explained that "`[c]onsent given after police conduct determined to be illegal is presumptively tainted and deemed involuntary, unless the state proves by clear and convincing evidence that there was a clear break in the chain of events sufficient to dissolve the taint.'" Navamuel v. State, 12 So. 3d 1283, 1286 (Fla. 4th DCA 2009) (quoting Delorenzo v. State, 921 So. 2d 873, 879 (Fla. 4th DCA 2006)). Here, the state failed to prove that the taint of illegal entry was dissipated by subsequent events. See State v. Sakezeles, 778 So. 2d 432, 434 (Fla. 3d DCA 2001) (the state bears the burden to show that the taint of illegal entry was dissipated by subsequent events).
Accordingly, we reverse the denial of the defendant's motion to suppress and reverse and remand for further proceedings.
CIKLIN, J. and BLANC, PETER D., Associate Judge, concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565899/ | 34 So. 3d 832 (2010)
Drew GESTEWITZ, Appellant,
v.
STATE of Florida, Appellee.
No. 4D08-3647.
District Court of Appeal of Florida, Fourth District.
May 26, 2010.
*833 Carey Haughwout, Public Defender, and Gary Lee Caldwell, Assistant Public Defender, West Palm Beach, for appellant.
Bill McCollum, Attorney General, Tallahassee, and Katherine Y. McIntire, Assistant Attorney General, West Palm Beach, for appellee.
HAZOURI, J.
Drew G. Gestewitz was charged with and convicted of possession of a controlled substance (Xanax) and escape. We reverse both convictions because those charges arose from conduct that took place after the police unlawfully detained Gestewitz for the purpose of issuing him a trespass warning.
On the eve of the 2007 Super Bowl, Gestewitz attended Sharky's Bar & Billiards in Sebastian, Florida. After an argument between Gestewitz and a bartender, the bartender called the police. Before the police arrived, Gestewitz had moved outside the bar and was standing by the bar's front door.
Three police officers initially responded. The officers approached Gestewitz and asked him to move away from the front door. The bar manager then asked the police to issue Gestewitz a trespass warning so that he could not re-enter the bar. While one officer went inside to fill out a written trespass warning, the two other officers detained Gestewitz outside the bar and spoke with him about the incident. During this detention, Gestewitz's friend who was to give him a ride home arrived. As she approached, Gestewitz asked if he could leave. The police told him he was not free to leave because they were detaining him until they processed his trespass warning.
Gestewitz then started putting his hands in his pockets. Although they did not notice a bulge in Gestewitz's pockets, the officers asked Gestewitz if he had any weapons on him and ordered him to remove his hands from his pockets. Gestewitz pulled his hands from his pockets and started voluntarily removing items from them.
*834 At this time, one of the officers noticed a clear plastic baggie poking out of Gestewitz's right pocket. The officer asked Gestewitz what was in the baggie. Gestewitz said it was a Xanax bar. Because Xanax is a controlled substance and Gestewitz did not have a prescription for it, the police placed Gestewitz under arrest. A few moments later, Gestewitz, whom the police had not yet handcuffed, tried to flee. About thirty feet into the chase, he tripped and fell and the police took him into custody. The State thereafter charged him with possession of a controlled substance (Xanax) and escape.
Gestewitz filed a motion to suppress the Xanax discovered during his detention. The trial court denied this motion, at which time Gestewitz pleaded guilty to possession of Xanax and reserved his right to appeal the denial as a dispositive order. Gestewitz went to trial on the charge of escape, resulting in a conviction. We find the detention was illegal and that it resulted in Gestewitz's arrest for possession of Xanax and escape. Therefore, we reverse Gestewitz's convictions for possession and escape, and direct the State to discharge him.
Our standard of review on a motion to suppress includes deference to the trial court to determine the credibility of witnesses and the weight of the evidence. See Wasko v. State, 505 So. 2d 1314, 1316 (Fla.1987) ("[A] reviewing court should not substitute its judgment for that of a trial court, but, rather, should defer to the trial court's authority as a factfinder."). Although we are required to accept the trial court's determination of historical facts, "a defendant is entitled to a de novo review of whether the application of the historical facts to the law establishes an adequate basis for the trial court's [determination]," i.e., whether the defendant's Fourth Amendment rights have been violated. See Delorenzo v. State, 921 So. 2d 873, 876 (Fla. 4th DCA 2006).
The sole basis for detaining Gestewitz was to give him a written warning stating that he could not re-enter the bar in question and, if he did re-enter, he would face arrest for trespass.
A detention for the purpose of issuing a trespass warning on behalf of a private ownerabsent other circumstances giving rise to a reasonable suspicion of other criminal activityis a consensual encounter. See Slydell v. State, 792 So. 2d 667, 672-73 (Fla. 4th DCA 2001); see also Rodriguez v. State, 29 So. 3d 310 (Fla. 2d DCA 2009) ("Accordingly, we conclude that a stop merely to issue a trespass warning is not a Terry stop, but rather a consensual encounter." (footnote omitted)). This is because a police officerunder the trespass statutemay issue a trespass warning for unauthorized entrance into a structure, but does not have the legal authority to conduct an investigatory stop or arrest for trespass unless the owner or his agent first warned the potential trespasser. See § 810.08(1), Fla. Stat. (2006);[1]S.N.J. v. State, 17 So. 3d 1258, 1259 (Fla. 2d DCA 2009) (stating that Florida's criminal trespass statute "requires that notice be given before a person can be guilty of trespassing on property," and that individuals "c[an] be legally detained for trespassing only if they were first warned to *835 leave the property"); see also Rodriguez, 29 So.3d at 310.
Section 810.08(3), Florida Statutes (2006), which defines a "person authorized" to issue a trespass warning, authorizes a law enforcement officer, on behalf of a property owner, to warn a particular individual that he or she may not re-enter the structure or conveyance and doing so would constitute the criminal offense of trespass.[2] There is nothing in section 810.08(3) defining how an authorized person is to convey a trespass warning.
In the instant case, the law enforcement officers could have chosen to give Gestewitz a verbal trespass warning and allowed him to leave when his friend arrived. If Gestewitz voluntarily decided to stay at the scene in order to receive a written trespass warning, that would have also been sufficient. However, the officers had no statutory or other lawful authority permitting them to detain Gestewitz for the purpose of issuing him a trespass warning. This is because, at the time the officers detained Gestewitz for warning purposes, there was no reasonable suspicion that Gestewitz committed the crime of trespass, as a trespass warning is a prerequisite to that crime.
Given these circumstances, and the officers having no fear for officer safety or reasonable suspicion that Gestewitz had committed a crime or was about to commit a crime, the detention was unlawful. See State v. Barnes, 979 So. 2d 991, 993 (Fla. 4th DCA 2008); see also Delorenzo, 921 So.2d at 878-79. Further compounding the illegality of the detention was one law enforcement officer's order for Gestewitz to remove his hands from his pockets. See, e.g., Delorenzo, 921 So.2d at 876 ("Ordering an individual to take his hand out of his pocket ordinarily turns a consensual encounter into a stop.").
Thus, the discovery of the Xanax bar was the product of an illegal detention, and the trial court should have granted the motion to suppress. It necessarily follows that because the discovery of the Xanax bar led to the arrest, which was unlawful, there could be no escape, as it stemmed from that unlawful arrest. Cf. State v. Frierson, 926 So. 2d 1139, 1143-45 (Fla. 2006) (providing that, absent circumstances purging the taint of an illegal stop, evidence found during an illegal stop is "fruit of the poisonous tree" stemming from the illegal stop and should be suppressed (citing Wong Sun v. United States, 371 U.S. 471, 487-88, 83 S. Ct. 407, 9 L. Ed. 2d 441 (1963)). We, accordingly, reverse the convictions for possession of the controlled substance Xanax and escape, and order Gestewitz to be discharged.
Reversed.
FARMER and DAMOORGIAN, JJ., concur.
NOTES
[1] Section 810.08(1) states:
Whoever, without being authorized, licensed, or invited, willfully enters or remains in any structure or conveyance, or, having been authorized, licensed, or invited, is warned by the owner or lessee of the premises, or by a person authorized by the owner or lessee, to depart and refuses to do so, commits the offense of trespass in a structure or conveyance.
[2] Section 810.08(3), Florida Statutes (2006), states:
As used in this section, the term "person authorized" means any owner or lessee, or his or her agent, or any law enforcement officer whose department has received written authorization from the owner or lessee, or his or her agent, to communicate an order to depart the property in the case of a threat to public safety or welfare. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565913/ | 284 S.W.2d 399 (1955)
Maggie Pearl HOLCHAK, Appellant,
v.
Edwin T. CLARK, Appellee.
No. 12854.
Court of Civil Appeals of Texas, San Antonio.
October 26, 1955.
Rehearing Denied November 30, 1955.
*400 John N. Barnhart, Reese Wade, Beeville, for appellant.
Reynolds N. Cate, San Antonio, for appellee.
NORVELL, Justice.
This being the second appeal of this cause, we refer to our former opinion, Clark v. Holchak, Tex.Civ.App., 247 S.W.2d 463, and that of the Supreme Court, Clark v. Holchak, 152 Tex. 26, 254 S.W.2d 101, for a more complete statement of the case.
The limitation or condition of defeasance contained in the habendum clause of the royalty deed reads as follows:
"It is further agreed and herein stipulated that in case there is no paying production on said land on December 10, 1945, and for six months thereafter, that this grant shall become null and void, and the minerals hereby conveyed shall revert to the said Grantor, their heirs and assigns, but should there be such production, then and in that event, this grant shall remain in full force and effect until such production ceases, after which this instrument shall become null and void."
Upon the former appeal, the Supreme Court held that the mineral estate conveyed by the deed would not terminate unless for a six months period following December 10, 1945, there should be an absence of paying production. The question presented by the record now before us is that expressly pretermitted by the Supreme Court, that is, "whether or not there was paying production from the land within six months after December 10, 1945," i. e., on June 10, 1946.
The answer to this inquiry is, or should be, simple of solution. Paying production undoubtedly means the production of oil, gas or other minerals from the premises in paying quantities. Mr. Leslie D. Harlowe, a practicing oil geologist and witness for the appellee, testified categorically that on or before June 10, 1946, there was no production from the well situated on the premises covered by the royalty deed. This testimony was uncontradicted and should end the matter, as the defeasance clause provides "that in case there is no paying production on said land on December 10, 1945, and for six months thereafter (June 10, 1946), that this grant shall become null and void, and the minerals hereby conveyed shall revert to the said Grantor, their heirs and assigns, * * *."
The trial judge, however, did not construe the word "production" as having the same meaning as that accorded to it by the oil geologist, nor did he construe the phrase "paying production" according to its common ordinary meaning, but gave it a much broader and more inclusive construction. This is apparent from the findings of fact and conclusions of law filed at appellant's request. From the findings it appears that on June 9, 1946, between the hours of midnight *401 and 8 A.M., a drill stem test was run in the well at the depth of approximately 4266 feet, and some 200 feet of pipe line oil and 180 feet of oily mud was recovered. Some of the oil was placed in a small bottle and the balance was run into the slush pits. Drilling was thereafter resumed and the well finally completed on July 14, 1946, at a depth of 7640 feet. Other than that recovered in the drill stem test of June 9, 1946, no oil was taken from the 4266 foot depth. The trial judge concluded as a matter of law that, "Said discovery of oil on June 9, 1946, kept said royalty deed in full force and effect until a reasonable time thereafter for the purpose of determining whether or not said well would produce oil in paying quantities."
The royalty deed, in the defeasance clause or elsewhere, does not provide that the discovery of oil, followed by the completion of a well within a reasonable time thereafter, shall operate to extend the term of the grant beyond June 10, 1946, the date set for termination unless paying production was obtained. The trial court's position, however, has support in the authorities. The doctrine that the discovery of oil within the definite term, followed by diligent operations thereafter, will extend the term of the lease or deed containing a "paying production" habendum clause, seems to have first been propounded by the Supreme Court of West Virginia. In Eastern Oil Co. v. Coulehan, 65 W.Va. 531, 64 S.E. 836, 839, the West Virginia Court seemingly proceeds upon the theory that the discovery of oil, gas or other minerals vests the lessee or grantee "with an estate in the right to produce oil and gas," and that this estate or right is not lost by abandonment or otherwise so long as operations are diligently continued after the expiration of the definite term and production is eventually obtained.
In construing the habendum clause in South Penn Oil Co. v. Snodgrass, 71 W.Va. 438, 76 S.E. 961, 967, 43 L.R.A.,N.S., 848, the Court said:
"May we not, therefore, say the qualifying clause `as oil or gas is produced' really means `as long as the premises are diligently and efficiently operated, providing minerals shall have been discovered within the fixed term'? Which construction harmonizes the more completely and naturally with the manifest purposes of the parties as indicated by the other provisions of the lease, their situation, and the surrounding circumstances?"
In a dissenting opinion, it was said that the majority of the Court "makes the contract between the parties to be other than that which they must have contemplated when the lease was executed."
In our opinion, the view expressed in the dissent is correct. One can not say that discovery of oil followed by diligent operations is the equivalent to production of oil and gas in paying quantities, without doing violence to the plain meaning of words in common use among English speaking peoples. Production has a commercial connotation. It means marketable oil or gas. Garcia v. King, 139 Tex. 578, 164 S.W.2d 509. All the record shows here is a favorable drill stem test within the definite term, followed by the completion of a producing well in another sand after the definite term had expired. A favorable test for oil or gas, coupled with a strong indication that the well may at some future day become a producer, is not the same as having a producing well. Numerous accidents, unforeseen happenings and the like may intervene between discovery and production. Had the parties desired a provision which would allow the term of the deed to be extended by a discovery of oil within the definite term, followed by diligent operations thereafter, they could have expressly so provided. As said by the United States District Court for the Eastern District of Oklahoma in Wickham v. Skelly Oil Co., 106 F. Supp. 61, 69, affirmed Skelly Oil Co. v. Wickham, 10 Cir., 202 F.2d 442: "No court will rewrite or reform a contract for the parties in the absence of fraud or mutual mistake, therefore, this court will not rewrite the lease contract for the parties and in effect substitute a reformed *402 contract for them to include something which is not present in the lease as made. To do so would be to construe a simple `well completion clause' to have the meaning of a `continuous drilling clause' or a `continuous development or operation clause'." Continuous operation clauses are usual in oil, gas and mineral leases and royalty conveyances. Rogers v. Osborn, 152 Tex. 540, 261 S.W.2d 311. It is not necessary that courts supply them.
We are aware of the circumstance that the West Virginia cases mentioned have been cited with approval in certain Texas decisions, and that other opinions have in substance stated the holding of the Snodgrass case, i. e., that discovery of minerals within the definite term, followed by diligent operations thereafter, is the equivalent of producing oil, gas or other minerals in paying quantities. Such cases are Texas Pacific Coal & Oil Co. v. Bratton, Tex. Civ.App., 239 S.W. 688; Scarborough v. New Domain Oil & Gas Co., Tex.Civ.App., 276 S.W. 331; Bouldin v. Gulf Production Co., Tex.Civ.App., 5 S.W.2d 1019, and Bain v. Strance, Tex.Civ.App., 256 S.W.2d 208. Upon examination, however, it appears that such statements were unnecessary to a decision of the particular case and hence are dicta. So far as we have been able to ascertain, the Supreme Court of Texas has never approved the West Virginia rule. In our opinion such rule is unsound in law and we decline to follow it. The words "discovered" and "production" do not mean the same thing. Morrison v. Swaim, Tex.Civ.App., 220 S.W.2d 493.
The West Virginia rule of Eastern Oil Co. v. Coulehan, 65 W.Va. 531, 64 S.E. 836, and South Penn Oil Co. v. Snodgrass, 71 W.Va. 438, 76 S.E. 961, 43 L.R.A.,N.S., 848, is fully discussed and pronounced unsound by Summers in his work on Oil & Gas, § 300; by Walker in "The Nature of the Property Interests Created by an Oil and Gas Lease in Texas," 8 Texas Law Review 483, l.c. 518, and by Veasey in "The Law of Oil and Gas," 19 Michigan Law Review 161, l.c. 182, wherein it was said that, "This decision (in the Snodgrass case) is contrary to the overwhelming weight of authority on the question. Moreover, it is utterly unsound in principle."
As there was no paying production from the premises covered by the royalty deed on June 10, 1946, the mineral estate reverted to the grantors of the deed, their heirs and assigns. The judgment of the trial court is accordingly reversed and judgment here rendered that appellee take nothing.
Reversed and rendered. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565941/ | 34 So. 3d 1176 (2010)
EWING
v.
STATE.
No. 2008-CT-00123-COA.
Supreme Court of Mississippi.
May 13, 2010.
Petition for Writ of Certiorari Denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565935/ | 34 So. 3d 1069 (2010)
William James REILLY, Plaintiff-Appellant,
v.
Ernesto A. SPINAZZE, M.D., Christus Health Northern Louisiana d/b/a Christus Schumpert Health System, Christus Schumpert Rehab and Clinton G. McAllister, M.D., Defendant-Appellees.
No. 45,209-CA.
Court of Appeal of Louisiana, Second Circuit.
April 14, 2010.
*1070 Richard L. Fewell, Jr., for Appellant.
Mark A. Goodwin, Shreveport, for Appellee, Christus Health Northern Louisiana d/b/a Christus Schumpert Health System.
Robert G. Pugh, Jr., Shreveport, for Appellees, Ernesto A. Spinazze, M.D. and Clinton G. McAllister, M.D.
Before WILLIAMS, STEWART and DREW, JJ.
WILLIAMS, J.
The plaintiff, William James Reilly, appeals the district court's grant of summary judgment in favor of the defendants, Christus Health Northern Louisiana, d/b/a Christus Schumpert Health System ("Schumpert"). For the following reasons, we affirm. We remand this matter to the district court for further proceedings.
FACTS
On December 18, 2005, the plaintiff was seriously injured when a horse fell on him at his place of employment, Louisiana Downs, in Bossier City, Louisiana. The plaintiff was initially treated for his injuries in the emergency room of Willis Knighton Medical Center, where tests revealed that he had multiple pelvic fractures, a large hematoma in the pelvic area and a small disc herniation at L5-S1. The emergency room staff inserted a Foley catheter into the plaintiff's penis and threaded it through his urethra into his bladder to allow his urine to drain; the plaintiff was admitted to the orthopedics unit at Willis Knighton.
On December 23, 2005, the plaintiff was admitted to Christus Schumpert-Bossier for rehabilitation and treatment. Dr. Clinton McAlister was the admitting physician. One day following the plaintiff's admission, Dr. Robert Saucier examined him for a family practice consult. Dr. Saucier noted the presence of the Foley catheter, visible *1071 bruising of the plaintiff's penis and the presence of blood in the plaintiff's urine. Subsequently, the plaintiff developed gross hematuria (a large amount of blood in the urine). On December 27, 2005, Dr. McAlister consulted Dr. Ernesto A. Spinazze, a urologist, to examine the plaintiff with regard to the hematuria. Dr. Spinazze noted small blood clots in the tubing of the plaintiff's catheter, ecchymosis (purple discoloration of the skin) of the plaintiff's penis and scrotum and the presence of "blood-tinged" urine in the catheter. Dr. Spinazze ordered a cystogram and a CT scan of the plaintiff's abdomen and pelvis. He also ordered that the Foley catheter be left in place.
On January 3, 2006, the plaintiff's catheter was supposed to have been removed and another catheter inserted. The nurses notes revealed that the nursing staff was unsuccessful in removing the catheter; however, the following day, the catheter was removed and a new catheter was inserted. The plaintiff testified that prior to the insertion of the catheter, he told the nurse that it was not the right catheter and that it was too large. He also testified that the nurse forced the catheter into his penis, causing extreme pain.
On January 5, 2006, the plaintiff was discharged from Schumpert with the catheter in place. He was followed by Dr. Spinazze and other physicians at Regional Urology. On January 12, 2006, the catheter was removed in accordance with Dr. Spinazze's orders. Thereafter, the plaintiff developed difficulty urinating. On January 17, 2006, plaintiff returned to the emergency room at Schumpert, and, by then, his urine stream had stopped completely. The nurses made multiple attempts to insert a Foley catheter, but were unable to do so. A physician was eventually able to insert the catheter. On January 23, 2006, the plaintiff was seen by Dr. Tobin Grigsby, who noted that the catheter remained in place, and the plaintiff had developed cramping, which was consistent with bladder spasms. At some point, the plaintiff was examined by Dr. Spinazze, who determined that the plaintiff had a bulbar stricture.[1] On February 7, 2006, the plaintiff underwent a cystoscopy and internal urethrotomy.[2] However, the plaintiff continued to experience difficulty urinating, and the procedure was repeated on March 15, 2006. The catheter continued to cause the plaintiff severe pain, so he returned to Dr. Spinazze on March 25, 2006 to have it removed. According to the plaintiff, the catheter was difficult to remove, so a nurse at Regional Urology twisted the catheter until it loosened and removed it. Plaintiff testified that he discharged blood and tissue from his penis when the catheter was removed. Plaintiff alleged that, as the result of the negligence of the nurses and physicians involved, he is now impotent and has had to endure several surgical procedures.
The plaintiff filed a claim under the Louisiana Medical Malpractice Act, LSA-R.S. 40:1299.41, et seq., against Dr. Spinazze, Dr. McAlister and Schumpert.[3] On April 15, 2008, a medical review panel unanimously concluded that Dr. McAlister and Dr. Spinazze met the applicable standard of care. The panel also concluded that the nursing personnel did not breach *1072 the applicable standard of care. The panel stated:
It is quite common in injuries involving urethral stricture that tissue and blood can be seen when catheters are removed. Moreover, after a urethral injury that may involve scarring, a catheter procedure can be quite painful, particularly if a stricture is present. In such an event, the choice of a Foley catheter is appropriate. The Panel believes that the choice of catheter was appropriate.
The Panel also notes that Mr. Reilly, based on the medical records, was a very demanding patient. Moreover, catheterizations in younger patients [are] frequently somewhat painful. The Panel believes that the nursing personnel acted reasonably in connection of [sic] the care provided to Mr. Reilly.
* * *
The Panel believes that Mr. Reilly's residual impotence is most likely causally related to the severe trauma which he sustained in December 2006, when the horse fell on him.
On July 18, 2008, the plaintiff filed a petition for damages against the same parties. The plaintiff alleged that the defendants were negligent in failing to: (1) use the appropriate technique to insert and/or remove a urinary catheter; (2) use the appropriate type of catheter; (3) use due care expected of a physician and/or employees within a medical facility under the circumstances; and (4) provide medical care consistent with the appropriate standards.
Following discovery, Schumpert filed a motion for summary judgment, contending the plaintiff lacked the necessary expert medical testimony to support his claims against the hospital and/or its employees.[4] In support of the motion, Schumpert relied upon the opinion of the medical review panel, which found no deviation from the standard of care by the defendants. Schumpert also relied upon a copy of the plaintiff's answers to interrogatories, in which the plaintiff stated that he did not have any retained experts.
The plaintiff opposed the motion for summary judgment, submitting an affidavit from Mary L. Rinaldi, a registered nurse, who had opined that Schumpert had breached the standard of care in treating the plaintiff. In her affidavit, Ms. Rinaldi attested that she had reviewed the plaintiff's medical records, and after summarizing the medical records, Ms. Rinaldi questioned Dr. Spinazze's decision to leave the catheter in place after the results of the CT and cystogram showed that the plaintiff's bladder was elongated. Ms. Rinaldi stated, "I question why the catheter was not removed at that time simply because common sense would make one believe that the catheter itself was causing trauma, thus an increase in bleeding." Ms. Rinaldi also questioned the physicians' decision to leave the catheter in place from December 18, 2005, until January 3, 2006, stating, "Rarely is a Foley catheter left in a 48 year old man for more than 3 days." Ms. Rinaldi noted that one physician's notes had made reference to the plaintiff's use of opiates without making reference to the plaintiff's urinary retention. She stated, "I find that interesting because opiate use can directly cause major issues with the inability to empty the bladder." Additionally, Ms. Rinaldi took issue with a physician's notes concerning the plaintiff's continued request for narcotics. In conclusion, Ms. Rinaldi opined:
It is my opinion that the above issues have resulted in both urinary and sexual *1073 impairment for Mr. Reilly due to the defendant's negligence.... Prior to this accident, Mr. Reilly never had problems passing urine or erectile dysfunction. No doubt these issues occurred secondary to nerve and structural damage resulting from [F]oley catheter mismanagement by the defendants. It is very clear that the life as a 48 year old male will never be the same due to this negligence.
The district court granted summary judgment, finding that Ms. Rinaldi's affidavit was inadmissible, and even if it was admissible, it was insufficient to defeat summary judgment with regards to Schumpert. The plaintiff appeals.
DISCUSSION
The plaintiff contends the district court erred in rejecting Ms. Rinaldi's affidavit. The plaintiff argues that Ms. Rinaldi's assessment "makes it clear that plaintiff's troubles began on January 3 and 4, 2006 after the nurses provided substandard treatment, and the nurses and others were at fault." The plaintiff also argues that genuine issues of material fact existed, and therefore, summary judgment is precluded.
A motion for summary judgment is a procedural device used when there is no genuine issue of material fact for all or part of the relief prayed for by a litigant. Samaha v. Rau, XXXX-XXXX (La.2/26/08), 977 So. 2d 880; Duncan v. USAA Ins. Co., 2006-363 (La. 11/29/06), 950 So. 2d 544; See also LSA-C.C.P. art. 966. Appellate courts review summary judgments de novo, while considering the record and all reasonable inferences drawn from the record in the light most favorable to the non-movant. Hines v. Garrett, XXXX-XXXX (La.6/25/04), 876 So. 2d 764; Austin v. Bundrick, 41,064 (La.App.2d Cir.6/30/06), 935 So. 2d 836. Summary judgment is warranted only if there is no genuine issue of material fact and the mover is entitled to judgment as a matter of law. LSA-C.C.P. art. 966(C)(1). In Hines, supra, our supreme court stated:
In ruling on a motion for summary judgment, the judge's role is not to evaluate the weight of the evidence or to determine the truth of the matter, but [is] to determine whether there is a genuine issue of triable fact. All doubts should be resolved in the non-moving party's favor. A fact is material if it potentially insures or precludes recovery, affects a litigant's ultimate success, or determines the outcome of a legal dispute. A genuine issue is one as to which reasonable persons could disagree; if reasonable persons could reach only one conclusion, there is no need for a trial on that issue and summary judgment is appropriate.
Id. at 765-66.
The burden of proof remains with the movant. LSA-C.C.P. art. 966(C)(2). 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. Id. 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. Id.
To establish a claim for medical malpractice, a plaintiff must prove, by a preponderance of the evidence: (1) the standard of care applicable to the defendant; *1074 (2) that the defendant breached that standard of care; and (3) that there was a causal connection between the breach and the resulting injury. LSA-R.S. 9:2794(A). A determination of whether a hospital has breached the duty of care to a particular patient depends upon the circumstances and facts of the case. Hunt v. Bogalusa Community Medical Center, 303 So. 2d 745 (La.1974); Clark v. G.B. Cooley Service, 35,675 (La.App.2d Cir.4/5/02), 813 So. 2d 1273.
A hospital is responsible for the negligence of its nurses under the respondeat superior doctrine. Hinson v. The Glen Oak Retirement System, 37,550 (La. App.2d Cir.8/20/03), 853 So. 2d 726, writ denied, 2003-2835 (La.12/19/03), 861 So. 2d 572; The Estate of Wilburn v. Leggio, 36,534 (La.App.2d Cir.3/19/03), 842 So. 2d 1175, writ denied, XXXX-XXXX (La.6/6/03), 845 So. 2d 1095. The liability imputed to the medical facility is to be viewed in light of the employee's actions. Hinson, supra; In re Triss, XXXX-XXXX (La.App. 4th Cir.6/5/02), 820 So. 2d 1204.
Nurses and other health care providers are subject to the same standard as physicians. Cangelosi v. Our Lady of the Lake Regional Medical Center, 564 So. 2d 654 (La.1989); Hinson, supra. It is a nurse's duty to exercise the degree of skill ordinarily employed, under similar circumstances, by the members of the nursing or health care profession in good standing in the same community or locality, and to use reasonable care and diligence, along with his or her best judgment, in the application of his or her skill to the case. Hinson, supra; King v. State, Dept. of Health and Hospitals, 31,-651 (La.App.2d Cir.2/24/99), 728 So. 2d 1027, writ denied, 99-0895 (La.5/7/99), 741 So. 2d 656.
In the instant case, pursuant to the above statutory and jurisprudential rules, the plaintiff must establish the standard of care applicable to the nursing staff at Schumpert, a violation of that standard of care and a causal connection between the nurses' alleged negligence and the plaintiff's injuries resulting therefrom. See, Pfiffner v. Correa, XXXX-XXXX, XXXX-XXXX, XXXX-XXXX (La.10/17/94), 643 So. 2d 1228; Hinson, supra. Expert testimony is generally required to establish the applicable standard of care and whether or not that standard was breached, except where the negligence is so obvious that a lay person can infer negligence without the guidance of expert testimony. Samaha, supra; Pfiffner, supra; Tillman v. Eldridge, 44,-460 (La.App.2d Cir.7/15/09), 17 So. 3d 69.
Courts in this state have not been reluctant to accept the testimony of registered nurses with regards to the standard of care and alleged negligence of nurses and certified nursing assistants. See, Hinson, supra; Hall v. Our Lady of the Lake R.M.C., XXXX-XXXX (La.App. 1st Cir.6/20/07), 968 So. 2d 179; Newsom v. Lake Charles Memorial Hospital, XXXX-XXXX (La.App. 3d Cir.4/4/07), 954 So. 2d 380, writ denied, XXXX-XXXX (La.6/15/07), 958 So. 2d 1198.
In the instant case, the plaintiff introduced the affidavit of Ms. Rinaldi. The district court found that the affidavit was inadmissible, stating:
[O]n the issue of whether the plaintiff's affidavit should even be admitted, of course the Court is mindful that in a medical malpractice case that expert opinion testimony is required to defeat the summary judgment if the defense has, and in this case particularly rel[ied] on the ruling of the Medical Review Panel. I don't believe that the affidavit of the nurse is sufficient to defeat summary judgment, so I would rule in favor *1075 of the defense that the affidavit should not be admitted. However, I will go even further and say that even if it was admitted, I don't believe itI believe it goes beyond the scope of what the expertise of a registered nurse would be, particularly when her affidavit is really addressing what the different doctors did. I agree with defense counsel that [in] my reading of her affidavit, I was never able to see where she really addressed... what the nurses may have done or may have failed to do, the nurses at Schumpert. So, even if I would admit the affidavit, I still believe that it is not sufficient to raise such material issues of fact that would defeat the Motion for Summary Judgment, which primarily relies on the finding of the Panel.
We agree. Our review of the record reveals that Ms. Rinaldi went to great lengths to express her opinion of what the physicians involved should or should not have done. More importantly, Ms. Rinaldi made no mention of any alleged negligent acts on the part of the nurses involved. Additionally, there is no mention in the affidavit of the applicable standard of care for the nurses involved and/or whether the nurses breached that standard. Therefore, we find that the district court was correct in finding that Ms. Rinaldi was not qualified to express any opinion concerning any negligence or a breach of the standard of care on the part of the physicians. Accordingly, we find no error in the district court's grant of summary judgment in favor of Schumpert. This case is remanded to the district court for further proceedings.
CONCLUSION
For the reasons set forth herein, we affirm the district court's grant of summary judgment in favor of Christus Health Northern Louisiana, d/b/a Christus Schumpert Health System, and remand for further proceedings. Costs of the appeal are assessed to the plaintiff, William James Reilly.
AFFIRMED; REMANDED FOR FURTHER PROCEEDINGS.
NOTES
[1] A bulbar stricture is an area of hardened tissue in the urethra, which narrows the urethra and reduces its diameter.
[2] A urethrotomy is an operation which involves the incision of the urethra to relieve a stricture.
[3] Christus Schumpert Rehab was also named as a defendant, but was voluntarily dismissed from the proceedings.
[4] The case against Dr. Spinazze and Dr. McAlister is still pending. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565939/ | 159 F.2d 219 (1947)
McCOMB et al.
v.
McCORMACK et al.
No. 11482.
Circuit Court of Appeals, Fifth Circuit.
January 8, 1947.
Rehearing Denied February 25, 1947.
*220 R. O. Kenley and Walter F. Brown, both of Houston, Tex., and Perry McComb, of Conroe, Tex., for appellants.
Jesse W. McDaniel, Robert L. Cole, Jno. C. Townes, Dwight H. Austin, Brian S. Odem, U. S. Atty., and Joseph W. Cash, Asst. U. S. Atty., all of Houston, Tex., and O. B. Wigley, of Galveston, Tex., J. L. Pitts, of Conroe, Tex., Julius H. Runge, of Dallas, Tex., and F. K. Dougharty, of Liberty, Tex., for appellees.
Before SIBLEY, WALLER, and LEE, Circuit Judges.
LEE, Circuit Judge.
In 1831 the Governments of Cohuila and Texas granted to James Hodge, on a survey and field notes made by Surveyor Wightman, what is known as the James Hodge Survey or the James Hodge League. While a dispute as to the location of the survey exists among the parties, all of them claim interests arising either out of record titles or out of estoppel, acquiescence, and limitation. To facilitate the description of the claims by the various parties within the survey, and to understand *221 the pleadings, we attach a map taken form a survey of the James Hodge League made in 1942 by J. S. Boyles:
In 1846 the James Hodge Survey by deed was divided into two equal areas, the East and West halves. On his map Boyles
*222 shows this division by the line AA. In 1862 the owners of the Eastern half of the James Hodge Survey conveyed by acreage a 400- and a 210-acre tract off the Southeastern corner of the survey. On his map Boyles shows these two tracts, combined, between the line HH and the San Jacinto River. After these two tracts were split off, the owners of the balance of the East half of the James Hodge Survey split the unconveyed portion into halves. Boyles on his map shows the Western one-half as the area between AA and FF, and he shows the Eastern one-half as the area between FF and HH. In 1876 the owner of the Western half of the James Hodge Survey, shown by Boyles as the land West of line AA, split the land by deed into halves. Boyles shows on his map the division line as BB: one half lying between BB and the Western boundary of the James Hodge Survey and the other half lying between BB and AA. The lines BB, AA, FF and HH on his map were calculated by him and are not represented by any marks on the ground.
On December 6, 1941, the plaintiffs[1] filed their original complaint against certain defendants[2] in trespass to try title with alleged jurisdiction based upon diversity of citizenship.[3] By a "first amended complaint," filed on October 1, 1942, the alleged residence of one plaintiff was changed,[4] and numerous defendants were added.[5] All persons, except the cotenants of the plaintiffs, claiming an interest in the James Hodge Survey were then parties before the court. The plaintiffs, as owners of an undivided half interest, asked judgment for the East half of the West half of the James Hodge Survey as they described it in metes and bounds (this claim is shown by Boyles as the land lying between AA and BB on his map) or the East half of the West half as the court might find it. They alleged that they knew not the exact nature of the claims of the defendants but that they were entitled to judgment against the defendants for title and possession and the removal of the cloud from their title.
By motions defendants, Perry McComb, et al., Grogan-Cochran, and the J. S. Hunt Lumber Co., Inc., unsuccessfully attacked the jurisdiction of the court over plaintiffs' original claim on the theory that plaintiffs' cotenants, who owned the other one-half undivided interest in plaintiffs' claimed East Half of the West Half, were indispensable to the suit and that their appearance in the suit with the then plaintiffs would destroy the diversity of citizenship between the plaintiffs and defendants.
On October 30, 1942, eighteen parties, including three nonresident aliens, citizens of Germany, intervened with permission of the court in the suit to assert claim to undivided interests to the East Half of the *223 West Half of the James Hodge Survey. On January 10, 1944, these interveners, by an amended plea of intervention, adopted in substance the plaintiffs' "first amended complaint."[6]
On July 3, 1943, the United States intervened and alleged that the three nonresident aliens[7] owned an undivided five-eighths (5/8) of one-fourth (¼) of the East Half of the West Half of the James Hodge Survey; that by an order of the Alien Property Custodian made on February 19, 1943, the interest of these alien nonresidents had vested in the Alien Property Custodian. The United States, in protection of the interests vested in the Alien Property Custodian, adopted the pleadings of the plaintiffs in their "first amended complaint."
On January 5, 1944, two other parties, Mrs. Ed. J. Drake and R. H. Moffatt, both residents of Texas, intervened to assert claim to their interests in the East Half of the West Half of the James Hodge Survey by adopting in substance the pleadings of the plaintiffs' "first amended complaint."
Both the plaintiffs and the different interveners claimed as cotenants without any conflicting interests among themselves. After these interventions, all the cotenants interested in the East Half of the West Half of the James Hodge Survey were before the court, and, consequently, all the interests in the survey were then before the court.
In order to understand the proper alignment of the parties for the purpose of determining whether the court had jurisdiction over the various claims, counterclaims, and cross-claims, it is necessary to determine beyond the actual formal pleadings what the controversies between the parties were at the trial. Only the McComb defendants actively disputed the correctness of the Boyles survey as to the location or the computed division of the James Hodge Survey. That does not mean, however, that all of the contentions of the defendants other than the McComb group were identical with those of the plaintiffs and interveners. The McComb group of defendants tried to establish a right to the land lying between AA and DD by way of estoppel and limitation on the hypothesis that their contention as to the incorrectness of the Boyles survey was not adopted by the court.
The Hunt Lumber Company and the Lamberton Drilling Company at the trial were primarily interested in proving title by estoppel, acquiescence, and limitation to the land lying between EE and FF, against the McComb group of defendants, who were claiming this same strip. No one was actively disputing the title of the Hunt Lumber Company and the Lamberton Drilling Company to the land lying between FF and GG and the adjoining land lying between the San Jacinto and Lake Creek, to which they had record title.[8]
Mrs. Zula Stewart, et al., claimed record title to the 610 acres shown in the Southeastern corner of the James Hodge Survey, between HH and the San Jacinto River, and claimed title to the land lying between GG and HH as shown on Boyles's map, by way of estoppel, acquiescence, and limitation.
*224 At the trial the Sealy and Smith Foundation group of defendants and the Humble Oil & Refining Company were chiefly interested in, besides the establishment of the Boyles version of the survey and their record title to the West Half of the West Half thereof, the establishment of their title to the land shown by Boyles between the line BB and the Western boundary of the James Hodge Survey.
In its judgment the court below established the location of the James Hodge Survey by metes and bounds as shown by Boyles on his map; the land of the Sealy group as shown by the strip between BB and the Western boundary of the James Hodge Survey; the land of the plaintiffs and interveners as shown by the strip between lines BB and AA on Boyles's map; the land of the McComb group as that between lines AA and EE on Boyles's map; the land of the Hunt Lumber Company and the Lamberton Drilling Company as the strip between lines EE and GG and the adjoining land between the San Jacinto River and Lake Creek; and the land of the Stewart defendants as that between GG and the San Jacinto River.
Perry McComb, N. M. Garrett, and George Clyburn, three members of the McComb group of defendants, bring this appeal. The assignment of errors for this appeal may be classified into these questions: (1) Did the court below have jurisdiction over the various claims?[9] (2) Did the court below err in making its finding of fact as to the location and divisions of the James Hodge Survey? (3) Did the court below improperly admit certain evidence?
Appellants' question as to the jurisdiction of the court below may be subdivided into four further questions: (1) Before the intervention of any of plaintiffs' cotenants, were the cotenants indispensable parties to the plaintiffs' claims? (2) Did the court have jurisdiction over the claims of the interveners and did their interventions destroy the original jurisdiction of the court? (3) Should the court below have realigned any of the defendants with the plaintiffs so as to destroy the diversity of citizenship between the plaintiffs and defendants? (4) Did the court have jurisdiction over cross-claims by the defendants Hunt Lumber Company and Lamberton Drilling Company, against the McComb defendants?
The cotenants of the plaintiffs were not, prior to their intervention, indispensable parties. Under the Texas law:
"* * * one tenant in common may maintain an action of trespass to try title without joining his cotenant. * * * one tenant in common may maintain an action of trespass to try title against a stranger.
* * * * * *
"The term `stranger,' as here used, means one who claims by title other than that asserted by the plaintiffs; or, more strictly speaking, one who, in deraigning title, does not in any way connect himself with that asserted by plaintiff."[10]
In speaking of tenants in common, the Supreme Court of Texas has said:
"* * * Tenants in common do not claim through or under each other, and there is no such privity between them that a judgment for or against one of them, affecting title to land, will bind the others."[11]
The question whether the court had jurisdiction over the claims of the interveners and whether the intervention destroyed the original diversity of citizenship, we have already settled in Drumright et al. v. Texas Sugarland Co., et al.[12] In *225 that suit we held that where a plaintiff brought suit to foreclose a mortgage against a defendant on grounds of a diversity of citizenship and where the intervener could not have originally joined the plaintiff without destroying the diversity of citizenship, he could intervene to protect an interest he had in the land under foreclosure despite the subsequent lack of diversity between intervener and defendant.[13]
The plaintiffs were chiefly interested in establishing the Boyles survey, and, while several of the defendant groups were likewise interested in the establishment of that survey, the establisment of that survey was not their primary interest. Their primary interest lay in the establishment of their claims by estoppel, limitation, or acquiescence, regardless of the location of the James Hodge Survey. For these reasons the interests of the defendants were not identical with those of the plaintiffs.
It follows that the court below did not err in failing to realign certain of the defendants as parties plaintiff at any stage in the proceeding.
"* * * The specific question is this: Does an alignment of the parties in relation to their real interests in the `matter in controversy' satisfy the settled requirements of diversity jurisdiction?
"As is true of many problems in the law, the answer is to be found not in legal learning but in the realities of the record. Though variously expressed in the decisions, the governing principles are clear. To sustain diversity jurisdiction there must exist an `actual,' Helm v. Zarecor, 222 U.S. 32, 36, 32 S. Ct. 10, 56 L. Ed. 77, `substantial,' Niles-Bement-Pond Co. v. Iron Moulders' Union, 254 U.S. 77, 81, 41 S. Ct. 39, 41, 65 L. Ed. 145, controversy between citizens of different states, all of whom on one side of the controversy are citizens of different states from all parties on the other side. Strawbridge v. Curtiss, 3 Cranch 267, 2 L. Ed. 435. Diversity jurisdiction cannot be conferred upon the federal courts by the parties' own determination of who are plaintiffs and who defendants. It is our duty, as it is that of the lower federal courts, to `look beyond the pleadings and arrange the parties according to their sides in the dispute.' [City of] Dawson v. Columbia Ave. Saving Fund, Safe Deposit, Title & Trust Co., 197 U.S. 178, 180, 25 S. Ct. 420, 421, 49 L. Ed. 713. Litigation is the pursuit of practical ends, not a game of chess. Whether the necessary `collision of interests,' [City of] Dawson v. Columbia Trust Co., supra, 197 U.S. at page 181, 25 S.Ct. at page 421, 49 L. Ed. 713, exists, is therefore not to be determined by mechanical rules. It must be ascertained from the `principal purpose of the suit,' East Tennessee, V. & G. R. Co. v. Grayson, 119 U.S. 240, 244, 7 S. Ct. 190, 192, 30 L. Ed. 382, and the `primary and controlling matter in dispute,' Merchants' Cotton-Press Storage Co. v. Insurance Co. [North America], 151 U.S. 368, 385, 14 S. Ct. 367, 373, 38 L. Ed. 195. These familiar doctrines governing the alignment of parties for purposes of determining diversity of citizenship have consistently guided the lower federal courts and this Court."[14] [Emphasis added.]
The principal purpose of the suit and the primary and controlling matter in the suit, so far as the defendants other than the McComb group were concerned, was the establishment of their claims, regardless of the location of the James Hodge Survey. Therefore, none of the defendants need be realigned with the plaintiffs and interveners.
The appellants urge that the court below lacked jurisdiction to render judgment against appellants on the crossclaims of the J. S. Hunt Lumber Company and the Lamberton defendants for the land lying between the lines EE and GG and the adjoining land between the San Jacinto River and Lake Creek because the cross-claims rest upon neither the requisite diversity of citizenship between the crossclaimants and the other parties to the suit nor the requisite $3000 amount in controversy.
*226 The appellants on this appeal do not claim the land lying between lines FF and GG and the adjoining land between the San Jacinto River and Lake Creek. Therefore, appellants' attack on this appeal of the judgment of the court below as to these lands raises a purely abstract question. This court will determine only matters actually in controversy and essential to a decision in the particular case before it.[15]
As to the land lying between the lines EE and FF, the appellants may not attack the jurisdiction of the court below for another reason. The appellants in their own cross-claim against the various parties to the suit asked judgment for the land lying between the lines EE and FF. The court below rendered judgment against the appellants in favor of the Hunt Lumber Company and the Lamberton defendants on this cross-claim. The appellants are not attacking the jurisdiction of the court over their own cross-claim. We need not, therefore, determine the propriety of the appellants' cross-claim unless the requisite amount of $3,000 and a diversity of citizenship must support it. "Cross-claims, like all cross-bills, and like compulsory counterclaims are considered as auxiliary or ancillary to the principal claim to which they are related, and the jurisdiction which supports that claim will support the crossclaim."[16]
Since the court below properly entered judgment on appellants' cross-claim for the Hunt Lumber Company and the Lamberton defendants against the appellants, we need not determine whether the court had jurisdiction over that part of the cross-claims of the Hunt Lumber Company and the Lamberton defendants involved in the appellants' cross-claim. A lack of jurisdiction over the cross-claims of the Hunt Lumber Company and the Lamberton defendants would not deprive the claimants of the right of contesting another cross-claim that concerned the same land, between lines EE and FF, and the right upon a successful contest to receive a judgment in their favor, for that land.
At the trial the McComb defendants attempted to show by the testimony of a surveyor, one Atkinson, that Boyles had incorrectly located the boundaries of the James Hodge Survey. At the trial they were the only ones who actively disputed the Boyles survey. Boyles had located the lines of the James Hodge League by certain witness marks on the ground. None of these witness marks were originally placed by Wightman, but they had been accepted by everyone, surveyors and interested landowners alike, as the true boundaries of the James Hodge Survey. Atkinson never had made a complete survey of the James Hodge Survey, but he claimed that Boyles had misplaced the James Hodge Survey because Atkinson had located one of the original Wightman witness marks at the Northwest corner of the survey. The location of the Northwest corner at this mark would have added lands to the survey sufficient to place the land described in metes and bounds in the McComb answer in the Eastern half of the James Hodge Survey rather than partly in the Eastern half and partly in the Western half, as placed by Boyles. The district court found that the correction of Atkinson was erroneous and the Boyles survey correctly located the James Hodge League and the divisions thereof. Since the record contains "substantial credible evidence" to support the finding as to the Boyles survey and the other findings of fact, we may not disturb those findings.[17]
The evidence likewise supports the finding of the court below that the McComb defendants did not have sufficient *227 possession of the land between AA and DD to support their counterclaim and that plaintiffs and interveners were not estopped to claim to line AA.
The appellants objected to the admission of much testimony before the court. Since the trial was not to a jury, the judge could admit any evidence offered and he could reserve decision on what legal effect he should give to it until he decided the case. The admission of evidence to which he gave no weight in his decision was harmless error. Federal Rules of Civil Procedure, 61.
The judgment appealed from is affirmed.
NOTES
[1] Lillie B. McCormack, Mary W. Millard, Adella W. Beard, Rebecca W. Lewis and husband, B. A. Lewis, all citizens of Kentucky.
[2] Grogan-Cochran Lumber Co., Perry McComb, Roy Simpson, N. M. Garrett, George Clyburn, M. R. House, J. S. Hunt Lumber Co., Inc., all of Texas; and Jennie Sealy Smith, of New York.
[3] No doubt exists as to the fact that $3,000 was involved.
[4] From Kentucky to Virginia.
[5] The defendants, including those in the original complaint, were then as follows: Grogan-Cochran Lumber Co., Perry McComb, N. M. Garrett, George Clyburn, Roy Simpson, M. R. House, Alfred H. Smith, David N. Picton, Jr., Stephen L. Pinckney, J. W. Cain, Harry C. Hanszen, D. B. McDaniels, and J. P. Scranton, all of Texas; Raymond Dickson, of Arizona; The Federal Royalty Co., of Texas; J. S. Hunt Lumber Co., of Texas; J. S. Lamberton, of Oklahoma; Georgia L. Seaton and husband, William L. Seaton, of Ohio; Mrs. Ruth L. Supplee and husband, George W. Supplee, residents of India and citizens of the State of Pennsylvania, U. S. A.; T. W. Sutherland, of Texas; M. C. Kifer, of Pennsylvania; Mrs. Zula Stewart, of Texas; Lillie Kayser Butler and husband, Earl H. Butler, of Texas; San Jacinto National Bank, Executor of the Estate of J. Llewellyn, deceased, of Texas; The Sealy and Smith Foundation, of Texas; Fred W. Catterall, one of the trustees under the will of John Sealy, deceased, of Texas; City Bank Farmers Trust Company, one of the trustees under the will of John Sealy, deceased, of New York; Rebecca Terry White, one of the trustees under the will of John Sealy, deceased, of Maryland; Humble Oil & Refining Co., of Texas.
[6] The interveners are: Julia Runge, of Texas; Catherine Scott Runge, of Texas; Dorothy Rose DeShong and husband, Andrew W. DeShong, Jr., and Julius H. Runge, of Texas; Henry J. Runge, of Texas; Adrian Rose McGee and husband, Kline McGee, of North Carolina; Margaret Rose Turnbull, of Texas, and her husband, presently residing in England; Henry J. Rose, of South Carolina; Higginbotham Brothers & Co., of Texas; Citizens National Bank, now in liquidation, of Texas; Mrs. J. R. Morris, and husband, Jim Morris, of Texas; Mrs. Anna Stromeyer, Meta Eyl, and Hans Eyl, of Hanover, Germany.
[7] Mrs. Anna Stromeyer, Meta Eyl, and Hans Eyl, residents of Hanover, Germany. They were three of the eighteen parties in the intervention of October 30, 1942.
[8] The cross-claims of Hunt Lumber Company and Lamberton Drilling Company included all the land lying between lines EE and GG and the adjoining land between the San Jacinto River and Lake Creek; but at the trial the McComb group made no claim to the lands between lines FF and GG and the adjoining land between the San Jacinto River and Lake Creek, thus leaving in contest, on the merits, between the parties under the cross-claims the lands between EE and FF.
[9] Since only members of the McComb group of defendants are making this appeal, only questions involving their interests may here be raised. As far as the jurisdiction of the court over the counterclaims of the various defendants is concerned, the McComb group is only interested in the counterclaims of the Hunt Lumber Company and the Lamberton Drilling Company to the extent that said counterclaims affect the land between the lines EE and FF. As far as the divisions of the survey are concerned, the McComb group is interested only in the lines that directly affect their interests.
[10] Pilcher v. Kirk, 55 Tex. 208.
[11] Kirby Lumber Corporation v. Southern Lumber Co., 1946, Tex., 196 S.W.2d 387, 389.
[12] 16 F.2d 657(1927).
[13] See criticism in 2 Moore's Federal Practice, p. 2413, § 24.15.
[14] City of Indianapolis v. Chase National Bank of City of New York, 314 U.S. 63, 69, 62 S. Ct. 15, 16, 86 L. Ed. 47.
[15] Marker, Federal Appellate Jurisdiction and Procedure, 296, § 252. See Alexander Sprunt & Son v. United States, 281 U.S. 249, 50 S. Ct. 315, 74 L. Ed. 832; Standard Oil Co. v. United States, 283 U.S. 163, 51 S. Ct. 421, 75 L. Ed. 926.
[16] 1 Moore 726, § 13.08 and cases cited therein. Cf. Galveston, Harrisburg & San Antonio Ry. Co. v. Hall, et al., 1935, 5 Cir., 70 F.2d 608; cf. Republic National Bank & Trust Co., et al., v. Massachusetts Bonding & Insurance Co., et al., 1934, 5 Cir., 68 F.2d 445.
[17] Sanders v. Leech, et al., 5 Cir., 158 F.2d 486; Federal Rules of Civil Procedure, rule 52 (a), 28 U.S.C.A. following section 723c. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565976/ | 284 S.W.2d 820 (1955)
George C. ENTWISTLE, Appellant,
v.
CARRIER CONVEYOR CORPORATION, Appellee.
Court of Appeals of Kentucky.
December 9, 1955.
*821 R. I. McIntosh, Woodward, Hobson & Fulton, Louisville, for appellant.
Thomas J. Wood, Stites, Wood, Helm & Taylor, Louisville, for appellee.
STANLEY, Commissioner.
The appellee, Carrier Conveyor Corporation, a Louisville manufacturer, in May, 1953, had an exhibit in Convention Hall in Philadelphia of a machine for conveying bulk materials such as sand, gravel, coal and the like along and through metal channels. One of these channels, 17½ inches wide, 5½ inches deep, and 10 feet long, was laid aside and set on edge on the floor along one side of the exhibition booth consisting in part of a curtain hung on a frame 3 or 4 feet high, separating it from the adjacent booth. This beam or channel extended into the aisle beyond the curtained wall and the carpet in the booth for perhaps a foot. The appellee engaged the services of a commercial photographing company to take pictures of its exhibit. An employee of that company, the appellant, George C. Entwistle, assisted in taking the pictures. His special duty was to prepare the booth to be photographed by tidying up the exhibit, straightening out literature on the table, picking up articles on the floor and the like. While he was so engaged, he started around the low side of the booth to reach a table in the back of the exhibit. As he went around the curtained wall he stumbled over the metal channel projecting into the aisle. The appellant testified that this projection "was covered with some kind of a blue jacket." He suffered a bad knee injury and sought damages for it.
After the evidence for both parties had been introduced, the court directed a verdict for the defendant on the view that the photographing company was an independent contractor, and the defendant corporation owed its employee no duty or obligation to provide him a safe place in which to work, citing as authority Hotel Operating Co. v. Saunders' Adm'r, 283 Ky. 345, 141 S.W.2d 260. The appellant submits that there was a duty on the part of the appellee which was violated and, in response to the appellee's argument, that the appellant could not be held guilty of contributory negligence as a matter of law.
We doubt the applicability of the Saunders case and others such as Wells v. W. G. Duncan Coal Co., 157 Ky. 196, 162 S.W. 821, which hold that a contractee in possession of premises does not owe a legal duty to provide a safe place in which to work for a contractor or his employee and is not responsible for injury sustained by him during the progress of the work contracted to *822 be done unless there is a dangerous condition hidden or not reasonably known to the contractor or his employee, or perhaps where the contractee undertakes to provide any of the instrumentalities to be used or reserves the authority to direct the performance of the contract in some related particular. King v. Creekmore, 117 Ky. 172, 77 S.W. 689; Owens v. Clary, 256 Ky. 44, 75 S.W.2d 536; Young's Adm'r v. Farmers & Depositors Bank, 267 Ky. 845, 103 S.W.2d 667; Arizona Binghampton Copper Co. v. Dickson, 22 Ariz. 163, 195 P. 538, 44 A.L.R. 881; 35 Am.Jur., Master and Servant, Sec. 159. None of these exclusions from duty appear in this case, and the cause of the injury was not related to the work contracted to be done. But we need not resolve the doubt or determine whether maintaining the condition was negligence on the part of the defendant for we are of opinion that the plaintiff, Entwistle, was guilty of contributory negligence as a matter of law.
The projecting metal channel or beam, 17½ inches high, was easily seen, especially so if it was covered with a blue cloth. Doubtless, Entwistle stumbled over it because his mind and eyes were centered on getting around the partition to straighten up the table to be photographed. But forgetfulness of a known danger or mental abstraction not due to the surrounding circumstances may in itself constitute contributory negligence. Vaughn v. Jones, Ky., 257 S.W.2d 583; 38 Am.Jur., Negligence, Sec. 187.
The plaintiff was a business invitee, but an invitee for a special business. Young's Adm'r v. Farmers & Depositors Bank, 267 Ky. 845, 103 S.W.2d 667; 65 C.J.S., Negligence, § 43(4) b. He was there for the purpose of doing a particular job, namely, to take a photograph of the exhibit and all that went with it. This piece of machinery was a part of the whole picture that was to be reproduced, although a small part of it projected beyond the booth. Aside from the very prominence of the obstacle, we think the photographer's helper was chargeable with seeing what he was there to see and photograph, and that the defendant cannot be held answerable for injury resulting from his failure to see part of the exhibit. As we have stated, his particular job was to put in order what was out of order, although it may be conceded that did not include rearranging part of the machinery or the exhibition where the exhibitor had placed it.
The plaintiff may not hold the defendant liable for his injury because he must be held to have assumed the risk in the sense that he was aware or was chargeable with being aware of the obstacle and general condition of the exhibit. This is closely associated with or is a form of contributory negligence. Gates v. Kuchle, 281 Ky. 13, 134 S.W.2d 1002; Porter v. Cornett, 306 Ky. 25, 206 S.W.2d 83. As stated in textual Note, 44 A.L.R. 1122:
"There is ample authority for the doctrine that, in an action brought by a contractor's servant against the contractee, it is a valid defense that the conditions by which the injury in question was occasioned were known to and appreciated by the plaintiff, and that he is consequently chargeable with an implied assumption of the risks arising from those conditions."
And, further, in Note, at page 1124:
"By most of the American courts which have had occasion to express their views upon the subject, the remedial rights of a contractor's servant have uniformly been determined upon the theory that his assumption of a risk becomes a conclusion in point of law, whenever it appears that the injured person was chargeable with knowledge, actual or constructive, of that risk."
Many cases supporting the statements are cited under these Notes and in the Annotation, "Liability of the contractee for injuries sustained by the contractor's servants in the course of the stipulated work." 44 A.L.R. at pages 932 et seq.
It is an elementary rule of appellate practice that a judgment will be affirmed if *823 the result is right even though the reason stated by the trial court for the judgment is wrong or doubtful. We are of opinion that the directed verdict for the defendant in this case was proper for the reasons stated.
Judgment affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566019/ | 284 S.W.2d 809 (1955)
Arch M. DAVIS et al., suing on behalf of themselves and all others similarly situated, Appellants,
v.
COMMONWEALTH LIFE INSURANCE COMPANY et al., Appellees.
Court of Appeals of Kentucky.
December 2, 1955.
Leo T. Wolford, Louisville, for appellant.
Squire R. Ogden, Wm. H. Abell, Louisville, for appellee.
STANLEY, Commissioner.
This class action under the declaratory judgment statute, KRS, Chapter 418, was brought by the appellants, three stockholders of the Commonwealth Life Insurance Company, against the corporation and its president and secretary for the purpose of obtaining the rendition of a judgment declaring whether or not it is lawful to split up the corporate stock of the company into a greater number of shares. The proposed plan is to reduce the par value of the stock from $10 to $2 per share and to issue to the stockholders five new shares for each one now held by them. The proposal to increase the capital stock by $1,000,000 and declare a stock dividend is not involved.
The question submitted arises from a provision in the Insurance Code enacted by the General Assembly in 1950, Chapter 21, Acts of 1950 which is now Chapter 304 of the Kentucky Revised Statutes, the particular provision being Sec. 304.121, subsection (2) (c). The circuit court declared the proposed action to be legal. We affirmed the judgment by an order of November 4, 1955, and took time to prepare the opinion.
The Commonwealth Life Insurance Company was organized under Kentucky law in May, 1904, with a capital stock of $1,500,000, divided into 150,000 shares of a par value of $10. In 1951 the capital stock was increased to $2,000,000 and the number of shares to 200,000. This was effected by transferring $500,000 from the surplus of the company and issuing a stock dividend. It appears that the company's current surplus is around $9,000,000, and the market value of each share of its stock is approximately $200.
By an appropriate resolution, already adopted, the Board of Directors will submit *810 to the stockholders a proposition to amend the charter to increase the capital stock to $3,000,000. To accomplish that, it is proposed to convert each share of the $10 par value of outstanding stock into 5 shares of $2 par value and to declare a 50 per cent stock dividend on the converted shares so that one additional share will be received for each two shares of the reclassified stock. It is also proposed to pay a cash dividend upon the new stock.
It is conceded that the stockholders will accept the plan and authorize the amendment to the Articles of Incorporation to conform unless it is declared illegal.
The proposed transactions and charter amendment are being proposed in the belief that the increased number of shareholders will be beneficial to the corporation's business and good will and advantageous to the stockholders in the creation of a wider market and greater demand for the shares of stock.
Before the adoption of the present Kentucky Insurance Code, which became effective September 1, 1950, the statutes relating to the organization of a life insurance company did not prescribe any minimum limitation on the par value of stock to be issued, although the amount of the capital stock and the number of shares had to be stated. Sec. 618, Kentucky Statutes; KRS 296.090, 1948 edition. KRS 304.121 now prescribes the requirements for the incorporation of domestic stock insurers additional to the applicable law governing the incorporation of business corporations generally. The pertinent subsection (2) (c) reads: "Each share of capital stock shall have a par value of not less than ten dollars." The Code is a comprehensive revision of the statutes relating to the Department of Insurance, the organization of domestic insurance companies and the regulation and control of the business of insurance. There are provisions regarding the authority of existing companies continuing in business, (e. g. KRS 304.078) but we find none indicating a purpose to limit or affect existing charter rights except perhaps in respect of security of the policyholders and the regulation of current business. The whole purport and intent of Article Four of the Act, being KRS 304.120 to 304.144 inclusive, relating to the incorporation of a domestic insurance company, seems to be prospective.
The split-up or change in the par value of each share of stock does not constitute and, indeed, is not in the nature of a reorganization of the company. It does not result in the impairment of the security of the policyholders or the assets of the company. Nor does it affect the proportional interest of the respective shareholders in the aggregate capital stock of the company. The new share will be a share in the same capital, being merely a conversion of existing units into a greater number for each shareholder. Cf. Bireley's Adm'rs v. United Lutheran Church in America, 239 Ky. 82, 39 S.W.2d 203.
The power of the corporation by proper procedure merely to reduce or change the par value of its outstanding shares of stock by amending its charter under general corporate law or under the previous statutes governing domestic insurance companies is not questioned. The par value was not fixed or limited by statute prior to the 1950 Act. It is elementary that in the construction of a statute the touchstone is the will or intent of the legislature. But that state of mind must be expressed or reasonably implied in the language used. What is not said may be of as much significance as what is said. We may suppose that the reason for the requirement of the 1950 Act that the par value of an insurance corporation shall not be less than $10 has some relation to the stability of an initial capital structure, which ordinarily demands stricter regulation than where stability is already established. If the legislative intent was to exercise some sort of reserve power (see Sec. 3, Ky.Const., KRS 271.600) and make the provision applicable to existing corporations which all along have had the power to reduce and to issue stock of less than the minimum par value, that intent was not expressed. The language used, as well as the omission, reasonably implies an intent to confine the limitation to *811 the organization of new corporations. The courts presume that statutes or amendments thereof operate prospectively only and will so construe an Act if it is susceptible of such interpretation. Lawrence v. City of Louisville, 96 Ky. 595, 29 S.W. 450, 16 Ky. Law Rep. 672, 674, 27 L.R.A. 560, 49 Am. St.Rep. 309; Dunlap v. Littell, 200 Ky. 595, 255 S.W. 280.
It is, of course, not necessary in this case to express an opinion as to whether or not a corporation organized since September, 1950, can by amendment of its charter reduce the par value of its stock below $10 a share. It will be time enough to decide that when a case presenting the question comes before us.
We conclude that the judgment declaring that the Commonwealth Life Insurance Company may legally reclassify each of its presently outstanding $10 par value shares of capital stock into 5 shares of new $2 par value capital stock should be and it is
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919770/ | 660 So. 2d 584 (1995)
Jackie R. McCALLIE
v.
Ruth C. McCALLIE, an alleged incompetent person.
1940094.
Supreme Court of Alabama.
March 10, 1995.
Rehearing Denied April 28, 1995.
John S. Morgan and Gary F. Burns, Gadsden, for appellant.
F. Michael Haney, Gadsden, for appellee.
HOUSTON, Justice.
Jackie R. McCallie filed a petition in the Probate Court of Etowah County, pursuant to the Alabama Uniform Guardianship and Protective Proceedings Act, Ala.Code 1975, § 26-2A-1 et seq., seeking to be appointed *585 as conservator of the estate of his mother, Ruth C. McCallie. Jackie's brother, David M. McCallie, acting under the authority of a durable power of attorney executed by his mother, filed a motion to dismiss the petition on the ground that he was qualified and competent to manage his mother's personal affairs and, therefore, that the appointment of his brother as conservator was unnecessary. After an ore terms hearing, during which Jackie and David stipulated that their mother was unable to manage her personal affairs, the probate court entered an order dismissing Jackie's petition and requiring him to pay David's attorney fee in the amount of $450. Jackie appealed. We affirm in part, reverse in part, and remand.
Because there is no record of the testimony presented to the probate court, the probate court's apparent finding that David is qualified and competent to manage his mother's personal affairs is presumed to be correct. See Davis v. Davis, 278 Ala. 328, 330, 178 So. 2d 154, 155 (1965):
"The rule is that where no testimony is contained in the record on appeal, a decree which recites that it was granted on pleadings, proofs and testimony will not be disturbed on appeal. Williams v. Clark, 263 Ala. 228, 82 So. 2d 295 [(1955)], 2 Ala.Dig., Appeal & Error § 671(3). And it will be presumed that the evidence was sufficient to sustain the verdict, finding, judgment, or decree where all the evidence is not in the record. Williams v. Clark, supra; 2 Ala.Dig., Appeal & Error Key No. 907(4).
"A decree of the probate court will not be reversed if the evidence upon which it is made is not set forth, and there is no bill of exceptions, unless it appears in the decree that the court had no jurisdiction. Forrester v. Forrester's Adm'rs, 40 Ala. 557 [(1867)]; McAlpine v. Carre, 203 Ala. 468, 83 So. 477 [(1919)]....
"The finding of the probate court, based on the examination of witnesses ore tenus, is presumed to be correct and will not be disturbed on appeal unless palpably erroneous. Cox v. Logan, 262 Ala. 11, 76 So. 2d 169 [(1954)], and cases there cited.
"We assume that the circuit court affirmed the decree of the probate court on the principles we have stated [above], and we have no alternative but to affirm the decree of the circuit court on the same authorities."[1]
Jackie contends, however, that the probate court had no statutory authority to dismiss *586 his petition after he and his brother had stipulated to their mother's lack of capacity. He also contends that his mother was not present at the hearing; that a guardian ad litem was not appointed to represent his mother; and that his mother was not examined by a physician or other qualified person designated by the court. These alleged procedural defects, according to Jackie, require the reinstatement of his petition. Jackie also argues that there was no basis for an award of attorney fees.
Section 26-2A-31 provides that a probate court has "full power to make order[s], judgments, and decrees and [to] take all other action necessary and proper to administer justice in the matters [relating to estates of protected persons and protection of minors and incapacitated persons] that come before it." Section 26-2A-135 provides in pertinent part:
"(b) Upon receipt of a petition for appointment of a conservator or other protective order for reasons other than minority, the court shall set a date for [a] hearing. Unless the person to be protected has chosen counsel, the court shall appoint an attorney to represent the person who may be granted the powers and duties of a guardian ad litem. If the alleged disability is mental illness, mental deficiency, physical illness or disability, physical or mental infirmities accompanying advanced age, chronic use of drugs, or chronic intoxication, the court must direct that the person to be protected be examined by a physician or other qualified person designated by the court, preferably one who is not connected with any institution in which the person is a patient or is detained. The court may send a court representative to interview the person to be protected. The court representative may be a guardian ad litem or an officer or employee of the court.
". . . .
"(d) The person to be protected is entitled to be present at the hearing in person. When the person to be protected is not present in person at the hearing, the court, before proceeding at the hearing in the person's absence, must determine that the person's absence is in the best interest of the person to be protected. At the request of the person to be protected, the person is entitled to be represented by counsel, at the person's expense, to present evidence, to cross-examine witnesses, including any court-appointed physician or other qualified person and any court representative, and upon demand to trial by jury as provided in Section 26-2A-35. The issue may be determined at a closed hearing if the person to be protected or counsel for the person so requests.
". . . .
"(f) After [the] hearing, upon finding that a basis for the appointment of a conservator or other protective order has been established, the court shall make an appointment or other appropriate protective order."
The parties agree that Ruth McCallie's capacity was not an issue at the hearing. Instead, the only issue appears to have been whether there was any basis for the appointment of Jackie as a conservator to manage Ruth McCallie's personal affairs. As previously noted, the probate court's finding that David was qualified and competent to manage his mother's personal affairs, pursuant to his power of attorney, is presumed to be correct. There is no statutory support for Jackie's contention that the stipulation of incapacity that he entered into with David required the probate court to appoint Jackie as a conservator. To the contrary, the appointment of a conservator is required under § 26-2A-135(f) only upon a finding by the probate court "that a basis for the appointment... has been established."
With respect to Jackie's procedural arguments, we note that Ruth McCallie's presence at the hearing was not required, and we presume that the probate court determined that her absence would not adversely affect her interests. Section 26-2A-135(d). Furthermore, § 26-2A-135(b) requires the appointment of a guardian ad litem only if the person to be protected is not represented by an attorney. Here, Ruth McCallie's interests were adequately represented by an attorney hired by David pursuant to the authority vested in him under the *587 durable power of attorney. Although Jackie questioned the validity of the power of attorney by suggesting that David may have unduly influenced or manipulated Ruth McCallie, nothing in the record remotely suggests that the power of attorney was acquired by improper means or that David was not carrying out his mother's wishes in contesting the petition. To the contrary, the record reflects that Ruth McCallie sent the following letter to Jackie and his wife in response to another conservatorship petition that Jackie had filed approximately one and one-half years before the present petition was filed:
"Dear Jackie and Sonja,
"I am writing you this letter today to let you know I am well in mind and body. This letter is to let you know that I love you, and that you are welcome in my home anytime, as long as it is to show me love and respect. The things that have happened in the past will not happen again if you respect me. Never again are you to try to make me change anything that I have decided is in my best interest, such as my power of attorney, my bank account, my C.D., or my annuities. All of these things are as I wish them to be, and I expect you to abide by my wishes.
