url stringlengths 55 59 | text stringlengths 0 818k | downloaded_timestamp stringclasses 1 value | created_timestamp stringlengths 10 10 |
|---|---|---|---|
https://www.courtlistener.com/api/rest/v3/opinions/843868/ | Order Michigan Supreme Court
Lansing, Michigan
January 29, 2007 Clifford W. Taylor,
Chief Justice
132454 Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
PEOPLE OF THE STATE OF MICHIGAN, Robert P. Young, Jr.
Plaintiff-Appellee, Stephen J. Markman,
Justices
v SC: 132454
COA: 272798
Houghton CC: 06-002116-FH
JONATHAN ANDREW CURTO,
Defendant-Appellant.
_________________________________________/
On order of the Court, the application for leave to appeal the October 6, 2006
order of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the question presented should be reviewed by this Court.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
January 29, 2007 _________________________________________
p0122 Clerk | 01-03-2023 | 03-01-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917897/ | 28 Wis.2d 1 (1965)
BARNARD, Receiver, Plaintiff and Respondent,
v.
COATES (LUCILLE) and others, Defendants:
COATES (LLOYD), Defendant and Appellant:
FOWLER, Intervenor and Appellant:
DAWSON, Intervenor and Respondent.
Supreme Court of Wisconsin.
June 1, 1965.
June 25, 1965.
*5 For the appellants there were briefs and oral argument by Delbert E. Fowler of Milwaukee.
For the respondent Joseph Dawson there was a brief and oral argument by John H. Schleifer of Benton.
Gilbert F. Barnard, Receiver, of Darlington, also argued.
CURRIE, C. J.
These issues are raised on appeal:
(1) Should the appeal be dismissed with respect to plaintiff receiver?
(2) Has respondent Dawson waived the right to object to the timeliness of the appeal?
(3) Does either the mistake in legal description in the order for sale and in the notices of sale, or the $2,500 increase in bid made by appellant Fowler, or both, warrant this court in granting relief to appellants?
*6 Dismissal of Appeal as to Receiver.
On March 6 and 8, 1965, plaintiff receiver served a notice of motion to dismiss the appeal as to him. This motion was grounded on his affidavit which alleged among other things these facts: On October 8, 1963, he was appointed receiver of Elda Kay by the circuit court for Dane county in a supplementary proceeding instituted by Henry Butler as a judgment creditor; that the instant partition action in Lafayette county court was instituted and prosecuted by authority of the Dane county circuit court; that subsequent to the partition judgment the receiver received a distributive share of the sales proceeds; that by order entered September 28, 1964, the accounts of the receiver were approved and allowed and he was discharged and the sureties on his bond released; and that he was not served with the notice of appeal until November 8, 1964 [actually November 18, 1964].
By order entered March 17, 1965, this court denied plaintiff receiver's motion without prejudice to his renewing his motion if, in our decision on the merits herein, there is any ruling that he deems prejudicial to him. The plaintiff receiver appeared at oral argument and again renewed his motion to dismiss as to him.
We have been presented with no authorities holding that a person standing in a fiduciary relationship such as receiver, trustee, or executor can remove himself from an appeal timely instituted by his own voluntary act of seeking and obtaining his discharge as a fiduciary in proceeding apart from the appeal. Therefore, we again deny plaintiff receiver's motion to dismiss.
Waiver by Respondent Dawson of Right to Object to Timeliness of Appeal.
The record discloses no service of a notice of entry of the trial court's order of May 21, 1964, or of the July 24, 1964, *7 judgment on either appellant. The record does establish, however, that a copy of such order of May 21, 1964, was personally served on appellant Lloyd Coates by the sheriff of Lafayette county on May 27, 1964, and that a copy of such order was mailed to appellant Fowler properly addressed on May 27, 1964.
Sec. 274.01, Stats., provides in part as follows:
"Except as otherwise provided the time within which a writ of error may be issued or an appeal taken to obtain a review by the supreme court of any judgment or order in any civil action or special proceeding in a court of record is limited to 3 months from service of notice of entry of such judgment or order or, if no notice is served, to 6 months from date of entry."
In Cash v. Kruschke (1908), 134 Wis. 130, 113 N. W. 675, sec. 3042, Stats. 1898, was the controlling statute and provided, "The time within which an appeal may be taken directly from an order is further limited to thirty days from the date of the service by either party upon the other of a copy of such order, with a written notice of the entry of the same." A notice of entry of the order appealed from had been served but not a copy of the order itself. This court held this was insufficient to trigger the thirty-day appeal period and declared (at p. 134):
"Service of a copy of the order was just as essential as service of a notice of the entry thereof to start the period of limitations running, . . ."
While this quoted language would provide strong support for holding that service of a copy of an order is not the equivalent of service of notice of entry of such order within the meaning of sec. 274.01, Stats., we find it unnecessary to decide this point here. Even if it were to be held to be the equivalent, Dawson has clearly waived the right to object to the timeliness of the appeal. This is because of his participation *8 in the appeal by filing a brief and arguing the merits of the appeal. Sec. 269.51 (1); Guardianship of Barnes (1957), 275 Wis. 356, 82 N. W. (2d) 211.
Relief, If Any, to be Granted.
The last decision of this court on the subject of the right of a court to confirm or refuse to confirm a judicial sale because of inadequacy of price is Gumz v. Chickering (1963), 19 Wis. (2d) 625, 121 N. W. (2d) 279. The former Wisconsin cases on the subject were so thoroughly reviewed therein that no useful purpose would be served to again do so in this opinion. As held in the Gumz Case, the applicable rules are as follows:
(1) The granting or refusing of an application to set aside a judicial sale rests in the sound discretion of the court and its determination will not be disturbed except for a clear abuse of discretion.[1]
(2) Such a sale will not be set aside merely because the price is inadequate unless: (a) There is also a showing of mistake, misapprehension, or inadvertence on the part of interested parties or of intending bidders which caused the failure to obtain a fair and adequate price; or (b) the inadequacy of price is sufficient to shock the conscience of the court.
Applying these rules to the instant case, and ignoring for the moment the mistake in description, there was no abuse of discretion on the part of the trial court in setting aside the first order of March 23, 1964, and entering the second order of May 21, 1964, which latter order confirmed the sale as originally made and reported by the sheriff. While the first *9 order found that the additional $2,500 bid by Fowler over and above the total of the amounts bid at the sale "is of substantial nature and is of substantial benefit to the rights and interest of the parties," there was no finding of mistake, misapprehension or inadvertence. Neither was there a finding made in this first order that the total amount of the two bids made at the sale was so inadequate as to shock the conscience of the court. The second order expressly found that these prices bid at the sale "were fair, just and reasonable, and were not so disproportionate as to shock the conscience."
We turn now to the mistake in legal description which occurred both in the order for sale and in the notices for sale. This was a very serious error. Appellants' brief asserts that the effect was to advertise a 144-acre farm for sale when the farm was actually approximately 250 acres in size. According to these figures the net mistake in acreage is 106 acres, while under our computation it is 115 acres. No acreage was stated in the descriptions used in the order and notices of sale so that the mistake was not obvious to anyone who merely read these descriptions.
Appellant Fowler filed an affidavit subscribed by him in opposition to the motion to set aside the order of March 23, 1964. In this affidavit Fowler stated that because of the mistake in description he attended the original sale prepared only to finance the purchase of 144 acres and not 250 acres. He relies on this mistake in description to account for the fact that he did not bid more for the premises at the sheriff's sale. However, in spite of this affidavit, the trial court in the May 21, 1964, order, as well as the March 23, 1964, order, expressly found that the error of description "was not prejudicial to the rights of the parties." Fowler is a cousin of the three owners and it seems odd that he would not have been acquainted with the true acreage of the farm prior to sale.
*10 There are no statements in affidavits or testimony in this record to support the trial court's finding that the error in description was not prejudicial. The record does establish that at the time of sale the sheriff had a plat showing the location and acreage of the farm which he displayed to prospective bidders. The point which has caused this court concern is that it is impossible to know whether any persons neglected to attend the sale who might have been interested in purchasing a 250-acre farm had one of that size been advertised for sale, but were not interested in a smaller farm containing 106 or 115 acres less than 250 acres. Our surmise is that this is probably not the case, and that the trial court was probably right in finding the error not to have been prejudicial. However, we are of the opinion that this error was so serious in nature that it should not be condoned and passed over as of no consequence. Therefore, we deem this is a proper situation in which to exercise our discretion under sec. 251.09, Stats., in behalf of appellant Coates, and require a new sale to be had subject to the conditions hereinafter stated.
Appellant Fowler seeks to have the order of March 23, 1964, left intact by our court reversing and setting aside the order of May 21, 1964, thus effecting a sale to him of the entire farm at a price of $19,599.50. However, Fowler is also counsel for appellant Coates on this appeal, and protection of the interest of the latter requires that he not be put in a position of jeopardy whereby less than $19,599.50 be realized from the ultimate sale. Because of this we further exercise our discretion to direct the county court on remand to do the following:
1. Order a new sale of the farm subject to a total upset price of $19,599.50.
2. Not to vacate and set aside the order of March 23, 1964 (which order will be reinstated by operation of law by our *11 reversal of the order of May 21, 1964), pending the holding of the new sale and the outcome of the same.
3. If a total price in excess of $19,599.50 be obtained at the new sale and the court determines to confirm such sale, the court, coincident to confirmation, shall then set aside the order of March 23, 1964.
4. If the new sale does not result in a total price being bid at the new sale in excess of $19,599.50, the results of such sale shall be reported by the sheriff to the court; the court shall enter proper findings as to what transpired at this sale; and the final judgment thereafter to be entered in the partition action shall adjudge the finality of the order of March 23, 1964, and the sale pursuant thereto to appellant Fowler.
5. A proper order or judgment should be entered setting aside any sheriff's deed heretofore issued which is in conflict with the final disposition of the farm premises ordered by the court.
We do not consider it necessary to spell out the mechanics to be followed in unscrambling the sales to Dawson and Fowler should either or both end up as not being purchasers. This unscrambling should await the outcome of the new sale. Inasmuch as plaintiff receiver and defendant owners have received a lesser distribution than they will ultimately be entitled to, there will be no necessity of requiring any refund of payment from them.
In providing for the continuation in effect of the order of March 23, 1964, pending the outcome of the new sale with the possibility that such order may in the end be validated for all purposes, we have not overlooked McDonald v. Byrnes (1911), 147 Wis. 139, 132 N. W. 888. That case is readily distinguishable from the instant one. There the successful purchaser at the original sale objected to having to consummate the purchase because of a serious defect in the notice of sale. Here appellant Fowler has requested that *12 the sale to him at the increased price, which was confirmed by the March 23, 1964, order, stand. Furthermore, we consider that by our above directions to the county court we have made certain that the title will then be confirmed in Fowler against any objections that there were irregularities in the sale to him.
By the Court.The judgment and order appealed from are reversed, and the cause is remanded for further proceedings not inconsistent with this opinion. No costs shall be taxed on this appeal by either party.
NOTES
[1] An order, which set aside a sheriff's sale made in a partition suit because of an increased offer made at time of hearing the application to confirm, was reversed by this court in Gratiot State Bank v. Martin (1943), 242 Wis. 254, 7 N. W. (2d) 863, because there was no showing of mistake, misapprehension, or inadvertence. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917834/ | 135 N.W.2d 607 (1965)
BANKERS TRUST COMPANY, Executor of the Estate of Alden B. Howland, Deceased, Appellee,
v.
Ward S. ALLEN, Jr. et al., Appellees and Cross-Appellants,
Bertha Howland, Cross-Petitioner-Appellant.
No. 51661.
Supreme Court of Iowa.
June 8, 1965.
*609 Herrick, Langdon, Sandblom & Belin, Des Moines, for Bertha Howland, cross-petitioner-appellant.
Gamble, Read, Riepe, Martin & Webster, Des Moines, for appellee Bankers Trust Co., ex'r.
Bannister, Carpenter, Ahlers & Cooney, Des Moines, for cross-petition-appellee and cross-appellant Ward S. Allen, Jr.
Davis, Huebner, Johnson & Burt, Des Moines, for cross-petition-appellees and cross-appellants Almy S. Howland and others.
Kent Emery, Des Moines, for cross-petition-appellees and cross-appellants, the known or unknown heirs of Alden B. Howland, and those persons known or unknown who may be entitled to take the intestate share of the estate of Alden B. Howland and who are otherwise unrepresented, and for all defendants who are in the military or naval service of the United States of America, and guardian ad litem for all defendants, known or unknown, who may be minors, who may be confined in a penitentiary or state hospital for insane or other institution, or judicially adjudged incompetent or under some other legal disability.
GARFIELD, Chief Justice.
Bankers Trust Co. of Des Moines, as executor of the estate of Alden B. Howland, deceased, brought this action for declaratory judgment construing his will and determining the rights of his widow, Bertha, and numerous heirs in the estate. Following trial to the court as in equity Bertha has appealed and the heirs have cross-appealed from the decree.
Decedent, a prominent Des Moines Lawyer, died July 24, 1962. His will, made October 3, 1961, was admitted to probate six weeks later. Item I of the will provides for payment of debts, taxes and expenses of last illnes and burial. Items II, III, and IV follow:
"Item II. If she survives me, I give, devise and bequeath the residence property occupied by me to my wife, Bertha Howland. I also give and bequeath to her all household furniture, equipment and furnishings of the home I reside in at the time of my death. In addition I give and bequeath to her one-half of my personal property including money on deposit, stocks and securities.
"Item III. If she survives me, I give and bequeath to my sister, Mary A. Howland, of Des Moines, Iowa, the remaining one-half of my personal property, plus the undivided one-half interest in the residence property located at 1712 Clark Street, Des Moines, Iowa, which I own as an heir of my deceased mother.
"Item IV. The provision made in Item II hereof for my wife if she survives me, shall be in lieu of all other claims she may be entitled to make and also in lieu of any widow's allowance pending administration of my estate."
Item V nominates plaintiff as executor to serve without bond.
The sister Mary, named in Item III, supra, predeceased testator on February 20, 1962. He acquired under her will her undivided *610 half interest in the Clark Street property. He previously owned the remaining interest therein, as Item III states. The trial court held the property bequeathed to Mary under Item III passed to decedent's heirs as intestate property. Bertha, the widow, contends all such property except the half interest in the Clark Street property acquired from Mary passed to her (Bertha) and the will should be so construed. She concedes this half interest in the Clark Street residence descended as intestate property.
The argument for Bertha is that it was testator's intent that if either of the two beneficiaries named in the will predeceased him, the property bequeathed to her would pass to the survivor and the will should be construed to so provide.
Those who claim as testator's heirs argue and the trial court held the will contains no residuary bequest of the property bequeathed to Mary, the will is unambiguous and testator's intent must be ascertained from the instrument itself, the bequest to Mary lapsed andthere being no residuary clausedescended as intestate property. We agree with this holding.
I. Reference should be made to the extrinsic evidence offered by Bertha to support her argument and that offered by defendants to meet it.
Decedent and Bertha were married in 1939 but did not live together until 1943. They had no children. Decedent was devoted to his widowed mother and unmarried sister Mary, with whom he lived until 1943. Bertha was not invited to their home on Clark Street nor was she welcome there. None of decedent's heirs lived in Des Moines during the last 50 years; most of them lived in the East. Decedent's father died when he was ten and his mother, with decedent, Mary and a daughter who died in 1937, moved into the home of the mother's sister and her husband in Des Moines and they lived together several years. They were grandparents of defendant Ward S. Allen, Jr. who claims half the intestate property as decedent's only heir by reason of descent from decedent's maternal grandparents.
Bertha testified none of decedent's relatives visited their home nor did he visit them, she saw no correspondence between her husband and his relatives and he told her he had no relatives. She also said she worked for the street car company 15½ years after she was married and never gave decedent less than $100 a month.
The record leaves no doubt decedent had many relatives of whom he was fully aware and with whom he corresponded occasionally (as at Christmas) and visited at times, especially the Allens and the Howlands. The latter claim one fourth the intestate property as heirs by reason of descent from two of the four paternal great-grandparents of decedent. One defendant-heir was a student at a college near Des Moines in 1936, decedent loaned her $200, most of which she repaid and the rest of which he forgave. The sister Mary's will was prepared under decedent's direction and contained small bequests to Ward S. Allen, Jr. and three defendant-Howland heirs.
Decedent's heirs who claim the remaining one fourth of the intestate property by reason of descent from the common ancestors of his paternal grandmother (the Pierce, Chase and Cleveland heirs) are numerous and have not all been ascertained. It is doubtless true decedent did not know who all of them were.
II. Where the language of a will is ambiguous or of doubtful meaning resort may be had to extrinsic evidence as an aid in determining its meaning. However, where the language used is plain and unambiguous its meaning must be determined from the language used without resort to extrinsic circumstances. The testator's intention must be determined from what he said, not from what it may be supposed he intended to say or should have said. The *611 question is not what testator meant to say but what he meant by what he did say.
See in support of the views just stated In re Estate of McCulloch, 243 Iowa 449, 457-458, 52 N.W.2d 67, 72, and citations; Henkel v. Auchstetter, 240 Iowa 1367, 1373-1378, 39 N.W.2d 650, 653-654; In re Estate of Eason, 238 Iowa 98, 103, 26 N.W.2d 103, 106; In re Will of Hagan, 234 Iowa 1001, 1007, 14 N.W.2d 638, 641, 152 A.L.R. 1296, 1301; 95 C.J.S. Wills §§ 591, 592. See also In re Barnes Estate, 256 Iowa ___, 128 N.W.2d 188, 191, 130 N.W.2d 227; In re Estate of Artz, 254 Iowa 1064, 1069-70, 120 N.W.2d 418, 422, and citations.
Nor is extrinsic evidence admissible to vary, contradict or add to the terms of a will or to show an intention different from that disclosed by its language. Evidence of testator's intention as an independent fact, divorced from the words of the will, is clearly inadmissible. Courts will not, from oral testimony, make a will testator perhaps intended to, but in fact did not, make. In re Estate of Roberts, 240 Iowa 160, 164, 35 N.W.2d 756, 758, and citations; 95 C.J.S. Wills § 634. See also In re Estate of Miller, 243 Iowa 920, 929-930, 54 N.W.2d 433, 438-439, 36 A.L.R. 2d 139.
We find no ambiguity in the will. We do not understand Bertha contends there was a patent ambiguity but thinks there was a latent one. A latent ambiguity exists where the language used does not lack certainty but some extrinsic matter outside the will renders the meaning obscure and uncertain. A classic example is a bequest "to my cousin John" when testator has two cousins named John. There is no evidence to indicate such an ambiguity here. In re Estate of Lepley, 235 Iowa 664, 670-672, 17 N.W.2d 526, 529, and citations (disapproved on another point in Nolte v. Nolte, 247 Iowa 868, 882, 76 N.W.2d 881, 889, 56 A.L.R. 2d 854).
The extrinsic evidence offered by Bertha was evidently designed to show it is unlikely decedent intended to leave any of his property to any of those claiming as heirs. But this does not indicate an ambiguity in the will. It may indicate decedent intended to say something he did not say but courts cannot draw his will to carry out a possible intent not expressed in the will. A contrary holding would nullify the requirement that wills be in writing. In re Estate of Lepley, supra, and citations.
Indeed it may be conceded testator did not intend to will any of his property to any of his heirs other than his sister Mary. They make no claim under the will. Their claim is under the statutory rules of descent. The only way decedent could vary these rules is by making an effective gift, either expressly or by necessary implication, at variance therewith. That he did not do. Certainly he made no express provision for the disposition of Mary's share if she did not survive decedent. None is claimed. There is a strong presumption (we have said "very strong") decedent did not intend a bequest not expressed in the will. In re Estate of Syverson, 239 Iowa 800, 805, 32 N.W.2d 799, 801-802, and citations; In re Estate of Eason, supra, 238 Iowa 98, 101-103, 26 N.W.2d 103, 105-106; In re Rosnow's Will, 273 Wis. 438, 78 N.W.2d 750, 751-752 (disapproving In re Will of Nielsen, 256 Wis. 521, 41 N.W.2d 369, cited by Bertha); 95 C.J.S. Wills § 633, page 898; 96 C.J.S. Wills § 718.
The bequest to Mary in Item III is conditioned on her surviving the testator. We have held many times, and it is conceded by all, that our antilapse statute (section 633.16, Code 1962, I.C.A.) does not apply to a bequest so conditioned. Nicholson v. Fritz, 252 Iowa 892, 896-897, 109 N.W.2d 226, 228, and citations. This is on the theory that a bequest to one "if she survives me" manifests an intent that the bequest would lapse if the named beneficiary dies before testator. Ibid; In re Estate of *612 Gerdes, 245 Iowa 778, 62 N.W.2d 777, 70 A.L.R. 2d 210.
There being no residuary clause and no provision for the disposition of the bequest to Mary if she predecease her brother, the property bequeathed in Item III descended as intestate property to his heirs. Karolusson v. Paonessa, 207 Iowa 127, 135-137, 222 N.W. 431, and citations; Jensen v. Nelson, 236 Iowa 569, 576, 19 N.W.2d 596, 600, and citations; In re Estate of Dluhos, 246 Iowa 1043, 1051, 70 N.W.2d 549, 554; In re Estate of Davis, 253 Iowa 973, 976-977, 114 N.W.2d 314, 316; 57 Am.Jur., Wills, section 1446.
95 C.J.S. Wills § 615c, page 840, states: "Where the testator, intentionally or otherwise, has failed to provide in his will for the disposition of all of his property, * * *, or has failed to provide for a contingency which has actually occurred, such as a lapse of a legacy or devise, * * *, the court cannot place a construction on the will not warranted by its language, but the testator must be held to have died intestate as to such property."
Bertha contends Items II and III of the will, supra, should be construed together so as to constitute a residuary clause in favor of the two legatees therein named or the one who survives testatorin this instance, Bertha. The contention is that all dispositive provisions in this will are residuary in character and both named legatees are residuary legatees.
The residuary clause of a will may be defined as a disposition of that which remains after satisfaction of charges, debts and particular bequests or, as sometimes said, that not otherwise disposed of. The purpose of such a clause is to make a complete disposition of testator's estate, so no part of it may be left to pass as intestate property. In re Estate of Hartman, 233 Iowa 405, 410, 9 N.W.2d 359, 363, and citations; Moore v. McKinley, 246 Iowa 734, 756-757, 69 N.W.2d 73, 86-87, and citations; 96 C.J.S. Wills § 796.
As before indicated, Bertha admits the will does not dispose of all the estate testator owned when he died by conceding the half interest he acquired in the Clark Street home from Mary descended as intestate property.
We find no language in this will that indicates testator intended all his property, other than the half interest in the Clark Street home, to go to the one of the two named legatees who might survive him. It is true, as Bertha urges, there is a presumption a testator intends to dispose of his entire estate. But the language of the will must be sufficient to carry the whole. The presumption referred to does not permit us to write into the will a provision omitted therefrom. Further, this presumption is not of greater force than the rule that heirs are not to be disinherited except by express words or necessary implication. Harvey v. Clayton, 206 Iowa 187, 191-2, 220 N.W. 25. See also 95 C.J.S. Wills § 615a, page 833; 57 Am.Jur., Wills, sections 1158, 1160.
If, however, it be concededwithout so decidingthat Items II and III of the will together constitute a residuary clause it does not follow that what would have gone to Mary, had she survived, goes to Bertha. Under the general rule, to which we are committed, the bequest to Mary descends as intestate property to testator's heirs and does not increase the share of Bertha who claims as the surviving residuary legatee. Lehr v. Switzer, 213 Iowa 658, 663, 239 N.W. 564, and citations; Brown v. Kalene, 230 Iowa 76, 79, 296 N.W. 809, 810; Nicholson v. Fritz, supra, 252 Iowa 892, 898, 109 N.W.2d 226, 229; Re Boyle, 121 Colo. 599, 221 P.2d 357, 36 A.L.R. 2d 1106, 1114-1116; Buffinton v. Mason, 327 Mass. 195, 97 N.E.2d 538, 37 A.L.R. 2d 1, 5; In re Brown's Estate, 324 Mich. 264, 36 N.W.2d 912; In re Rosnow's Will, supra, 273 Wis. 438, 78 N.W.2d 750; Annos. 36 A.L.R. 2d 1117, 28 A.L.R. 1237, 139 A.L.R. 870; 96 C.J.S., Wills § 1226d page 1083; 57 Am.Jur., Wills, section 1453. *613 See also Leighton v. Leighton, 193 Iowa 1299, 1317-1318, 188 N.W. 922.
Nicholson v. Fritz, supra, quotes this with apparent approval from the annotation in 36 A.L.R. 2d 1117, 1118. "* * * the rule which prevails in most jurisdictions, in the absence of statute or distinctly disclosed intention or justified construction of the will to the contrary, is that if the instrument disposes of residuary property or funds to two or more persons and one or some of them renounce the gift, or predecease the testator, or for any reason are or become disentitled to take, the shares affected do not inure to the other residuary beneficiaries in augmentation of their shares but on the contrary pass as in case of intestacy." To like effect is 4 Bowe-Parker: Page on Wills, section 33.56.
We have considered the precedents Bertha cites. For the most part they are a few cases from other jurisdictions which hold, contrary to the general rule which prevails in Iowa, that a residuary legacy which fails enhances the share of the remaining residuary legatees rather than to descend as intestate property to testator's heirs. Except for Corbett v. Skaggs, 111 Kan. 380, 207 P. 819, 28 A.L.R. 1230, they are based on a statute or clearly expressed language in the will so providing.
We do not regard the precedent most relied on, In re Armstrong's Estate, 347 Pa. 23, 31 A.2d 528, as in point factually, and the decision is based on a statute designed to abolish the common law rule as to lapse of a residuary bequest where it is apparent the testator intended not to give the next of kin any interest in his estate. We have no such statute.
In McElroy v. Fluker, Mo., 265 S.W.2d 361, unlike the will, here, there was a residuary clause. The court held the whole will evinced testator's intent to will the residue to his two sisters or the survivor, if one should predecease testator. We find no such intent here.
In In re Moloney Estate, 15 N.J.Super. 583, 83 A.2d 837, a decision of a county judge in New Jersey, the will also contained a traditional residuary clause. The judge found merit in the contention the residuary gift was to a class, not to individuals. The decision is also based on a statute providing that lapsed residuary legacies go to the surviving residuary legatees in the absence of any contrary intent manifested by testator. It could not be claimed Bertha and Mary constitute a class here. Further reference to precedents Bertha cites is deemed unnecessary.
III. On defendant-heirs' cross-appeals it is contended the trial court erred in holding Bertha elected to take under the will and is entitled to the bequest under Item II and a widow's allowance in addition; Item IV of the will required Bertha to take either the bequest or her widow's allowance, dower and exempt property; by procuring and accepting a widow's allowance and making other claims, she elected against the will.
Item IV states the provision in Item II for Bertha "shall be in lieu of all other claims she may be entitled to make and also in lieu of any widow's allowance pending administration of my estate."
Section 635.12, Code 1962, I.C.A., so far as pertinent, provides: "The court shall, if necessary, set off to the widow and children of the decedent * * *, or to either, sufficient of his property * * * to support them for the period of administration * *."
Bertha applied for, the court granted and she accepted a widow's allowance of $12,000. Her amended application stated she did not by making it waive her right to elect to take under the will. She subsequently filed such an election. The trial court upheld Bertha's right to the widow's allowance and also to take under the will on the ground testator's attempt in Item IV to require an election between these two rights was contrary to public policy and void. Also on the ground a widow's allowance is an expense of administration payment of which testator could not defeat by his will.
*614 Undoubtedly, as defendants concede, a widow's allowance is an expense of administration, not part of the estate to be distributed. In re Estate of Miller, 143 Iowa 120, 122, 121 N.W. 700; In re Estate of Johnson, 154 Iowa 118, 120, 134 N.W. 553, 37 L.R.A.,N.S., 875. See also section 3(8) of our new Probate Code, chapter 326, Acts 60th General Assembly.
As defendants also in effect admit, we have held several times that public policy forbids interference with the power of the court to grant an allowance under what is now section 635.12 for the protection of decedent's widow and children during the period of administration. Miller and Johnson cases, supra; In re Estate of Peet, 79 Iowa 185, 188, 44 N.W. 354; In re Estate of Uker, 154 Iowa 428, 434, 134 N.W. 1061. See also McMinimee v. McMinimee, 238 Iowa 1286, 1298-1300, 30 N.W.2d 106, 112-113.
These precedents directly involve antenuptials contracts in which the surviving sponse agreed to accept a stated sum in full of her claims against the estate. In the Johnson case the agreement covered all claims for dower, support, or maintenance out of the estate. In the Uker agreement the survivor relinquished all right to dower, exemptions, allowance for support, together with all other statutory or common law rights. The Johnson opinion holds (page 121 of 154 Iowa, page 554 of 134 N.W.): "* * * by no provision in an antenuptial contract, no matter how fair and reasonable it may be in itself in view of circumstances of the parties, can the prospective wife relinquish or cut herself off from the right to an allowance for support under the statute, provided the court finds such allowance to be a proper one when applied for."
The logic of the above precedents has been applied to a testamentary provision attempting to deprive the widow of a statutory allowance for her support. In re Estate of Frick, 192 Iowa 75, 77, 182 N.W. 790, where the provisions of the will for the widow were stated to be in lieu "of all statutory provisions in her favor." We held the widow was entitled to her statutory allowance even though she accepted the provisions of the will. See also Industrial Trust Co. v. Dean, 68 R.I. 43, 26 A.2d 482, 140 A.L.R. 1213, 1217-1218; Scharkofsky v. Landfear, 50 Ohio App. 213, 197 N.E. 810.
An annotation in 97 A.L.R. 2d 1319 on "Effect of testamentary gift on widow's right to fixed statutory allowance or allowance for support" states at page 1326, "The rationale of the view that a widow is entitled to her statutory allowance in addition to any devise or bequest under her husband's will has been best expressed by the Iowa court."
We are aware many precedents from other jurisdictions hold, under language similar to Item IV of this will, a widow cannot have the benefits given by the will and also the statutory widow's allowance and she is put to her election as to which she will take. See annotation, supra, pages 1327, et seq. (Earlier annotations on a related subject appear in 4 A.L.R. 391 and 140 A.L.R. 1220.) This is the rule for which defendants contend. We are content with the view that public policy forbids a testator from requiring his widow to elect between benefits under his will and the statutory allowance during the period of administration. Accordingly we hold that applying for and receiving such allowance, paid under court order, did not amount to a rejection of the will and that Bertha is entitled to take under the will as well as the amount so paid her.
Our conclusion finds support, in addition to the precedents previously cited, in Hill v. Kalamazoo Probate Judge, 128 Mich. 77, 87 N.W. 113; Collier v. Collier's Executors, 3 Ohio St. 369, 375-376; In re Peebles' Estate, 157 Pa. 605, 27 A. 792; In re Stachnick's Estate, 376 Pa. 592, 103 A.2d 765, 767.
*615 We may note also that Code section 633.1, Code 1962 excepts from the property a person may dispose of by will "sufficient to pay his debts and expenses of administration." And, as previously indicated, a widow's allowance is an expense of administration the widow should not be required to renounce.