"If my wishes are not carried out by you then I will see that my last will and testament will be rewritten to read, to Jackie R. McCallie, I leave one dollar and love and affection. This will stand up in any court of law in Ala. A copy of this letter is also being mailed to my attorney and the Probate Judge.
"My door is always open for you, but you will respect me at all times.
"With love and respect,
"Your Mother."
Jackie's contention that the dismissal of his petition was improper because his mother was not examined by a physician or other qualified person designated by the court is also not persuasive. The Comment to § 26-2A-135 states in part:
"In subsection (b), this section requires (`must') the court to direct that the person to be protected be examined. This provision differs from the Uniform Act section 26-2A-135, which makes the direction discretionary with the court. In exercising this direction, this subsection also permits the examination to be by `other qualified person,' which is an addition that is not in the Uniform Act section 26-2A-135. The Alabama committee made this addition based on the belief that the procedures under sections 26-2A-102 and 26-2A-135 should be parallel in this regard. And in section 26-2A-102, `other qualified person' will include perhaps psychologists and clinical psychologists if the court so determines.
"Since there has not been any prior determination of incapacity, the person, for whom a protective order is sought, should be extended the same rights as any other person whose personal freedom may be restricted as a result of the proceedings. Subsection (d) expressly recognizes those rights."
Ruth McCallie's interests were represented by an attorney, who stipulated to her incapacity. Although § 26-2A-135(b) requires an examination to determine the extent, if any, of an alleged disability, the stipulation in this case obviated any need for an examination. Furthermore, Ruth McCallie's personal freedoms were not in any way restricted by the probate court; to the contrary, the probate court maintained the status quo by allowing the person of her choice to continue to manage her personal affairs. Based on the circumstances here presented, it would elevate form over substance, and run counter to the apparent intent of the legislature, for us to reverse the order of the probate court on this ground. See § 26-2A-2, which provides, in pertinent part, as follows:
"(a) This chapter shall be liberally construed and applied to promote its underlying purposes and policies.
"(b) The underlying purposes and policies of this chapter are to:
"(1) Simplify and clarify the law concerning the affairs of minors, missing or disappeared persons, protected persons, and incapacitated persons;
"(2) Promote a speedy and efficient system for managing and protecting the *588 estates of protected persons so that assets may be preserved for application to the needs of protected persons and their dependents."
Finally, we do agree with Jackie's contention that there is no apparent basis for the award of an attorney fee. Alabama follows the American rule, by which attorney fees may be recovered if they are provided by statute, if they are provided by contract, or if they are available by special equity, such as in proceedings where the attorney's efforts create a "common fund" out of which fees may be paid. City of Ozark v. Trawick, 604 So. 2d 360 (Ala.1992). Section 26-2A-142(a) provides:
"If not otherwise reasonably compensated for services rendered, any court representative, attorney, physician, conservator, or special conservator appointed in a protective proceeding and any attorney whose services resulted in a protective order or in an order that was beneficial to a protected person's estate is entitled to reasonable compensation from the estate ..."
(Emphasis added.)
There being no legal basis for requiring Jackie to pay David's attorney fee, the probate court's order, to the extent that it requires such a payment, is reversed; otherwise, the order dismissing the petition is affirmed.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
SHORES and INGRAM, JJ., concur.
ALMON and BUTTS, JJ., concur in the result.
NOTES
[1] The record is unclear as to whether the parties or the probate court anticipated that the issue of David's competence to manage Ruth McCallie's personal affairs would be tried to a jury, pursuant to § 26-2A-35. The petition does not contain a request for a jury trial, and there is no order from the probate court indicating that a jury trial was contemplated; however, Jackie's "memorandum brief," filed in response to the motion to dismiss, states: "Under the facts as alleged it is necessary for a jury ... to decide the merits of the petition." We note that even if we were to assume that Jackie did not waive his right to a jury trial, we would nonetheless have to presume that no genuine issue of material fact exists with respect to the need for a conservator. When a trial court holds a hearing on a motion to dismiss and considers matters outside the pleadings in ruling on the motion, the motion must be treated as one for a summary judgment. See Rule 12(b), Ala.R.Civ.P. (With certain exceptions, the Rules of Civil Procedure are applicable to conservatorship proceedings under the Alabama Uniform Guardianship and Protective Proceedings Act. See § 26-2A-33.) Here, the probate court held a hearing on the motion to dismiss and considered matters outside the pleadings in ruling on the motion; therefore, we would have to treat the probate court's order as a summary judgment. A summary judgment is appropriate only where the moving party has made a prima facie showing that there is no genuine issue of material fact and that the movant is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P. Once a moving party makes this prima facie showing, the burden shifts to the nonmoving party to present substantial evidence in support of his position to defeat the summary judgment motioni.e., evidence creating a genuine issue of material fact.
As noted, there is no record of the testimony presented at the hearing in this case. Based on the record before us, we would have to presume that at the hearing before the probate court, David made a prima facie showing that there was no genuine issue of material fact as to his competence to manage his mother's personal affairs and that he was entitled to a judgment as a matter of law; and that Jackie failed to present substantial evidence creating the genuine issue of material fact necessary to defeat the summary judgment motion. In other words, we would have to presume that the probate court's judgment was supported by the evidence the court had before it. See Vise v. Cole Sanitation, Inc., 591 So. 2d 32 (Ala.1991). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2367673/ | 978 A.2d 1006 (2009)
COMMONWEALTH of Pennsylvania, Appellee
v.
Lamont BOOKARD, Appellant.
No. 1557 EDA 2007.
Superior Court of Pennsylvania.
Argued February 12, 2009.
Filed July 29, 2009.
Peter A. Levin, Philadelphia, for appellant.
Hugh J. Burns, Jr., Assistant District Attorney, Philadelphia, for Commonwealth appellee.
BEFORE: FORD ELLIOTT, P.J., STEVENS, ORIE MELVIN, LALLY-GREEN, KLEIN, BOWES, PANELLA, DONOHUE and SHOGAN, JJ.
OPINION BY KLEIN, J.:
¶ 1 Lamont Bookard appeals from an order denying his request for post-conviction relief on the ground that his trial counsel, attorney Susan Burt-Collins, was ineffective for failing to ask for a charge on alibi. We find that counsel articulated a reasonable strategic basis for failing to request such a charge; she had an alternate theory of defense and did not want to cloud the issue by focusing on an alibi defense. Since it was questionable as to whether it was impossible for Bookard to be present to commit the crime, and counsel did not want the jury distracted by that issue, we believe that strategy was reasonable and therefore we affirm the denial of post-conviction relief.
¶ 2 Bookard was convicted of an armed robbery of men playing a dice game on Reno Street in the Mantua section of Philadelphia. The robbery took place on March 23, 2000. A 911 call was placed at 4:19 p.m., and the time of the robbery was between 4:00 p.m. and 4:19 p.m.
*1007 ¶ 3 According to the Commonwealth, Bookard and John Rosser arrived at the game in Rosser's car, and, after the robbery, Rosser was shot and killed while the two were fleeing in Rosser's car. The car crashed within two blocks of the robbery. The Commonwealth alleged that Bookard shot Rosser as the two were fleeing in Rosser's car, that the shooting caused Rosser to crash his car within two blocks of the site of the robbery, and that after the shooting and crash, Bookard fled on foot.
¶ 4 Bookard was charged with the murder, robbery, conspiracy and related offenses. Following a jury trial, he was acquitted of the homicide, but convicted of two counts of robbery and one count each of carrying a firearm on a public street and criminal conspiracy. Trial counsel was not totally successful but obviously was not totally unsuccessful, either.
¶ 5 Bookard later filed a pro se PCRA petition claiming trial counsel was ineffective for failing to request an alibi instruction. Ultimately counsel was appointed and there was an evidentiary hearing on the allegation of ineffectiveness. Trial counsel testified at the hearing and on April 26, 2007, the PCRA court entered an order denying post conviction relief.
¶ 6 In order to establish ineffective assistance of counsel, appellant must demonstrate that (1) his claims have arguable merit; (2) counsel had no reasonable basis for his action or inaction; and (3) counsel's action or inaction prejudiced appellant. Commonwealth v. Pierce, 515 Pa. 153, 527 A.2d 973, 975 (1987). "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 the trial counsel's decision had any reasonable basis." Commonwealth v. Hawkins, 586 Pa. 366, 894 A.2d 716, 730 (2006).
¶ 7 At the hearing on Bookard's PCRA petition, trial counsel explained that based on her twenty-four years of experience handling hundreds of major felony cases as a defense attorney, she did not want to classify this case as an alibi case. Counsel instead wanted the jury to focus on the testimony of Marin McClain. Bookard and McClain both testified that Bookard had borrowed McClain's car and Bookard was to pick McClain up at 4:30 p.m. Bookard testified that he, along with his former girl friend, Latonya Coles, did pick McClain up at his job at a warehouse in South Philadelphia at 4:30 p.m. McClain testified that Bookard appeared calm and displayed nothing out of the ordinary when he picked him up. Trial counsel testified that she wanted to focus on Booker's demeanor and appearance when he picked McClain up at 4:35 p.m. She did not want to cloud that testimony.
¶ 8 McClain testified that he was picked up by Bookard at his work at 4:35 p.m., which would be somewhere from 20 to 35 minutes from the time of the crime. While McClain's job is about 8½ miles from the scene of the crime, both the job site and the scene of the crime can easily be reached just off the Schuylkill Expressway in Philadelphia. It certainly was not impossible for Bookard to have traveled that distance in 30 or 35 minutes; in fact, notwithstanding traffic, construction, or accident delays, he could have driven that distance in sixteen minutes.[1] An alibi instruction is required only in cases where a defendant's explanation places him at the relevant time at a different place than the scene involved and so far away as to render it impossible for him to be the guilty *1008 party. Commonwealth v. Kolenda, 544 Pa. 426, 676 A.2d 1187, 1190 (1996). That was not the case here.
¶ 9 At the PCRA hearing, counsel explained:
Because I did not feel that he was close enough in terms of contemporaneousness with the time of the crime.... As I recall, I thought it was much farther away and there was some evidence that it was not very far away. That there was a way to get there that was a fairly quick way. You could get from 3800 Reno Street [the scene of the crime] to Lawrence Street [where Bookard worked and McClain picked him up]; and it wasn't going to be you know, a 10 mile drive, and that you wouldn't encounter tons of traffic at 4:30, I think it was a weekday. So I was concerned that because they weren't close enough in time 4, 4:15, 4:35, and the distance wasn't great enough that I was really going to miss the alibi. I wasn't going to make an alibi and by asking for an alibi instruction, I was going to call attention to the inadequacy of the time match up and draw attention away from the very adequate testimony of Mr. McClain, that Mr. Bookard, when he picked him up was perfectly calm, normal, not upset, not injured, was perfectly fine and didn't look like he had just been involved in a robbery in which somebody died. I thought that was a more valuable focus for the jury to have. I didn't really want to have to hang it on alibi.
N.T. PCRA Hearing, 1/18/07, at 25-27 (emphasis added).
¶ 10 Additionally, counsel testified that the Commonwealth had informed her that it had evidence to rebut any alibi testimony. While counsel did not recall the exact evidence since the PCRA hearing was held six years after the trial, she stated that she remembered thinking the evidence would strain McClain's credibility in the eyes of the jury. Counsel testified that McClain's testimony as to Bookard's appearance and demeanor was critical to her case. This is what she wanted to emphasize. Further, because she wanted to keep out the rebuttal evidence, it was her professional opinion that she should not make this an alibi case. Id. at 32-33.
¶ 11 Here, the evidence placed Bookard close enough to the scene that, while difficult, it would not have been impossible for him to have been involved in the robbery; no testimony actually placed him in another place at 4:00 p.m. on the date in question. In such a case, no alibi instruction is required.[2]See Commonwealth v. Johnson, 538 Pa. 148, 646 A.2d 1170 (1994). See also Commonwealth v. Hawkins, 586 Pa. 366, 894 A.2d 716 (2006) (where trial counsel articulated reasonable and sound basis for deliberately declining to seek alibi instruction, Court found trial counsel was not constitutionally ineffective). Counsel's strategy, to focus on McClain's *1009 testimony and keep out what might be damaging rebuttal evidence, was a reasonable one. Pierce, supra.
¶ 12 Because counsel's explanation and strategy are reasonable, counsel was not ineffective. Therefore, we affirm the denial of post-conviction relief.
¶ 13 Order affirmed.
¶ 14 BOWES, J., concurs in the result.
¶ 15 DONOHUE, J., files a Dissenting Opinion.
DISSENTING OPINION BY DONOHUE, J.:
¶ 1 I respectfully dissent from the Majority's conclusion that counsel for Appellant Lamont Bookard ("Bookard") had a reasonable or strategic basis for failing to request an alibi instruction in this case, as the record on appeal reflects instead that counsel's failure to do so resulted from her misconception that she had failed to produce sufficient evidence to establish an alibi defense. Moreover, counsel's contention that she did not request an alibi instruction because it would have permitted the Commonwealth to respond with rebuttal evidence is also unsupported, as her testimony at the evidentiary hearing on remand suggests that no such rebuttal evidence in fact existed; to the extent she believed otherwise, she misunderstood the nature of the evidence at issue. Accordingly, I would grant Bookard's requested PCRA relief in the form of a new trial, based upon ineffective assistance of counsel.
¶ 2 When evaluating a challenge to the reasonableness of a decision by trial counsel, we must determine whether counsel had "some reasonable basis designed to effectuate his client's interests." Commonwealth v. Hawkins, 586 Pa. 366, 389, 894 A.2d 716, 730 (2006). At trial, Bookard's counsel presented the following evidence:
Bookard testified that on March 23, 2000, he had borrowed the automobile of Marvin McClain ("McClain"), who was at work in South Philadelphia. N.T., 5/2/01, at 150-51.
Bookard further testified that on the afternoon of the 23rd he was at his mother's home (on North Croskey Street in North Philadelphia) along with John Rosser, the victim of the homicide, and LaTonya Coles, his former girlfriend. Id. at 154-55. Bookard testified that Tyrone Sydnor came to the home and asked to speak to Rosser. Id. at 156. After Rosser and Sydnor talked, Bookard stated that Rosser told him that he (Rosser) was going to rob a craps game, and asked Bookard to join himbut Bookard declined. Id. at 156-57.
According to Bookard's testimony, Rosser left the home at approximately 3:00 p.m. Id. at 157. Bookard testified that he remained at his mother's home with Coles prior to leaving to pick up McClain. Id. at 159-60. He picked up McClain at approximately 4:30 p.m. Id. at 160.
Ronnicka Davis ("Davis"), who lives on North Croskey Street, testified for the defense that she saw Rosser on the afternoon of May 23, 2000, and that Rosser left the neighborhood in his own vehicle. Id. at 181. Davis further testified that she saw Bookard and Coles leave thirty or forty-five minutes after Rosser left. Id. at 186. She stated that Bookard and Coles left the neighborhood in a blue car. Id. at 187.
McClain testified that he lent his car, a blue Chevrolet, to Bookard, and that Bookard and Coles picked him up at his South Philadelphia place of employment *1010 at 4:35 p.m. driving his (McClain's) car. Id. at 127, 129.
¶ 3 As this summary of the evidence presented on behalf of Bookard makes clear, McClain's testimony regarding Bookard's whereabouts after the crime did not, by itself, establish an alibi. Instead, the alibi defense was established through Bookard's own testimony that he was in transit from his mother's home to McClain's place of employment at the time of the crimes.[1] The testimony of Davis and McClain tended to corroborate Bookard's testimony by providing confirmation that he left his mother's house shortly before 4:00 p.m. and arrived at McClain's place of employment just after 4:30 p.m.
¶ 4 At trial, however, Bookard's counsel displayed what can at best be described as general confusion regarding the evidence presented to the jury, as she never requested an alibi instruction and in fact, appeared to deny that any alibi defense even existed. For example, at the outset of McClain's testimony and in the presence of the jury, counsel indicated that McClain was not an alibi witness because the crimes occurred 16 minutes before Bookard arrived to pick him up.[2] This assertion was in apparent disregard for Bookard's own testimony that he was in transit from his mother's home at the time of the crimes. At the subsequent jury instruction conference held before the close of the defense's evidence, counsel then failed to request an alibi instruction based upon her apparent misapprehension that she had not presented sufficient evidence for an alibi defense.[3]
¶ 5 This Court clearly recognized counsel's confusion in this regard, as we remanded the case to the trial court for an evidentiary hearing on precisely this issuenamely whether counsel had any reasonable or strategic basis for not requesting an alibi instruction. Commonwealth v. Bookard, 909 A.2d 866 (Pa.Super.2006) (unpublished memorandum). In remanding the case to the trial court for an evidentiary hearing, we specifically acknowledged counsel's amorphous and seemingly contradictory explanations at trial for not requesting an alibi instruction, noting that "[r]ather than clarifying whether the defense centered on an alibi defense, [counsel's] remarks acknowledge such a defense, but indicate that for some reason to which we are not privy she decided to abandon that position." Id. at *6.
¶ 6 At the evidentiary hearing on remand, counsel's testimony served only to create more confusion on the issue on which we sought clarification. She testified *1011 that presenting an alibi defense would have been problematic because it would have highlighted the possibility that Bookard could have driven to McClain's place of employment from the crime scene and still have committed the crimes, thus distracting the jury from the strength of her defense (i.e., McClain's testimony):
As I recall, I thought it [the site of the robbery] was much further away [from the location where appellant picked up McClain] and there was some evidence that it was not very far away. That there was a way to get there that was a fairly quick way. You could get from 3800 Reno Street to Lawrence Street [in South Philadelphia] and it wasn't going to be, you know, a 10 mile drive, and that you wouldn't encounter tons of traffic at 4:30, I think it was a weekday.[4] I was concerned that because they weren't close enough in time, 4, 4:15, 4:35, and the distance wasn't great enough that I was really going to miss the alibi. I wasn't going to make an alibi and by asking for an alibi instruction, I was going to call attention to the inadequacy of the time match up and draw attention away from, what I thought to be, the very adequate testimony of Mr. McClain, that [appellant], when he picked him up was perfectly calm, normal, not upset, not injured, was perfectly fine and didn't look like he had just been involved in a robbery in which somebody died.
N.T., 1/18/07, pp. 26-27.
¶ 7 From this testimony, the Majority concludes that counsel's decision not to request an alibi instruction and to instead focus on McClain's testimony that Bookard arrived calm and unflustered at his place of employment 15-20 minutes after the crimes were committed was a reasonable strategy. In my view, precisely the opposite is true, since McClain's testimony regarding Bookard's arrival at his place of employment at 4:35 p.m. unquestionably begs the question for the jury: Where was Bookard at the time of the crimes? The evidence presented established that Bookard was at his mother's house until he left with his former girlfriend in a blue car to pick up McClain, and that as a result he had an alibi[5]namely that he was in transit *1012 (in a blue vehicle) from his mother's home to McClain's place of employment at the time of the crimes which were, according to the Commonwealth, perpetrated by two male occupants of a black vehicle. N.T., 5/1/01, at 126-27. Bookard was entitled to an alibi instruction, as the jury should have been given a structured opportunity, via an alibi instruction, to find that Bookard was at home and then in transit, and that this was the reason that he arrived at McClain's place of employment calm and unflustered at 4:35 p.m.
¶ 8 Instead, at the evidentiary hearing counsel testified to a strategy predicated upon her continuing misconception that (1) she had failed to produce sufficient evidence to establish an alibi defense, and (2) that Bookard's defense depended entirely on McClain's testimony, which it clearly did not. As such, I discern no basis in the record to conclude that counsel made a conscious decision to decline to seek an alibi instruction based upon a reasoned evaluation of her concerns. Nothing in the record on appeal supports counsel's suggestion that requesting an alibi instruction would have drawn the jury's attention away from McClain's testimony, since McClain's testimony that Bookard arrived calm and unflustered at his place of employment does not in any way contradict Bookard's testimony that he was in transit at the time of the crimes.[6] To the contrary, the jury was certainly capable of understanding that the components of the defense were entirely complementary: (1) Bookard was elsewhere at the time of the crime (i.e., in transit from his mother's home to pick up McClain), and (2) his calm demeanor upon arrival to pick up McClain just minutes after the crimes occurred showed that he had not just been involved in a robbery or murder. To the extent that counsel's strategy assumed to the contrary, it was unreasonable.
¶ 9 At the evidentiary hearing on remand, counsel testified to a second strategic reason for not requesting an alibi instructionshe did not want to characterize her defense as an alibi defense because it would have permitted the Commonwealth to present rebuttal evidence. N.T., 1/18/07, at 32. Initially she claimed that she could not recall the specific nature of the rebuttal evidence, but when pressed to remember she identified McClain's time card indicating that he may have left work at 3:23 p.m.more than an hour before he testified that Bookard picked him up. N.T., 1/18/07, at 32-33, 39-40. The time card in question, however, plainly established *1013 that McClain left work at 4:20 p.m., and the notation "3:23" on the card referred not to the time McClain left work, but rather to the relevant date of March 23 (the date of the crimes in question). Counsel's apparent concern over this time card as rebuttal evidence did not, therefore, establish any reasonable basis for her failure to request an alibi instruction. Moreover, since McClain's time card had already been introduced at trial and since counsel for Bookard and the Commonwealth both questioned McClain regarding its contents during his testimony, N.T., 5/2/01, id. at 128, 140, the time card was already in evidence and thus would not have been rebuttal evidence. Therefore, this explanation (i.e., fear of rebuttal evidence) does not establish any reasonable or strategic basis for failing to request an alibi instruction.
¶ 10 In its written opinion that we are reviewing on this appeal, prepared subsequent to the evidentiary hearing on remand, the learned trial court implicitly acknowledged what the Majority here refuses to dothat counsel's testimony at the evidentiary hearing provided no reasonable basis for her failure to request an alibi instruction, and that Bookard's testimony, corroborated by that of other defense witnesses, created the alibi. To find a reasonable basis for counsel's conduct, the trial court went back to the trial transcript, recognized Bookard's alibi testimony, and skillfully identified potential rebuttal evidence never referenced at the evidentiary hearing on remand. Specifically, the trial court pointed out that the victim's mother Glenda Birke ("Birke") testified in the Commonwealth's case that Bookard told her that he could not have killed her son because he was at work at the time of the killing (i.e., on March 23 at around 4:15 p.m.). Trial Court Opinion, 7/16/07, at 4 (citing N.T., 5/2/01, at 54-56). Birke further testified that two other individuals (her son Norman and Bookard's cousin Rasheed West) heard Bookard make this statement.[7]Id. Birke's testimony was apparently offered in anticipation of and in contradiction to Bookard's alibi defense which Bookard's counsel later developed in the defense case. In its written opinion, the trial court indicates that the Commonwealth could have, but did not, call either Birke's son Norman or Rasheed West as rebuttal witnesses to contradict Bookard's "in transit" testimony.[8] Trial Court Opinion, 7/16/07, at 4.
¶ 11 Nothing in the record on appeal, however, proves (or even suggests) that counsel ever even recognized that the evidence supported an alibi, let alone that counsel considered the possible rebuttal testimony of Birke's son Norman or Rasheed West in deciding not to request an alibi instruction. Counsel did not articulate this rationale as a basis for her decision, either at trial or the evidentiary hearing on remand, and thus there is no basis on this record to conclude that counsel in fact had the strategy the trial court generated from the trial transcript. In my view, it is likely that an experienced trial judge could review the record in most cases and, in retrospect, concoct a theory as to why *1014 decisions by counsel were made, e.g., a foregone piece of documentary evidence was (probably) more confusing than helpful; the abandoned witness' credibility was (probably) too easily impeached. The inquiry on a Sixth Amendment claim of ineffective assistance of counsel, however, must forego "the distorting effects of hindsight" and instead be based solely upon the actual strategic decisions of trial counsel. See, e.g., Strickland v. Washington, 466 U.S. 668, 689, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984) ("A fair assessment of attorney performance requires ... [the court to] evaluate the conduct from counsel's perspective at the time."); Kimmelman v. Morrison, 477 U.S. 365, 386-387, 106 S. Ct. 2574, 91 L. Ed. 2d 305 (1986) (hindsight cannot be used to supply a reasonable reason for the decisions of counsel); Commonwealth v. Marshall, 534 Pa. 488, 505-06, 633 A.2d 1100, 1108 (1993) ("We find that counsel's answers [at the PCRA evidentiary hearing] demonstrate that he did not have a reasonable basis to effectuate appellant's interests."). As one federal court has described it, "courts should not conjure up tactical decisions an attorney could have made, but plainly did not.... Tolerance of tactical miscalculations is one thing; fabrication of tactical excuses is quite another." Griffin v. Warden, 970 F.2d 1355, 1358-59 (4th Cir.1992); see also Harris v. Reed, 894 F.2d 871, 878 (7th Cir.1990) ("Just as a reviewing court should not second guess the strategic decisions of counsel with the benefit of hindsight, it should also not construct strategic defenses which counsel does not offer.").
¶ 12 Because I view the record as establishing counsel's clear misunderstanding of the evidence and the requisites of an alibi defense, I believe the trial court erred in finding that counsel possessed a reasonable strategic basis for her failure to request an alibi instruction.[9] Consequently, it is necessary to proceed to consider whether the failure to request an alibi instruction was sufficiently prejudicial to warrant relief under the PCRA. Here, counsel's unexplained failure to request an alibi instruction left the jury without proper guidance to consider the totality of the evidence, and essentially deprived appellant of a defense firmly established by the evidence presented at trial. See, e.g., Mikell, 556 Pa. at 518, 729 A.2d at 570-571; Roxberry, 529 Pa. at 166, 602 A.2d at 829. Therefore, I am compelled to conclude that *1015 counsel's omission constituted constitutionally ineffective assistance of counsel, upon which appellant is entitled to post conviction relief.
¶ 13 Accordingly, I dissent from the decision of the Majority and would reverse the order denying post conviction relief and remand this case for a new trial.
NOTES
[1] http://www.mapquest.com; http://maps.google.com.
[2] Following is a model alibi instruction:
In this case, the defendant has presented evidence of an alibi, that is, that [he][she] was not present at the scene or was rather at another location at the precise time that the crime took place. You should consider this evidence along with all the other evidence in the case in determining whether the Commonwealth has met its burden of proving beyond reasonable doubt that a crime was committed and that the defendant [himself] [herself] committed [or took part in committing] it. The defendant's evidence that [he][she] was not present, either by itself or together with other evidence, may be sufficient to raise a reasonable doubt of [his][her] guilt. If you have a reasonable doubt of the defendant's guilt, you must find [him][her] not guilty. Pa. Suggested Std.Crim. Jury Instr. § 3.11 (emphasis added).
[1] See, e.g., Commonwealth v. Roxberry, 529 Pa. 160, 164-165, 602 A.2d 826, 828 (1992) (emphasizing that (1) "[t]here is no minimum or threshold quantum of physical separation necessary for a defense to constitute an alibi, so long as the separation makes it impossible for the defendant to have committed the crime"; and (2) that an alibi instruction is appropriate even when the "alibi defense had been presented solely by the unsupported testimony of the defendant").
[2] [Counsel for the Commonwealth]: Mr. McClain, when did you learn that you were going to be an alibi witness in this case?
[Counsel for Bookard] Your Honor, if I may, he's not exactly an alibi witness. The time of the crime is 4:19. He shows up 4:35, not really an alibi witness.
[The Court] Is that an objection?
[Counsel for Bookard] It is, Your Honor.
[The Court] Overruled.
N.T., 5/2/01, at 132 (emphasis added).
[3] [Counsel for the Commonwealth]: Does counsel want an alibi charge in this matter? There was no
[Counsel for Bookard]: It's really not.
[Counsel for the Commonwealth]: I want the record to reflect that for the future.
[The Court]: She said it's not alibi. So therefore no reason to give an alibi charge.
N.T., 5/2/01, at 196 (emphasis added).
[4] In its footnote #1, the Majority cites to two mapping websites in support of its contention that McClain's place of employment was eight and one half miles from the scene of the crimesby way of the Schuylkill Expressway in Philadelphia. Majority Opinion at 1007-08. The Majority further contends that "it was certainly not impossible for Bookard to have traveled that distance in 30 or 35 minutes; in fact, notwithstanding traffic, construction, or accident delays, he could have driven that distance in sixteen minutes." Id.
My review of the record has not disclosed any reference to specific distances or approximate driving times between McClain's place of employment and the scene of the crimes. Likewise, the record does not appear to include any references to either www.mapquest.com or www.maps.google.com. In deciding issues on appeal, this Court must resolve them based solely upon the basis of facts that were before the lower court when it rendered its decision and subsequently contained in the record on appeal. See, e.g., Commonwealth v. Rainey, 593 Pa. 67, 99 n. 20, 928 A.2d 215, 235 n. 20 (2007); Kozura v. Tulpehocken Area School Dist., 568 Pa. 64, 73 n. 9, 791 A.2d 1169, 1173 n. 9 (2002); Commonwealth v. Foster, 764 A.2d 1076, 1084 n. 3 (Pa.Super.2000), appeal denied, 566 Pa. 658, 782 A.2d 542 (2001). Moreover, without specific reference to traffic conditions on the date and time of the events in question, internet mapping results are totally speculative. One traffic accident or any construction activity renders the time estimates useless.
[5] Counsel's testimony at the evidentiary hearing on remand is abundantly clear that Bookard's explanation of his whereabouts at the time of the crimes was not part of her analysis in deciding to forego an alibi defense:
Q. Now, getting back to the facts of the crime. Do you know, was your defense in this case, did you present an alibi defense in this case?
A. That, I did not present what I termed an "alibi defense." I presented evidence that around the time, although not the exact time, but around the time of the crime or 15 to 20 minutes after the crime, the robbery, that my client was picking up a friend of his, Mr. McClain, who was also a friend of the deceased, at the place where Mr. McClain worked.
N.T., 1/18/07, at 17-18.
[6] In addition, a conscious decision on counsel's part to decline an alibi instruction would have required her to disregard the particularly damaging consequences to Bookard's defense from such a strategy. Our Supreme Court has instructed that where there is sufficient evidence in the record to establish an alibi defense, the defendant is clearly entitled to an alibi instruction for at least two reasons: (1) "an alibi defense, either standing alone or together with other evidence, may be sufficient to leave in the minds of the jury a reasonable doubt that might not otherwise exist," and (2) to "alleviate the danger that the jurors might impermissibly view a failure to prove the defense as a sign of defendant's guilt." Commonwealth v. Mikell, 556 Pa. 509, 517, 729 A.2d 566, 570 (1999). The latter concern is of particular significance here because the only apparent reason for calling Bookard to testify on his own behalf was to set up the alibi defense.
[7] The Commonwealth also called Vincent Marsico ("Marsico"), the human resource manager at Bookard's prior employer, in its case-in-chief to disprove the suggestion that Bookard was at work on March 23. Marsico testified that Bookard's employment had lasted only a single dayMarch 22, and thus he was not at work on March 23. N.T., 5/2/01, at 92.
[8] One may question whether these witnesses would have been or should have been allowed to testify in rebuttal, since their testimony merely corroborated Birke's testimony already offered in the Commonwealth's case-in-chief and therefore was arguably cumulative and repetitive.
[9] The Commonwealth argues that counsel's decision to forgo an alibi instruction was reasonable under the guidance provided by the Supreme Court in Commonwealth v. Hawkins, 586 Pa. 366, 894 A.2d 716 (2006). In Hawkins, the Supreme Court found that there was a "detailed record ... of trial counsel's rationale for consciously declining to seek the instruction," and held that counsel's explanation expressed "a reasonable basis for declining, as a tactical matter, to avail himself of a particular jury instruction to which his client unequivocally was entitled." Id., 586 Pa. at 390-391, 894 A.2d at 730 (emphasis supplied). Specifically, the Court noted:
[C]ounsel explained that in his twenty years of experience he had come to the conclusion that where alibi testimony is weak, or is predicated on the defendant's testimony alone, calling attention to that testimony explicitly as alibi evidence disserves the defendant's interests. Notably, he did not suggest that such testimony itself serves no purpose, nor did he suggest that counsel should not highlight alibi evidence for the jury in closing. He simply expressed his discomfort, under the circumstances at bar, with the expectations a specific alibi instruction might raise in the minds of the venire, and explained that it was his practice to avoid disappointing such expectations where possible.
Id., 586 Pa. at 390, 894 A.2d at 730.
While it was evident in Hawkins that defense counsel had carefully considered possible costs and benefits of the instruction in light of the evidence presented at trial, the record on appeal in this case, as explained hereinabove, does not reflect the same consideration. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565967/ | 284 S.W.2d 160 (1955)
DALLAS RAILWAY & TERMINAL COMPANY, Appellant,
v.
Kinzy FLOWERS, Appellee.
No. 3314.
Court of Civil Appeals of Texas, Waco.
November 10, 1955.
Rehearing Denied December 1, 1955.
*161 Burford, Ryburn, Hincks & Ford, Howard Jensen, Joseph M. Stuhl, Dallas, for appellant.
Chester A. Oehler, Chas. W. Tessmer, Dallas, for appellee.
McDONALD, Chief Justice.
This is a negligence case. Parties will be referred to as in the Trial Court. Plaintiff sued defendant for damages for injuries resulting from defendant running over plaintiff with a bus. Trial was to a jury, which convicted defendant of various acts of negligence and found that same were a proximate cause of plaintiff's injuries. The jury further acquitted plaintiff of contributory negligence, and fixed plaintiff's damages at $12,500. The trial Court granted defendant a new trial on the grounds that a juror failed to divulge certain prior claims against defendant on voir dire examination, but thereafter set aside the order granting a new trial and entered judgment for plaintiff on the verdict.
Defendant appeals, contending: 1) That the jury's finding that plaintiff did not fail to keep a proper lookout, was against the great weight and preponderance of the evidence; 2) and was contrary to the undisputed evidence. 3) That the jury's finding that plaintiff did not attempt to cross the street outside the pedestrian marked walk was against the great weight and preponderance of the evidence. 4) That the Trial Court erred in refusing defendant's requested special issues on plaintiff's intoxication. 5) That the Trial Court erred in refusing defendant's requested definitions of "proper lookout" and "negligence", which added the word "sober" to the usual definition "ordinarily prudent person". 6) That the Trial Court should have granted a new trial because of the failure of one of the jurors to disclose on voir dire examination of the jury panel that he and his wife had previously made claims against defendant. 7) That the Trial Court erred in not discharging the jury panel after plaintiff's counsel inquired of a member whether he had "ever been a claim agent for a big insurance company". 8) That the Trial Court erred in not discharging the jury panel after plaintiff outlined to them on voir dire examination defendant's defenses as alleged in defendant's pleadings. 9) That the verdict was excessive.
Defendant's first three points are levelled at the jury's findings that plaintiff did not fail to keep a proper lookout, and that he did not attempt to cross the street outside of the marked walkway for pedestrians. Defendant contends that these findings are both against the great weight and preponderance of the evidence and that the first finding is in addition, contrary to the undisputed evidence.
In our opinion, the evidence, when viewed most favorably in support of the jury findings, as we must view it, does not show that plaintiff was as a matter of law guilty of contributory negligence, or that the findings are against the great weight and preponderance of the evidence. See: Lang v. Henderson, 147 Tex. 353, 215 S.W.2d 585; Little Rock Furniture Co. v. Dunn, 148 Tex. 197, 222 S.W.2d 985; Dallas Railway *162 & Terminal Co. v. Tucker, Tex.Civ. App., 280 S.W.2d 600. The record reflects that one witness saw plaintiff coming from the north curb of Pacific, walking south and within the pedestrian crosswalk, with the green light with him, when the defendant's bus, without stopping, came down Pearl and made a righthand turn from Pearl into Pacific, knocking plaintiff down and west out of the crosswalk and running over his legs with its front wheel. Another witness saw plaintiff walking up the sidewalk like any ordinary person would; that he stepped off the curb to cross the street, in the pedestrian walk, and while the light was green; and that the bus ran into him from behind as he was going across the street in the crosswalk. It is further reflected that all the traffic had stopped on each side of the crosswalk as the plaintiff started to go across the street. The bus did not sound its horn and sort of ran up behind plaintiff and knocked him out of the corsswalk; that the light was green for plaintiff; that the bus knocked him unconscious and ran over his legs.
From the foregoing and from the record as a whole, consisting of some 655 pages, we think that there was reasonable basis for the jury to conclude that the plaintiff was not guilty of contributory negligence, both from the direct evidence and from the reasonable inferences therefrom.
Defendant's 4th point complains of the Trial Court's refusal to submit requested special issues on plaintiff's intoxication, while its 5th point contends that the Trial Court's definition of "negligence" and "proper lookout" should have included therein the word "sober".
In the case at bar the record reflects that the plaintiff had counsumed a half pint of 40¢ wine, along with some crackers and bologna, some hour and a half before the accident; that one witness thought plaintiff was intoxicated; that a laboratory test of a specimen of plaintiff's blood indicated the presence of alcohol to the extent that some impairment of faculties might be observed; there was other testimony to the effect that plaintiff was not drunk; that plaintiff's actions and movements during the hour and a half prior to the accident were those of a sober man; and that the plaintiff was knocked unconscious by the bus which hit and ran over him.
On the state of the record detailed, the defendant contends that it was entitled to special issues inquiring whether plaintiff was intoxicated on the occasion in question; whether plaintiff attempted to cross the street while intoxicated; whether such was a failure to exercise ordinary care; and whether such was a proximate cause of the occurrence.
The Trial Court correctly refused to submit these issues. Evidence of intoxication is an evidentiary fact to be considered by the jury, or trier of facts, in determining whether or not a person is guilty of some act of contributory negligence. The jury had the right to consider the evidence of plaintiff's alleged intoxication along with all other material evidence and circumstances in determining the issue as to whether or not plaintiff failed to keep a proper lookout, or attempted to cross the street outside of the marked pedestrian crossway. It is our view that the Trial Court's refusal to submit the requested issues on intoxication was not error. Benoit v. Wilson, 150 Tex. 273, 239 S.W.2d 792; Paris & G. N. R. Co. v. Robinson, 104 Tex. 482, 140 S.W. 434; St. Louis S. F. & T. Ry. Co. v. Morgan, Tex.Civ.App., 220 S.W. 281; Scott v. Gardner, 137 Tex. 628, 156 S.W.2d 513, 141 A.L.R. 50; San Antonio P. S. Co. v. Fraser, Tex.Civ.App., 91 S.W.2d 948.
The Trial Court's definitions of "proper lookout" and "negligence" were correct definitions. Defendant was not entitled to have the word "sober" inserted between the words "ordinarily prudent" and "person". The Trial court did not err in refusing the defendant's requested definitions.
*163 Defendant's 6th point contends that the Trial Court should have granted a new trial because the juror Atchley failed to disclose on voir dire examination that he and his wife had previously made claims against defendant. Defendant contends that had juror Atchley made true disclosure of the fact of the previous claims against defendant that he would have excrcised a peremptory challenge against such juror. It is evident from the record before us that juror Atchley had forgotten the claims in questionboth claims were small and insignificantone was settled for $90, the other claim was denied; both were some eleven years past. The record further shows that the juror Atchley not only was not prejudiced against defendant, but that he urged the award of the $12,500 verdict as against a $20,000 verdict which some members of the jury favored. There is no showing whatever that harm resulted to defendant; there is no exact record of just what actual questions were propounded to the jury panel or what exact answers were given by the juror in response thereto; and moreover, the facts of prior claims by the juror and his wife and all the details thereof were available to defendant from card index files kept by defendant on prior claimants. See Dossett v. Franklin Life Ins. Co., Tex.Com.App., 276 S.W. 1097.
We believe that Childers v. Texas Employers Ins. Ass'n, Tex., 273 S.W.2d 587, 588, is determinative of this point. In that case our Supreme Court said:
"The failure of the juror on his voirdire examination to disclose information that he had suffered previous injuries is not the test to be applied in this case, unless * * * such action resulted in probable injury to the respondent * * * [and] unless the appellate court shall be of the opinion that the error complained of amounted to such a denial of the rights of the complaining party as was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case."
We do not believe that defendant was deprived of a trial before a fair and impartial jury or that the error complained of resulted in the rendition of an improper judgment in the case. See also: Swartout v. Holt, Tex.Civ.App., 272 S.W.2d 756, W/E Ref. N.R.E; Coats v. Windham, Tex.Civ.App., 281 S.W.2d 207.
In its 7th point defendant contends that the Trial court should have discharged the jury panel after plaintiff's counsel asked a juror if he had ever been a claim agent for a big insurance company. The juror had stated that he worked for "North American". "North American" is a large insurance company and we cannot say that the jury panel should have been discharged because plaintiff's counsel asked that question. Insurance was not involved in this case and defendant's counsel could have asked for a jury instruction to disregard the question, and that insurance was not involved.
In its 8th point defendant contends that the Trial Court should have discharged the jury panel because plaintiff's counsel outlined to the members thereof defendant's defensive pleadings. The matter of voir dire examination of the jury panel is one in which a wide latitude is accorded. The extent of such examination is largely within the discretion of the Trial Court. Defendant has not showed where he has been injured in any manner whatsoever, and we fail to perceive any merit in this contention. See: Ft. W. & D. C. Ry. Co. v. Kiel, Tex.Civ.App., 195 S.W.2d 405, W/E Ref. N.R.E.
Defendant's last point contends that the damages awarded plaintiff are excessive. The award of $12,500 included $2,200 medical bills, $2,000 future medical bills, loss of past and future earnings and pain and suffering. The record disclosed that plaintiff's injuries were very serious and very painful. It is the jury's duty to reconcile all the evidence tendered as to the pecuniary loss sustained by the plaintiff. There is no showing in this record *164 of passion or prejudice, or of any fact that the verdict is excessive. See: Dallas Ry. & Terminal Co. v. Tucker, Tex.Civ.App., 280 S.W.2d 600; Bayshore Bus Lines v. Cooper, Tex.Civ.App., 223 S.W.2d 77, W/E Ref. N.R.E; Hawkins v. Collier, Tex.Civ. App., 235 S.W.2d 528.
From what has been said it follows that the judgment of the Trial Court is in all things affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565993/ | 284 S.W.2d 207 (1955)
SOUTHLAND LIFE INSURANCE COMPANY, Appellant,
v.
Lola J. TRAHAN, Appellee.
No. 12946.
Court of Civil Appeals of Texas, San Antonio.
November 2, 1955.
Rehearing Denied November 23, 1955.
Brewer, Matthews, Nowlin & Macfarlane, San Antonio, R. L. Dillard, Jr., Curtis White, Dallas, for appellant.
*208 Hoyo, Shelton & Height, San Antonio, for appellee.
POPE, Justice.
This is a suit upon a life insurance policy. Whether the policy provisions covered or excluded the risk of death while the insured was flying in a military plane and whether the insurer is estopped to claim that aviation risks were excluded are the legal questions presented. The jury answered all issues in favor of the plaintiff, who is the widow of deceased. The court, however, gave judgment in her favor, not grounded upon the jury verdict, but as a matter of law, based on an interpretation of the insurance policy.
Claude Trahan, the insured, in 1953 was a Sergeant on flying status at Randolph Air Force Base. He made application for an insurance policy, but before issuance Tom Pair, as soliciting agent for appellant, convinced insured that Southland Life Insurance Company could offer a better policy than the company with which the insured was dealing. The insured explicitly stated that he would not be interested in any policy which excluded flying coverage. Insured relied on Pair's representations and made application for a policy with Southland. When Pair delivered the policy the insured read it and refused to accept it, because it contained two aviation riders. One was known as the War and Aviation Risk Rider and the other was known as Partial Exclusion of Aviation Risk. Twenty-four days later, Pair returned with a policy, handed it to insured and showed him a separate slip of paper which stated that the War and Aviation Risk Rider had been removed. This was a true statement, but the other rider had not been removed. Insured did not again inspect the policy. Relying upon the printed slip and the agent's statement that the policy "takes care of the flying coverage," he accepted the policy. A few months later the insured died as a result of a fall from an airplane while making a military flight, 20,000 feet over the Gulf of Mexico. He was a member of the crew and was on training flight. The insurer refused to pay the death benefits because the insured suffered death by reason of the flight, which was a risk excluded by the rider known as Partial Exclusion of Aviation Risk.
The trial court, in sustaining the plaintiff's motion for judgment, held that the Partial Exclusion of Aviation Risk, which was not taken from the policy, was intended to exclude risks incurred by civilian aviation only, and that death suffered in military aviation was not excluded. To reach that conclusion, inferences from matters outside the policy itself were necessary. The War and Aviation Risk Rider, which was taken off the policy, excluded several kinds of war risks in addition to military flying. It excluded death as a result of an act of war, declared or undeclared, if the act of war occurred outside the United States or Canada. It excluded coverage for death within two years if death resulted from an act of war, and if the death occurred outside the United States or Canada while the insured was a civilian noncombatant occupying certain described hazardous areas. It also excluded coverage which:
"3. Occurs inside or outside the Home Area whether or not the Insured is in war service and as a result of operating or riding in or descending from any kind of aircraft if the Insured is pilot, officer or member of the crew of such aircraft or is giving or receiving any kind of training or instructions or has any duties aboard such aircraft or requiring descent therefrom."
Though that rider was taken off the policy, the other rider remained and was attached to the delivered policy. The rider was a separate sheet attached to the policy bearing the descriptive words in bold type, "Partial Exclusion of Aviation Risk." The rider was pasted to the policy and extended more than half way down the second page. It was visible to a casual inspection. Stamped in red on the policy were the words: "See Aviation Rider." It provided:
"If at any time, the insured is a pilot, officer, or member of the crew of any *209 aircraft, or is operating or assisting in the operation of any aircraft, or is giving or receiving any kind of training or instruction or has any duties whatsoever with respect to any aircraft while aboard it during travel or flight, and if the death of the insured results directly or indirectly from travel or flight in, or descent from or with such aircraft, the company's liability under this policy shall be limited to a total amount of premiums paid on the policy, without interest * * *."
The trial court's distinction between military and civilian flights in an aviation exclusion rider has been urged in some cases outside of Texas. The point has never been presented in Texas. The cases believed to support the distinction have been disapproved or distinguished by the majority of the courts on sound reasoning. Those cases do not hold that the deaths occurred by reason of airplane flights, but by reason of gun-shot, acts of third persons, or other positively excluded risks, and are therefore not in point. Boye v. United Services Life Ins. Co., 83 U.S.App.D.C. 306, 168 F.2d 570; Temmey v. Phoenix Mut. Life Ins. Co. of Hartford, 72 S.D. 387, 34 N.W.2d 833; Bull v. Sun Life Assur. Co., 7 Cir., 141 F.2d 456, 155 A.L.R. 1014; Riche v. Metropolitan Life Ins. Co., 193 Misc. 557, 84 N.Y.S.2d 832. A few other cases make a valid distinction between civilian and military flights because the language of the policy supports such a distinction. Schifter v. Commercial Travelers Mut. Acc. Ass'n of America, 183 A.D. 74, 50 N.Y.S.2d 376; Paradies v. Travelers Ins. Co., 183 Misc. 887, 52 N.Y.S.2d 290; Conaway v. Life Ins. Co. of Virginia, 148 Ohio St. 598, 76 N.E.2d 284.
The majority view, which we shall follow, is expressed in Mutual Life Ins. Co. of New York v. Daniels, 125 Colo. 451, 244 P.2d 1064, 1068, by these words:
"Nor does the fact that the policy did not have a war-risk clause give support to any implication that military flights were not excluded. The courts in the following cases have directly considered whether the lack of a war-risk clause renders the aviation clause in an insurance policy ambiguous and all have ruled that it does not: Wilmington Trust Co. v. Mutual Life Ins. Co. of N. Y., 3 Cir., 1949, 177 F.2d 404, certiorari denied 339 U.S. 931, 70 S. Ct. 665, 94 L. Ed. 1351; Green v. Mutual Benefit Life Ins. Co., 1 Cir., 1944, 144 F.2d 55; Hyfer v. Metropolitan Life Ins. Co., 1945, 318 Mass. 175, 61 N.E.2d 3; Thoma v. New York Life Ins. Co., Pa., 1946, 30 Northam.Law Rep. 369; Knouse v. Equitable Life Ins. Co. of Iowa, 1947, 163 Kan. 213, 181 P.2d 310; McKanna v. Continental Assurance Co., 1948, 165 Kan. 289, 194 P.2d 515, 517; Durland v. New York Life Ins. Co., 1946, 186 Misc. 580, 61 N.Y.S.2d 700; and Burns v. Mutual Benefit Life Ins. Co. of Newark, D.C., 1948, 79 F. Supp. 847, affirmed without opinion, 6 Cir., 179 F.2d 236. It seems more logical to assume that the company had the purpose of solely limiting its aviation risk, whether military or civilian, and was assuming all other risks, whether military or civilian, not in the aeronautic field."
Cases, in addition to those cited in Mutual Life Ins. Co. v. Daniels, which hold that the aviation exclusion clause applies equally to military and civilian flights are: United Services Life Ins. Co. v. Bischoff, 86 U.S. App.D.C. 328, 181 F.2d 627; Janco v. John Hancock Mut. Life Ins. Co., 164 Pa.Super. 128, 63 A.2d 138; and Richardson v. Lowa State Traveling Men's Ass'n, 228 Iowa 319, 291 N.W. 408. Contra: Broidy v. State Mut. Life Assur. Co., etc., 2 Cir., 186 F.2d 490.
The case was submitted to the jury on the theory that the insurer is estopped to deny that Pair contracted for a policy which would cover aviation risks. The jury found that Tom Pair, the agent, misrepresented facts to the insured, that Pair stated the policy would cover aviation risks, that the insured relied upon the statements, that the insured would and could have purchased other insurance covering *210 aviation risks but for the representations, that the insured would not have accepted the policy had he known it did not cover aviation risks, and that the insured was without knowledge or means of acquiring knowledge of the fact that the delivered policy did not cover aviation risks.
The findings afford no basis for a judgment for the plaintiff. Taking all the findings as true, there is no finding and no evidence that Tom Pair had authority to make a contract which included risks not covered by the policy itself.
Agency by estoppel depends upon the attitude, conduct and knowledge of the principal, not the agent. The record does not show that the principal ever had knowledge or reason to believe that the aviation rider should be left off the policy. The proof supports the findings with reference to Pair, the soliciting agent, but that is not enough. "The powers which the agent pretends to have, or assumes to exercise, are inoperative as a basis for ostensible authority when the principal is not affected by knowledge of them and does not validate them by acquiescence or assent; and no mere combination of circumstances which may, without the principal's participation, mislead third persons, however reasonably, into a false inference of authority affords a sufficient predicate for apparent authority." 2 C.J.S., Agency, § 96e(2); Hearn v. Hanlon-Buchanan, Tex.Civ.App., 179 S.W.2d 364, 368; Foote v. De Bogory, Tex.Civ.App., 179 S.W.2d 983, 986; Bell v. Moody, Tex. Civ.App., 147 S.W.2d 852, 855.
This was a life insurance policy. The statutes of Texas declare that a soliciting agent shall not have the power to waive, change or alter any of the terms or conditions of the application or policy. Insurance Code, Art. 21.04, Vernon's Ann.Civ. Stats. The policy in suit expressly limited the powers of an agent, and declared that the principal shall not be bound by any promise or representation made by persons other than certain executive officers. Soliciting agents do not possess the power to enlarge the coverage beyond those risks stated in the policy. Southland Life Ins. Co. v. Statler, 139 Tex. 496, 163 S.W.2d 623; Indianapolis Life Ins. Co. v. Powell, 133 Tex. 547, 127 S.W.2d 172; American Nat. Ins. Co. v. Huey, Tex.Com.App., 66 S.W.2d 290; Texas Life Ins. Co., v. Shuford, Tex.Civ. App., 131 S.W.2d 118. The precedents relied upon by appellee were cases wherein the necessary authority was present in the form of action taken by the home office, a general agent, or other persons possessed of powers, which in this case Pair did not have.
Appellee relies upon a statement, in part printed and in part typewritten, as controlling evidence of company authority to work an agency by estoppel and also to effect a modification of the policy. Before the policy was delivered to the insured, it was returned several times to the home office, because it contained the War Risk and Aviation Rider. No communication suggested that the Home Office should remove the Partial Exclusion of Aviation Risk Rider. Mrs. Hazel Hecathorn, the insurer's "Policy Change Manager," in transmitting the policy which was finally delivered to the insured, mailed the policy and a transmittal form to Pair, not to the insured. That transmittal form stated:
"Southland Life Insurance Company Dallas, Texas
We have made the requested change in the enclosed policy and take pleasure in returning it. Date November 24, 1953, Policy No. 379807-R Insured Claude Joseph Trahan Underwriting Department has reconsidered, War and Aviation Rider removed.
Mr. Tom Pair
1424 Majestic Bldg.
San Antonio 5, Texas
Hazel Hecathorn
Policy Change Manager"
The signature was typewritten. When Pair delivered the policy, he handed the policy to the insured and showed him the form. The form was not attached to the policy. The phrase "War and Aviation Rider removed" is treated as the company authorization to remove all aviation riders.
*211 The transmittal form may not be so regarded for many reasons. It was nothing more than an interoffice communication, addressed to Pair, the soliciting agent. This appears on the face of the form. It was not intended for any use other than transmittal to Pair. Pair had requested the Home Office to remove the very rider which the form states was removed. The other rider was not mentioned to the company by Pair and was never removed. The Home Office, which passed on risks, never intended that it be removed, and the record fails to disclose any request to the company that it be removed.
The terms of the policy issued by the home office control this case. A soliciting agent may not vary those terms. The judgment is reversed and rendered that the appellee recover only the amount of premiums paid, as provided in the policy. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565997/ | 284 S.W.2d 467 (1955)
James C. ROGERS, Plaintiff-Respondent,
v.
Guy A. THOMPSON, Trustee, Missouri Pacific Railroad Company, a Corporation, Defendant-Appellant.
No. 44595.
Supreme Court of Missouri, Division No. 1.
November 14, 1955.
Motion for Modification of Opinion and for Rehearing or to Transfer to Denied December 12, 1955.
Harold L. Harvey, Oliver L. Salter and Donald B. Sommers, St. Louis, for appellant.
Mark D. Eagleton, Thomas F. Eagleton, and Leland Jones, St. Louis, for respondent.
Motion for Modification of Opinion and for Rehearing or to Transfer to Court en Banc Denied December 12, 1955.
VAN OSDOL, Commissioner.
Plaintiff, James C. Rogers, instituted this action under the Federal Employers' Liability *468 Act, 45 U.S.C.A. § 51 et seq., for personal injury alleged to have been sustained by him July 17, 1951, when, during the course of his employment, he was burning weeds on defendant's right of way near Garner, Arkansas, and fell at one of defendant's drainage culverts. Plaintiff had verdict and judgment for $40,000 damages, and defendant has appealed.
Plaintiff alleged that he, as defendant's employee, was engaged in burning weeds by the use of a hand torch at a point a short distance north of Garner Crossing; that in so doing he was required to work at a place in close proximity to defendant's tracks whereon trains were passing; and that a train caused the fire from the burning weeds to come so dangerously close to him that he was obliged to retreat and move quickly from the place where he was working and to use as a place of work a part of defendant's right of way that was covered with loose and sloping gravel which did not provide adequate and sufficient footing for plaintiff to thus move or work under the circumstances. Plaintiff further alleged "that the said method of doing said work and the place of work thus provided became and were unsafe and dangerous and defendant in thus adopting said method and furnishing said place of work, failed to exercise ordinary care and was guilty of negligence and by reason thereof, plaintiff was caused to fall and to be injured thereby, all of which directly and proximately resulted, in whole or in part, from the negligence of the defendant as aforesaid."
Inasmuch as defendant-appellant's initial contention is that plaintiff failed to make out a case submissible to a jury and the trial court erred in overruling defendant's motion for a directed verdict, we will examine the evidence tending to support plaintiff's claim.
Plaintiff, twenty-four years old when injured, fell and was injured at a culvert approximately two hundred fifty yards north of Garner Crossing, a public crossing over defendant's line. At this point defendant's double-track line lies in a north-south direction. The tracks, consisting of rails and ties resting on gravel or crushed rock ballast, are supported by an earthen "dump."
Plaintiff had become the employee of defendant as a section laborer May 21, 1951; and in the morning of July 17, 1951, he with others of the section crew in charge of one Howdershell as foreman had started working near McRae, a short distance south of Garner Crossing. The section men worked until ten-thirty between McRae and Garner Crossing, at which time the foreman directed others of the crew to do some work three or four hundred yards north of the crossing. However, plaintiff was given the task of burning weeds and other vegetation on the shoulder, and on an area two and a half or three feet wide down over the crest of the incline of the dump. Plaintiff was told to begin just north of the crossing and burn the vegetation up to a point several hundred yards north of the crossing. The vegetation was dry. It had been withered and killed by chemicals. Plaintiff was given a torch consisting of a quart container with a spout on one side and a three-foot handle on the other. The spout was stuffed with waste for a wick, and the container was filled with kerosene and "white gasoline mix." Plaintiff had not theretofore seen anyone attempt to fire vegetation with that sort of device. He said that normally it is done with a flame thrower wherein the operators sit fifteen or twenty yards ahead of the flame. Flame throwers burn the whole right of way. Plaintiff had seen a flame thrower used. This was long before he was employed by defendant. Plaintiff does not know what the section crew's duty was when the flame thrower was used. Defendant's foreman testified a machine had been used as a flame thrower in burning weeds from 1928 or 1929 to early 1950. The machine caused too much fire. It burned hay, pasture and woodland on properties adjoining the right of way. The section men had to follow along and fight fire. The machine was later converted into a sprayer to kill weeds and after they are killed, the section men burn them. They use a torch or "something that is handy." They now have less fire and fire fighting.
*469 Pursuant to instructions, plaintiff had fired the weeds, "just spots," along the west shoulder and west side of the incline up to a point thirty or thirty-five yards south of the drainage culvert when a train came from the south on the east (northbound) track.
In firing the weeds, plaintiff had been walking two and a half or three feet from the west ends of the ties supporting the rails of the west (southbound) track. There is a flat place, "a path," along therea shoulder three to three and a half feet widebetween the edge of the sloping ballast and the crest of the dump.
Having heard the train whistle for the crossing and having seen that the train was on the east track, plaintiff quit firing the weeds, set the torch on a tie west of the west rail of the west track and ran northwardly to a point "right next" to the culvert. He knew the culvert was there. He had noticed it when he "was running north." But he paid no attention to it. He had forgotten it at the time. And, ignoring the fire, plaintiff directed his attention to the passing train. Plaintiff knew there would be a "wind come along behind" a passing train; but, there being a track between the fire and the train, he "didn't think the wind would affect it too much." Plaintiff explained how he was injured as follows, "At the time I thought I was far enough away, that I was plenty far enough to clear myself of the fire or any danger of the fire and it was time to start to watch these journals. So I set my torch down on the end of the tie, and was standing out on the flat surface, watching the train go by. After the train had gotten approximately half or two-thirds of the way back, I felt this heat on my face, on the side of my face. I turned to see what had happened, and it was fire right up in my face. I threw my left arm over my face and started turning to the west, to the north, backing away rapidly from the fire, and that is when I walked in on this culvert and slipped and fell."
Plaintiff further testified his foreman had instructed that when trains approached the section men were to "get clear of what we were doing and stand and watch the trains go by for hot boxes. . . He (the foreman) said at all times he wanted some of (the) men on one side of the track and some on the other." The foreman had also said, "`Don't stand even on the end of the ties or close to the other rail while there is a train on the opposite rail, because the interference, the sound of one train would deaden the sound of another one that possibly would come from the other way.'" The foreman had said to "`always stand on the shoulder.'" Plaintiff testified there was no flat surface or walkway over the top of the culvert where he was injured. A flat pathway on the shoulder including the ends of culverts was "supposed to be" kept free of ballast, so "the men would have a safe place to walk." He said that "normally" there is a flat place two or two and one-half feet on which to walk across a culvert; on this one there was nothing but crushed rockno flat surface. "It (the ballast) rolled out from under me." Vibration of trains had shaken crushed rock down onto the culvert so as to make a sloping incline.
Plaintiff, on cross-examination, testified that, when the foreman told him and others of the section crew to suspend their labors when a train approached and watch for hot journal boxes, he did not understand that he, plaintiff, when burning weeds, was to completely ignore the fire. Plaintiff "never thought he (the foreman) meant anything like that." Plaintiff said he knew it was his primary duty to watch the fire.
Plaintiff, on cross-examination, further testified as follows,
"Q. When you slipped, you say the gravel slipped out from underneath you? A. Yes.
"Q. This is that portion of the gravel that is right up next to the ties, isn't it? A. Yes, sir.
"Q. There is gravel right up next to those ties everywhere along the railroad, isn't there? A. Yes. sir.
*470 "Q. That is the proper way, I believe, that a railroad is built so far as you know, isn't it? A. Yes. * * *
"Q. You say the section gang keeps a path there for themselves to walk on? A. It is there, yes, sir.
"Q. On both sides of the right-of-way? A. Yes, that's right.
"Q. Every place on the railroad you have been? A. No, sir, not every place.
"Q. Well, all along the right-of-way on that section you worked on? A. Yes; there is a flat surface of dirt other than where the culverts are.
"Q. Other than where the culverts are? A. Yes.
"Q. So anytime you come to a culvert there isn't any. Is that right? A. There is not a dirt, flat surface.
"Q. At any culvert? A. To a certain extent; I mean not like a shoulder is."
Defendant's foreman testified that, "generally speaking," there is a shoulder eighteen inches to three or four feet wide along the outer edge of the ballast. There is no ballast on the shoulder unless "there would be loose rock kicked out. * * * We clean it up if we have a slide." The section men keep the ballast "lined up (approximately) straight."
As stated, defendant-appellant contends the trial court erred in overruling defendant's motion for a directed verdict. It is said there was no proof that an accident and injury could have been reasonably foreseen from the manner in which the drainage culvert was constructed and maintained; and there was no evidence that plaintiff's alleged injury was proximately caused by the method adopted by the defendant in burning the weeds or that such an injury or other danger could have been reasonably foreseen in the method used by defendant.
As to the issue of negligencethe facts in the instant case are not like those in Bailey v. Central Vermont Ry., 319 U.S. 350, 63 S. Ct. 1062, 87 L. Ed. 1444, cited by plaintiff-respondent, wherein the employee was ordered to work at a particular place where there was a narrow footing and no guardrail on a bridge eighteen feet above the ground, and the wrench he was required to use, unless disengaged when the doors of a hopper car were opening, was likely to spin with the shaft of the hopper and throw the employee off balance. Defendant was not absolved from its continuing duty to provide the employee with a reasonably safe place to work by the fact that the work there required was fleeting or infrequent. The nature of the task which the employee undertook, the hazards which it entailed, the effort which it required, the kind of footing he had, the space in which he could stand, the absence of a guardrail, the height of the bridge above the ground, the fact that the car could have been opened or unloaded near the bridge on level groundall these were facts and circumstances for the jury to weigh and appraise in determining whether the employer, in furnishing the employee with that particular place in which to perform the task was negligent. Nor are the facts of the instant case like those in Kelso v. W. A. Ross Const. Co., 337 Mo. 202, 85 S.W.2d 527, wherein the employee was required to work alternately between the top of a rock pile where he was safe, and on the ground by the rock pile in the performance of duties which distracted his attention from the danger of trucks passing or backing through or into his place of work, and no warning was given or other precaution taken to protect him from the danger. In Tatum v. Gulf, M. & O. R. Co., 359 Mo. 709, 223 S.W.2d 418, cited by plaintiff-respondent, there was no catwalk, platform or guardrail on a trestle so as to guard trainmen against the danger of falling to a creek thirty-four feet below. In Luthy v. Terminal R. Ass'n of St. Louis, Mo.Sup., 243 S.W.2d 332, there was no light at plaintiff's place of work, and plaintiff working in the dark fell over a black switch mechanism when attempting to board a car.
As to the issue of causal connectionthe mere fact that injury follows negligence *471 does not necessarily create liabilitycausal connection between negligence and injury is necessary. The test of whether there is causal connection is that, absent the negligent act the injury would not have occurred. Moreover, in order that negligence be actionable, there must not only be causal connection so that the injury would not have occurred but for the negligence, but such negligence must also be a proximate (legal) cause of the injury. Foreseeability of injury is sometimes employed as a test of proximate cause; but if it reasonably could have been foreseen or anticipated that an act of commission or omission was likely to injure someone, then it makes no difference that the manner in which the act did injure someone might not have been foreseen or anticipated and the actor may be held liable for any injury which, after the occurrence, appears to have been a natural and probable consequence of his act. Kimberling v. Wabash R. Co., 337 Mo. 702, 85 S.W.2d 736; Annin v. Jackson, 340 Mo. 331, 100 S.W.2d 872; Pedigo v. Roseberry, 340 Mo. 724, 102 S.W.2d 600; Mrazek v. Terminal R. Ass'n of St. Louis, 341 Mo. 1054, 111 S.W.2d 26; Gray v. Kurn, 345 Mo. 1027, 137 S.W.2d 558; Rose v. Thompson, 346 Mo. 395, 141 S.W.2d 824; Fassi v. Schuler, 349 Mo. 160, 159 S.W.2d 774; Springer v. Security Nat. Bank Savings & Trust Co., Mo.Sup., 175 S.W.2d 797; Branstetter v. Gerdeman, Mo. Sup., 274 S.W.2d 240.
The principle of the essentiality of proximate causation has been recognized by the Supreme Court of the United States in Federal Employers' Liability Act cases. Tiller v. Atlantic Coast Line R. Co., 318 U.S. 54, 63 S. Ct. 444, 87 L. Ed. 610; Brady v. Southern R. Co., 320 U.S. 476, 64 S. Ct. 232, 88 L. Ed. 239; Reynolds v. Atlantic Coast Line R. Co., 336 U.S. 207, 69 S. Ct. 507, 93 L. Ed. 618. As pointed out in Luthy v. Terminal R. Ass'n of St. Louis, supra, Mo.Sup., 243 S.W.2d 332, the Brady case (a five to four holding) involved facts arising prior to the 1939 amendment to the Federal Employers' Liability Act. However, the 1939 amendment did not affect the rule that liability must be based on negligencea proximate cause of the injury. In Tiller v. Atlantic Coast Line R. Co., supra, the court held that the Act and its amendment of 1939 abolished the post Priestly v. Fowler[1] defenses (the fellow servantassumption of risk rule) and authorized comparison of negligence instead of barring the employee from all recovery because of contributory negligence. But the Act and the amendment "leave for practical purposes only the question whether the carrier was negligent and whether that negligence was the proximate cause of the injury." (Our italics).
In the Brady case [320 U.S. 476, 64 S. Ct. 236], plaintiff's decedent, assisting in a switching movement, was thrown from the step of a gondola car to instant death when the trucks of the car hit "the wrong end" of a closed derailer on the east rail of the switch track. The opposite (west) rail of the switch track was defective. The west rail was so worn on the top and sides that experts were of the opinion it permitted the thrust of the east wheels of the trucks, as they rose over "the wrong end" of the derailer, to force the flange on the west wheels over the defective rail and so to derail the cars, when no such derailment would have occurred, "`nine times out of ten, if the best type'" rail was in use. The misuse of the derailer was an act of negligence, but it was mere speculation as to whether that negligence was chargeable to decedent or another. Plaintiff, therefore, could not recover on the theory that defendant was negligent in setting the derailer without warning decedent. As to negligence in using a defective railthe rail was sufficient for ordinary use, and defendant was not obliged to foresee or guard against misuse of the derailer, although a witness with years of experience as a brakeman recalled instances when trains were improperly backed over a closed derailer. The Supreme Court of the United States was of the opinion that the misuse of the derailer was entirely disconnected from the earlier act of defendant in placing the weak rail in the track. The unsound rail was not a proximate cause of the accident. The mere fact that with *472 a sound rail the accident would not have happened was not enough.
In our case, plaintiff's testimony leaves much unsaid as to the actual condition at the west end of defendant's drainage culvert, and as to the place where defendant was stepping when he fell. Plaintiff's testimony at best tends to show the fact that generally there was a level shoulder between the edge of the ballast and the crest of the dump supporting defendant's tracks. This level shoulder was supposed to be kept there so that section men might have a safe place to walk when working. There were flat surfaces across the ends of culverts, but not "like" the shoulders were. Considered from a standpoint most favorable to plaintiff, it reasonably could be said the flat surface across the west end of the culvert in question was narrower than elsewhere along the shoulder, and the vibration of trains had loosened and shaken down some gravel or crushed rock so as to make an inclined surface down to or near the end of the culvert. Plaintiff's testimony, which we have quoted in question and answer form, supra, was support for a conclusion that plaintiff slipped on gravel "right up next to the ties"; however, at another time while testifying, plaintiff said, "I didn't back up east, next to the rails." Even so, the condition of the culvert was not shown to have been unsafe for workmen in the ordinary use of the area in maintaining the tracks, including the firing and attending the firing of "spots" of weeds along the shoulder and incline of the dump. Can it be correctly said that a reasonably careful and prudent person would assume that loose gravel or crushed rock, shifted down on the shoulder at the culvert by the vibration of trains, would subject section men to an unreasonable hazard, accustomed as section men are to moving over tracks, ties and ballast in their multiple duties in the maintenance of the line? It is established that the standard of care must be commensurate to the dangers of the business. Less diligence is required where the danger is slight than where great. Frizzell v. Wabash R. Co., 8 Cir., 199 F.2d 153. It is true plaintiff was confronted by an emergency, in a sense; but, as we shall see, it was an emergency brought about by himself.