We need not determine whether Bertha should have been granted a widow's allowance if, before applying therefor, she had elected to take under the will and received benefits therefrom.
IV. There were three policies of insurance on testator's life, two payable to him and the other to his executor. The insurers paid the executor nearly $20,000 as proceeds of the policies. The trial court held Bertha was entitled to these proceeds in addition to the bequest under Item II on the theory the executor held them in trust for her. Defendants assign this as error and contend the insurance money should have gone to Bertha only as part of the statutory share of a widow who has elected against the will. We affirm the trial court on this point.
The pertinent part of section 511.37, Code 1962, I.C.A., provides: "A policy of insurance on the life of an individual, in the absence of an agreement or assignment to the contrary, shall inure to the separate use of the husband or wife and children of said individual, independently of his creditors."
In re Estate of Clemens, 226 Iowa 31, 33-34, 37, 282 N.W. 730, is in point. After quoting the foregoing statutory provision we say: "This statute * * * is more than an exemption statute. It specifically provides that if there is no agreement or assignment to the contrary, the surviving spouse or the children of the decedent shall have the proceeds of the insurance, not only to the exclusion of the decedent's creditors, but likewise to the exclusion of his other heirs at law.
"It is recognized by this court, as well as by courts of almost every other jurisdiction, that when insurance is payable to the estate the insured may make specific disposition of the proceeds by provision to that effect in his last will and testament. But, in order that testator may make disposition of the insurance proceeds other than already provided by the statute, there must be an agreement or assignment to the contrary. A specific disposition of insurance proceeds by the terms of the will satisfies this statutory requirement. * * *
"* * * There is no mention whatever in the will of the insurance policies. It necessarily follows that the proceeds of the insurance policies passed into the hands of the personal representative, or the estate, as a trust fund, to be distributed to the beneficiaries specified in the statute."
So here, the will does not mention the life insurance. There being no agreement or assignment to the contrary it inured to the separate use of Bertha under the quoted statute. See also In re Estate of Ensign, 181 Iowa 1081, 1085, 165 N.W. 319; In re Will of Grilk, 210 Iowa 587, 589-590, 231 N.W. 327, 329; Nolte v. Nolte, 247 Iowa 868, 874-875, 76 N.W.2d 881, 885, 56 A.L.R. 2d 854; Westinghouse Credit Corp. v. Crotts, 250 Iowa 1273, 1275-1277, 98 N.W.2d 843, 846.
V. Pursuant to stipulation the court reserved from the trial determination of who decedent's heirs are except that for the purpose of resolving the issues which were tried, and no others, it was stipulated defendant Ward S. Allen is an heir by reason of descent from common ancestors of decedent's maternal grandparents and defendants Almy S. Howland et al. are heirs by reason of descent from common ancestors of two of the four paternal great-grandparents of decedent. As stated, defendant Allen claims one-half, and defendants Almy S. Howland et al. one-fourth, the intestate property. Also excepted from the trial was the issue raised by Bertha that decedent died without heirs *616 and she took the entire estate under Code section 636.41.
The trial court ruled determination of who the heirs may be and, evidently, the share of each could best be made in another action; the executor should discontinue further search for heirs, proceed to close the estate, determine the net shares passing to the window and heirs and pay the share of the heirs to the clerk of the trial court. We understand the share due Bertha was to be paid her.
We cannot agree determination of who are heirs and the share of each may best be made in another action. Only reason the trial court gave for this provision is that Bertha would thereby not be delayed in obtaining her share of the estate. However, her brief concedes trial as to who the heirs, if any, are should be in this action. Jurisdiction has been obtained and issues joined in the present action. To require the issues withheld from the trial already had to await determination in another proceeding apparently would involve delay and substantial duplication of costs and expenses.
Mr. Emery, court-appointed attorney for all heirs not otherwise represented and guardian ad litem for all defendants under legal disability, assigns as error the court's direction that the executor discontinue further search for heirs and pay the clerk that part of the estate passing as intestate property to heirs presently unknown. He would have the executor continue to search for heirs. All other parties approve the order to discontinue the search and we are inclined to agree with it.
In view of the stipulation of the parties before referred to, no determination is now made of who testator's heirs are. However, it is clear the executor and its attorneys have made considerable search at a good deal of expense to determine identity of the heirs. It is apparent their investigation has satisfied them that defendant Ward S. Allen, Jr., is an heir entitled to one-half the estate passing as intestate property and defendants Almy S. Howland et al, are heirs entitled to one-fourth such estate. The executor and its attorneys seem also to be satisfied there are heirsin large number toowho are entitled among them to the remaining fourth of the intestate estate by descent from the common ancestors of decedent's paternal grandmother. They are the Pierce, Chase and Cleveland heirs referred to in Division I hereof, entitled, respectively, to one-sixteenth, one-sixteenth, and one-eighth the intestate property.
The executor and its attorneys also believe, evidently with reason, further exhaustive search for all the heirs entitled to this remaining fourth of the intestate property would unduly delay the orderly administration of the estate and entail large expense which might well exhaust or exceed the fund to be distributed to them. Our approval of directing the executor to discontinue further search for heirs, under the circumstances shown, finds support in Tiller v. Norton, 123 Utah 42, 253 P.2d 618, 620.
We understand all parties assail the order requiring the executor to pay the clerk all the funds which pass as intestate property. We are satisfied it cannot be approved. In view of the issues withheld from the trial, it is at best premature. As indicated, one such issue is Bertha's claim decedent left no heirs and she took the entire intestate estate under Code section 636.41.
The executor and defendants Allen and Almy S. Howland et al. ask that the order last referred to be affirmed to the extent it directs payment to the clerk of the one-fourth share of intestate property to the Pierce, Chase and Cleveland heirs. Such an order would be no less premature than the one made. If, upon trial of the remaining issues, the claim of Bertha last referred to (asserted in Division *617 II of her counter-claim and cross-petition) is disallowed and it is found that defendants Allen and Almy S. Howland et al. are heirs entitled, respectively, to half and a fourth of the intestate property and the Pierce, Chase and Cleveland heirs have not all been ascertained, payment of their combined shares of one fourth could then be ordered made to the clerk and the estate closed.
Code section 682.31 furnishes sufficient authority for such an order: "Whenever any administrator, * * * shall desire to make his final report, and shall then have * * * funds, * * * due, * * * to any heir, * * *, whose place of residence is unknown to such administrator, * * * or to whom payment of the amount due cannot be made as shown by the report on file, such funds * * * may upon order of the court * * * be deposited with the clerk * * *" (emphasis added). Like provisions are sections 109, 110, of our new Probate Code, chapter 326, Acts 60th General Assembly. It is unnecessary to decide whether the Iowa Code provisions or those of the Probate Code apply to the present case.
VI. The court ordered the executor to pay the costs of this action, half thereof to be treated as a cost of administration, the other half charged against the intestate property passing to the heirs. The fees to be allowed Mr. Emery and his predecessor Mr. Voigts were also to be paid by the executor and charged against such intestate property. The cross-appeals of defendants Allen and Almy S. Howland et al. complain of these provisions; other parties ignore the complaint.
We are clear the fees to be allowed Messrs. Emery and Voigts should be charged to the parties they represent, not against all the property passing as intestate. Defendants Allen and Almy S. Howland et al. have been well represented by their own attorneys whom they must pay. If their claims as heirs are established, they will be required, under the trial court's order, to pay three fourths the fees of appointed attorneys who did not act for them and were hostile to them at least on the question of continuing the search for heirs. Sections 118, 119, and 120 of our new Probate Code, supra, chapter 326, Acts 60th General Assembly, support this conclusion. To like effect are Iowa Code sections 638.37, 638.38 and 638.39, I.C.A. See also In re Estate of Jenkins, 245 Iowa 939, 65 N.W.2d 92; In re Estate of Law, 253 Iowa 599, 602-603, 113 N.W.2d 233, 234-235, and citations.
We think the costs in the trial court should be taxed as part of the costs of administration in the estate. The action was brought for a declaratory judgment pursuant to rules 261-264, Rules of Civil Procedure, 58 I.C.A. Section 11 of the new Probate Code, supra, also specifically authorizes such an action. Section 2 of this Code provides it shall govern further proceedings in probate then pending except to the extent the court believes this would not be feasible or work injustice. This action was commenced a few months before the Code took effect but was transferred to probate for trial as in equity, with all matters of procedure to be governed by the Probate Code and the Rules of Civil Procedure. No one complains of this order.
Section 47 of the Probate Code provides the costs of serving any notice by publication or otherwise given by the fiduciary shall be taxed as part of the costs of administration. A substantial part of the costs in the trial court was incurred by service of the long original notice by plaintiff-executor and a like notice by Bertha of her cross-petition. We see no good reason why the remaining costs in the trial court should not likewise be taxed as part of the costs of administration of the estate.
Half the costs of the appeals in this court are taxed to Bertha; the remaining half to defendants-cross-appellants.
*618 The decree is affirmed on the widow's (Bertha's) appeal. On defendants-cross-appellants' appeal it is modified in the respects pointed out in Divisions V and VI hereof and, as thus modified, affirmed.
Affirmed on appeal of the widow; modified and affirmed on cross-appeals of defendants.
All Justices concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917835/ | 272 So. 2d 53 (1973)
LATTER & BLUM
v.
OCEAN DRILLING & EXPLORATION COMPANY.
No. 5191.
Court of Appeal of Louisiana, Fourth Circuit.
January 15, 1973.
Rehearing Denied February 6, 1973.
Writ Refused April 12, 1973.
*54 J. William Vaudry, Jr., of McCloskey, Dennery & Page, New Orleans, for plaintiff-appellant.
Lemle, Kelleher, Kohlmeyer, Matthews & Schumacher, Murphy Moss, New Orleans, for defendant-appellee.
Before REGAN, BOUTALL and BAILES, JJ.
REGAN, Judge.
Plaintiff, Latter & Blum, Inc., a realtor filed this suit against the defendant, Ocean Drilling and Exploration Company (ODECO) to recover unpaid commissions which it alleged was due in conformity with a rental listing contract. Plaintiff asserted that it was the exclusive rental agent for leasing all of the eighth and a portion of the ninth floor of the ODECO Building under its agreement with the defendant, particularly that clause binding defendant to refer all prospective tenants to the plaintiff. Plaintiff claimed that the defendant breached the contract when it negotiated a lease directly with Southdown Sugars, Inc., for a substantial amount of the space covered by the listing contract and then refused to pay the 6% commission due the realtor.
Defendant answered and explained therein that the plaintiff had breached the contract before it negotiated directly with Southdown by endeavoring to place a prospective tenant interested in the ODECO Building in another office building. In effect, the defendant claimed that the plaintiff breached its obligation to act in a fiduciary capacity. Defendant reconvened for damages for loss of rentals due to negligent administration.
From a judgment dismissing both the main and reconventional demands, only the plaintiff has appealed.
The record discloses that the plaintiff was the leasing agent for the ODECO Building and that the defendant negotiated its lease for more than six floors of space therein with plaintiff's agents. Although defendant had no immediate use for the eighth floor and a portion of the ninth, it leased the space anticipating future expansion. On December 11, 1968, defendant entered into an agreement with plaintiff appointing it rental agent to sublease its excess space. The portion of this contract pertinent to the issue before us reads:
"The undersigned (ODECO) * * * hereby engages Latter & Blum, Inc * * * as Sublessor's exclusive agent to rent all of the eighth floor and a portion of the ninth floor of the ODECO *55 Building * * *. This contract shall remain in full force and effect for a period of one (1) year after completion of construction of said building.
"Said premises may be leased to one or more tenants, for periods of one (1) to three (3) years, the periods of said leases to be determined by Sublessor * * *
* * * * * *
"Sublessor shall have the right, on written notice to Agent, to withdraw from this listing contract, from time to time, any part of the premises covered thereby.
* * * * * *
"Sublessor agrees to refer all prospects for the leasing of said premises to Agent and Agent shall conduct all negotiations for the leasing of said premises.
"Agent agrees to make all reasonable efforts to find a tenant for said premises.
* * * * * *
In the early part of April 1969, through the efforts of plaintiff's agents, Seymour Hirsch and Percy Johnson, the entire eighth floor had been rented to four tenants, namely, Home Data Processing; Ruhlman, Profumo and Associates; Coastal States Gas, and C. G. Bizot.
In late April or early May of 1969, Herbert Vaccaro of Southdown Sugars, Inc., contacted Latter & Blum to inquire if space was available in the ODECO Building. Hirsch informed him that there was not enough space available for Southdown's needs. Instead Hirsch suggested Vaccaro consider the Plaza Towers, another building where plaintiff possessed an exclusive leasing agency.
On May 13, 1969, following a meeting with Southdown's representatives, Hirsch, plaintiff's agent, submitted to them an offer to lease the entire 34th floor of the Plaza Towers for $3751.58 per month for a primary term of ten years and 1000 to 1200 square feet on the 33rd floor for a comparable rate. In addition the offer included a call option for an additional 1800 to 2000 square feet on the 33rd floor and a call option for the remainder of the 33rd floor in six years.
On May 16, 1969, Southdown rejected the offer for the reason that the rent was too high for only 6222 square feet of effective floor space on the 34th floor. Southdown offered to pay $3091.92 per month for the 34th floor of the Plaza Towers and insisted on the right to sublease. The counter offer was rejected.
By the time Hirsch and Johnson were aware of the fact that the counter offer had been rejected, or in mid-May, they also knew space had become available in the ODECO Building. Both Home Data Processing and Ruhlman, Profumo and Associates had advised Hirsch and Johnson that they wished to vacate the ODECO Building and requested that the agents find tenants to sub-sublease their office suites. Plaintiff obtained listing agreements from both subtenants. In the latter part of July on a weekend, without any notice to ODECO, both Home Data and Ruhlman moved out of their offices and both were two months in arrears of their rent.
Meanwhile, plaintiff's agents continued negotiating with Southdown for space in the Plaza Towers and on August 21, 1972, the realtor submitted an offer to Southdown which was still unacceptable. Plaintiff's agents Hirsch and Johnson never mentioned Southdown's inquiry about space in the ODECO Building to defendant's representatives nor did they advise Vaccaro of Southdown that space had become available in that building and offer to show it. Hirsch justified this omission by stating that Southdown needed more space and a long term lease with a minimum term of ten years to justify the expense of installing leasehold improvements. He also pointed out that the space subject to call options in the Plaza Towers was not available in the ODECO Building.
*56 Vaccaro's testimony contradicts Hirsch's assertion. He stated that it was plaintiff's agents who endeavored to impose a long term lease on Southdown and the ten years minimum duration was entirely Hirsch's idea. At one point Southdown agreed to and was negotiating for a maximum of five years.
Finally in August 1969 after Southdown terminated the negotiations for space in the Plaza Towers, Vaccaro was informed by J. B. Storey, connected with an affiliated company, occupying offices in the ODECO Building, that space was available. Vaccaro contacted the president of ODECO, Alden LaBorde, about renting space. LaBorde referred Vaccaro to the plaintiff and at this point Vaccaro disclosed the fact that Hirsch and Johnson had previously informed Vaccaro that there was no space available. It was then that LaBorde instructed Charles Howe, manager of the defendant's service division, to cancel the listing agreement with the plaintiff covering the vacant space on the eighth floor.
When Howe received this instruction from LaBorde, he had been working with Hirsch and Johnson to negotiate a lease for the vacant eighth floor space with F and A Map Company. LaBorde told him to discontinue the negotiations because ODECO would not complete the lease forms that had already been signed by F and A Map Company.