Nor was there evidence tending to show that the use of the hand torch (in itself) was an unsafe method or a more dangerous method than any other in burning weeds. See and compare Fore v. Southern Ry. Co., 4 Cir., 178 F.2d 349. Of course, it could be asserted that fire itself is a hazard. But it is not contended that defendant was negligent in starting a fire. And the use of the hand torch in firing the weeds did not make the fire dangerous. Defendant did not start a fire on its right of way and abandon it to sweep at large in changing winds or in swirls of wind caused by passing trains. Defendant had detailed plaintiff to fire the weeds; and, according to his testimony, plaintiff knew it was his primary duty to watch the fire.
It seems to us that the fireunattended and unwatched as it wasswept northwardly by the wind of the passing train toward defendant's culvert so that plaintiff (who had left the fire unattended) was obliged to move blindly away and fall, was something extraordinary, unrelated to, and disconnected from the incline of the gravel at the culvert. And now, after the event, we are obliged to say we think plaintiff's injury was not the natural and probable consequence of any negligence of defendant. And if there was negligence in failing to maintain a sufficiently wide path across the culvert or in permitting that path to become covered with crushed rock or gravel, still plaintiff's evidence is completely lacking in probative facts supporting a conclusion that defendant's negligence, in whole or in part, contributed to plaintiff's injury. Brady v. Southern R. Co., supra, 320 U.S. 476, 64 S. Ct. 232, 88 L. Ed. 239; Atlantic Coast Line R. Co. v. Anderson, 5 Cir., 221 F.2d 548; Chesapeake & O. Ry. Co. v. Burton, 4 Cir., 217 F.2d 471; Gill v. Pennsylvania R. Co., 3 Cir., 201 F.2d 718; Fore v. Southern Ry. Co., supra, 178 F.2d 349; Wolfe v. Henwood, 8 Cir., 162 F.2d 998; *473 Seaboard Air Line R. Co. v. Gentry, Fla., 46 So. 2d 485; Restatement, Torts, § 433.
The judgment should be reversed.
It is so ordered.
COIL and HOLMAN, CC., concur.
PER CURIAM.
The foregoing opinion by VAN OSDOL, C., is adopted as the opinion of the court.
All of the Judges concur.
NOTES
[1] Ex.1837, 3 M. & W. 1. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/624793/ | NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
MICHAEL WINSTON,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
2011-5093
__________________________
Appeal from the United States Court of Federal
Claims in Case No.11-232C, Judge Eric G. Bruggink.
__________________________
Decided: March 7, 2012
__________________________
MICHAEL WINSTON, of Somerset, Pennsylvania, pro se.
JAMES P. CONNOR, Trial Attorney, Commercial Litiga-
tion Branch, Civil Division, United States Department of
Justice, of Washington, DC, for defendant-appellee. With
him on the brief were TONY WEST, Assistant Attorney
General, JEANNE E. DAVIDSON, Director, and KIRK T.
MANHARDT, Assistant Director.
__________________________
WINSTON v. US 2
Before LOURIE, MOORE, and WALLACH, Circuit Judges.
PER CURIAM.
Michael Winston appeals the decision of the United
States Court of Federal Claims (“Claims Court”) dismiss-
ing his Complaint pursuant to Claims Court Rule 12(h)(3)
for lack of subject matter jurisdiction. We have jurisdic-
tion to review this final decision of the Claims Court
based on 28 U.S.C. § 1295(a)(3). Because we agree that
the Claims Court did not have jurisdiction over Mr.
Winston’s Complaint, we affirm.
I.
Mr. Winston is an inmate at the Laurel Highlands
State Correctional Institution in Somerset, Pennsylvania.
In his Claims Court Complaint, Mr. Winston alleged that
he was battered by local and state police officers on at
least two separate occasions, was assaulted by private
individuals, was wrongly imprisoned, was denied due
process as a result of a conspiracy, and was subjected to
mental and physical torture. Mr. Winston also claimed
that he was denied counsel and proper service in a Peti-
tion for Writ of Habeas Corpus filed in September, 2010 in
the United States Court for the Western District of Penn-
sylvania. 1 Mr. Winston asked the Claims Court to release
him from incarceration, order the federal government to
protect him outside of the Commonwealth of Pennsyl-
1 Mr. Winston’s petition was dismissed on January
9, 2012. Winston v. Pennsylvania, Case No. 1:10-cv-215-
SJM-SPB (W.D. Pa. Jan. 9, 2012). The court ruled that
Mr. Winston’s petition was dismissed for failure to amend
the petition to comply with court rules and repeated
failure to provide service.
3 WINSTON v. US
vania, reinstate his several prior legal actions, and order
an “honest federal judge” to preside over those actions. 2
On May 13, 2011 the Claims Court dismissed Mr.
Winston’s Complaint for lack of subject matter jurisdic-
tion. The court stated that it had no jurisdiction to hear
Mr. Winston’s tort claims or plea to be released from
incarceration. Additionally, the court stated that al-
though it has jurisdiction over claims for unjust impris-
onment in limited instances, Mr. Winston’s conviction
does not fall within that ambit.
II.
On appeal, Mr. Winston makes many of the same al-
legations he did to the Claims Court. Mr. Winston con-
tests the dismissal of his habeas petition, says that he has
been subject to “perjury, fraud, malicious prosecution,
torture, abuse,” and alleges he was battered by various
police officers and fellow prison inmates. Additionally,
Mr. Winston alleges negligence on the part of several
Commonwealth employees, federal agencies, and the
federal courts, which he faults for not considering the
merits of his prior legal actions.
We review the Claims Court’s dismissal for lack of
subject matter jurisdiction de novo. Adair v. United
States, 497 F.3d 1244, 1250 (Fed. Cir. 2007). Under the
Tucker Act, the Claims Court has jurisdiction over “any
claim against the United States founded either upon the
2 Mr. Winston has filed many complaints in the
United States Court for the Western District of Pennsyl-
vania and United States Court for the Middle District of
Pennsylvania in recent years. See e.g., Winston v. Riel,
Civ. No. 1:09-cv-223-SJM, 2010 WL 3505126 (W.D. Pa.
Sept. 3, 2010). Mr. Winston’s prior cases have been
dismissed for failure to state a claim and lack of subject
matter jurisdiction.
WINSTON v. US 4
Constitution, or any Act of Congress or any regulation of
an executive department, or upon any express or implied
contract with the United States, or for liquidated or
unliquidated damages in cases not sounding in tort.” 28
U.S.C. § 1491(a)(1). A plaintiff attempting to sue the
United States in the Claims Court first must “identify a
substantive right for money damages against the United
States separate from the Tucker Act itself” before the
court can address the claim’s merits. Todd v. United
States, 386 F.3d 1091, 1094 (Fed. Cir. 2004). The United
States is the only proper defendant in the Claims Court.
28 U.S.C. § 1491(a)(1).
Even broadly construing Mr. Winston’s pro se argu-
ments on appeal, we agree with the Claims Court; it did
not have subject matter jurisdiction to entertain his
claims. Mr. Winston’s allegations against officers of the
Commonwealth of Pennsylvania, the Commonwealth
itself, and private individuals do not fall within the juris-
diction of the Claims Court. 28 U.S.C. § 1491(a)(1).
Similarly, the Claims Court may not hear Mr. Winston’s
claims “sounding in tort.” Id. None of Mr. Winston’s other
claims, such as his due process claim, cruel and unusual
punishment claim, Sixth Amendment claim, and claim for
habeas review, are money mandating. Thus, they fall
outside the jurisdiction of the Claims Court. See e.g.,
Trafny v. United States, 503 F.3d 1339, 1340 (Fed. Cir.
2007); LeBlanc v. United States, 50 F.3d 1025, 1028 (Fed.
Cir. 1995).
The Claims Court does have limited jurisdiction over
unjust imprisonment claims under 28 U.S.C. § 1495.
However, in order for the court to hear such claims, a
plaintiff must “allege and prove” that his conviction was:
reversed or set aside on the ground that he is not
guilty of the offense of which he was convicted, or
5 WINSTON v. US
on new trial or rehearing he was found not guilty
of such offense, as appears from the record or cer-
tificate of the court setting aside or reversing such
conviction, or that he has been pardoned upon the
stated ground of innocence and unjust conviction
....
28 U.S.C. § 2513(a). Mr. Winston, however, is still incar-
cerated and his conviction has not been reversed or set
aside. Therefore, the Claims Court lacked jurisdiction to
hear his claim for unjust imprisonment.
For the reasons stated above, this court determines
that the Claims Court properly dismissed Mr. Winston’s
Complaint for lack of subject matter jurisdiction.
AFFIRMED
No costs. | 01-03-2023 | 03-07-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/997844/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
HAREGU GEBRU,
Petitioner,
v.
No. 98-1927
U.S. IMMIGRATION & NATURALIZATION
SERVICE,
Respondent.
On Petition for Review of an Order
of the Board of Immigration Appeals.
(A70-510-887)
Submitted: January 19, 1999
Decided: February 18, 1999
Before MURNAGHAN, WILKINS, and MICHAEL, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Mikre Michael Ayele, Arlington, Virginia, for Petitioner. Frank W.
Hunger, Assistant Attorney General, Karen Fletcher Torstenson,
Assistant Director, Joan E. Smiley, Senior Litigation Counsel, Office
of Immigration Litigation, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Respondent.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Haregu Gebru petitions for review of a final order of the Board of
Immigration Appeals (Board) denying her application for asylum and
withholding of deportation. Because substantial evidence supports the
Board's decision, we affirm.
The Immigration and Nationality Act (Act) authorizes the Attorney
General, in her discretion, to confer asylum on any refugee. See 8
U.S.C.A. § 1158(a) (West Supp. 1998). The Act defines a refugee as
a person unwilling or unable to return to her native country "because
of persecution or a well-founded fear of persecution on account of
race, religion, nationality, membership in a particular social group, or
political opinion." 8 U.S.C.A. § 1101(a)(42)(A) (West Supp. 1998);
see M.A. v. INS, 899 F.2d 304, 307 (4th Cir. 1990) (en banc).
The "well-founded fear of persecution" standard contains both a
subjective and an objective component. An applicant may satisfy the
subjective element by presenting "`candid, credible, and sincere testi-
mony' demonstrating a genuine fear of persecution." Berroteran-
Melendez v. INS, 955 F.2d 1251, 1256 (9th Cir. 1992) (citation omit-
ted); see Figeroa v. INS, 886 F.2d 76, 79 (4th Cir. 1989). The objec-
tive element requires a showing of specific, concrete facts that would
lead a reasonable person in like circumstances to fear persecution. See
Huaman-Cornelio v. Board of Immigration Appeals, 979 F.2d 995,
999 (4th Cir. 1992).
A finding of past persecution creates a rebuttable presumption of
a well-founded fear of future persecution. See 8 C.F.R. § 208.13(b)(1)
(1998). This presumption may be rebutted by evidence demonstrating
that there is no longer a reasonable fear of future persecution, such as
when conditions in an alien's native country have changed signifi-
cantly. See 8 C.F.R. § 208.13(b)(2) (1998).
2
Eligibility for asylum can also be based on grounds of past perse-
cution alone even though there is "`no reasonable likelihood of pres-
ent persecution.'" Baka v. INS, 963 F.2d 1376, 1379 (10th Cir. 1992)
(quoting Rivera-Cruz v. INS, 948 F.2d 962, 969 (5th Cir. 1991)). To
establish such eligibility, an alien must show past persecution so
severe that repatriation would be inhumane. Id. ; see Matter of Chen,
20 I. & N. Dec. 16 (BIA 1989).
We must uphold the Board's determination that Gebru is not eligi-
ble for asylum if the determination is "supported by reasonable, sub-
stantial, and probative evidence on the record considered as a whole."
8 U.S.C. § 1105a(a)(4) (1994).* We accord the Board all possible
deference. See Huaman-Cornelio, 979 F.2d at 999. The decision may
be "reversed only if the evidence presented by[Gebru] was such that
a reasonable factfinder would have to conclude that the requisite fear
of persecution existed." INS v. Elias-Zacarias, 502 U.S. 478, 481
(1992).
Gebru, who entered the United States in December 1990 as a visi-
tor, disagrees with the Board's finding that she failed to qualify for
a humanitarian grant of asylum based on past persecution and failed
to establish a well-founded fear of persecution in Eritrea and Ethiopia
due to her political opinion. Our review reveals, however, that sub-
stantial evidence supports the Board's finding that Gebru did not sat-
isfy her statutory burden.
Evidence at the hearing established that Gebru, a native of Ethiopia
and a citizen of Eritrea, worked in a hotel in Asmara. Now the capital
city of Eritrea, Asmara was once the provincial capital for what was
then a part of Ethiopia. In 1980, Gebru joined the Eritrean People's
Liberation Front (EPLF). Active in employee activities at her hotel,
Gebru eventually became the head of the hotel union. Because of her
leadership role in the union, the Ethiopian Worker's Party (EWP), the
_________________________________________________________________
*We note that 8 U.S.C. § 1105a(a)(4) was repealed by the Illegal
Immigration Reform Immigrant Responsibility Act of 1996, Pub. L. No.
104-128, 110 Stat. 3009 (IIRIRA), effective April 1, 1997. Because this
case was in transition at the time the IIRIRA was passed, 8 U.S.C.
§ 1105a(a)(4) is still applicable under the terms of the transitional rules
contained in § 309(c) of the IIRIRA.
3
party that supported the now defunct Communist regime in Ethiopia,
summoned Gebru to its Asmara office in December 1985. The party
official asked Gebru to join EWP. Gebru declined, claiming that she
was too busy to join the party. The party official then communicated
to Gebru that she might be considered a supporter of the EPLF if she
refused to join EWP. Gebru was afraid because EPLF was in rebellion
against the Communist regime. The party official permitted her to
leave, but warned her she could be suspected of membership in the
EPLF.
In January 1986, the party official summoned Gebru again to his
office and she again declined to join the EWP. The next month, Gebru
was arrested by Communist government agents and imprisoned for
over four months. During her incarceration, Gebru was interrogated
and was forced to view the corpses of executed prisoners. During two
interrogations, Gebru was tied up and suspended on a stick. She was
tortured with electric shocks, kicked, burned with cigarettes, and her
head was periodically immersed in a barrel of dirty water in attempts
to induce her to confess membership in EPLF. Despite this mistreat-
ment, Gebru did not admit her EPLF membership.
After her release, Gebru was summoned to the Department of
Investigation for interrogation several times in 1986, 1987, 1988, and
1989 for questioning. Gebru continued to deny support for the EPLF.
After the civil war in Eritrea took a turn against the Communist
regime in early 1990, Gebru and other suspected EPLF supporters
were rearrested and incarcerated. Held for three months, Gebru was
again tortured by her captors. Unable to withstand her mistreatment
this time, Gebru revealed that she had been a member of the EPLF
and provided names of two individuals she said were EPLF members.
In fact, those individuals were not involved with the EPLF but Gebru
named them to satisfy the demands of her captors. Gebru later refused
to sign a written confession.
After her release, Gebru traveled to Addis Ababa to stay with her
cousin. With her cousin's help, Gebru obtained an Ethiopian passport
and a visitor's visa to come to the United States. Gebru testified at the
hearing that she has come to oppose the EPLF, which now governs
a free and independent Eritrea, and has not been an EPLF member
since 1993. Since 1993, Gebru has associated herself with the Eritrean
4
Liberation Front, an opposition group active in Eritrea. She testified
that the EPLF government does not respect human rights and she does
not wish to return.
Gebru challenges the IJ's and Board's finding that although she
suffered past persecution, it did not compare to the level of atrocious
persecution suffered by the asylum applicant in Matter of Chen and
thus did not merit a humanitarian grant of asylum based on past perse-
cution alone. As the IJ noted in a lengthy and detailed opinion that
was affirmed by the Board, the asylum applicant in Matter of Chen
became physically debilitated due to years of mistreatment, had to
wear a hearing aid for the rest of his life, and suffered psychological
damage which made him suicidal. While Gebru undoubtedly suffered
greatly as a result of the mistreatment she endured during her incar-
cerations, the IJ and Board noted she presented no evidence demon-
strating that she suffers from physical and psychological disabilities
like those shown in Matter of Chen. While we note that Gebru's mis-
treatment was serious and agree that she indeed suffered past persecu-
tion, we find that substantial evidence supports the IJ's and Board's
finding that a grant of humanitarian asylum was not warranted.
We also find that substantial evidence supports the IJ's and Board's
finding that Gebru failed to demonstrate a well-founded fear of perse-
cution in Eritrea or Ethiopia because of changes in country condi-
tions. Mengistu no longer rules Ethiopia, and Eritrea is now an
independent nation governed by the same organization Gebru sup-
ported for almost thirteen years. As the IJ noted, the human rights sit-
uation in both Ethiopia and Eritrea has greatly improved since the
overthrow of Mengistu, and evidence in the record, particularly the
State Department country reports, does not support a finding that
members of the Eritrean Liberation Front are targeted for persecution
in Eritrea or Ethiopia.
Finally, Gebru contends that the Board used the wrong standard of
law and evidence and abused its discretion in denying her asylum. We
find the Board properly cited and applied the law. Gebru's contention
that the Board abused its discretion is misplaced because the Board
found her ineligible for relief and did not reach the question of
whether she merited a grant of asylum in the exercise of discretion.
5
Because Gebru has not established entitlement to asylum, she can-
not meet the higher standard for withholding of deportation. See INS
v. Cardoza-Fonseca, 480 U.S. 421, 431-32 (1987). We accordingly
affirm the Board's order. We dispense with oral argument because the
facts and legal contentions are adequately presented in the materials
before the court and argument would not aid the decisional process.
AFFIRMED
6 | 01-03-2023 | 07-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/726222/ | 95 F.3d 1152
NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Leroy L. McINTYRE, Jr., Petitioner-Appellant,v.Terry J. COLLINS, Respondent-Appellee.
No. 95-3947.
United States Court of Appeals, Sixth Circuit.
Aug. 20, 1996.
Before: BROWN, MARTIN, and SILER, Circuit Judges.
ORDER
1
Leroy L. McIntyre, Jr., a pro se Ohio state prisoner, moves for miscellaneous relief and appeals a district court order denying his petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254. This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination, this panel unanimously agrees that oral argument is not needed. Fed.R.App.P. 34(a).
2
McIntyre was convicted following a jury trial of felonious assault and aggravated burglary, with firearm and prior felony specifications. He was sentenced to eight to fifteen and eight to twenty-five years of imprisonment, plus three years of actual incarceration on each of the firearms specifications, all to run consecutively. In this habeas petition, McIntyre argued that the prosecution surprised him with changed testimony of a witness who had previously identified only the car used in the crime, but at trial testified that she recognized McIntyre and had not identified him earlier out of fear for her safety. Additionally, McIntyre argued that his appellate counsel had been ineffective in failing to raise a number of issues. The district court adopted the magistrate judge's recommendation to deny the petition, over McIntyre's objections.
3
Upon review, we conclude that this petition was properly denied, as McIntyre was not denied a fundamentally fair trial. See Clemmons v. Sowders, 34 F.3d 352, 356 (6th Cir.1994). As to McIntyre's claim of surprise testimony, even if this claim was not procedurally defaulted in the state courts, the record shows that there was more than sufficient evidence to connect McIntyre with both crimes even absent this identification, and therefore the admittance of this testimony did not deny him a fair trial. McIntyre's claims of ineffective appellate counsel are also unpersuasive, as appellate counsel is not constitutionally required to raise every possible claim, see Smith v. Murray, 477 U.S. 527, 536 (1986), and the claims McIntyre argues should have been raised are of little merit.
4
Accordingly, all pending motions are denied and the district court's order is affirmed. Rule 9(b)(3), Rules of the Sixth Circuit. | 01-03-2023 | 04-17-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1006213/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
LARRY A. CAMPBELL; EASTERN
KENTUCKY RESOURCES; BLUE ASH
DEVELOPMENT, INCORPORATED,
Plaintiffs-Appellants,
and
THE JOAN CAMPBELL TRUST, by its
trustee, Larry A. Campbell; J.
MILLER ESHLEMAN & SON,
INCORPORATED; EXECUTIVE
PROPERTIES, INCORPORATED,
Plaintiffs,
v. No. 00-2275
JOHN W. LYON,
Defendant & Third Party
Plaintiff-Appellee,
v.
THE CHUBB CORPORATION; PACIFIC
INDEMNITY COMPANY, a subsidiary of
The Chubb Corporation,
Third Party Defendants.
REUBEN GUTTMAN,
Movant.
Appeal from the United States District Court
for the District of Maryland at Greenbelt.
Alexander Williams, Jr., District Judge.
(CA-97-904-AW)
Argued: September 24, 2001
Decided: December 27, 2001
2 CAMPBELL v. LYON
Before MICHAEL, TRAXLER, and GREGORY, Circuit Judges.
Affirmed by unpublished per curiam opinion. Judge Traxler wrote an
opinion concurring in part and dissenting in part.
COUNSEL
ARGUED: Arnold Murray Weiner, SNYDER, WEINER, WELT-
CHEK, JACOBS & SLUTKIN, Baltimore, Maryland, for Appellants.
Barry Coburn, COBURN & SCHERTLER, Washington, D.C., for
Appellee. ON BRIEF: Thomas J. Zagami, Lynn Edwards Brenne-
man, HODES, ULMAN, PESSIN & KATZ, P.A., Towson, Maryland,
for Appellants.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Larry Campbell, Eastern Kentucky Resources ("EKR") and Blue
Ash Development, Inc. ("Blue Ash") (collectively, "Campbell") filed
this suit against John Lyon,1 Campbell’s former business associate,
alleging various counts of invasion of privacy, tortious interference
with business and economic relations, abuse of process, and conspir-
acy. Campbell claims that Lyon organized and directed the dissemina-
1
Campbell captioned his appellate briefs as "Larry A. Campbell et al
v. John W. Lyon v. The Chubb Corporation; Pacific Indemnity Company
and Reuben Guttman." It is unclear why he did so, as he did not name
Chubb, Pacific Indemnity, or Guttman in his Complaint. They are not
parties to this appeal.
CAMPBELL v. LYON 3
tion of private, harmful, and/or false information about him to third
parties who conspired with Lyon by further disseminating the infor-
mation to members of the public. Campbell claims that Lyon’s activi-
ties caused the failure of a landfill project in Magoffin County,
Kentucky, in which Campbell was the principal investor.
Campbell appeals the district court’s decision granting summary
judgment to Lyon. We affirm.
I.
The Magoffin County landfill project began in September 1991,
when EKR formed a joint venture with Blue Ash and Royalton
Resources ("Royalton") for the purpose of developing and operating
a municipal solid waste landfill in Magoffin County. William Polan
was affiliated with Royalton and, ultimately, Campbell alleged that
Polan misused substantial amounts of the joint venture’s funds. The
parties eventually terminated the joint venture and removed Polan
from the project.
Campbell alleges that Lyon and Polan formed a conspiracy to
effectuate the failure of the landfill project by spreading inflammatory
information about Campbell. Campbell claims that Lyon, through
Polan, disseminated copies of a complaint filed against Campbell, dis-
seminated Campbell’s criminal record, that Lyon made lump sum
payments to Polan or Polan’s wife totaling approximately $50,000,
that Lyon caused the arrest of an EKR official during an open house
event intended to promote the landfill project, and that Polan gener-
ally made defamatory statements about Campbell.2
On March 24, 1998, Campbell voluntarily withdrew four tortious
interference and conspiracy claims. Upon Lyon’s motion for sum-
mary judgment, the district court granted summary judgment against
Campbell’s remaining tortious interference claims, explaining that
Campbell failed to show that Lyon’s actions resulted in the landfill
project’s failure. The court held that the project more likely than not
failed because of grass-roots opposition to the project, Campbell’s
2
Campbell did not name Polan as a defendant in this suit.
4 CAMPBELL v. LYON
inability to obtain regulatory approval, and a Kentucky Supreme
Court ruling invalidating the agreement between Magoffin County
and Campbell to develop the landfill. The district court also granted
summary judgment against Campbell’s invasion of privacy claims,
explaining that the information Lyon allegedly disseminated about
Campbell was true and public. Finally, the district court granted sum-
mary judgment against Campbell’s abuse of process claims. Campbell
claimed that Lyon previously filed a RICO action in Maryland federal
court and abused that process by providing copies of the complaint to
third parties. The district court rejected this claim, stating that it was
"merely a regurgitation of the invasion of privacy and tortious inter-
ference claims." Campbell v. Lyon, Civil Action No. AW-97-904,
Mem. Op. at 15 (D. Md. 2000). The court also noted that no authority
exists for the proposition "that the mere dissemination of public docu-
ments filed in court constitutes sufficient basis for an abuse of process
claim." Id.
II.
We review a grant of summary judgment de novo. Higgins v. E.I.
DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th Cir. 1988).
Summary judgment is appropriate only when there are no material
facts in dispute and the moving party is entitled to judgment as a mat-
ter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). A material fact is in dispute when its existence or
non-existence could lead a jury to different outcomes. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue exists
when there is sufficient evidence on which a reasonable jury could
return a verdict in favor of the non-moving party. Id. Mere specula-
tion by the non-moving party cannot create a genuine issue of mate-
rial fact. Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). The
Court must view the evidence in the light most favorable to the non-
moving party, which, in this case, is Campbell. Smith v. Virginia
Commonwealth Univ., 84 F.3d 672, 675 (4th Cir. 1996).
III.
To establish a tortious interference claim under Maryland law,3 a
3
The parties agree that Maryland law applies to this dispute.
CAMPBELL v. LYON 5
plaintiff must prove: (1) that the defendant committed an "‘intentional
and wilful act[ ];’" (2) that was "‘calculated to cause damage to the
plaintiffs in their lawful business;’" (3) was "‘done with the unlawful
purpose to cause such damage and loss, without right or justifiable
cause on the part of the defendants (which constitutes malice);’" and
(4) that "‘actual damage and loss result[ed].’" Willner v. Silverman,
71 A. 962, 964 (Md. 1909) (quoting Walker v. Cronin, 107 Mass.
555, 562 (1871)). See also Lyon v. Campbell, 707 A.2d 850 (Md.
App. 1998) (same). To establish causation in a tortious interference
action, a plaintiff must prove that the defendant’s wrongful or unlaw-
ful act caused the harm done to the business that was the target of the
interference. Alexander v. Evander, 650 A.2d 260, 269 (Md. 1994).
See also Macklin v. Logan Associates, 639 A.2d 112, 119 (Md. 1994)
("to be actionable, the improper or wrongful conduct must induce the
breach or termination of the contract").
The district court correctly ruled that other factors, rather than
Lyon’s actions, brought about the end of Campbell’s involvement in
the landfill project. As the district court explained,
there was no shortage of community attention to an involve-
ment in the trash landfill issue. The proposed project
appears to have been a highly politically charged issue. In
fact, the grass-roots opposition to the project, its inability to
obtain regulatory approval, and the Kentucky Supreme
Court’s ruling (that the agreement between the county and
EKR was not a valid agreement) are the likely causes of the
landfill project’s failure.
Campbell, Mem. Op. at 9.
In Eastern Kentucky Resources v. Arnett, 934 S.W.2d 270 (Ky.
1996), the Kentucky Supreme Court voided the agreement between
EKR and Magoffin County to build the landfill. It is undisputed that
Lyon was not involved in that litigation in any way. Additionally, it
is undisputed that Campbell never tried to renegotiate the agreement
after the decision, thereby effectively ending Campbell’s involvement
with the landfill project. Finally, it is undisputed that the landfill faced
extensive grass-roots opposition, with more than 6,000 people signing
petitions opposing the landfill. In light of these undisputed facts,
6 CAMPBELL v. LYON
Campbell cannot prove that Lyon’s alleged wrongful acts were the
acts that more likely than not caused the demise of the landfill project.
That demise was more likely than not caused by other factors, includ-
ing the Kentucky Supreme Court’s decision. Thus, summary judg-
ment was appropriate against Campbell’s tortious interference claims.
IV.
Campbell purports to make two types of invasion of privacy
claims: one for false light invasion of privacy and another under
§ 652D of the Restatement (Second) of Torts for "unreasonable pub-
licity given to the other’s private life." Summary judgment was appro-
priate as to both.
A.
To state a claim for false light invasion of privacy, a plaintiff must
prove (1) that the defendant gave "publicity to a matter concerning
another that places the other before the public in a false light"; (2) that
"the false light in which the other person was placed would be highly
offensive to a reasonable person"; and (3) that "the actor had knowl-
edge of or acted in reckless disregard as to the falsity of the publi-
cized matter and the false light in which the other would be placed."
Bagwell v. Peninsula Regional Medical Center, 665 A.2d 297, 318
(Md. App. 1995). As in defamation cases, a defendant in a false light
case is entitled to judgment as a matter of law if the statements made
are true. Id.
Campbell’s complaint states that by "disseminating and publicizing
information, . . . including Campbell’s FBI criminal record, Lyon
unreasonably invaded Campbell’s privacy by giving publicity to the
private facts of Campbell’s life." The Complaint further asserts that
Lyon "continued to satisfy Polan’s thirst for scandalous information
about Campbell’s background . . . by relating to Polan numerous
embellished and grossly exaggerated accounts of mysterious investi-
gations of which Campbell had allegedly been the subject."
As the district court held, the information allegedly disseminated
by Lyon about Campbell was both true and public. For example,
CAMPBELL v. LYON 7
Campbell does have a criminal record, and that criminal record is a
matter of public record.4 The RICO complaint that Lyon filed against
Campbell similarly is a public record. Additionally, while Campbell
alleges that Lyon sent Polan other documents to disseminate to the
public, he fails to provide any specifics about the documents.
However, Campbell claims that the district court ignored his alle-
gations that Lyon disseminated other, false information about him,
including that Campbell wrote bad checks, committed mail fraud,
wire fraud, and racketeering, was imprisoned for committing racke-
teering offenses, was a murderer, was blacklisted from jobs nation-
wide, was involved in organized crime, and was a career criminal. In
support of these allegations, Campbell relies on the affidavits of Tim-
othy Weddington and Angela Siegel Clark.
However, the Weddington and Clark affidavits are inadmissible
hearsay. Both relay out-of-court statements allegedly made to the affi-
ants by Polan. Campbell claims the affidavits are admissible under
Fed. R. Ev. 801(d)(2)(E), which allows the admission of a hearsay
statement against a party if the statement was made "by a coconspira-
tor during the course and in furtherance of the conspiracy." The Rule
further states that "[t]he contents of the statement shall be considered
but are not alone sufficient to establish . . . the existence of the con-
spiracy and the participation therein of the declarant and the party
against whom the statement is offered[.]"
This Court reviews for abuse of discretion a district court’s refusal
to admit evidence under Fed. R. Ev. 801(d)(2)(E). United States v.
Blevins, 960 F.2d 1252, 1255 (4th Cir. 1992). The Court reviews the
district court’s factual findings regarding admissibility under the
clearly erroneous standard. United States v. Shores, 33 F.3d 438 (4th
Cir. 1994).5
4
Polan, who is accused of disseminating this information on Lyon’s
behalf, averred in an affidavit that he obtained information about Camp-
bell’s criminal record from public sources in Danville, Virginia. Camp-
bell does not point this Court to any evidence to the contrary.
5
Federal Rule of Evidence 104(a) states that "[p]reliminary questions
concerning the qualification of a person to be a witness, the existence of
a privilege, or the admissibility of evidence shall be determined by the
court . . . . In making its determination it is not bound by the rules of evi-
dence except for those with respect to privileges."
8 CAMPBELL v. LYON
In Bourjaily v. United States, the United States Supreme Court
explained that a court may not admit a statement under Rule
801(d)(2)(E) without first determining that a conspiracy actually
existed between the third party and the party-opponent. 483 U.S. 171,
175 (1987). See also Blevins, 960 F.2d at 1255; Fed. R. Ev. 104(a).
The existence of a conspiracy must be shown with independent evi-
dence, but may be supplemented by the disputed hearsay statement.
Id. at 181. The party seeking to admit the statement must prove the
existence of a conspiracy by a preponderance of the evidence.
Blevins, 960 F.2d at 1255.
The district court refused to admit the Weddington and Clark affi-
davits because Campbell failed to offer independent evidence of a
conspiracy. In fact, the only arguably independent evidence Campbell
proffered (other than his own conclusory statements) was proof that
Lyon gave Polan approximately $50,000. Neither Polan nor Lyon
deny that Lyon gave Polan the money, but claim that the money trans-
fers represented a series of collateralized loans, albeit as yet unpaid.
Campbell claims the transfers were pay-offs in furtherance of the con-
spiracy, but fails to advance any evidence in support of this conclu-
sory assertion. As the district court explained, Campbell "has not
presented evidence to the Court that the loans were in any way con-
nected to an alleged conspiracy or plot to cause the failure of [Camp-
bell’s] business and economic pursuits. . . . [Campbell] present[s] no
evidence beyond mere speculation and compilation of inferences."
Campbell, Mem. Op. at 13. Campbell fails to proffer any independent
evidence of a conspiracy. The district court did not abuse its discre-
tion by finding the Weddington and Clark affidavits inadmissible.6
6
Campbell also argues that this Court may find the existence of a con-
spiracy solely by reviewing the disputed hearsay statements themselves.
However, the plain language of Rule 801(d)(2)(E) counsels against such
an approach. The Rule explicitly states that "[t]he contents of the state-
ment shall be considered but are not alone sufficient to establish . . . the
existence of the conspiracy[.]" Fed. R. Ev. 801(d)(2)(E) (emphasis
added). The Rule plainly states that the disputed hearsay statements,
alone, cannot establish the prerequisite conspiracy. See also United
States v. Padilla, 203 F.3d 156, 161 (2nd Cir. 2000) (an out-of-court
statement may not be admitted if the statements themselves are the only
evidence of the defendant’s participation in a conspiracy); United States
CAMPBELL v. LYON 9
Because the affidavits are inadmissible, the allegations contained
in those affidavits cannot support a false light invasion of privacy
claim. Because these inadmissible affidavits are the only "evidence"
Campbell has to support his claim that Lyon told others that Campbell
wrote bad checks, committed mail fraud, wire fraud, and racketeering,
was imprisoned for committing racketeering offenses, was a mur-
derer, was blacklisted from jobs nationwide, was involved in orga-
nized crime, and was a career criminal, summary judgment was
appropriate against this claim.
B.
Section § 652D of the Restatement (Second) of Torts states that
[o]ne who gives publicity to a matter concerning the private
life of another is subject to liability to the other for invasion
of his privacy, if the matter publicized is of a kind that
(a) would be highly offensive to a reasonable person, and
(b) is not of legitimate concern to the public.
To come within this branch of the invasion of privacy tort, the matter
disclosed must be a private fact and it must be made public. Pember-
ton v. Bethlehem Steel Corp., 502 A.2d 1101, 1118 (Md. App. 1986).
The requirement that the information publicized be private is rooted
in constitutional law. In Cox Broadcasting Corp. v. Cohn, 420 U.S.
469 (1975), the Supreme Court noted that "even the prevailing law of
invasion of privacy generally recognizes that the interests in privacy
fade when the information involved already appears on the public
record." The First and Fourteenth Amendments prohibit States from
v. Portela, 167 F.3d 687, 702-03 (1st Cir. 1999) ("While a trial court
may consider the contents of the statements at issue as evidence" of a
conspiracy, "the determination must rest at least in part on corroborating
evidence beyond that contained in the [hearsay] statements at issue");
United States v. Kelly, 989 F.2d 980 (8th Cir. 1993) ("in supporting co-
conspirator statements . . . the government must provide evidence inde-
pendent of the challenged statements").
10 CAMPBELL v. LYON
imposing sanctions "on the publication of truthful information con-
tained in official court records open to public inspection." Id. at 494-
95. Thus, as the Pemberton court explained, "[t]here is no liability
when the defendant merely gives further publicity to information
about the plaintiff that is already public." 502 A.2d at 1118. In Pem-
berton, the Maryland court held that "the circulation of court records
pertaining to [the appellant’s] conviction is Constitutionally protected
and cannot, therefore, form the basis of tort liability." Id. Similarly,
the commentary to § 652D states that "there is no liability for giving
publicity to facts about the plaintiff’s life that are matters of public
record, such as the date of his birth, the fact of his marriage, his mili-
tary record, the fact that he is admitted to the practice of medicine or
is licensed to drive a taxicab, or the pleadings that he has filed in a
lawsuit."
Campbell claims that Lyon publicized his criminal record and the
RICO complaint. Both documents are public records. Thus, summary
judgment was appropriate against Campbell’s § 652D claim.
V.
To maintain an abuse of process claim, a plaintiff must prove "(1)
wilful use of process for an illegal purpose, (2) with an underlying
ulterior motive, and (3) resulting damages." Humphrey v. Herridge,
653 A.2d 491, 493 (Md. App. 1995). Abuse of process claims are
concerned with "improper use of criminal or civil process in a manner
not contemplated by law after it has been issued[.]" Walker v. Ameri-
can Security & Trust Co., 205 A.2d 302, 307 (Md. App. 1964) (inter-
nal citations omitted).
Campbell claims that Lyon filed a RICO suit against him on
December 31, 1992, which was dismissed by the U.S. District Court
for the District of Maryland. Lyon appealed the dismissal order to this
Court, which affirmed. See Lyon v. Campbell, 28 F.3d 1210, 1994
WL 369453 (4th Cir.) (unpublished). Campbell claims that Lyon filed
the suit "for the illegal purposes" of invading Campbell’s privacy and
tortiously interfering with his business, and for the "ulterior motives
of causing [Campbell] to suffer financial ruin, causing the personal
and business reputations of [Campbell] to be damaged and causing
interference with the conduct of the business affairs of [Campbell]."
CAMPBELL v. LYON 11
In other words, as Campbell states in his appellate brief, Campbell
claims that Lyon filed the suit with the ulterior motive of "adopting
the dismissed claims as truths, and disseminating the complaint to
others in furtherance of their conspiratorial objectives." Appellants’
Br. at 51.
The district court held that Campbell’s abuse of process claims
were "merely a regurgitation of the invasion of privacy and tortious
interference claims." Campbell, Mem. Op. at 15. Additionally, the
court explained that Campbell failed to allege any illegal purpose. Id.
Indeed, the only allegation Campbell made is that Lyon provided a
copy of the RICO complaint to Polan. The mere dissemination of a
public document cannot constitute a sufficient basis for an abuse of
process claim. Because Campbell failed to establish that the dissemi-
nation was somehow illegal, see Humphrey, 653 A.2d at 493, sum-
mary judgment was appropriate against this claim.
VI.
For the foregoing reasons, the judgment of the district court is
affirmed.7
AFFIRMED
TRAXLER, Circuit Judge, concurring in part and dissenting in part:
I concur in the majority’s opinion except as to Part IV, as to which
I take a different view. At summary judgment, Campbell presented
affidavits from Angela Siegel Clark, the public relations consultant
for EKR (a company in which Campbell was a principal) and Timo-
thy Weddington, the President of Salyersville National Bank where
EKR banked. These individuals stated that Polan made quite a few
statements to them about Campbell’s character, his criminal history
and his past business dealings. While some of what Polan told them
was true and verifiable, there is much that was not. For example,
Weddington stated that Polan told him that Campbell was alleged to
7
We have reviewed Campbell’s remaining arguments and find them to
be equally without merit.
12 CAMPBELL v. LYON
have murdered a business associate, that he had been found guilty of
price fixing and was consequently barred from government contracts,
and that he had been convicted of RICO violations. See J.A. 2780.
Weddington also indicated that Polan told him that he, Polan, was
working with Lyon to discredit and ruin Campbell. See J.A. 2781.
Clark stated Polan told her that Campbell had served time in jail
for a RICO violation, that he was a murderer, and that he had been
blacklisted from jobs across the United States. See J.A. 2793-95.
Polan also stated, according to Clark, that he was working with Lyon
to hurt Campbell and that Lyon had paid Polan between $200,000 and
$300,000 for that purpose. See J.A. 2794.
The parties apparently agree that these statements, if indeed made
and proven false as Campbell states they are, would support a claim
under Maryland law for false light invasion of privacy. See Bagwell
v. Peninsula Reg’l Med. Ctr., 665 A.2d 297, 318 (Md. Ct. Spec. App.
1995); Allen v. Bethlehem Steel Corp., 547 A.2d 1105, 1108 (Md. Ct.
Spec. App. 1988). However, in order to make such a claim actionable
against Lyon, Campbell must be able to tie Polan’s statements to
Lyon, which Campbell asserts he can do through the Clark and Wed-
dington affidavits, provided they are admissible. I agree that the state-
ments of Clark and Weddington are admissible under Federal Rule of
Evidence 801(d)(2)(E).
Rule 801(d)(2)(E) instructs that a statement is not inadmissible
hearsay if
[t]he statement is offered against a party and is . . . (E) a
statement by a coconspirator of a party during the course
and in furtherance of the conspiracy. The contents of the
statement shall be considered but are not alone sufficient to
establish . . . the existence of the conspiracy and the partici-
pation therein of the declarant and the party against whom
the statement is offered under subdivision (E).
The statements attributed to Polan by Clark and Weddington provide
strong evidence of a conspiracy, but under Rule 801(d)(2)(E) they are
not enough in and of themselves. Here, though, the admissibility of
this testimony is established by other independent evidence which
CAMPBELL v. LYON 13
corroborates the existence of the conspiracy reflected in Polan’s state-
ments. Campbell has produced a substantial number of financial doc-
uments showing large and frequent transfers of money from Lyon to
Polan and, in some instances, to Polan’s eleven-year-old daughter.
See J.A. 2394-2594.
If there were some legitimate relationship between Lyon and Polan
to justify the payments, Campbell might fall short on his proof. But
here Campbell alleges, and apparently can show, that the only com-
mon ground shared by Lyon and Polan was their animosity toward
Campbell. The payments from Lyon to Polan and his family between
1993 and 1998 approximated $300,000, see J.A. 231-233, 517-519,
856-862, which substantiates Clark’s affidavit, and Campbell has evi-
dence that Lyon did not attempt to characterize these payments as
"loans" until long after they were made. In my view, the giving of a
large amount of money in an extremely suspicious manner is very
incriminating and sufficient to corroborate the existence of a conspir-
acy between Poland and Lyon and to make the statements of Clark
and Weddington admissible under Rule 801(d)(2)(E). Because the
admission of this evidence would preclude summary judgment against
Campbell on his claim for false light invasion of privacy, I respect-
fully dissent. | 01-03-2023 | 07-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1541176/ | 258 Pa. Superior Ct. 506 (1978)
393 A.2d 473
COMMONWEALTH of Pennsylvania, Appellant,
v.
Charles Timothy TYLWALK.
Superior Court of Pennsylvania.
Argued April 14, 1978.
Decided October 20, 1978.
*507 Barbara H. Schickling, Assistant District Attorney, with her Thomas F. Morgan, District Attorney, Clearfield, for Commonwealth, appellant.
James A. Naddeo, and Belin, Belin & Naddeo, Clearfield, submitted a brief for appellee.
Before JACOBS, President Judge, and HOFFMAN, CERCONE, PRICE, VAN der VOORT, SPAETH and HESTER, JJ.
PRICE, Judge:
This is an appeal by the Commonwealth from the lower court's order suppressing chemical tests because they were deemed to have been performed too long after a fatal accident in which appellee was allegedly involved. We reverse the order of the lower court and remand the case for trial.
It is the Commonwealth's position that without the suppressed evidence the prosecution will be substantially handicapped and that "the suppressed evidence may well mark the difference between conviction and acquittal of the defendant." (Appellant's brief at 8). Therefore, the order before us is ripe for appellate review. Commonwealth v. Bosurgi, 411 Pa. 56, 190 A.2d 304 (1963); Commonwealth v. Deren, 233 Pa.Super. 373, 337 A.2d 600 (1975).
Facts pertinent to our consideration of the order's propriety are the following. On September 18, 1976, a hit and run *508 accident occurred at approximately 12:15 a.m., which resulted in the death of one pedestrian and the injury of a second. A third pedestrian, also struck, sought no medical attention. One of the witnesses gave police a description of the vehicle. At approximately 1:00 a.m. that same day, a van fitting the witness' description was located across the street from appellee's home. The windshield of the vehicle was shattered, and matter believed to be human blood and hair was smeared on the van. A registration check confirmed appellee's ownership of the vehicle. Officers proceeded to appellee's home, entered there for the first time at approximately 1:15 a.m., and learned from his brother that appellee, then asleep in bed, had arrived home at approximately 12:30 or 12:35 a.m. After appellee was aroused, he was finally arrested at about 2:00 a.m. Appellee was then taken to a nearby hospital for chemical and breathalyzer tests, to which he gave his consent after conferring by telephone with his attorney. Because of confusion in getting someone to administer the tests, they were not performed until about 4:30 a.m. Appellee was charged with involuntary manslaughter,[1] driving under the influence of alcohol[2] and failure to stop at the scene of an accident.[3] As a result of a suppression hearing on December 10, 1976, the lower court held that the tests performed on appellee were too remote in time and place from the accident and therefore suppressed the results. It is from that order that the Commonwealth appeals.
The Motor Vehicle Code specifically provides for chemical testing to determine alcoholic content of the blood.[4] The statute does not specify that to be admissible into evidence a chemical test must be performed within any stated time *509 after an incident or arrest. This case presents the same question that we addressed in Commonwealth v. Trefry, 249 Pa.Super. 117, 375 A.2d 786 (1977). In that case, we held that there was probable cause that rendered the appellant's arrest legal and that therefore, the chemical tests should not be suppressed as tainted by an illegal arrest, as the lower court had held. We also determined that a one and one-half hour delay between a motorist's arrest and the performance of a blood test did not render the results inadmissible in the appellant's trial on charges of involuntary manslaughter, failure to stop at the scene and give identification and driving under the influence of liquor. We reversed the lower court's suppression order, emphasizing that: "At trial, the results of a test, as indicative of intoxication at a relevant point in time, may be attacked or contradicted by any competent evidence. The weight to be accorded test results then properly rests with the finder of fact." 249 Pa.Super. at 130, 375 A.2d at 793 (footnote omitted).[5]
Appellee in the instant case relies heavily upon what he considers to be a material factual distinction between Trefry and this case. Appellee points out that in Trefry, as well as in other cases of foreign jurisdictions cited in the Commonwealth's brief, the motorist was found by police either in or near the vehicle. Appellee seems to imply that the fact that police first saw him asleep at his home should somehow effect the admissibility of the chemical analyses. If appellee *510 wishes to defend at trial by asserting that he was not driving the vehicle which was involved in the fatal mishap, he may certainly do so. Appellee's physical proximity to the vehicle at the time of his initial encounter with police has nothing, however, to do with the admissibility of the results of the tests which he consented to have performed.
In the instant case, the time interval between arrest and testing was longer than that in Trefry. This fact does not, however, take the instant case outside of our decision in Trefry. Here, the time interval between the accident and appellee's tests was more than four hours; between appellee's arrest and testing, approximately two and one-half hours. The effect that the passage of time may have had on appellee's test results is for the trier of fact to consider.
The Commonwealth stresses that appellee was observed by police from the time of their arrival at appellee's home at about 1:15 a.m. until the tests were ultimately performed. Appellee emphasizes that his activities during the hour that elapsed between the accident and the police officers' arrival at his home remain unexplained. Appellee would have us infer, perhaps, that during that hour he consumed the alcohol which was detected by the tests. Again, this factor does not render the results inadmissible. Rather, the trier of fact should properly consider and weigh evidence offered by appellee to show that he consumed alcohol after the accident and before police arrived at his home rather than before the accident, if he chooses to introduce such evidence. If we were to hold that the tests should be suppressed because appellee was not under constant police surveillance from the time of the accident until the tests were performed, we would be seriously curtailing the use of chemical analyses in legal proceedings. It is the norm rather than the exception that, in the case of an automobile accident, some time passes between the incident and the arrival of police at the scene, or police apprehension of the motorist who has simply continued on after the accident.
*511 The purpose of 75 Pa.C.S. § 1547 and prior enactments has been to facilitate the acquisition of chemical analyses and to permit their utilization in legal proceedings. 75 Pa.C.S. § 1547(e) is a defendant's only source of relief in a situation such as the one before us.[6] That section provides that, "Subsections (a) through (d) shall not be construed as limiting the introduction of any other competent evidence bearing upon the question whether or not the defendant was under the influence of alcohol." The suppression order is therefore reversed and the case is remanded for trial at which appellee, if he wishes, may introduce competent evidence to challenge the test results.
The order is reversed and the case is remanded for trial.
JACOBS, President Judge, and SPAETH, J., concurred in the result.
HOFFMAN, J., did not participate in the consideration or decision of this case.
NOTES
[1] 18 Pa.C.S. § 2504.
[2] The Act of April 29, 1959, P.L. 58, § 1037 (75 P.S. § 1037).
[3] The Act of April 29, 1959, P.L. 58, § 1027 (75 P.S. § 1027).
[4] 75 Pa.C.S. § 1547. At the time of the accident in the instant case, chemical testing was provided for by the Act of July 28, 1961, P.L. 918, § 1, as amended July 31, 1968, P.L. 758, No. 237, § 1 (75 P.S. § 624.1).
[5] This court was more recently presented with this issue in a civil action, Schwarzbach v. Dunn, 252 Pa.Super. 454, 381 A.2d 1295 (1977). We granted a new trial because we found that the case was not tried before an impartial jury. President Judge Watkins' opinion continued by dictum to inform the lower court that blood tests administered to the defendant driver three hours after a fatal auto accident should be regarded with skepticism due to their "speculative" nature. It is important to note that a majority of this court did not embrace that rationale. (The lead opinion written by former President Judge Watkins was joined by Judges Jacobs and Van der Voort. Judge Cercone concurred in the result. Judge Price filed a concurring opinion in which Judge Spaeth joined, and Judge Spaeth filed a concurring opinion. Judge Hoffman filed a dissenting opinion.)
[6] Prior to the enactment of 75 Pa.C.S. § 1547(e), the Act of July 28, 1961, P.L. 918, § 1, as amended July 31, 1968, P.L. 758, No. 237, § 1 (75 P.S. 624.1(d)) permitted a defendant to introduce any competent evidence to defend a charge of driving under the influence. It was this codification that was in effect at the time of appellee's trial. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1541186/ | 344 B.R. 79 (2006)
In re COMPUTER LEARNING CENTERS, INC., Debtor.
No. 01-80096-RGM.
United States Bankruptcy Court, E.D. Virginia, Alexandria Division.
January 24, 2006.
*80 *81 Scott J. Newton, Stephens, Boatwright, Primeau & Cooper, Manassas, VA, James *82 W. Reynolds, Donald F. King, Odin, Feldman & Pittleman, Fairfax, VA, Robert O. Tyler, Tyler, Bartl, Gorman & Ramsdell, P.L.C., Alexandria, VA, Dylan G. Trache, Wiley Rein & Fielding Llp, McLean, VA, for Debtor.
MEMORANDUM OPINION
ROBERT G. MAYER, Bankruptcy Judge.
This chapter 7 case presents the question of whether a class proof of claim may be filed in this case. Joshua Ruiz, Eric Evangelista, Edwin Potts, Jr., and Frank Sekiecki, through their attorney, filed a proof of claim on behalf of themselves and a prospective class consisting of all persons who, from May 5, 1992 through May 4, 1998, were enrolled in a course of study, education or training provided by Computer Learning Centers, Inc., at its New Jersey locations and suffered injury from its false claims, misrepresentations or omissions regarding the nature and quality of instruction provided by it; the quality and sufficiency of its equipment; the qualifications, capability and quality of its instructors; and its job placement services. They base their claims on fraud, breach of contract and violation of New Jersey's consumer fraud act, N.J.S.A. § 56:8-1, et seq. The chapter 7 trustee objected to the proof of claim as a class proof of claim.
I. Procedural Background
A. New Jersey Suit
The claimants filed a class action in superior court in New Jersey on May 5, 1998. The complaint contained two counts: violation of the New Jersey Consumer Fraud Act and breach of contract. It alleges that the debtor failed to provide adequate instruction, failed to provide adequate equipment and facilities and failed to provide job placement and career services all in violation of representations made to prospective students. The complaint sought to enjoin such practices in the future and damages for the alleged injuries. The damages sought were compensatory damages, generally a refund of tuition; treble damages under the New Jersey Consumer Fraud Act; and punitive damages. It also sought prejudgment and postjudgment interest and attorney's fees. On November 19, 1999, the Superior Court certified the action as a class action under New Jersey Rule 4:32-1(a) and (b). The class consisted of all persons who, from May 5, 1992 through May 4, 1998, were enrolled in a course or course of studies, education or training provided by the debtor at its New Jersey locations and who incurred tuition expenses. Ruiz and Evangelista were designated as the class representatives.[1]
The Superior Court discussed the elements of a class action and its reasons for certifying the action as a class action in its oral ruling on the certification motion on November 19, 1999. See Motion to Allow Claim No. 2336 of Joshua Ruiz et al. as a Class Claim and Memorandum of Law in Support Thereof, Exhibit D, Transcript of November 19, 1999 Hearing at 30-37 (hereinafter "Tr."). The New Jersey class action rule, Rule 4:32-1, is textually substantially the same as F.R.Civ.P. 23.[2] The court found that the four prerequisite elements of Rule 4:32-1(a), numerosity, commonality, typicality and adequacy of representation, were present. It found that "there appear on this record to be at least 100 persons who may be affected." Tr. at 33. Although it found that commonality was present, it was concerned with whether *83 the questions of fact common to the class predominated over questions affecting only individual members, specifically potential counterclaims against class members for unpaid tuition. The debtor argued that many putative class members owed money to the debtor for unpaid tuition. With respect to the predominance factor in Rule 4:32-1(b)(3), the court stated:
[T]he prime Achilles heel in that is the claim of potential counterclaims for amounts due on tuition and otherwise. That's not the only issue that raises its head here. I don't view the prosecution and defense of those counterclaims as a bar to class action prosecution. It's a balancing test, and in looking at what I might call the presumption, that class action is most appropriate for consumer fraud cases, balancing that against some limited difficulty of management and need to treat individual situation[s], that balance is tipped in favor of the class action.
Tr. at 34-35. The presumption to which the court referred is the New Jersey rule that "the class action rule should be construed liberally in a case involving allegations of consumer fraud." Matter of Cadillac V8-6-4 Class Action, 93 N.J. 412, 435, 461 A.2d 736, 747 (1983).[3]See also Strawn v. Canuso, 140 N.J. 43, 68, 657 A.2d 420, 432-433 (1995).[4]
The Superior Court conditionally dismissed the suit about three months after this case was filed. See Reply to Trustee's Opposition to Motion to Lift Automatic Bankruptcy Stay, Affidavit of Howard M. Wagner at ¶ 2. (Docket Entry 201). While the conditional dismissal was likely an administrative response to the filing of this bankruptcy case, neither the order of dismissal nor the reasons for the dismissal is a part of the record before this court.
B. Notice to Potential Class Members
No notification of the class action lawsuit or individual's membership in the certified class was given to the class members despite the passage of more than a year from the date of the class certification on November 19, 1999, to the date this case was filed on January 25, 2001.
No specific notice of the pendency of this case or the existence of the class members' potential claims was given to the potential class members in this case. *84 However, knowledge of this case was widely disseminated. The trustee requested an order limiting notice shortly after the case was commenced. The motion was granted and notice was limited to certain parties, including the twenty largest creditors and a committee of creditors directed to be appointed by the court. While the order did not specifically require the trustee to maintain the debtor's website and publish notices on it, the motion requested this relief and, in fact, the trustee maintained the debtor's website throughout the course of this case.
Local counsel for Ruiz and Evangelista was on the service list and received e-mail notification of all filings and orders. Counsel in the New Jersey suit was admitted to practice before this court pro hac vice.
New Jersey law required the debtor to maintain a bond with the New Jersey Department of Education to protect students in certain events. One such event was the closing of the school before all classes were completed. The bond was available to reimburse students who had paid their tuition but not received the promised training. The New Jersey Department of Education mailed notices of the availability of its bond to all enrolled students, published a notice in newspapers and placed a notice on its website. The trustee filed an omnibus objection to New Jersey student proofs of claim on September 30, 2004, to the extent that the claims could be satisfied from the bond. The order resolving most of the claims was entered on February 28, 2005. The New Jersey Attorney General participated in the resolution of the claims and received notice of the proceeding in this case.
C. Destruction of Estate Records
The trustee, pursuant to court order, destroyed many records of the debtor. In his initial motion filed on April 5, 2001, he noted he had sold all of the schools. He acknowledged the obligation to protect certain student records and stated that those records had been transferred to the purchasers of the schools or turned over to appropriate custodians such as state agencies. The remaining records were either shipped from across the nation to a single records facility in Virginia or, pursuant to court order, abandoned and destroyed. Over the course of the administration of the case, additional records were destroyed. Neither Ruiz nor Evangelista objected to the destruction of the records.
D. Proof of Claim
Ruiz and Evangelista timely filed their class proof of claim on May 31, 2001.[5] Proof of Claim 2336. The trustee objected to the proof of claim on October 28, 2004. On July 25, 2005, Ruiz and Evangelista responded to the trustee's objection and filed a separate motion requesting that F.R.Bankr.P. 7023 be made applicable to their claim and that their proof of claim be certified as a class claim (the "Rule 7023 motion").[6]
II. Positions of the Parties
Ruiz and Evangelista make two arguments: First, that class proofs of claim are permitted in bankruptcy and where a class has been certified pre-petition in another case, the bankruptcy court must accept the certification without further review. Second, they argue that class certification *85 should be granted independently under F.R.Civ.P. 23 and, therefore, Rule 7023 must be made applicable to their proof of claim and the class certified. The latter conclusion, they argue, is particularly appropriate where a pre-petition certification is made under a class action rule that mirrors Rule 23 of the Federal Rules of Civil Procedure.
The trustee argues that there is doubt as to whether any proof of claim is permissible in a bankruptcy proceeding as a class proof of claim. He correctly notes that under the Bankruptcy Act of 1898 class proofs of claim were not permitted. He acknowledges that the Seventh Circuit's opinion in In re American Reserve Corp., 840 F.2d 487 (7th Cir.1988) was the first decision to reject the prior Bankruptcy Act analysis. "[T]he rejection of the argument that the Code and Rules did not absolutely preclude class proofs of claim was not only unprecedented at the time, but also . . . turned out to be revolutionary." In re Sacred Heart Hosp. of Norristown, 177 B.R. 16, 21 (Bankr.E.D.Pa.1995). Many, but not all, courts have followed American Reserve.[7] However, the trustee argues, even under American Reserve class proofs of claim are not permitted as a matter of right. The application of F.R.Bankr.P. 7023, which is necessary in order for a class proof of claim to be filed, is discretionary with the bankruptcy court under F.R.Bankr.P. 9014. Unlike in adversary proceedings where Rule 7023 is always applicable without any action of the court, in contested matters Rule 7023 is not applicable unless specifically made applicable by the court. Cf. Rules 7001 and 7023 with Rule 9014(c). The burden is on the claimant to obtain application of Rule 7023 and also to satisfy the requirements of Rule 23 itself. Finally, he disputes Ruiz' and Evangelista's argument that a prepetition certification mandates application of Rule 7023 under Rule 9014(c) in the subsequent bankruptcy case and the certification of the same class under Rule 23.
III. Discussion
A. General Application of Rule 7023 to a Proof of Claim
1. May class proofs of claim be filed in bankruptcy cases?
The threshold question is whether class proofs of claim are ever permitted in bankruptcy cases. As the trustee points out, there is a split of authority on the issue. The Fourth Circuit has not yet addressed the issue. Existing decisions clearly set forth the dueling interpretations of the Bankruptcy Code and need no amplification. See Anno., "Validity of Class Proofs of Claim, under Bankruptcy Code of 1978," 99 A.L.R.Fed. 858, 1990 WL 675227 (1990). The better argument appears to be that a class proof of claim can be filed if Rule 7023 is made applicable to the proof of claim under Rule 9014(c). The court will assume, arguendo, that they may be filed if Rule 7023 is made applicable to the proof of claim.
2. Is filing a class proof of claim a matter of right?
American Reserve, the seminal case on this issue, makes plain that although *86 class proofs of claim may be permitted, they are not a matter of right. "[T]he bankruptcy judge did not recognize that he has discretion under Rule 9014 not to apply Rule 7023-and therefore not to apply Rule 23-in this `contested matter'". In re American Reserve Corp., 840 F.2d at 494. The court suggested several nonexclusive considerations a bankruptcy court may take into account in exercising its discretion in making Rule 7023 applicable to a proof of claim as permitted by Rule 9014(c). The court may consider the benefits and costs of class litigation. "Suits for very small stakes may hold out little prospect of either compensation or deterrence." Id. at 492. It may consider whether a class proof of claim would unduly complicate or delay the administration of the bankruptcy case. Id. at 492. The bankruptcy court's control over the debtor and its property may "make class certification unnecessary." Id. at 493. Special notice of the bankruptcy together with an opportunity to file an individual proof of claim "might achieve the principal benefit of the class action device while preserving what the district court saw as the principal benefits of individual claims." Id. at 494.[8] An additional consideration is the timeliness of the motion to make Rule 7023 applicable to the proof of claim. Reid v. White Motor Corp. (In re White Motor Corp.), 886 F.2d 1462, 1463-1464 (6th Cir. 1989).
It is important to note that there are two steps in the class proof of claim process. Two decisions must be made: (1) Whether Rule 7023 should be made applicable to the proof of claim; and (2) whether a class should be certified under Rule 23. A decision favorable to the class on one step is not sufficient. Application of Rule 7023 to the proof of claim does not assure that the putative class will be certified or that the movant will be designated the class representative. Conversely, anticipated certification by the bankruptcy court or pre-petition certification by another court does not assure that Rule 7023 will be made applicable to the proof of claim.[9]
3. How is application of Rule 7023 raised?
The applicability of Rule 7023 is raised by motion. In re Trebol Motors Distributor Corp., 220 B.R. 500 (1st Cir. BAP 1998) sets out one possible procedure. In that case, counsel for the class[10] filed a proof of claim on behalf of the class clearly identifying that it was a class proof of claim and clearly identifying the class. Counsel also *87 filed a motion asking that the court grant an extension of time for individual members of the class of creditors . . . to file Proofs of Claim herein, or in the alternative, to determine that the filing of the Proof of Claim by the [attorney] is filed timely and correctly by a representative of the class of creditors pursuant to Federal Rule of Civil Procedure 23 and Federal Rules of Bankruptcy Procedure 7023 and 9014.
Id. at 501. The point is that the proponent of the class proof of claim must seek and must obtain application of Rule 7023. The proponent is the one who wants the court to enter an order. Without that order, Rule 7023 is not applicable to the proof of claim and a class proof of claim is improper.[11]
Reid v. White Motor Corp., 886 F.2d 1462 (6th Cir.1989) illustrates this point. Patrick T. Reid, the attorney for a class certified in a state court class action before the filing of the petition, filed a class proof of claim on September 3, 1981. The bar date expired on August 30, 1983. The trustee objected to the class proof of claim on September 30, 1983. His objection was sustained on June 20, 1985 on his motion for summary judgment and the proof of claim was disallowed. After summary judgment was granted for the trustee and the claim disallowed, Reid filed a motion to reconsider and a motion under Rule 9014 to apply Rule 7023. The bankruptcy court held that the Rule 7023 motion came too late. In upholding the bankruptcy court, the Court of Appeals stated:
Reid totally disregarded compliance with the bankruptcy procedures regulating the filing of class proofs of claim in a bankruptcy proceeding.
Reid failed to confirm his representative capacity to represent a class; he failed to identify the class he purportedly represented; and he failed to timely petition the bankruptcy court to apply the provisions of Rules 9014 and 7023. In re GAC Corp. (Novak v. Callahan), 681 F.2d 1295, 1299 (11th Cir.1982) ("[Claimant] never filed a Rule 914 motion requesting that Rule 723 apply, and the bankruptcy court in its discretion chose not to so direct. Thus, Rule 723 . . . was never made applicable to the proceedings involved here, and in the absence of such application a class proof of claim could not properly be permitted.") In sum, Reid ignored every mandatory requirement essential to filing a class proof of claim with the bankruptcy court.
Id. at 1470-1471. Reid makes clear that a class proof of claim is not permissible without an order making Rule 7023 applicable and that the proponent of the class proof of claim must timely obtain that order.
4. Ripeness and Timeliness: When may a Rule 7023 motion be made?
Timeliness raises two issues: (1) When may a Rule 7023 motion first be made; and (2) when is a Rule 7023 motion too late? The first question is essentially an issue of ripeness. The second question is one of timeliness. Timeliness is normally *88 measured from the time an action may first be taken.
Certified Class v. The Charter Co. (In re The Charter Co.), 876 F.2d 866 (11th Cir. 1989) addresses both questions. A class action suit was filed against The Charter Co. in the United States District Court. Shortly thereafter, The Charter Co. filed bankruptcy in the same judicial district. The plaintiffs filed a class proof of claim in the bankruptcy case on September 14, 1984, before the bar date but did not file a motion to make Rule 7023 applicable to their proof of claim. Almost two years later, in August 1986, the district court certified the class. Two months later, the debtor objected to the class proof of claim as a class proof of claim. The claimants responded by filing their Rule 7023 motion and their motion for class certification. The bankruptcy court disallowed the class proof of claim on two grounds: that class proofs of claim were not permitted in bankruptcy cases; and that the claimants had not timely filed their Rule 7023 motion. The district court affirmed but the Court of Appeals reversed. The Court of Appeals held that class proofs of claim were permissible in bankruptcy cases and that the claimants' Rule 7023 motion was timely.
On the second issue, the timeliness of the claimants' Rule 7023 motion, the Court of Appeals concluded that until the proof of claim was objected to, there was no contested matter in which Rule 7023 could be made applicable. It reasoned that Rule 7023 may only be made applicable to contested matters. The mere filing of a proof of claim is not a contested matter. An objection to a proof of claim is a contested matter. Therefore, the first opportunity that the claimants had to invoke Rule 7023 was when the objection to the class proof of claim was filed. Since the Rule 7023 motion was filed soon after the objection, it was timely filed.
Other cases follow the same argument but, generally in connection with the first issue addressed by the Court of Appeals, whether class proofs of claim are permitted in bankruptcy cases. Those courts generally note that Rule 7023 is not automatically applicable in a contested matter. See Rule 9014(c). Instead, it may be made applicable to a contested matter "at any stage in a particular matter." Rule 9014(c). They note that filing a proof of claim is not itself a contested matter, but that filing an objection to a proof of claim is a contested matter. Since there is a contested matter at that stage of the proceedings, the point when an objection is filed to a proof of claim, the court may make Rule 7023 applicable to the proof of claim. This argument is generally used as textual support that class proofs of claim are permissible, not to determine the timeliness of the filing of the Rule 7023 motion. The issue of timeliness is not generally raised or discussed.
The argument in support of the permissibility of class proofs of claim should not be extended to determine when a Rule 7023 motion is ripe for consideration, that is, the time before which it is procedurally improper to be brought. The argument treats the objection to the proof of claim as the commencement of a contested matter that permits the filing of a Rule 7023 motion for the first time, and, silently, not earlier. In fact, the issue in controversy is whether the proof of claim may be filed as a class proof of claim in the first instance. This is the contested matter. It is resolved by filing a Rule 7023 motion which itself commences the contested matter. Logically, the Rule 7023 motion should be granted before a class proof of claim is filed. Objection to a purported class proof of claim on the ground that Rule 7023 has *89 not been made applicable to it is only one ground upon which a valid objection might be made.[12] A Rule 7023 motion is not a defense to such an objection since the objection is well taken at the moment that it is made. A Rule 7023 motion filed at that time is merely an attempt to remedy an obvious defect that will otherwise certainly result in disallowance of the claim. A Rule 7023 motion at that time may be untimely depending on the circumstances of the case. It may be denied at that time and if it is denied, the purported class proof of claim will necessarily be disallowed.
Rule 9014 establishes no deadline for filing a Rule 7023 motion. In fact, it provides that "The court may at any stage in a particular matter direct that one or more of the other rules in Part VII shall apply." This is not, however, license to procrastinate. A Rule 7023 motion should be filed as soon as practicable and should be denied if it comes so late as to prejudice any party.[13] Early application of Rule 7023 solves the logical problem of filing a class proof of claim before Rule 7023 is made applicable to the prospective class proof of claim and furthers the policy of an orderly and expeditious administration of the bankruptcy estate. See Bankruptcy Code § 704(1) ("The trustee shall . . . close such estate as expeditiously as is compatible with the best interests of parties in interest."). This can only be accomplished by timely filing of proofs of claim. See Bankruptcy Code §§ 501(b), 501(c), 726(a)(2) and 726(a)(3) and Rules 3002(c), 3003(c) and 3004. A bar date for filing proofs of claim is important to the orderly administration of the case and prevents delays in the distribution of funds to creditors.
The Charter Co. may well have reached the right result. It cannot be said with certainty from the published opinion, but the opinion suggests that the debtor and the class claimant were in protracted negotiations over the terms of a consensual chapter 11 plan, negotiations that ultimately failed. Id. at 868. The class claimants appear to have returned to the district court where they successfully obtained class certification. The debtor countered by objecting to the class proof of claim and the timeliness of the Rule 7023 motion which if successful would have mooted the district court class action. Id. These are circumstances where there is good cause for a delayed Rule 7023 motion.
B. Application of Rule 7023 to Ruiz' and Evangelista's Proof of Claim
1. Timeliness of the Rule 7023 Motion.
The Rule 7023 motion in this case was not timely filed. It was filed more than four years after the commencement of the case and years after the bar date set for filing proofs of claim. During the intervening years, the debtor, after notice to creditors, and with court approval, destroyed many of its records. Many were abandoned or destroyed at their original locations when the schools were sold in 2001. Others were destroyed as a part of an orderly document destruction program implemented by the original trustee. Required student records records that would show a student's enrollment, course of studies and completion of the course of *90 studies were not destroyed but are not in the debtor's possession. They were transferred to appropriate custodians, in some cases the successful purchasers of the schools and in others to state agencies. It is unclear how those records have been maintained and whether they are organized in such a manner as to permit identification of class members. These records probably do not include financial records. Financial records are necessary to establish the amount of the class members' claims and to permit the trustee to verify or defend against amounts claimed. Except for the required student records, the extant records almost certainly do not contain information from the period from 1992 to 1998, the relevant time period relating to the underlying allegations of the representations made to prospective students and the quality of the services provided.
All of the debtor's employees were discharged in January 2001 immediately prior to the filing of the petition in this case. They are important witnesses relating to the underlying merits of the allegations. It is questionable whether the trustee now would be able to find enough of them from the critical period who have any significant recollection of the events of that time to allow him to properly defend the estate against the proposed class claims on their merits.
The trustee undertook a systematic analysis of the claims filed and spent several years resolving them. That review resulted in numerous objections and amendments to the claims filed. There were several significant settlements.[14] That process is now completed. Only ministerial matters remain and the trustee should soon be in a position to prepare and file his final report. Distribution to creditors should occur in the near future. Active administration of the case is all but over.
The trustee is prejudiced by the delay in filing the Rule 7023 motion. Had the motion been timely filed, he could have modified his document destruction program to preserve applicable records. He could have identified and sought former employees who could have assisted him in resolving the allegations raised in the proposed class proof of claim. He could have preserved their testimony. He could have included the class action allegations in his analysis and settlement of claims.
Creditors are prejudiced. After years of waiting, they are about to receive payment on their claims. Permitting a class proof of claim will delay that payment for an indefinite period of time. The court, at the very least, would have to estimate the claim and reserve for it and for the trustee's expenses of defending against it. It is not clear that a reliable estimate can be made because of the state of the records, but it is clear that the estimation procedure itself would take a significant amount of time that would necessarily delay the presently anticipated distribution to creditors. If the class claim is unsuccessful, a second distribution to creditors would be made from the reserved funds. That would probably not be for at least a year. As every day passes, contact with more creditors is lost. Every delay in the distribution to creditors inevitably means that more creditors will never receive the payment to which they are entitled.
The claimants' Rule 7023 motion must be denied because of their delay in filing their Rule 7023 motion.[15]
*91 2. Applicability of Rule 7023.
Even if the Rule 7023 motion had been timely filed, it would be denied on its merits. In re American Reserve Corp., supra, and In re Craft, supra, set out some factors to be considered in resolving a Rule 7023 motion. Several are similar to class certification factors, principally the three additional factors a court must consider in certifying a class under Rule 23(b). They are:
(1) the prosecution of separate actions by or against individual members of the class would create a risk of (A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or (B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or (2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or (3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.
F.R.Civ.P. 23.
The application of the three additional factors is different in a bankruptcy proceeding than in a prospective non-bankruptcy class action. The risk of inconsistent adjudications which might establish incompatible standards of conduct for the party opposing the class, that is, the debtor, is less likely in a bankruptcy case if all adjudications are in the same bankruptcy court and before the same bankruptcy judge. This minimizes the likelihood of inconsistent adjudications. But the factor is more than inconsistent adjudications among class members, it is inconsistent adjudications among class members that "establish incompatible standards of conduct for the party opposing the class." In a corporate chapter 7 bankruptcy, it is unlikely that the debtor will continue in existence after the case is concluded. The purpose of a chapter 7 case is to liquidate the corporate debtor. The trustee will typically administer all valuable assets and abandon all assets with no value. A corporate debtor does not receive a chapter 7 discharge. What is left is an entity stripped of all valuable assets that is subject to the claims of its unpaid creditors. Such entities rarely continue in business and standards of conduct for post-bankruptcy *92 actions have little meaning.[16] Injunctive relief designed to address future conduct has much less significance in a chapter 7 corporate case than against a solvent, thriving entity.[17]
These are the circumstances of this case. The debtor terminated operations immediately before filing its petition. It has not been operational for more than five years and the trustee has liquidated all of its valuable assets. The trustee abandoned the rest of its assets. There is no likelihood that the debtor will resume operations. There is no need to establish standards of conduct for the debtor's future conduct and the request for an injunction to assure compliance with such standards is moot.
Rule 23(b)(3) permits class certification if a class action "is superior to other available methods for the fair and efficient adjudication of the controversy."[18]See also In re American Reserve Corp., 840 F.2d at 494 (achieving the principal benefits of a class action in a bankruptcy case). A bankruptcy case presents many of the same mechanisms to process large numbers of claims as a class action. There are established mechanisms for notice. Established procedures exist for managing a large number of claimants. All proceedings are centralized in a single court with nationwide service of process. There is no race, to judgment since all the debtor's assets are under the control of the bankruptcy court.
A class action in this case is not superior to the ordinary operation of this bankruptcy case. The trustee actively administered the case. He spent considerable time evaluating all claims filed. Duplicate claims were filed against the estate by students, bonding companies and New Jersey that were resolved. The complexity of these competing claims and the manner in which they were resolved illustrate that addressing the type of claims asserted by Ruiz and Evangelista could have been as easily resolved in the ordinary claims allowance process as through a class action. In this regard, it should be noted that the individual class members must file a proof of claim in any event. They must either file a proof of claim in this bankruptcy case in order to share in any distribution from the estate or file a proof of claim in the class action to share in any distribution from any recovery by the class. Each proof of claim, whether filed in the bankruptcy case or in the class action, must be reviewed and be determined to be a legitimate proof of claim, both as to entitlement and amount. Proceeding by way of class action does not change this requirement at all.[19] It only changes the forum.
*93 There is a difference between class actions and bankruptcy cases that may be significant. In a class action, the class typically obtains a single recovery that is then distributed by the class action claims administrator to eligible class members. Other creditors of the defendant are not necessarily affected. Other creditors are affected by a class recovery in a bankruptcy case because there are typically limited resources. In this case, overall, creditors will receive about a 15% distribution.[20] Class members, if the class proof of claim were to be allowed, should receive the same prorata distribution as other unsecured creditors of their class. It is not likely that this result would be achieved if a single award were made to the class to be distributed by a class administrator rather than the trustee in bankruptcy. Without knowing the precise amount of each claim, it is more likely that a class member would receive more or less than his prorata share, but not exactly his prorata share. Either a class member is disadvantaged by the class action or the other creditors are disadvantaged. In this case, where the trustee could easily have reviewed and analyzed an additional 100 or so claims, there is no principled reason to allow any creditor to be disadvantaged in its distribution.
The class proponents raise one additional argument, that many class members may not have realized that they had claims and may not have filed claims in this case.[21] The advantage of a class action is that the class members can be particularly identified and be given notice of their potential claims. In a bankruptcy case, notice is only mailed to known creditors. While on the surface there appears to be merit to this argument, any notice that can be given in a class action case can also be given in a bankruptcy case. If potential class members can be identified in a class action, they can surely be as easily identified in a bankruptcy case. Here, for example, the trustee obtained all of the debtor's records and could have examined them to find potential class members. Individual notice could have been given to them. The notice might also have been specially drafted to alert them to their potential claims. Additional notice might have been given by publication. In short, any notice that could have been given in a class action could have been given in this case. Thus, the class action in this case is not superior to this bankruptcy case for the fair and efficient adjudication of the controversy.[22]
As discussed above, a pre-filing class certification is not binding on the bankruptcy court. The consideration of the additional factors required for class certification did not take into account and could not have taken into account the alternative of a bankruptcy case that was at that time not even contemplated. In addition, New Jersey's class action rule, unlike Rule 7023, appears to favor or even have a *94 presumption in favor of, class action in consumer fraud cases. Consequently, the state court's pre-filing certification, a procedural matter, is not binding on this court.[23] If Rule 7023 were made applicable to this case, the class would not be certified because none of the additional factors contained in Rule 7023(b) is present. The potential for a different result exists if the class proponents were seeking to certify a class consisting of those individuals described in its state court complaint who also filed an individual proof of claim in this bankruptcy case.
Conclusion
The class proponent's motion for application of Rule 7023 will be denied. It was not timely made and the delay unduly prejudices the estate and its other creditors. If it had been timely made, it would have been denied. In this case, with over 2,000 claims filed, the trustee could easily have reviewed and administered an additional 100 or so claims and the benefits of a class action would not have materially aided the class members. To the extent that procedural changes would have been appropriate to handle the similar claims, such procedures could have been instituted for the benefit of the class members and the estate in this bankruptcy case without the added unnecessary burdens of a class action.
NOTES
[1] Secklecki and Potts were dismissed from the class action on November 30, 1998.
[2] The principal difference is that New Jersey Rule 4:32-1 omits F.R.Civ.P. 23(b)(3)(C).
[3] "The last prerequisite for certification is that a class action be `superior to other available methods for the fair and efficient adjudication of the controversy.' R. 4:32-1(b)(3). In assessing that requirement, we are mindful that the class action rule should be construed liberally in a case involving allegations of consumer fraud. Riley v. New Rapids Carpet Center, 61 N.J. 218, 228, 294 A.2d 7 (1972) (in a consumer fraud case, `a court should be slow to hold that a suit may not proceed as a class action'); Lusky v. Capasso Bros., 118 N.J.Super. 369, 373, 287 A.2d 736 (App.Div. 1972) (calling for liberal construction of class action rule in breach of license agreement case)." Matter of Cadillac V8-6-4 Class Action, 93 N.J. 412, 435, 461 A.2d 736, 747 (1983).
[4] The trustee correctly noted that much of the relief requested in the New Jersey suit is not practically available in bankruptcy. Treble damages and punitive damages are a fourth-tier distribution in bankruptcy. Bankruptcy Code § 726(a)(4). With the Department of Education's claim which is more than five times larger than the $20 million in assets that trustee recovered, there is no likelihood that such claims will receive any distribution. (Cohen v. de la Cruz, 523 U.S. 213, 118 S.Ct. 1212, 140 L.Ed.2d 341(1998) allowed punitive damages as part of a non-dischargeability judgment. It did not address the distribution of estate assets to satisfy those claims under § 726.) Postjudgment interest, a fifth-tier distribution, similarly, will not be paid. Bankruptcy Code § 726(a)(5). The claim for attorney's fees from the estate would be disallowed. The request for an injunction is discussed below.
[5] More than 2665 proofs of claim were filed before the bar date.
[6] The delay between the trustee's objection and the creditors' response and motion was occasioned by local counsel moving her office. She did not receive actual notice of the objection because it was mailed to her old office address. The default order disallowing the proof of claim was vacated and the objection proceeded on its merits.
[7] Birting Fisheries, Inc. v. Lane, 92 F.3d 939 (9th Cir.1996); Reid v. White Motor Corp., 886 F.2d 1462 (6th Cir.1989), cert denied, 494 U.S. 1080, 110 S.Ct. 1809, 108 L.Ed.2d 939 (1990); In re Charter Co., 876 F.2d 866 (11th Cir.1989), cert. dismissed, 496 U.S. 944, 110 S.Ct. 3232, 110 L.Ed.2d 678 (1990). But see Sheftelman v. Standard Metals Corp. (In re Standard Metals Corp.), 817 F.2d 625 (10th Cir.1987) vacated and reversed in part on other grounds sub. nom. 839 F.2d 1383 (10th Cir. 1987) cert. dismissed, 488 U.S. 881, 109 S.Ct. 201, 102 L.Ed.2d 171 (1988). The Court of Appeals for the Fourth Circuit has not addressed the issue.
[8] In re Craft, 321 B.R. 189 (Bankr.N.D.Tex. 2005) raises the notice issue differently. It explains how notice in a class action may assist a chapter 11 debtor in reorganizing by including unknown claimants that might otherwise not be discharged.
[9] There may be good reasons to consider the issues together in some cases, but they remain separate decisions. One reason not to consider them together may be the extent of proof necessary to obtain certification of the class. In this case, certification in the New Jersey court took more than eighteen months to achieve. It was achieved only after significant discovery was conducted that was vigorously contested. See Motion to Allow Claim, ¶ 4. Under federal rules, the court must conduct a rigorous analysis of the certification requirements and may not accept the plaintiff's allegations as true. Gariety v. Grant Thornton, L.L.P., 368 F.3d 356, 365-367 (4th Cir.2004). On the other hand, a bankruptcy court should make a prompt decision on the applicability of Rule 7023 even though it cannot reach the certification issue at that time. It is as important to the administration of the case to know whether a class proof of claim may be filed as to whether the class will be certified.
[10] The class was certified in the pre-petition class action suit.
[11] There is an embarrassing logical problem in suggesting that the procedure in Trebol Motors is acceptable. It suggests that a class proof of claim may be filed before the motion to make Rule 7023 applicable and thus permitting the class proof of claim to be filed has been granted. Strictly speaking, the class proof of claim is premature and should be disallowed on objection because Rule 7023 is not yet applicable. The better practice is to resolve the Rule 7023 motion first, then file the class proof of claim. If an extension of the bar date is necessary to achieve this, a motion to extend the bar date should be made.
[12] All of the usual objections may also be made to a class proof of claim, for example, the proof of claim was untimely; the debtor is not liable to the claimant; the claim is unenforceable against the debtor or property of the debtor; or the claim is for unmatured interest. See 11 U.S.C. §§ 101(5), 502(b), 726(a)(2)(C) and 726(a)(3).
[13] Rule 7023 itself requires that the class certification decision be made "at an early practicable time." Rule 7023(c).
[14] The most significant settlement was with the Department of Education. It was predicted in large part on an anticipated scheme of distribution. Had the Rule 7023 motion been granted earlier in the case, the negotiations would probably have been affected.
[15] The court's 2001 ruling on the plaintiff's motion for relief from stay is not relevant. Whether the plaintiffs obtained relief and proceeded in their New Jersey class action or were denied relief and were required to proceed exclusively in this court does nothing to alter the requirement that they file a proof of claim in this case and have Rule 7023 be made applicable to it. Without an allowed class proof of claim in this case, no recovery in the New Jersey suit would be paid from this bankruptcy estate.
[16] The analysis would be different for a chapter 11 debtor seeking to reorganize and continue in business.
[17] Rule 7023 is applicable in an adversary proceeding and there is no need to seek its application as is required in the claims allowance process. F.R.Bankr.P. 7001. Moreover, injunctive relief is not available in connection with a proof of claim. A proceeding to obtain an injunction is an adversary proceeding. F.R.Bankr.P. 7001(7). If injunctive relief is sought, it must be sought in a separate adversary proceeding and not as a part of the claims allowance process.
[18] The alternative of litigating claims in a bankruptcy case cannot be considered by a non-bankruptcy court until a bankruptcy petition is filed. Such a court cannot take into account the concomitant benefits or burdens of a bankruptcy case in evaluating the Rule 23(b)(3) factors because the alternative is not available.
[19] There is a potential advantage to proceeding by a class action in that liability can be established for the entire class in a single trial. However, this can be achieved in a bankruptcy case as well.
[20] Some creditors will be paid in full because of their priority status or the settlement reached by the trustee with the U.S. Department of Education which held the single largest claim, over $110 million out of total claims of about $130 million.
[21] The class proponents have not reviewed the proofs of claim actually filed in this case to determine whether class members filed proofs of claim, whether class members recovered under a bond or whether any were able to obtain relief from the Department of Education by the forgiveness of their loans. It is possible that class members obtained relief.
[22] The absence of individualized notice in this case also goes to the timeliness of the Rule 7023 motion. The notice issue could have been raised by the class proponents at the beginning of the case and addressed then, but was not. Now such notice, for the reasons discussed above, is impossible.
[23] There may be circumstances where the adjudication of the four prerequisites might be binding on this court under the doctrine of collateral estoppel. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1541199/ | 344 B.R. 440 (2004)
In re Christopher K. EVANS, Deirdre B. Evans, Debtors.
No. 7-03-01742-WSA-13.
United States Bankruptcy Court, W.D. Virginia, Roanoke Division.
February 26, 2004.
*441 John M. Lamie, Abingdon, VA, for Debtors.
MEMORANDUM DECISION
WILLIAM F. STONE JR., Bankruptcy Judge.
This case raises a number of interesting and challenging issues concerning the right of bankruptcy debtors, who have originally filed under Chapter 7, to convert their case to Chapter 13 and to obtain confirmation of a Plan over the determined opposition of the Chapter 7 Trustee, who contends that their actions have been taken in bad faith. For the reasons stated in this Memorandum Decision, the Court denies the Trustee's Motion to convert the case back to Chapter 7, denies the Trustee's Application for compensation for the services he has provided in the case, and confirms the Debtors' Chapter 13 Plan.
CASE HISTORY
Christopher and Deirdre Evans, the Debtors, filed in this Court their Chapter 7 petition on April 25, 2003. Michael L. Shortridge, Esq. was appointed as the Chapter 7 Trustee and very promptly began a vigorous exercise of his duties as such. He demanded that various documents *442 relating to the Debtors' assets and financial condition be made available to him. He also obtained information from creditors. As a result he learned, among other things, that the Debtors' partially constructed residence was subject to an outstanding mortgage debt payoff of approximately $210,000 as of the filing date rather than the $255,000 amount reported on the bankruptcy schedules, and that they were entitled to income tax refunds far exceeding the $500 amount listed in the bankruptcy schedules. He next demanded on May 3 that the Debtors deliver to his office on the following Monday, May 5, a Dodge Durango motor vehicle which Mrs. Evans used to provide transportation to her job as a nurse in Morganton, North Carolina, and the keys to property described as the "rental house". On May 9 he filed a motion to employ Larry W. Akers, t/a Southeast Recovery, to assist him to liquidate assets of the estate. On May 10 he demanded that the Debtors turn over to him the keys to both houses and that they vacate the premises with the admonition not to remove anything other than furnishings and clothing. On May 14 he filed a motion to employ himself and his firm as counsel for the Trustee. Orders granting the employment motions were entered by this Court on May 27 and May 28. On May 29 Mr. Shortridge filed another application to employ Jack Reynolds, Realtor, to provide services to the estate relating to the sale of the "rental house".
On June 4 the Debtors filed a motion to convert their case to Chapter 13 and filed a proposed Chapter 13 Plan. Pursuant to this motion the Court on June 9 entered an order converting the case to Chapter 13 and among other things provided that the "trustee or any other party entitled to compensation may within thirty (30) days . . . file an application for compensation and reimbursement of expenses." Because the case was converted to Chapter 13 prior to the originally scheduled date for the "341 meeting", the Chapter 7 meeting of creditors never occurred and the Chapter 13 "341 meeting" was scheduled for July 9. The latter meeting did not actually take place on that date and was continued to August 15. On July 9 Mr. Shortridge filed a Motion to Reconvert or Reconsider Order of Conversion and a Motion for Allowance of Administrative Expense. The grounds of the former motion are that the Debtors' bankruptcy schedules contained "intentional and material representations", "the Debtors repeatedly failed to turn over assets and information requested by the Chapter 7 Trustee" and "attempted to hinder, delay and defraud the Chapter 7 Trustee and the creditors", and therefore the "Debtors have not acted in good faith". The latter motion sought compensation in the amount of $3,442[1] and reimbursement of expenses of $78.92. Of these amounts $2,684 worth of compensation and $71.84 of expenses were rendered or incurred prior to the June 9 conversion of the case and $768.00 worth of compensation and $7.08 of expenses were rendered or incurred on or after such date. On July 29 Mr. Shortridge in his asserted capacity as "the Chapter 7 bankruptcy trustee for the estates of Christopher K. Evans and Deirdre B. Evans" filed an Objection to confirmation of the Debtors' proposed Chapter 13 Plan. This Objection incorporated by reference the allegations contained in Mr. Shortridge's previously filed motions and further asserted that the Chapter 13 Plan should not be confirmed because it did "not propose to pay the administrative expense claimed by Trustee Shortridge".
*443 On August 28 the Debtors filed an amended Chapter 13 Plan which, as a result of clerical error, was inadvertently initially docketed in another case. On September 2, 2003 the Debtors filed amended schedules materially different than the ones originally filed.[2] The original scheduled confirmation hearing for September 3 was commenced but was continued due to the intervening filing of the amended Plan and all objections were continued to the new confirmation hearing date for the amended Plan. A new confirmation hearing was held on October 22 but was continued to November 19 to allow the parties to file briefs upon the Debtors' objections to (i) the standing of the former Chapter 7 Trustee to maintain a motion to reconvert the case to Chapter 7, and (ii) the allowability of an administrative "expense claim by a Chapter 7 Trustee who has not actually recovered or sold assets of the estate and has not disbursed any funds to creditors or to the Chapter 13 Trustee. On October 29 "Chapter 7 Trustee" Shortridge filed a new Objection to the amended *444 Plan and added to his previously stated grounds the objection that the proposed Plan would not result in a distribution to creditors equal to what they would receive in a Chapter 7 liquidation of assets and therefore violated 11 U.S.C. § 1324(a)(4). Counsel for the Debtors and Mr. Shortridge filed their respective briefs addressing the issues raised at the October 22nd confirmation hearing. The amended Chapter 13 Plan and the pending Motions came on for further hearing on November 19. At that time the Court had not been able to give full consideration to the arguments of the respective parties and allowed Mr. Shortridge, over the objection of the Debtors, to participate in the confirmation hearing and be heard on his Objection to confirmation.
Mr. Shortridge mainly disputes the Debtors' good faith based on inaccuracies in their schedules, principally the listing of the construction loan deed of trust debt as $255,000, the maximum amount which could have been advanced on the loan, rather than the correct payoff of approximately $210,000, and the incorrect listing of the Debtors' 2002 tax refund as $500 rather than the amounts shown on their tax returns and subsequently actually received by them of $5,718 Federal, $2,180 Virginia, and $ 924 North Carolina, an aggregate total of $ 8,822. He has asserted that the Debtors were attempting to mislead the Court and their creditors as to the facts of their financial condition and has contended that the Debtors filed schedules representing that they had no equity in their property available to creditors and that the case was noticed as a "no asset" case. Actually neither of these contentions is correct. The Debtors' petition indicated that assets should be available to make a distribution to creditors, their schedules did reflect the existence of equity in some of their property, and the case was noticed to creditors as an asset case. It can be seen, therefore, that the Chapter 7 Trustee as well as the Debtors can be demonstrated to have made inaccurate representations to the Court in this case.
QUESTIONS PRESENTED
The issues presented in the matters before the Court may be summarized as follows:
1. Did the Debtors have a right to convert their case from Chapter 7 to Chapter 13?
2. Does the former Chapter 7 Trustee in a case which has been converted to Chapter 13 by the Debtors pursuant to 11 U.S.C. § 706(a) have standing to object to such conversion or prosecute an objection to confirmation of the Debtors' proposed Chapter 13 Plan and a motion to convert the case back to Chapter 7?
3. Does the Chapter 7 Trustee who has made no distributions to creditors or to a successor Trustee and has not turned over any property to a successor trustee have any claim for the value of his services rendered either prior to or following the Debtors' exercise of their right pursuant to 11 U.S.C. § 706(a) to convert their case to Chapter 13?
4. Does the former Chapter 7 Trustee have any claim against the Chapter 13 estate for any expenses incurred by him while serving as Chapter 7 Trustee or after the conversion to Chapter 13?
5. If the Trustee is entitled to an allowance of either compensation or reimbursement of expenses against the bankruptcy estate, does this accord him standing as a party in interest to object to confirmation of the Chapter 13 Plan and move to reconvert the case to Chapter 7?
6. Even if the Chapter 7 Trustee lacks standing, may the Court consider the issues raised by such Trustee in determining *445 whether the proposed Chapter 13 Plan complies with the confirmation requirements of 11 U.S.C. § 1325(a)?
7. Have the Debtors satisfied their burden of proving by a preponderance of the evidence that their proposed Chapter 13 Plan fulfills the requirements of 11 U.S.C. § 1325(a)?
8. Does cause exist for the conversion of the case back to Chapter 7 pursuant to 11 U.S.C. § 1307(a)?
FINDINGS OF FACT
There are four principal assets to which the parties have given their chief attention, (1) a 2001 Dodge Durango vehicle, (2) the rental house, (3) the residence under construction, and (4) the 2002 tax refund. The Dodge Durango was (i) valued at $18,000, (ii) subject to a $25,000 debt to Bank of Marion the payment of which was secured by a first lien on the vehicle and a second deed of trust against the rental house property, and (iii) claimed as exempt in Schedule C to the extent of $13,500 of its value. The rental house was (i) valued at $138,000 in the original schedules and $100,000 in the amended schedules, (ii) subject to a $55,000 debt secured by a first deed of trust to Highlands Union Bank and the previously noted second deed of trust to Bank of Marion, and (iii) not claimed as exempt in Schedule C. The sale of this property for $100,000 was authorized by the Court on November 20, 2003, during the Chapter 13 phase of this case, with the net proceeds after selling expenses and payment of applicable real estate taxes and secured liens to be paid over to the Chapter 13 Trustee pursuant to the terms of the proposed Plan. The third asset, the residence under construction, was (i) valued at $250,000 in the original and amended schedules, (ii) subject to a deed of trust in favor of Four Leaf Financial Corporation securing a debt listed as $255,000 in the original schedules and $210,173 in the amended version, and (iii) not claimed as exempt in Schedule C. Although a copy of the Four Leaf Financial deed of trust was not introduced into evidence and has not been filed otherwise in the Court's file, Mr. Evans testified that $255,000 was the maximum amount which could be advanced pursuant to such deed of trust and that by the date of the bankruptcy filing, regular monthly loan amortizing payments had to be paid based on such maximum amount. (T.38) He testified that was the reason he had listed the secured debt against such property at $255,000 in the original Schedules A and D. (T.39) He admitted, however, that he knew at the time of filing that the amount owing on this debt was approximately $210,000 rather than the $255,000 amount scheduled. (T.59)[3] A review of petition, schedules and statement of affairs indicates that Mrs. Evans signed the declaration affirming the correctness of the schedules on "3/19/03" while Mr. Evans did not affix a date to his signature, that the date shown for the signing of the petition by the Debtors is "4-24-3", but this appears to be in counsel's handwriting rather than their own, and represented that, neither of the Debtors had been an officer or director of a corporation during the preceding six years. Neither did the schedules list any ownership of Mr. Evans's construction company, Evans Construction Services, Inc.
After extended consideration of the schedules, exhibits, and testimony offered at the confirmation hearing, the Court finds that the Debtors' motivation in filing a motion to convert their case to Chapter 13 was not the result of the Chapter 7 Trustee's discovery of the incorrect information *446 in their schedules, but rather the consequence of an overly zealous effort by such Trustee to remove them from their property upon short notice and to require them on virtually no advance notice to surrender to him the vehicle used by Mrs. Evans to furnish transportation to her outof-the-area employment, a vehicle which had been claimed as exempt to the extent of $13,500 of its $18,000 represented value, and the Debtors' concern that a precipitous liquidation of their property might result in insufficient proceeds to pay their priority tax debt.[4]
The evidence is in conflict on the issues of whether the Debtors or either of them intentionally misstated the correct loan amount owing on the residence under construction and the amounts of their 2002 income tax refunds. With respect to the misstatement of the loan balance on the residence, Mr. Evans testified that the loan documents required them to make full loan payments even though not all of the loan had been disbursed and that he had been instructed to list any debt at the largest amount he thought it might be. (T.67) He also testified, however, that he knew at the time they filed that they owed only about $210,000 on this loan rather than the $250,000 amount listed in the schedules. (T.59) In those same schedules, however, the property known as the "rental house" was valued at $138,000 rather than its actual value of approximately $100,000. If it had been the Debtors' intention to sail through Chapter 7 with little or no distribution to their creditors, however, it would seem that they would have had an incentive to understate rather than overvalue this property. The lack of care given by the Debtors to the preparation and review of their schedules before filing them with the Court is demonstrated by the fact that their answers to the questions contained in the Statement of Affairs failed to disclose anything about the construction company, Evans Construction Services, Inc., owned and operated by Mr. Evans or both of them, which was the principal cause of their financial downfall. The obvious lack of any intent to mislead, however, is demonstrated by the facts that a bankruptcy petition for the corporation was filed on April 25, 2003, the same day as their personal petition was filed, the Debtors listed all of the corporation's debts on their personal schedules, and the corporation's assets were worth considerably less than the amount of the Federal tax lien to which they were subject. Because the Debtors exercised their statutory right to convert their case to Chapter 13 before the Chapter 7 "section 341" meeting was held, we do not know how forthcoming they would have proved at such a meeting.
*447 Moving to the issue of the 2002 income tax refunds, both the Debtors and their counsel appear to have been under the belief that the Federal and Virginia refunds would be offset by the tax authorities to pay for withholding tax liabilities of the corporation for which Mr. Evans expected to be liable. This belief, however, does not explain the failure to list the North Carolina income tax refund applicable to Mrs. Evans's income. A review of the bankruptcy schedules indicates that they were signed by Mrs. Evans on "3/19/03". No date is noted adjacent to the signature of Mr. Evans. The 2002 income tax returns indicate they were finished by the preparer on "3/14/03" but the date they were reviewed and signed by the Debtors is unknown. What is known, however, is that the Debtors did disclose an entitlement to a tax refund in their schedules and did not attempt to claim an exemption in any such refund. It seems reasonable to find, therefore, that the Debtors understood and intended that any income tax refunds which they received would pass to the Chapter 7 bankruptcy estate. It further seems appropriate to find that the $500 amount was never intended to be taken as the exact amount of such refund but as a "marker" sufficient to make the Trustee aware of its existence. While the' Court does not wish to condone anything less than a diligent and scrupulous attention by bankruptcy debtors to the correctness of their schedules and statement of affairs, it must acknowledge the reality that many such debtors approach this responsibility with a casualness which is distressing. The unfortunate consequence is that a determination of whether inaccuracies in schedules are the result of an intent to conceal and mislead or simply sloppiness is frequently not clear cut.
As noted previously in footnote no. 2, under the Debtors' amended schedules they represent that they have priority debt of $54,190, and general unsecured debt, much of which is indicated to be contingent and/or disputed, of $1,465,671. In their Chapter 13 Plan they propose to pay the Trustee $525 per month for 6 months and $1,525 per month for the next 54 months to the end that general unsecured creditors receive $40,000 over the life of the Plan. They further propose to pay to the Trustee for the purpose of satisfying their priority tax debt in full the total amount of the income tax refunds, the net proceeds of approximately $14,000 after payment of the secured debt from the sale of the rental house property, and approximately $15,000 from the sale of abandoned assets of Evans Construction Services. If the aggregate of such amounts is not enough to pay the priority taxes in full, any balance is to be satisfied from the general Plan payments to the Trustee. Finally, they propose to pay directly the monthly mortgage payments of $2,006.09 to Four Leaf Financial upon the partially constructed residence, which they will retain, and the monthly debt service payments to Bank of Marion and Highlands Union Bank until the rental house has been sold and the sales proceeds have satisfied the banks' liens. Accordingly, the Debtors propose to pay all of their secured debt aggregating $296,532.88, all of their priority debt of $54,190, and $40,000 towards their general unsecured debt. These results must be compared with the reasonably likely results of a Chapter 7 liquidation of their property.
In a Chapter 7 liquidation the bankruptcy estate would clearly get the full amount of the income tax refunds of 822. It likewise would receive the same net proceeds of approximately $14,000 resulting from the sale of the rental house. The timing of receipt of these payments by the Trustee is essentially the same under either *448 Chapter 7 or 13. An agreed order has already been entered providing that the Evans Construction assets are to he sold and the proceeds applied to payment of applicable local personal property taxes, if any, secured by a lien thereon and the balance to the IRS tax lien. This tax lien is part of the priority tax debt scheduled by the Debtors, apparently because Mr. Evans was clearly a "responsible person" for the payment of the withholding taxes in question pursuant to 26 U.S.C. § 6671(b). The key factor, therefore, is the comparison of the liquidation value of (i) the partially completed residence and (ii) the Dodge Durango as of the filing date with the total of $85, 500 which the Debtors propose to pay into the Plan over its five-year term. In both the original and amended schedules the Debtors asserted that the fair market value of this property on the filing date was $250,000. At the confirmation hearing Mr. Evans did not testify as to his opinion as to the value on the filing date of the partially completed residence, but the Debtors did offer expert appraisal testimony as to valuation from Larry John Chittester, Jr., a licensed real estate appraiser. Mr. Chittester testified that this residence and one acre of land had a current value of $78,500 (T.14), that the rental house and an assumed five acres of the Debtors' tract of over twenty acres had a fair market value of $103,500 (T.16), and the remaining land had a value of $67,500 (T.18), or an aggregate real estate value of $249,500. The "quick sale" value of this property he estimated at $194,798 (T.24). When asked on cross-examination about the value added to the property by the partially completed residence, the expert replied,
It may not add any value because it is unfinished, to be quite honest with you. But it added $76,000 because, as it stands, that is the value of what it would be at this point in time.
(T.31)
The Court accepted without objection from the Chapter 7 Trustee the credentials of Mr. Chittester as an expert witness. Based on the testimony given by Mr. Chittester, his confidence and his demeanor on the witness stand, the Court finds that his opinion as to the valuation of the partially completed residence is entitled to considerably more weight than the valuation listed by the Debtors in their schedules. Under this expert testimony the partially completed residence is worth considerably less than the mortgage debt to which it is subject. This conclusion squares with the common sense observation that the market for partially completed residences having substantial work needing to be done is limited compared to the numbers of buyers for houses which have been finished and do not entail the risk presented by significant work yet to be done. Accordingly, the Court finds that a Chapter 7 liquidation of the partially completed residence and remaining land not included with the sale of the rental house would not yield net proceeds for the benefit of unsecured creditors. Indeed, from the evidence such a liquidation, if pursued, would very possibly generate a deficiency claim from the mortgagee. Even if it were assumed that the Chapter 7 Trustee could sell the Dodge Durango for its full scheduled value of $18,000 with no associated liquidation expense, the net benefit to the bankruptcy estate after paying off the Debtors' exemption claims against this vehicle totaling $13,500 would be only $4,500. It is clear that the proposed Chapter 13 Plan will provide a considerably better distribution to general creditors than would a Chapter 7 liquidation of the estate and the Court so finds. The Court has also determined that the Debtors' filing fees for this case have been paid.
*449 Mrs. Evans continues to be employed as a nurse in Morganton, North Carolina. She earns over $50,000 a year in that job. The failure of Evans Construction Services, Inc. of course eliminated Mr. Evans's income from that business. Since the date of the petition filing, Mr. Evans has obtained employment with the school system as a substitute bus driver. He also does small construction projects and is able to earn a "take-home" income of $2,000 per month to contribute to the household budget. On the basis of this income earned by the Debtors, the Court finds that they will be able to make the payments required under the Plan and will be able to fulfill its terms.
The Court further adopts the factual statements made in the "Case History" portion of this Memorandum Decision.
CONCLUSIONS OF LAW
This Court has jurisdiction of this proceeding by virtue of the provisions of 28 U.S.C. §§ 1334(a) and 157(a) and the delegation made to this Court by Order from the District Court on July 24, 1984. The matters before the Court constitute "core" bankruptcy proceedings pursuant to 28 U.S.C. § 157(b)(2)(A), (B), and (L).
Unlike a debtor who originally files under Chapter 13 of the Bankruptcy Code, who has an unqualified right to obtain a dismissal of his or her case so long as it has not been converted to a proceeding under another chapter of the Code, 11 U.S.C. § 1307(b), a debtor who files under Chapter 7 has no right to obtain a dismissal of the case if the results are not what he anticipated. 11 U.S.C. § 707(a). Even though the Chapter 7 debtor does not have a right to obtain a dismissal of the case, he or she does have a largely unqualified right to convert the case from Chapter 7 to Chapter 13 by virtue of section 706(a) of the Code, which provides:
The debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title. Any waiver of the right to convert a case under this subsection is unenforceable.
For obvious reasons, however, the debtor cannot convert a case to a chapter of the Code under which the debtor would not have been eligible to file initially. 11 U.S.C. § 706(d). Under 11 U.S.C. § 109(e), only individuals or married couples who owe on the petition date less than $290,525 of "noncontingent, liquidated, unsecured debts" and less than $871,550 of "noncontingent, liquidated, secured debts" are eligible to proceed under Chapter 13 of the Bankruptcy Code. There is no express statutory requirement of "good faith" in exercising the right of conversion similar to the requirement of establishing good faith to obtain confirmation of a proposed Chapter 13 Plan. 11 U.S.C. § 1325(a)(3). The debtor's exercise of this right of conversion terminates "the service of any trustee . . . that is serving in the case before such conversion." 11 U.S.C. § 348(c).
Under the statutory provisions enacted by Congress bankruptcy trustees are compensated based on the value of the assets they administer. A Chapter 7 Trustee's compensation is limited to a percentage of "all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but including holders of secured claims." 11 U.S.C. § 326(a). Chief Judge Krumm of this Court in a recent decision[5] held that by *450 virtue of this provision he was without power to award compensation to a Chapter 7 Trustee in a case which had been properly administered but in which no creditor had filed a proof of claim, resulting in the Trustee making distribution of the bankruptcy estate solely to the debtor, even though the Trustee had earned his compensation and denial of compensation seemed both unfair to the Trustee and contrary to sound bankruptcy policy. The Code expressly deals with the situation where more than one trustee serves in a case in section 326(c), which provides that in such a situation "the aggregate compensation of such persons for such service may not exceed the maximum compensation prescribed for a single trustee by subsection (a) [Chapter 7 or 11] or (b) [Chapter 12 or 13] of this section, as the case may be." This subsection, however, does not expressly instruct, or arguably even contemplate, how compensation is to paid when trustees under multiple chapters of the Code serve, and certainly does not determine how compensation is to be divided among trustees when such is appropriate.
The Code directs that the Court "shall confirm" a debtor's proposed Chapter 13 Plan if several requirements have been met. As relevant to the case before the Court, such requirements include findings that "the plan has been proposed in good faith and not by any means forbidden by law", 11 U.S.C. § 1325(a)(3), and that "the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under Chapter 7 of this title on such date", 11 U.S.C. § 1325(a)(4). This latter requirement is sometimes known as the "liquidation test" and assures that the Chapter 13 debtor must provide to his general creditors at least as good a "deal" as they would receive under Chapter 7. Bankruptcy Rule 3015(f) provides that if no objection to confirmation is filed, "the court may determine that the plan has been proposed in good faith and not by any means forbidden by law without receiving evidence on such issues." This Court and many others have held that the proponent of a Chapter 13 plan has the burden of proving by a preponderance of the evidence that the noted statutory requirements for confirmation have been met. In re Brown, 244 B.R. 603 (Bankr.W.D.Va.2000); B. Russell, Bankruptcy Evidence Manual § 301.80 at page 671 (West 2003 ed.). A bankruptcy court has an independent duty, irrespective of the lack of any objection to confirmation by a creditor or other party in interest, to satisfy itself that a proposed chapter 13 plan does meet the confirmation requirements set forth in the statute. United States v. Easley, 216 B.R. 543, 544 n. 1 (W.D.Va.1997); In re Bowles, 48 B.R. 502, 505 (Bankr.E.D.Va.1985).
In considering the issues of the nature of the Debtors' right to convert their case to Chapter 13 and possible re-conversion of the case back to Chapter 7, the Court has found most analogous the decision of the Fourth Circuit Court of Appeals in the case of In re Finney, 992 F.2d 43 (4th Cir.1993). In that case the Chapter 7 debtor was uncooperative with the Trustee and made certain undisclosed post-petition transfers of real property which the bankruptcy court found to have been made with the intent to hinder, delay or defraud his creditors. After the trustee successfully recovered these transfers, the debtor moved to dismiss his case. The bankruptcy court denied the motion to dismiss and sustained a creditor's complaint objecting to Finney's discharge on the basis of the bad-faith transfers. At this point the debtor exercised his right under Bankruptcy *451 Code § 706(a) to convert his case to Chapter 11. The bankruptcy court denied the motion to convert "on equitable grounds" and "for good case shown". 992 F.2d at 44. On appeal the Fourth Circuit Court stated as follows:
Adopting the majority approach, the district court concluded that subjective bad faith, standing alone, is insufficient to abrogate the unqualified § 706(a) right of conversion. [Finney v. Smith,] 141 B.R. [94]at 98 [(E.D.Va.1992)]. We express no opinion on what circumstances, if any, would justify invocation of § 105(a) to deny a § 706(a) motion outright. We agree with the district court, however, that Finney's misconduct during the Chapter 7 proceedings was insufficiently "egregious" to warrant such extreme action. 141 B.R. at 98. (distinguishing [In re] Calder, 93 B.R. [739]at 740 [(Bankr.D.Utah 1988)]).
After recognizing Finney's right to convert his case from Chapter 7, however, the district court observed that he had no subsequent right to remain in Chapter 11. To the contrary, § 1112(b) allows a bankruptcy court to dismiss a Chapter 11 petition upon finding that Chapter 11 status was sought in subjective bad faith and that it is objectively futile. Carolin, 886 F.2d at 700-701. The court correctly held the Carolin standard to apply whether the remedy sought is dismissal, as in that case, or reconversion to Chapter 7, as here. 141 B.R. at 99. A bankruptcy court may act under § 1112(b) on the motion of a party in interest or sua sponte as "necessary or appropriate" under § 105(a). Pleas ant Pointe Apartments, Ltd. v. Kentucky Housing Corp., 139 B.R. 828, 831 (W.D.Ky.1992); 5 Collier on Bankruptcy § 1112.03[4] (1992).
Reading these statutes in pari, materia, the district court reasoned that the bankruptcy court could deny Finney's § 706(a) motion upon finding a sua sponte § 1112(b) reconversion to be warranted under § 105(a) and Carolin. With respect to whether § 105(a) was properly invoked here, the district court held that since a conversion creates no break in a bankruptcy case, Finney's prior misconduct was "relevant to the [bankruptcy] court's sua sponte reconversion. 141 B.R. at 100.
We agree. Finney's recalcitrance and fraud during the Chapter 7 proceedings, J.A. 84, and his resort to the § 706(a) motion only after his discharge was denied, are reasonably read as constituting abuse of process sufficient to trigger § 105(a). See Carolin, 886 F.2d at 702 ("[t]he subjective bad faith inquiry is designed to . . . determine whether the petitioner's real motivation is "to abuse the reorganization process'") (citations omitted). While Finney's actions do not justify an equitable override of his "onetime absolute right" to convert the case under § 706(a), they do justify the bankruptcy court's sua sponte consideration of whether immediate reconversion under § 1112(b) is appropriate.
992 F.2d at 45. Because under the Fourth Circuit's prior ruling in the case of Carolin Corp. v. Miller, 886 F.2d 693, 700-01 (4th Cir.1989), findings of both subjective bad faith and objective futility were required to dismiss a Chapter 11 case prior to a confirmation hearing, the Court remanded the Finney case back to the bankruptcy court to determine whether the bankruptcy case under Chapter 11 would be objectively futile. The bankruptcy court's power to convert a case back from Chapter 11 to Chapter 7 for "cause" under 11 U.S.C. 1112(b) is very comparable to its similar power to convert a case back from Chapter 13 to Chapter 7 for "cause" pursuant to 11 U.S.C. § 1307(c). Accordingly, applying the principles of that holding to the present *452 case, even if the Chapter 7 Trustee's characterization of the Debtors' conduct were accepted, appears to require that this Court determine whether "cause" exists to convert the case back to Chapter 7 under section 1307.
In determining whether a bankruptcy debtor is proposing a Chapter 13 plan in "good faith", the Court of Appeals for the Fourth Circuit has held that the bankruptcy court should consider all relevant circumstances, expressly including (1) the percentage of proposed repayment, (2) the financial situation of the debtor, (3) the time period for the plan, (4) employment history and prospects of the debtor, (5) the nature and amount of unsecured claims, (6) debtor's honesty in representing facts, (7) past bankruptcy filings by the debtor, and any "unusual or exceptional" problems of the debtor. Deans v. O'Donnell, 692 F.2d 968 (4th Cir.1982). In the subsequent case of Neufeld v. Freeman, 794 F.2d 149 (4th Cir.1986) the Fourth Circuit held that such circumstances to be considered include the debtor's pre-petition conduct. This Court has not found any Fourth Circuit decision specifically dealing with a situation where the debtors' failure in a Chapter 7 to disclose property or alleged concealment of equity in assets was revealed by an aggressive Chapter 7 Trustee, which was followed by their conversion of the case to Chapter 13. It is clear that such conduct should be considered; just how it should be weighed in the balance with other relevant circumstances is not clear at all.
With these general principles in mind, the Court will now endeavor to answer the questions earlier presented.
1. Did the Debtors have a right to convert their case from Chapter 7 to Chapter 13?
According to the information contained in the original bankruptcy schedules, the Debtors were not eligible to convert their case to Chapter 13 because the amount of their non-contingent, undisputed and liquidated unsecured debt exceeded the permitted maximum amount allowed for a Chapter 13 debtor by 11 U.S.C. § 109(e). See In re Grew, 278 B.R. 619, 621-22 (Bankr.M.D.Fla.2002). Such schedules were not amended prior to the date the Debtors filed their motion to convert or the date the Court's conversion order was entered. In retrospect the Court erred in converting the case to Chapter 13 because such conversion was contrary to 11 U.S.C. § 706(d). This issue was not raised, however, by any party or noticed by the Court prior to the Debtors' amendment of their schedules. Having accepted that such amendment was made in good faith and determined that under the correct facts as represented in the amended schedules the Debtors were eligible to proceed under Chapter 13, the Court concludes that the Debtors did have a right to convert their case pursuant to 11 U.S.C. § 706(a). Moreover, under the teaching of In re Finney it is clear that the factual circumstances surrounding the exercise of the right to convert are not of a nature as to call into question the Debtors' statutory privilege to do so.
2. Does the former Chapter 7 Trustee in a case which has been converted to Chapter 13 by the Debtors pursuant to 11 U.S.C. § 706(a) have standing to object to such conversion or prosecute an objection to confirmation of the Debtors' proposed Chapter 13 Plan and a motion to convert the case back to Chapter 7?
Bankruptcy courts have struggled with the policy implications of denying standing to Chapter 7 Trustees to be heard in cases converted to Chapter 13 when such conversion seems to be motivated by a desire to avoid impending liquidation of debtors' property which has come to light as a *453 result of the Trustees' conscientious and vigorous exercise of their duties. Compare In re Verdi, 241 B.R. 851, 858 (Bankr. E.D.Pa.1999) (former Ch. 7 Trustee is "party in interest" withstanding both as potential administrative claimant and as former trustee) with In re `Veber, 81 B.R. 726, 727 (former Ch. 7 Trustee has no standing to file motion to reconvert). The latter holding is the one cited approvingly by Collier. 6 Collier on Bankruptcy § 706.06 at p. 706-12 (15th ed. rev.) While the court acknowledges its doubt as to the wisdom of a rule which enables Chapter 7 debtors to escape, at least partially and without penalty, the consequences of their own carelessness or even intentional misconduct in the preparation of their bankruptcy schedules, it nevertheless recognizes that such policy concerns are for Congress to make. When Congress has provided language which by its terms is applicable to a particular situation, and the result of such application does not yield an absurd result or one clearly contrary to Congressional intent, such language should be applied. Lamie v. United States Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004); Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6, 120 S.Ct. 1942, 147 L.Ed.2d 1 (2000); United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). Therefore, the Court will align itself with those decisions which have precluded a former Chapter 7 Trustee from later participation in the case in such capacity once it has been converted to Chapter 13.
3. Does the Chapter 7 Trustee who has made no distributions to creditors or to a successor Trustee have any claim for the value of his services rendered either prior to or following the Debtors' exercise of their right pursuant to 11 U.S.C. § 706(a) to convert their case to Chapter 13?
As has been noted previously in this decision in the general discussion of applicable legal principles, Chief Judge Krumm of this Court has dealt with a situation where he felt obliged under the wording of the applicable statute to deny compensation to a Chapter 7 Trustee although the work had been done and sound bankruptcy policy would seem to point in favor of awarding compensation. In re Meadows, 2003 WL 477428, *3, 2003 Bankr.LEXIS 21, *10, 50 C.B.C.2d at 61. That opinion cited many of the decisions which are applicable to the issue now before the Court when the case has been converted to Chapter 13 before the Chapter 7 Trustee has been able to gain dominion over estate property which he has turned over to the Chapter 13 Trustee. Some of those decisions have allowed compensation on equitable or policy grounds pursuant to 11 U.S.C. § 105, while others have denied it as the necessary result of applying the statutory language. Compare In re Hages, 252 B.R. 789, 794 (Bankr.N.D. Cal. 2000); In re Rodriguez, 240 B.R. 912, 915 (Bankr.D.Colo.1999); In re Moore, 235 B.R. 414, 416-17 (Bankr.W.D.Ky.1999); In re Colburn, 231 B.R. 778, 783 (Bankr.D.Or. 1999); and In re Berry, 166 B.R. 932, 935 (Bankr.D.Or.1994) (allowing compensation) with In re Murphy, 272 B.R. 483, 485-86 (Bankr.D.Colo.2002); In re Fischer, 210 B.R. 467, 469 (Bankr.D.Minn.1997); and In re Woodworth, 70 B.R. 361, 363 (Bankr. N.D.N.Y.1987) (denying compensation). In this case, although the Chapter 7 Trustee was extraordinarily prompt and vigorous in the discharge of his responsibilities, the Debtors converted their case to Chapter 13 before he actually had in hand any of the assets he was pursuing. The Supreme Court has just within the last month in a bankruptcy decision again made clear that the responsibility of this *454 Court is to apply the statutory language provided by Congress rather than construing what Congress has enacted in such a way as to reach a result which seems more appropriate to the Court. Laurie v. United States Trustee, 540 U.S. at 542, 124 S.Ct. 1023 (2004). In the case under consideration it is clear that the Chapter 7 Trustee neither distributed any money or other property to creditors nor to the Chapter 13 Trustee. The Court concludes in harmony with the Meadows and Murphy decisions, that however laudable or desirable it might be on fairness and good bankruptcy policy grounds to award compensation to Mr. Shortridge for the work he did in this case before its conversion, to do so would be inconsistent with the provisions of 11 U.S.C. § 326(a) because it limits compensation to a Chapter 7 Trustee to a percentage of "moneys" actually turned over by him or her to parties in interest, other than the debtor, and here the Chapter 7 Trustee did not disburse or turn over property of any kind to anyone.
The Court has considered whether the Chapter 7 Trustee might be deemed to have been in constructive possession for compensation purposes of the income tax refunds which he demanded that the Debtors turn over to him prior to case conversion, but the evidence before the Court on this point, which consists of the testimony of Mr. Evans, is that at least two out of the three refunds were received after the case had been converted to Chapter 13 and he wasn't sure about the North Carolina refund, which. might have been received before the case was converted. (T.68) For the Court to find on such evidence that such refund was received prior to the conversion would involve guesswork on its part. Because one seeking an allowance of an administrative expense against a bankruptcy estate has the burden of proving his or her entitlement to same, In re Merry-Go-Round Enterprises, Inc., 180 F.3d 149, 157 (4th Cir.1999), the Court cannot assume what has not been proven. Accordingly, the Court is not presented in the present case with whether compensation might be allowable to a Chapter 7 Trustee where the Trustee's failure to gain possession of estate property is attributable solely to a debtor's wrongful refusal to turn over property which has not been claimed as exempt and to which the Trustee was unequivocally entitled to obtain.
4. Does the former Chapter 7 Trustee have any claim against the Chapter 13 estate for any expenses incurred by him while serving as Chapter 7 Trustee or after the conversion to Chapter 13?
The strictures of 11 U.S.C. § 326(a) are only applicable to compensation, not reimbursement of expenses. Accordingly, the Court will award Mr. Shortridge an administrative claim for his pre-conversion out-of-pocket expenses of $71.84. Because he was divested of his office once the case was converted to Chapter 13, his expenses thereafter were incurred in his capacity as an administrative claimant against the estate and are not compensable.
5. If the Trustee is entitled to an allowance of either compensation or reimbursement of expenses against the bankruptcy estate, does this accord him standing as a party in interest to object to confirmation of the Chapter 13 Plan and move to reconvert the case to Chapter 7?
A "party in interest" has standing both to move to convert a Chapter 13 case to Chapter 7 and to object to confirmation of the proposed Chapter 13 Plan. 11 U.S.C. §§ 1307(c), 1324. The term "party in interest" is not defined in the Code, but it has been held that a former Chapter 7 Trustee as an administrative claimant against the estate gave him standing as such a "party in interest". In re Barnes, 275 B.R. 889 (Bankr.E.D.Cal.2002). Accordingly, *455 Mr. Shortridge in his capacity as an administrative claimant against the estate, but not by reason of his status as the former Chapter 7 Trustee, has standing to move to convert the case and to object to confirmation.
6. Even if the Chapter 7 Trustee lacks standing, may the Court consider the issues raised by such Trustee in determining whether the proposed Chapter 13 Plan complies with the confirmation requirements of 11 U.S.C. § 1325(a)?
Because the pleadings filed by Mr. Shortridge assert standing by reason of his capacity as the former Chapter 7 Trustee rather than as an administrative claimant against the bankruptcy estate, the Court will proceed to address this question. Bankruptcy Rule 3015(f) provides that a bankruptcy court, in the absence of objection to confirmation, "may determine that the plan has been proposed in good faith and not by any means forbidden by law without receiving evidence on such issues." Clearly this language permits a bankruptcy court to require evidence on such issues in its discretion. In this case the Court chooses to do so even if had determined that Mr. Shortridge had no status whatsoever to object to confirmation or to move that the case be re-converted to Chapter 7. Furthermore, the Court has its own responsibility to satisfy itself that the confirmation standards of section 1325(a) have been met. United States v. Easley, 216 B.R. at 544 n. 1; In re Bowles, 48 B.R. at 505.
7. Have the Debtors satisfied their burden of proving by a preponderance of the evidence that their proposed Chapter 13 Plan fulfills the requirements of 11 U.S.C. § 1325(a)?
The Court concludes that the Debtors' proposed Chapter 13 Plan complies with the provisions of Chapter 13 and other applicable provisions of the Bankruptcy Code, that all required filing fees have been paid, that the value, as of the effective date of such Plan, of property to be distributed under the Plan to unsecured creditors exceeds the amount which would be distributed to them if the bankruptcy estate were liquidated under Chapter 7, that the secured creditors will retain their liens and receive the full value of the allowed amounts of such claims, and that the Debtors will be able to make the required payments and otherwise comply with the Plan. 11 U.S.C. § 1325(a)(1), (2), (4), (5) and (6). The key question is whether the Debtors have proposed their Plan "in good faith and not by any means forbidden by law". In deciding this question the Court has sought to consider all relevant circumstances as mandated by Deans v. O'Donnell and Neufeld v. Freeman. The main point calling in question the Debtors' good faith is the Court's uncertainty as to whether the inaccurate representation of the loan payoff upon the mortgage debt against the partially completed residence was simply an innocent mistake or was the result of an affirmative intent on the Debtors' part to take an aggressive position in their bankruptcy filing for which they might offer some explanation if challenged, but which might pass unchallenged if the Trustee were less thorough and careful than Mr. Shortridge proved to be. In more common terms, did they plan to "play dumb". It might be reasonably observed on this point that at no point did Mr. Evans testify that he inquired of his bankruptcy counsel as to how to list in the schedules a loan which had only been partially advanced. On the other side of the ledger, the Court is satisfied that the Chapter 13 Plan itself, as possibly distinguished from the conduct which preceded it, has been proposed in good faith and with an actual intent on the Debtors' part to perform it, even if that intent is motivated *456 in significant part to avoid the possibility of Mr. Shortridge's aggressive handling of a Chapter 7 liquidation.[6] The Court gives the greatest weight to the interests of the Debtors' creditors. The Court believes that their interest will fare significantly better under the terms of the Plan than they would be served by a Chapter 7 liquidation. Accordingly, to the extent that the issue of "good faith" is a combined one of fact and law, the Court concludes that such confirmation test is satisfied in this case.
8. Does cause exist for the conversion of the case back to Chapter 7 pursuant to 11 U.S.C. § 1307(a)?
Having determined that the Debtors have proposed a Chapter 13 Plan which satisfies the confirmation requirements of 11 U.S.C. § 1325(a), including that of good faith, it would be inconsistent to conclude that good cause exists to convert the case back to Chapter 7. See In re Finney, 992 F.2d at 45 (holding that bad faith alone was insufficient cause to convert a case back to Chapter 7 from Chapter 11 and that the bankruptcy court needed to consider whether a Chapter 11 proceeding would be objectively futile). Furthermore, the burden to establish lack of good faith on the part of the Debtors to support a motion to dismiss or convert is upon the party making such motion, who has the burden of proof thereon. In re Love, 957 F.2d 1350, 1355-56 (7th Cir.1992). Accordingly, the Court will deny the motion to convert the case back to Chapter 7.
The decisions made above are incorporated in a separate order being entered contemporaneously with the signing of this opinion.
NOTES
[1] The Court's review of the itemized statements indicates that the correct total is $3,452.00 rather than $3,442.00 as requested in the Motion.
[2] The differences between the two sets of schedules can be summarized as follows:
Asset Values Original Amended
Real Property $ 388,000 $ 350,000
Personal Property 39,179 45,091
Subtotal $ 427,179 $ 395,091
Debts
Secured:
Bank of Marion $ 25,000 $ 23,915
Four Leaf Financial Corp. 255,000 210,173
GMAC 8,000 6,882
Highlands Union Bank 55,000 55,563
Total Secured Debt $ 343,000 $ 296,533
Priority Unsecured: $ 66,000 $ 54,190
General Unsecured:
Undisputed, Liquidated & Non-Contingent 750,649* 64,011*
Disputed, Unliquidated and/or Contingent 660,832* 1,347,470*
-------- ----------
Total Priority and General Unsecured Debt $1,477,481 $1,465,671
*The difference in these figures is accounted for by the shift of a debt to The Mountbatten Surety Company, Inc. in the amount of $686,638 from undisputed and non-contingent in the original Schedule F to both contingent and disputed in the amended Schedule F. This debt is by far the largest obligation in the Debtors' schedules. Upon inquiry by the Court as to the basis for the change in the listing of the nature of this debt, Debtors' counsel has explained that this debt is for a surety bond provided by Mountbatten to Evans Construction Services, Inc. and that it was always his intention and that of his clients to list this debt as contingent. The amount shown was the full amount of the bond although the construction company had completed "85 to 90 percent of the work on that job." The Court accepts this explanation and notes that a similar debt to National Grange Mutual Insurance Co. was listed as contingent. Without deciding whether or not a debt of this kind upon a personal guaranty executed by the Debtors is contingent within the meaning of 11 U.S.C. § 109(e), the debt is also listed as disputed. Furthermore, based on the explanation provided by counsel, the amount of any actual liability to Mountbatten appears at this point to be unliquidated.
Household Income (Sch. I) $5,380 $6,092
Household Expenses (Sch. J not amended)
5,105 5,105
------ ---------
Monthly Disposable Income $ 275 $ 987
(Difference of Above Figures)
[3] Mrs. Evans did not testify during the confirmation hearing.
[4] Mr. Evans's testimony as to why they converted the case to Chapter 13 was as follows:
Q. When you in June converted to a Chapter 13, tell the Court why you decided to go to a Chapter 13 in this case?
A. Well, it became evident to my wife and I that what we were most concerned about was paying all of the taxes and that at ... it was evident that Mr. Shortridge was just trying to sell everything "as is" and there was no guarantee that the taxes wouldn't follow us after that was completed. There was no guarantee that that was going to be paid. And we know that we have to pay them.
And we also knew that if everything was turned over and that everything was quick sold, that the big losers would be Highlands Union Bank, Four Leaf Financial, and the Bank of Marion, the local banks and financial institutions that have trusted us. And we were greatly upset about the possibility that these people had put their faith in us and through circumstances that weren't their fault, they would end up losing a lot of money.
(T.53-54)
[5] In re Meadows, 2003 Bankr.LEXIS 21, 50 C.B.C.2d 58, 2003 WL 477428 (Bankr. W.D.Va.2003).
[6] "[T]here is nothing inherently wrong, dishonest or improper about a debtor converting from a liquidation proceeding to a Chapter 13 proceeding in order to save his home and secure assets not otherwise available." In re Thacker, 6 B.R. 861, 865 (Bankr.W.D.Va. 1980) (Pearson, J.). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3034445/ | United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 03-3188
___________
Betty J. Lee, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the Eastern
* District of Arkansas.
Cingular Wireless, LLC, *
originally sued as Cingular * [UNPUBLISHED]
Wireless, Inc. *
*
Appellee. *
___________
Submitted: April 1, 2004
Filed: April 8, 2004
___________
Before BYE, McMILLIAN, and RILEY, Circuit Judges.
___________
PER CURIAM.
Betty J. Lee (Lee) appeals the district court’s1 adverse grant of summary
judgment in her action under the Americans with Disabilities Act, 42 U.S.C. § 12112
et seq. and state law. After careful de novo review of the record, see Darby v. Bratch,
287 F.3d 673, 678 (8th Cir. 2002), we agree with the district court that Lee failed to
1
The Honorable Susan Webber Wright, Chief Judge, United States District
Court for the Eastern District of Arkansas.
show a prima facie case of discrimination, see Greer v. Emerson Elec. Co., 185 F.3d
917, 921 (8th Cir. 1999). Further, Lee’s claim that she was denied a promotion is
raised for the first time on appeal, see Taylor v. S.W. Bell Tel. Co., 251 F.3d 735, 740
(8th Cir. 2001) (declining to consider issue raised for first time on appeal), and Lee’s
challenge to the effectiveness of her counsel is not a basis to overturn the court’s
judgment, see Glick v. Henderson, 855 F.2d 536, 541 (8th Cir. 1988) (no
constitutional right to effective assistance of counsel in civil case). Finally, we find
no abuse of discretion in the district court’s decision to dismiss without prejudice
Lee’s state-law claims. See Labickas v. Ark. State Univ., 78 F.3d 333, 334-35 (8th
Cir.) (per curiam), cert. denied, 519 U.S. 968 (1996).
Accordingly, we affirm. See 8th Cir. R. 47B.
______________________________
-2- | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1307790/ | 426 S.E.2d 438 (1993)
109 N.C. App. 216
Gary SCHWARTZBACH, Plaintiff-Appellee,
v.
APPLE BAKING COMPANY, Defendant-Appellant.
No. 9119SC786.
Court of Appeals of North Carolina.
March 2, 1993.
*439 Kluttz, Hamlin, Reamer, Blankenship and Kluttz by Malcolm B. Blankenship, Jr., Salisbury, for plaintiff-appellee.
Ferguson, Stein, Watt, Wallas, Adkins & Gresham, P.A. by James E. Ferguson, II, Charlotte, for defendant-appellant.
WELLS, Judge.
In one of its assignments of error, defendant contends that the trial court erred by not granting its motion for judgment notwithstanding the verdict as to plaintiff's claim. We agree, and reverse that part of the trial judgment below. N.C.Gen.Stat. § 1A-1, Rule 50(b)(1) of the Rules of Civil Procedure provides that a motion for judgment notwithstanding the verdict "shall be granted if it appears that the motion for directed verdict could properly have been granted." The test for allowing a motion for judgment notwithstanding the verdict is essentially the same as that for allowing a motion for directed verdict. Dickinson v. Pake, 284 N.C. 576, 201 S.E.2d 897 (1974). A motion by a defendant for a directed verdict under N.C.Gen.Stat. § 1A-1 Rule 50(a) of the Rules of Civil Procedure tests the legal sufficiency of the evidence to take the case to the jury and support a verdict for the plaintiff. Manganello v. Permastone, Inc., 291 N.C. 666, 231 S.E.2d 678 (1977); see also Eifler v. Pyles, 94 N.C.App. 349, 380 S.E.2d 149 (1989). On such a motion, the plaintiff's evidence must be taken as true and the evidence must be considered in the light most favorable to the plaintiff, giving the plaintiff the benefit of every reasonable inference to be drawn therefrom. Id. A directed verdict for the defendant is not properly allowed unless it appears as a matter of law that a recovery cannot be had by the plaintiff upon any view of the facts that the evidence reasonably tends to establish. Id.
The "agreement" on which plaintiff's claim was founded was a resolution adopted at a special meeting of defendant's "Board of Directors" on 1 August 1988. As we have noted earlier, at that time plaintiff was the sole director of the defendant corporation. The resolution read as follows:
*440 A special meeting of the Board of Directors was held at the office on August 1, 1988 at 11:00 A.M.
It was agreed that if Gary Schwartzbach should be removed as president, all his company stock must be bought by the Corporation at $1,000.00 each within thirty days of his removal. He will also receive six months severance pay.
The meeting was adjourned, as there was no further business.
Gary Schwartzbach
On 1 August 1988, the existing Business Corporation Act contained the following provisions:[1]
N.C.Gen.Stat. § 55-30 Director's Adverse Interest.
(b) No corporate transaction in which a director has an adverse interest is either void or voidable, if:
(1) With knowledge on the part of the other directors of such adverse interest, the transaction is approved in good faith by a majority, not less than two, of the disinterested directors present even though less than a quorum, irrespective of the participation of the adversely interested director in the approval, or if
(2) After full disclosure of all the material facts to all the shareholders, the transaction is specifically approved by the vote of a majority or by the written consent of all the voting shares other than those owned or controlled by the adversely interested directors, or if
(3) The adversely interested party proves that the transaction was just and reasonable to the corporation at the time when entered into or approved. In the case of compensation paid or voted for services of a director as director or as officer or employee the standard of what is "just and reasonable" is what would be paid for such services at arm's length under competitive conditions.
It is undisputed that plaintiff, the sole director at the time of the contested transaction, did not comply with either subsection (1) or (2) with respect to the transaction. Therefore, the only manner in which plaintiff could enforce the otherwise voidable transaction would be to satisfy the requirements of subsection (3).
It has long been the generally prevailing rule throughout the various courts of the United States and our State that directors and officers of a business corporation in charge of its management are, in the performance of their official duties, under obligations of trust to the corporation or its stockholders and must act in good faith and for the interest of the corporation or its stockholders. See 18B AmJur2d, Corporations, § 1684. North Carolina law has been consistent with this rule. See e.g. Alford v. Shaw, 320 N.C. 465, 358 S.E.2d 323 (1987); Meiselman v. Meiselman, 309 N.C. 279, 307 S.E.2d 551 (1983); Fulton v. Talbert, 255 N.C. 183, 120 S.E.2d 410 (1961). At the time the case at bar arose, G.S. § 55-35 spoke very plainly on this aspect of our law of corporations:
§ 55-35 Duty of Directors and Officers to Corporation.
Officers and directors shall be deemed to stand in a fiduciary relation to the corporation and to its shareholders and shall discharge the duties of their respective positions in good faith, and with that diligence and care which ordinarily prudent men would exercise under similar circumstances in like positions.
Speaking more directly to the specific transaction in this case, one leading authority has generally analyzed and explained the law of this State, as follows. Prior to the enactment of G.S. § 55-30(b), the applicable common law rule governing transactions between directors and officers and their corporations was one of presumptive invalidity, due to the good faith and undivided loyalty required of such persons serving the corporation in their fiduciary capacity. See Robinson on North Carolina Corporation Law, 3rd Ed., § 12-11 and *441 § 12-13. The purpose of the enactment of G.S. § 55-30(b) was to clarify the previously uncodified rules relating to transactions of interested directors. Id. § 12-11. Those seeking to sustain such a transaction must prove that it was openly and fairly made. Id.
In interpreting the provisions of G.S. § 55-30(b)(3), the 4th Circuit Court stated the rule as follows:
It is a settled rule that a corporate officer acts in a fiduciary capacity and cannot profit at the expense of the corporation.... [T]he adversely influenced party must prove that the transaction was fair, just, and reasonable when entered into. Smith v. Robinson, 343 F.2d 793 (4th Cir.1965).
Plaintiff's evidence in support of his claim included the resolution of 1 August 1988 and testimony from plaintiff relating to previous stock sales. The resolution on its face obviously cannot be said to be fair, just, or reasonable to the defendant under elemental principles of contract law; this transaction simply does not constitute an "agreement." The resolution does not reflect any consideration flowing to defendant, no promise by plaintiff to sell his shares to defendant, no forbearance in the form of a promise not to sell his shares to others, and no giving up by plaintiff of any benefit. Under this resolution, defendant would be forced to buy at a fixed price. Plaintiff would not be required to sell at any price.
On its face, the resolution purports to establish a value on plaintiff's stock at some then undetermined time in the future, a time at which it could not then be possible to predict or establish the value of plaintiff's stock. The only evidence plaintiff offered to support his version of the value of his stock were past transactions, sales which took place in 1984 (original subscriptions for $1,000 per share) and several instances where investors paid $1,000 a share in 1986. Plaintiff's opinionthat the "value" the defendant was receiving consisted of his shares comprising 17 percent of the company's stocksis meaningless in the context of the requirements of the statute.