ODECO then leased directly to Southdown approximately 7128 square feet on the eighth floor. In November 1969 Bizot, one of the original eighth floor tenants vacated and Southdown signed an amended lease to incorporate this space dealing directly with ODECO. At that time the defendant advised plaintiff by letter that the listing agreement was cancelled.
Plaintiff insists that it is entitled to commissions of the Southdown lease signed in August and the amended lease executed in November of 1969. Its claim is based on that portion of the listing agreement requiring the defendant to refer all prospective tenants to its agent. Plaintiff assumes the position that this clause conferred on it the exclusive right to rent the available space.
It is argued that the agreement at issue herein is analogous to contracts granting a broker the exclusive right to sell property. Plaintiff relies on several cases holding the seller of real estate liable for the agent's commission when the seller deals directly with the buyer and negotiates his own sale during the period covered by the listing agreement.[1]
Defendant, on the other hand, argues that the plaintiff was given the exclusive right to act as an agent but defendant reserved to itself the right to withdraw space from time to time. Defendant insists that it also possessed the right to rent space and relies on the rule enunciated in McKinney Realty Company v. Kabel[2]. That case points out the distinction between an exclusive right to sell as opposed to an exclusive right to act as agent. In the former, only the agent may negotiate the sale. In the latter, the owner is free to sell himself but he is limited to appointing only one agent during the life of the listing agreement.
We are of the opinion that the contract posed for our consideration does not reserve to the defendant the right to execute leasing agreements independent of the relator and thus avoid liability for the agent's commission. Although the instrument reserves to the defendant the right to withdraw space covered by the agreement it also requires defendant to refer all prospective tenants to the agent. In reaching *57 this conclusion we are not unmindful of the provisions of LSA-C.C. art. 1955 which reads:
"All clauses of agreements are interpreted the one by the other, giving to each the sense that results from the entire act."
Thus in reading this agreement in its entirety, we are of the opinion that the listing agreement gave the relator the exclusive right to negotiate leases during the life of the contract.
However, we find merit in defendant's alternative contention that the plaintiff had breached its contract before the first Southdown lease had been negotiated. We are convinced that the plaintiff failed to comply with its obligation to "* * * make all reasonable efforts to find a tenant for said premises."
Southdown's first inquiry to plaintiff concerned space in the ODECO Building. While it is true that none was available at the time, Hirsch and Johnson, plaintiff's agents, were aware within several weeks that considerable space would be available for rent. Once Southdown rejected the Plaza Tower offer, the agent could have offered to show what space was available in the ODECO Building. It will be recalled that the 34th floor of the Plaza Tower had some 6200 square feet of effective space and Southdown was ultimately able to rent 7128 square feet on the eighth floor of the ODECO Building.
Although plaintiff's agent, Hirsch, partially justified his failure to mention the available space to Southdown or to mention Southdown's inquiry to ODECO representatives because Southdown wanted a long term lease, this assertion is contradicted by Vaccaro of Southdown. According to Vaccaro the agents were attempting to oversell by insisting on a long term lease Southdown did not want.
Defendant, conversely, acted in good faith until it became apprised of the actions of plaintiff's agents with Southdown's representatives. When Vaccaro of Southdown first called upon defendant's president, he was referred to the plaintiff. It was not until he learned that plaintiff's agents, Hirsch and Johnson had made no effort to show the vacant space to Southdown that LaBorde of ODECO decided to negotiate the lease directly. Once he learned of the breach, he was justified in acting as set forth hereinabove.
For the reasons assigned, the judgment appealed from is affirmed.
Affirmed.
NOTES
[1] See Alex F. Dreyfus v. Friedman, 171 La. 90, 129 So. 679 (1930) and Doll v. Thornhill La.App., 6 So. 2d 793 (1942).
[2] La.App., 131 So. 2d 567. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917838/ | 272 So. 2d 697 (1972)
R. E. HIBBERT, Plaintiff-Appellant,
v.
William MUDD et al., Defendants-Appellees-Appellants.
No. 4022.
Court of Appeal of Louisiana, Third Circuit.
December 13, 1972.
Rehearing Denied January 24, 1973.
*700 Bailey & Hollier by William C. Hollier, Lafayette, for plaintiff-appellant.
Domengeaux & Wright by James Domengeaux, Lafayette, for defendant-appellee.
Before SAVOY, CULPEPPER and MILLER, JJ.
MILLER, Judge.
In Hibbert v. Mudd, 187 So. 2d 503 (La. App. 3 Cir. 1966), [writ denied 249 La. 714, 190 So. 2d 233 (1966) because the judgment was not final] we reversed the trial court's summary judgment. We found a genuine issue of fact and remanded for a determination of whether the marriage of Frank Mudd and Agnes Sinclair was miscegenous.
On remand the parties stipulated to many facts and specifically that the Mudd Sinclair union was miscegenous. The trial court adopted the dissent reported in 187 So. 2d 503 at page 508 as the applicable law relative to inheritance by miscegenous natural children. Tr. Vol. II, page 69. Additionally, the trial court cited Loving v. Commonwealth of Virginia, 388 U.S. 1, 87 S. Ct. 1817, 18 L. Ed. 2d 1010 (1967) as supporting that result. These issues are not before this court[1] because the State of Louisiana did not appeal. The natural brothers and sisters of lessor Edna Mudd Anderson have been recognized as the sole heirs of lessor Edna Mudd Anderson.[2]
Plaintiff R. E. Hibbert instituted this concursus proceeding on July 19, 1963 and on that date deposited in the registry of court the royalties which had accumulated to the owner of land leased by Hibbert from Anderson. Except for an alleged telephone call, Hibbert made no prior attempt to pay these royalties which accumulated from production starting December 9, 1961 through January 14, 1962. The production was under a voluntary unit dated September 15, 1961, recorded in Book 35, Folio 387, Entry No. 414582, Conveyance Records of Lafayette Parish. Hibbert also held royalties produced from January 15, 1962 through April 2, 1962 under the second unit when that forced unit was approved by the Louisiana Conservation Commission.
Cited as defendants having conflicting claims to the royalties were the State of Louisiana (which could claim the property by escheat if Anderson left no heirs) and certain alleged natural brothers and sisters, and/or their descendants, of lessor, Edna Mudd Anderson, who died intestate in 1961. Some of the defendants were born of an alleged miscegenous union and others were born of an adulterous union all as stipulated at trial.
The Mudd-Sinclair group reconvened seeking cancellation of the lease because of Hibbert's failure to pay royalties for nineteen months after production. The trial court cancelled the lease on finding lessee had actively breached the lease contract. LSA-R.S. 30:105 and 106.[3] Pierce v. Atlantic *701 Refining Company, 140 So. 2d 19 (La.App. 3 Cir. 1962). However the trial judge refused to cancel those portions of the lease which were in production citing the lease provisions that "... in the event of the forfeiture of this lease for any cause the lessee shall have the right to retain around each well producing oil, gas or other minerals, the number of acres fixed and located by (the Louisiana Conservation Department) under which said well is being drilled or produced ..." Paragraph 3 of lease, Vol. I, Tr. 9. Attorney's fees of $7,500 (the parties stipulated that amount IF landowners were entitled to fees) were awarded under LSA-R.S. 30:102[4]
Plaintiff Hibbert appealed the judgment insofar as it cancels the lease outside the units and awards attorney's fees. The Mudd-Sinclair group answered the appeal, seeking cancellation of the lease in its entirety. We affirm the trial court's cancellation of the lease and award of attorney's fees and reverse the holding that lessee is entitled to retain the producing lands.
There is an issue of fact and an issue of law presented in this case. Although many facts were stipulated, others must be gleaned from the depositions and answers to interrogatories filed in evidence.
The factual issue is: When did lessee Hibbert learn that lessor Anderson had died? The legal issue is: Does death of a lessor relieve lessee from paying the royalties required by the lease? More particularly is LSA-R.S. 30:105 suspended when lessee withholds royalties on learning of lessor's death? We find that it does not.
A lease should not be cancelled when the delay in paying royalties is based on a bona fide title dispute. Mire v. Hawkins, 177 So. 2d 795 (La.App. 3 Cir. 1965); Broadhead v. Pan American Petroleum Corporation, 166 So. 2d 329 (La.App. 3 Cir. 1964); Fawvor v. U. S. Oil Company, 162 So. 2d 602 (La.App. 3 Cir. 1964); Bonsall v. Humble Oil & Refining Company, D.C., 201 F. Supp. 516; 300 F.2d 150 (5th Cir. 1962).
We agree that eight months after royalty was due (it was due under the voluntary unit which produced from December 9, 1961 through January 14, 1962) Hibbert learned FOR THE FIRST TIME that there was a bona fide title dispute as to who inherited from Edna Mudd Anderson. But note this: there is not now and never has been a question as to Edna Mudd Anderson's title to the property. Hibbert first learned of a possible title dispute as to who inherited from Anderson on September *702 10, 1962 when he received the demand for cancellation of the lease. Although there was no question as to Anderson's title to these royalties, Hibbert continued to hold them until July 19, 1963 when he first deposited the accumulated royalties into the registry of court.
Hibbert does not contend that he knew of a title dispute prior to September 10, 1962. Until that date, he contends only that he knew that his lessor Edna Mudd Anderson had died. She died on September 20, 1961.
Lessee's proof that he was justified in withholding royalties because he knew of Anderson's death is meager. The only evidence offered to prove this knowledge is Hibbert's selfserving unsupported testimony that he was informed of her death by two people and that he later received a newspaper clipping which noted her passing. Deposition of R. E. Hibbert, Tr. Vol. II, p. 4. Hibbert does not pin down the time that he allegedly learned of her passing. The record allows two inferences: 1) lessee learned of Anderson's death shortly after completing the well on her property, or 2) he later learned of her death, possibly as late as September 10, 1962 when the Mudds demanded cancellation of the lease. It is argued that we should accept the former interpretation because Hibbert's testimony is uncontradicted. It is difficult to establish when a party first learned of a certain fact. In making that determination, we look to his response to the information.
If Hibbert promptly learned of Anderson's passing, his response falls so far short of the requirements needed to maintain his lease, that he has lost the lease under LSA-R.S. 30:105. What did he do? He testified that he telephoned (Vol. II, p. 18, line 17) the Mudd's attorney's office and asked "a girl" (Vol. II, p. 13, line 18) if he could speak to the Mudd's attorney. When told by telephone that the attorney was out, Hibbert asked "a girl" to send him a copy of the judgment of possession in the Anderson succession as soon as it was signed. He did not identify the girl or the approximate date when he allegedly telephoned. Hibbert did not testify 1) that he established that the firm was handling the succession; 2) that he asked to have an attorney return his call; or 3) that he sought advice as to what he should do with the accumulated royalties or those which would accumulate pending receipt of a judgment of possession. Hibbert did not attempt to follow up this alleged telephone call. He never wrote a letter to the firm and never spoke to a lawyer about the problem of what he should do with the accumulating royalties.
When asked what he would have done had not the succession been opened, Hibbert replied "That is a technicality on which we would have followed the law, whatever the law required." Vol. II, p. 17. His actions do not support this testimony. He admits that it is a legal question, yet he made no effort to determine what the law required. So far as this record shows, Hibbert first consulted an attorney to determine the proper disposition of the accumulated royalties after receiving the demand for cancellation of the lease.
On the basis of a telephone call (we note again, there is not one shred of evidence to suggest when this telephone call was made) and conversation with "a girl" in the office of Mudd's attorneys, Hibbert withheld royalties admittedly due from January 14, 1962 until he first learned of a bona fide title question as to who inherited Anderson's property. This knowledge came with the cancellation demand of September 10, 1962.
After September 10, 1962, Hibbert had a bona fide reason to withhold royalties from the Mudds, but not from Anderson's heirs whoever they might be. A title problem as to who inherited from Anderson does not entitle Hibbert to withhold royalties due to Anderson's successors, whoever they might be. Hibbert held these royalties until July 19, 1963 when he *703 deposited them in the registry of court. For over eighteen months, Hibbert had the use of these royalties which had been due since January 14, 1962.
Hibbert's timely knowledge of Anderson's death is basic to his defense against the lease cancellation. We could not fail to cancel the lease if Anderson were alive and Hibbert failed to pay royalties for either eight or eighteen months. LSA-C.C. Art. 2712. Melancon v. Texas Co., 230 La. 593, 89 So. 2d 135 (1956). Hibbert's testimony that he knew of Anderson's death was insufficient to carry his burden of proving that he was justified in withholding royalties. The trial court may have rejected his testimony as lacking credibility (although this was not specifically stated). This is suggested because the lease was dissolved. And if the trial court rejected Hibbert's testimony, there was no manifest error in that determination.
Even if we accept Hibbert's contention that he promptly learned of Anderson's passing, what was his duty? The lease specifically provides for that contingency in paragraph 9:
"All provisions hereof shall extend to and bind the successors and assigns (in whole or in part) of Lessor and Lessee; but no change in the ownership of the land or any interest therein of change in the capacity or status of Lessor whether resulting from sale, inheritance or otherwise, shall impart any additional burden on Lessee nor shall any change in ownership or in the status or capacity of Lessor impair the effectiveness of payments made to Lessor herein named unless the then record owner of said lease shall have been furnished thirty (30) days before payment is due with certified copy of recorded instrument or judgment evidencing such transfer, inheritance or sale or evidence of such change in status or capacity of Lessor. The furnishing of such evidence shall not affect the validity of payments theretofore made in advance ..."
Under the express terms of the lease, lessee is protected when he pays royalties to the named lessor. He testified that he knew her last address; had received no request that payments be sent elsewhere; and that he had not sent royalty payments to anyone.
The lease drawn by lessee was so worded in order that lessor or her successors would have the burden and duty of notifying lessee of the changed status of lessor. In this way and by the express lease terms, lessee is given a mode of payment which protects its interest should lessor die. The corollary to lessor's duty to notify is a corresponding duty of lessee to continue to pay royalties to the named lessor. Were it otherwise, and lessee had discretion under the jurisprudence to withhold payment until notified, at least one obvious inequity would result: lessee would derive the unintended windfall of interest-free use of another's money while the heirs (whoever they might be) waited sans accumulated interest on their royalties. As demonstrated by this case, it sometimes takes years to get a recognized judgment of possession. See also concurring opinion in Pierce v. Atlantic Refining Company, 140 So. 2d 19, 31 (La.App. 3 Cir. 1962).
No provision of the mineral lease and no provision of law has been cited which allows lessees to withhold payment of royalties when a lessor dies. Absent such authority, the court will strictly interpret the mineral lease with ambiguities construed against the lessee who prepared it. Odom v. Union Producing Co., 243 La. 48, 141 So. 2d 649 (1961): Pecot v. Callery Properties, Inc., 247 So. 2d 160 (La.App. 1 Cir. 1971).
The lease provides an adequate and definite mode of payment. To allow lessee to delay rentals when he learns of lessor's death would expand the ambit of the term *704 "justified" as it has been used in the jurisprudential rule that delay in making royalty payments will not result in lease cancellation when the delay is "justified." Bonsall v. Humble Oil & Refining Company, D.C., 201 F. Supp. 516; 300 F.2d 150 (5th Cir. 1962); Fawvor v. U. S. Oil Company, 162 So. 2d 602 (La.App. 3 Cir. 1964); Broadhead v. Pan American Petroleum Corporation, 166 So. 2d 329 (La.App. 3 Cir. 1964); Mire v. Hawkins, 177 So. 2d 795 (La.App. 3 Cir. 1965).
"The lessee may be expelled from the property if he fails to pay the rent when it becomes due." LSA-C.C. Art. 2712. On death of the lessor, we cannot countenance a lessee's nonpayment of rent for eight or eighteen months while it enjoyed the benefits of the lease.
Mineral royalties are the same as rent. Mineral leases are to be construed according to the same codal provisions applicable to ordinary leases. Melancon v. Texas Company, 230 La. 593, 89 So. 2d 135 (1956).