We hold as a matter of law that plaintiff failed to carry his burden of showing the subject transaction to be just and reasonable to defendant, and we reverse that part of the judgment.
Defendant's Counterclaim
In its last assignment of error, defendant corporation brings forward the trial court's refusal to instruct the jury that a finding against plaintiff on defendant's counterclaim concerning the $7,500 bonus he awarded himself necessarily dictated a finding of a breach of fiduciary duty and fraud as a matter of law. Defendant specifically takes exception to the trial court's instruction to the jury to award punitive damages only if they found aggravating circumstances. Defendant contends that plaintiff's failure to withstand G.S. § 55-30's "just and reasonable" test should lead to an assessment of punitive damages as a matter of law.
While there is arguable support for defendant's contention that a breach of a fiduciary duty is fraud as a matter of law,[2] we are unwilling to hold that every time a director is unable to carry his burden of proof in a G.S. § 55-30(b) analysis, he is automatically subject to punitive damages. A director might be biased in his assessment of the fairness of a self-dealing transaction, and therefore his acts could fail to withstand G.S. § 55-30's "just and reasonable" analysis. Such evidence would not necessarily qualify as being the type of reckless or intentional behavior which would justify punitive damages. For that reason, we hold that an award of punitive damages is not an automatic right of a party who successfully establishes the invalidity of an adversely interested director's transaction under G.S. § 55-30, and that the trial court correctly instructed the jury to find aggravating circumstances *442 before awarding punitive damages in this case.
Plaintiff's Cross Appeal
In his purported cross appeal, plaintiff attempts to challenge the jury verdict awarding defendant the return of a $7,500 bonus that plaintiff awarded to himself as president of the company. Plaintiff has not perfected appeal from the judgment below, but attempts to bring forward this question under a "cross-assignment of error." This is not permissible. See Rule 10 of the North Carolina Rules of Appellate Procedure.
As to the plaintiff's recovery on his claim, the judgment below is reversed.
As to defendant's recovery on its counterclaim, no error.
ORR and GREENE, JJ., concur.
NOTES
[1] Chapter 55 of the General Statutes has been completely rewritten and recodified effective 1 July 1990.
[2] See Stone v. Martin, 85 N.C.App. 410, 355 S.E.2d 255, disc. rev. denied, 320 N.C. 638, 360 S.E.2d 105 (1987). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566054/ | 159 F.2d 665 (1947)
AMERICAN COAST LINE, Inc.,
v.
COMMISSIONER OF INTERNAL REVENUE.
No. 80, Docket 20301.
Circuit Court of Appeals, Second Circuit.
February 3, 1947.
*666 Howe P. Cochran, of Washington, D. C. (Paul L. Clugston, of New York City, Margaret F. Luers and Betty C. Stockvis, both of Washington, D. C., and James F. Ouchterloney, of New York City, of counsel), for petitioner.
Carleton Fox, of Washington, D. C., Sewall Key, Acting Asst. Atty. Gen., and J. Louis Monarch, Sp. Asst. to Atty. Gen., for respondent.
Before L. HAND, CHASE and FRANK, Circuit Judges.
L. HAND, Circuit Judge.
This is an appeal from an order of the Tax Court which assessed a deficiency in excess profits tax against the petitioner for the year 1940, and dismissed its petition for lack of jurisdiction, so far as it sought relief under § 722.[1] Two questions arise: (1) Whether any excess profits tax was due for the year 1940; and (2), if so, whether the Tax Court had jurisdiction to entertain an application for relief under § 722(d) of the Internal Revenue Act.[2] The facts are as follows. The petitioner is a corporation organized in 1933, all of whose 100 shares were held in 1939 by the "Prudential Steamship Company." The wife of Stephen D. Stephanidis owned two-thirds of the shares of the Prudential Steamship Company, and Nicholas D. Allen owned the other third; the shares had been transferred to the Prudential Company as security for a loan, but this had been paid at or before the time here in question. The corporation had at one time been in business, but had been wholly inactive since 1935; it had kept alive as a corporation by paying its franchise taxes but it had filed no income tax returns. In July, 1939, Stephanidis, Allen and two others, decided to revive it in order to take title to a ship which they proposed to buy and operate. The Prudential Steamship Company i. e., Stephanidis and Allen surrendered their certificates for 100 shares; the capital was increased to 600 shares; and 150 shares were issued to Stephanidis, to Allen and to each of the other two. (Stephanidis' shares were issued in the name of his wife as the original 100 had been.) The corporation spent about $6000 in repairs and operated the ship at a loss during the last part of 1939 and the early part of 1940. On March 15, 1940, it sold her to the British Government for $400,000, title being transferred on June 7th at a profit of $287,000. The corporation during the years when it was active had filed its income tax returns on the basis of the calendar year. This it wished to change; and on May 7, 1940, it asked leave of the Commissioner *667 to file on the basis of a fiscal year from July 1, 1939, to June, 1940, which would have exempted it from the excess profits tax. The Commissioner granted leave, but on certain conditions with which the corporation never complied; and on March 15, 1941, it filed its income tax and excess profits tax returns upon a calendar year for the years 1939 and 1940, as it had always done in the past. The Commissioner mailed to it a "preliminary deficiency notice" on December 18, 1941, assessing the whole profit from the sale as subject to the excess profits tax; the corporation protested on January 2, 1942, and filed an "application" for relief under § 722[3] on March 14, 1942. The Commissioner had several conferences with it, but mailed a "notice of deficiency" on September 29, 1942; and the corporation filed its petition with the Board on December 26, 1942.
The petitioner's first point is that the corporation, having for all practical purposes been long moribund, became a new corporation when it was revived in July, 1939, and, as such had the privilege, without the Commissioner's leave, of fixing a fiscal year instead of a calendar year, unlike a corporation which had already used a calendar year. This argument is unsound on its face; every act of the shareholders contradicted it. They cancelled the old shares, increased the capital of the corporation, took new shares for themselves, put the title of the ship in the corporation, asked leave to change its fiscal year, and filed a return for the whole year, 1939. Nothing could more clearly prove that they meant to avoid the expense of forming a new corporation, and proposed to make use of the old one. The excuse, which they attempted to make at the trial, that they thought they were making a new corporation, and merely signed such papers as their lawyer told them, is plainly untenable; as Judge Murdock said in the court below: they "have not a leg to stand on."
The second question is whether the Tax Court was without jurisdiction to review the Commissioner's denial of the benefits of § 722, a question quite different from the merits of the Commissioner's action. The section as a whole was intended to relieve corporations from the harsh results of applying the excess profits tax to situations in which the "excess profits tax credit" even with the assistance of § 721 was not adequate protection. In 1940 when the tax was first passed (Second Revenue Act 1940, 201, 26 U.S.C.A. Int.Rev.Acts, p. 35), § 722 merely provided in general terms that the Commissioner might relieve corporations from "abnormal" results, and that the Board of Tax Appeals as it then was should have jurisdiction to review his decision. In 1941 the section was greatly enlarged so as to make more specific those situations to which it applied, and subdivision (e) was added, providing for the "Application for Relief Under This Section." Act March 7, 1941, § 6, 26 U.S.C.A. Int. Rev.Acts, page 84. This subdivision required the corporation to return its excess profits tax without regard to § 722; but gave the privilege within six months after the return was filed of making "application" to the Commissioner for the "benefits" of the section under appropriate regulations; it did not in terms require the corporation to pay the tax as a condition of making the "application." If the Commissioner denied the relief, it could not appeal to the Board but was forced to pay the tax as returned, to claim a refund and appeal to the Board under § 732. However, the Commissioner might assess a deficiency against the corporation, because it had returned too small a tax, or none at all; and this he might do either by a "preliminary notice" followed by an assessment, or without any notice. In either case subdivision (e) allowed the corporation to invoke the "benefits" of § 722 upon an appeal to the Board from the deficiency. If the Commissioner proceeded by "preliminary notice" the corporation might file an "application" to him within ninety days; if it did not, apparently it lost its privilege. In the case at bar the Commissioner did serve a "preliminary notice" and the corporation filed a timely "application." Since the Commissioner never passed upon the "application" except by assessing the deficiency on September 29, 1942, the Board had a jurisdiction to review his disallowance under § 722(e) (1) in the *668 same proceeding in which it reviewed the deficiency. This is a necessary consequence of the language of the exception as a whole, because, unless the jurisdiction of the Board extended to cases within subdivision (e) (1), that subdivision hung in the air and the sentence did not even parse. If the Commissioner cut short the ninety days after his "preliminary notice," or gave none at all, an appeal to the Board also lay, but with these we are not concerned.
So the law stood until October 21, 1942, Revenue Act 1942, § 222 (a), 26 U.S. C.A. Int.Rev.Acts page 299, when subdivision (e) was renumbered (d), and was amended to provide that as a condition upon making any "application" to the Commissioner the corporation must not only "compute its tax" and "file its return," but "pay its tax * * * without the application of this section": i. e., § 722. This amendment was expressly made applicable retroactively to all taxes imposed after December 31, 1939, and therefore covered the tax at bar. Two questions arise. First, whether the corporation's appeal of December 26, 1942 was defective, assuming that the amendment of October 21, 1942, for the first time made payment of the tax assessed a condition as well upon appeals to the Board as upon "applications" to the Commissioner. Second, whether payment of the tax was in fact a condition as well upon appeals to the Board, as upon "applications" to the Commissioner. The right answer to the first of these questions is yes. It might perhaps be argued that, if before October 21, 1942, the corporation had appealed from the deficiency assessed on September 29, 1942, the amendment would not have deprived the Board of a jurisdiction already vested in it. That we do not answer; for there can be no doubt that, if it be once conceded that § 722(d) did make payment of the deficiency a condition upon the appeal granted by subdivision (d) (1) or (d) (2), all appeals taken after October 21, 1942, were subject to that condition, regardless of whether the deficiency to be reviewed had been assessed before payment had been made a condition either upon "applications" to the Commissioner or appeals to the Board.
The answer to the other question is not so plain: Should the condition of payment which the amendment imposed upon all "applications" to the Commissioner be understood as also applicable to appeals to the Board? Appeals to the Board lay only after the Commissioner had finally assessed a deficiency, because, as we have already implied, § 722(d) (1) presupposed that any "preliminary notice" has been followed by a definitive assessment. Since § 272(a) stayed process on an assessment, pending appeal to the Board, it is true that the assessment must be regarded as not final in the same sense that a judgment stayed on the appeal is not final. Moreover, there is no doubt a difference between a tax, conceded to be due in the corporation's own return, and a tax assessed against it in invitum. This argument might perhaps be persuasive, if the denial of "benefits" under § 722 were regarded as a constituent factor of the tax itself, as for example are the conditions detailed in § 721. We do not so regard § 722; on the contrary it was a favor; it presupposed that, even after taking into account the ameliatory conditions of § 721, the tax was due unless ex gratia the blow was softened; it was a tempering of the wind to the shorn lamb. When Congress imposed as a condition upon such a favor, and expressly prescribed that the recipient must not be in default as to what it acknowledged to be due, we can hardly believe that it meant to relieve those of the same condition who had wrongly, even though honestly, failed to acknowledge what in fact was due, merely because their liability had not been finally determined on an appeal. Moreover, we think it not unimportant as disclosing a pre-existing purpose that by the amendment of 1943 Congress denied the "benefits" of § 722 in all cases where the amount of the tax as assessed was not paid; and wholly assimilated the situation to a claim for refund. It is not unfair to regard the earlier statutory steps, though inarticulate, as successive efforts to realize an object already in mind.
Finally, so far as concerns our review of the Tax Court, as distinct from its own decision as to its jurisdiction, the case seems to us especially proper for the application of the doctrine that, even as to matters of law unmixed with fact, we are to yield unless our conviction to the contrary *669 is strong. In Brooklyn National Corporation v. Commissioner,[4] the Tax Court had refused to follow our earlier decisions on the point involved, saying with engaging candor that they thought us mistaken. Relying upon our earlier decision in Kirschenbaum v. Commissioner,[5] in which we had followed Commissioner v. Estate of Bedford,[6] we deferred to that ruling. It is of course not our province to fix the distribution of judicial power; least of all are we in a position to measure the higher authority which the Tax Court's constant occupation in its special field should give to its rulings, as distinct from ours in our sprawling jurisdiction. We can think of no legal question as to which we ought more readily yield than that at bar; in that thicket of verbiage, through which we have been forced to cut a way, it must surely be an advantage to have been familiar with other tangles of the same general sort; and, while it is the pleasure of Congress to express itself so apocalyptically, we may well be grateful that we are permitted to put our hand into those of accredited pathfinders.
Order affirmed.
NOTES
[1] § 722, Title 26, U.S.C.A.Int.Rev. Code.
[2] § 722(d), Title 26 U.S.C.A.Int.Rev. Code.
[3] § 722, Title 26 U.S.C.A.Int.Rev. Code.
[4] 2 Cir., 157 F.2d 450.
[5] 2 Cir., 155 F.2d 23.
[6] 325 U.S. 283, 65 S. Ct. 1157, 89 L. Ed. 1611. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566076/ | 159 F.2d 828 (1947)
WATERMAN S. S. CORPORATION
v.
CIVIL AERONAUTICS BOARD.
No. 11765.
Circuit Court of Appeals, Fifth Circuit.
February 14, 1947.
Francis H. Inge, of Mobile, Ala., and Joseph M. Paul, Jr., of Washington, D. C., for petitioner.
H. Don Reynolds, Chief Enforcement & Lit. Section, Civil Aeronautics Board, of Washington, D. C., Edw. J. Hickey, Jr., Sp. Asst. to Atty. Gen., and Robert Weinstein, Asst. U. S. Atty., of New Orleans, La., for respondent.
R. Emmett Kerrigan, of New Orleans, La., for intervener, Chicago & Southern Air Lines, Inc.
Before SIBLEY, HUTCHESON, and LEE, Circuit Judges.
SIBLEY, Circuit Judge.
On May 17, 1946, the Civil Aeronautics Board made a proposed decision and order on its consolidated docket No. 525 in which some fifteen applications for certificates to engage in air transportation between points in the United States and points in Latin *829 America, including Mexico, Columbia, Venezuela, Brazil, Cuba, and Puerto Rico, were disposed of. The President approved the order on May 22, 1946, and it was served on the parties affected on May 24, 1946. By the order Waterman Steamship Corporation was denied a certificate of public convenience and necessity for the route it sought, and one was granted to a rival applicant, Chicago and Southern Air Lines, Inc. The latter we will refer to as C. and S. and the former as Waterman. On September 6, 1946, Waterman filed in this court a petition for review of certain portions of the order affecting it and C. and S. under Section 1006 of the Civil Aeronautics Act, 49 U.S.C.A. § 646, and a copy was transmitted to the Board. The Board on November 4, 1946, moved to dismiss the petition mainly on the ground that this order, because approved by the President, was not subject to judicial review; and alternatively that if the petition be not dismissed the order be forthwith affirmed for the same reason. On November 29, 1946, C. and S. was allowed to intervene, and moved to dismiss the petition on the same grounds; and also because C. and S. was an indispensable party and had not been served with formal notice of it; and because the petition was not filed within sixty days from service of the order on May 24, 1946, as required by Section 1006. A skeleton record only has been filed, to save the preparation of a very voluminous one if the petition is to be dismissed. The motions to dismiss only are now presented for decision.
1. As to timeliness, it appears that the order was published as such on May 24, 1946; on June 24, 1946, a motion for reconsideration was filed by Waterman, which the Board entertained and considered on its merits and overruled on July 12, 1946. The petition for review was well within the sixty days allowed by the statute from the latter date. The rules of procedure of the Board provide for such a motion filed within thirty days after the service of the order, or at a later date by leave of the Board. It is argued by Waterman that the thirty days expired on a Sunday and for that reason an extra day was by a general principle permitted. We do not think it matters. The Board did not reject the motion because not in accord with its rule, but decided it on its merits. It does not now raise any such contention. We think the motion, although it did not by the Board's rules supersede or suspend the order, operated to retain the Board's authority over the order, so that the order overruling the motion should be taken as the final "entry of such order" intended by the statute to start the running of the sixty-day period for judicial review. Braniff v. Civil Aeronautics Board, 79 U.S.App. D.C. 341, 147 F.2d 152; Saginaw Broadcasting Co. v. Federal Communications Commission, 68 App.D.C. 282, 96 F.2d 554.
2. C. and S. is manifestly interested in the review and entitled to be heard. Section 1006, however, does not provide for any service except upon the Board. We should perhaps rightly have ordered some service or notice to C. and S., but this is not now necessary for it has voluntarily appeared by intervention. The petition should not be dismissed on a question of parties.
3. There remains the larger question whether an order of the Board which has the approval of the President under Section 801 of the Act[1] may be reviewed by this court under Sec. 1006. By Sec. 401, 49 U.S.C.A. § 481, certificates must (with exceptions not here material) be obtained from the Board by "air carriers", including those undertaking foreign transportation, and the Board may revoke them. *830 By Sec. 402, 49 U.S.C.A. § 482, "foreign air carriers" must obtain permits from the Board in a similar manner. We learn from the definitions in Sec. 1, 49 U.S.C.A. § 401, (2), (19), that "air carrier" means a citizen of the United States who undertakes air transportation, while "foreign air carrier" means a person not such citizen who engages in foreign air transportation. The former is granted a certificate and the latter a permit under different sections of the Act. But by the precise terms of Sec. 801 if the certificate of the United States citizen covers foreign air transportation its issuance, denial, revocation, etc., are subject to the approval of the President, and so also are such matters as to any permit issuable to any foreign air carrier. We are emphasizing the separateness of the provisions as to the certificates of the citizen from those as to the permit of the foreigner. Now Sec. 1006(a), 49 U.S.C.A. § 646(a), we think is equally clear and precise: "Any order, affirmative or negative, issued by the Board under this act, except any order in respect of any foreign air carrier subject to the approval of the President as provided in section 801 of this act, shall be subject to review by the circuit courts of appeals of the United States * * *". The language here shifts from certificates and permits to orders affirmative or negative of the Board, but it is evident that certificates and permits are to be issued, denied, revoked, or otherwise dealt with by the Board through orders, which are frequently so named throughout the Act. All such orders are reviewable with one exception an order in respect of a foreign air carrier subject to approval of the President as provided in Section 801. The words are too plain to be misunderstood. If Congress had intended to except all orders made subject to Presidential approval by Section 801, fewer words would have sufficed. To make that meaning we must eliminate the words "in respect of any foreign air carrier", or we must change them to read "in respect of any foreign air transportation". Though we might think this change would make a better law, we have no right thus to amend it. The Bill which passed both the House and the Senate and was approved by the President does not read that way.[2] That Bill became the law, by the express provision of the Constitution, Art. 1, Sec. 7. Since no foreign air carrier is here concerned and no order has been made concerning such a carrier, the one exception Congress has made does not apply.
We recognize of course that "any order affirmative or negative" does not mean interlocutory or indecisive orders, but refers only to the Board's final conclusions. We recognize, too, the important role given the President in Sec. 801 in respect of foreign air transportation both by our citizens and by foreigners, because of complications ever possible in our foreign relations. While the right to regulate foreign commerce is vested by the Constitution in the Congress, Art. 1, Sec. 8(3), the President is charged with a peculiar responsibility for our relations, by treaty and otherwise, with other countries, and is often possessed of information not proper to be made public, which may cause what the Board has concluded to be commercially desirable seem to him politically or otherwise undesirable. Such considerations probably led the Congress to give the President what amounts to an absolute veto as to all orders of the Board respecting all the matters named in Sec. 801. Since the order would still be the order of the Board, this veto power we think would persist as to any modification of such an order by the court under Section 1006(c) or any new order framed by the Board under direction of the court. The court has no power to question or review either the approval or disapproval of the President. He does not have even to state his reasons. On review under Sec. 1006 the court has only to consider the order of the Board and whether it is according to the Act. Congress has made the Board its regulatory agent touching public convenience and necessity, the fitness, willingness and ability of the applicant for a *831 certificate or permit to operate successfully, and other things named in the Act; and the Board's action is subject to court review to the extent the Act provides and permits. It is not final till the Board and the court have completed their functions. Thereafter the completed action must be approved by the President as to citizen air carriers in cases under Sec. 801. As to foreign air carriers the court has no function at all, and the President's action on the Board's order is final and unreviewable.
We are aware that this question was decided otherwise in Pan American Airways Co. v. Civil Aeronautics Board, 2 Cir., 121 F.2d 810. The court there leaned upon United States v. George S. Bush & Co., 310 U.S. 371, 60 S. Ct. 944, 84 L. Ed. 1259. We think the Bush case does not apply. It involved Sec. 336 of the Tariff Act of 1930, 46 Stats. 696, 19 U.S.C.A. § 1336, and the Tariff Commission set up in that Act. That Commission was authorized to make no orders, but only to investigate and report to the President, who then by proclamation would make the recommended changes in the tariff rates "if in his judgment" they ought to be made. The only action was taken by the President. The Aeronautics Board has powers similar to those of the Interstate Commerce Commission, and makes orders of many kinds affecting air carriers and air commerce. The certificates and permits here involved are issued or denied on the orders of the Board. The President cannot make any order, though under Sec. 801 he can frustrate some of them. Under that section copies of applications and proposed certificates and permits are to be transmitted to him before a hearing, and decisions are to be submitted to him before publication. Apparently this is for his information and to give him opportunity to look into the matter and give the Board any facts he may desire. He is not required to do anything until the Board reaches a decision and is ready to make an order, when he may approve it, or stop it by a disapproval. If he approves, it means only that he consents. It does not deprive the court of its power to see that the order is otherwise according to law, except as to foreign air carriers. Because of our view that the President's power to disapprove applies as well after as before the court acts we see no chance of a deadlock, no conflict of function. The Act clearly defines the function of court and President. Each may be expected to respect the function of the other. Nor is there such prospect of futility as ought to deter the court. Courts try criminal cases notwithstanding an executive pardon may frustrate a conviction. They constantly reach conclusions in all kinds of cases undeterred by the chance that a higher court may disapprove their orders.
We therefore esteem it our duty to entertain this petition under the Act. We will, of course, give proper regard to the presumptions due to the Board's action in favor of C. and S. If it should appear to us or to the Supreme Court that that action was for any reason unlawful, so that C. and S. cannot serve the proposed air route, it may be that both the Board and the President would reconsider the denial of a certificate to Waterman. We as yet on a skeleton record have little idea of what the merits of the controversy may be. We are holding merely that we have the jurisdiction and the duty to find out.
The motions to dismiss are denied.
NOTES
[1] 49 U.S.C.A. § 601. "The issuance, denial, transfer, amendment, cancelation, suspension, or revocation of, and the terms, conditions and limitations contained in, any certificate authorizing an air carrier to engage in overseas or foreign air transportation, or air transportation between the places in the same territory or possession, or any permit issuable to any foreign air carrier under section 482, shall be subject to the approval of the President. Copies of all applications in respect of such certificates and permits shall be transmitted to the President by the Administrator of Civil Aeronautics Board before hearing thereon, and all decisions thereon by the Administrator of Civil Aeronautics Board shall be submitted to the President before publication thereof * * *".
[2] It is stated in argument and not denied that the Bill as introduced did read "in respect of foreign air transportation" and was changed in Committee to the present words, showing a deliber choice of the latter. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566038/ | 34 So. 3d 603 (2009)
DUETT LANDFORMING, INC., Appellant,
v.
BELZONI TRACTOR CO., INC. and Deere & Company, Appellees.
No. 2008-CA-00022-COA.
Court of Appeals of Mississippi.
September 8, 2009.
Rehearing Denied February 23, 2010.
Certiorari Denied May 13, 2010.
*605 Merrida Coxwell, Charles E. Griffin, Jackson, attorneys for appellant.
Frank Malvin Holbrook, attorney for appellees.
Before KING, C.J., BARNES and ISHEE, JJ.
ISHEE, J., for the Court.
¶ 1. Following a trial in the Circuit Court of Humphreys County, the jury returned a verdict in favor of the defendants, Belzoni Tractor, Inc., (Belzoni) and Deere & Co. (Deere). The jury found that Duett Landforming, Inc., (Duett Landforming) had failed to prove that Belzoni and Deere had breached the implied warranties of merchantability and fitness for a particular purpose with regard to the Deere tractors that Duett Landforming had purchased from Belzoni. Aggrieved by the jury's verdict, Duett Landforming appeals and asserts two issues:
I. Whether the circuit court improperly allowed Scott Cook to give prejudicial testimony concerning the tractors' engineering without being disclosed or qualified as an expert.
II. Whether the jury's verdict is against the overwhelming weight of the evidence.
Finding no reversible error, we affirm.
FACTS AND PROCEDURAL HISTORY
¶ 2. Brookie Duett (Duett) was in the business of dirt moving, leveling, and building catfish ponds in the Mississippi Delta. Prior to purchasing the tractors at issue, Duett's business, Duett Landforming had operated a number of John Deere tractors, model number 8970. Seeking to upgrade his tractors, Duett Landforming rented and later purchased from Belzoni four new John Deere tractors, model number 9400. Initially, Duett Landforming rented two 9400 tractors in July 1998, and it took delivery of a third 9400 tractor in October 1998. The company purchased those three 9400 tractors in December 1998, and it purchased a fourth 9400 tractor in January 1999.
¶ 3. Duett negotiated with Larry Shurden, who was the dealer for Belzoni, to purchase the four tractors. Duett could not recall anything specific that Shurden told him about the tractors, nor could he remember anything from the brochure on the 9400 tractor on which he relied. Duett did not speak with anyone at Deere about the tractors prior to purchasing them. Nevertheless, Duett claimed that Shurden was familiar with Duett's business and that *606 Shurden knew the type of work for which the 9400 tractors would be used.
¶ 4. Duett testified that in the summer of 1999, the 9400 tractors began experiencing problems. The first problem that Duett experienced involved a transmission running hot. Later, he described problems such as: (1) the axle seals would leak; (2) the brackets holding the hydraulic lines would break; (3) the center pin that was involved in allowing the tractor to turn would break; (4) pressure would cause the fuel cap to fall off and would cause fuel to spray[1]; (5) the hydraulic tank would leak; and (6) it was difficult to remove some of the bolts.
¶ 5. Most importantly, Duett testified about problems with the tractor gudgeons. According to Duett, a gudgeon is a large pipe that allowed the tractors to twist.[2] He said that the gudgeons would wear down, which would cause the tractors to ride badly. Duett stated that he had also experienced problems with the gudgeons on the 8970 tractors, but he operated them for more hours before experiencing any problems with them. He could not remember how many gudgeon problems he had with the 8970 tractors, but he mentioned at least two instances. He claimed that he lost business because of the unreliability of the 9400 tractors, and he also claimed that he lost resale value on them.
¶ 6. Shurden testified that he offered Duett some options to alleviate the problems caused by the 9400 tractors, such as trading in one or all of the 9400 tractors, replacing the 9400 tractors with used 8970 tractors, keeping a 9400 tractor in stock for Duett to rent, or keeping a 8970 tractor in stock for Duett to use rent free. However, Duett never accepted any of Shurden's offers. According to Shurden, the Deere warranty covered the tractors for two years or 2,000 hours, whichever came first, and Deere made every covered repair on the 9400 tractors. Scott Cook, Deere's corporate representative, testified that Deere provided an additional $24,000 worth of repairs beyond the warranty at no cost to Duett.
¶ 7. Duett Landforming called Charlie Sanders, a consultant, as an expert witness in rental value, value of equipment, and general equipment repair knowledge. Sanders testified as to the damages that Duett Landforming suffered because of the 9400 tractors. According to Sanders, Duett Landforming lost a total of $114,914 on the resale value of the tractors and between $100,000 and $150,000 "rental value" for the four tractors because of their downtime. On cross-examination, Sanders admitted that Duett Landforming had put more hours on the tractors than was the average in the industry. For example, at the time that the company traded in tractor number 11013 in March 2002, Sanders said that it had 4,114 hours logged on it, which was more than twice the industry average of 1,800 hours. None of the tractors had been used for fewer than 3,152 hours.
¶ 8. Cook, who was Deere's engineering manager for the 9000 series tractors, testified on behalf of Deere and Belzoni. He had not inspected the tractors at issue, but he initially explained some of the design differences between the 8970 series and the 9400 series tractors. Although the 9400 was a newer series, it incorporated the same transmission as the 8970, with *607 minor modifications. As for the gudgeon on the 9400 tractors, Cook testified it incorporated a bushing-style bearing; whereas, the 8970 tractors incorporated a tapered rolling bearing. Deere switched to the bushing-style bearing because of some sealing issues in the 8970 tractors with the tapered rolling bearings that required daily maintenance. Deere discovered that in cases of extreme oscillation when the front of the tractor tips relative to the reardebris could enter the gudgeon and cause problems with the 9400 tractors. Cook did not deny that Duett Landforming had experienced problems with the 9400 tractors. However, he noted that it had used the tractors for many more hours than what an average user would. Cook rated the company's landforming operation as some of the most strenuous work that Deere's tractors could perform, describing it as a nine or a ten on a ten-point scale.
¶ 9. When Cook was questioned on direct examination about the effect of pushing one tractor that was stuck in the mud with another tractor, Duett Landforming objected to his testimony as being that of an expert witness. In response, Deere argued that Cook would testify as to facts, not opinions; therefore, it was not expert testimony. The circuit court overruled the objection and allowed Cook to testify about the engineering strains that are placed on a tractor when it is pushed with another tractor. Cook's conclusion was that pushing the tractor would put a different strain on the gudgeon than the tractor normally experienced, and the act would bring in more debris through the seal. He contrasted pushing a tractor to pulling or towing a tractor, in which cases the strains on the gudgeon would be similar to normal operation.
¶ 10. According to Cook, Deere would not try to build a tractor that could not break because customers would not be able to afford it, and it would not be functional for customers. He said Deere expected its tractors to need occasional servicing. In the present case, he testified that Deere performed every required warranty repair on all four of Duett Landforming's tractors. He testified that Deere had done everything to uphold its end of the implied warranties and had also gone beyond what was necessary to repair the tractorsproviding an additional $24,000 in repairs that was not required under the warranties. Duett Landforming had also been offered concessions to extend the warranties on its tractors and to upgrade the bearings on the 9400 tractors, and it had been offered trade-in incentives on newer tractors.
¶ 11. The jury returned a verdict finding that Belzoni did not breach an implied warranty of merchantability or fitness for a particular purpose.[3] The jury also returned a verdict finding that Deere had not breached any implied or express warranties. After the circuit court denied Duett Landforming's motion for a judgment notwithstanding the verdict, he timely filed the present appeal.
DISCUSSION
I. Expert Testimony
¶ 12. Duett Landforming first takes issue with the circuit court's decision to allow what he claims amounted to expert testimony from Cook. According to Duett Landforming, the circuit court improperly allowed Cook to give expert testimony when Cook was never disclosed or qualified as an expert. The testimony with which Duett Landforming takes issue is *608 Cook's engineering testimony concerning the tractors' gudgeons and the possible effects that pushing a tractor with another tractor could have on the gudgeons. After Duett Landforming's objection was overruled, that exchange continued as follows:
Q. Mr. Cook, you were explaining to the jury, tell us whatif a tractor is pushing on the front of this tractor, what engineering strains there are on a tractor that is stuck. And if you want to use this model, I'll be glad to hand it to you.
. . . .
A. When a tractor is pushing on the nose or the front end of the tractor, what tends to happen is, the front of the tractor is pushed up. . . . [Y]ou tend to load the gudgeon or the spindle area right here and put a bending load on it in this direction where it's in compression on the top side and tension on the bottom side. That's different than it is normally loaded. That's one of the things that pushing causes a different loading than most of the tractors in this application.
Q. Okay. What effect would that pushing and that motion have on the bushing seal?
A. As you can see, the motion here would cause thatthat gap there to change and so it tends to work it and would tend to bring more debris through that seal. As that seal gets breached and you continue to do that, even if it's on an infrequent basis, you tend to pump material into thatthat bearing.
. . . .
Q. Would thereif a tractor is pushing another tractor, would you explain to the jury what forces from an engineering standpoint apply to the tractor that is pushing?
A. The tractor that's pushing would have a similar set of forces and would tend to close up that gap and so both the tractor being pushed and the tractor pushing would tend to see that type of loading.
. . . .
Q. I don't believe it's shown in this picture, but I believe that there's another picture that Mr. Cote showed yesterday that showed a tractor being pulled by a bulldozer. Ifif a bulldozer hooks up to this pan and pulls, what are the forces that are applied to the tractor up here in this gudgeon area?
A. Being pulled from the rear is essentially the same as the tractor pulling forward so the forces in the gudgeon area would be very similar to what they would be in a normal operation.
Q. So that would not beis it correct to say that that would not be as difficult on the bearing as the bushing?
A. That is correct.
Q. Now, did you ever personally inspect the tractors at issue in this case?
A. No, I did not.
¶ 13. "The `admissions or exclusion of evidence is within the discretion of the trial judge and will not be reversed absent an abuse of that discretion.'" Irby v. Travis, 935 So. 2d 884, 905(¶ 56) (Miss. 2006) (quoting Miss. Dep't of Transp. v. Cargile, 847 So. 2d 258, 263(¶ 16) (Miss. 2003)). Upon review, this Court will reverse a case based on the admission of evidence only if it "results in prejudice and harm or adversely affects a substantial right of a party." Blake v. Clein, 903 So. 2d 710, 722(¶ 30) (Miss.2005) (quoting *609 K-Mart Corp. v. Hardy, 735 So. 2d 975, 983(¶ 21) (Miss.1999)).
¶ 14. Pursuant to Mississippi Rule of Civil Procedure 30(b)(6), Duett Landforming requested that Deere make available a corporate representative to testify regarding, among other things: (1) "Defects discovered by Deere . . . in regard to all gudgeons in the John Deere 9400 Series tractors . . ."; (2) "Defects discovered by Deere . . . in regard to all transmissions of the John Deere 9400 Series tractors. . ."; and (3) "All alleged product performance problems involving John Deere 9400 Series tractors including, but not limited to, gudgeons and transmissions." Cook, who oversaw the design of the 9000 series tractors, of which the model 9400 was included, was designated as Deere's corporate representative to testify regarding the specified matters. At his deposition, Cook testified about the technical aspects of the tractors, including the design and purpose of the gudgeon and the known defects with it. Duett Landforming's attorney also questioned Cook as to whether the push bars that Duett installed on the front ends of the 9400 tractors would have affected the gudgeonsthe same issue about which Duett Landforming now argues that Cook should not have been allowed to testify. The deposition exchange proceeded with the defense attorney questioning Cook as follows:
Q. Okay. Go to Bates number 1720 and read that top part, the very top of the, start out four-wheel drive tractor.
A. All the four-wheel drive tractors we saw were equipped with pusher bars attached to the front frame. We discussed this with the TAM, or territory aftermarket manager, and suggested that any equipment attached to the front axle of these tractors should reach under the axle and attach to the frame behind the front axle.
Q. Do you know why that statement was made?
. . . .
A. The first one we do not recommend pushbars on any of those four-wheel drive tractors with scrapers.
Q. And why not?
A. Because that is not an approved application. We do not test for it and do not recommend it.
Q. Do you have any warning put out in your literature and tell them not to do that?
A. I can't answer that, sir. I don't know if that's in there or not. That's a vehicle modification.
Q. Would that have anything to do with the gudgeon or would you know?
A. I would have to speculate. I don't know, sir.
¶ 15. Despite the presence of such testimony in Cook's deposition, Duett Landforming introduced the deposition into evidence during his case-in-chief. This was prior to the alleged improper testimony that was elicited from Cook during the defense's case. Duett Landforming played a tape recording of the deposition before the jury and then introduced a transcript of the deposition in evidence. In the deposition, Cook did not specifically answer the question about whether pushing the tractor with the push bar would cause the gudgeon problems. However, after the questions concerning the push bars, the defense attorney continued to ask Cook about the various modifications that Duett had made to the tractors and whether those modifications would have adversely affected the gudgeons. When Cook was later questioned at trial, he said that pushing *610 the tractor could possibly cause damage to its gudgeon.
¶ 16. From his deposition and from the trial testimony, it was clear that Cook had not inspected any of Duett Landforming's tractors. He did not testify that Duett caused the gudgeon problems by pushing his tractors, and he did not give an opinion as to why Duett Landforming's tractors experienced problems. Nevertheless, Cook's testimony was in the nature of expert testimony. Cook was neither disclosed as an expert witness prior to trial nor accepted as an expert at trial; therefore, it was improper for him to give expert testimony. We note, however, that Duett Landforming initially brought up this matter by playing a tape recording of Cook's deposition for the jury. Therefore, any objectionable engineering testimony that Cook gave was initiated when Duett Landforming introduced the deposition in which the jury heard Cook speak at length about the design of the 9400 tractors, the gudgeon problems they experienced, and the possible effects that Duett's modifications might have had on the gudgeons. The supreme court has held that "as a general rule, the issue of whether a party opens the door for an opposing party to inquire about otherwise inadmissible evidence, lies within the sound discretion of the trial court." Hartel v. Pruett, 998 So. 2d 979, 988(¶ 22) (Miss.2008) (quoting APAC-Miss., Inc. v. Goodman, 803 So. 2d 1177, 1185(¶ 35) (Miss.2002)). We find that whether the circuit court found the testimony to be proper layperson testimony or not was not dispositive of the issue. Duett Landforming opened the door for such testimony by playing the tape recording of Cook's deposition for the jury. Therefore, we find it was within the circuit court's discretion to allow the defense to continue the line of questioning.
¶ 17. In the present case, the circuit court did not explain its decision to admit Cook's objectionable testimony; therefore, we are left in the dark as to the rationale behind the ruling. Deere argued at trial, and continues to argue on appeal, that Cook's testimony amounted to factual information of which he had knowledge; therefore, he claims it was not expert testimony. However, in Palmer v. Volkswagen of America, Inc., 904 So. 2d 1077, 1092(¶ 64) (Miss.2005), the supreme court stated:
To be clear, the test for expert testimony is not whether it is fact or opinion. The test is whether it requires "scientific, technical, or other specialized knowledge beyond" that of the "randomly selected adult." If so, the testimony is expert in nature, and must be treated in discovery, and at trial, as such.
Whatever the circuit court's reason for allowing the testimony, "we may on appeal affirm the decision of the trial court where the right result is reached, even though we may disagree with the trial court's reasons for reaching that result." Magnolia Healthcare, Inc. v. Barnes, 994 So. 2d 159, 162(¶ 12) (Miss.2008) (quoting Pass Termite and Pest Control, Inc. v. Walker, 904 So. 2d 1030, 1032(¶ 6) (Miss.2004)). In the present case, we find that although Cook gave improper expert testimony, it was within the circuit court's discretion to allow that testimony because Duett Landforming initiated that line of questioning when its attorney played the tape recording of Cook's deposition, which covered the same issue to which Cook testified at trial.
II. Judgment Notwithstanding the Verdict
¶ 18. In Duett Landforming's second issue, it alleges that the evidence did not support the verdict that the jury returned. Duett Landforming claims that it presented a clear case of breach of implied *611 warranties of merchantability and fitness for a particular purpose, and it claims that no reasonable juror could have returned a verdict finding that there was not a breach of those warranties.
¶ 19. A motion for a judgment notwithstanding the verdict tests the legal sufficiency of the evidence. White v. Yellow Freight Sys., Inc., 905 So. 2d 506, 510(¶ 6) (Miss.2004) (citing Tharp v. Bunge Corp., 641 So. 2d 20, 23 (Miss.1994)). The circuit court must consider all the evidence in a light most favorable to the nonmoving party. Id. (citing Janssen Pharmaceutica, Inc. v. Bailey, 878 So. 2d 31, 54 (¶ 107) (Miss.2004)). "If the facts and inferences so considered point so overwhelmingly in favor of the movant that reasonable jurors could not have arrived at a contrary verdict," then the circuit court must grant the motion. Id. This Court applies a de novo standard of review when considering a circuit court's denial of a motion for a judgment notwithstanding the verdict. Irby, 935 So.2d at 888(¶ 9) (quoting Poole ex rel. Poole v. Avara, 908 So. 2d 716, 726(¶ 24) (Miss.2005)).
¶ 20. Mississippi Code Annotated section 75-2-314 (Rev.2002) provides for an implied warranty of merchantability. Under section 75-2-314(1), "a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." Section 75-2-314(2) further provides that for goods to be merchantable, they "must be at least such as":
(a) Pass without objection in the trade under the contract description; and
(b) In the case of fungible goods, are of fair average quality within the description; and
(c) Are fit for the ordinary purposes for which such goods are used; and
(d) Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) Are adequately contained, packaged and labeled as the agreement may require; and
(f) Conform to the promises or affirmations of fact made on the container or label if any.
¶ 21. First, Belzoni and Deere were merchants who sold tractors; therefore, the implied warranty was applicable. However, they presented testimony to support their position that they did not breach the implied warranty. The fact that the 9400 tractors experienced more problems than Duett Landforming's previously-owned 8970 tractors does not necessarily mean that they were not merchantable. "The implied warranty of merchantability is not intended to guarantee that the goods be the best or of the highest qualitythe standard is measured by the generally acceptable quality under the description in the contract." Johnson v. Davidson Ladders, Inc., 403 F. Supp. 2d 544, 551 (N.D.Miss.2005) (quoting Beck Enters., Inc. v. Hester, 512 So. 2d 672, 676 (Miss. 1987)). "Where a product conforms to the quality of other similar products in the market, it will normally be merchantable." Id. There was testimony that Duett Landforming was engaged in an intensive operation building catfish ponds and that it operated the tractors for some time before it encountered any problems with them. Furthermore, at that point in the life of the tractors, the company had operated them well in excess of the number of hours that was average for the 9400 tractors.
¶ 22. While Duett Landforming presented testimony that supported its claim of a breach of the implied warranty, Deere and Belzoni presented evidence to the contrary. We find no merit to Duett Landforming's claim that the circuit court *612 should have granted its motion for a judgment notwithstanding the verdict with regard to the implied warranty of merchantability.
¶ 23. As for the alleged breach of an implied warranty of fitness for a particular purpose, Mississippi Code Annotated section 75-2-315 (Rev.2002) provides, in part, that:
Except as otherwise provided in this section, where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is an implied warranty that the goods shall be fit for such purpose.
¶ 24. Shurden admitted that he was aware that Duett was in the business of building catfish ponds. However, Duett could not remember any assurances that Shurden gave him as to how the 9400 tractors would function, nor did he say that he relied on Shurden's representations in making his decision to purchase the 9400 tractors. Duett said he had spoken to Shurden about the 9400 tractors, and he had also seen a video and looked at a brochure about them. The evidence did not reflect that Duett relied on Shurden's "skill or judgment to select or furnish suitable goods." Miss.Code Ann. § 75-2-315. To the contrary, Duett stated that he was the expert on building catfish ponds, and he was the person who had selected the 9400 tractors. As for how Duett decided to purchase the 9400 tractors, he said, "I wanted the bigger tractors and they were the only ones available sold by John Deere and I'd been buying John Deere tractors soand had had good luck with them, so that's the only one I wanted to try, I guess."
¶ 25. We find that the evidence was such that reasonable jurors could have disagreed over whether Belzoni or Deere breached their implied warranties to Duett Landforming. Therefore, the circuit court did not err by denying Duett Landforming's motion for a judgment notwithstanding the verdict. We find that this issue is without merit.
¶ 26. THE JUDGMENT OF THE CIRCUIT COURT OF HUMPHREYS COUNTY IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, GRIFFIS, BARNES, ROBERTS, CARLTON AND MAXWELL, JJ., CONCUR.
NOTES
[1] Duett testified that he installed valves to prevent this from occurring.
[2] The 8970s and the 9400s were articulating tractors, which means that they had a front and a back section that were connected at a central joint. The gudgeon was the piece that allowed the two pieces of the tractor to pivot or twist.
[3] After Duett Landforming rested its case-in-chief, the circuit court granted Belzoni's motion for a directed verdict on the claim that it violated any express warranties. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566079/ | 159 F.2d 332 (1947)
ASSMANN
v.
FLEMING, Temporary Controls Adm'r, et al.
No. 13441.
Circuit Court of Appeals, Eighth Circuit.
January 29, 1947.
*333 John C. Mullen and Thomas J. Sheehan, Jr., both of Omaha, Neb. (Gerald M. Mullen, of Omaha, Neb., on the brief), for appellant.
Jacob W. Rosenthal, Atty., OPA, (William E. Remy, Deputy Commissioner of Price Administration for Enforcement, David London, Director, Litigation Div., and Albert M. Dreyer, Chief, Appellate Branch, all of Washington, D.C., George E. Leonard, Regional Litigation Atty., of New York City, and Allen Wilson, Sp. Trial Atty., of Omaha, Neb., on the brief), for appellee Temporary Controls Administrator.
Alexander McKie, Jr., and Barton H. Kuhns, of Finlayson, McKie & Kuhns, *334 both of Omaha, Neb., appeared on statement by appellee First Nat. Bank of Omaha.
Before GARDNER, THOMAS, and JOHNSEN, Circuit Judges.
GARDNER, Circuit Judge.
This is an appeal from an order denying appellant's motion to vacate a consent judgment entered against him on December 28, 1945. To avoid confusion, the parties will be referred to as they were designated in the trial court. At all times pertinent to this action, defendant was and still is a retail clothier dealing in the sale of wearing apparel, at Omaha, Nebraska. On December 28, 1945, plaintiff filed a complaint charging defendant with the violation of the Emergency Price Control Act of 1942 and Maximum Price Regulation No. 580 as amended, in the way of overcharges in an amount exceeding $3,374.01 in the sale of merchandise and in the matter of the making and maintenance of records. The complainant demanded judgment for three times the alleged overcharges and for injunctive relief. With this complaint was filed a stipulation in writing, dated December 27, 1945, signed by attorneys for plaintiff and by the defendant personally. In this stipulation defendant waived the service of process, answer, and any and all defenses. He also waived hearing and the entry of findings of fact and conclusions of law, and consented to the entry of a final judgment incorporating the stipulation as a part thereof. The stipulation recited that,
"5. The single amount of the overcharges listed in said complaint is stipulated to be $3,374.01.
"6. It is hereby specifically stipulated that the claim of the plaintiff for treble damages in the amount of $10,122.03, subject to the approval of the court, is hereby settled and compromised, and is to be placed in judgment against the defendant for the amount of $5,061.01, together with the costs of said action in the amount of $15.00. The Attorney's docket fee is to be waived.
"7. Defendant specifically stipulates to the entry of a permanent injunction enjoining him from selling, delivering or offering to sell or deliver apparel, apparel accessories or any other items covered by Maximum Price Regulation No. 580 at prices in excess of the maximum prices established by said Regulation, or set forth on or determinable from his Pricing Chart which is on file with the Omaha District Office of the Office of Price Administration, and further that he may be enjoined from violating any of the pricing rules or record keeping rules set in said Regulation.
"8. It is further stipulated that Defendant shall, on or before February 28, 1946, prepare and file his amended base date pricing chart as required by and prescribed in said Maximum Price Regulation No. 580.
"9. A final judgment for money damages and for a permanent injunction in the form hereto attached and approved by the defendant, may be entered against the defendant without notice at any time hereafter."
Attached to this stipulation was a copy of the form of judgment proposed to be entered and this form of judgment was endorsed over the signature of defendant, "approved as to form." In pursuance of this stipulation judgment was entered on December 28, 1945. On the same date of the entry of the judgment plaintiff by his attorney filed a written satisfaction of the money part of the judgment.
On January 4, 1946, defendant filed a motion to vacate the judgment and praying that the First National Bank of Omaha, Nebraska, be made a party defendant and be enjoined from paying defendant's certified check in the sum of $5,061.01 given in satisfaction of the judgment. The motion as originally filed recited that during the month of December, 1945, agents of the plaintiff reported to defendant that he had been selling merchandise in excess of the ceiling price fixed; that he owed plaintiff a large sum of money in the nature of overcharges; that if defendant would make a settlement of the amount due the plaintiff there would be no court action nor publicity about the matter, but the transaction would be closed for all time; that at the *335 time defendant was short of help, was in the midst of a Christmas rush of business, and thinking that perhaps mistakes had been made in the operation of his business, deemed it best for the welfare of his business quietly to settle the matter and prevent litigation and undue publicity; that the agents of plaintiff represented to defendant that if he would pay the sum of $5,061.01, all claims on account of overcharges would be settled without publicity and without litigation; that defendant, relying upon these representations, without making examination of his records agreed to pay plaintiff the sum of $5,061.01, and "signed the pleadings which are on file in this case in this court; that at the time the defendant signed said pleadings and paid said sum of money he was convinced that no court action would be necessary and he would receive no publicity; that the pleadings which the defendant signed were filed by the plaintiff in this court and part of pleadings were published in the daily newspaper in Omaha, Nebraska, and the defendant did receive undue publicity which has been harmful to the defendant and his business." That by reason of the publicity referred to, defendant consulted attorneys and had a thorough check made of the records of his business to ascertain whether or not he had been selling merchandise in violation of the ceiling prices, and that the representations made by plaintiff's agents to induce him to make settlement were false and fraudulent; that he was induced to consent to an injunction and pay unjust demands without being properly advised of his rights and without a full knowledge of the demands and representations of plaintiff's agents and under a misapprehension of the facts. He then asked that he be authorized to stop payment on the certified check which he had issued; that the First National Bank of Omaha be made a party and be directed to stop payment on the check, and that the judgment be set aside. Attached to this motion and made a part of it was an affidavit of defendant's daughter which went solely to the question of whether or not defendant had sold merchandise in excess of the ceiling price. It contained no allegation with reference to any misrepresentations made by the agents of plaintiff, and the motion was not supported by a proposed answer nor affidavit of merits.
The court entered an order making the bank a party, authorizing defendant to stop payment on the check for $5,061.01, holding the injunction entered in abeyance until the hearing on the motion to vacate, and setting the motion down for hearing. At a later date and before the hearing on the motion, the court by order directed defendant to prepare proposed answer to be tendered at the hearing, and thereafter defendant prepared and tendered a proposed answer to plaintiff's complaint, in which he denied the allegations of the complaint which charged him with a violation of the Price Control Act. 50 U.S.C.A Appendix, § 901 et seq. On leave of court defendant filed an amended and supplemental motion to set aside the judgment, reiterating the allegations as to fraudulent representations of plaintiff's agents and charging a breach of the alleged compromise agreement in securing and entering the judgment. Plaintiff filed response to defendant's motion, putting in issue all the allegations charging plaintiff's agents with fraud and misrepresentations. There were various continuances and certain orders relative to permitting the introduction of oral testimony at the hearing of the motion. The court, after hearing oral testimony on the issues raised by the motion to vacate the judgment, after hearing argument of counsel for the respective parties, and considering typewritten briefs filed by them, entered its order denying the motion to vacate, and it is from this order that defendant prosecutes his appeal.
In seeking reversal defendant in substance contends that: (1) the court erred in finding that the parties entered into a valid contract in December, 1945, and in failing to find that plaintiff repudiated the transaction of December, 1945, and in failing to find that defendant had a legal right to repudiate the transaction; (2) the court erred in determining that the stipulation of December 28, 1945, was valid; (3) the court erred in determining that the stipulation entered into by the parties on January 10, 1946, was of no force and effect; *336 (4) the court erred in denying defendant the right to introduce evidence to show that he had a meritorious defense; (5) the court erred in failing to try the case on its merits and in overruling defendant's amended and supplemental motion to vacate the judgment.
Courts under proper circumstances have the power to open, correct, modify or vacate their own judgments, especially during the term at which they were entered. It is elementary that courts favor the trial of causes of action upon their merits, and hence, judgments by default or by confession are within the rule conferring power on courts to open or vacate their own judgments. The action of a trial court in either granting or refusing an application to vacate a judgment is generally speaking within the judicial discretion of the court. The discretion is not an arbitrary one to be capriciously exercised, but a sound legal discretion guided by accepted legal principles. While the authority to vacate a judgment during the term at which it was entered, stems from the common law independently of statute, many of the states have enacted laws embodying the rule of common law and expressly authorizing applications for relief against judgments even after the expiration of the term at which they were entered. Federal Rules of Civil Procedure, rule 60(b), 28 U.S.C.A. following section 723c, provides in part as follows:
"On motion the court, upon such terms as are just, may relieve a party or his legal representative from a judgment, order, or proceeding taken against him through his mistake, inadvertence, surprise, or excusable neglect. The motion shall be made within a reasonable time, but in no case exceeding six months after such judgment, order, or proceeding was taken. A motion under this subdivision does not effect the finality of a judgment or suspend its operation. * * *."
This rule is substantially the same as the statutory provision of California, Minnesota, New York, and several other states. The proceeding by motion to vacate a judgment is not an independent suit in equity but a legal remedy in a court of law; yet the relief is equitable in character and must be administered upon equitable principles. Fraud and circumvention in obtaining a judgment are ordinarily sufficient grounds for vacating a judgment, particularly if the party was prevented from presenting the merits of his case. The burden of proving such fraud and misrepresentation is, of course, upon the applicant and fraud is not to be presumed but must ordinarily be proven by clear and convincing evidence. It must also be made to appear where the application is made by a defendant that he has a meritorious defense to the action. If, however, there are adequate allegations of a meritorious defense properly verified, no counter-showing will be received to refute the allegations of merits presented by the moving party. In the instant case the court accepted defendant's proffered answer and allegations with reference thereto as tendering in good faith a defense on the merits.
As to the alleged fraud and misrepresentations relied upon as grounds for vacating the judgment, it would serve no useful purpose to set out in detail the evidence before the trial court. Defendant contended that after examination of his files and records by plaintiff's representative he was accused of certain violations of regulations, including the making of sales over ceiling prices and that by deceit, fraud and intimidation, and by assurances of freedom from publicity and by concealment of a purpose to obtain a judgment or file a suit against him, he was induced to enter into a compromise settlement and to give his check for $5,061.01 in payment thereof, and that thereafter on request of a representative of plaintiff, he was induced to sign the stipulation for judgment without reading it and without having the contents disclosed to him, and that by use of the stipulation so obtained from him the plaintiff secured the judgment complained of. The plaintiff's representative, on the other hand, testified that she explained to the defendant that the settlement would involve the getting of a judgment for the amount which might ultimately be agreed upon and the entry of an injunction requiring his future compliance with the regulation, and that two checks would be required from him, one for the amount that might be agreed upon in settlement, and the other for $15.00 for court costs, payable to *337 the clerk of the United States District court. As to the question of publicity, she told the defendant that it was a matter of Federal Court record and she had no control over the matter and could not guarantee against publicity; that there would have to be a judgment and that that was the agency's only way to prevent further violations.
There was evidence that defendant asked for time to consider the proposition of settlement and to enable him to see an Omaha attorney and a friend of his who was chief of the Agency Price Division at Omaha. Defendant was handed a separate paper containing a notation of the amount of the two checks to be given in the event settlement were concluded, and it was upon the basis of the data shown on this slip that defendant later signed the two checks.
Generally, it may be said that the government representative specifically denied every allegation charging misrepresentation or fraud. The court did not try the case on affidavits, but heard the testimony of the witnesses in open court, and referring to the conflict in the testimony, particularly the charges with reference to the alleged misrepresentations made by the plaintiff's representative, the court found: "Those statements were squarely denied by Mrs. McAllister, and this court, in appraising the conflicting testimony, gives credence to the evidence of Mrs. McAllister, and not to that of Miss Assmann."
Referring to the conversations between defendant and his daughter on one part, and Mrs. McAllister on the other, the court found: "They were conducted in an atmosphere of cordiality and courtesy. In no phase of them was there any aspect of threat, intimidation, or coercion."
The court also specifically found: "By way of negative finding, the court now declares explicitly and very clearly that, upon the entire evidence, it finds generally that Assmann has wholly failed to sustain his charges of fraud, deceit, misleading or overreaching in any particular. * * * The court also finds that there was no concealment from Assmann on December 27, 1945, of the contents of the papers he signed or of the purpose thereof, though he did not then read them, and that full copies of all of them were left with him and the necessity of his filing an amended price chart under the injunctive order was drawn to his notice by Keedy, acting in behalf of the plaintiff."
In addition to the oral testimony produced by the plaintiff the court apparently gave some weight to certain surrounding facts and circumstances corroborative of plaintiff's proffered evidence. Among these was the fact that defendant was a man of intelligence with wide business experience. Before signing the stipulation he had signed two checks, one of which was payable to the clerk of the District Court, which plaintiff's evidence indicated was for the cost of entering judgment. If no court proceeding had been anticipated, it would manifestly not have been necessary to make this check of $15.00 payable to the clerk of the District Court. On the day following the making of these checks, defendant signed the stipulation for judgment and signed the approval as to the form of judgment endorsed on the proposed judgment.
The findings of the court are presumptively correct and should not be reversed unless clearly erroneous. It was within the province of the trial court to pass upon the credibility of the witnesses and the weight to be given to their testimony. Jackson County v. Dufty, 8 Cir., 147 F.2d 227; Kincade v. Mikles, 8 Cir., 144 F.2d 784. The order of the trial court, being sustained by substantial evidence, could not be held to be an abuse of discretion. Conceding, as the trial court did, that defendant's proffered answer pleaded a meritorious defense, defendant is without standing here because the court has found that his charges of fraud and misrepresentation were untrue, and it is not the province of this court to weigh the evidence nor to attempt to pass upon the credibility of witnesses.
The issue as finally resolved by the trial court was wholly one of fact. It is, however, urged that the court erred in not hearing the case on the merits because in a previous order entered on motion of the plaintiff and on stipulation of the parties, it was provided, "that either party *338 to this action be and is hereby given the right to introduce oral testimony on any question involved in this action." If, as defendant contends, this was an order that the cause be heard on its merits, it would have been idle to present his motion to vacate the judgment. The relief which he ultimately sought was the trial of the action on its merits. It is observed too that this order was entered in response to plaintiff's motion, in which it is specifically recited:
"That defendant's motion is not supported by any affidavit which would entitle him to the relief prayed for in said motion, there being no testimony or sworn statements of defendant or any other person, or any other competent evidence presented in support of said motion, other than the affidavit of Gretchen Assmann concerning matters not relevant to or directly in support of said motion.
"That plaintiff can not fully and adequately answer or respond to the motion of defendant to set aside the judgment heretofore entered on stipulation of the parties, unless he first has opportunity to examine or cross-examine the defendant and affiant, Gretchen Assmann, on the statements of their attorneys that they were induced by false and fraudulent representations and other inducements set forth in said motion."
It is further recited in this motion that the court should not consider defendant's motion "without hearing the witnesses and observing their demeanor in the courtroom, both on direct examination and on cross-examination." The order entered in response to this motion permitting either party to introduce oral testimony on any question involved was clearly interlocutory. The only matter before the court was whether the judgment should be vacated because of the alleged fraud and misrepresentations of plaintiff's agent and whether or not defendant proffered a defense on the merits. The court accepted defendant's answer as evidence that he had a defense to the action on its merits so that the oral testimony was properly directed to the charges of fraud and misrepresentation.
Convinced, as we are, that the court did not abuse its discretion in entering the order appealed from, it is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566083/ | 159 F.2d 546 (1947)
COMMISSIONER OF INTERNAL REVENUE
v.
NATHAN'S ESTATE.
No. 9228.
Circuit Court of Appeals, Seventh Circuit.
February 11, 1947.
Sewall Key, J. Louis Monarch and L. W. Post, Asst. Attys. Gen., and J. P. Wenchel and John T. Rogers, Bureau of Int. Rev., both of Washington, D. C., for petitioner.
Myron E. Wisch, of Chicago, Ill., for respondent.
Before EVANS, MAJOR, and KERNER, Circuit Judges.
EVANS, Circuit Judge.
This appeal involves the Federal estate taxes of the deceased, Charles Nathan. The controversy arises out of a trust created in 1941 by him. He died in April, 1943.
Petitioner argues that the funds in said trust should be included in decedent's gross estate for the purpose of Federal estate tax, subject only to the deduction of the value of a sister's life estate.
Respondent contends, and the Tax Court accepted her contention, that the value of the trust should not be included in the decedent's gross estate in view of the facts disclosed in this case.
As the applicability of Section 811(c) of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 811(c), and its construction, depend upon the terms of the trust which the decedent created, we quote from said agreement:
"This Trust Agreement, made this 23rd day of December, A. D., 1941, by and between Charles Nathan * * * hereinafter called the Donor * * * and * * * hereinafter called the Trustees, Witnesseth:
"Whereas the donor has assigned * * * to the trustees the property described in the schedule hereto attached * * *
"Now, Therefore * * * it is hereby agreed that the trustees shall hold and administer the said property * * * in trust for the uses and purposes and upon *547 the terms and conditions hereinafter set forth.
* * * * * *
"2. The entire net income from the trust estate, commencing at the date hereof, shall be paid to Rose Straus, the sister of the donor, for and during her natural life for her sole use and benefit, in installments as hereinabove stated. In the event, however, of the said Rose Straus predeceasing the said donor, Charles Nathan, then and in such event the net income shall be paid over by the trustees to the said donor, Charles Nathan, for and during his natural life for his sole use and benefit, in installments as hereinabove stated."
It must be conceded that Section 811(c) of the Internal Revenue Act governs. Sharp is the controversy over the Regulation (105) promulgated by the Commissioner in 1937.
Section 811(c) reads:
"(c) Transfers in contemplation of, or taking effect at death. To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, or of which he has at any time made a transfer, by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death (1) the possession or enjoyment of, or the right to the income from, the property * * *"
shall be included in the gross estate of the decedent.
Treasury Regulation 80 (approved October 26, 1937) reads as follows:
"(a) Transfers included. The statutory phrase, `a transfer * * * intended to take effect in possession or enjoyment at or after the death,' includes a transfer, whether in trust or otherwise, made subject to the reservation or retention by the decedent of the use, or the possession, or the rents or other income or enjoyment of the transferred property, or any part thereof, for his life, or for a period not ascertainable without reference to his death, or for such a period as to evidence his intention that it should extend at least for the duration of his life; including also the reservation or retention of the use, possession, rents, or other income the actual enjoyment of which, by the decedent, was to be postponed until the termination of a transferred precedent interest or estate."
The U.S. Tax Court, with three judges dissenting, held for the respondent. In reaching its conclusion the majority relied largely, if not entirely, upon a previous decision by it rendered in the case of Estate of Charles Curie v. Commissioner, 4 T.C. 1175 (1945).
We think the Curie case is distinguishable in its facts from the instant case. The Regulation was not the same when Curie died as it was at the time of Nathan's death. In the Curie case the transfer which the Commissioner sought to tax was made in 1935. Curie died in 1936. The old Regulation which governed the Court in the Curie case excluded funds where the transferor's contingent right was eliminated by his death prior to that of the first life tenant. The Treasury Department in 1934 made a ruling (E.T. 5, XIII 2 Cum.Bull. 369) which provided that if the transferor was at the time of his death in the actual enjoyment of the income of the trust the transfer should be subject to taxation and where the transferor's contingent right to the trust income was obliterated by his death prior to that of the first life tenant the transfer was not taxable.
It is true Nathan's death occurred prior to that of the first life tenant. However, the Treasury Regulation 105 had been in force for six years prior to Nathan's death and it expressly changed that part of the 1934 ruling which dealt with the transferor's contingent right to the trust income in case of his death prior to that of the first life tenant.
This difference not only clearly distinguishes the factual background of the Curie case from this case but also makes it necessary for us to consider respondent's challenge of the authority of the Treasury Department to promulgate its Regulation 105 in view of the statute, Sec. 811(c).
Is Treasury Regulation 105 within the scope of the language of Section 811(c)? *548 Evidently its validity depends upon the construction we give to one sentence in Section 811(c) "To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, or of which he has at any time made a transfer, by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death (1) the possession or enjoyment of, or the right to the income from, the property * * *."
We think it clear that said Regulation can not be upheld unless we give to the statute a breadth which requires us to say the contingent estate retained by Nathan was for his life or for a period not ascertainable without reference to his death or was for a period which does not in fact end before his death.
It would be outside the power of the Commissioner to extend the liability of this transfer for taxation beyond that designated in the statute. We say this notwithstanding the Regulation was promulgated in 1937 and numerous sessions of Congress have come and gone without its approving, revising or disapproving the Regulation.
We find ourselves then unable to pass upon the validity of the Regulation without construing the above-quoted language of the statute.
The doubt, if any exists in this case, is over the question, was the property which was transferred and in which deceased retained a contingent life interest, terminable by his death or by that of his sister? Stated differently, was the period during which his contingent estate therein existed ascertainable without reference to his death or did the period of the contingent estate which decedent retained in the trust he created have a possible ending before his death?
Notwithstanding some doubt (in view of the discussion in the Curie case) we hold the language of the statute must be so construed as to impose an estate tax on the property covered by this trust less the value of the life estate of the sister. Our decision is not predicated on the Regulation. It is made necessary by the statute which, without the Regulation, imposes the tax.
The Commissioner could not have found or held otherwise. The transfer in which the deceased retained a contingent estate was held by him for a period which did not in fact end before his death. It was his death, not his sister's death, which terminated his contingent interest.
The trend of legislation imposing taxes on trusts created to take effect upon the settlor's death, the income in the meantime to run to the settlor, directly or even contingently, has been in one direction.
The effect of the changes in the Federal estate tax statute and which ultimately found expression in Section 811(c) has been to enlarge the taxable estate of one who in his lifetime transferred all or part of his property in trust, the transfer to take effect on his death. The decisions of the courts have given effect to the evident purpose of Congress. (Commissioner v. Spiegel's Estate, 7 Cir., 159 F.2d 257; Commissioner v. Field, 324 U.S. 113, 116, 65 S. Ct. 511, 89 L. Ed. 786, 159 A.L.R. 230; Fidelity Co. v. Rothensies, 324 U.S. 108, 111, 65 S. Ct. 508, 89 L. Ed. 783, 159 A.L.R. 227; Helvering v. Hallock, 309 U.S. 106, 60 S. Ct. 444, 84 L. Ed. 604, 125 A.L.R. 1368.)
The inclusion of that part of the statute here under consideration is traceable to a start by Congress, in the Revenue Act of 1926. In other words, to Section 302(c) of the Act of 1924 there was enacted an amendment in 1926, also found in Section 302(c). This section was amended in 1932 and became Section 811(c).
The effect of these amendments was to enlarge the property upon which the estate tax was assessed. Its heading indicated its purpose. In other words, it dealt with "transfers in contemplation of, or taking effect at death." It included transfers which took effect at the death of a settlor of a trust, and evidenced the purpose of Congress to include all transfers which may be described broadly as testamentary in character.
The factual difference between the instant case and the usual trust agreement which may be called testamentary has not been *549 ignored. The decedent here retained only a contingent estate which became effective in case he survived his sister. Notwithstanding this rather important fact so far as enjoyment is concerned, it did not take the transfer out of the reach of the language of Section 811(c) which controls our decision. We cannot lessen the effect or the meaning of the words because the settlor's interest was less certain or the enjoyment of the estate reserved more remote. We feel we must give the words used their fair, rightful meaning and we can not make them depend on the size or nature of the settlor's reservation appearing in his transfer. The vital test of said reservation in settlor's favor necessitates an answer to the query was the transfer one which was for a period not ascertainable without reference to his death?
The decision of the Tax Court is reversed with directions to enter an order in accordance with the views here expressed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3034447/ | FILED
NOT FOR PUBLICATION MAR 04 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 08-50438
Plaintiff - Appellee, D.C. No. 2:08-cr-00714-JFW
v.
MEMORANDUM *
RAFAEL CASTANON-ESPITIA, AKA
Trigger,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
John F. Walter, District Judge, Presiding
Submitted February 16, 2010 **
Before: FERNANDEZ, GOULD, and M. SMITH, Circuit Judges.
Rafael Castanon-Espitia appeals from his guilty-plea conviction and 57-
month sentence for being an illegal alien found in the United States following
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
SR/Research
deportation, in violation of 8 U.S.C. § 1326(a). Pursuant to Anders v. California,
386 U.S. 738 (1967), Castanon-Espitia’s counsel has filed a brief stating there are
no grounds for relief, along with a motion to withdraw as counsel of record. We
have provided the appellant with the opportunity to file a pro se supplemental
brief. No pro se supplemental brief or answering brief has been filed.
Our independent review of the record pursuant to Penson v. Ohio, 488 U.S.
75, 80-81 (1988), discloses no arguable grounds for relief on direct appeal.
Accordingly, counsel’s motion to withdraw is GRANTED, and the district
court’s judgment is AFFIRMED.
SR/Research 2 08-50438 | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1565977/ | 159 F.2d 997 (1947)
MILLER et al.
v.
UNITED STATES.
No. 11067.
Circuit Court of Appeals, Ninth Circuit.
February 11, 1947.
Rehearing Denied March 18, 1947.
*998 William L. Paul, Jr., of Juneau, Alaska, and Frederick Paul, of Seattle, Wash., for appellants.
David L. Bazelon, Asst. Atty. Gen., Roger P. Marquis and John C. Harrington, Attys., Dept. of Justice, both of Washington, D. C., and R. L. Tollefsen, of Juneau, Alaska, for appellee.
Before GARRECHT, DENMAN, and BONE, Circuit Judges.
GARRECHT, Circuit Judge.
Involving the question of whether or not the appellants have a compensable interest in certain Alaska tidelands under condemnation proceedings, this appeal requires an examination into the nature of the possessory rights of various Tlingit Indians.
On September 19, 1942, pursuant to the Second War Powers Act of March 27, 1942, 56 Stat. 177, c. 199, § 201, 50 U.S.C.A. § 171a, the appellee filed a petition for the condemnation in fee of 10.95 acres, including *999 land under water, for use in the establishment of wharfage facilities in connection with the Juneau Subport of Embarkation.
On April 3, 1944, the appellee filed a third amended petition in which it was alleged that the lands involved were tidelands, title to which was and always had been in the United States, and that, with a "possible exception" not pertinent here, all the improvements were the property of the United States, so that no compensation was due therefor.
In addition to certain named individuals, in the amended petition there were made parties defendant "all persons or parties unknown claiming any right, title, estate or interest in and to the real property described herein."
On July 27, 1944, the appellants filed an "answer and claim" in which some of the allegations of the appellee's petition were admitted and others were denied. Forming part of the appellants' pleading was a section captioned "affirmative defense and claim," the first paragraph of which is important:
"Ever since the year 1867, and from time immemorial prior thereto, said claimants, being Tlingit Indians of Alaska, and their predecessors and successors in lineal consanguinity, under the laws, customs and usages of the Tlingit Indians of Alaska and in conformity with the laws of the United States, during all the times herein mentioned, have been, and now are the aboriginal users and occupants of, and in the exclusive possession of, and entitled to the exclusive possession of the land, submerged land and water described as follows, namely: * * *"
The appellants further alleged that their "said use and occupancy, possession and right of possession" had "not been condemned, expropriated, extinguished, modified, impaired or encumbered by any person, corporation or body politic" until the appellee filed its first petition for condemnation "to a limited portion of said area." They claimed damages totaling $80,000.
The appellee demurred to the answer and claim on the ground that it appeared from the pleading that the appellants had no such interest in the property sought to be condemned as would entitle them to compensation. The court below filed an opinion indicating that the demurrer would be sustained because aboriginal title created no compensable interest against the United States. Later, an order was entered sustaining the demurrer. Since the appellants elected to stand on the allegations of their pleading, the court filed its final judgment, in which it was decreed that none of the appellants should receive any compensation for the taking of the lands, and that the "unencumbered and absolute title in fee simple" to the area "is vested in the United States of America, free and discharged of any and all charges, interests, claims, liens and encumbrances of any kind and character whatsoever."
From that judgment the present appeal was taken.
1. The General Character of Indian Title.
From the earliest reaches of American jurisprudence, the title of the Indians to the lands of their fathers has been regarded at best as one of occupancy only. In the leading case of Johnson v. McIntosh, 8 Wheat. 543, 574, 21 U.S. 543, 574, 5 L. Ed. 681, Mr. Chief Justice Marshall, referring to the aborigines, said:
"They were admitted to be the rightful occupants of the soil, with a legal as well as just claim to retain possession of it, and to use it according to their own discretion; but their rights to complete sovereignty, as independent nations, were necessarily diminished, and their power to dispose of the soil, at their own will, to whomsoever they pleased, was denied by the original fundamental principle, that discovery gave exclusive title to those who made it. While the different nations of Europe respected the rights of the natives, as occupants, they asserted the ultimate dominion to be in themselves; and claimed and exercised, as a consequence of this ultimate dominion, a power to grant the soil, while yet in the possession of the natives. These grants have been understood by all, to convey a title to the grantees, subject only to the Indian right of occupancy.
*1000 "The history of America, from its discovery to the present day, proves, we think, the universal recognition of these principles."
Half a century later, another Chief Justice Waite restated the doctrine in even more emphatic language. In United States v. Cook, 19 Wall. 591, 592, 593, 86 U.S. 591, 592, 22 L. Ed. 210, it was said:
"The right of the Indians in the land from which the logs were taken was that of occupancy alone. They had no power of alienation except to the United States. The fee was in the United States, subject only to this right of occupancy. This is the title by which other Indians hold their lands." (Emphasis supplied)
And another half century later, a third Chief Justice the one who at this writing presides over the Supreme Court once again reaffirmed the time-honored principle. In United States v. Alcea Band of Tillamooks, 67 S. Ct. 167, 170, the following language was used:
"It has long been held that by virtue of discovery the title to lands occupied by Indian tribes vested in the sovereign. This title was deemed subject to a right of occupancy in favor of Indian tribes, because of their original and previous possession. It is with the content of this right of occupancy, this original Indian title, that we are concerned here.
"As against any but the sovereign, original Indian title was accorded the protection of complete ownership; but it was vulnerable to affirmative action by the sovereign, which possessed exclusive power to extinguish the right of occupancy at will."
See also Cherokee Nation v. Georgia, 5 Pet. 1, 17, 48, 30 U.S. 1, 17, 48, 8 L. Ed. 5; Beecher v. Wetherby, 95 U.S. 517, 525, 24 L. Ed. 440; Buttz v. Northern Pacific R., 119 U.S. 55, 66, 7 S. Ct. 100, 30 L. Ed. 330.
2. The Indian Right of Occupancy is "Sacred."
While consistently careful to point out that the right of the red man to the lands of his ancestors was "only" that of occupancy, the Supreme Court has with corresponding uniformity insisted that this right, so far as it goes, is "sacred."
We find this transcendental adjective first used in the concurring opinion of Mr. Justice Baldwin in Cherokee Nation v. Georgia, supra, 5 Pet. 1, at page 48, 30 U.S. 1 at page 48, 8 L. Ed. 5:
"Indians have rights of occupancy to their lands, as sacred as the fee-simple, absolute title of the whites. * * *"
In United States v. Cook, supra, 19 Wall. 591, at page 593, 86 U.S. 591 at page 593, 22 L. Ed. 210, Mr. Chief Justice Waite went even a step farther. He held that "the right of the Indians to their occupancy" is not only as sacred as the right of private white landowners to their fee, but that it is "as sacred as that of the United States to the fee," i. e., as sacred as the fee title of the sovereign itself.
See also Mitchel v. United States, 9 Pet. 711, 746, 34 U.S. 711, 746, 9 L. Ed. 283; Minnesota v. Hitchcock, 185 U.S. 373, 389, 22 S. Ct. 650, 46 L. Ed. 954; Shoshone Tribe v. United States, 299 U.S. 476, 497, 57 S. Ct. 244, 81 L. Ed. 360; United States v. Alcea Band of Tillamooks, supra.
In Johnson v. McIntosh, supra, 8 Wheat 543, 574, 585, 588, 592, 603, 21 U.S. 543 at pages 574, 585, 588, 592, 603, 5 L. Ed. 681, Mr. Chief Justice Marshall stressed the point that, wherever the fee simple title might reside, it could be held in Indian land "subject only to the Indian right [or title] of occupancy."
Like a leitmotif, this quoted phrase runs through the Chief Justice's opinion and through subsequent decisions of the Supreme Court. European grants could "convey a title to the grantees, subject only to the Indian right of occupancy." Either the United States, or the several states, had a clear title to all the lands within the boundary lines described in the treaty [ending the Revolutionary War], "subject only to the Indian right of occupancy." The title of the crown was absolute, "subject only to the Indian right of occupancy." The absolute ultimate title has been considered as acquired by discovery, "subject only to the Indian title of occupancy." The claim of government extends to the complete ultimate title, "charged with this right of possession."
*1001 See also United States v. Cook, supra, 19 Wall. 591, 592, 593, 86 U.S. 591 at pages 592, 593, 22 L. Ed. 210; Buttz v. Northern Pacific R., supra, 119 U.S. 55 at page 67, 7 S. Ct. 100, 30 L. Ed. 330; Minnesota v. Hitchcock, supra, 185 U.S. 373 at page 389, 22 S. Ct. 650, 46 L. Ed. 954.
3. The Indian Right of Occupancy is Compensable.
It would be indulgence in pious and high-sounding but empty generalizations to say that the Indian right to occupancy is "sacred," and at the same time to refuse to grant compensation to Indian possessors when their land is taken away from them under condemnation proceedings.
The Supreme Court has countenanced no such inconsistency. In Minnesota v. Hitchcock, supra, 185 U.S. 373 at page 389, 22 S. Ct. 650, 656, 46 L. Ed. 954, the Court said:
"At the same time, the Indians' [sic] right of occupancy has always been held to be sacred; something not to be taken from him except by his consent, and then upon such consideration as should be agreed upon."
In the Tillamook case, supra, the Court, quoting with approval the foregoing language from the Hitchcock case, held that it was applicable equally to "original Indian title" and the so-called "recognized" title:
"Admitting the undoubted power of Congress to extinguish original Indian title compels no conclusion that compensation need not be paid. * * * In our opinion, taking original Indian title without compensation and without consent does not satisfy the `high standards for fair dealing' required of the United States in controlling Indian Affairs. United States v. Santa Fe R. Co., 1941, 314 U.S. 339, 356, 62 S. Ct. 248, 86 L. Ed. 260. The Indians have more than merely a moral claim for compensation.
* * * * *
"Furthermore, some cases speak of the unlimited power of Congress to deal with those Indian lands which are held by what petitioner would call `recognized' title; yet it cannot be doubted that, given the consent of the United States to be sued, recovery may be had for an involuntary, uncompensated taking of `recognized' title. We think the same rule applicable to a taking of original Indian title."
At this point, it might be well to observe that, in its brief before this court in the instant case, the appellee in two footnotes criticizes the decision of the Court of Claims in the Tillamook case, 59 F. Supp. 934. After the appellee's brief herein was filed, however, the Supreme Court affirmed the Tillamook decision of the Court of Claims.
In United States v. Klamath Indians, 304 U.S. 119, 123, 58 S. Ct. 799, 801, 82 L. Ed. 1219, the court used language that is apposite here:
"The established rule is that the taking of property by the United States in the exertion of its power of eminent domain implies a promise to pay just compensation, i. e., value at the time of the taking plus an amount sufficient to produce the full equivalent of that value paid contemporaneously with the taking."
4. The Sources of the Appellants' Right of Occupancy.
As we have seen, the appellants base their right of possession to the lands in question upon the claim that "ever since the year 1867, and from time immemorial prior thereto" they "and their predecessors and successors in lineal consanguinity * * * have been, and now are the aboriginal users and occupants," etc., of the land. In other words, they are claiming under "original Indian title," on which the decision in the Tillamook case, supra, rested.
The reference to the year 1867 is an allusion, of course, to the Treaty with Russia, proclaimed by the United States on June 20, 1867. 15 Stat. 539. An examination of that document, however, convinces us that whatever "original Indian title" the Tlingit Indians may have had under Russian rule was extinguished by the treaty.
The opening sentence of Article II of the treaty is as follows:
"In the cession of territory and dominion made by the preceding article are included the right of property in all public *1002 lots and squares, vacant lands, and all public buildings, fortifications, barracks, and other edifices which are not private individual property." (Emphasis supplied.)
The closing sentence of Article VI reads as follows:
"The cession of territory and dominion herein made is hereby declared to be free and unencumbered by any reservations, privileges, franchises, grants, or possessions, by any associated companies, whether corporate or incorporate, Russian or any other, or by any parties, except merely private individual property holders; and the cession hereby made, conveys all the rights, franchises, and privileges now belonging to Russia in the said territory or dominion, and appurtenances thereto." (Emphasis supplied.)
There is no possibility of errors in translation here, between the official English and French versions of the Alaska treaty. The expression "private individual property" is an exact equivalent of the French "propriété privée individuelle", and the phrase "except merely private individual property holders" is the correct rendering of "sauf simplement les propriétaires possédant des biens privés individuels."
The United States Government paid an additional $200,000 for the inclusion of these reservations in the treaty. In Kinkead v. United States, 150 U.S. 483, 486, 14 S. Ct. 172, 173, 37 L. Ed. 1152, the following interesting sidelight on American history appears:
"It should be added in this connection, and as explanatory of the sixth article of the treaty, that on March 23, 1867, Mr. Seward, then secretary of state of the United States, addressed a letter to the Russian minister, in which he stated: `I must insist upon that clause in the sixth article of the draft which declares the cession to be free and unincumbered by any reservations, privileges, franchises, grants, or possessions by any associated companies, whether corporate or incorporate, Russian or any other, etc., and must regard it as an ultimatum. With the president's approval, however, I will add two hundred thousand dollars to the consideration money on that account.' To this letter the Russian minister made reply that he believed himself `authorized to accede literally to this request on the conditions indicated', in the note of the secretary."
We agree with the appellee that "by no stretch of the imagination can [original] Indian title be considered the equivalent of private individual property."
In Cherokee Nation v. Hitchcock, 187 U.S. 294, 307, 23 S. Ct. 115, 120, 47 L. Ed. 183, the Court said:
"Whatever title the Indians have is in the tribe, and not in the individuals, although held by the tribe for the common use and equal benefit of all the members."
See also Choate v. Trapp, 224 U.S. 665, 667, 32 S. Ct. 565, 56 L. Ed. 941.
It seems quite clear, therefore, that whatever "possession" the Tlingit Indians had "from time immemorial prior to" the year 1867 was a tribal and not an individual right, and did not come within the classification of the excepted "private individual property" specified in the Russian treaty. Consequently, the Tlingits' "original Indian title" to the tidelands in question was extinguished by that state paper.
Nevertheless, the appellants are not without a right of possession in the tidelands that the appellee has sought to have condemned. This right has been repeatedly accorded the Congressional "recognition" on which the Government was vainly insisting in the Tillamook case, supra, as a sine qua non of Indian title. That insistence has been reaffirmed by the appellee in the instant case.
On May 17, 1884, there was approved "An act providing a civil government for Alaska," 23 Stat. 24. A proviso in § 8 of that act sets forth:
"Provided, That the Indians or other persons in said district [territory] shall not be disturbed in the possession of any lands actually in their use or occupation or now claimed by them but the terms under which such persons may acquire title to such lands is reserved for future legislation by Congress."
No such future legislation has been enacted by Congress.
On June 6, 1900, in an "Act making further provision for a civil government for *1003 Alaska," we find that § 27 contains the following opening language:
"The Indians or persons conducting schools or missions in the district shall not be disturbed in the possession of any lands actually in their use or occupation, * * *." 31 Stat. 330, 48 U.S.C.A. § 356.
On May 1, 1936, there was enacted a statute authorizing the Secretary of the Interior "to designate as an Indian reservation any area of land which has been reserved for the use and occupancy of Indians or Eskimos by section 8 of the Act of May 17, 1884 [supra]," etc. There again we find a saving proviso:
"Provided further, That nothing herein contained shall affect any valid existing claim, location, or entry under the laws of the United States, whether for homestead, mineral, right-of-way, or other purpose whatsoever, or shall affect the rights of any such owner, claimant, locator, or entryman to the full use and enjoyment of the land so occupied." [Emphasis supplied.] 49 Stat. 1250, 1251, 48 U.S.C.A. § 358a.
On May 31, 1938 only four years before the original petition in this suit was filed Congress enacted the following brief statute:
"That the Secretary of the Interior be, and he is hereby, authorized, in his discretion, to withdraw and permanently reserve small tracts of not to exceed six hundred and forty acres each of the public domain in Alaska for schools, hospitals, and such other purposes as may be necessary in administering the affairs of the Indians, Eskimos, and Aleuts of Alaska: Provided, That such withdrawals shall be subject to any valid existing rights." [Emphasis supplied.] 52 Stat. 593, 48 U.S.C.A. § 353a.
See also § 14 of 26 Stat. 1095, 1100.
The Act of 1884 has been construed to constitute a Congressional "guarantee" to all persons in possession of lands in Alaska on the date of its enactment, that they were not to be disturbed in their occupancy. The rationale for this guarantee is lucidly expounded in Young v. Goldsteen, D.C. Alaska, 97 F. 303, 307, 308:
"The title to all these lands, mineral and nonmineral, remained in the federal government. Those making the improvements had a possessory right or title only to the premises occupied and improved by them. The mineral claimant had no greater or different right or title to the premises occupied by him than had the nonmineral claimant. This was the condition of land titles in Alaska when a form of civil government was extended to the territory in 1884. Realizing, apparently, the possibility that those who had risked so much in establishing their homes in this then well-nigh unknown country might not reap the fruits of their labor, and for the purpose of protecting them in their property rights, the congress passed the following law: [Here the court quoted the provision in the Act of 1884 that we have already set out.]
"* * * In our opinion, the language used is susceptible of but one construction; i. e. that congress guarantied to all persons in possession of lands in Alaska at that date the right ultimately to acquire a perfect title to the same. If anything less was intended, then the act is wholly meaningless. If congress meant only to guaranty to them undisturbed possession for the time being, reserving the right to ultimately pass such laws as would confiscate the property to the government, or give it to another, then the act is worse than a mockery. If the expression, `the terms under which such persons may acquire title,' means anything, it means that at some future date the congress will pass the needful legislation whereby their possession will ripen into perfect ownership. And until such legislation is enacted the `future legislation' is yet to be achieved." [Emphasis supplied.]
See also Haltern v. Emmons, D.C., 46 F. 452, 456, affirmed, 159 U.S. 252, 15 S. Ct. 1039, 40 L. Ed. 142; Carroll v. Price, D.C., 81 F. 137, 139, 140; United States v. Cadzow, 5 Alaska 125, 133.
From the foregoing statutes and decisions, it is clear that Congress, since 1884, has intended to protect, recognize and even "guarantee" the possessory rights of these Tlingit Indians. Such rights are compensable; for their holders are neither squatters nor outlaws.
5. The Tlingits' Right of Occupancy Extends to the Tidelands.
*1004 The appellee insists that the fact that the area in question consists in tidelands further militates against the appellants' compensable right of occupancy therein. This Court, in the oft-quoted Heckman v. Sutter cases, 119 F. 83, 88, and 128 F. 393, 395, has held otherwise. In the first of these decisions, it was said:
"The prohibition contained in the act of 1884 against the disturbance of the use or possession of any Indian or other person of any land in Alaska claimed by them is sufficiently general and comprehensive to include tide lands as well as lands above high-water mark. Nor is it surprising that congress, in first dealing with the then sparsely settled country, was disposed to protect its few inhabitants in the possession of lands, of whatever character, by means of which they eked out their hard and precarious existence."
In his second opinion, Judge Ross elaborated the point further:
"It is true that it has never been the policy of the United States to dispose of its tide lands, but, on the contrary, that its policy has always been to retain them for the benefit of the future state in which they might lie. But it is thoroughly settled that the United States has all the power of national and municipal government over its territories, and may, if it sees fit to do so, grant rights in or titles to the tide lands of its territories as well as the public lands therein situated above high-water mark. Shively v. Bowlby, 152 U.S. 1, 14 S. Ct. 548, 38 L. Ed. 331, and the numerous cases there cited."
6. The Tlingits' Right of Occupancy is Heritable and Otherwise Transmissible.
It will be remembered that the appellants' "affirmative defense and claim" alleges that they and "their predecessors * * * in lineal consanguinity * * * during all the times herein mentioned, have been, and now are * * * in the exclusive possession of * * * the land." etc. For the purposes of the appellee's demurrer, this allegation is to be taken as true.
This court has repeatedly held that the right of occupancy and possession enjoyed by the Tlingit Indians who were on the lands in question when the act of 1884 was passed, was capable of being transmitted to their successors in interest.
In Arness v. Petersburg Packing Co., 9 Cir., 260 F. 710, 712, the following language was used:
"By the Act of May 17, 1884, c. 53, § 8, 23 Stat. 26, Congress enacted that persons in Alaska `shall not be disturbed in the possession of any lands actually in their use or occupation or now claimed by them.' That statute conferred upon persons in possession more than a mere pedis possessio. It conferred the right to convey the possessory right to another. [Cases cited]"
Again, in Worthen Lumber Mills v. Alaska Juneau Gold Mining Co., 9 Cir., 229 F. 966, 969, this Court said:
"We do not think that it was the purpose of this act [of 1884] merely to protect the possession of the Indians of lands which they then occupied in Alaska, and to deny them the power to convey to others their right of occupation. It was an act, not only for the benefit of the Indians, but also for the white settlers. It was enacted with a view to conditions which then existed in Alaska. Since the time of its acquisition, settlers and miners had been entering the territory. They had located mining claims and town sites, and had transferred lands in tracts and in lots and blocks. They had erected buildings for mercantile purposes and dwelling purposes. The mining claims and lands so occupied by Indians and settlers were held under a claim of possession only, and such possessory rights had been freely conveyed and transferred. Those possessory rights as they then existed were recognized and protected by the act. The act made no distinction between the rights of the white settlers and the rights of the Indians, and it is not to be presumed that Congress intended thereby to deprive either of the power to exercise rights which they had theretofore possessed."
One of the reasons why this court affirmed the decree of the trial judge in Whelpley v. Grosvold, 9 Cir., 249 F. 812, 815, was because it did "not appear that the appellant or any of his predecessors in interest was in possession of the island or claimed it in the year 1884." [Emphasis supplied.]
*1005 See also two cases, already referred to, decided by the District Court of Alaska Haltern v. Emmons, 46 F. 452 at page 456, and Carroll v. Price, 81 F. 137 at page 140.
7. The Appellants Have the Right to Sue Individually.
The appellee maintains that the appellants, as individuals, "have no standing to prosecute a claim based on Indian title," but that the Indian right, if any, is tribal. Since the appellee is here referring to original Indian title, its statement may be correct, although we are not expressing an opinion on this point.
As we have already pointed out, however, the only sound basis for relief that the appellants have is not based upon original Indian title. The true foundation of their right is the repeated Congressional recognition of the occupancy or possession of the land by the "Indians" who were on the land at the time the act of 1884 was passed.
Not once in the various Congressional "recognitions" that we have referred to, does the word "tribe" occur. The occupancy or possession sought to be protected or recognized by those statutes is always that of "Indians" or "persons" or "claimants" or "the natives of Alaska"; i. e., the individual Indians or other persons who happened to be occupying the lands in 1884 and in the other years when the succeeding statutes were enacted. See Cramer v. United States, 261 U.S. 219, 227, 228, 229, 43 S. Ct. 342, 67 L. Ed. 622.
8. Appellants' Misconceived Legal Theory Should Not Bar Their Recovery.
The fact that the appellants have misconceived the basis of their right, and have pleaded what seems to be "original Indian title", should not prevent their recovery on the merits, under the record in this case.
It will be remembered that they and their "predecessors" have had "exclusive possession" "ever since the year 1867, and from time immemorial prior thereto." Since the greater includes the less, their pleading can be understood to cover adequately the period on which their true right is based; namely, possession and occupancy since the year 1884. They have simply alleged more than was necessary: the excess can be disregarded as surplusage.
Similarly, their designation of themselves as "aboriginal" users and occupants is not a fatal error. It is merely a conclusion of law, with which this court does not agree, and can be likewise dismissed as surplusage.
Section 3461 of the Compiled Laws of Alaska (1933) provides as follows:
"The court shall, in every stage of an action, disregard any error or defect in the pleadings or proceedings which shall not affect the substantial rights of the adverse party."
In Royal Palm Soap Co. v. Seaboard Air Line R. Co., 5 Cir., 296 F. 448, 449, it was said:
"Legal conclusions expressed in the above set out plea are not to be considered in determining the legal effect of the state of facts it alleges."
See also, In re Marron Mfg. Co., 7 Cir., 1 F.2d 903; 28 U.S.C.A. § 391.
9. Conclusion.
It is the appellee's main contention that, "unless formally recognized or acknowledged by the ruling sovereign in such manner as to amount to a guarantee of a permanent right of occupancy, aboriginal Indian title or temporary right of occupancy may be extinguished by the United States without any liability to compensate the Indians."
As far as it relates to "aboriginal Indian title," the Supreme Court, as we have seen, already has rejected this theory. See the Tillamook case, supra. By a parity of reasoning, we believe that the same conclusion should be reached with regard to what the appellee chooses to term the Indians' "temporary right of occupancy."
As may be seen from the many Supreme Court decisions dealing with the nature of Indian title, all such title is, in a strict sense, "temporary" unless, of course, an allotment in fee simple is granted by the Government to an individual Indian. Even original Indian title is, in Mr. Chief Justice Vinson's language, "vulnerable to affirmative action by the sovereign." The Tillamook case, supra. Yet that type of Indian title is compensable.
*1006 It may freely be conceded that the so-called "temporary right of occupancy" of these appellants is similarly "vulnerable to affirmative action by the sovereign." But this second type of Indian title, we think, is likewise compensable.
Nor is it pertinent to balance the appellants' "temporary right of occupancy" in an apothecary's scales against the Tillamooks' "original Indian title" although the repeated Congressional recognition, so much insisted upon by the appellee, might well turn the balance in the Tlingits' favor.
We are not concerned here, however, with the quantum of compensation, but with the right of compensation. We believe that the appellants have that right, and that the learned judge below erred in sustaining the demurrer against their "affirmative defense and claim."
Accordingly, the judgment is reversed, and the cause is remanded for further proceedings consistent with this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566015/ | 159 F.2d 695 (1947)
Petitions of RUDDER et al.
Nos. 131-134, Docket 20420.
Circuit Court of Appeals, Second Circuit.
January 27, 1947.
J. Vincent Keogh, U. S. Atty., of Brooklyn, N. Y. (Vine H. Smith and Edward S. Szukelewicz, Asst. U. S. Attys., both of Brooklyn, N. Y., of counsel), for appellant.
Lawrence Pomeroy, of Buffalo, N. Y., for appellees.
Before SWAN, AUGUSTUS N. HAND, and CLARK, Circuit Judges.
SWAN, Circuit Judge.
These four appeals in naturalization proceedings present similar questions and have been argued together. In each case a preliminary hearing was conducted by a duly designated examiner of the Naturalization Service of the Department of Justice, resulting in his recommendation that the petition be denied on the ground that the petitioner had failed to establish good moral character during the five year period immediately preceding the date of filing his petition, as required by 8 U.S.C.A. § 707(a). In each case the district court *696 disapproved the examiner's recommendation and admitted the petitioner to citizenship. The appellant contends that in so ruling the court abused its discretion.
In support of this contention the appellant refers in its briefs and argument to facts concerning the marital relations of the particular alien involved, which counsel for the appellees contends are not disclosed by the record on appeal. This raises a preliminary question for determination before the merits of the controversy are reached. As certified by the clerk of the district court, the record in each case consists of (1) the alien's petition for naturalization, with accompanying affidavits by his character witnesses, (2) examiner's recommendation, (3) the stenographic minutes of the proceedings in open court on February 26, 1946, (4) the court's order, (5) the notice of appeal, and (6) the appellant's designation as to the record on appeal. The first five items are copies of original papers and records filed in the district court, and no objection is, or could be, made to their inclusion in the record. In addition to them, the appellant's designation calls for certain papers described as "Copies of papers in the files of the Naturalization Bureau which were submitted to this Court for its consideration at the time when it entertained the application of the above named petitioner for citizenship." In each case such additional material has been presented to us in the form of an Appendix to the appellant's brief.[1] The appellees object that it is not properly before us. Technically they are right. The rules of this court as to appendices permit the appellant to print such parts of the record as he has designated. See Rule 17. What the appellant has presented as an appendix is not part of the record as certified by the clerk. The appellant did not attempt to have the record settled by the district judge, as is permissible if differences arise as to whether the record truly discloses what occurred in the district court. Rule 75(h), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.[2] Nor does it appear that anything was omitted from the record on appeal "by error or accident," in which case the omission might be cured pursuant to Rule 75(h). See United States v. Brodbeck, 3 Cir., 139 F.2d 916; Moore's Federal Practice, Vol. 3, p. 3406. Since the material printed in the appendices has not been incorporated into the records on appeal, we shall not consider it in determining the merits of the appeals.[3]
The basis for the appellant's contention that each alien failed to establish good moral character during the requisite five year period is to be found in the examiner's oral statement to the court. This statement was made in open court in the presence of the petitioner,[4] was taken down by the official stenographer, and appears in the transcript of the hearing contained in the record. The appellees, however, contend that the statement of the examiner, who was not sworn as a witness, can be given no weight as evidence to establish the facts he narrates concerning the alien's marital relations; that the statute, 8 U.S.C.A. § 734(d), gives the United States the right to produce evidence and to be heard in opposition to the granting of the petition in naturalization proceedings, and since no evidence was produced by the United States, there is nothing to overcome *697 the prima facie proof of good moral character made by the alien's petition with its accompanying affidavits. We think this is too narrow a view of the procedure contemplated by the statute. Section 733 of Title 8 provides for preliminary examinations of the petitioner before a designated examiner and for the submission of his findings and recommendation to the court at the final hearing. Section 734 provides the procedure at final hearing. It must be had in open court. If there has been a preliminary hearing by an examiner, the court may, in its discretion, examine the petitioner and the witnesses, and must do so if the petitioner so demands. If the United States appears in opposition, it has "The full rights of a litigant," Tutun v. United States, 270 U.S. 568, 577, 46 S. Ct. 425, 427, 70 L. Ed. 738, and may cross-examine the petitioner and the witnesses and produce evidence on its own behalf. But we do not think this reservation of the rights of a litigant requires the United States to put the petitioner upon the stand and by cross-examination to extract from him in the presence of the court the admissions already made at the preliminary hearing before the examiner. Such hearing is one step in ascertaining whether the applicant is a fit candidate for citizenship. See United States v. Saracino, 3 Cir., 43 F.2d 76, 77. We think that it should suffice, if no more is required by the court, for the examiner to state to the court in the presence of the petitioner the facts brought out by the preliminary hearing. If the petitioner wishes to contradict them he may demand that witnesses be called; if he does not so demand, he should be taken for purposes of the hearing to admit the facts as stated. In the only case we have found involving the identical situation Judge Bondy remarked, "It is assumed that the facts are as stated by the district director of naturalization without contradiction." In re Spiegel, D.C.S.D.N. Y., 24 F.2d 605. It is apparent from the stenographic minutes of the proceedings that Judge Kennedy made a similar assumption in the cases at bar. We shall likewise so assume in considering the merits of the appeals.
In Johnson's case, the alien was born in Finland and came to the United States in 1912; he is 54 years old and by occupation a dock builder. His petition for naturalization, filed in April 1943, states that he was married in New York in 1924, and has no children. The examiner informed the court that Johnson was not legally married because the "wife," who had been previously married, was divorced by her husband in January 1923, and a New York statute prohibits a divorced defendant from remarrying within the state without first obtaining permission so to do from the state court, Domestic Relations Law, N. Y., Consol. Laws, c. 14, § 8; that the petitioner admitted his wife had not received such permission, and "we have been living together without being married." Because of the statutory impediment, the relationship did not constitute a common law marriage; and the examiner urged that the parties to it, "now, at least," know that their relationship is "meretricious." The district judge, however, ruled that the situation had existed openly for so many years that it was tantamount to a common law relationship and was not meretricious. In so ruling we do not think the district judge abused the discretion vested in him to determine whether the petitioner "Has been and still is a person of good moral character." 8 U.S.C.A. § 707 (a) (3). Morality is not to be measured solely by conventional formality, nor are the mores of a community static. The trend of recent naturalization decisions is to stress stability and faithfulness in the "marital" relationship rather than the mere legality of ties, which everyone knows may so easily be severed if the parties have the financial resources to obtain a Reno divorce. See Petition of R____, D.C.Mass., 56 F. Supp. 969, and authorities hereinafter cited.
Petitioner Rudder is a blacksmith by occupation, 43 years of age, who came to the United States in 1923 from Barbados, B. W. I. He is of the African race and of British nationality. In his petition, filed August 6, 1945, he states that he was married in Brooklyn on June 17, 1945, and that he has one child born on January 9, 1941. *698 The examiner stated to the court that the petitioner and his wife commenced to live together on January 9, 1941, when she bore a child of which he is the father. At that time she was a married woman separated from her husband. The latter died in April 1945 and thereafter she and the petitioner were legally married. He admitted that they would have continued to live together if the former husband had not died. Because the relationship was adulterous until the former husband's death, the United States objected to granting the petitioner citizenship, but the district court overruled the objection.
The situation as to Mengler is practically identical. He is a German, 37 years old, who arrived in 1927. By occupation he is a baker. He was married in Brooklyn in November 1943 and has a son born in June 1939. In 1936 he commenced living with his "wife," who was then a married woman separated from her husband, from whom she secured a divorce in Florida in June 1943. The petition for naturalization was filed in January 1945.
Jannibelli filed his petition in October 1944. He came to this country from Italy in 1906 and is 58 years old. His petition states that he was married to his wife in Brooklyn in April 1909, and they have four children, all of whom reside in New York. The examiner informed the court that the petitioner has been separated from his wife for the past fifteen years, except for a few months in 1934 when he made an unsuccessful attempt to resume living with her; that for the last eight or nine years he has maintained an adulterous relationship with an unmarried woman who is known to the neighbors and others as his "wife," and that by way of explanation he stated "I am in this condition because my wife has refused to give me a divorce just for spite. I asked her for a divorce 15 years ago and she refused."
In Estrin v. United States, 2 Cir., 80 F.2d 105, this court denied citizenship to an applicant who was shown to have committed within the five year period preceding the filing of his petition an act of adultery which formed the basis for a divorce granted to his wife. Such an act we said is offensive to the generally accepted moral standards of the community. To that view we still adhere. But the cases now at bar present a very different situation. There the sexual intercourse accepted as proof of lack of good moral character was prompted by lust. What we are here asked to do is to brand as immoral long-term, faithful relationships between couples who consider themselves and are considered by their neighbors as upright and decent husbands and wives and would willingly have made legitimate their status if they could. Indeed, two of the couples became formally married as soon as that was legally possible; and the third couple would do so if Jannibelli could secure a divorce. We do not believe that the present sentiment of the community views as morally reprehensible such faithful and long continued relationships under the circumstances here disclosed. And the court decisions, following as they should the mores of the time, show an increasingly liberal trend in naturalization cases. Thus in 1928 citizenship was denied to an applicant who had remarried in honest reliance upon an invalid rabbinical divorce, In re Spiegel, D. C.S.D.N.Y., 24 F.2d 605; but in 1943 we said that remarriage after such a divorce did not necessarily preclude naturalization, even though the first marriage had been concealed in the application for a license for the second. In re Schlau, 2 Cir., 136 F.2d 480. In United States v. Rubia, 5 Cir., 110 F.2d 92, citizenship was granted to an applicant having a long and honorable service in the coast guard, despite the fact that he had been living with a married woman who was separated from her husband. In Petition of R____, D.C.Mass., 56 F. Supp. 969, the court granted naturalization to an applicant, who after being informed by agents of the Naturalization Service that her husband's Mexican divorce was invalid, continued to live with him in a relationship which made her guilty of the crime of fornication under the state law. See also Petition of Lieberman, D.C.E.D.N.Y., 50 F. Supp. 121.
Because of the permanence, stability and apparent respectability of the relationships *699 involved in the cases at bar, we think the trial judge did not err in ruling that the several petitioners were not disqualified for citizenship.
Orders affirmed.
NOTES
[1] In Rudder's case the Appendix contains copies of the "Government's Objection" and of two affidavits by Rudder. In Johnson's case it contains copies of the "Government's Objection," the "Naturalization Examiner's Report," an affidavit by Johnson, a certified copy of a judgment of divorce granted on January 2, 1923 to Thomas South against Agnes South, and an affidavit by Agnes South signed as "Agnes Johnson." In Mengler's case it contains copies of the "Government's Objection" and an affidavit by Mengler. In Jannibelli's case it contains copies of the "Government's Objection," and the "Naturalization Examiner's Report."
[2] The Federal Rules of Civil Procedure are applicable to appeals in proceedings for admission to citizenship. Rule 81 (a) (2), F.R.C.P., 28 U.S.C.A. following section 723c.
[3] Whether it could have been properly so incorporated is a question not now before us and upon which we express no opinion.
[4] The petitioner was not represented by counsel in the district court. Counsel was assigned to him for the appellate proceedings. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566018/ | 159 F.2d 464 (1947)
CAVE
v.
UNITED STATES.
No. 13381.
Circuit Court of Appeals, Eighth Circuit.
February 17, 1947.
Rehearing Denied March 7, 1947.
*465 Walter F. Maley, of Des Moines, Iowa (Charles W. Bowers, of Des Moines, Iowa, on the brief), for appellant.
Meyer Rothwacks, Sp. Asst. to Atty. Gen. (Sewall Key, Acting Asst. Atty. Gen., J. Louis Monarch and John Lockley, Sp. Assts. to Atty. Gen., Maurice F. Donegan, U.S. Atty., of Davenport, Iowa and William R. Sheridan, Asst. U. S. Atty., of Keokuk, Iowa, on the brief), for appellee.
Before GARDNER, THOMAS, and JOHNSON, Circuit Judges.
THOMAS, Circuit Judge.
The appellant was indicted and tried upon an indictment in four counts charging separately attempts to defeat and evade federal income taxes for the years 1941 to 1944 inclusive in violation of § 145(b) of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 145(b). He was acquitted by the jury on counts one and two involving income taxes for 1941 and 1942 and convicted and sentenced on counts three and four relating respectively to the taxes for 1943 and 1944, and he appeals.
The several counts of the indictment are identical in form except as to dates and amounts of income and taxes. The third count charged:
"That on or about the 15th day of March, 1944, * * * Fred C. Cave, * * * did willfully, knowingly, unlawfully and feloniously attempt to defeat and evade a large part of the income tax due and owing by him to the United States of America for the calendar year 1943
"(1) by filing and causing to be filed with the Collector of Internal Revenue * * * a false and fraudulent income tax return wherein he stated that his income tax net income for said calendar year was the sum of $8455.00; that his victory tax net income for said calendar year was the sum of $8,800.00; that the amount of income and victory tax due and owing thereon was the sum of $1,933.58, whereas, as he then and there well knew, his income tax net income for the said calendar year was the sum of $55,611.60, * * * upon which said net income he owed to the United States of America an income and Victory tax of $30,843.69; and
"(2) by concealing and attempting to conceal from the said Collector and any and all proper officers of the United States the true and correct gross and net incomes received by him during the said calendar year and the sources thereof: * * *."
The fourth count charged that appellant attempted to defeat and evade his 1944 income tax by filing his return therefor on January 15, 1945, stating that his net income for the year was $788.04 and that the amount of tax thereon was $8.64, whereas he well knew that his net income for 1944 was the sum of $69,959.52 upon which net income he owed to the United States an income tax of $43,392.22.
In instruction 13 the court withdrew from the consideration of the jury paragraph numbered (2) in each count of the indictment, supra, and submitted only the means by which appellant was charged to have attemped to defeat and evade his income taxes as charged in paragraph numbered (1) in each count thereof.
Section 145 of the Internal Revenue Code, 26 U.S.C.A.Int.Rev.Code, § 145, so far as pertinent, is set out in the footnote.[1]
*466 The appellant's contentions on appeal are:
1. That the evidence does not support a conviction under § 145(b) of the statute because (a) the indictment fails to charge and the proof fails to establish any willful commission in addition to the willful omission to file a return or to pay a tax, (b) the offense of evasion of an income tax under § 145(b) can not be committed prior to the day on which the taxpayer is required to file his return.
2. That the court erred in the admission of expert testimony; and
3. That the instructions, although not excepted to at the time they were given, are so indefinite, uncertain, contradictory, misleading, inconsistent and prejudicial as to require reversal on review.
The theory of appellant's first contention is that the indictment as it read after the court in instruction 13 withdrew paragraph (2) of each count from the consideration of the jury attempted to charge a violation of § 145(b) for each year in question by filing, and causing to be filed, a false and fraudulent income tax return; that this was an insufficient allegation as a matter of law to charge an offense under § 145(b) because the indictment as it then stood charged no more than an offense under § 145(a), and would not support a judgment under § 145(b). In other words, appellant could not be convicted under § 145(b) without issue and proof of the commission of some act in addition to the willful omission to file a return which appellant claims is declared to be a misdemeanor only under § 145(a).
To support his theory thus outlined appellant relies upon the decision of the Supreme Court in Spies v. United States, 317 U.S. 492, 63 S. Ct. 364, 368, 87 L. Ed. 418. In this case Spies was convicted of attempting to defeat and evade income tax in violation of § 145(b) of the Act by failure to make a return and pay a tax although he had sufficient income during the year in question to place him under a statutory duty to do so. The Supreme Court reversed. The Court observed that § 145(a) makes, among other things, willful failure to pay a tax or make a return by one having sufficient income a misdemeanor, and that § 145(b) makes a willful attempt in any manner to evade or defeat any tax by a taxpayer a felony. The Court held that while a felony may include lesser offenses in combination either with each other or with other elements, Congress by the felony defined in § 145(b) meant more than the same derelictions defined in § 145(a) as a misdemeanor. The Court summarized the analysis of the statute as follows:
"Congress did not define or limit the methods by which a willful attempt to defeat and evade might be accomplished and perhaps did not define lest its effort to do so result in some unexpected limitation. Nor would we by definition constrict the scope of the Congressional provision that it may be accomplished `in any manner'. By way of illustration, and not by way of limitation, we would think affirmative willful attempt may be inferred from conduct such as keeping a double set of books, making false entries or alterations, or false invoices or documents, destruction of books or records, concealment of assets or covering up sources of income, handling of one's affairs to avoid making the records usual in transactions of the kind, and any conduct, the likely effect of which would be to mislead or to conceal. If the tax-evasion motive plays any part in such conduct the offense may be made out even though the conduct may also serve other purposes such as concealment of other crime."
It is apparent that the Spies case does not support appellant's theory. The indictment in this case after the withdrawal of paragraph (2) of each count from the consideration of the jury did not attempt to charge a felony under § 145(b) by failure to file a return or pay a tax or by the omission or commission of any other dereliction defined as a misdemeanor in § 145(a). It charged an attempt to defeat *467 and evade the tax by the positive act of willfully filing a false and fraudulent return not a mere failure to file any return. The indictment charged that for the year 1943 appellant filed a return showing an income of $8,455 and a tax due of $1,933.58, whereas he received an income in that year of $55,256.60 on which a tax in the amount of $30,843.69 should have been paid; and for the year 1944 he disclosed an income of only $788.04 and a tax of $8.64, whereas his income was $69,959.62 on which a tax in the sum of $43,392.22 should have been paid.
The distinction between the offenses defined in § 145(a) and § 145(b) is too clear to permit confusion. Section 145(a) denounces as a misdemeanor (1) willful failure to pay a tax; (2) willful failure to make a return; (3) willful failure to keep records; or (4) willful failure to supply information. Section 145(b), on the other hand, denounces as a felony a willful attempt "in any manner" to evade or defeat any tax. As said by the Supreme Court in the Spies case, supra, "Congress did not define or limit the methods by which a willful attempt to defeat and evade might be accomplished and perhaps did not define lest its effort to do so result in some unexpected limitation."
That the evidence justified a finding by the jury that appellant's income tax returns filed by him for the years 1943 and 1944 were deliberately false and fraudulent is not controverted. The record shows that appellant when his income was under investigation furnished to the Internal Revenue agents data concerning his income for the years in question showing an income tax due from him for many thousands of dollars in excess of the amount shown on the returns which he filed. The government was not required to prove more than that there was willfully unreported income to sustain a conviction under § 145(b). United States v. Johnson, 319 U.S. 503, 517, 518, 63 S. Ct. 1233, 87 L. Ed. 1546; United States v. Ragen, 314 U.S. 513, 62 S. Ct. 374, 86 L. Ed. 383; United States v. Troy, 293 U.S. 58, 55 S. Ct. 23, 79 L. Ed. 197; Gleckman v. United States, 8 Cir., 80 F.2d 394, 399, certiorari denied 297 U.S. 709, 56 S. Ct. 501, 80 L. Ed. 996; Cooper v. United States, 8 Cir., 9 F.2d 216; Murray v. United States, 8 Cir., 117 F.2d 40.
Appellant further contends that count 4 of the indictment is insufficient to sustain a conviction. Count 4 alleges that appellant willfully attempted to defeat and evade a large part of his 1944 income tax by filing and causing to be filed a false and fraudulent return for that year on the 15th of January, 1945. Appellant argues that since the tax was not due until March 15, 1945, there could be no criminal attempt to defeat or evade it prior to that time, unless the government proved that it had not been paid up to and including the time the indictment was returned.
The argument is fallacious. A taxpayer whose returns are made on the basis of the calendar year may file his return with the collector "on or before the 15th day of March following the close of the calendar year," § 53(a) (1) Internal Revenue Code, 26 U.S.C.A.Int. Rev. Code, § 53(a) (1); and the tax "shall be paid on the fifteenth day of March following the close of the calendar year," § 56(a); and it "may be paid * * * prior to the date prescribed for its payment," § 56(d). The crime denounced by § 145(b) of willfully attempting to defeat or evade the tax is complete when the taxpayer willfully and knowingly files a false and fraudulent return with intent to defeat or evade any part of the tax due the United States, Guzik v. United States, 7 Cir., 54 F.2d 618, 619, certiorari denied 285 U.S. 545, 52 S. Ct. 395, 76 L. Ed. 937; Bowles v. United States, 4 Cir., 73 F.2d 772, 774.
Appellant next contends that the court erred in admitting in evidence the testimony of government witnesses Paul J. Powers and George J. Zimmerman, called as expert witnesses to compute the income taxes of appellant for the years involved. Both witnesses are Internal Revenue agents of several years' experience. Powers had audited appellant's income tax returns and had participated in the investigation of his income for the years in question.
During the years here involved the appellant's income was derived principally *468 from the operation of slot machines in Moose Lodge Club rooms in five Iowa cities and from the operation of a farm. He kept no books. Discovery of his income required the checking of the books of the Moose Lodges where his slot machines were operated, investigation of his farm and other operations. The deductions allowed him for expenses consisted in large part of his own estimates. The books of the lodges and of their auditors and his bank accounts were introduced in evidence.
While an investigation of appellant's tax returns by the government was in progress appellant and the tax lawyer employed by him attended a conference with a representative of the Intelligence Unit of the Bureau of Internal Revenue. Thereafter, under date of May 15, 1945, the tax lawyer filed with the Special Agent in charge of the investigation a Statement, verified by appellant which was introduced in evidence without objection. The data disclosed in the statement, identified as Exhibit 35, will sometimes be referred to hereinafter as "admissions" by appellant. The exhibits consisting of copies of the account books of the Moose Lodges, bank accounts, and the like, together with appellant's admissions, showing in large part the income of appellant for the taxable years in question were numbered from 1 to 44 inclusive.
Appellant's criticism of the testimony of Powers and Zimmerman is that in computing his tax liability for the years in question the witnesses took into consideration some items of income not disclosed in the exhibits in evidence. The exact amount of these items is not shown by cross examination or otherwise. But both witnesses testified that their calculations were based substantially on exhibits 1 to 44. Their computations show, also, that the witnesses allowed deductions substantially in excess of those claimed by appellant in his statement, exhibit 35. Appellant did not testify, and introduced no testimony. The witness Zimmerman in response to an hypothetical question based upon appellant's admissions in exhibit 35 computed his tax liability for both years for which he was convicted. We summarize the computations of the two expert witnesses as follows:
1943.
Powers Zimmerman Admissions
Gross income $60,241.60 $60,061.60 $54,314.35
Deductions 4,985.00 4,958.00 4,960.00
__________ __________ __________
Net income $65,256.60 $55,103.60 $49,354.35
Tax liability $30,843.69 $30,705.73 $26,379.48
1944.
Gross income $93,309.06 $92,987.52 $90,092.30
Deductions 23,349.44 24,870.44 19,954.44
__________ __________ __________
Net income $69,959.62 $68,117.08 $70,137.86
Tax liability $43,392.22 $43,131.84 $43,536.50
A comparison of these computations discloses that the tax computed by both witnesses for the year 1944 was less than the tax computed upon appellant's admissions.
The criticism of the expert testimony is without merit. No exception was saved to the clear and correct instruction of the court on the weight to be accorded the expert testimony, In United States v. Johnson, 319, U.S. 503, 519, 63 S. Ct. 1233, 87 L. Ed. 1546, the Supreme Court held that the admission of testimony of an expert witness regarding income and expenditures of one accused of violating § 145(b), consisting of computations based upon substantially the entire evidence in the record, was not error, where all the issues, as in this case, are left to the independent determination of the jury.
Further, the amount of the tax which it was charged the appellant attempted to defeat and evade was not of the gist of the offense, and the court so instructed in substance. Gleckman v. United States, 8 Cir., 80 F.2d 394, 401. It is not necessary that the government prove in evasion of all the tax charged. Tinkoff v. United States, 7 Cir., 86 F.2d 868, 878; United States v. Ragen, 314 U.S. 513, 526, 62 S. Ct. 374, 86 L. Ed. 383; Rose v. United States, 10 Cir., 128 F.2d 622; Wiggins v. United States, 9 Cir., 64 F.2d 950; United States v. Miro, 2 Cir., 60 F.2d 58. The appellant was in no way prejudiced by the admission of the expert testimony. The admitted excess of his income and of the tax due the government over the amounts set out in his returns would support the jury's finding that he willfully attempted to defeat and evade his *469 taxes by filing false and fraudulent returns. This is especially true when it is remembered that although he did not keep books he knew that he had a much larger income than he reported for tax purposes and that even though he had forgotten the exact amount of his receipts means were easily available to him to find out from the Moose Lodges the amounts paid to him during the year as rental on his slot machines. In any event the question was for the jury to determine.
Finally, the appellant complains that instructions 10, 11, 13, and 14 were so indefinite, inconsistent and prejudicial as to require reversal, although no exceptions were taken at the trial.
As indicated in the assignment of error no exceptions to these instructions were saved by appellant. Rule 30 of the Rules of Criminal Procedure, effective March 21, 1946, 18 U.S.C.A. following section 687, provides that "No party may assign as error any portion of the charge or omission therefrom unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection." Notwithstanding this rule, in criminal cases involving life or liberty of a defendant an appellate court may notice plain and seriously prejudicial error in the trial even though not assigned as error. Harper v. United States, 8 Cir., 143 F.2d 795, 803. Rarely, however, will a trial court's judgment be reversed for failure to give instructions in the absence of a seasonable request or exception, Yoffe v. United States, 1 Cir., 153 F.2d 570, 576; Stassi v. United States, 8 Cir., 50 F.2d 526, and then only if the failure to instruct constitutes a basic and highly prejudicial error. Joyce v. United States, 8 Cir., 153 F.2d 364.
In the instant case we find no prejudicial error in the instructions such as to require reversal or extended consideration. Instructions 10 and 11 related to counts 3 and 4 of the indictment and charged the jury that the burden rested upon the government to establish beyond a reasonable doubt the material allegations of the indictment, enumerating them. These instructions are correct. Gleckman v. United States, 8 Cir., 80 F.2d 394; United States v. Schenck, 2 Cir., 126 F.2d 702; Guzik v. United States, 7 Cir., 54 F.2d 618.
Instruction 13 withdrew paragraph (2) of each count of the indictment and as to the manner of evading and defeating the tax submitted the case on paragraph (1) thereof. Appellant again contends that by so doing the court submitted only the question of violation of § 145(a). We have discussed and disposed of this criticism supra, in connection with the discussion of appellant's first contention.
As to instruction 14, appellant says the trial court therein advised the trial jury that something more must be proven than had been submitted by it in instructions 10 and 11. This contention arises from a misapprehension of the meaning and application of the instruction and a failure to consider the instructions as a whole. The instruction merely explains the measure and quality of proof necessary to establish willfullness of the appellant as that term is defined in instruction 7. It adds nothing to the burden imposed upon the government in instructions 10 and 11. Even if it did augment the burden resting upon the government in the trial of the issues it is difficult to understand how the appellant was prejudiced thereby. The proof in any event abundantly supports the verdict of the jury.
For the foregoing reasons the judgment appealed from is affirmed.
NOTES
[1] § 145(a). Failure to file returns, submit information, or pay tax. Any person required under this chapter to pay any estimated tax or tax, or required by law or regulations made under authority thereof to make a return or declaration, keep any records, or supply any information, for the purposes of the computation, assessment, or collection of any estimated tax or tax imposed by this chapter, who willfully fails to pay such estimated tax or tax make such return or declaration, keep such records, or supply such information, at the time or times required by law or regulations, shall, * * * be guilty of a misdemeanor * * *.
(b) Failure to collect and pay over tax, or attempt to defeat or evade tax. Any person * * * who willfully attempts in any manner to evade or defeat any tax imposed by this chapter or the payment thereof, shall, * * * be guilty of a felony * * *. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566032/ | 284 S.W.2d 734 (1955)
Howard J. ELDREDGE, Appellant,
v.
The STATE of Texas, Appellee.
No. 27707.
Court of Criminal Appeals of Texas.
November 2, 1955.
Rehearing Denied December 14, 1955.
*735 Hood & Hood, by H. M. Hood, Borger, for appellant.
Bill W. Waters, Dist. Atty., Pampa, Leon B. Douglas, State's Atty., Austin, for the State.
WOODLEY, Judge.
Appellant was convicted for rape and assessed a term of 40 years in the penitentiary. The victim was his 15 year old daughter.
According to the testimony of the daughter, appellant had intercourse with her without her consent and against her will, after commanding her to stop the car on a country road. She further testified that he was drinking and threatened to kill her if she said anything.
Appellant's confession was offered in evidence without objection, in which he admitted having intercourse with the daughter on the occasion in question.
On cross-examination of the daughter, it was shown that appellant had on a number of prior occasions, over a period of a year or two, had intercourse with her. The State, on re-direct, showed by the witness that the prior acts were without her consent and against her will and that her father had struck her on some of the previous occasions.
In the confession offered by the State, appellant stated that about two years ago he "started messing" with his daughter, and imagined he had had intercourse with her about twelve times in a period of two years.
Appellant complains of the court's charge (1) because he says it did not properly charge on the degree of resistance on the part of the prosecutrix; (2) because it did not submit the affirmative defense as to prior intercourse between the two, and (3) because it failed to specifically instruct and charge the jury that they could only consider the act of intercourse on the night of December 25, 1954, in reaching their verdict.
Neither of the questions is properly before us for consideration.
The transcript shows that appellant complained of the court's charge in certain of the particulars mentioned, and that the objections were overruled by the court. However, it is not shown that appellant reserved any exception to the court's ruling.
To invoke a review of a refusal to amend the main charge, in response to objections thereto, the record must show that an exception was reserved. Anderson v. State, 95 Tex. Crim. 346, 254 S.W. 986; Latson v. State, 95 Tex. Crim. 502, 254 S.W. 982, 4 Tex.Jur., Appeal and Error Criminal Cases, Sections 63, 137 and 160.
The record further shows that appellant requested three special charges which were refused, but no exception was reserved to such action of the court.
In the absence of a timely exception, verified by the trial judge, the refusal of the requested charge is not reversible error. Atkins v. State, 149 Tex. Crim. 408, 195 S.W.2d 143; Boaz v. State, 142 Tex. Crim. 550, 154 S.W.2d 849; Spivey v. State, 144 Tex. Crim. 432, 164 S.W.2d 668; 4 Tex.Jur. 225, Appeal and Error Criminal Cases, Sec. 161.
The remaining claim of error is addressed to argument of counsel for the State. There is no bill of exception and no effort appears to have been made to reserve the error in the statement of facts, under the recent amendment of Art. 759a, V.A. C.C.P.
Nothing is therefore presented for review.
We find the evidence sufficient to sustain the conviction.
The judgment is affirmed.
*736 On Motion for Rehearing
DICE, Commissioner.
Appellant insists that we erred in refusing to consider his complaints of the court's charge because it was the duty of the court to instruct the jury on every essential question in the case whether requested or not.
Art. 658, V.A.C.C.P., in placing the duty upon the trial judge to deliver a written charge to the jury in a criminal case, provides in part as follows:
"In each felony case and in each misdemeanor case tried in a court of record, the Judge shall, before the argument begins, deliver to the jury, except in pleas of guilty, where a jury has been waived, a written charge distinctly setting forth the law applicable to the case * * *. Before said charge is read to the jury, the defendant or his counsel shall have a reasonable time to examine the same and he shall present his objections thereto in writing, distinctly specifying each ground of objection."
It is further provided in Art. 659, V.A. C.C.P.:
"Before the court reads his charge to the jury, counsel on both sides shall have a reasonable time to present written instructions and ask that they be given to the jury."
Art. 666, V.A.C.C.P., further provides:
"All objections to the charge and to the refusal or modification of special charges shall be made at the time of the trial."
In applying the provisions of these statutes, it has been the consistent holding of this court since the amendment to Art. 658, supra, in 1913, that complaint of a charge will not be considered on appeal in the absence of a proper objection made in the trial court or the submission of a requested charge covering the matter of which complaint is made. Gerard v. State, 91 Tex. Crim. 374, 238 S.W. 924; Garriott v. State, 128 Tex. Crim. 103, 79 S.W.2d 848; Jones v. State, 149 Tex. Crim. 441, 195 S.W.2d 349; Woods v. State, Tex.Cr.App., 215 S.W.2d 334; May v. State, Tex.Cr. App., 272 S.W.2d 886; Robbins v. State, Tex.Cr.App., 274 S.W.2d 691.
Under the authorities cited in our original opinion, the action of the court in overruling the objections to the charge and refusal of the requested charges cannot be considered in the absence of a showing in the record that an exception was reserved to the court's ruling.
The motion for rehearing is overruled.
Opinion approved by the court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566031/ | 159 F.2d 683 (1947)
NIEWIADOMSKI
v.
UNITED STATES.
No. 10322.
Circuit Court of Appeals, Sixth Circuit.
February 7, 1947.
*684 Francis L. Williams, of Grand Rapids, Mich. (Francis L. Williams and William S. Wison, both of Grand Rapids, Mich., on the brief), for appellant.
Fendall Marbury, of Washington, D.C. (Jos. F. Deeb, of Grand Rapids, Mich., and John F. Sonnett, Searcy L. Johnson, D. Vance Swann, and Fendall Marbury, all of Washington D.C., on the brief), for appellee.
Before HICKS, SIMONS and MILLER, Circuit Judges.
MILLER, Circuit Judge.
The plaintiff-appellant, Rebecca Niewiadomski, appeals from a judgment of the District Court dismissing her action against The United States of America, defendant-appellee herein, in which she, as named beneficiary, attempted to recover on a policy of life insurance issued under the National Service Life Insurance Act of 1940 on the life of Wayne S. Andrews. The case was tried before the District Judge without a jury. The question presented is whether the appellant stood "in loco parentis" to the insured, which relationship would have authorized a recovery. The Court held that the relationship did not exist.
Wayne S. Andrews, the insured, was a full blooded Indian, born June 4, 1906. He entered the armed forces of the United States as a soldier on March 24, 1942. While in such military service, and on March 25, 1942, he applied for and was granted effective April 1, 1942 a National Service Life Insurance contract in the principal sum of $3,000. Premiums thereon were paid by deductions from his military service pay up to and including the month of June 1944. He died while in the service on June 25, 1944. In his application for the insurance the insured designated the appellant, who was his first cousin, as the beneficiary, whose relationship to him was described as "loco parentis." The appellant was four months and four days older than the insured. In naming her as such beneficiary and as standing in loco parentis to him the insured acted in good faith and no fraud or concealment of any kind is shown.
Both of the parents of the insured died when he was a young child and he lived with his uncle until he was 26 years of age. He never married. Following the death of his uncle in 1932, he went to the home of the appellant and her husband in Grand Rapids, Michigan. He was without money, without clothes, without a place to live in, and had no employment. The appellant and her husband took him into their home, gave him clothes and food and treated him as a member of the family. He had completed eight years of elementary school, but was not skilled in any trade and was only able to obtain work as a common laborer. He secured employment after about two weeks. He used his wages for his first two weeks' work for his own needs, and then beginning about four weeks after coming to appellant's home he started paying board to her at the rate of $5 per week, and continued to do so throughout the time that he lived in her home. He continued to make his home in the home of the appellant and her husband until his entry into the armed forces, with the exception of about four different periods, of several weeks each, when he left and lived elsewhere, but leaving his clothes at appellant's home. While living with appellant he was able to and earned his living as a common laborer, earning an average of approximately $20 per week, when working. He was not able to obtain steady employment on account of the depression. He collected his wages, retained them as his own, and handled his own finances.
The insured at times performed household chores, such as cutting the grass, removing snow from the walks, chopping wood and bringing in coal, without asking or receiving any pay therefor. He also assisted appellant's husband in repairing the roof of the house. He ate with the family and had the run of the home. He shared a room with one of appellant's sons. He took appellant's children to amusement places and occasionally brought them presents. He exchanged gifts at Christmas time with members of the family. He usually accompanied appellant and her family on fishing and pleasure trips. The appellant washed and mended his clothes without extra compensation. He occasionally gave gifts to the appellant, such as a pair of stockings or a house dress. He *685 drank to excess, getting drunk practically every Saturday night. Resulting friction with appellant's husband would cause him to temporarily leave appellant's home. He called the appellant "sister" most of the time. She usually called him by his first name and some times "brother." The appellant testified that she always considered the insured as her brother, and not as a son. The rest of the family called him "Uncle Wayne." The appellant and her husband paid the insured's funeral expenses amounting to $243.45, and expenses incident to his last illness amounting to $9.
At the time of the issuance of the contract of insurance and at the time of his death, the insured had no actual widow, child, parent, brother or sister. All premiums required to be paid by the terms of the contract were duly paid from April 1942 through June 1944. The defendant has retained these premiums and has never tendered return thereof to the administratrix of the insured's estate, duly appointed by the Probate Court of Kent County, Michigan, on August 24, 1944. Such premiums were not tendered into court during these proceedings. Claim for insurance benefits under the policy was filed with the United States Veterans Administration on August 22, 1944 and was denied on February 14, 1945. The complaint stated that a disagreement existed between the plaintiff and the Veterans Administration as to the payment of the insurance according to the terms of the contract.
The insurance contract in question was issued under the provisions of the National Service Life Insurance Act, enacted October 8, 1940, Sections 801-818, Title 38 U.S. C.A.
Section 602(g) of the Act, Section 802 (g), Title 38 U.S.C.A., provided as follows: "The insurance shall be payable only to a widow, widower, child (including a step-child or an illegitimate child if designated as beneficiary by the insured), parent, (including person in loco parentis if designated as beneficiary by the insured), brother or sister of the insured. The insured shall have the right to designate the beneficiary or beneficiaries of the insurance, but only within the classes herein provided, and shall, subject to regulations, at all times have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries but only within the classes herein provided."
The above section was amended on July 11, 1942 by striking out the words included in the parenthesis following the word "parent," and by adding to Section 601 of the Act Section 601(f), reading as follows: "The terms `parent', `father', and `mother' include a father, mother, father through adoption, mother through adoption, persons who have stood in loco parentis to a member of the military or naval forces at any time prior to entry into active service for a period of not less than one year."
Appellant relies chiefly upon the ruling in Zazove v. United States, 7 Cir., 156 F.2d 24. In that case the Court held that the fact that the insured was an adult did not prevent the beneficiary from standing in loco parentis to him; that the statute should be liberally construed in favor of the insured in order to carry out his intentions; that Congress used the words "in loco parentis" as descriptive words rather than in the generally accepted limited common law sense; and under the particular facts in that case the beneficiary was entitled to recover, reversing the judgment of the District Court to the contrary. In two recent district court decisions the named beneficiary was also held to occupy the status of "in loco parentis" and allowed to recover. Horsman v. United States, D.C.W.D.Mo., 68 F. Supp. 522; Baldwin v. United States, D.C. W.D.Mo., 68 F. Supp. 657. The facts in those two cases are much stronger than the facts in the present case and do not involve the same questions presented by this case. There are also several district court opinions arising under similar provisions of the War Risk Insurance Act of World War 1. In Meisner v. United States, D.C.W.D.Mo., 295 F. 866, the Court held that the fact that the insured was an adult did not prevent the beneficiary from standing in loco parentis to him and recovering under the policy. In that case the insured admittedly was regarded as a son of the family and the only real question presented was the one raised *686 by the fact that he was an adult. In Howard v. United States, D.C.E.D.Ky., 2 F.2d 170, the insured was also an adult. The Court considered the question carefully and at length and ruled that one could not stand in loco parentis to an adult. In Tudor v. United States, D.C.W.D.Wash., 36 F.2d 386, the Court in a ruling which was not necessary to the decision of the case held that one could not stand in loco parentis to an adult who was mentally and physically competent to provide for himself. These cases accordingly embody rulings on one of the questions presented in the case at bar, namely, whether or not the relationship of in loco parentis can exist when the insured is not a minor. The present case might possibly turn on that issue. However, in view of our conclusions with regard to the broader aspects of the case we make no ruling on that issue, and pass to a discussion of whether or not under the particular facts in this case the appellant actually stood in the relationship of in loco parentis to the insured, irrespective of the fact that he was an adult.
The term "in loco parentis," according to its generally accepted common law meaning, refers to a person who has put himself in the situation of a lawful parent by assuming the obligations incident to the parental relation without going through the formalities necessary to legal adoption. It embodies the two ideas of assuming the parental status and discharging the parental duties. The opinions in both Meisner v. United States, supra, and Howard v. United States, supra, accept this view and approve such a definition. It clearly embodies more than furnishing material help to a close relative who is in need. One may be willing to furnish needed assistance to such a relative, even over an indefinite period of time, without being willing at the same time to assume the legal obligation of a parent. Due to the obligations and rights that arise out of such a relationship, the assumption of the relationship does not arise by chance, but is the result of intention. Both Meisner v. United States, supra, 295 F. at page 868, and Howard v. United States, supra, 2 F.2d at page 175, recognize the necessity of that basic element. See also Miller v. United States, 8 Cir., 123 F.2d 715, 717. At common law a parent is charged with the duty of educating and supporting a minor child, and with a continuing obligation thereafter in certain cases of physical or mental disability. A parent has the right to the custody and control of a minor child together with the authority to take such disciplinary measures as are reasonably necessary to discharge the parental duty. A parent who is providing a home for his minor son and supporting him is entitled to his services and earnings. The same rights and duties exist when the relationship of in loco parentis has been intentionally assumed and established. The relationship is essentially different from the relationship of brother and sister, or the relationship of cousins, which relationships do not include the legal obligations existing between parent and child. Viewing the facts in the present case in the light of these well established principles, it would seem clear that the appellant had no intention of assuming the relationship of a parent to the insured. Her purpose was to aid and assist rather than to assume any parental obligations or exercise such parental control as continues to exist in the case of an adult child continuing to live in the parent's home. Both the age of the insured and the age of the appellant are important factors in the situation, although neither factor need be considered a conclusive one. His self support and independence of action are also important factors. The most conclusive factor in the case is the appellant's own testimony that she considered the insured as a brother, and not as a child. We fully recognize the kindness and generosity which, to a large degree, was extended by the appellant and her husband to the insured, but as indicated above, kindness and generosity, even on the part of near relatives, are not the same as assuming the common law relationship of in loco parentis.
The facts in Zazove v. United States, supra, are not reported in detail. The Court concerned itself largely with ruling that the relationship of in loco parentis was possible even in the case of an *687 adult and that the words were used by Congress as descriptive words rather than in the common law sense above indicated. Under that construction of the Act, the details of the relationship were unnecessary. The facts may have been stronger than are the facts in our case and sufficient to support the ruling in the absence of such a construction. We do not agree with the construction that the words are descriptive rather than legalistic. The Act is not loosely drawn with respect to the specific persons entitled to be beneficiaries. On the contrary, it goes into detail and enlarges the scope of permitted beneficiaries, where the common law meaning of the word used would be restrictive. It provides that the term "child" includes an adopted child, and also that the term includes either a step-child or an illegitimate child if designated as a beneficiary by the insured. The terms "father" and "mother" are broadened by defining them as including a father or mother through adoption. The term "parent" is also broadened by defining it as a person who has stood in loco parentis to a member of the military or naval forces for a period of not less than one year. Since Congress did not by the terms of the Act enlarge on the generally accepted common law meaning of the term "in loco parentis," as it did in the case of children and parents, we believe that Congress intended the term to be construed in its usually accepted common law sense and with regard to the limitations which the common law has consistently for a long period of time attached to it. Such is the well established rule of statutory construction. Case v. Los Angeles Lumber Products Co., 308 U.S. 106, 115, 60 S. Ct. 1, 84 L. Ed. 110; McNally v. Hill, 293 U.S. 131, 136, 55 S. Ct. 24, 79 L. Ed. 238; Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 59, 31 S. Ct. 502, 55 L. Ed. 619, 34 L.R.A.,N.S., 834, Ann.Cas. 1912D, 734; Keck v. United States, 172 U.S. 434, 446, 19 S. Ct. 254, 43 L. Ed. 505; Seven Cases v. United States, 293 U.S. 510, 517, 36 S. Ct. 190, 60 L. Ed. 411, L.R.A. 1916D, 164.
The opinion in Zazove v. United States also relies upon an amendment to Section 602(g) of the Act, passed August 1, 1946 as indicating the intention of Congress that a legalistic construction of the phrase was never intended. The amendment referred to provided that the provisions of the subsection as to the restricted permitted class of beneficiaries shall not apply to any national service life-insurance policy maturing on or after August 1, 1946. However, we construe this as a change of policy on the part of Congress in a move to enlarge the class of beneficiaries, rather than an attempt to avoid the limited legal construction of the phrase. The amendment was specifically limited to policies maturing on or after August 1, 1946. The liberalizing effect of the amendment could have been made applicable to all policies previously issued. Helmholtz v. Horst, 6 Cir., 294 F. 417; Gilman Heirs v. United States, D.C. 290 F. 614, affirmed 3 Cir., 294 F. 422; Gregg v. United States, 7 Cir., 15 F.2d 8. But Congress did not elect to do so. The time limitation adopted by the amendment indicates a specific intent on the part of Congress to broaden the terms of the Act only with respect to the future, and to retain the limited provisions pertaining to beneficiaries with respect to policies previously maturing but which have not been fully paid, even though the installment payments thereunder may extend well past August 1, 1946.