Failure to pay mineral royalties to a lessor is a grievous wrong which results in the harsh but necessary expedient of lease cancellation. Bollinger v. Texas Company, 232 La. 637, 95 So. 2d 132 (1957); Melancon v. Texas Company, 230 La. 593, 89 So. 2d 135 (1956); Fontenot v. Sunray Mid-Continent Oil Company, 197 So. 2d 715 (La.App. 3 Cir. 1967), writ refused, 250 La. 898, 199 So. 2d 915 (1967). In order to avoid cancellation, lessee must carry the awesome burden of establishing that his failure to pay was justified. Mire v. Hawkins, 177 So. 2d 795 (La.App. 3 Cir. 1965); Broadhead v. Pan American Petroleum Corporation, 166 So. 2d 329 (La.App. 3 Cir. 1964); Fawvor v. U. S. Oil Company, 162 So. 2d 602 (La.App. 3 Cir. 1964); Bonsall v. Humble Oil & Refining Company, D.C., 201 F. Supp. 516; 300 F.2d 150 (5th Cir. 1962).
Having found that the trial court properly cancelled the lease, we consider the reservation to lessee of the developed property. The trial court cited no authority for this holding.
An identical provision was considered in the case of Melancon v. Texas Company, 230 La. 593, 89 So. 2d 135 (1956). The Supreme Court refused to recognize the provision stating that to except the developed land "... would lead to an anomalous, if not ridiculous, situation, for the lessor would be at the mercy of the lessee." The court went on to state that "... this is an equitable provision for the benefit of the lessee and apply(s) to those cancellations involving a bona fide dispute as contemplated in the first clause of this particular paragraph."
Hibbert contends that there was a bona fide dispute as to the title, and therefore he is entitled to retain the developed lands. Hibbert did not know of a title dispute until September 10, 1962. And that title dispute did not concern the last record owner. For eight to eighteen months, Hibbert withheld royalties which he was required to pay to the last record owner (Anderson). There was no bona fide title dispute as to her ownership. He knew her last address, that she was the last record owner, and that he had received no requests to pay royalty to others.
The trial court judgment is affirmed with the exception of that part of the decree recognizing Hibbert's lease as to Anderson's interest in the following lands:
1) 1,089.018 acres, Anderson Sand Unit "A" established by Louisiana Department of Conservation Order 197-G-1, effective May 13, 1970.
2) 323.41 acres, Stutes Sand Unit "M", established by Louisiana Department of Conservation Order 197-C-11, effective May 13, 1970.
That portion of the trial court judgment is reversed. All costs of court are taxed to plaintiff-appellant.
*705 Affirmed in part. In part reversed and rendered.
CULPEPPER, Judge (dissenting).
I respectfully dissent, being of the opinion the circumstances of this case do not justify the drastic remedy of a cancellation of a mineral lease.
THE LAW ON LEASE CANCELLATION
The Mudd-Sinclair group rely on Melancon v. Texas Company, 230 La. 593, 89 So. 2d 135 (1956); Bollinger v. Texas Company, 232 La. 637, 95 So. 2d 132 (1957); Bailey v. Meadows, 130 So. 2d 501 (La.App. 2d Cir. 1961), and Pierce v. Atlantic Refining Company, 140 So. 2d 19 (La.App. 3rd Cir. 1962). These cases hold that the failure to pay production royalties under an oil and gas lease, for an appreciable length of time, without justification, amounts to an active breach of such lease which entitles the lessor to a cancellation thereof without the necessity of placing the lessee in formal default. For instance, in Melancon, which was the first case to announce this rule, the lessee failed to payroyalties for 15 months, despite repeated requests on the part of the landowner for payment. The court found "the non-payment of royalties by the defendant was not the result of negligence or inadvertence, but a studied and purposeful nonfeasance designed and intended to pressure the plaintiff into the acceptance of an enlarged production unit contrary to his express desires and the terms of the contract."
Hibbert contends that all of these cases are distinguished on the grounds that they did not involve a bona fide title question or other adequate reasons for the delay in royalty payments. Plaintiff points to the following language in Melancon which expressly states that title questions can justify delay in payment:
"A justifiable cause for delay in such payment might arise when there is a reasonable dispute as to those entitled to receive the royalties, or the amount due each, but no such factual situation is here presented, and we agree with the trial judge that a delay of fifteen months for no valid reason is unjustifiable and violative of the terms of the contract."
The Bollinger, Bailey and Pierce cases, supra, also contain language stating that the delay in royalty payments may be justified because of title questions or other adequate reasons.
Hibbert relies on Bonsall v. Humble Oil & Refining Company, D.C., 201 F. Supp. 516; 300 F.2d 150 (5th Cir. 1962); Fawvor v. U. S. Oil Company, 162 So. 2d 602 (La.App. 3rd Cir. 1964); Broadhead v. Pan American Petroleum Corporation, 166 So. 2d 329 (La.App. 3rd Cir. 1964) and Mire v. Hawkins, 177 So. 2d 795 (La.App. 3rd Cir. 1965). In these cases the court held the delay in royalty payments was justified because of title disputes or other reasons. For instance, in Mire, we distinguished Melancon and its progeny on the following basis:
"In the present instance, there was a genuine and bona-fide dispute as to the plaintiffs' ownership of other mineral ownership whatsoever in the Mire tract,; which the other co-owners have denied in these proceedings. It was necessary to resolve various serious and unsettled questions of law before it could be determined that the plaintiffs had not lost by prescription any mineral rights they still owned affecting the Mire tract. Under the provisions of the lease, the mineral lessees were authorized to withhold payment of royalties in the event of a dispute as to their ownership. We are cited to no applicable statute or jurisprudence justifying the drastic remedy of cancellation of a mineral lease under such circumstances."
HIBBERT'S DELAY IN PAYMENT JUSTIFIED BY TITLE DISPUTES
Applying these rules to the facts of the present case, Hibbert's delay in making *706 royalty payments was justified. Briefly, the facts are that this lease became productive on December 9, 1961, which was approximately two months after the lessor, Edna Mudd Anderson, died on September 20, 1961. Hibbert's testimony is uncontradicted that shortly after production commenced he learned of the lessor's death and, in order to determine the new owners, sought a copy of the judgment of recognition and possession rendered in her succession proceedings on December 5, 1961. He says he contacted the office of the attorneys who handled the succession, who are the same attorneys who represent the Mudd-Sinclair group in these proceedings, and are also the attorneys who did the title work for Mr. Hibbert when he purchased the lease. It is stipulated that Hibbert was never furnished with a copy of the judgment of recognition and possession, nor with copies of the sale by the Sinclair-Birrat group to William Mudd.
Following the commencement of production, three forced units were established by the Department of Conservation. This required that surveys of the units be made and approved by the Department. One survey was approved after five months, but the other two were not approved for 10 or 11 months. Of course, no royalty payments could be made until after these surveys were completed.
The first demand for cancellation of the lease was made on September 10, 1962, approximately nine months after first production. The stipulation shows that between Hibbert's receipt of this demand and the filing of this concursus action, counsel for Hibbert and counsel for both the Mudd-Sinclair and the Sinclair-Birrat groups engaged in negotiations and exchanged correspondence relative to the disputed ownership of the property. The last offer of compromise by the claimants was made on July 9, 1963. This offer was rejected on July 19, 1963 and the concursus proceedings was filed and the production royalties deposited on the same date.
Hibbert takes the position that he could not pay royalties because he simply did not know who owned the land. The facts clearly support him. The Mudd-Sinclair children were born of the unmarried union between Frank Mudd and Agnes Sinclair. The evidence is conclusive that Frank Mudd was white and Agnes Sinclair was negro. At least until 1967, when the United States Supreme Court decided Loving v. Commonwealth of Virginia, supra, Louisiana law was that a child born of a miscegenous union was incapable of being acknowledged and enjoyed no rights of inheritance whatsoever, LSA-C.C. Article 204; Succession of Gravier, 125 La. 733, 51 So. 704 (1910); Succession of Davis, 126 La. 178, 52 So. 266 (1910); and Hibbert v. Mudd, 187 So. 2d 503 (La.App. 3rd Cir. 1966), and the authorities cited therein. It may be that Loving v. Commonwealth of Virginia has the effect of declaring all miscegenation statutes unconstitutional. But, the Loving case applied to a penal statute and there could be a question as to whether it extends to civil statutes such as the one involved in the present case. Nevertheless, during the time Hibbert delayed payment of royalty in 1961, 1962 and 1963, there was a very serious legal question as to whether the Mudd-Sinclair group owned any interest whatever in this property.
Furthermore, there was also a very serious question as to the claims of the Sinclair-Birrat group. The evidence is clear that these claimants were born of the adulterous union between Agnes Sinclair and Lawrence Birrat. Under Louisiana law, a child born to an adulterous union is incapable of being acknowledged and enjoys no rights of inheritance whatever, LSA-C.C. Article 920; Marshall v. Smedley, 166 La. 364, 117 So. 323 (1928); and Prieto v. Succession of Prieto, 165 La. 710, 115 So. 911 (1929). It may be that there is some question as to the constitutionality of this code article under recent federal decisions. But during the time in question, 1961, 1962 and 1963, Louisiana law was clearly to the *707 effect that the issue of an adulterous union were incapable of acknowledgment and had no rights of inheritance.
Additionally, even assuming that the Mudd-Sinclair children and the Sinclair-Birrat children were legally capable of acknowledgment, there was a serious factual question as to whether they had actually been acknowledged. Claimants do not contend there was a formal acknowledgment. And there were serious factual issues as to whether there had been an informal acknowledgment.
The Mudd-Sinclair group argue that these title issues do not justify the delay in, royalty payments because this was not Hibbert's real reason for the delay. My appreciation of the facts shown by the record is entirely different. Mr. Hibbert testified that when he purchased the lease from Edna Mudd Anderson in 1959, the same attorneys who now represent the Mudd-Sinclair group did the title work. Accordingly, when production commenced in December of 1961, and Hibbert learned that Edna Mudd Anderson was deceased and that this same law firm had handled her succession, he logically called their office and asked for a copy of the judgment of recognition and possession. He says he did not talk to a member of the firm but left the message with a secretary. His testimony is not contradicted and appears to be logical.
Of course, it is stipulated that Hibbert never received a copy of the judgment of recognition and possession. It may be true that before the letter of demand, nine months after production commenced, and the negotiations which followed for ten months, Hibbert did not know the names of the claimants nor the nature of the serious title questions. But it is also true that he knew Edna Mudd Anderson was dead and he did not know who had inherited the property. Of course, the lease requires that the lessee be notified of any change in ownership. No notice of the names of the claimants was given until the letter of demand, and this revealed the serious title issues discussed above.
THE ARGUMENT THAT HIBBERT SHOULD HAVE COMMENCED PAYMENT ON THE BASIS OF THE JUDGMENT OF RECOGNITION AND POSSESSION
The Mudd-Sinclair group argues that when Hibbert learned of the judgment of recognition and possession he should have started royalty payments to these named heirs. The answer to this argument is that the succession proceedings were ex parte and state on their face that these were irregular heirs. Unlike regular heirs, who enjoy seizin, natural children and other irregular heirs own no interest in the property until they have filed a contradictory proceedings with other irregular heirs or claimants and have been recognized as owners by a judgment. See LSA-C.C. Article 949; Glenn v. West, 151 La. 522, 92 So. 43 (1922); Succession of Giordano, 188 La. 1057, 178 So. 627 (1938); and Succession of Allen, 44 La.Ann. 801, 11 So. 42 (1892). Thus, the proceedings in the Succession of Edna Mudd Anderson show on their face that Hibbert was justified in not paying royalty to these irregular heirs.
THE ARGUMENT THAT HIBBERT SHOULD HAVE PAID ROYALTY TO THE BANK DESIGNATED IN THE LEASE TO RECEIVE RENTALS
The Mudd-Sinclair group argues that Hibbert should have paid royalty to the First National Bank of Lafayette, which was designated in the lease to receive "rentals". The answer to this argument is that the bank was designated to receive only rentals and not royalty payments.
THE ARGUMENT THAT HIBBERT SHOULD HAVE PAID RENTALS TO THE "ESTATE" OF EDNA MUDD ANDERSON
The Mudd-Sinclair group also argues that Hibbert could have simply made royalty checks payable to the "Estate of Edna Mudd Anderson." Of course, the succession *708 proceedings were merely for recognition and possession. No administrator or other succession representative was appointed or qualified. When not under administration, an "estate" or "Succession" does not exist as a legal entity under Louisiana law, Succession of Coco, 185 La. 901, 171 So. 70 (1936); Tulane University of Louisiana v. Board of Assessors et al., 115 La. 1025, 40 So. 445 (1905); and Dion v. Knap, 230 So. 2d 842 (La.App. 1st Cir. 1970). These cases hold that when a person dies the ownership of his property is not vested in an abstract entity known as a "succession" or an "estate". In the present case there were no regular heirs who were seized of the property, no irregular heirs who had been properly recognized as owners, and there was no succession under administration whose representative could receive the royalty payments. There was no one to whom Hibbert could safely pay the royalty.
HIBBERT'S WITHHOLDING ROYALTY NOT IN VIOLATION OF LSA-R.S. 30:105
The claimants contend and the majority holds, that Hibbert's withholding of royalties violated LSA-R.S. 30:105 which provides as follows:
"It shall be unlawful for a person acquiring mineral rights from, or mineral rights under a lease by, the last record owner and holding under an instrument sufficient in terms to transfer title or for a person purchasing mineral products to withhold payment of any rentals, royalties or other sums due to a party holding an interest in the minerals, or under the lease."
This statute has no application here since the claimants are not the "last record owner and holding under an instrument sufficient in terms to transfer title." An ex parte judgment of recognition and possession is declaratory, and not translative of title, Everett v. Clayton, 211 La. 211, 29 So. 2d 769 (1947). Furthermore, in the above cited case of Mire v. Hawkins, 177 So. 2d 795 (La.App. 3rd Cir. 1965), we clearly held that this statute has no application to a situation where royalties are withheld because of serious unresolved title questions.
For the reasons assigned, I respectfully dissent.
ON APPLICATION FOR REHEARING
Before SAVOY, CULPEPPER and MILLER, J J.
MILLER, Judge.
The thrust of plaintiff appellant's application for rehearing is his contention that our opinion represents an erosion of the concept of "justification" in the jurisprudence dealing with lease cancellation, and renders the rights of an oil and gas lessee "more illusory than real when ownership changes are worked by the lessor's death." The well prepared application raises several issues which have been carefully considered and are here rejected.
We hold to the opinion that Hibbert's failure to pay royalties was not "justified" as that term has been defined in the jurisprudence. Had Hibbert exercised but a modicum of diligence in attempting to ascertain his legal obligation under the lease after he allegedly learned of Mrs. Anderson's death, his "rights" would be far from "illusory," rather they would be as sure and certain as the lease terms which he breached.
Before discussing the merits of Hibbert's arguments, we take note of his contention that our construction of the lease (as requiring payment of royalties to the named lessor until proper "notice" is received by lessee) presents a "third mode" of payment which had never been urged by the Mudd-Sinclair Group in the trial court and did not appear in the trial court's reasons for judgment. Hibbert argues that the Mudd-Sinclair Group only claimed that payment of royalties should have been made to *709 them or to the estate of Mrs. Anderson. It is argued that the trial court awarded partial cancellation of the lease because Hibbert should have paid royalties to lessor's "estate"; that this was impossible because "... when not under administration an `estate' or `succession' does not exist as a legal entity under Louisiana law."
Hibbert confuses the definition of "estate" with that of "succession." LSA-C.C. Art. 448 provides that
"The word estate in general is applicable to any thing of which riches or fortune may consist. This word is likewise relative to the word things, which is the second object of jurisprudence, the rules of which are applicable to persons, things and actions."
See also the discussion of this definition at 1 A. Yiannopolus, Louisiana Practice Civil Law of Property § 9 (1966).
There is no doubt that the trial judge used the word "estate" in that context. The trial court, in alluding to the mode of payment contained in the lease, didn't interpret the lease to require payment of royalties to an entitya "succession" as Hibbert states. Rather he held that lessee would be protected under paragraph 9 of the lease by paying royalties to Mrs. Anderson "or her account." These are the precise words found in the trial court opinion.[1]
At Tr. Vol. II, p. 17, counsel for appellee raised this issue by asking Hibbert if anyone told him not to issue a check in the name of Edna Mudd Anderson and mail it to her address following the production date of this particular well. He gave a negative reply.
There is no merit to applicant's persuasive suggestion that the trial court's "written reasons (did not) even remotely suggest that Hibbert had a third mode of payment open to himpayment of royalties to the named lessor."
Hibbert argues that LSA-R.S. 47:2413 (B) required him to withhold payment of royalties to the named lessor following her death until he had received a certified copy of the judgment of possession. Essentially this argument is that lessee is "protected" under the "notice" provisions of paragraph 9 of the lease as to the effectiveness of payments made without benefit of certified evidence of an ownership change; he is also protected against the imposition of "additional burdens" resulting from such an ownership change until he receives certified evidence. It is argued that it will not do to say that Hibbert would have been "protected" as to the effectiveness of payments to the named lessor if, by making those payments, an additional burden would have been imposed on him as a direct result of an ownership change worked by lessor's death. The additional burden which the rehearing application suggests is that had lessee paid to the named lessor or to the lessor's "estate" prior to receipt of a certified copy of a judgment of possession, his doing so would have been in violation of LSA-R.S. 47:2413(B)[2], and would have *710 subjected Hibbert to the risk of personal liability for inheritance taxes due as a direct result of the change in ownership.
We reject this contention. The statute does not, as Hibbert states, prohibit the release of funds or property belonging to a deceased person; it prohibits their delivery to heirs or legatees of the deceased person. The distinction is important. The effect of our opinion and our interpretation of the cited statute is to protect the State's interest in securing inheritance taxes while at the same time giving effect to the lease provisions requiring the payment of royalties. We protect lessee's interest by honoring the payment of royalty in accordance with the lease provisions. No additional burden is placed on lessee, yet lessee is denied the windfall of interest free use of lessor's money. We recognize the lease provisions which place the burden on lessee to make royalty payments instead of shifting the burden to lessor's successors to fulfill an uncontemplated additional requirement (the presentation of a judgment of possession to lessee) as a prerequisite to the payment of royalties. This is not to be confused with the payment of royalties to the heirs which under the terms of lease paragraph 9 requires that the heirs present a certified copy of the judgment of possession.
Under our interpretation of LSA-R.S. 47:2413(B) the State's interest in securing inheritance taxes is protected because royalties paid to the named lessor become succession property which is deemed to be in the succession representative's possession. LSA-C.C.P. Art. 3211. Succession of Lambright v. Lambright, 252 So. 2d 349 (La.App. 3 Cir. 1971). To get possession of the royalties, the heirs and legatees must pay inheritance taxes before they can obtain a judgment of possession. LSA-C.C.P. Art. 3381. If, as in the instant case, the succession is not placed under administration, the heirs must nevertheless secure a judgment of possession before they can take possession of the royalty checks made payable to the named lessor. LSA-C.C.P. Art. 3061.
Although LSA-R.S. 9:1516 was enacted too late to be relevant to this case, its language is apposite. It provides:
"§ 1516. Transfer or payment of monetary proceeds of minerals or mineral products, rentals, accrued royalties, and other funds related to minerals or *711 mineral contracts belonging or payable to deceased person; authority; discharge of holder
A. Upon proper authority any holder of monetary proceeds of minerals or mineral products, rentals, accrued royalties or other funds related to minerals or mineral products, belonging or payable to a deceased person, under the terms of a mineral lease or other contract, by operation of law or otherwise, may transfer or pay the same to the decedent's succession representatives, heirs, or the legal representatives of the heirs. The letters of the succession representative or the judgment recognizing and putting the heirs in possession, issued by a Louisiana court of competent jurisdiction, and accompanied by letters of tutorship or curatorship of the heirs who are not sui juris, shall constitute proper authority for making the transfer or payment which when so made shall be full protection to the holder. Conclusive proof to the holder of the letters or judgment and of the jurisdiction of the court rendering them shall result from copies thereof, duly certified.
B. Nothing contained in this section shall be construed as limiting the rights of a holder in making any transfer or payment under the terms and provisions of a mineral lease or other contract, or under existing law.
C. The term "holder" as used in this section means any natural person, corporation, association, partnership, receiver, tutor, curator, executor, administrator, fiduciary, or representative of any kind, in possession of the monetary proceeds of minerals or mineral products, rentals, accrued royalties or other funds related to minerals or mineral contracts, belonging or payable to a deceased person.
D. All laws or parts of laws in conflict herewith are hereby repealed. It is expressly provided however, that R.S. 30:105 through 108 shall not be repealed by the provisions of this section, nor shall this section be construed as altering or affecting the provisions of R.S. 47:2413." Acts 1970, No. 153, § 1.
Sub-paragraph B gives legislative approval to the provision found in paragraph 9 of the Hibbert-Anderson mineral lease. Sub-paragraph D states that the statute shall not be construed as altering or affecting the provisions of LSA-R.S. 47:2413. Would the legislature approve the payment of royalties to a deceased named lessor as it does in LSA-R.S. 9:1516(B) in one breath, and in another prohibit their release as Hibbert interprets LSA-R.S. 47:2413(B) to do? We think not. If Hibbert's contention is correct, then LSA-R.S. 9:1516(B) would not have been enacted.
The construction which we have applied gives effect to both legislative enactments and is required by the terms of the lease contract.
Hibbert next contends that his failure to pay production royalties to the named lessor did not violate LSA-R.S. 30:105. Hibbert has never disputed Edna Mudd Anderson's title to the leased land. He argues in this application (and still does not attack Edna Mudd Anderson's title) that the statute does not here apply because: (1) Edna Mudd Anderson did not hold under an instrument sufficient in terms to transfer title, and (2) she was not a party holding an interest in the minerals or under the lease. We find no merit in either contention.
Hibbert's application states that Mrs. Anderson ". . . acquired the property by inheritance as evidenced by a judgment of possession." He contends that a ". . . judgment of possession is declaratory, but not translative, of title. Everett v. Clayton, 211 La. 211, 29 So. 2d 769 (1947)." If these were the only facts, there might be merit to the argument. But Mrs. Anderson acquired this property as a particular legacy by last will and testament from her deceased husband. Tr. Vol. II, p. 22. The property bequeathed was her *712 husband's separate property. Tr. Vol. II. p. 22. A particular legacy, unlike a universal legacy or an inheritance by intestacy which are not translative of title since the universal legatee or the heir merely continues the possession of its author, can be translative of title. LSA-C.C. Art. 3485; Sides v. Nettles, 4 Rob. 170 (La. 1843); Moore v. Blanc, 12 La.Ann. 7 (1857); Howell v. Noah, 6 La.App. 538 (La.App. 2 Cir. 1926); 1 Planiol, Civil Law Treatise, no. 2660 (La.St.L.Inst. transl. 1959); 28 Baudry-Lacantinerie & Tisser, Prescription, no. 657 (4th ed. 1924, La.St.L.Inst. transl. 1972); Comment, 15 Tul.L.Rev. 442 (1941).
The second contention is that Mrs. Anderson was not a party holding an interest in the minerals or under the lease. Although not alive, Mrs. Anderson was a party under the lease, and according to the provision of paragraph 9 Hibbert was required to continue paying royalties to her as the last record owner.
Hibbert's final argument on this issue is that LSA-R.S. 47:2413(B) conflicts with our construction of LSA-R.S. 30:105. This is again answered by the fact that LSA-R.S. 47:2413(B) does not prohibit the release of funds or property; it prohibits delivery of such funds to heirs or legatees of the deceased person absent a judgment of possession.
Although Hibbert violated LSA-R.S. 30:105 as we have demonstrated, both the trial court and appellate court decisions to cancel the lease were bottomed on the finding that Hibbert violated the lease provision requiring payment of production royalties, and the jurisprudential rule that such a violation, when unjustified, will result in lease cancellation. Violation of LSA-R.S. 30:105 was a contributing factor but was of secondary importance. See Pierce v. Atlantic Refining Company, La. App., 140 So. 2d 19, which does not refer to LSA-R.S. 30:105. Consequently even if LSA-R.S. 30:105 did not apply, the cited jurisprudence requires that the lease be cancelled.
Hibbert argues that we erred in cancelling the entire lease. This is premised on his appreciation of the meaning of Melancon v. Texas Company, 230 La. 593, 89 So. 2d 135 (1956). Hibbert reads Melancon to mean: ". . . the so called `forfeiture' provision permits lessee to retain unitized acreage in suits for cancellation based on delays in payment of royalties when there are bona fide disputesfor example, when the dispute turns on the question of who is entitled to receive royalties, or the amount due each." This interpretation is inadequate.
We understand Melancon to mean that when there is a bona fide dispute as to which there is real disagreement in good faith between the parties over undetermined matters, then it must first be judicially determined that lessee has failed to perform and discharge its obligations under the lease, after which lessee must be given a reasonable opportunity to prevent forfeiture by performing and discharging its obligations. However, lessee's failure to perform an undisputed obligation under the lease will result in a final judgment, including lease cancellation with no retention by lessee of unitized acreage if so ruled by the court, without the necessity of first allowing lessee a reasonable opportunity to avoid forfeiture.
The forfeiture clauses in Melancon and in paragraphs 3 and 11 in the Anderson lease are essentially the same, and consequently the forfeiture decreed by the Supreme Court in Melancon is to be here followed.
Hibbert contends that he is entitled to retain unitized acreage because there was a bona fide dispute sufficient in law to permit retention of unit acreage under the forfeiture provisions as interpreted in Melancon. Applying Melancon, we determined that in order for Hibbert to be allowed to retain unitized acreage, the bona *713 fide dispute would have to exist between Hibbert and Mrs. Anderson. Since there was no dispute concerning Mrs. Anderson's title, Hibbert was required to promptly and timely pay royalties. The title problems which constituted Hibbert's bona fide dispute concerned the Mudd-Sinclair Group, not Mrs. Anderson. Hibbert was required to pay royalties to Mrs. Anderson, the named lessor under paragraph 9 of the lease. When she granted the lease, she became the last record owner. Hibbert did not dispute her title. His disputes with the Mudd-Sinclair Group were irrelevant. By failing to perform his undisputed obligation under the lease, Hibbert was not entitled under the Melancon holding to retain unitized acreage.
We mentioned that Hibbert did not learn of a title dispute until September 10, 1962 to illustrate that Hibbert's argument (that he was entitled to retain the unitized acreage because of his dispute with the Mudd-Sinclair Group) was off point inasmuch as the basis of the cancellation was his failure to pay royalties to the named lessor. These royalty payments were long overdue before Hibbert learned of the title dispute. We therefore reject the argument that ignorance of these facts is immaterial under settled authority to the effect that ignorance of facts warranting or excusing nonperformance under a contract does not affect the right to assert such facts after they are discovered.
Hibbert was not justified, as that term has been defined in the jurisprudence, in his failure to pay royalties to the named lessor as was required by the express terms of the lease. We were however mindful of the harsh effect of lease cancellation. We therefore searched for mitigating factors which would persuade us that Hibbert acted in utmost good faith (as he is required to do) in performing his obligations to lessor under the lease. We found none. The withholding was not the result of a necessary delay in order to have surveys approved by the Department of Conservation as in Fawvor v. U. S. Oil Company, 162 So. 2d 602 (La.App. 3 Cir. 1964). There was no bona fide dispute with respect to the effect of a forced unit on a previously established declared unit as in Bonsall v. Humble Oil & Refining Company, 201 F. Supp. 516, aff. 300 F.2d 150 (5th Cir. 1962). There was no problem with curative work on a title as in Broadhead v. Pan American Petroleum Corporation, 166 So. 2d 329 (La. App. 3 Cir. 1964). There was no problem with prescription of mineral rights as in Mire v. Hawkins, 177 So. 2d 795 (La.App. 3 Cir. 1965).
When questioned about what he would have done with the accumulated and accumulating royalties had the succession not been opened, Hibbert explained that he would follow the law as to that technicality. Despite his years of experience as an oil field operator and his care in seeking professional legal opinions, his actions after allegedly learning of Mrs. Anderson's death leave one with the impression that the best that could be said of his actions was that they were recklessly cavalier. So far as this record discloses, Hibbert did not seek advice concerning his obligations to the lessor. He simply enjoyed the fruits of his personal interpretation of the lease. To the contention that this was only an honest mistake by a layman, we reiterate that Hibbert was far from "layman" status as an oil field developer. We cannot ignore the serious implications of his failure to perform according to the terms of his lease. The "substantial rights in property" lessor holds under a lease are no less important and no less deserving of the same good faith care in treatment as those of lessee.
The application for rehearing is denied.
CULPEPPER, J., dissents and votes for a rehearing.
NOTES
[1] Many of the facts stipulated on remand are therefore irrelevant.
[2] The claimants referred to in our 1966 opinion as the "Sinclair-Birrat" group sold their interest in the property to William Mudd, a member of the Mudd-Sinclair group and did not appeal.
[3] Sec. 105. Withholding payment of rentals or royalties, when unlawful.
It shall be unlawful for a person acquiring mineral rights from, or mineral rights under a lease by, the last record owner and holding under an instrument sufficient in terms to transfer title or for a person purchasing mineral products to withhold payment of any rentals, royalties or other sums due to a party holding an interest in the minerals, or under the lease.
Sec. 106. Right to revenues pending test of title; effect of recorded lease.
A. A person producing minerals under a lease granted by the last record owner and holding under an instrument sufficient in terms to transfer title to the land or mineral rights, shall be presumed to have derived his right from the true owner. The lessor, royalty owner, lessee or producer or persons holding from them shall be entitled to all minerals produced or to their proceeds, unless and until a suit testing title of the land or mineral rights embraced in the lease is filed in the district court of the parish in which the property is located.
B. A purchaser of minerals produced from a recorded lease granted under these conditions shall be fully protected in making payment to any party in interest under the lease unless and until the above mentioned suit should be filed and the purchaser receives notification of it by the usual postal registry receipt card. The purchaser shall not be entitled to this protection unless he has recorded in the conveyance records of the parish in which the land is located, notice that the minerals have been and will be bought by him.
[4] "If a lessee, having been given written notice demanding cancellation of the lease, fails or refuses to comply within ten days, he shall be liable to the lessor for a reasonable attorney's fee incurred by the lessor in bringing suit to have the cancellation adjudged."
[1] "Hibbert, the lessee, under (paragraph 9 of) the lease from Edna Mudd Anderson would have been protected had he made payments to the estate of Edna Mudd Anderson ....
Accordingly, under the provisions of the lease from Edna Mudd Anderson to R. E. Hibbert providing for cancellation of the same for failure to pay royalties and in keeping with the rulings of the Court of Appeal in Pierce versus Atlantic Refining Company, 140 So. 2d 19, and the authorities cited therein, the Court herein finds that the failure to pay royalties to Edna Mudd Anderson or to her account amounted to an active breach of the lease and serves as a basis for its cancellation." Tr. Vol. II, pp. 72, 73. (Emphasis added.)