The appellant's final contention is that the United States is estopped under the facts and circumstances of this case from denying that the appellant stood in loco parentis toward the insured. She relies particularly upon the long period which elapsed after issuance of the insurance contract without the insured being advised that the designated beneficiary was not a permitted one, the fact that the insured acted in good faith and with no intent to defraud, and the fact that the United States has collected and retained all of the premiums due and payable under the contract. No authority is cited or found to support the claim that the Administrator of Veteran Affairs owed any duty to the insured to verify the fact that the relationship of the beneficiary was actually as claimed by the insured. The certificate of insurance provides on its face that it is granted "under the authority of the National Service Life Insurance Act of 1940, and subject in all respects to the provisions *688 of such Act, of any amendments thereto, and of all regulations thereunder, now in force or hereafter adopted. * *" The Act limited to specific relationships those who were eligible as beneficiaries. It is not enough that the insured acted in good faith. In order to create estoppel it is necessary that misrepresentation be made by the party sought to be estopped. It is not shown that any officer or agent of the United States misrepresented any fact to the insured. He knew the facts; they didn't. In any event, it appears well settled that in matters of this kind the United States is neither bound nor estopped by the acts of its officers and agents in entering into an agreement to do what the law does not permit. Government officers may not waive the provisions of the National Service Life Insurance Act. Wilber National Bank of Oneonta, New York v. United States, 294 U.S. 120, 123, 55 S. Ct. 362, 79 L. Ed. 798; Coleman v. United States, 6 Cir., 100 F.2d 903, 905; United States v. Valndza, 6 Cir., 81 F.2d 615, 617.
The judgment of the District Court is accordingly affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566072/ | 284 S.W.2d 201 (1955)
Burnett ESTES et al., (Oilfield Salvage Co., Inc.), Appellants,
v.
OILFIELD SALVAGE CO., Inc., (Burnett Estes et al.), Appellees.
No. 15005.
Court of Civil Appeals of Texas, Dallas.
October 21, 1955.
*202 Lee Shipp, Dallas, for Gaylord Shaw and Burnett Estes.
Fulbright, Crooker, Freeman, Bates & Jaworski, and Robert M. Welch, Jr., Houston, for Oilfield Salvage Co., Inc.
DIXON, Chief Justice.
This is an appeal from a summary judgment in favor of Oilfield Salvage Company, plaintiff in the trial court, against Gaylord Shaw and Burnett Estes, defendants, based on a written guaranty contract.
Shaw and Estes, the guarantors, have appealed from a judgment of $6,205.57 against them; Oilfield Salvage Company has appealed from that part of the judgment denying it attorneys' fees. Since both parties are appellants and both are appellees, for the sake of clarity we shall continue to refer to them as plaintiff and defendants.
Sometime in 1950 plaintiff filed suit against Swiss Oil Company on a note in *203 the principal amount of $9,440.30 principal plus interest and attorneys' fees of ten per cent. Plaintiff in the same suit also asked for the appointment of a receiver for Swiss Oil Company. The last named Company, subsequent to the making of the note, had entered into a contract for the sale of its assets to Texmass Petroleum Company. Evidently plaintiff's pending suit was about to block the sale of said assets, for defendants wrote the following letter to plaintiff:
"Dallas, Texas
January 20, 1950.
"Oilfield Salvage Company, Inc.
Houston, Texas.
"Gentlemen:
"In consideration of your forbearance in prosecuting your petition for receivership filed against Swiss Oil Company, of which the undersigned Gaylord Shaw is President and stockholder, and Burnett Estes is stockholder, the undersigned, on behalf of both himself and Estes as partners, agrees as follows:
"(a) To pay to you the sum of three Thousand ($3,000.00) Dollars cash on or before 2:00 P.M., January 23, 1950.
"(b) Upon the closing of pending negotiations for the sale of portions of the properties of Swiss Oil Company to Texmass Petroleum Company, we guarantee that out of such proceeds you will receive the balance of your indebtedness, with interest, and that, if such proceeds be inadequate, we, as partners, guarantee to make good such deficiency, such deficiency to be paid at the time of the consummation of such sale.
"(c) If, for any reason, the sale to Texmass Petroleum Company is not consummated, then the undersigned agree to pay the balance due and owing unto you within a period of seven (7) months from this date, with interest.
"(d) Upon full payment of the obligations aforesaid, you agree to assign your promissory note that you now hold of Swiss Oil Company, bearing a present unpaid balance of $9,440.30, together with accrued interest, as of January 10, 1950, of $369.34, to the undersigned partnership.
"(e) We agree to bear the costs of the receivership proceedings which you will dismiss upon receipt of the $3,000.00 payment, and you are to bear your own attorney's fees. Very truly yours, Shaw & Estes By: /s/ Gaylord Shaw Gaylord Shaw."
Thereafter defendants paid plaintiff $3,000 as provided in paragraph (a) of their agreement, plaintiff dismissed its suit against Swiss Oil Company, and the sale of the latter's assets to Texmass Petroleum Company was consummated for a sum in excess of $400,000. All secured creditors of Swiss Oil Company were paid out of the proceeds, with Texmass holding the balance of the purchase price for unsecured creditors.
Some time later Swiss Oil Company was adjudicated an involuntary bankrupt, and said balance was turned over to the trustee in bankruptcy. Plaintiff then filed its claim with the trustee in bankruptcy and participated along with other unsecured creditors in the distribution of the assets of the bankrupt Swiss Oil Company. In its judgment in this case the trial court found that the bankruptcy court had paid plaintiff a final dividend of $683 which sum was credited on the amount of the judgment entered against defendants as guarantors.
Defendants' first point on appeal asserts that there was a total want of consideration passing to defendants for the guaranty contract. We see no merit in this contention. It is not denied that pursuant to the terms of the contract defendants paid and plaintiff accepted the $3,000 as provided in paragraph (a) of the contract; and that plaintiff then dismissed its pending lawsuit, including its application for a receiver, thus enabling the sale of the assets of Swiss Oil Company to be consummated. In our opinion this was a benefit and a consideration flowing to defendants.
*204 The position of defendants is untenable for another reason. A number of courts, including our Supreme Court, have held that to support a contract of suretyship-guaranteeship it is not necessary that any consideration pass directly to the guarantor. A consideration moving to the principal alone will suffice to bind the guarantor. Bonner Oil Co. v. Gaines, 108 Tex. 232, 191 S.W. 552; Dean v. Allied Oil Co., Tex.Civ.App., 261 S.W.2d 900. An agreement to forbear bringing suit on a well founded claim, or an agreement to dismiss a pending suit it a sufficient consideration for a contract. Russell v. Lemons, Tex. Civ.App., 205 S.W.2d 629; Dyson v. Moore, Tex.Civ.App., 78 S.W.2d 285; Parriss v. Jewell, 57 Tex.Civ.App., 199, 122 S.W. 399; 10 Tex.Jur. 135. Defendants' first point on appeal is overruled.
Defendants' second point on appeal is that there was a fact question as to the amount of the credits to which they were entitled. The trial court allowed certain creditsthe $3,000 paid by defendants, and $683 from the bankruptcy court. The record contains an affidavit by M. A. Rutis, Secretary-Treasurer of plaintiff, that after allowing all offsets the amount due was $6,205.57. Defendants filed no counter-affidavits, and sought no delay on the ground that affidavits were not available at the time of the hearing. Under the circumstances their failure to present counter-affidavits must be taken as an admission of the truth of the facts alleged in plaintiff's affidavit as to the balance due on the indebtedness. Rountree v. Bridwell, Tex. Civ.App., 269 S.W.2d 824; Holland v. Lansdowne-Moody Co., Tex.Civ.App., 269 S.W.2d 478; Rolfe v. Swearingen, Tex.Civ. App., 241 S.W.2d 236. We overrule defendants' second point.
Defendants in their third point contend that it was the duty of plaintiff to take judgment against Swiss Oil Company before it was entitled to look to them for payment as guarantors. We are unable to agree with defendants. In our opinion their contract with plaintiff was an absolute guaranty on their party to pay plaintiff if the proceeds of the sale of the assets of the principal debtor were inadequate, the deficiency to be paid by them at the time of the consummation of the sale. They were guaranteeing payment of a debt which was already past due. Under such a contract the creditor may proceed against the guarantors without proceeding first against the principal. 21 Tex.Jur. 146-147, 182; 38 C.J.S., Guaranty, §§ 7, 61, pp. 1139-1140, 1218-1220. Anyway, the bankruptcy of Swiss Oil Company is sufficient to determine the issue against defendants. Our Supreme Court has held that upon the bankruptcy of the principal maker the guarantors become liable as principals. Huggins v. Johnston, 120 Tex. 21, 35 S.W.2d 688. Defendants' third point is overruled.
In our opinion the trial court correctly refused to allow plaintiff its attorney's fees. It is true the note of Swiss Oil Company provided for a ten percent attorney's fee, but in paragraph (e) of the contract sued on it is expressly stipulated that plaintiff will bear its own attorney's fees.
Plaintiff contends that this stipulation had reference only to its attorney's fees incurred in connection with its application for receivership. However plaintiff also contends that the contract as a whole when properly construed was an agreement to dismiss the entire suit. Apparently this was the construction put upon the agreement by both parties, for in carrying out the contract the entire suit was dismissed by plaintiff with the express written approval of defendants, acting through their attorney. Thus neither party, and especially plaintiff, is in position to say that the contract was limited in its meaning to attorney's fees in connection with the receivership only. We overrule plaintiff's point on appeal.
Plaintiff on appeal also prays for damages of ten percent of the original judgment on the ground that this appeal was merely for delay, with no sufficient cause for taking an appeal. Rule 438, *205 T.R.C.P. In our opinion the record before us does not warrant the assessment of such damages. Plaintiff's prayer is denied.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566036/ | 159 F.2d 940 (1947)
KEASBEY & MATTISON CO. et al.
v.
FEDERAL TRADE COMMISSION.
NORRISTOWN MAGNESIA & ASBESTOS CO. et al.
v.
SAME.
ACME ASBESTOS COVERING & FLOORING CO. et al.
v.
SAME.
PLANT RUBBER & ASBESTOS WORKS
v.
SAME.
Nos. 9826-9829.
Circuit Court of Appeals, Sixth Circuit.
February 17, 1947.
*941 *942 Philip L. Leidy, of Philadelphia, Pa., (John J. Kelly, John J. Kelly, Jr. and George Gilman Kelly, all of Chicago, Ill. on the brief), for petitioner Standard Asbestos Mfg. Co.
John Sailer and Philip L. Leidy, both of Philadelphia, Pa., (Pepper, Bodine & Stokes, of Philadelphia, Pa., and Taft, Stettinius & Hollister, of Cincinnati, Ohio, of counsel), for petitioner Keasbey & Mattison Co.
Albert L. Wolfe and Cyrus B. Austin, both of New York City, Moses Lasky, Herman Phleger, and Theodore R. Meyer, all of San Francisco, Cal., and Richard D. Daniels, of Washington, D.C. (Guy George Gabrielson and Cadwalader, Wickersham & Taft, all of New York City, on the brief; Albert L. Wolfe, F. Sims McGrath, and Cyrus Austin, all of New York City and Taft, Stettinius & Hollister, of Cincinnati, Ohio, of counsel), for other petitioners.
W. T. Kelley, Walter B. Wooden and Floyd O. Collins, all of Washington, D.C., for respondent.
Before HICKS, ALLEN and MARTIN, Circuit Judges.
ALLEN, Circuit Judge.
The petitioner corporations,[1] which compete with each other in the manufacture, processing, sale and interstate distribution of insulating materials and insulating articles fabricated therefrom, were charged with entering into an agreement with each other and petitioner Donald Tulloch, Jr., prior to and during the year 1934, for the purpose and intent and with the effect of substantially restricting and eliminating competition in price and otherwise in the sale and distribution of insulating material and products, including asbestos paper, plain and corrugated asbestos roll board, wool felt and sponge felt paper, pipe coverings, boiler jackets, sheets and blocks. Petitioners were found to have violated § 5 of the Federal Trade Commission Act, Title 15 U.S.C.A. § 41 et seq., 15 U.S.C.A. § 41 et seq., which declares unlawful, § 45(a) "unfair methods of competition in commerce * * *," and were ordered to cease and desist from the practices described in the findings.
The case arises out of the following facts found by the Commission, and for the most part uncontradicted.
On June 26, 1933, the members of the asbestos industry, including the petitioner corporations, acting under the National Industrial Recovery Act, 48 Stat. 195, formulated a code and merchandising plan applicable to the sale of their insulating products. All of the petitioner corporations were included in the Asbestos Paper and Allied Products Division of the Asbestos Industry. Petitioner Tulloch does not manufacture nor distribute the products involved, but had been connected with the industry since 1922, and was secretary manager of the division under the code. The petitioners operated in accordance with the code, and the merchandising plan, from November 1, 1933, until May 27, 1935.
The merchandising plan covered all sales of pipe covering by members in all parts of the United States except a specified zone on the Pacific Coast. It established and *943 defined classes of buyers and required its members to submit the names of their customers to a merchandising committee of the division. It was the duty of the committee to investigate the lists of customers submitted by the members and if the committee found such customers to be properly classified, they were added to what was known as a "Master" classified list which was to be available to the members of the division. There was a provision for the addition to or deletion from such "Master" list by the code manager.
Definitions were established in the merchandising plan for carload, mixed car, stopover car, and less-than-carload shipments with prohibitions against hiring the trucks of customers or renting trucks of customers or making allowances for trucking charges where the material was picked up at the factory or warehouse by customers' trucks. Factory points, metropolitan areas and manufacturers' warehouses were defined and units of sale were established. Sales were required to be made at prices derived from one standard list price. Price differentials were fixed as between different thicknesses of covering and different types of construction, as between the different geographical zones, and as between the various classifications of purchasers. Price differentials were fixed for differences in weight of canvas used on pipe coverings or waterproof jackets and for various types of bands. Procedures were established for many details in the handling of quotations and shipments as well as the treatment of different classes of customers following an advance or decline in price. The method of determining warehouse prices was specified. The terms of payment, including cash discounts to different classes of buyers, were fixed. Important features of contracts were standardized. Consignment of stocks and the selling of sub-standard materials below the normal selling schedule of the manufacture were prohibited. Territorial zones were defined for the purpose of determining freight allowances and similarly detailed schedules applied to other products.
Following the decision of the Supreme Court in A.L.A. Schechter Poultry Corp. v. United States, May 27, 1935, 295 U.S. 495, 55 S. Ct. 837, 79 L. Ed. 1570, 97 A.L.R. 947, which declared vital provisions of the National Industrial Recovery Act unconstitutional, certain of the petitioners assisted in preparing a voluntary agreement to continue many features of the code, including the filing of prices and adherence to the prices and terms filed. The agreement was not approved by the Government and never became operative.
Petitioners Johns-Manville, Norristown, Carey, Keasbey & Mattison, and Empire filed price schedules with petitioner Tulloch under the N.R.A. Code, and as manager for the Asbestos Paper Division he distributed them to other manufacturers. As a result of the price filing, prices tended to become uniform, for each company set its prices to meet the published price.
Since September, 1931, an application for patent had been pending upon the process of manufacturing water-repellent and shrink-proof asbestos paper and asbestos pipe covering. Johns-Manville had done the experimental research and development of this patent, and expended about $20,000 upon it. The patent, No. 1,972,500 (hereinafter called the Toohey patent), issued September 4, 1934 to Earl L. Williams and Edward Toohey, was assigned to Johns-Manville, which gave an exclusive license to Tulloch on September 11, 1935. The license gave Tulloch the exclusive right to sub-license others, and required payment by him of $1,250 a year to Johns-Manville. He immediately gave a non-exclusive sublicense to Johns-Manville, and then proceeded to sub-license the respondents below, including all of the petitioners in this court.
The essential feature of the Toohey patent is that it covers an insulating product into which a wax sizer composed of paraffin and other ingredients has been beaten, rendering it water-repellent and shrink-proof. The invention solved an industry problem and created a superior product. However, it is agreed that the various products involved in this case which after the license were manufactured under the Toohey patent, prior to Toohey were manufactured without the use of the sizer, and after the *944 issuance of the patent could be, and often were, manufactured without using the sizer.
While he was still manager of the Asbestos Paper and Allied Products Division under the N.R.A. Code, Tulloch had tried to interest members of the industry in entering into a licensing system and merchandising plan. He consulted with Johns-Manville and other petitioners as to the details of such an agreement, appointed an advisory committee with representatives of Johns-Manville, Carey, Ruberoid, Norristown, and Keasbey & Mattison, to consider a merchandising plan, and called meetings of various members of the industry to consider the matter months before Johns-Manville issued its exclusive license to him.
In connection with the license and sub-licenses, a merchandising plan similar to that adopted under the N.R.A. Code was formulated by Tulloch after consultation with the petitioners, and put into effect. While special conditions were attached to the sale of different licensed products, in substance the plan among other things, (a) fixed the price at which and the conditions under which the products were to be sold; (b) required uniform classification of customers for pricing purposes; (c) fixed differentials in prices between different classes of customers; (d) required contracts for the sale of such products to be uniform in substance; (e) zoned the country, or large parts thereof, into territorial zones for pricing purposes and required certain items of such products to be sold at delivered zone prices; (f) designated standards for the size and thickness of certain products and fixed the differential in prices between such products of different size and thickness; (g) provided for equalization of delivered prices through freight equalization on standard products and designation of certain specific cities from which freight should be figured in equalizing freight; (h) provided for rigid enforcement of the provisions of the merchandising plan and price schedule and for the imposition of penalties for digression; (i) required a uniform method of computing prices through the use of so-called "Manual of Unit Prices" for pipe covering and insulating blocks.
All the licensees conformed to the requirements of the merchandising plan. Changes were made from time to time in its provisions as to prices and terms of sale, after consideration by and consultation with the important members of the industry. The Commission found that the merchandising plan in general outline and in many details was simply a re-establishment with additions of the merchandising plan created by the petitioners and others under N.R.A. It found the principal differences to be largely a matter of degree rather than principle, and stated that the present plan substitutes direct price-fixing for price reporting, stops some loopholes for competition which existed in the N.R.A. plan, and provides some direct and effective means of enforcement. With reference to the combination and conspiracy, it found that "The respondent sublicensees who did not participate in the organization of the licensing system could not have remained ignorant of the fact that the merchandising plan was being administered upon the basis of cooperation, agreement, and understanding between and among the sublicensees and the licensor. The numerous communications from Mr. Tulloch to all his licensees alone make this plain, without reference to other negotiations and meetings." Its final finding and conclusion was "that the license from Johns-Manville to Mr. Tulloch was granted and the patent-licensing and merchandising plan heretofore described was established as a part of and as a means of effectuating the combination and conspiracy entered into and maintained by the respondents herein in the manner aforesaid. It further finds that the capacity, tendency, and effect of said combination and conspiracy and the acts and practices performed thereunder and in connection therewith by said respondents as set out herein has been, and is, to lessen, restrain, and suppress competition in the sale and distribution of pipe covering and other insulating materials as described herein, among, and between the several States of the United States; to fix and maintain prices, terms, and conditions of sale for such materials and to deprive purchasers of such materials of benefits of competition in price; to collectively determine and establish classifications *945 of customers for pricing purposes, and fix and determine price differentials as among such classes; to create substantial uniformity in contracts of sale and in terms and conditions specified therein; to determine and maintain uniform delivered prices on certain insulating materials; to determine and maintain uniform delivered costs to particular purchasers through a freight-equalization plan based upon specified equalization points; to determine and maintain geographical zones within which prices of certain insulating materials were made uniform, and using such zones so established for pricing purposes; to establish standard construction, size, and thickness specifications of products to facilitate price fixing thereon; and otherwise to promote and maintain their price-fixing combination and conspiracy and obstruct, lessen, and defeat any form of competition which threatened the maintenance and purpose of said combination and conspiracy."
The cease and desist order was based upon these findings.
The petitioners contend that there is no evidence of conspiracy to fix or stabilize unpatented materials; that the licensing and price control under the Toohey patent neither caused nor tended to cause suppression of competition; that the license control exercised under the patent did not unlawfully restrain competition, and that the order in any case should be set aside because all licensees except one had voluntarily abandoned their licenses prior to the filing of the complaint.
Petitioners also contend that the amended complaint charges a price-fixing conspiracy only as to materials embodying the Toohey invention, flexible range boiler jackets and accessories, and that it was not alleged that the patent-licensing plan and merchandising system were established as a means of carrying out a conspiracy to restrict competition in unpatented insulating materials. Hence they urge that the order is broader than the amended complaint and should be modified. We think that this contention has no merit. The complaint avers that the petitioners manufacture and sell from eighty to ninety per cent of the low pressure asbestos pipe covering manufactured and sold in the United States, and that the conspiracy covers both licensed and unlicensed materials. Certain items are listed specifically in a phrase which reads: "Non-licensed materials include such items as: solid brass, zinc, and lacquered bands, flexible range boiler jackets and canvas covering." This provision, petitioners aver, limits "non-licensed materials" to the items stated. This contention ignores the use of the word "includes," which clearly indicates that other non-licensed materials are covered by the amended complaint, as well as those listed. It also ignores the allegation that "Both licensed and non-licensed materials are embodied, involved and employed in the manufacture, use and sale of such covering." The word "embodied" is used in a similar connection several times in the amended complaint. The bands and the canvas covering which are placed on the outside of the products involved can hardly be said to be embodied in the manufacture of the pipe covering. The term "embodied" under this record applies to materials and it is so specifically interpreted in the phrase "of both licensed and non-licensed materials and also of the low pressure asbestos covering embodying such materials." This is an additional and cogent reason for concluding that the amended complaint charges conspiracy with reference to non-licensed materials generally.
Nor are we impressed with the contention that in substituting for the word "unlicensed" in the complaint the word "non-licensed," which is used for the most part in the amended complaint, the Commission indicated an intention to limit the charge of restraint of trade in unpatented materials to range boiler jackets and accessories. While Webster's Dictionary makes a distinction between the prefix "un" and the prefix "non," the latter being a more negative term than the former, for the purposes of this case unlicensed and non-licensed have equivalent meanings. They mean that the articles which they describe are not licensed. The Toohey patent is an article patent, whose claims are covered by the sub-license agreements. Whatever product involved herein is not licensed or "non-licensed" for the purpose of this controversy *946 is "unpatented." The specific charge of the amended complaint is that pursuant to and in furtherance of the alleged combination and conspiracy, Tulloch and the petitioners agreed "upon the inclusion of non-licensed materials to be covered by said merchandising plan [the Tulloch merchandising plan] and thereby" fixed "the prices, terms and conditions of sale of said materials." The complaint clearly covers unpatented, as well as patented materials.
Moreover, the practices charged, if proven, constitute an "unfair method of competition" within the meaning of § 5 of the Act, Title 15, § 45(a); Federal Trade Commission v. Pacific States Paper Trade Ass'n, 273 U.S. 52, 47 S. Ct. 255, 71 L. Ed. 534. The fact that these practices also constitute a violation of the Sherman Act, Title 15 U.S.C., § 1 et seq., 15 U.S.C.A. § 1 et seq., does not deprive the Commission of jurisdiction. In fact the public policy evinced in the Sherman Act is to be considered in determining what are unfair methods of competition under the Federal Trade Commission Act. Federal Trade Commission v. Beech-Nut Packing Co., 257 U.S. 441, 453, 42 S. Ct. 150, 154, 66 L. Ed. 307, 19 A.L.R. 882. That case held that a system of merchandising which had a "dangerous tendency unduly to hinder competition or create monopoly" fell within the jurisdiction of the Commission. A recent decision holding that the suppression of competition constitutes an unfair method of competition within § 5 of the Federal Trade Commission Act is Fashion Originator's Guild of America, Inc., v. Federal Trade Commission, 312 U.S. 457, 61 S. Ct. 703, 85 L. Ed. 949.
Certain of the specific methods employed by petitioners under their merchandising plan have been held to constitute evidence of unlawful combination, such as the use of uniform price lists (Federal Trade Commission v. Pacific States Paper Trade Ass'n, supra); an agreed nation-wide zone system for fixed delivery prices [Salt Producers Ass'n v. Federal Trade Commission, 7 Cir., 134 F.2d 354]; a freight equalization plan [Milk and Ice Cream Can Institute v. Federal Trade Commission, 7 Cir., 152 F.2d 478].
If the facts found by the Commission are supported by the record, the cease and desist order is lawful.
Congress has left to the Commission the determination of the facts. Federal Trade Commission v. A. E. Staley Mfg. Co., 324 U.S. 746, 65 S. Ct. 971, 89 L. Ed. 1338. The weight to be attributed to the facts proven and the inferences to be drawn from them are for the Commission to determine. Corn Products Refining Co. v. Federal Trade Commission, 324 U.S. 726, 739, 65 S. Ct. 961, 89 L. Ed. 1320. We think the record presents evidence of a combination and conspiracy to fix and stabilize prices and to restrict competition both as to patented and unpatented materials in the asbestos industry.
It is significant that the transactions detailed in the voluminous record are set off against a background of concerted price fixing and elimination of competition. Tulloch's negotiations for a licensing system and merchandising plan were begun while N.R.A. was in effect, and were carried on during the period following the Schechter decision while the voluntary plan was being considered. As found in Socony-Vacuum Oil Co. v. United States, 310 U.S. 150, 160, 60 S. Ct. 811, 84 L. Ed. 1129, the N.R.A. provided for a price-fixing system. The petitioners were members of the same division operating under the N.R.A. code applicable to the asbestos industry, and Tulloch was the executive manager of the division. After the invalidation of the Act by the decision in the Schechter case, the most important manufacturers in the group, including five of the petitioners, made a voluntary agreement which contemplated the fixing of prices, although it never became operative.
Declarations of certain petitioners conclusively demonstrate that they desired to continue the stabilization of the industry and the price control which had existed under the N.R.A. Johns-Manville entered the combination at a distinct financial sacrifice. It owned the Toohey patent, had spent about $20,000 in developing it, and gave up its exclusive rights for a meager compensation of $1,250 a year. The other petitioners, judging from their conduct, *947 did not enter into the sub-license contracts primarily for the sake of being able to use a superior product. None of them except Johns-Manville advertised or pushed the patented shrink-proof asbestos products in any substantial way. Acme "mentioned" them in one of its catalogues. It was Carey's policy never to mention them, and to supply them only upon request. Various jobbers testified that they had never heard of the pre-shrunk material. Typical of petitioners' attitude in considering the licensing system was that of Keasbey & Mattison, which stated that it would consider becoming a licensee of Norristown under the range boiler jacket patent if "everybody of importance" did likewise.
A principal point stressed by Tulloch in endeavoring to sell the idea of the licensing system was the stabilization of the industry. Morgan, of Chicago, said Tulloch urged this point upon him prior to the issuance of the Toohey patent. It was the understanding at least of certain licensees that this was the great advantage in entering the group. Officials of Atlantic and Clark made direct statements to this effect. Ozurovich, of Atlantic, said to a federal investigator that in taking the license he realized the unusual advantage "because of the price control which legally carried pursuant to the agreement." Ozurovich carried out this price control as to unpatented material. Mladinich, office manager of Atlantic, said that he understood "the whole thing was merely a method used by the industry for every one to stabilize asbestos prices." He had attended various meetings with members of the industry when prices and terms of sale, as well as zoning for the continuation of further equalization, were discussed. These meetings were usually the result, he stated, of price confusion in the New York area.
It was natural that the petitioners should desire to retain the stabilized price system of N.R.A. They had known its advantages. That they did seriously consider restricting the output of unpatented material is shown by the fact that a proposed draft of the license contained a restriction against selling asbestos pipe covering "which does not embody, employ or contain the invention." The license was finally drafted without this provision. However, the license contained a provision that it could be cancelled if the licensee sold unpatented material so as to interfere with the patented product. Evidently there was a gentleman's agreement that the proposed provision forbidding the selling of unpatented pipe covering should be carried out, for letters were sent to licensees ordering them to dispose of unpatented material by December 31, 1935. A copy of the letter sent to Standard October 29, 1935, is as follows:
"This is to notify you that prices, terms, and conditions of sale, as specified in schedules being forwarded under separate cover, on all products manufactured under U.S. Letters Patent No. 1,972,500 are to be made effective November 1, 1935.
"It is understod that contracts and protections exist and that manufacturers should have a reasonable period in which to take care of these protections and to dispose of existing stocks of non-patented materials.
"You are at liberty to dispose of non-patented stocks and to take care of commitments up to December 31, 1935 after which date, you will manufacture and sell licensed materials only on the basis of the licensed schedules."
A practically identical letter was sent to Asbestos Insulating Materials, Inc., on the same day.
That these restrictions were enforced by Tulloch is shown by a letter sent "To Licensees" on January 15, 1936, stating that a Philadelphia firm was reselling low-pressure covering at prices which indicated that it must be buying at lower than the license schedules. Tulloch asked the licensees whether they had any contacts with the Philadelphia firm, and concluded "Of course it is possible that they may be operating from an old stock, and in view of the fact that this can not continue indefinitely, it seems to be worth investigating."
A basic fact in this case is that most of the asbestos paper products could be made either under the Toohey patent or without the use of the wax sizer, in which case they were made of unpatented materials. Many of the licensees under the Toohey patent manufactured or processed both *948 patented and unpatented paper. The price lists for the patented products were used for the unpatented products, without any differentiation. They bore no statement indicating that the printed lists were for pre-shrunk material; but the prices they carried were the prices set for preshrunk material which were higher than the prices for the unpatented material. Petitioners explain that it would be unreasonable to have two sets of price lists, and contend that as a matter of fact the unpatented materials were always sold at prices substantially lower than the patented materials, even though the same price lists were used. But this was not always the case. Ozurovich, of Atlantic, told a federal agent that he bought a small amount of wax sizer for use in the Toohey process, but never used all of it. Although Atlantic was a licensee, it continued to manufacture asbestos paper without employing the Toohey method, continued to pay royalties to Tulloch under the license, and charged substantially the same prices for the unlicensed as were charged for the licensed paper. Steffens said that Carey followed the Tulloch price schedule on items on which "it paid no royalty." He also said that Carey paid royalty on aircell boards which petitioners concede are unpatented. It is a fair inference that if royalty was paid, the license price was charged. Evidence to the same general effect exists in a contract between Acme and one of its purchasers, which contained the following provision: "The seller agrees to sell the buyer asbestos . . . and other licensed and unlicensed insulating material according to the terms and conditions of the license agreement." Collopy stated that Acme had no license agreement with this purchaser.
Tulloch's memoranda were sent in many instances to "all licensees," and he never altered prices without consulting the licensees immediately concerned. He set up the price lists and distributed them. They were sent to and adhered to even by non-licensees, and in such case they were applied to transactions not properly covered by the Toohey price schedules. Ehret, a non-licensee, asked for the price lists, stating "If you expect the Ehret Company to live up to the letter of your Merchandise Plan it is going to be necessary for you to send direct to us any memos or rulings, particularly regarding change in price or price clarification. * * * We realize we are not a Licensee under your patent but we are desirous of living up to all the rules and regulations just as if we were, but we can not do it unless we get the information just as soon as all Licensees get it."
Clark, also before it was a licensee, wrote to Tulloch:
"Not having received any further correspondence since November 14th, 1935, we are anxious to know if the present set-up on low pressure covering is in effect now.
"The reason we ask, is that we have been following prices as you laid down and find that our competitors are not doing this. In fact, the Poewils Asbestos Company has stated that they had not received any new prices and are still quoting the old."
Clark became a licensee January 22, 1936. It cancelled the license in 1938 but continued to adhere to the Tulloch price schedule.
The Commission reproduced in its findings a number of letters relating to the range boiler jacket which was manufactured by a number of the petitioners under license from Norristown. Judging by the space devoted to these communications, the Commission considered them highly important, but in its general findings and conclusions it did not specifically indicate the connection of the range boiler jacket transaction with the conspiracy. It found that the price for boiler jackets included unpatented articles such as bands, staples, and asbestos cement, and that by establishing price differentials on the same pipe covering when different weights of canvas were used, when different kinds of bands were supplied, and when waterproof jackets were furnished, as well as for unpatented articles used with boiler jackets, prices were fixed for the unpatented articles. The petitioners maintain that the whole transaction of the range boiler jackets is irrelevant and insignificant; but this was a matter for the Commission to decide.
We think the Commission did not err in its conclusion that the range boiler jacket *949 transaction presented important evidence relevant to this proceeding. The boiler jacket is an asbestos pipe covering which is used principally for insulating household hot water tanks. The patent involved was issued to Grant Williams March 2, 1933, and assigned to Norristown. It discloses a jacket made of laminated asbestos sheets which are flexible and collapsible, and therefore can be packed in much smaller space than the rigid type, greatly reducing the expense of packing. Norristown, on August 20, 1933, licensed Carey under this patent, the contract including no provision for price control. Later licenses were issued, including one to Johns-Manville, executed February 4, 1934, and licenses to Ruberoid, Sall Mountain and Keasbey & Mattison in 1938, all of which embodied a price-control provision. Norristown twice requested Tulloch to assist in securing other licensees for it under the range boiler patent, but no contract was executed between them, and Tulloch secured no licensees. However, in 1936 Norristown ceased to issue its own price lists on the flexible jacket, and Tulloch included this item in his price lists under the Toohey patent. As was the case with other asbestos pipe covering, the range boiler jackets could be made under Toohey or they could be made without use of the wax treatment, in which case they were not properly subject to the provisions of the Toohey license. Carey made certain systematic efforts to indicate on its invoices whether or not the products sold were manufactured or treated under the Toohey patent, using the words "No wax treatment" on a large number of its invoices.
The letters embodied in the Commission's findings show that Johns-Manville was insistent that other principal manufacturers should be secured as licensees under the Norristown patent, with contracts embodying price control. Johns-Manville was a royalty-paying licensee, and its inordinate interest in the securing of licensees among other manufacturers by Norristown is significant and has bearing on the question of intent. The correspondence plainly shows that the uppermost consideration, in the execution of the Norristown licenses just as in the case of the Toohey licenses, was not the use of a superior product which would effect great savings in freight and packing, but was the establishment of price control or "stabilization" in the sale of this important article.
The choice of Tulloch, who was the dictator of price control under Toohey, to secure licenses and to establish the price schedules for Norristown, is also significant. When asked why Tulloch was chosen to perform this particular service, the president of Norristown twice stated that Tulloch was chosen because he had failed to get Norristown any license. This would seem properly to be a reason for not employing Tulloch rather than for employing him. When Tulloch included the boiler jackets in his price schedules under the Toohey sublicenses, at higher prices than Norristown's, that company ceased to publish its own price lists on this article.
The petitioners do not seriously challenge the Commission's finding that by their fixing prices on accessories to the range boiler jackets, competition on unpatented articles was restricted. This fact alone, in addition to the circumstances above set forth, makes the range boiler transaction relevant.
An impressive part of the record dealing with restriction of competition in unpatented material relates to transactions in air cell board, and strongly supports the Commission's order upon this point. The reply brief filed on behalf of 13 of the petitioners, including Atlantic, Carey, Johns-Manville, Ruberoid and Tulloch, concedes that air cell board was not a licensed material, pointing out that it is not listed among the materials described in the complaint or in the findings. If air cell board, therefore, was subjected to the price control applied to licensed material, that constitutes substantial evidence of an agreement to impose upon certain unpatented material the rigid price regimentation applicable under the special licenses to the licensed products. The petitioners concede that Burgstresser, of Norristown, sent a letter to Tulloch dated February 24, 1936, suggesting that "the industry should reprice" certain air cell board. They endeavor to wipe out the inference of combination and conspiracy *950 arising from this communication by stating that the undisputed evidence is that Tulloch refused to act on this request, and that there is no evidence of any such action ever having been taken on the matter. This contention, however, is contradicted by the record. Tulloch stated categorically that he told Burgstresser orally, in response to this letter, that "we were no longer operating under N.R.A.," and that he, Tulloch, could do nothing. He testified that he had never established a price on air cell board, and that so far as he was aware, Norristown was the only company that had ever manufactured the material. This is hardly credible in view of the fact that Collopy, of Acme, wrote him about this time in regard to the packing of air cell board. Invoices in evidence show that air cell board was sold by Carey and Johns-Manville. The correspondence clearly shows that Tulloch must have known that the licensees generally were concerned about the handling of air cell board. In response to a question as to whether he had taken up the matter with any other member of the industry, Tulloch said "No, I did not." When questioned by the examiner as to what the product was of which he was making this statement, he called it a "specialty item," and avoided calling it air cell board.
As a matter of fact, the letter dated February 24, 1936, was not the first communication from Burgstresser of Norristown to Tulloch with reference to this subject. A letter dated February 7, 1936, asked Tulloch about charges for packing on air cell board, and the same question had been raised with Tulloch on February 5, 1936, by Collopy, of Acme. This letter of Collopy's shows on its face that it is in answer to a letter from Tulloch. On March 25, 1936, Tulloch sent out a communication "To All Licensees," which was headed:
"General Air cell board.
Silicated or taped edges.
Heat-resisting coatings."
The communication continued that an investigation of costs on the special treatments above indicates that extra charges should be made, lists the charges, and asks for comment by return mail.
On April 9, 1936, Tulloch wrote to licensees in effect that a licensee had complained that "the Equipment Account basis will now be given on air cell board to almost any type of buyer in the absence of a definite list of Equipment Accounts.
"There has always been objection to publication of such a list."
Tulloch says that the complainant requests that a list be established which covers accounts that actually make and sell a product containing air cell board. Tulloch asks for the "serious and immediate consideration of this thing, as it is a problem," and concludes "Please let me hear from you at your earliest convenience."
Tulloch sent out a notice for the meeting to be held May 14, 1936, which listed among the subjects for discussion at the meeting, "(1) Air-cell Board Listing of Equipment Accounts." On September 22, 1936, he sent a notice to all licensees headed "General Cut size Boards Equipment Accounts," and suggests the figuring of certain definite prices of cut sizes to equipment manufacturers. He sent out a notice for a meeting to be held in New York on March 25, 1937, headed "Agendum for Low Pressure Meeting." The first subject for consideration was "Air cell Boards Equipment Accounts Redefinition." The fifth subject was "Air cell Boards to Rehandlers who sell for Air-Conditioning."
While the Commission lists a few of these exhibits in its findings it is in another connection, and neither the findings nor the Commission's brief point out these dealings as specific evidence of conspiracy to restrain competition in unpatented materials.
Yet it is conclusively established that the price of air cell board conceded to be unpatented material, and of the packing which made part of the expense of handling this item called forth a number of communications between the licensees and Tulloch and was made the subject of repeated general discussions and consultations. Several of these consultations were subsequent to the receipt of the letter from Burgstresser about which Tulloch says that he said nothing to any other licensee. The conclusion *951 is inescapable, that Tulloch on several occasions took up with the licensees the subject of air cell board and imposed prices on this concededly unpatented material. The conclusion also cannot be avoided that Tulloch's testimony on this subject to say the least was incorrect. In view of the importance of his general testimony and of his dominating position throughout these transactions, Tulloch's credibility has direct bearing upon the question whether the Commission erred in finding that evidence existed to support the order.
These facts dispose of petitioners' contention that neither the patent-licensing plan nor anything done by petitioners had the tendency or effect of fixing the prices of unpatented materials or restraining competition in them. Petitioners urge in this connection that the uncontradicted evidence shows that there was competition in the unpatented materials which in fact resulted in undercutting the prices of the patented materials to such an extent that all of the petitioners except Carey cancelled their licenses a considerable period prior to the filing of the complaint. These circumstances, however, do not relieve the petitioners of liability for their acts, which constituted a violation of the Federal Trade Commission Act, § 5, Title 15 U.S.C. § 45(a), 15 U.S.C.A. § 45(a). It is the combination or conspiracy in restraint of trade or commerce which the Act prohibits "whether the concerted activity be wholly nascent or abortive on the one hand, or successful on the other." Socony Vacuum Oil Co. v. United States, supra [310 U.S. 150, 60 S. Ct. 845]. The fact that the projects charged and proved never came to fruition is not material, for it is the object of the Federal Trade Commission Act to reach in their incipiency combinations which could lead to undesirable trade restraints. Fashion Originators' Guild v. Federal Trade Commission, supra, 312 U.S. at page 466, 61 S. Ct. 703, 85 L. Ed. 949. The conclusion that the habitual use of the established price list, of the uniform zones, classification of customers and other methods of stabilizing the industry lessened competition and fixed prices in unpatented as well as patented material is supported by the record.
It was not error for the Commission to issue the cease and desist order even though the licenses were cancelled by all but one of the petitioners prior to the institution of the action. The Commission is invested with a wide discretion in determining whether or not the practices forbidden will be resumed. Arkansas Wholesale Grocers' Ass'n v. Federal Trade Commission, 8 Cir., 18 F.2d 866, certiorari denied 275 U.S. 533, 48 S. Ct. 30, 72 L. Ed. 411; Vaughan v. John C. Winston Co., 10 Cir., 83 F.2d 370, 376.
The order as to petitioner Plant Rubber & Asbestos Works, however, must be reversed. The sole testimony implicating this petitioner, a California corporation, with the conspiracy is the fact that it was for some period a licensee, in which capacity presumably it received communications sent by Tulloch to all licensees. The record is devoid of any evidence of cooperation or combination in restraint of trade on the part of Plant Rubber & Asbestos Works. There is no evidence of sale by this petitioner of unpatented materials at licensed prices, nor of the slightest assistance toward securing the ends of the combination. Obviously evidence of being a licensee is not sufficient of itself alone to sustain a finding of conspiracy. As to all other petitioners and in all other respects the order of the Federal Trade Commission is affirmed.
NOTES
[1] Petitioners' names are abbreviated throughout this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/732792/ | 104 F.3d 357
NOTICE: THIS SUMMARY ORDER MAY NOT BE CITED AS PRECEDENTIAL AUTHORITY, BUT MAY BE CALLED TO THE ATTENTION OF THE COURT IN A SUBSEQUENT STAGE OF THIS CASE, IN A RELATED CASE, OR IN ANY CASE FOR PURPOSES OF COLLATERAL ESTOPPEL OR RES JUDICATA. SEE SECOND CIRCUIT RULE 0.23.UNITED STATES of America, Plaintiff-Appellee.v.George LYNCH and Christopher Moscinski, Defendants-Appellants.
No. 96-6137.
United States Court of Appeals, Second Circuit.
Dec. 11, 1996.
S.D.N.Y.
AFFIRMED.
APPEARING FOR APPELLEE: APPEARING FOR APPELLANT: MARTIN J. SIEGEL, Assistant United States Attorney, New York, N.Y. (Mary Jo White, United States Attorney for the Southern District of New York, James L. Cott, Gideon A. Schor, Assistant United States Attorneys, of counsel). MICHAEL P. TIERNEY, Legal Center for Defense of Life, New York, N.Y. (A. Lawrence Washburn, Jr., Cornelius Cawley, of counsel).
PRESENT: VAN GRAAFEILAND, JACOBS, and CALABRESI, Circuit Judges.
This cause came on to be heard on the transcript of record from the United States District Court for the Southern District of New York (Sprizzo, J.), and was argued by counsel.
1
ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the judgment of the district court is AFFIRMED.
2
Defendants George Lynch and Christopher Moscinski appeal from the February 23, 1996 order of the United States District Court for the Southern District of New York (Sprizzo, J.), permanently enjoining them from violating in any way the Freedom of Access to Clinic Entrances Act ("FACE"), 18 U.S.C. § 248, including but not limited to violations by impeding or obstructing ingress to or egress from the Women's Medical Pavilion ("WMP") in Dobbs Ferry, New York. Defendants contend on appeal that the district court should have entertained and accepted a defense to the injunction based upon natural law. For the reasons set forth below, we find defendants' contentions on appeal to be without merit.
3
The complaint, filed on October 27, 1995, alleged that defendants violated FACE by blocking access to the WMP on May 13, 1995. On November 3, 1995, the Government moved for a preliminary injunction prohibiting defendants from impeding ingress to or egress from the WMP and/or from coming within fifteen feet of the clinic's property. After consolidating the preliminary injunction application with trial on the merits, the district court conducted a hearing on December 12, 1995. At the close of the hearing, the court reserved decision and ordered briefing as to FACE's validity under the Commerce Clause. On February 21, 1996, the district court upheld FACE under the Commerce Clause, and found that the defendants had violated the statute by making entry to the WMP unreasonably difficult. The court therefore granted the Government's application for a permanent injunction; the injunction order was entered on February 28, 1996. On March 11, 1996, defendants moved to amend the order under Rule 59(e) of the Federal Rules of Civil Procedure on the ground that the court's opinion had failed to address expressly their natural law argument. The district court denied this motion on April 17, 1996, and defendants filed a notice of appeal on May 8, 1996.
4
The FACE statute provides for civil and criminal penalties against anyone who:
5
by force or threat of force or by physical obstruction, intentionally injures, intimidates or interferes with or attempts to injure, intimidate or interfere with any person because that person is or has been, or in order to intimidate such person or any other person or any class of persons from, obtaining or providing reproductive health services.
6
18 U.S.C. § 248(a)(1). The statute provides for civil enforcement by the Attorney General of the United States, and authorizes courts to "award appropriate relief, including temporary, preliminary or permanent injunctive relief," to remedy statutory violations. Id. § 248(c)(2).
7
Defendants concede that they willfully intended to impede and did impede access to the WMP on May 13, 1995. At the December 12, 1995 hearing, defendants essentially offered no challenge to the Government's evidence, nor did they present any evidence of their own. Their only defense was their contention, which they argued at length, that the FACE statute protects the taking of innocent human life, and is therefore contrary to natural law and accordingly null and void.
8
Defendants' sole contention on appeal is that the district court declined to address their only defense based on natural law. We find it abundantly clear from the record that the district court considered and rejected this defense. Judge Sprizzo stated that, "I don't recognize my authority to refuse to issue an injunction under natural law," and "I don't have the right to act my own private conscience." He pointedly explained to defense counsel:
9
That seal above my head says ... this is Caesar's court. This is not a church, this is not a temple, this is not a mosque. And we don't live in a theocracy. This is a court of law. I will look at all the legal issues.
10
Thus did the district court fully and forcefully address and deny defendants' natural law defense.
11
We agree with the district court's conclusion that natural law cannot furnish a valid basis upon which to nullify the FACE statute, or the injunction issued pursuant to it. Defendants cite, among others, Pope John Paul II's encyclical, Evangelium Vitae, Thomas Aquinas' Summa Theologia, and Ronald Dworkin's Taking Rights Seriously. For better or worse, as the case may be, these texts do not control our decision in this case: "the Constitution and the laws passed pursuant to it are the supreme laws of the land, binding alike upon states, courts, and the people." Testa v. Katt, 330 U.S. 386, 391 (1946). Defendants do not argue that FACE is unconstitutional. They argue instead that FACE (and abortion) are anathema, and thus violate principles superior to the Constitution. Under Supreme Court precedent, well-settled constitutional principles, and the rule of stare decisis, we decline to invalidate a federal statute (on its face or as applied) on the basis of natural law principles.
12
We have considered all of defendants' contentions on this appeal and have found them to be without merit. The judgment of the district court is AFFIRMED. | 01-03-2023 | 04-17-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1566075/ | 284 S.W.2d 265 (1955)
SAM BLOOM ADVERTISING AGENCY, Appellant,
v.
Kenneth L. BRUSH, d/b/a Rose City Nursery, Appellee.
No. 6826.
Court of Civil Appeals of Texas, Texarkana.
October 13, 1955.
Rehearing Denied November 24, 1955.
*266 Warren G. Moore, Smith & Smith, Tyler, for appellant.
Spruiell, Lower, Potter & Lasater, Tyler, for appellee.
FANNING, Justice.
Plaintiff-appellant, Sam Bloom Advertising Agency, and appellee, Kenneth L. Brush, doing business as Rose City Nursery, entered into an oral agreement whereby appellant would conduct certain advertising on behalf of appellee's rose nursery business. A portion of the charges made by appellant were paid by appellee. Suit was brought by appellant to recover $9,430.12 which appellant alleged to be the reasonable worth of the services performed but not paid for. Certain jury findings (among others) were made to the effect that the reasonable value of appellant's services (not paid for) was $4,715.06, that the parties had agreed that plaintiff would be paid for its services only out of income and profits from the enterprise, that the 1953 mail order enterprise of defendant resulted in a loss and that there were no profits available from said enterprise to pay plaintiff the balance of his claimed account. The court entered a judgment that plaintiff take nothing, overruled plaintiff's amended motion for new trial, and plaintiff advertising agency has appealed.
By its first point appellant contends that the trial court erred in admitting hearsay evidence from the witness John Stephens, president of a Tyler bank, in regard to a telephone conversation Mr. Stephens had with someone who called him (who apparently showed some knowledge of Brush's negotiations with reference to the advertising matter) and wanted to know about Mr. Brush's financial ability, etc., and wherein Mr. Stephens advised such person that he considered Brush honest, "but if he entered into the contract, the advertising contract would have to pay the indebtedness because we could not advance him any more money because he already owed us." Stephens could not identify the calling party. Brush testified that at this same time he had urged Bloom to call Stephens with respect to this matter and that Bloom advised him (while he was in Dallas conducting his negotiations with Bloom) that Stephens had been contacted. Mrs. Brush, wife of appellee, who was present at the negotiations in Dallas, testified to the effect that she and her husband asked Bloom if he had contacted Stephens, and "he said that he hadn't; that his banker, or somebody, was trying *267 to contact him and we told him we would not go into it until Mr. Stephens was contacted." She was asked if she knew whether Bloom did contact Stephens and she testified:
"A. He told us he did. We came back later in the afternoon and he told us he had talked to the banker.
"Q. You don't know whether it was he himself or which one in his office? A. No, I do not. He just said they had contacted Mr. Stephens."
Bloom denied calling Stephens. He was asked: "Did you have your banker call him?" and answered as follows: "I did not call him. From the best of my memory, best of memory, the only contact was the one that Dick Johnson had, but I could not I did not personally call him." There is further testimony to the effect that Dick Johnson, an employee of Bloom, later went to Tyler to see Stephens and received from Stephens virtually the identical information that was related in the telephone conversation in question.
In Colbert v. Dallas Joint Stock Land Bank, Tex.Com.App., 136 Tex. 268, 150 S.W.2d 771, 775, it is stated:
"In our opinion the identity of Ferguson was by the facts and circumstances to which Colbert testified sufficiently shown to admit the contents of the conversation. The person called and answering the call stated that he was Hugh Ferguson. In the conversation he revealed a familiarity with the ranch owned by the Land Bank and knowledge of the proposal that Gay had made to Colbert for the sale of the ranch. Colbert, in the telephone conversation, told Ferguson that he had in Carothers a prospective purchaser and that he had shown the ranch to him. Riley, land salesman of the bank, appeared at the ranch with knowledge about Carothers and thereafter sold to Carothers and undivided one-half interest in the ranch. The Land Bank offered no evidence in contradiction of Colbert's testimony as to the conversation with Ferguson. Riley, who was a witness on the trial, did not testify to the source of his information about Carothers. In view of these facts and circumstances, the sufficiency of the identification was a question of fact for the jury, and the question was decided favorably to plaintiff in error Colbert by the jury's finding that Ferguson, prior to the selling of the ranch, knew of Colbert's efforts to procure a purchaser." (Italics ours.)
It is our opinion that the sufficiency of the identification of the person calling Stephens being Bloom, Bloom's banker, or someone from his office representing him, in view of the facts and circumstances outlined above and other circumstances in the record, was a question of fact for the jury, and that question was decided favorably to appellee by virtue of the jury's findings. Appellant's first point is overruled.
Appellant contends by its sixth and seventh points that there was no admissible evidence to support jury finding No. 5 that plaintiff was only to be paid out of the profits of the enterprise and that the evidence was insufficient to support such finding.
Testimony which would probably tend to support the verdict of the jury comes from Brush and his wife, from the circumstances of Brush's financial situation made known to Bloom by Brush at the time of the alleged agreement, and Brush's insistence that Bloom verify this condition from Brush's banker before Brush would enter the agreement, from the testimony of banker Stephens with reference to Brush's financial condition and with reference to the controversial telephone conversation related above. There are also probably other circumstances and inferences from the testimony of Brush, his wife and Dick Johnson, employee of Bloom, who checked up on Brush's financial condition, which would probably tend to support the finding in question to some extent. Bloom vigorously denied any agreement that he was to be paid only out of profits. Brush at one place in the early part of his testimony testified *268 that he had an agreement with Bloom to the effect that Bloom was to be paid out of the profits. Brush testified that he did no discuss with Bloom that payments for plaintiff's services would be made weekly or every ten days, but that he sent in payments from time to time as the money was accumulating, that Bloom sent his statements each week, that he made payments on the bills as the money came in and "it was understood that as the thing rolled along and money came in, I would keep it going to Mr. Bloom." However, in other portions of his testimony Brush testified as follows:
"Q. Just what did Mr. Bloom tell you at that time? Just what were his words when he told you that he would take his share out of profits? A. Well, I would say he didn't tell me in words.
"Q. He didn't tell you in words? A. No, sir.
"Q. How did he tell you? A. Well, by entering into the agreement that I lay before him; the proposition which was the one and only way that I could do it, and that was done repeatedly.
"Q. Now, you mean you told him state whether or not you told him that you couldn't employ him unless he could do it on a profit-sharing basis. A. That is what it would amount to. Those are not the words.
"Q. Will you answer that question yes or no?
"The Court: He said that is not the words. State what the conversation was.
"Mr. Moore: I will ask her to please read the question.
"Reporter's Note: Question is read.
"Q. Did you tell him that?
"The Court: By words or otherwise, did you tell him that? A. Well, yes. It would be otherwise. I didn't use the words `profit-sharing.'
"Q. You didn't use the word profitsharing? A. That term was not used.
"Q. I will ask you whether or not you told him that he would have to wait until the end of the season to get `your pay,' determined if `we' made a profit. Did you tell him that? A. No, sir. I wanted him to start getting that money as fast as it was coming in. * * *
"Q. That was one of their requirements that you send in these payments? A. I am sure they would have hollered pretty quick if they hadn't been getting some money. * * *
"Q. Did he agree to this advertisement with the understanding he would not get paid for it unless you made enough profit out of these particular advertisements to pay it? A. Well, I don't know just how to answer that.
"Q. Well, answer it. A. I didn't ask him the question but I explained my side of it and that's the way I assumed it was meant. He didn't answer me and say definitely if the deal doesn't make it there is no obligation on the part of either of us. I wouldn't expect him to make a statement like that.
"Q. As a matter of fact, he didn't make any statement like that, did he? A. No, I said he did not. * * *" (Italics ours.)
We quote from the testimony of Mrs. Brush as follows:
"Q. Now, then, did Mr. Bloom make any statement in your presence in the original transaction in Dallas to the effect that if you don't make a profit, you don't owe me any money? A. Didn't anyone make that statement.
"Q. There wasn't such statement made? A. No, it wasn't made. We gave him our proposition and he took it.
"Q. He didn't say, though, that he was going to only expect you to pay it out of the profits?
*269 "The Court: She has already testified that he didn't make that statement."
The testimony further reveals that Brush never denied (to Bloom or to Bloom's attorney) owing the account in question until the suit was filed. We quote from Mr. Brush's testimony as follows:
(Questions being propounded by Mr. Moore, attorney for Bloom.)
"Q. I will ask you if it isn't a fact that you stated to me if we would give you a little time, you believed you could work out of it and pay it? A. I wouldn't say a little time.
"Q. Well, some time. A. I would say sufficient time.
"Q. I will ask you further if it isn't a fact that you, on one or more occasions, at least, one or more, advised Mr. Bloom that you did owe the indebtedness and that you would pay it if given sufficient time? A. Sufficient time, yes sir.
"Q. I will ask you to state whether or not you, at any time mentioned to Mr. Bloom that this account has been due, that thishe was to be paid only out of the profits? A. No." (Italics ours.)
Brush denied the account when his deposition was taken after suit had been filed. Mr. Brush's explanation for not denying the account until suit was filed was to the effect that he was in financial straits, with all his property pledged to the bank and his business in such condition that he could not stand a lawsuit, that he would rather have paid the account than to have a lawsuit because he felt sure that a lawsuit would mean bankruptcy for him. Mrs. Brush testified to a similar effect. At another place in his testimony with reference to the account Brush stated: "I will say I didn't admit it and I didn't deny it."
We are inclined to the view that there is some evidence to support jury finding No. 5. Appellant's sixth point is overruled.
However, in view of the recitals above quoted from the testimony of appellee Brush and his wife, and after carefully considering the matter it is our best judgment that the evidence in this case is insufficient to support jury finding No. 5. Appellant's seventh point is sustained.
Appellant contends by its second point that the trial court erred in admitting in evidence the audit statement of the witness Don Cowan and in permitting him to testify thereto, over appellant's objections.
Don Cowan was called as a witness by appellee Brush. The manner in which the audit report was admitted in evidence, and the objections made thereto, are revealed by the record as follows:
"Q. You are Don Cowan? A. Yes, sir.
"Q. Are you an accountant? A. I am.
"Q. You work for various and different people in Tyler and this area? A. Yes, sir.
"Q. Is one of your clients Mr. Kenneth Brush? A. Yes, sir.
"Q. How long have you kept his records? A. Since about May of '52.
"Q. Have you made up any record showing the result of his 1953 mailorder rose business? A. Yes, sir.
"Will you hand me that, please sir?
"Reporter's Note: Witness takes from brief case an instrument which is marked for identification `D-2'/M
"Q. Was this statement you have handed me made up from the books and records of Mr. Brush that were keptthat you have examined from time to time? A. Yes, sir.
"Mr. Potter: We offer this. Would like to offer this statement in evidence.
*270 "Mr. Moore: Object to the statement until I have seen the number of items and what it is based upon. I want to see it before it is admitted, Your Honor.
"Mr. Potter: Your Honor, that would be matter of cross examination. I am sure he has the details on whatever data he may want to go into.
"The Court: Overrule.
"Mr. Moore: Your Honor, I further object to the admission of that statement in evidence because of the fact that it has not been substantiated by the proper documents; for the reason that it does not, the proper predicated has not been laid for its admission here.
"The Court: Overrule.
"Mr. Moore: Note my exceptions.
"Q. Mr. Cowan, is this statement, marked Defendant's Exhibit 2, is that a correct statement of income and expenses for the retail mail-order operations from January 1, '53 to June 30, '53? A. That is a correct representation with this qualification: that a number of the items on the statement are expenses which were not kept separate in the general books and accounts by departments. They were kept only for the over-all operations. The books themselves are maintained for income tax purposes, and are maintained, therefore, on the entire operations, only. Now, when it came down to dividing between this operation and a couple of others, it was necessary to make certain allocations."
The exhibit in question purports to show an income of $77,773.32, expenses of $78,249.10, and a loss of $475.78.
Appellant in its reply brief states: "The jury during its deliberation, called for the exhibit in question, namely Cowan's report." Appellee filed later a supplemental brief which does not question the above statement made by appellant.
Mr. Brush testified that Mr. Don Cowan had "kept his books" and referred to him as "his auditor" and also referred to him as an accountant. Mr. Cowan testified as above that he had "kept Mr. Brush's records" since May, 1952. He also answered "Yes" to the question above quoted with reference to the exhibit in question, as follows: "Was this statement you have handed me made up from the books and records of Mr. Brush that were keptthat you have examined from time to time?" And Mr. Cowan (as shown by his testimony hereinbefore quoted) testified that the statement (audit exhibit) was a correct statement of income and expenses for the retail mail-order operations from January 1, "53" to June 30 "53", with a qualification hereinbefore quoted in his testimony. He did not thus testify that the original books of accounts themselves were correctly kept. We have carefully searched the entire record and we have been unable to find any testimony from any source that the original books of accounts of Brush were correctly kept.
We quote further from Mr. Cowan's testimony as follows:
"Q. How do you know that that was the funds which cameall of the funds which came from the mail-order account? A. I have no way of knowing.
"Q. Is it your testimony that none of the money from this particular enterprise went into those sheds? A. Now, you are getting me off on a subject I don't know anything about. The books of account
"Q. That is all right. You just don't know, then, do you? A. That is true.
"Q. It could have and you not know it? A. Yes, sir, very well."
In McCormick & Ray, Texas Law of Evidence, Sec. 557, p. 709, it is *271 stated: "It is obvious that account-books and entries therein are not admissible in the absence of some showing by preliminary evidence as to what the proffered books and entries are and under what circumstances they have been kept. The books do not `prove themselves.'" (Italics ours.) The necessary lagel predicate for the introduction in evidence of books of account is stated by the Supreme Court of Texas in Stark v. Burkitt, 103 Tex. 437, 129 S.W. 343, 344, as follows:
"To authorize the introduction of book accounts in evidence, it must be proved: (1) That the book or books contain original entries of transactions pertinent to the business in question. (2) It must appear that the entries were made in the regular course of business at or near to the time the transactions were had. (3) That the entries must be such as to indicate what the charge is for; that is, what the transaction was. (4) That the entries were made by one who was authorized to do so, and that he did the act so recorded himself, or that he made the record upon information derived from one who was authorized to do so. (5) That the transactions were regularly entered, and that the books were correctly kept. 17 Cyc. p. 371 et seq.; Taylor v. Coleman, 20 Tex. [772] 778; Ward v. Wheeler, 18 Tex. [249] 264; Burnham v. Chandler, 15 Tex. [441] 444; Bupp & Robbins v. O'Connor, 1 Tex. Civ. App. 328, 21 S.W. 619. The evidence did not comply with these requirements."
Appellee contends that the audit statement was admissible because appellant failed to object to it on the ground that it was secondary evidence and not the best evidence and also contends that it was inferable from the record that the books and accounts were voluminous, and that under the exception and rule stated in the case of Shelby County v. O'Banion, Tex.Civ.App., 188 S.W.2d 195, and other cases cited by appellee, the audit and testimony of the auditor was admissible. The rule with respect to summaries and tabulations is terstly stated in 17 Tex.Jur., Sec. 202, pp. 509-510, in part, as follows:
"Where books of account or accounts are voluminous, involving intrinsic details, and it is inconvenient to make the necessary examination, an expert accountant or other competent person who has examined them may be permitted to state his conclusions as to what they show, or tabulated statements made up from books in evidence may be admitted where they are shown to be correct and to contain all that which the books would show in regard to the matter involved." (Italics ours.)
In 17 Tex.Jur., Sec. 201, pp. 507-508, it is stated:
"If books which are admissible cannot be produced, their contents may be shown by secondary evidence, as by testimony of the person who kept them, or by copies of them properly proven, provided it is shown, with all reasonable certainty that the books were so kept as to render them admissible upon being produced." (Italics ours.)
The audit report in question was clearly secondary evidence. The original books of accounts were not introduced in evidence and no reason was given for their non-production. There was no direct testimony that they were volumious; however, appellee argues that this might be reasonably inferred from the length of plaintiff-appellant's account shown in the record. However, appellant objected to the introduction of the audit report because the proper predicate for its introduction had not been laid. It is just as necessary in introducing secondary evidence (whenever secondary evidence may become admissible) of the contents of books of account that the same predicate be laid as would have been required had the books themselves been offered. In Caldwell v. McGarvey, Tex.Civ. App., 285 S.W. 859, 861, error dismissed, it is stated:
"Complaint is further made that testimony as to the contents of the books *272 of the Citizens' National Bank of Longview were received in evidence without a predicate that the entries in said books were made in due course of business and that the books were correctly kept. The books were beyond the jurisdiction of the court, and secondary evidence as to the contents of said books was therefore admissible; but, if the books had been brought into court, the entries therein could not have been introduced without the necessary predicate. The requirements of such a predicate are concisely stated by the Supreme Court in the case of Stark v. Burkitt, 103 Tex. 437, 129 S.W. 343. It is believed that the same predicate for the introduction of secondary evidence as to the contents of said books is required as would have been requisite had the books been offered." (Italics ours.)
We have carefully searched the entire record and find no testimony that such original books of account were correctly kept. In fact, the qualifying evidence with respect to the books of accounts of Brush is rather meager and we have reached the further conclusion that the evidence in this case does not sufficiently show that the other requirements stated in Stark v. Burkitt, supra, were made in order to make admissible in evidence either the books of accounts themselves (which were not offered) or the secondary evidence audit statement in question over the objection of appellant to the effect that the proper predicate had not been laid for the introduction of such audit report. Appellant's second point is sustained. We are of the further opinion that the error in question constitutes reversible error for the reasons hereinafter stated.
Appellee contends that the audit statement in question was not the only evidence showing a loss; that there was the direct testimony of Brush and Cowan (unobjected to) when they had a discussion with Bloom in July 1953, wherein Bloom admitted that they told him there was a loss and appellee contends that this evidence is cumulative evidence sufficient to support the jury's answers to issues 3 and 6 (issues with reference to whether a profit or loss was sustained) even in the absence of the audit exhibit in question and that therefore reversible error was not shown by the introduction in evidence of the audit report. Appellee also contends that appellant waived its objection to the audit report by his cross-examination of Cowan and further examination of Brush and Cowan concerning same.
In Bush v. Davis, Tex.Civ.App., 147 S.W.2d 888, 890, error dismissed, where a secondary evidence audit report involving voluminous transactions were admitted in evidence, and where the cause was reversed because of the objectionable nature of the contents of the audit report, the court stated:
"Furthermore, the court permitted the jury to take into the jury room and retain during its consideration, the auditor's report containing, as it did, the series of opinions, conclusions, deductions, arguments and hearsay statements on controverted issues. Clearly, the admission of the report was calculated to influence the jury and impress it with the importance of the document." (Italics ours.)
Probably the unobjected to statement of appellee to the effect that he had a loss and had made no profits out of the enterprise (although he undoubtedly used his access to his books to determine this inasmuch as the claimed loss was small and the transactions were many) was barely sufficient to support jury findings 3 and 6. The testimony to the same effect of the witness Cowan, however, under this record is undoubtedly based on Cowan's examination or interpretation of the books of account as his other testimony indicates his lack of actual knowledge of the transactions other than from the books and accounts of Brush.
The audit account exhibit in question was permitted in evidence, the jury heard this testimony, the exhibit was an instrument authorized to be given to the jury, and an unchallenged statement in appellant's reply brief states that the jury called for the exhibit.
*273 Clearly, the audit exhibit greatly bolsters the testimony of appellee to the effect that he had sustained a loss and did not make a profit in the enterprise. Clearly the admission of the audit report exhibit was calculated to influence the jury and impress it with the importance of the exhibit.
We have carefully examined the record and have reached the conclusion that appellant did not waive its objection to the audit report exhibit by the cross-examination and examinations referred to by appellee. See the following authorities: Cathey v. Missouri K. & T. Ry. Co. of Tex., 104 Tex. 39, 133 S.W. 417, 33 L.R.A.,N.S., 103; Dallas Ry. & Terminal Co. v. Bailey, 151 Tex. 359, 250 S.W.2d 379; Tex. Employers Ins. Ass'n v. Dillingham, Tex.Civ.App., 262 S.W.2d 748, wr. ref., n. r. e.; Tex.Emp. Ins. Ass'n v. Shiflet, Tex.Civ.App., 276 S.W.2d 942, er. ref. n. r. e.
Where the erroneous admission in evidence of the audit report exhibit in question was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case is a question which we must determine as a matter of our judgment in the light of the record as a whole. Southwestern Greyhound Lines v. Dickson, 149 Tex. 599, 236 S.W.2d 115; Rules 434 and 503, Texas Rules of Civil Procedure.
Considering the record as a whole, considering the undoubted weight given by the jury to the audit report in question in passing on issues Nos. 3 and 6, it is our best judgment that the admission in evidence of the audit report in question over appellant's objections was in law reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case.
Appellant's other points have been carefully considered and are respectfully overruled.,
The judgment of the trial court is reversed and the cause is remanded to the district court for a new trial.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566081/ | 284 S.W.2d 906 (1955)
Earl GILBERT, Appellant,
v.
The STATE of Texas, Appellee.
No. 27873.
Court of Criminal Appeals of Texas.
December 14, 1955.
M. L. Cobb, Cullen B. Vance, Edna, for appellant.
Leon B. Douglas, State's Atty., Austin, for the State.
WOODLEY, Judge.
The conviction is for driving a motor vehicle upon a public highway while intoxicated; the jury having assessed the minimum punishment.
Appellant, testifying in his own behalf, admitted having taken two small drinks a short time before his arrest, but denied that he was intoxicated.
The highway patrolman who made the arrest and the officer who admitted appellant to the jail testified that he was intoxicated.
The jury resolved the issue against appellant's contention and the evidence is sufficient to sustain the conviction.
Appellant urges two claims of error.
A motion was filed seeking to have this case continued until all cases previously filed in the County Court had been set for trial. The motion was overruled.
The motion for continuance was sworn to by appellant before one of his counsel, and is therefore insufficient. Art. 545, C.C.P.; Reeves v. State, 145 Tex.Cr. R. 208, 167 S.W.2d 176, and cases there cited; Ferguson v. State, 159 Tex. Crim. 169, 261 S.W.2d 721.
In any event, there is no merit in the exception to the overruling of this motion. Sowers v. State, 157 Tex. Crim. 345, 248 S.W.2d 949; Stone v. State, 146 Tex. Cr.R. 70, 171 S.W.2d 364.
It is next contended that appellant was denied due process of law and is entitled to a reversal of his conviction because the arresting officer failed to take him before a magistrate, as required by Art. 217, C.C.P. and Art. 6701d, Sec. 147(3), Vernon's Ann. Civ.St.
The record shows that appellant was arrested and taken to jail at about 8 o'clock P.M. The following morning he called his *907 wife who came down and arranged for his bond about 11 o'clock.