[2] "§ 2413. Certain acts prohibited prior to payment of tax
* * * * *
B. Giving of possession by banks, depositories, or other custodians. Unless the tax due under this Part has been paid, or unless it is determined judicially in the manner prescribed herein that no tax is due: (1) no bank, banker, trust company, warehouseman, depository, or other person having on deposit, or having possession or control of, any money, credits, goods, or other things or rights of value which belonged to a deceased person, or in which the latter had an interest, shall deliver any such money or property to any heirs or legatees of the deceased person; and (2) no corporation shall transfer to any heirs or legatees of a deceased person any stock or registered bonds of such corporation which were owned by the deceased person. Except as provided hereinafter, any person or corporation so making delivery or transfer shall be liable for the tax.
A person or corporation may deliver or transfer money or property which belonged to a deceased person, without incurring any liability for the tax due under this Part, to: (1) the succession representative of the deceased who submits a certified copy of the letters issued to him by a court of competent jurisdiction; or (2) the surviving spouse, heirs, or legatees of the deceased who submit a certified copy of the judgment of possession rendered by a court of competent jurisdiction which evidences their right to the possession of the money or property so delivered or transferred. A certified copy of such a judgment of possession constitutes full proof of the payment of all taxes due under this Part, or that no such tax is due. Nothing contained herein shall be construed to repeal, modify, or affect R.S. 9:1513 or those provisions of R.S. 6:66 which provide that a copy of the letters issued to a succession representative, or of a judgment of possession, certified by the clerk of the court which issued or rendered it, is conclusive proof to a bank of the jurisdiction of such court.
No bank or other depository having in its possession a safe deposit box or any property, enterable by or deliverable to one or more persons, upon receipt of knowledge of the death of any such persons, shall permit entry thereunto or delivery thereof until after three days' written notice to the inheritance tax collector of the parish in which the property is situated, or receipt of his written consent thereto. As amended Acts 1960, No. 35, § 1." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572532/ | 225 S.W.2d 958 (1950)
CONSTRUCTION AND GENERAL LABOR UNION, LOCAL NO. 688, et al.
v.
STEPHENSON.
No. A-2322.
Supreme Court of Texas.
January 4, 1950.
Rehearing Denied February 1, 1950.
*959 Mullinax, Wells & Ball, Dallas, L. N. D. Wells, Jr., Dallas, Charles J. Morris, Dallas, for petitioners.
E. Byron Singleton, Amarillo, Singleton, Smyth, Morris, Lockhardt & Edwards, Amarillo, Looney, Clark, & Moorhead, Austin, Everett L. Looney, Edward Clark, R. Dean Moorhead, Austin, for respondent.
HART, Justice.
The question before us is whether a permanent injunction against peaceful picketing can be sustained under Texas statutes when attacked on the ground that it deprives the petitioners of their rights under the Fourteenth Amendment to the United States Constitution.
The picketing was directed against the respondent, H. I. Stephenson, who is engaged in the house-moving business. He uses special equipment and employs a crew of men who perform all of the tasks necessary to dismantling and removing a building from one place and transporting it to and setting it up at another location. None of the members of this crew belong to any union.
Stephenson contracted with Potter County to dismantle two hangars at Dalhart and to transport them to Amarillo and to reconstruct them there as one building. Before he began work on this contract, Stephenson was approached by union representatives who wished to have the members of his crew join unions. Stephenson stated that he had no objections to their joining unions, and agreed that the union representatives could talk to a meeting of his crew. They did so, and an election was held in which Stephenson's employees voted not to join any union. An effort was made by union representatives to have Stephenson employ union men in the work at Dalhart, but there was no interference by the union with Stephenson's work until the hangars had been removed to Amarillo and the work of reconstruction had started there. The union representatives then attempted to persuade Stephenson to substitute union men for his non-union regular crew in this work. Upon his refusal to do so, they picketed Stephenson's job, a *960 single picket carrying a banner reading as follows:
"Amarillo Building and Construction Trades Council protest the employment by Ira Stephenson and Company of non-union labor on this job, and the failure of the employees on this job to join unions affiliated with the Amarillo Building and Construction Trades Council."
Stephenson thereupon brought suit, alleging that the unions' purpose was to force him to hire only union men and to compel his crew to join two local unions, that no labor dispute existed as defined by Texas statutes, and that the picketing was in violation of Texas statutes, particularly referring to Article 5154f, Vernon's Ann. Civ.St., Acts 1947, 50th Leg., p. 779, ch. 387. He prayed for temporary and permanent injunctive relief against picketing. The unions and their business agents who were named as defendants answered that a bona fide labor dispute existed, that Stephenson had agreed to employ only union members on the re-erection job in Amarillo but had failed and refused to carry out this agreement and had employed non-union labor at wages below the union scale, that the unions and their members had a constitutional right to picket Stephenson's job, and that to the extent that Texas statutes prohibited the exercise of this right they were invalid.
The defendants waived a hearing on a temporary injunction and agreed that the court might proceed to a hearing on the merits. After a trial without a jury, the court rendered judgment in favor of Stephenson permanently enjoining the unions and their members from picketing the premises where Stephenson was performing his work, "unless at such time controversy then exists between plaintiff and the majority of his employees concerning wages, hours or conditions of employment, or a controversy exists between plaintiff and the majority of his employes belonging to any one labor union concerning wages, hours or conditions of employment." This judgment has been affirmed by the Court of Civil Appeals. 221 S.W.2d 375.
No request was made of the trial court to make and file findings of fact and conclusions of law, under Rules 296-299, Texas Rules of Civil Procedure, and no separate findings and conclusions were filed. In the absence of findings of fact in a case tried without a jury, it is settled that we must test the validity of the judgment on the assumption that the trial court found every disputed fact in such a way as to support the judgment he rendered. Rolison v. Puckett, 145 Tex. 366, 198 S.W. 2d 74; International Union of Operating Engineers v. Cox, Tex.Sup., 219 S.W.2d 787; North East Texas Motor Lines v. Dickson, Tex.Sup., 219 S.W.2d 795. Petitioners point out that the judgment in this case recites certain findings of fact and, after granting an injunction against picketing, provides that all other relief not specifically granted is denied. However, this denial of other relief does not constitute a finding of the nonexistence of facts not recited in the judgment; and in this situation omitted findings necessary to support the judgment will be supplied by a presumption in support of the judgment, if there is evidence in the record to sustain such omitted findings. Bednarz v. State, 142 Tex. 138, 176 S.W.2d 562. Moreover, it is established that this court will not reverse a judgment of the trial court affirmed by the Court of Civil Appeals if the judgment is correct in view of the entire record, even though in our opinion one or both of the lower courts have given erroneous reasons for rendering or upholding the judgment. Walker v. Garland, Tex.Com.App., 235 S.W. 1078; Bordelon v. Philbrick, 125 Tex. 460, 84 S. W.2d 710; Payne v. Bracken, 131 Tex. 394, 115 S.W.2d 903. This rule is not contrary to the holdings in Safety Casualty Co. v. Wright, 138 Tex. 492, 160 S.W.2d 238, and Kousal v. Texas Power & Light Co., 142 Tex. 451, 179 S.W.2d 283, to the effect that parties are restricted in the appellate court to the theory on which the case was tried in the lower court. In the present case, the case was tried in part on the theory on which we hold the judgment can be sustained, as is shown by the pleadings *961 and the evidence in the record, and therefore the fact that the lower courts rested their judgments in part on what we hold to be erroneous legal reasons does not require a reversal of the judgment.
The ground on which the district court apparently based his judgment was that the picketing was unlawful because no labor dispute existed between Stephenson and any of his employees, and therefore the picketing in question was "secondary picketing" as defined and prohibited by Article 5154f, Vernon's Ann.Civ.St. The Court of Civil Appeals sustained this reason for the judgment, and also placed its judgment in part on the basis that the purposes for which the unions picketed Stephenson were not lawful purposes or objectives. 221 S.W.2d at pages 380, 381. In spite of our settled policy not to decide constitutional questions where they can be avoided, we must determine whether Article 5154f can be validly applied to sustain the injunction in this case, because the injunction by its terms incorporates the provisions of Sec. 2, par. h of that statute, and the petitioners specifically attack this portion of the trial court's judgment.
We do not think that the injunction can be upheld on the ground that no "labor dispute" existed because there was in fact no dispute between Stephenson and any of his employees. To the extent that Article 5154f restricts the meaning of a "labor dispute" to a controversy between an employer and his employees and prohibits picketing except where such a controversy exists, we think that the statute is in conflict with the Fourteenth Amendment as construed by the Supreme Court of the United States in American Federation of Labor v. Swing, 312 U.S. 321, 61 S.Ct. 568, 85 L.Ed. 855, and Cafeteria Employees Union, Local 302 v. Angelos, 320 U.S. 293, 64 S.Ct. 126, 88 L.Ed. 58, and that the statute must yield. In the Swing case the Supreme Court held, and repeated in the Angelos case, that "a state cannot exclude workingmen from peacefully exercising the right of free communication by drawing the circle of economic competition between employers and workers so small as to contain only an employer and those directly employed by him." 312 U.S. at page 326, 61 S.Ct. 568, 570, 85 L.Ed. 855; 320 U.S. at page 296, 64 S.Ct. 126, 88 L.Ed. 58. The rule is thus stated unequivocally as a constitutional limitation on the exercise of power by a state in dealing with industrial disputes, and we must therefore hold that the admitted fact that none of Stephenson's employees had any quarrel with him will not justify the issuance of the injunction in this case.
The Court of Civil Appeals undertook to distinguish the Swing case, supra, citing Carpenters & Joiners Union of America, Local No. 213 v. Ritter's Cafe, 315 U.S. 722, 62 S.Ct. 807, 86 L.Ed. 1143, on the ground that there was no "interdependence of economic interest" between the petitioners and Stephenson's employees, emphasizing the facts that house moving is a specialized business, that there was no house movers' union for Stephenson's employees to join, and that Stephenson's employees performed a variety of tasks, many of which were not performed by any members of the picketing unions. Conceding all of this to be true, still we think that the undisputed facts compel the conclusion that a relation existed between the work which Stephenson's employees were doing at the time of the picketing and the work which the union members were accustomed to perform which would give them a real and substantial economic interest in the work on Stephenson's job. The undisputed evidence shows that the work of erecting the steel trusses was work which members of the iron workers' union were accustomed to do. Other work being done in the erection of the building came within the tasks usually performed by members of the carpenters' and the laborers' unions. Moreover, union members were employed by the county on the same job and had to work alongside of Stephenson's employees. We believe, therefore, that it must be concluded that the unions had a legitimate concern with the work done by Stephenson's employees, and that therefore the injunction cannot be sustained on the basis of the absence of such concern.
*962 Without specifically referring to Article 5207a, Vernon's Ann.Civ.St., Acts 1947, 50th Leg., p. 107, ch. 74, the Court of Civil Appeals indicated in its opinion that it considered the purpose for which petitioners picketed to be unlawful. 221 S.W. 2d at pages 380, 381. Stephenson alleged in his petition in the district court that the purpose of the picketing was to compel Stephenson to employ only union men on this job. The answer filed by the unions sought to justify the picketing on the ground that Stephenson had violated an alleged agreement to employ only members of unions affiliated with the Amarillo Building and Construction Trades Council. The banner carried by the picket protested the employment by Stephenson of non-union men and the refusal of his employees to join the unions. The testimony heard by the court reasonably sustains the conclusion that the purpose of the unions was to make this a union job. There was therefore a substantial basis in the record for the trial court to conclude that the immediate purpose of the picketing was to compel Stephenson to discriminate in favor of union members and against non-union men in hiring his employees, in violation of Article 5207a, which reads in part as follows:
"Section 1. The inherent right of a person to work and bargain freely with his employer, individually or collectively, for terms and conditions of his employment shall not be denied or infringed by law, or by any organization of whatever nature.
"Sec. 2. No person shall be denied employment on account of membership or nonmembership in a labor union.
"Sec. 3. Any contract which requires or prescribes that employees or applicants for employment in order to work for an employer shall or shall not be or remain members of a labor union, shall be null and void and against public policy. The provisions of this Section shall not apply to any contract or contracts heretofore executed but shall apply to any renewal or extension of any existing contract and to any new agreement or contract executed after the effective date of this Act."
There cannot be any question regarding the constitutionality of Article 5207a in view of the recent decisions of the Supreme Court of the United States upholding almost identical provisions contained in the statutes and constitutions of other states. Lincoln Federal Labor Union v. Northwestern Iron & Metal Co. and Whitaker v. North Carolina, 335 U.S. 525, 69 S.Ct. 251, 93 L.Ed., and American Federation of Labor v. American Sash & Door Co., 335 U.S. 538, 69 S.Ct. 258, 93 L.Ed..
The immediate purpose of the picketing being to compel Stephenson to violate the statutory prohibition by denying employment to his regular crew because of their nonmembership in a labor union and to require him in violation of the statute to abide by an alleged agreement requiring his employees to be members of labor unions, the picketing was not entitled to constitutional protection and could be validly enjoined. This follows from the decision of the Supreme Court of the United States in Giboney v. Empire Storage and Ice Co., 336 U.S. 490, 69 S.Ct. 684, 93 L. Ed.. There it was held that picketing could be enjoined where it was designed to compel a violation of a valid Missouri statute prohibiting combinations in restraint of trade. Here a different statute is involved, but the Texas statute, like the Missouri law, represents a solemn and valid declaration of an important public policy by the legislative branch of the state government. We have recently recognized, in line with decisions of the Supreme Court of the United States, that picketing is one form of the exercise of the constitutional right of freedom of speech. Ex parte Henry, 147 Tex. 315, 215 S.W.2d 588; International Union of Operating Engineers v. Cox, Tex.Sup., 219 S.W.2d 787. But we have been careful to point out that there must be a valid controversy, International Union of Operating Engineers v. Cox, Tex.Sup., 219 S.W.2d at page 794, and that the picketing must be for lawful purposes. North East Texas Motor Lines v. Dickson, Tex.Sup., 219 S.W.2d at page 798. Since the purpose of the picketing in this case was to bring about a violation *963 of a valid statute, the purpose was unlawful, and under the Giboney case, supra, it could validly be enjoined. See, also, Fred Wolferman, Inc. v. Root, 356 Mo. 976, 204 S.W.2d 733, 174 A.L.R. 585; R. H. White Co. v. Murphy, 310 Mass. 510, 38 N.E.2d 685; Restatement of Torts, § 794; Dodd, "Picketing and Free Speech: A Dissent," 56 Harv.L.Rev. 513 at 523-524.
Petitioners urge, however, that the objective of their picketing was to improve wage and working conditions, because the evidence shows that some of Stephenson's employees were paid less than the union scale and there was some evidence that Stephenson's nonunion employees were so inexperienced in heavy steel work as to endanger union men working on the same location. On the record before us, there is evidence to support a conclusion that the unions were only concerned with making Stephenson's job a union job and that they agreed that if Stephenson's employees joined the unions Stephenson could continue the same men on the job at the same wages he was then paying them. Under our settled procedure, we must presume that the trial court so found. Aside from this, however, we note that in the Giboney case the facts showed that "one objective of the organizational drive was to better wage and working conditions of peddlers and their helpers." 336 U.S. 490, 69 S.Ct. at page 685, 93 L.Ed.. Nevertheless, the court held in that case that since the immediate objective was to cause a violation of the statute, the ultimate objective of improving wages and working conditions would not justify the picketing. Similarly here, the immediate purpose being to cause a discrimination among employees on the basis of their membership or nonmembership in a union, the underlying purpose of improving wages and working conditions would not validate the picketing.