We have held that the failure of the arresting officer to take the accused before a magistrate does not render the testimony of the officer inadmissible. Stasney v. State, 151 Tex. Crim. 563, 208 S.W.2d 894; Henson v. State, 159 Tex. Crim. 647, 266 S.W.2d 864.
The requirement that the arrested person be taken immediately before a magistrate was before this Court in Beeland v. State, 149 Tex. Crim. 272, 193 S.W.2d 687. We there cited with approval the case of Fouraker v. Kidd Springs Boating and Fishing Club, Tex.Civ.App., 65 S.W.2d 796, 798, wherein the Dallas Court of Civil Appeals, speaking through Justice Looney, said:
"Plaintiff was arrested at night and in an intoxicated condition. We judicially know that, in the regular course of official business, magistrates, before whom the statute requires a defendant, arrested without warrant, to be immediately taken, do not keep open office at night; hence, under the circumstances, it was impracticable for the officers to attempt literal compliance with the statutes, and, in our opinion, it is unreasonable to say such was their duty. Under the forbidding circumstances, pending return of the regular time for official business, we think the officers acted with legal propriety.
"The general doctrine, as to what constitutes reasonable delay or reasonable excuse for failure to immediately take an arrested person before a magistrate, is stated in 25 C.J. 493 as follows: `What is a reasonable time depends upon the facts of each case. Prolonged detention must, however, be considered with regard, among other things, to such matters as judicial accessibility, and facilities, the unavoidable duties of the officer making the arrest, the intervention of Sunday, or a holiday, the intoxication, or mental condition of the person detained.'
"The Supreme Court of Indiana, in Scircle v. Neeves, 47 Ind. 289, held that the duty of an arresting officer to take the offender forthwith before the justice of the peace did not require the taking of a prisoner before the magistrate at so late an hour as 11 o'clock at night, and especially as the prisoner was so intoxicated as not to be conscious of what was passing. This case is directly in point, and its reasoning, in our opinion, is sound. Also see Pratt v. Brown, 80 Tex. 608, 16 S.W. 443, 446; Haverbekken v. Hollingsworth, Tex.Civ.App., 250 S.W. 261, 265."
Both of these authorities were cited by the Galveston Court of Civil Appeals in Robinson v. Lovell, 238 S.W.2d 294, 298, in holding that delay in taking the accused before a magistrate until the office was open or until the prisoner became sober posed the question of whether the delay was reasonable.
The provisions of Art. 6701d, V.C.S., were before the Supreme Court of Texas in Hicks v. Matthews, 266 S.W.2d 846, 849, opinion by Chief Justice Hickman, wherein is found the following:
"The word `immediately' is a term of relative signification. Sometimes it is understood to mean instantaneously or without intervention of time, but, as used in most statutes, it is not to be construed so strictly. The law must be given a practical and reasonable application. Accordingly, the word `immediately' is very generally held to mean with due diligence. The accused has the right to be presented without delay, but the question of what is delay must be determined by all the facts and circumstances. Necessarily some time must elapse between the arrest and the presentment before the magistrate. Venable v. Huddy, 77 N.J.L. 351, 72 A. 10; Mullins v. Sanders, 189 Va. 624, 54 S.E.2d 116; State for Use of Kelley v. Yearwood, 204 Miss. 181, 37 So. 2d 174; Fouraker v. Kidd Springs Boating and Fishing Club, *908 Tex.Civ.App., 65 S.W.2d 796 (no writ history); Haverbekken v. Hollingsworth, Tex.Civ.App., 250 S.W. 261 (no writ history); Bishop v. Lucy, 21 Tex. Civ.App. 326, 50 S.W. 1029 (no writ history). While courts must safeguard the rights of individuals, they should not impose liability upon peace officers for delays which are reasonable under all the circumstances. The statute does not make it the duty of the officer to take the accused to the office of the justice of the peace when he knows or has good grounds for the belief that the justice is not in his office."
As we view the record the fact that appellant was confined in jail from 8 P.M., the time of his arrest, until the following morning does not show an unreasonable or unnecessary delay in taking him before a magistrate as required by Art. 217, C.C.P. and Sec. 147 of Art. 6701d, V.C.S.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566059/ | 284 S.W.2d 275 (1955)
Edwin K. ATWOOD, Appellant,
v.
WILLACY COUNTY NAVIGATION DISTRICT et al., Appellees.
No. 12928.
Court of Civil Appeals of Texas, San Antonio.
October 5, 1955.
Rehearing Denied November 30, 1955.
*276 Carter, Stiernberg & Skaggs, Harlingen, S. L. Gill, Nielsen & McCormick, Raymondville, for appellant.
Robinson, Strawn & Robinson, Raymondville, Bowie & Scanlon, San Benito, John Ben Shepperd, Atty. Gen., Elbert M. Morrow, Frank Pinedo, Asst. Attys. Gen., Vinson, Elkins, Weems & Searls, Victor W. Bouldin, houston, for appellees.
POPE, Justice.
Appellant, Edwin K. Atwood, challenges the constitutionality of Chapter 404, Acts 53rd Legislature, on the grounds that the caption of the Act violates Sections 35 and 56 of Article III, Texas Constitution, Vernon's Ann.St. He appeals from a judgment which denied him an injunction to enjoin the sale of certain unissued bonds by the Willacy County Navigation District under the authority of the law under attack. He owns land within the District. The title to the act in quetion states:
"An Act granting to Willacy County Navigation District certain additional powers and authority; validating said District and bonds heretofore issued by it, except under certain conditions; containing a saving clause; and declaring an emergency."
Appellant argues that the title did not give fair notice of its contents, that being the oft-repeated purpose of Section 35, Art. III, Texas Constitution. The act in question, under the foregoing caption, undertook to make certain changes to Article 8263h, Vernon's Ann.Civ.St., which was first enacted in 1925, Acts 1925, 39th Legislature, Chapter 5; amended in 1945, Acts 49th Legislature, Chapter 139; and still later amended in 1947, Acts 50th Legislature, Chapter 125. The act here involved granted additional powers to Willacy County Navigation District. Those additional powers were (1) to authorize the issuance of bonds secured not only by revenues, as formerly permitted, but also by a levy of ad valorem taxes; (2) to levy a tax not exceeding twenty cents on each $100 instead of only ten cents; (3) to authorize *277 the district to own lands adjacent or accessible to navigable waters within the district; (4) to grant the district the power to lease its lands to municipal bodies, public or private, to any government or governmental agency, the State of Texas or the United States, instead of to individuals or corporations as formerly permitted; (5) to make such leases for periods not to exceed thirty years instead of an unstated period as formerly permitted; (6) to acquire lands, which clause is broader than the former act which limited the acquisition of lands "for all necessary improvements"; (7) to permit canal commissioners, engineers and employees of the district to go upon lands to make plans, surveys, maps and profiles instead of limiting that power to engineers only; (8) to permit those persons "to attend to any business of the District"; (9) to convey property to the United States; (10) to authorize the calling of bond elections; and (11) to provide for publishing instead of posting election notices. The act also provided that the bonds are incontestable, except in certain stated instances, when they were approved by the Attorney General, registered by the Comptroller and sold.
The liberality with which the rules about titles should be applied has often been stated. Central Education Agency v. Independent School Dist. of City of El Paso, 152 Tex. 56, 254 S.W.2d 357; Stone v. Brown, 54 Tex. 330, 343; State ex rel. Garza v. Rodriguez, Tex.Civ.App., 213 S.W.2d 877. A title which is broad is no detriment so long as it gives fair notice of what is contained in the body of the law. The constitutional provision contemplates that a title should be brief, since it declares that it shall contain the subject and then further declares that only one subject shall be stated. Though titles frequently are extensive and include an index, synopsis, or details of a bill, the Constitution does not require the long caption. Terrell v. Alpha Petroleum Co., Tex.Civ.App., 54 S.W.2d 821, 828, affirmed Tex.Com.App., 122 Tex. 257, 59 S.W.2d 364; Tilton v. Dayton Independent School Dist., Tex.Civ.App., 2 S.W.2d 889, 891.
A title may be so general, so specific in some limited matters, or inaccurate as to throw one off guard, mislead or serve as a cover for secret legislation. Gulf Ins. Co. v. James, 143 Tex. 424, 185 S.W.2d 966; Gulf Production Co. v. Garrett, Tex.Com. App., 119 Tex. 72, 24 S.W.2d 389; De Silvia v. State, 88 Tex. Crim. 634, 229 S.W. 542; Sutherland v. Board of Trustees of Bishop Independent School Dist., Tex.Civ. App., 261 S.W.2d 489; Missouri, K. & T. R. Co. of Texas v. State, 102 Tex. 153, 113 S.W. 916. Moreover, a caption which details the matters of the bill may be limited to those items which are specified, whereas a general caption may not be so limited. Bitter v. Bexar County, Tex.Com.App., 11 S.W.2d 163. The essence of appellant's argument, applied to the facts of this case, is that a title fails unless it details the body of the bill.
Broad subjects in titles have generally been approved. "The title `An act to adopt the common law of England' is regarded as sufficient for a statute the body of which corresponds with it." Missouri, K. & T. R. Co. of Texas v. State, 102 Tex. 153, 113 S.W. 916, 918. This Court has formerly expressed its views on what is the subject and what amounts to detail in titles. In Lowe v. Commissioners' Court of Val Verde County, Tex.Civ.App, 69 S.W.2d 153, the Court held that the subject of the bill there in question was "`"the construction and maintenance of a State Highway system under the control of the State Highway Department."'" Such a title is as broad or broader than the one here in question. The title in the Lowe case included other matters, but the Court looked through the other verbiage to the quoted words, declared that they were a fair statement of the subject, and treated the rest of the title as details which are permissible but not essential. Under that general subject, as is revealed from an examination of Acts of 39th Legislature, Chapter 186, broad powers were granted the State Highway Department. Certain powers were withdrawn from the Commissioners' Court; the power to use Federal aid; the power to make surveys, plans, specifications and estimates; *278 the power to use certain funds then or thereafter deposited in the State Treasury, and other matters were embraced within the general subject. This Court repeated this distinction between subject and detail in Garvey v. Wood, Tex.Civ.App., 101 S.W.2d 288. King v. State, 74 Tex. Crim. 658, 169 S.W. 675, 677, also looked to a long title, separated the subject from the detail and held that the subject of the statute there questioned was sufficiently, though broadly, stated as "`An act to provide for a more efficient system of public free schools for the state of Texas'". Acts 1905, c. 124.
In Johnson v. Martin, 75 Tex. 33, 12 S.W. 321, 323, a caption entitled: "`An act creating the office of public weigher, and regulating the appointment, and defining the duties and liabilities, thereof'" was sufficient to embrace a section which created a penal offense by persons who violated the law. The Court stated that the section was "necessary to the enforcement of the main object of the law", for otherwise it would be a dead letter. In International & G. N. R. Co. v. Smith County, 54 Tex. 1, the title was: "An act to define the duties, powers, qualifications and liabilities of assessors of taxes, and to regulate their compensation." Gen.Laws 1876, p. 265. The body of the act extensively stated the steps required for rendering property, the form of oath, and provided for proceedings before boards of equalization, as well as other matters. The subject was sufficient. See also Stone v. Brown, 54 Tex. 330, 341.
More recently, Mallard v. Texas State Board of Examiners in Optometry, Tex. Civ.App., 203 S.W.2d 778, 779, passed on the sufficiency of notice contained in the words of a title "prescribing powers and duties of the Board'". Acts 1939, p. 360. The title of the bill contained many other statements, but included within the quoted phrase, and falling under no other statement of the title, were broad powers to make rules and regulations about the practice of optometry and the enforcement of the act, the power to appoint committees pertaining to the enforcement, the power to employ inspectors, stenographers and others, the power to call upon the Attorney General and County and District Attorneys to enforce the act, the power to issue subpoenas and to take testimony, and the power to try matters before the Board absent the strict rules of procedure and to institute actions. Those broad powers, including the imposition of new duties upon many other public officials, were included within the general words of the caption and "gave fair warning to any person reading such caption that the body of the act contained a grant of powers to the board." The case cites the pertinent precedents. See also, Central Education Agency v. Independent School Dist. of City of El Paso, 152 Tex. 56, 254 S.W.2d 357, 361; Texas Liquor Control Board v. Warfield, Tex.Civ.App., 111 S.W.2d 862; Tilton v. Dayton Independent School Dist., Tex.Civ.App., 2 S.W.2d 889; Board of Insurance Commissioners v. Sproles Motor Freight Lines, Tex.Civ. App., 94 S.W.2d 769, 772; Stuard v. Thompson, Tex.Civ.App., 251 S.W. 277, 282; Fry v. Jackson, Tex.Civ.App., 264 S.W. 612, 618; Breen v. Texas & P. Ry. Co., 44 Tex. 302.
In this case, as in the Mallard case, a subject which states there will be a grant of additional powers to a named agency, immediately gives rise to the inquiry: What are the additional powers? Upon such notice, the body of the bill may then be examined, which in this case was short.
Appellant by a separate point argues that the Act in question is unconstitutional because it contains more than one subject. He argues that each power granted the Willacy County Navigation District is a separate subject. That argument means that even though the caption had at length included the details in the caption, the bill would fall because it contained more than one subject. If that be true, each power, however necessary to the effective operation of the same Navigation District, would need be stated in a separate bill. Supposedly, the multitude of powers of a municipality or other agency would also need to be stated in separate legislation concerning such agencies. No case has so held. The variety of powers granted by the Legislature and *279 discussed in the Mallard, Lowe, and International & G. N. R. Co., cases were not treated as separate subjects, but as bearing upon general subjects. Legislation is not so confined that a bill can accomplish only one thing. It may accomplish many things so long as they "relate, directly or indirectly, to the same subject, have a mutual connection, and are not foreign to the subject expressed in the title." Stone v. Brown, 54 Tex. 330, 343; Central Education Agency v. Independent School Dist. of City of El Paso, 152 Tex. 56, 254 S.W.2d 357. To hold that each power granted a district is a separate subject which must be granted by separate bills, would bring in question the constitutionality of all legislation concerning districts of all kinds. The Act concerns one subject, the grant of additional powers to the Willacy County Navigation District, and the body of the bill is germane to that subject. Missouri, K. & T. R. Co. of Texas v. Rockwall County Levee Imp., Dist. No. 3, 117 Tex. 34, 297 S.W. 206; Texas & P. R. Co. v. Stoker, 102 Tex. 60, 113 S.W. 3; Lower Neches Valley Authority v. Mann, 140 Tex. 294, 167 S.W.2d 1011; Texas Liquor Control Board v. Warfield, Tex.Civ.App., 111 S.W.2d 862.
Appellant makes a third attack upon the constitutionality of the Act on the grounds that it is a special or local law in violation of Section 56, Article III, of the Texas Constitution. Section 59, Article XVI, of the Constitution authorizes the conservation and development of the State's natural resources, including the navigation of its inland and coastal waters. Whether a law which creates a district under that provision of the Constitution is a local or special law is not an open question. "It is settled that a statute is not local or special, within the meaning of this constitutional provision, even though its enforcement is confined to a restricted area, if persons or things throughout the state are affected thereby, or if it operates upon a subject that the people at large are interested in." Lower Colorado River Authority v. McCraw, 125 Tex. 268, 83 S.W.2d 629, 636; Lower Neches Valley Authority v. Mann, 140 Tex. 294, 167 S.W.2d 1011; Harris County Flood Control Dist. v. Mann, 135 Tex. 239, 140 S.W.2d 1098. See, City of Aransas Pass v. Keeling, 112 Tex. 339, 247 S.W. 818.
Appellant urges that Section 3 of the Act is unconstitutional as a taking of property without compensation by a grant of power to the District to enter upon any lands within the District "to attend to any business of the District." The context of that section, in our opinion, limits the entry upon such lands to the specific purposes named in the section, those being, to examine the lands, make plans, surveys, maps and profiles for improvements contemplated by the District. The District denounces any other intent in fact, and we think a reasonable construction of the statute is that no right to enter is intended or meant other than for the specific purposes stated.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566078/ | 284 S.W.2d 568 (1955)
Raymond J. DICKERSON, Respondent,
v.
TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS, a corporation, Appellant.
No. 44545.
Supreme Court of Missouri. Division No. 2.
December 12, 1955.
*569 Warner Fuller, Arnot L. Sheppard, St. Louis, for (defendant) appellant.
Morris M. Rosenthal, Charles E. Gray, St. Louis, for respondent.
*570 EAGER, Presiding Judge.
This is a suit by respondent for damages for personal injuries sustained when a switch engine, owned and operated by appellant, ran into a truck in which he was riding with two co-employees of General Motors. A verdict was returned in plaintiff's favor for $25,000 and defendant has appealed.
The place involved was the Chevrolet plant of General Motors in St. Louis. The plant and yard were fenced and are not open to the public; all switching operations were conducted exclusively by defendant, which owned all the equipment but not the tracks. Plaintiff, whose usual occupation had been that of a hod carrier, had just gone to work at this plant as a "sweeper" and was working his third day. He was then thirty-four years old and, according to his testimony, in sound physical condition. Some time shortly prior to 6:30 p. m. on November 26, 1952, and well after dark, he and two co-employees, James Reynolds and Jesse Whitehorn, took a one and one-half ton truck from the "passenger line dock" to the "mill-dock" to load and haul away some rubbish. Reynolds drove the truck and had been assigned as a driver for the past two years; he had also driven a truck there previously "off and on" during the period of his eight-year employment. Whitehorn had worked in the plant nine years as a porter.
There were several places within the plant where roads or driveways crossed the railroad tracks; apparently the tracks were used solely for the purpose of switching and bringing in and taking out materials and finished products. The switch engines were equipped with bells and whistles. It appears that certain other crossings within the plant were protected by bells, lights or watchmen, but none of these was provided at the crossing where this collision occurred. On the way to the "mill-dock" the truck used one of the other crossings and plaintiff had never previously been over the crossing where the injury occurred.
At the crossing in question there were three railroad tracks running north and south, crossed by a concrete east and west roadway 17.5 feet wide. A "lead" track or spur curved off to the southeast from a point a little south of the crossing; this "lead" track passed a corner of the power house approximately 360 feet from the crossing. This track was known as the "Fisher" lead. The "mill-dock" was approximately fifty feet southwest of the nearest point of the crossing, and the roadway from it curved to the right approaching the crossing, so that as it straightened out, a vehicle was practically on the crossing. At the time in question there was at least one freight car on a track east of the "mill-dock" which obscured the view to the east and southeast. There was also at least one freight car, and probably more, standing on the middle track of the three tracks immediately south of the crossing in question, and extending up to a few feet (probably five to ten) from the edge of the driveway; these blocked the view to the south of one driving east.
Plaintiff and his co-employees left the "mill-dock" in the truck and proceeded to the crossing at about five miles per hour; plaintiff was on the right, Reynolds was driving and Whitehorn was in the middle. The right window was closed, the left partially open. The truck proceeded slowly across the tracks and as the cab of the truck got "past the boxcars" standing on the middle of the three tracks plaintiff saw the big light of the engine almost upon them; he shouted to the driver, but the front end of the truck was already on the last track and the engine struck the truck just back of the cab, pushing or knocking it approximately twenty-five feet and turning it over. Plaintiff had been looking forward until he cleared the boxcars. The train was traveling about twenty miles per hour, according to the only evidence thereon, which was "faster than usual."
Plaintiff testified: that he did not at any time hear any bell or whistle and did not see the beams of the headlight until he got past the boxcar; that he was not "just exactly listening," and did not remember definitely whether they were talking; he had been "just looking ahead"; he "depended" *571 on the driver; that the headlights of the truck were on and that he had not seen or heard the train go south previous to the collision. The driver testified: that he "always" looked for trains; that there were no lights or flagman at that crossing; that he heard no bell or whistle of a locomotive at any time and heard no train; that he did not know whether he particularly "listened" or not; that this driveway was used day and night for hauling rubbish from the mill and other material; that on prior occasions he had heard the bells and whistles of the locomotives; at one point this witness said that if he heard the sound of the train or any bell or whistle on this occasion "I don't remember"; that when plaintiff shouted, he stepped on the gas because part of his truck was already on the track where the train was; he did not recall seeing the engine go south previously. The other employee (Whitehorn) was sitting in the middle; he testified: that while at the "mill-dock" he did not hear or see any engine on those tracks; that Dickerson shouted when they were on the tracks and the driver "speeded up," but they were struck; that the boxcars obstructing the view were "pretty close" up to the driveway; that he heard no bell or whistle and when he looked around he "looked right at the engine"; that he had not previously seen the light from the engine; that he "depended" on the driver. Both Reynolds and Whitehorn testified, over objection, that they would have been able to hear a bell or whistle if such had been sounded.
A watchman of General Motors, as witness for plaintiff, testified that he was located in a tower 35-40 feet high and considerably north of the crossing; that he saw the headlight on this engine as it came around the corner of the power house (360 feet from the crossing) and heard the bell as it "came around the curve"; he did not hear any whistle. He did not testify how long the bell continued sounding and stated that he did not know; he could not see the collision, but heard it.
The defendant put on no evidence. The extent of plaintiff's injuries and other material facts will be referred to later in this opinion. The case was submitted to the jury on the issue of negligence in failing to sound a whistle or bell when approaching and entering the crossing. It will be impossible in this opinion to discuss all the cases appellant has cited. The parties will be referred to as they appeared below.
Defendant first contends that there was no duty to warn under the circumstances, and certainly no duty to warn by any particular method. Although the statute requiring specific warnings at public crossings, Section 389.990, RSMo 1949, V.A.M.S., does not apply, yet there is a common law duty to use reasonable care to avoid injury at all crossings, public or private, by warnings or otherwise. Boland v. St. Louis San F. Ry., Mo., 284 S.W. 141, 145; the statute is merely cumulative of the common law and provides the minimum requirements. Hackett v. Wabash R. R., Mo., 271 S.W.2d 573, 577; Hoelzel v. Chicago R. I. & P. Ry., 337 Mo. 61, 85 S.W.2d 126, 129-130. Also, the situation here is quite different from those involving private crossings established merely for the benefit of the landowners; here defendant was operating in this plant for the joint benefit of itself and General Motors, knowing that employees must and did frequently cross its tracks. We hold that there was a common law duty to warn. Arguendo, we may concede that any one of various methods of warning would be sufficient if actually used, though certainly the usual method is by bell or whistle. Hackett v. Wabash R. R., Mo., 271 S.W.2d 573, 577. In the present case the evidence involved the sounding, or failure to sound, of a bell or whistle and we may consider the issues as so joined, although the failure to sound a whistle was not specifically pleaded. No objection was made when evidence was offered to show the lack of a whistle and the pleadings are considered as amended. Section 509.500 RSMo 1949, V.A.M.S.
Defendant contends that no jury issue was made on the failure to ring the bell. This is based on the fact that plaintiff produced the General Motors watchman, Plessing, as a witness and he testified that *572 he heard the bell ringing; so, defendant says, plaintiff is bound by this affirmative testimony because there was no substantial evidence to contradict it. It would extend this opinion greatly to consider the argument in detail; briefly, its substance is that the testimony of the occupants of the car that they heard no bell is mere negative testimony and that parts of their own testimony showed inattention. The latter is based on such statements as plaintiff's that he was not "just exactly listening" and of the driver (after stating directly twice that he heard no bell or whistle) that "If I did, I don't remember." Defendant cites many cases, such as Knorp v. Thompson, (Banc), 357 Mo. 1062, 212 S.W.2d 584, 5 A.L.R. 2d 103, and McCreery v. United Railways Co., 221 Mo. 18, 120 S.W. 24. The substance of the cited cases seems to be that if the ones who say they did not hear a whistle or bell were so situated or so inattentive that they would probably not have heard it, or if their evidence is otherwise incredible, then that testimony does not constitute evidence sufficiently substantial to controvert the affirmative testimony and create an issue. But if those who so testify are fairly in a position to hear, and are sufficiently attentive to hear, then their negative testimony is substantial evidence and does create an issue. Borrson v. Missouri-Kansas-Texas R. R., Mo., 161 S.W.2d 227, 231; 2 Wigmore, Evi., § 664, p. 778; Francis v. Terminal R. R. Ass'n of St. Louis, 354 Mo. 1232, 193 S.W.2d 909, 911, 912; Scheidegger v. Thompson, Mo.App., 174 S.W.2d 216. Naturally, each case depends upon its own facts and circumstances. We do not feel that the remarks or supposed admissions relied on as detracting from the testimony of these men constitute any real contradictions of their basic testimony; reading the whole record, the statements appear to be such casual remarks as any witness might consistently make.
We hold that the evidence of these witnesses was substantial evidence that no bell or whistle was sounded, thus contradicting the affirmative evidence of the ringing of the bell. See generally Murray v. St. Louis Public Service Co., Mo.App., 201 S.W.2d 775, 780. A fact issue was thus made. However, we note also that Mr. Plessing's "affirmative" evidence of the ringing of the bell was very hazy as to the location of the engine at the time,merely when it "came around the curve"; the curve extended back at least 360 feet from the crossing. It certainly cannot be said that this was positive testimony that the bell was ringing as the engine approached the crossing.
Defendant contends that the admission of testimony from the driver (Reynolds) and Whitehorn that they would have been able to hear a bell or whistle if one had been sounded was prejudicial error; that the answers were "conclusions," and that the point was highly material. We note that objections had previously been sustained to questions asking whether Reynolds had previously, while operating trucks, heard the bells and whistles of switch engines as they approached a crossing. Actually one of the answers of which defendant now complains was made before the objection and there was no motion to strike it. We prefer, however, to consider the evidence on a broader basis. The trial court admitted the evidence on the authority of Meredith v. Terminal R. R. Ass'n, Mo.App., 257 S.W.2d 221, 227, in which the St. Louis Court of Appeals specifically held a question in that precise form to be proper, citing Geers v. St. Louis Public Service Co., Mo.App., 247 S.W.2d 318, and Gillespie v. Terminal R. R. Ass'n, Mo.App., 204 S.W.2d 598. We should hesitate to convict the trial court of error under such circumstances. The Court of Appeals held that such an answer was one of fact and not a conclusion. Perhaps we need not go so far here. Not all conclusions and opinions of laymen are inadmissible. A question and answer substantially identical were held proper in Francis v. Terminal R. R. Ass'n, 354 Mo. 1232, 193 S.W.2d 909, 913. In Brawley v. Esterly, Mo., 267 S.W.2d 655, 661, 662, a truck driver was permitted to tell what certain marks on the road "looked like" to him. The court said that these were not "opinions" in a true sense, nor objectionable conclusions; they were "comprehensions" *573 of things such as he had previously seen and observed and that such evidence is often permitted when it is impossible or difficult to put the exact facts and circumstances into descriptive words for the jury (citing cases). And see particularly Kennedy v. Union Electric Co. of Mo. (Banc), 358 Mo. 504, 216 S.W.2d 756, 761, for a full discussion. Such evidence is occasionally described as a "short-hand" rendering of the facts. The cases cited by defendant are on different facts, such as a question asking whether the driver of a car could have done anything more to avoid an accident. Here Reynolds and Whitehorn had worked in this plant for periods of eight or nine years; Reynolds had driven trucks much of this time. It would have been virtually impossible to describe for the jury the degree of hearing of each, the amount of noise made by the truck, the loudness of the usual whistle and bell, and all the other attendant circumstances. Kennedy v. Union Electric Co. of Mo., supra. Counsel had opportunity to cross-examine these witnesses as to the basis for their answers. Perhaps some other form of question might have been preferable, as, for instance, one calling for their actual experience in the past in hearing whistles and bells under generally similar circumstances; but we are unwilling to hold that the admission of the evidence was error.
It is next contended that plaintiff was guilty of contributory negligence as a matter of law. Defendant, of course, recognizes that no negligence of the driver is imputed to plaintiff, that plaintiff is only required to exercise ordinary care for his own safety, and that he is not held to the same "attentive vigilance" as the driver of the truck. It will be impossible to discuss defendant's many citations on this point. Contributory negligence may be established as a matter of law under certain circumstances, but only when reasonable minds could not differ as to plaintiff's negligence. Flint v. Chicago, B. & Q. R. R., 357 Mo. 215, 207 S.W.2d 474. Defendant emphasizes plaintiff's statement that he depended on the driver, and also the fact that the view was obviously obstructed and greater care was, therefore, required. We do not think that the cited cases control the present situation. Here plaintiff was wholly unfamiliar with the crossing, whereas the driver had driven trucks in that plant for years. Under such circumstances the law recognizes the right to rely on the driver, certainly to some extent. Flint v. Chicago, B. & Q. R. R., 357 Mo. 215, 207 S.W.2d 474, 479; Boland v. St. L. S. F. Ry., Mo., 284 S.W. 141, 144 (citing authorities). We note also that other crossings in the plant had bells, lights or other signals; that this truck had traveled only 50-60 feet, and on a curve, before it was struck; that plaintiff looked forward, the only way he could effectively look, until he got past the boxcars, and then looked to his right; that this was not a main-line railroad crossing, but involved a very unusual situation; there was nothing to show that plaintiff even knew that switching was conducted at night. Perhaps the only other thing which plaintiff might have done was to insist that the driver stop, and then get out and look. Under these circumstances we hold that a submissible jury issue on contributory negligence was established, but that plaintiff was not contributorily negligent as a matter of law.
In this same connection we mention, briefly, defendant's contention that the injuries were due to the sole cause negligence of the driver, Reynolds. The facts, as already related, refute such a contention. We hold that a submissible case was made on defendant's negligence. If such be true, certainly the court could not have taken away the right to that submission by declaring, as a matter of law, that all the negligence was that of the driver. Hackett v. Wabash R. R., Mo., 271 S.W.2d 573, 578. The contention is denied. Two sole cause instructions were given at defendant's request.
A point is made concerning allegedly erroneous rulings on objections made during the final arguments. We note that the only assignment in the motion for new trial which involved the question of argument was that the court erred in failing "to rebuke plaintiff's counsel" in connection with certain lines of argument. Counsel do not *574 brief here any such failure to "rebuke." We, therefore, give no further consideration to these contentions.
Defendant complains of Instruction No. 1 given for plaintiff. In substance, it hypothesized the physical circumstances, including the location of the cars obstructing the view to the south, that defendant knew thereof and knew that the crossing was used by motor vehicles, and then submitted that "if you further find and believe from the evidence that under the aforesaid physical surroundings and circumstances, ordinary care required the sounding of the whistle or bell of said locomotive during the period of time that said locomotive was approaching and entering upon said crossing," that defendant failed to sound either, and that "in so failing, said defendant * * * was negligent," plaintiff should recover. Defendant again argues the lack of any duty to warn. We have already ruled on that. The principal complaint is that this instruction limited defendant's permissible methods of warning to the bell or the whistle, whereas a warning could have been given by shouts, an alarm bell at the crossing, flashing lights, or the rays of the headlight. There was absolutely no evidence of the presence or use of any of these other possible means of warning except for evidence that the headlight of the engine was burning. An instruction may disregard matters not fairly in evidence; in fact, the evidence here, fairly considered, negatived the use and presence of these other possible warnings except the headlight. In the cases cited by defendant, Blackwell v. Union Pacific R. Co., 331 Mo. 34, 52 S.W.2d 814; Sprankle v. Thompson, Trustee, Mo., 243 S.W.2d 510, and Knorp v. Thompson, Trustee, (Banc), 357 Mo. 1062, 212 S.W.2d 584, 586, 587, instructions were held erroneous as ignoring other warnings which the evidence affirmatively showed were given. Throughout the evidence in the present case the issue was whether a bell or whistle had been sounded; defendant put on no evidence. Indeed, the bell and whistle are the usual warnings given by railroads. Hackett v. Wabash R. R., Mo., 271 S.W.2d 573, 577. Plaintiff was entitled in his instruction to hypothesize his own version of the evidence since defendant had advanced no affirmative theory. Bebout v. Kurn, 348 Mo. 501, 154 S.W.2d 120, 127. If specific means of warning had not been hypothesized, defendant might well have claimed that the instruction was a "roving commission," as in Hackett v. Wabash R. R., Mo., 271 S.W.2d 573, 579. There was no evidence of the illumination generally in the area; the lights of the truck were burning, which fact would normally interfere with the visibility of other rays of light. Doyel v. Thompson, 357 Mo. 963, 211 S.W.2d 704, 707, 708. The evidence fairly shows that plaintiff did not see the rays of the headlight until the cab of the truck had passed the boxcars and then he immediately shouted to the driver.
Under this evidence we do not think plaintiff was required to include in his instruction any other type of warning. And, regardless of other possibilities, the jury was specifically required to find that the specified failure to sound a bell or whistle was negligence under the circumstances. Defendant did not request any affirmative instruction relieving it of liability by reason of any other type of warning. If there was sufficient evidence to sustain such, it would not seem to have conflicted with plaintiff's instruction, for thereon the jury could still have found against plaintiff on his instruction, finding at the same time that such "other" warning was sufficient. We do not think, as claimed, that this instruction assumed that the bell had stopped ringing, or indeed assumed that the bell had ever rung. We hold that the giving of this instruction was not error.
The last contention of defendant is that the verdict is excessive. Defendant cites no cases on this contention. Plaintiff was 34, and in supposedly good physical condition. The evidence indicated that his earnings had averaged approximately $3,123 for the past four years. He had just started on a new job and his wage rate there was not shown. In this collision he was "thrown around" in the cab of the truck, and immediately felt sharp shooting pains *575 in his lower back and right leg; he was hospitalized for X-rays, and received various examinations and treatments; he was in bed for about a month and used crutches for some months after that. He testified that up to the time of trial he always had pain in his lower back or leg and that he has frequently suffered from headaches since the accident; his right leg at times feels numb. Beginning in the summer of 1953 plaintiff did some hauling with a truck and in the fall and winter of 1953-54 he worked for a time at hod carrying. The record indicates that his earnings from the time of the accident to the time of trial (a little over sixteen months) were approximately $1,158.80; he testified, however, that the pain during and after doing the hod carrying was terrific. There was substantial, uncontradicted medical testimony, supported by findings from a myelogram, that plaintiff had sustained, by reason of this collision, a rupture of the intervertebral disc between the last lumbar vertebra and the sacrum. His physicians, one of whom was a neurosurgeon, testified that he should have an operation for the removal of the ruptured disc; the operation was described and it is one, certainly, of no slight import. One of these witnesses testified that probably 75% of such persons are improved or well after such an operation, 10% are only slightly improved and about 15% are no better or worse; the other gave somewhat more favorable figures. It was indicated, however, that plaintiff could not, even after an operation, successfully do heavy work such as hod carrying, and that in a small percentage of cases the condition recurs after the operation. The gist of all this is that there remains a substantial probability of some remaining and permanent impairment, as well as continued pain, even with an operation.
The amount of the verdict in this case seems rather liberal, but we cannot say that under all the circumstances it is so excessive as to require a remittitur. For somewhat similar cases, with perhaps more exaggerated injuries and with larger verdicts sustained, see Rucker v. Illinois Terminal R. R., Mo., 268 S.W.2d 849; Hayes v. Wabash R. R., 360 Mo. 1223, 233 S.W.2d 12; Cassano v. Atchison, T. & S. F. Ry., 362 Mo. 1207, 247 S.W.2d 786; and see particularly the very recent case of Sandifer v. Thompson, Mo., 280 S.W.2d 412. The judgment will be and is hereby affirmed.
All concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566087/ | 592 S.W.2d 886 (1980)
STATE of Missouri, Plaintiff-Respondent,
v.
Walter McGEE, Defendant-Appellant.
No. 11214.
Missouri Court of Appeals, Southern District, En Banc.
January 10, 1980.
*887 John D. Ashcroft, Atty. Gen., Lew A. Kollias, Asst. Atty. Gen., Jefferson City, for plaintiff-respondent.
Albert A. Crump, Jr., Rolla, for defendant-appellant.
PREWITT, Judge.
Defendant appeals from convictions of burglary and stealing. He was sentenced to consecutive terms of two years on both charges.
Defendant presents two points for our review: 1. that there was insufficient evidence to show that defendant broke into the house from which the goods were taken, and 2. that an instruction was erroneous as the evidence did not show that the items listed in the instruction were the same items that were taken from the house.
On the morning of October 6, 1977, Earl and Fannie Potts left their residence near Cabool in Texas County, Missouri, to go to Arizona. When they left, their house was locked and there was no broken glass in any of the doors. Later that day entry to the house was gained by breaking glass in a door and reaching inside and opening the door lock. Glass was scattered on the floor near the door. Their garage was entered in a like manner. Defendant was a passenger in a van which was discovered by the highway patrol stopped along a highway three-eighths to one-half mile from the house. The driver testified that the steering wheel of the van was wobbling and they pulled over alongside the road. Before the van stopped, defendant had told the driver "let's stop and make some money". Defendant got out of the passenger's side. The driver checked the truck and when he got back in, defendant wasn't there. He saw that defendant had gone in the vicinity of the Potts' house and he went there. Glass in a door at the side of the house was broken and defendant was in the house "standing over the top of a sheet full of stuff." Defendant carried the sheet to the van and then the driver and defendant carried out the television. The Potts did not know defendant and he did not have permission to enter their house. Numerous items found in the van were identified as having been taken from the house.
Defendant's first point contends that there was no evidence that he broke into the house. In determining if the evidence is sufficient to support the charge, the evidence and all reasonable inferences must be considered in the light most favorable to the state and all evidence and inferences to the contrary disregarded. State v. Buffington, 588 S.W.2d 512, 514 (Mo.App. 1979); State v. Sherrill, 496 S.W.2d 321, 323 (Mo.App.1973). Although any fact can be established by circumstantial evidence, the circumstances must be such as are inconsistent with the defendant's innocence, but need not be absolutely conclusive of guilt. State v. Buffington, supra, 588 S.W.2d at 514. The house was locked and there was no broken glass that morning. Defendant wanted to stop and make some money. He went to the house, entered without permission, and took numerous items not his. Two entry doors were broken. He was in the vehicle which contained the items taken, a short distance from the house, when apprehended. "Some circumstantial evidence is very strong, as when you find a trout in the milk." Henry David Thoreau, Journal, Nov. 11, 1854. Evidence of a forcible entry coupled with defendant's presence inside a building is sufficient to support a charge of burglary. State v. Johnson, 533 S.W.2d 629, 631 (Mo.App.1976). Evidence that a house was secured when the owner left and when he returned, one of the windows had been broken and defendant was inside, has been held sufficient to indicate a breaking and entering; even though there were no eyewitnesses to the actual breaking. State v. Steward, 564 S.W.2d 95, 98 (Mo.App.1978). The evidence was sufficient to support the charge. Point I is denied.
Defendant's claim of instructional error was not presented to the trial court, either by objection during trial or in defendant's *888 motion for new trial. This point was not properly preserved for our review. Rule 20.03, V.A.M.R.; State v. Larabee, 563 S.W.2d 154, 155-156 (Mo.App.1978). Nor do we believe that this is a matter for review as plain error under Rule 27.20(c), V.A.M.R. The items described in the instruction were identified as being taken from the residence. There were some differences in the descriptions but every item was identified and described. The instruction had a more specific and somewhat different description of some items than the testimony. The jury should easily have been able to determine what items were referred to in the instruction. We do not see how any prejudice could have occurred to defendant and certainly no manifest injustice or miscarriage of justice. Rule 27.20(c), V.A.M.R. Point II is denied.
The judgment is affirmed.
All concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566110/ | 34 So. 3d 1018 (2010)
W.L. WAGNER & Nina Wagner
v.
Stephen R. ALFORD, et al.
No. 09-1338.
Court of Appeal of Louisiana, Third Circuit.
April 7, 2010.
*1019 Michael Steven Beverung, Lake Charles, LA, for Plaintiffs-Appellees, W.L. and Nina Wagner.
Jack L. Simms, Jr., Leesville, LA, for Defendant-Appellant, Greenhills International, LLC.
Court composed of MARC T. AMY, ELIZABETH A. PICKETT, and SHANNON J. GREMILLION, Judges.
PICKETT, Judge.
The defendant-appellant, Greenhills International, LLC, appeals the confirmation of a default judgment against it.
STATEMENT OF THE CASE
W.L. And Nina Wagner own two condominium units in the Fairway Villas Condominiums (Fairway Villas) on the grounds of Emerald Hills Resort in Florien, Louisiana. At the time this suit was filed, Rael, Inc., was the owner of Emerald Hills Resort and the remaining eighteen condominium *1020 units in Fairway Villas. Steve Alford is the sole shareholder of Rael, Inc., and the president of the Fairway Villas Condominium Owners' Association, Inc. (FVCOA).
In January 2008, the Wagners filed suit against Alford, Rael, Inc., and FVCOA, alleging that FVCOA had a duty to provide water and sewer utilities and to maintain the common areas for the benefit of the owners, and that they had failed to provide water and sewer services to their units and maintained the common areas. The Wagners sought damages for the decreased value of their condominium units, lost rental income for on of the units, and general damages. Alford and Rael, Inc., filed an exception of prescription in the trial court.
This is not the first time the issue of the Wagners' access to water and sewage service has been presented to this court. This court has previously held that the resort property owned by Rael, Inc. and Alford was not burdened with a personal servitude to provide utilities in favor of the Wagners. Wagner v. Alford, 98-1726 (La. App. 3 Cir. 6/30/99), 741 So. 2d 884, writ denied, 99-2265 (La.11/5/99), 750 So. 2d 192. In a subsequent case, we found there was not a predial servitude in favor of the Wagners' property for the provision of water and sewage service, that Rael, Inc. and Alford were not abusing the right of ownership in failing to provide utilities, and that Rael, Inc. did not have a contractual obligation to provide utilities to the Wagners. Wagner v. Fairway Villas Condominium Associates, Inc., 01-734 (La.App. 3 Cir. 3/13/02), 813 So. 2d 512, writ denied, 02-1492 (La.9/20/02), 825 So. 2d 1174.
In April 2008, Rael, Inc. and Alford sold their interest in the eighteen units in Fairway Villas to Greenhills International (Greenhills). In October 2008, the Wagners filed a First Amending and Supplemental Petition adding Greenhills as a defendant. When FVCOA and Greenhills failed to file an answer to the suit, the Wagners filed a Motion for a Preliminary Default, and a preliminary default was entered by the trial court on April 1, 2009. At a hearing on the confirmation of default on June 15, 2009, Mrs. Wagner testified. During her testimony, the condominium regime declaration filed in the Sabine Parish Clerk of Court's office, the cash deed transferring ownership from Rael, Inc., and Alford to Greenhills, and an appraisal of the value of the Wagners' units was introduced into evidence. On July 6, 2009, the trial court signed a judgment confirming the default and awarding the Wagners $92,000.00 for loss of value of the condominiums, $20,340.00 for loss of income, and $10,000.00 in general damages. Greenhills now appeals.
ASSIGNMENTS OF ERROR
Greenhills asserts six assignments of error:
1. No notice of the entry of a default was sent to counsel for defendants, James R. Mitchell, or to any of the parties, as provided by law;
2. There was no proper substitution or joinder of parties ordered by the trial court, after the filing of the supplemental and amended petition, and plaintiffs did not proceed, thereafter, as required by La.Code Civ.P art. 807;
3. The exception filed by defendants, Stephen R. Alford and Rael, Inc., which directly affected the merits of these proceedings, was still pending when the default judgment was confirmed;
4. The trial court allowed the plaintiffs to prove their claim by hearsay evidence and non-authenticated exhibits;
5. The trial court did not require plaintiffs to prove the essential elements of its claim by admissible evidence;
*1021 6. The law and evidence presented by plaintiffs did not present a prima facie case in support of the judgment.
DISCUSSION
The supreme court recently explained the procedure for obtaining and confirming a default judgment:
A defendant's failure to comply with Louisiana Code of Civil Procedure articles 1001 and 1002 exposes the party to a judgment of default. The law and procedure relative to default judgments is set forth in Louisiana Code of Civil Procedure article 1701, et seq. Specifically, in an ordinary proceeding, such as the instant one, a defendant is generally required to file an answer within fifteen (15) days after service of citation upon him. La. C.C.P. art. 1001. A delay is afforded when an exception is filed prior to answer or the trial court grants additional time for answering upon motion. La. C.C.P. art. 1001. Notwithstanding the specified delay periods for answering, a defendant may file his answer at any time prior to confirmation of a default judgment against him. La. C.C.P. art. 1002. However, when the defendant in the principal or incidental demand fails to answer within the time prescribed by law, judgment by default may be entered against him. La. C.C.P. art. 1701(A). 1 Frank L. Maraist, Louisiana Civil Law Treatise: Civil Procedure § 12.3, at 451 (2d ed.2008).
The process for obtaining a default judgment when the defendant has failed to answer a petition timely is uncomplicated. It may be obtained by oral motion in open court or by written motion, entered in the minutes of the court, and the judgment consists merely of a minute entry. La. C.C.P. art. 1701(A); Power Marketing Direct, Inc. v. Foster, 05-2023, p. 10 (La.9/6/06), 938 So. 2d 662, 669. A judgment of default is sometimes referred to as a "preliminary default." Power Marketing Direct, 05-2023 at 10, 938 So.2d at 669.
Thereafter, the judgment of default may be confirmed after two days, exclusive of holidays, from the entry of the judgment of default, that is, on the third "judicial day" after the lapse of two days, which are not judicial holidays, from the entry of the preliminary default La. C.C.P. art. 1702(A).
Confirmation of a default judgment is similar to a trial and requires, with admissible evidence, "proof of the demand sufficient to establish a prima facie case." La. C.C.P. art. 1702(A); Power Marketing Direct, 05-2023 at 10, 938 So.2d at 670; Maraist, supra, at 452-453. The elements of a prima facie case are established with competent evidence, as fully as though each of the allegations in the petition were denied by the defendant. Sessions & Fishman v. Liquid Air Corp., 616 So. 2d 1254, 1258 (La. 1993); Thibodeaux v. Burton, 538 So. 2d 1001, 1004 (La.1989). In other words, the plaintiff must present competent evidence that convinces the court that it is probable that he would prevail at trial on the merits. Thibodeaux, 538 So.2d at 1004. A plaintiff seeking to confirm a default must prove both the existence and the validity of his claim. A default judgment cannot be different in kind from what is demanded in the petition and the amount of damages must be proven to be properly due. La. C.C.P. art. 1703.
. . . .
There is a presumption that a default judgment is supported by sufficient evidence, but this presumption may be rebutted by the record upon which the judgment is rendered. Ascension Builders, Inc. v. Jumonville, 262 La. *1022 519, 527, 263 So. 2d 875, 878 (1972). Finally, a defendant against whom a default judgment is confirmed may not assert an affirmative defense on appeal. Galland v. Nat'l Union Fire Ins. Co. of Pittsburg, Pa., 452 So. 2d 397, 398-99 (La.App. 3d Cir.1984); Romero v. Sunseri, 359 So. 2d 305, 308 (La.App. 4th Cir.1978).
Arias v. Stolthaven New Orleans, L.L.C., 08-1111, pp. 5-8 (La.5/5/09), 9 So. 3d 815, 818-820 (footnotes omitted).
On appeal, we restrict our review of default judgments to a determination of the sufficiency of the evidence offered in support of the judgment. Bordelon v. Sayer, 01-717 (La.App. 3 Cir. 3/13/02), 811 So. 2d 1232, writ denied, 02-1009 (La.6/21/02), 819 So. 2d 340. As this is a question of fact, we review it under the manifest error standard of review. Id.
Greenhills argues that as the successor-in-interest to Rael, Inc., the Wagners should have been required to substitute Greenhills for Rael, Inc., or that the suit against Rael, Inc., should have been consolidated with the suit against Greenhills, pursuant to La.Code Civ.P. art. 807. Article 807 states:
When a party to an action transfers an interest in the subject matter thereof, the action shall be continued by or against such party, unless the court directs that the transferee be substituted for or joined with the transferor.
This argument is based on a misrepresentation of the procedural facts of this case. The supplemental petition added Greenhills as an additional defendant in this suit. While some of the allegations in the supplemental petition against Greenhills were substantially similar to those lodged against the other defendants, the petition was based on Greenhills' failure to provide water or sewage facilities after it purchased Emerald Hills Resort and the other units in Fairway Villas. Thus, Greenhills was an additional defendant. The pending exception of prescription filed by Rael, Inc., and Alford did not prevent the Wagners from seeking a default judgment against Greenhills. See Dismuke v. Quaynor, 25,482 (La.App. 2 Cir. 4/5/94), 637 So. 2d 555, writ denied, 94-1183 (La.7/1/94), 639 So. 2d 1164. This assignment of error lacks merit.
Greenhills also argues that the Wagners were required to give notice to the attorney for Rael, Inc., and Alford pursuant to La.Code Civ.P. art. 1702(A). This provision of law requires notice of the preliminary default if the party against whom the default judgment is taken has made an appearance in the record. Again, this is a misstatement of the procedural posture of this case based on the supposition that Greenhills was a substitute party for Rael, Inc., and Alford. As discussed earlier, Greenhills was named as an additional defendant. As Greenhills never made an appearance of record, the notice requirement of La.Code Civ.P. art. 1702(A) does not apply. This assignment of error lacks merit.
Greenhills argues that the evidence admitted by the trial court to support the Wagners' prima facie case were not admissible. Specifically, they object that the appraisal of their property provided by Raymond Willett was inadmissible hearsay evidence. As this is an action for tort damages, La.Code Civ.P. art. 1702(B)(2) explains the evidence required:
When a demand is based upon a delictual obligation, the testimony of the plaintiff with corroborating evidence, which may be by affidavits and exhibits annexed thereto which contain facts sufficient to establish a prima facie case, shall be admissible, self-authenticating, and sufficient proof of such demand. *1023 The court may, under the circumstances of the case, require additional evidence in the form of oral testimony before entering judgment.
In Arias, 9 So. 3d 815, 820, the supreme court explained that the rules of evidence are applicable to confirmations of default judgments:
At the hearing, the rules of evidence generally apply. La. C.E. art. 1101(A); Maraist, supra, at 452-453. The plaintiff must follow the rules of evidence even though there is no opponent. "Because at a default confirmation there is no objecting party, to prevent reversal on appeal, both plaintiff and the trial judge should be vigilant to assure that the judgment rests on admissible evidence" that establishes a prima facie case. George W. Pugh, Robert Force, Gerald A. Rault, Jr., & Kerry Triche, Handbook on Louisiana Evidence Law 677 (2007). Thus, inadmissible evidence, except as specifically provided by law, may not support a default judgment even though it was not objected to because the defendant was not present. 19 Frank L. Maraist, Civil Law Treatise: Evidence and Proof § 1.1, at 5 (2d ed.2007).
"Hearsay evidence does not sustain this burden of proving a prima facie case." Ducharme v. Guidry, 392 So. 2d 755, 757 (La.App. 3 Cir.1980).
The Willett appraisal, which the Wagners used to prove their damages, is hearsay evidence. While evidence corroborating the testimony of Mrs. Wagner may be used to prove a prima facie case, the evidence must be admissible. The appraisal is not admissible because it is hearsay evidence. Without the appraisal, the Wagners cannot prove an element of their claim, damages. Therefore, they failed to prove a prima facie case, and the default judgment was improperly confirmed.
CONCLUSION
The judgment of the trial court finding Greenhills liable for damages in the amount of $122,340.00 is reversed. The case is remanded for further proceedings. Costs of this appeal are assessed to the Wagners.
REVERSED AND REMANDED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1566488/ | 161 F.2d 718 (1947)
CAROTHERS
v.
UNITED STATES.
No. 11951.
Circuit Court of Appeals, Fifth Circuit.
May 28, 1947.
Rehearing Denied July 10, 1947.
*719 Walter F. Brown and H. Fletcher Brown, both of Houston, Tex., for appellant.
Brian S. Odem, U. S. Atty., and James K. Smith, Asst. U. S. Atty., both of Houston, Tex., for appellee.
Before HUTCHESON, McCORD, and WALLER, Circuit Judges.
HUTCHESON, Circuit Judge.
Defendant was charged in an indictment in twenty-six counts with violations of the *720 Emergency Price Control Act of 1942, as amended, 50 U.S.C.A.Appendix, § 901 et seq., and Maximum Price Regulation No. 165. Each count charged in substance that he willfully sold a particular service at a particular lot at a named price and that this price was in excess of the ceiling. Plaintiff's evidence concluded, a verdict was instructed for defendant on Counts 4, 6, 10, 13, 14, 17, 18, 19 and 25, and the jury acquitted him on seven counts[1] and convicted him on ten.[2] Sentenced to pay fine of $250 on each count, he is here insisting, in a brief containing 131 pages and specifying 82 errors, that the judgment must be reversed because (1) no case was made out in law on any of the counts, and (b) if there was, reversible errors were committed in rulings on the introduction of evidence and in the submission of the case to the jury.
The United States, pointing out that defendant offered no evidence in rebuttal or explanation of that offered by the government, insists that the case as to each count is really a simple one of a clear cut violation of price ceilings established by undisputed evidence on a trial free from reversible error, and that the judgment must be affirmed.
A careful study of the record and of the applicable law in the light of these opposing claims convinces us that as is so often the case when extreme claims are afoot, the right and truth of the case lies somewhere between them. We are of the opinion, in short, that the trial was neither as errorful as appellant would have us believe, nor as errorless as appellee claims, and that while the judgment of conviction should be affirmed as to some of the counts, it must be reversed as to others.
Though defendant was convicted on ten counts, the offences charged in them fall naturally into two groups of five each which may be described as "Park and Lock" counts[3] and "Attendant Type" counts,[4] and such differences as there are between the two groups are differences in their facts and not in the applicable principles of law. Because this is so, though appellant's points are many and his arguments extended, we may hope to dispose of them in an opinion which, summarizing his points of attack, will briefly state our conclusions as to them, and as briefly our reasons for so concluding.
A major general attack on the conviction as a whole is that arising out of the fact established by the evidence that defendant was not, as charged in the indictment doing business as All Right Auto Park but was merely a member of a limited partnership under Article 6112, Revised Civil Statutes of Texas, providing that general partners only shall be authorized to transact business and sign for the partnership, and to bind the same. It takes three forms: (1) a claim that proof of his limited connection with the business constitutes a fatal variance since the indictment charges that he was doing business as All Right Auto Park and as such made the sale; (2) an attack on the sufficiency of the evidence to make out a case of criminal responsibility against him, a special partner, for the acts of the employees of the partnership; and (3) an attack on the failure of the judge to give the limited partnership statute in charge.
We are convinced that there is no substance in these points. It is true that the indictment was not technically correct in charging that the defendant was doing business as All Right Auto Park and that it would have been better pleading to charge that he and others, constituting a limited partnership, were doing business. It is equally true, though, that however this technical variance might in times past have operated to prevent the common sense disposition of an appeal in a criminal case, such considerations have no weight today, for both by statute and by decision it is settled in federal jurisprudence that a variance to constitute reversible error must be material and prejudicial.[5]
The second point, that proof of this *721 fact prevents conviction, is no better taken. Defendant was entitled to such benefit as he could get from the fact that he was not the sole owner of the business but a member of a limited partnership. This fact was before the jury to be considered by it in connection with all the other evidence including that of Morris and Lary as to conversations they had had with defendant about the charges. It was for the jury to give such weight to the fact of his being a limited partner and the circumstances as to when this limited partnership was entered into as they thought it deserved, and defendant having offered no testimony to rebut the inference of positive direction and control by him which the evidence raised is in a poor position to attack the verdict as contrary to the facts.
Of the third point, it is sufficient to say that the special charge defendant requested was not correct because it stated the purport of the statute only in part, and failed to state it fully and correctly as, if a charge of any kind on the subject was proper, it ought to have done.
Against the conviction on the Park and Lock counts, appellant levels many attacks. The most fundamental are (1) that the order of DeWitt C. Dunn, purporting to establish maximum prices as to them was not properly proved up so as to be admitted in evidence; and (2) that if it was proved up, it was without validity or effect for the reasons, (a) that M.P.R. 165, under which it purported to be made, expressly excepts parking lot services, (b) that it does not authorize any one to fix charges as Mr. Dunn did, and (c) certainly not Mr. Dunn, as acting director.
We cannot agree. An examination of the Federal Register makes it clear not only that the services rendered in this case were covered by the regulation, but that the statute does not, as claimed by appellant, limit price determinations to regulations of general applicability. On the contrary, we think it may not be doubted that they expressly authorize and provide for determinations of the kind made here.
As to the authority of Mr. Dunn, as director, to make them, the record in this case establishes that defendant dealt with him in respect of the proposed prices in the manner required by the regulation; that the effect of his order was to establish many of the prices which the defendant had himself proposed, and that as to those instances in which the defendant's prices were disapproved and revised prices were fixed, defendant did not prosecute an appeal from the order and at least for a time complied with them.
As the matter then stood on the trial, it is too clear we think, for argument, that the order of Mr. Dunn fixed the maximum prices which could be charged on the Park and Lock lots, and the district judge, in submitting these counts to the jury, was correct in accepting these prices as maxima. This being so, and there being no real dispute that the prices charged in the indictment were in excess of the prices so fixed, there was no error in charging the jury that the prices named in the Park and Lock counts were in excess of the maximum and that it was for them to determine whether these prices were in fact charged and whether the defendant was a willful party to their charging.
For the same reason that the Dunn order in law fixed the prices to be charged, it was not error for the indictment to fail to charge that the prices at which the service was sold must be in excess of the prices fixed in that order, nor was there a variance between indictment and proof. The offense charged was selling services at above ceiling prices. The prices when fixed by the order became in law the maximum prices, and it was not necessary to charge how they became fixed.
Neither is there any merit in the claims that no service was rendered in connection with the Park and Lock counts; that there was a mere renting of parking space in which the owners parked their own cars. We think that it is unreasonable on its face to say that a parking set up, such as that the evidence established, with a lot set off with *722 spaces for individual parking, an office on it, a person to take deposits and make refunds, is not the furnishing of service. Besides the matter has been definitely determined against appellant in two decisions, Bowles v. Carothers, 5 Cir., 152 F.2d 603, and Carothers v. Bowles, Em.App., 148 F.2d 554.
On the attendant type counts, the general attack is made that the evidence was insufficient to show what the maximum price was as to them, that the maximum price as to these counts was the maximum charged for the same service in 1942, and the evidence was insufficient to show what that was. This point is without merit for while the evidence was certainly not conclusive as to what the March, 1942, price was, it was sufficient to take the counts to the jury.
Another general attack on all the attendant type counts and on Count 20 of the Park and Lock counts is: that no case for a jury verdict was made on them; that the offense charged in these counts was violating the maximum rate fixed for all day parking; that the proof showed that all day parking had been discontinued and was not being offered at these lots, and the employees were not authorized to sell parking in excess of three hours.
It is quite clear that the evidence showed no such thing. It showed, on the contrary, that the method employed, in order to increase the parking charge, of calling all moneys collected in excess of the charge for the fixed period not charges for parking but damages for overparking, was a mere subterfuge of the management. It was a device by which the partnership, conducting all day parking on the lot, could charge each individual for parking in excess of three hours a price greatly in excess of what had theretofore been charged. Proof of such a scheme was a defense neither in law nor in fact. We are quite clear that as to all the counts, the indictment sufficiently charged an offense, and as to all of them but Count 20, as to which a verdict should have been instructed, a case was sufficiently made out to take them to the jury.
It remains only to inquire whether, as to the other nine counts, errors were committed which require a reversal for retrial. A careful examination of the errors of this kind assigned leaves us in no doubt that not one of those to the admission of evidence is well taken, and that none assigned to errors in the giving and refusing of charges except one presents reversible error. This one, which is fatal to the conviction on the attendant type counts, arises out of the assumption by the court that the maximum ceiling price on these counts was established as matter of law at a price less than the price the defendant is charged with receiving. This assumption led the court into the error of submitting to the jury only whether defendant had sold the service dealt with in these counts at the price charged in the indictment instead of submitting for the jury's determination, first, what was the maximum price, and then whether that price had been exceeded. This assumption, that the price had been established as matter of law at less than the price the indictment charged defendant with receiving, put the judge in the position of deciding a fact issue material to defendant's conviction, instead of submitting it to the jury for its determination, and thus deprived the defendant of his constitutional right of trial by jury. In a carefully worded exception to the court's charge, the defendant pointed this error out.
This being a criminal case, if, as the United States claims, the evidence had clearly and beyond question established what the maximum price was, this would not render the error harmless, for in such a case the court may not direct a verdict as to any fact. In addition, the evidence as to the March, 1942, maximum price was quite meager and unsatisfactory. As to the Park and Lock counts, the charge was not erroneous, because as to these counts the defendant's schedules and the administrator's order on them had fixed as matter of law the selling price, above which defendant could not go, and the only question of fact as to these counts was whether the price at which the service was sold was in excess of the price as fixed.
As to Count 20, the Park and Lock count relating to Morris, the undisputed evidence showed that no service was sold to Morris in excess of the ceiling price fixed Before the time came when a price in excess of that fixed for three hours was exacted of *723 him, the defendant had in conversation with Morris agreed that he would not be so charged, and no sale of service at the excess price was therefore made to Morris.
No reversible error appearing as to Counts 5, 11, 15, and 16, Park and Lock counts, the judgment is affirmed as to them. For the error in the charge as to Counts 21, 22, 23, 24, and 26, Attendant Type counts, the judgment as to these counts is reversed, and the cause remanded for trial anew. For the want of evidence to establish the commission of the offense charged in Count 20, the judgment on this count is reversed with directions to dismiss it.
Affirmed in part and reversed in part.
NOTES
[1] Counts 1, 2, 3, 7, 8, 9, and 12.
[2] Counts 5, 11, 15, 16, 20, 21, 22, 23, 24, and 26.
[3] Of these counts, the fifth dealt with a parking lot at 1101 Fannin, the 11th, 15th, 16th, and 20th with the lot at 805 San Jacinto.
[4] Counts 21, 22, and 23 have to do with a lot at 1108 Rusk; Count 24 with one at 1009 Texas; and count 26 with one at 819 Fannin.
[5] 18 U.S.C.A. § 556, R.S. § 1025; Hagner v. United States, 285 U.S. 427, 52 S. Ct. 417, 76 L. Ed. 861; United States v. Fawcett, 3 Cir., 115 F.2d 764, 132 A.L.R. 404; 28 U.S.C.A. § 391; Berger v. United States, 295 U.S. 78, 55 S. Ct. 629, 79 L. Ed. 1314. Cf. Whitehead v. United States, 5 Cir., 245 F. 385. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2866704/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-02-00794-CV
The Debt Registry, Inc., Appellant
v.
Dennis C. Moroney, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. GN201777, HONORABLE SCOTT H. JENKINS, JUDGE PRESIDING
MEMORANDUM OPINION
Appellant The Debt Registry, Inc. has filed a motion to dismiss its appeal, informing this
Court that the parties have compromised and settled all matters between them and appellant no longer
desires to pursue its appeal. We grant appellant=s motion and dismiss the appeal. See Tex. R. App. P.
42.1(a)(1).
__________________________________________
W. Kenneth Law, Chief Justice
Before Chief Justice Law, Justices B. A. Smith and Puryear
Filed: July 11, 2003
Dismissed on Appellant=s Motion | 01-03-2023 | 09-06-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/457152/ | 770 F.2d 888
Larry W. PETERMAN, Petitioner,v.U.S. DEPARTMENT OF AGRICULTURE, Respondent.
No. 84-1053.
United States Court of Appeals,Tenth Circuit.
Aug. 13, 1985.
Jerome H. Mooney of Mooney & Smith, Salt Lake City, Utah, for petitioner.
Aaron B. Kahn, Atty., Washington, D.C. (James Michael Kelly, Associate Gen. Counsel, and Raymond W. Fullerton, Asst. Gen. Counsel, with him on the brief), U.S. Dept. of Agriculture, Washington, D.C., for respondent.
Before BARRETT, LOGAN, and McWILLIAMS, Circuit Judges.
McWILLIAMS, Circuit Judge.
1
Larry W. Peterman, doing business as Meat Masters, petitions this Court for review of a final order of the Secretary of Agriculture, which order found Peterman guilty of deceptive trade practices, including false and improper advertising, misrepresentations to customers, and "bait and switch" sales tactics, and, in connection therewith, entered a corrective order and imposed a civil penalty in the sum of $20,000. We have reviewed the Secretary's order, and the administrative record made in connection therewith, and are of the view that the order should be affirmed.
2
The issues raised by Peterman in this Court are essentially three: (1) Is Peterman in his meat marketing operation subject to the Packer & Stockyards Act, 1921, as amended, 7 U.S.C. Sec. 181, et seq.; (2) is the Secretary's finding that Peterman had engaged in unfair and deceptive practices supported by the record; and (3) is the corrective order entered by the Secretary sufficiently definitive to inform Peterman of prohibited conduct, or is it, on the contrary, too vague.
3
From the record we learn that Larry W. Peterman, the petitioner, is an individual doing business as Meat Masters in East Layton, Utah, which is a suburb of Salt Lake City, Utah. Peterman personally operated the East Layton store, and he had franchised stores which operated under the name of "Meat Masters" in Colorado, Idaho, Oregon, Wyoming, and in Utah at Orem and Ogden. The marketing modus operandi of these franchises was the same as that of Peterman.
4
Peterman and his various franchisees are engaged in the business of preparing and selling meat food products to consumers in a "meat locker" type operation. For example, Peterman, in the store which he personally runs in East Layton, acquires most of his carcass beef from Utah suppliers, though some of his purchases are from suppliers outside Utah. In connection with his meat operation in East Layton, Peterman carried on an intensive newspaper and television advertising program, some of which reached outside the state of Utah. Customers of Peterman's East Layton store were predominantly from within the state, though some were from out of state. Peterman would cut a beef carcass into portions to meet the customer's desires, and the customers would take their packaged beef, and other meat products in some instances, to their respective homes for personal use, and not resale.
5
As indicated, Peterman's initial argument is that he is not subject to the Packers & Stockyards Act, because he is not a "packer," nor is he engaged in "commerce," and that he in reality is only a "meat retailer," and therefore possibly subject to the jurisdiction of the Federal Trade Commission, but not the Secretary of Agriculture.
6
Our study of the matter leads us to conclude that Peterman is a "packer" engaged in "commerce" and is otherwise within the ambit of the Packers & Stockyards Act. Such, in our view, is evidenced by Peterman's East Layton operation. Additionally, Peterman is operating through franchisees in several other western states, and while these franchisees, under the franchise agreement, have rights of their own, at the same time Peterman, as the franchisor, controls certain of the franchisees' activities, including the marketing operation.
7
A case having remarkable resemblance to the instant one is Bruhn's Freezer Meats v. United States Department of Agriculture, 438 F.2d 1332 (8th Cir.1971). There the Eighth Circuit held that freezer plant operators who, in commerce, cut up sides and quarters of beef into consumer cuts, boned and ground meats, and then trimmed and wrapped individual cuts and froze prepared meat to preserve it, were "packers" within the Packers & Stockyards Act. The Eighth Circuit in Bruhn's followed the judicial construction of the Act as found in Safeway Stores, Inc. v. Freeman, 369 F.2d 952 (D.C.Cir.1966). In this regard, Peterman argues that the Eighth Circuit in Bruhn's "misused" the D.C. Circuit's opinion in Safeway, and that in any event we should not follow the result and rationale of those two cases. This we decline to do. Those two opinions make sense to us, and we are in accord with the result and rationale of each. The further suggestion that the instant case is within the sole jurisdiction of the Federal Trade Commission, exclusive of the Secretary of Agriculture, is not persuasive.
8
The Secretary found Peterman guilty of deceptive trade practices, including "bait and switch." The record, in our view, supports the finding. Numerous persons testified that in response to advertising they went to Peterman's stores intending to buy beef at about $1 per pound, but were discouraged by Peterman and his employees and agents from buying the advertised cuts and encouraged to buy better cuts at about $3 per pound. That Peterman also produced some satisfied customers is not, in itself, a defense. In sum, the record abundantly supports the Secretary's finding of deceptive trade practices by Peterman. See National Beef Packing Co. v. Secretary of Agriculture, 605 F.2d 1167, 1168-69 (10th Cir.1979).
9
Peterman also complains about the corrective order entered by the Secretary, claiming that it is vague and doesn't apprise him of what he can do, or cannot do. We disagree. The order, to us, is sufficiently definitive. As was said in Luria Brothers and Company v. F.T.C., 389 F.2d 847, 862 (3d Cir.), cert. denied, 393 U.S. 829, 89 S. Ct. 94, 21 L. Ed. 2d 100 (1968):
10
Petitioners' contention that the language "exclusive or substantially exclusive" is too vague cannot be accepted. The order, when interpreted in light of the record, is clear and not subject to attack on that ground. It is necessarily general. Anything more specific would be subject to evasion. E.B. Muller & Co. v. Federal Trade Commission, 142 F.2d 511, 520 (6 Cir.1944). Furthermore, the Commission's order is not required to "chart a course for the petitioner." Zenith Radio Corp. v. Federal Trade Commission, 143 F.2d 29, 31 (7 Cir.1944).
11
As mentioned, Peterman was assessed a civil penalty in the sum of $20,000. Before the Secretary, Peterman's position was that such a sanction was too severe in view of the fact that he had already been subjected to a criminal sanction for the same general type of violation here involved in the United States District Court for the District of Wyoming and sentenced to two years imprisonment, three years probation, and fined $2,700. The Secretary considered that fact, but opined that a $20,000 civil penalty in the instant case was not too severe, considering the widespread and serious nature of his violations. On appeal, Peterman does not, so far as we can find, contest the civil penalty imposed. In any event, we agree with the Secretary's evaluation of this particular matter.
12
Order affirmed. | 01-03-2023 | 08-23-2011 |
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