We sustain the granting of the injunction on the ground that the picketing had as its unlawful purpose to cause a violation of Article 5207a. However, we think that the petitioners are in part correct in saying that the terms of the injunction should be modified. The requirement that before picketing will be permitted there must be a dispute between Stephenson and a majority of his employees or between him and a majority of such employees belonging to any one labor union, concerning wages, hours or conditions of employment, is invalid, as we have held, and should be eliminated. The application of the injunction is of course to be confined to picketing for unlawful purposes, as disclosed by the facts of this record, and is not to be construed to prevent peaceful picketing at proper places for lawful purposes, or other methods of publicizing any legitimate protests which petitioners may have against respondent.
Petitioners assign error to the alleged failure of the Court of Civil Appeals to make supplemental findings of fact under Rule 455, Texas Rules of Civil Procedure. Under Rule 482 we could refer the case back to the Court of Civil Appeals for further findings, if we were of the opinion that additional findings of fact by that court were necessary to enable us properly to determine the rights of the parties. We believe, however, that the Court of Civil Appeals' opinion sufficiently states its conclusions on the controlling issues of fact, that many of the findings requested by the petitioners were evidentiary and argumentative, and that the Court of Civil Appeals properly refused to make the requested findings. Nowlin v. Hall, 97 Tex. 441, 79 S.W. 806.
The judgment of the district court is modified, and as modified, that judgment and the judgment of the Court of Civil Appeals are affirmed.
GRIFFIN, Justice (concurring).
We are all in agreement that the judgment of the trial court and Court of Civil Appeals must be affirmed on the second ground stated in the opinion. Therefore any ruling on the constitutionality of Art. 5154f in this cause is unnecessary to a decision of this case. Regardless of our holding on this question as to Art. 5154f, the judgment must be affirmed. As I understand the law, Courts should not declare *964 acts of the Legislature unconstitutional unless necessary to do so for a decision in the case at hand. For that reason I do not concur in the decision that Art. 5154f is unconstitutional but reserve that for determination when the point squarely arises.
SHARP, J., joins in this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572533/ | 2 So.3d 354 (2008)
Christopher J. KARLING, Appellant,
v.
BUDGET RENT A CAR SYSTEM, INC., et al., Appellee.
No. 5D08-310.
District Court of Appeal of Florida, Fifth District.
December 5, 2008.
*355 Roy D. Wasson, of Wasson and Associates, Miami, and Allan L. Ziffra of Rue & Ziffra, P.A., Port Orange, for Appellant.
Philip Glatzer, of Marlow, Connell, Valerius, Adler, Newman & Lewis, Coral Gables, for Appellee.
LAWSON, J.
Christopher Karling timely appeals a final summary judgment entered in favor of Budget Rent A Car System, Inc., PV Holding Corporation, and Aesop Leasing Corporation, defendants below. The ruling was based upon the finding that the vicarious liability of short-term motor vehicle lessors under Florida's dangerous instrumentality doctrine is now preempted by 49 U.S.C. § 30106, commonly referred to as the Graves Amendment. Karling alternatively argues that if the Graves Amendment is construed to preempt his suit, it is unconstitutional as exceeding Congress' power under the Commerce Clause of the United States Constitution. We affirm.
Christopher Karling was severely injured as a result of a collision between the motorcycle he was driving and a rental car driven by defendant Derek Johnson. Budget rented the car to Johnson. And, at the time of the accident, PV Holding Corporation and Aesop Leasing Corporation held identifiable ownership interests in the vehicle. Karling does not allege that Budget, PV Holding, or Aesop Leasing were negligent or engaged in any criminal wrongdoing which contributed to the accident. Rather, Karling seeks to hold these defendants liable solely on the theory of vicariously liability, as owners/lessors of the vehicle under Florida's dangerous instrumentality doctrine.
The issues raised in this appeal have been thoroughly addressed and decided in three reported federal court decisions, all holding that the Graves Amendment preempts Florida's state law (which would otherwise impose strict vicarious liability on rental car owners up to the liability limits set forth in section 324.021(9)(b)2., Florida Statutes) and that this legislation is a valid exercise of Congress' power under the Commerce Clause. See Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (11th Cir.2008); Dupuis v. Vanguard Car Rental USA, Inc., 510 F.Supp.2d 980 (M.D.Fla.2007); Garcia v. Vanguard Car Rental USA, Inc., 510 F.Supp.2d 821 (M.D.Fla.2007). We fully agree with these courts' analyses and see no reason to restate the analyses here. All of Florida's intermediate appellate courts that have addressed *356 this issue have now reached the same conclusion. See Kumarsingh v. PV Holding Corp., 983 So.2d 599 (Fla. 3d DCA 2008), rev. denied, 984 So.2d 519 (Fla.2008); Bechina v. Enterprise Leasing Co., 972 So.2d 925 (Fla. 3d DCA 2007); St. Onge v. White, 988 So.2d 59 (Fla. 1st DCA 2008); Lucas v. Williams, 984 So.2d 580 (Fla. 1st DCA 2008); Vargas v. Enterprise Leasing Co., 993 So.2d 614 (Fla. 4th DCA 2008) (en banc).
Accordingly, we affirm the final summary judgment.
AFFIRMED.
ORFINGER and MONACO, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917874/ | 178 B.R. 590 (1995)
In re Judith A. DRINKWATER, Debtor.
In re Wilfredo GUZMAN, Debtor.
Bankruptcy Nos. 93-41032-HJB, 93-42766-HJB.
United States Bankruptcy Court, D. Massachusetts.
March 24, 1995.
*591 MEMORANDUM OF DECISION
HENRY J. BOROFF, Bankruptcy Judge.
Before the Court for determination are motions filed by James M. Lynch, United States trustee for Region I (the "UST"), pursuant to 11 U.S.C. § 324 and Bankruptcy Rules 9013 and 9014, for the removal of Cecilia Calabrese ("Calabrese") from the above-captioned cases and from all other cases in which she is the Chapter 13 Trustee in the Western Division of this District (jointly and severally the "UST Motions"). The UST Motions also ask the Court to order Calabrese to turnover to the UST, or his designee, all case records, including financial records and funds held by Calabrese relative to the affected cases.
I. BACKGROUND
Calabrese was appointed to serve as the standing Chapter 13 Trustee for the Western Division of the District of Massachusetts by the predecessor to the UST, effective April 1, 1993. According to the UST, as of December 31, 1994, Calabrese serves as the Chapter 13 Trustee in approximately 818 cases and currently holds approximately $867,115.05 in payments received under Chapter 13 plans. In January of 1995, the UST terminated the appointment of Calabrese as the standing Chapter 13 Trustee, meaning that she was informed that she would be receiving no new cases. The UST also requested that Calabrese resign from all pending cases in which she served as Chapter 13 Trustee (the "Pending Cases"). Calabrese refused. In response, the UST filed the instant motions.
II. THE PLEADINGS
The pleadings filed by the parties portray totally disparate pictures of Calabrese and her performance as Chapter 13 Trustee.
The UST Motions were filed on February 24, 1994. The motion with respect to the Drinkwater case complains that, notwithstanding an order confirming the plan on July 14, 1994, the dismissal of that case (at the request of the debtor) on September 21, 1994 and the closing of the case on October 5, 1994, Calabrese failed to (i) enter any of the claims in her computer system for payment, (ii) file a final report as required by 11 U.S.C. §§ 704(9) and 1302(b) or (iii) ever distribute any of the funds collected by her, other than a payment of her fee.[1]
The motion with respect to the Guzman case complains that, notwithstanding confirmation of the debtor's plan on July 14, 1994, the twelve payments received by Calabrese during the period between February 1, 1994 and December 6, 1994, totalling $5,940.00, were carried in Calabrese's computer records as "error receipts" and were never distributed to creditors.
More damaging than the foregoing, are the UST allegations common to each of the UST Motions. In substance, the UST cites the following alleged deficiencies in Calabrese's performance:
1. Calabrese has demonstrated a pattern of being unable to properly administer cases evidenced by (a) her performance in the Drinkwater and Guzman cases, (b) a complaint by the Commonwealth of Massachusetts Department of Revenue that she had failed to make distributions to that agency in a number of cases, (c) a confusing response by Calabrese to the UST with respect to at least one of those cases, (d) Calabrese's failure to follow through on her advice to the UST that she would shortly move to dismiss a number of cases on account of the failure of those debtors to make required payments, and (e) repeated mathematical and substantive legal errors in proposed orders of confirmation *592 submitted to the UST for approval or submitted to the Court for allowance;[2]
2. Calabrese is not accountable for funds entrusted to her care as Trustee, evidenced by an accounting system so deficient that (i) as of September 23, 1994, her computer system carried the sum of $244,728.96 as "error receipts", (ii) Calabrese has not timely performed basic monthly bank reconciliations[3], (iii) in December of 1994, auditors chosen by the Department of Justice to audit Calabrese's records[4] were unable to complete their audit or even reconcile her bank balances with her computer records or any other records, (iv) Calabrese had maintained inadequate bonding for several months, and (v) Calabrese had failed to submit required monthly reports to the UST since September, 1994 (approximately five [5] months); and
3. Calabrese had, on three (3) occasions, drawn compensation in excess of that permitted by her compensation order, pursuant to 28 U.S.C. § 586(e), or as allowed by paragraph 13-19(d) of this Court's Joint Procedural Order of September 1, 1994.
The "Initial Opposition of Chapter 13 Trustee Calabrese to Motion for Order Removing Trustee" (the "Oppositions"), filed March 16, 1995 in each of the Drinkwater and Guzman cases[5], paints a dramatically different picture of Calabrese's performance. According to the Oppositions, Calabrese failed to act in the Drinkwater and Guzman cases because she failed to receive notice of the Guzman confirmation or Drinkwater dismissal. She promises to make the appropriate disbursements as soon as she receives the appropriate notices. With respect to the complaint of the Commonwealth of Massachusetts Department of Revenue, Calabrese either has acted (or will soon act) on those complaints. In reply to the alleged problems with the Department of Justice sponsored audit, Calabrese claims that she provided all of the information requested and her accounts balanced against her records. In response to the UST complaint that her monthly reports to the UST have not been filed since October of 1994, Calabrese answers that she:
has submitted monthly expense reports, monthly trust fund reports for both pre and post confirmation accounts and statements of her receipts and expenses, and bank reconciliations for her expense account for each month from October 1994 through February 1995 to the U.S. Trustee. All her financial reporting to the U.S. Trustee is current and complete. . . . Her records and her actions are fully accountable.
Oppositions, Page 3.
Calabrese rebuts the UST claim that she took improper compensation, by attributing the problem to "poor communications and bad timing", and rejects the notion that she failed to provide adequate notice to the UST of her request for compensation in the Drinkwater case. She responds to the claim of inadequate bonding by noting that her bond was subsequently increased. Finally, she counters the claim that she has submitted *593 improper proposed confirmation orders to the UST by indicating the problems in each of the affected cases have been "competently resolved".
In closing, Calabrese requests, as a matter of due process, the right to discovery and an evidentiary hearing.
III. THE HEARING
The Court conducted a nonevidentiary hearing on the UST Motions on March 17, 1995 in Worcester[6]. At the outset, the parties reached their only agreements. First, the parties agreed that only the Court has jurisdiction to remove Calabrese from the cases in which she serves as Trustee. Second, although the UST has determined not to appoint Calabrese to any further cases[7] and this determination is not challenged, the parties also agree that, as a matter of due process, Calabrese can not be removed from the Pending Cases, absent this Court's determination, pursuant to § 324.
Oral argument by Attorney Gary Donahue ("Donahue") on behalf of the UST, and Attorney Michael Roitman ("Roitman") on behalf of Calabrese, essentially tracked the positions taken by each in their respective papers. However, Donahue added that only two days before the hearing, Calabrese had forwarded the missing monthly reports for the period of October 1994 through February, 1995. However, he noted that the reports were incomplete and unverifiable since, inter alia, required copies of bank statements were not included. Furthermore, the reports allegedly reflected a discrepancy of approximately $28,000, a matter of concern to the UST.
The Court raised the recent filing of the monthly reports with Roitman, particularly with respect to the clear implication in the Oppositions that these reports had been timely filed. In response, Roitman conceded that they were not timely filed and that the contrary implication, if misleading, may have been his fault. He did not, however, meaningfully respond to the UST allegation that the reports were insufficient.
Roitman insisted that Calabrese was entitled to an evidentiary hearing after an opportunity to conduct discovery. He indicated that a sixty (60) day discovery period was a "bare minimum" of what was required.
Finally, counsel for the debtors Drinkwater and Guzman each addressed the Court briefly. The attorney for Drinkwater indicated that his client did not object to the allowance of the UST Motions. However, the attorney for Guzman, Francis Lafayette, urged support for Calabrese because of satisfaction experienced by Guzman with respect to Calabrese's performance. The Court's reminder that the alleged deficient performance in the Guzman case related not to the treatment of the debtor, but rather to an alleged failure to make distributions to creditors, did not elicit a meaningful reply.
At the conclusion of the hearing, the Court took the matter under advisement.
IV. DISCUSSION
Section 324 of the Bankruptcy Code provides:
(a) The court, after notice and a hearing, may remove a trustee, other than the United States Trustee, or an examiner, for cause.
(b) Whenever the court removes a trustee or examiner under subsection (a) in a case under this title, such trustee or examiner shall thereby be removed in all other cases under this title in which such trustee or examiner is then serving unless the court orders otherwise.
11 U.S.C. § 324.
There are very few published decisions relating to the removal of standing Chapter *594 13 Trustees. In the case of Matter of Chapter 13, Pending And Future Cases, 19 B.R. 713 (Bankr.W.D.Wash.1982), the issue facing the court was whether a Chapter 13 Trustee could be removed on the grounds of the sexual harassment of employees, if the Trustee was otherwise competently performing his duties. On reconsideration, the court removed the Trustee. Id. In the case of Flournoy v. Hershner, 68 B.R. 165 (Bankr. M.D.Ga.1986), the Bankruptcy Judge decided to consolidate the District's two Chapter 13 operations by removing one Trustee. However, before the issue of cause under § 324 could be determined, the Trustee scheduled to be terminated chose to resign, thereby avoiding the § 324 hearing. The primary issue remaining was the appropriate amount owed to the departing Trustee with respect to the cases turned over[8]. Finally, in the recent case of Richman v. Straley, et al., 48 F.3d 1139, the issue before the court was whether a standing Chapter 13 Trustee had a due process right to appointment in future cases. The Richman court answered in the negative, drawing a careful distinction between appointment in future cases (to which the court ruled there was no due process right) with appointment in pending cases (with respect to which the Court felt that removal could be accomplished only through § 324). Id., 48 F.3d at 1143-44.
Without helpful precedent in the Chapter 13 context, this Court looks for precedent in the Chapter 7 context. Chapter 7 Trustees have been removed under Section 324 for cause. What constitutes sufficient cause is not defined in the Code but rather is left for the courts to determine on a case by case basis. In re Haugen Construction Serv., Inc., 104 B.R. 233, 240 (Bankr.D.N.D.1989). Recently, in the case of In re Lundborg, 110 B.R. 106 (Bankr.D.Conn.1990), that court succinctly summarized the various decisions finding sufficient cause for removal of a Chapter 7 Trustee:
Cause has been found to exist, inter alia, where the trustee is not disinterested, In re BH & P, Inc., 103 B.R. 556, 561 (Bankr. D.N.J.1989); In re Paolino, 80 B.R. 341, 344 (Bankr.E.D.Pa.1987), and where the trustee fails to perform his or her duties, Matter of Schoen Enter., Inc., 76 B.R. 203, 206 (Bankr.M.D.Fla.1987), or unreasonably delays in the performance of those duties. Matter of Island Amusement, Inc., 74 B.R. 18, 19 (Bankr.D.P.R.1987); In re Mira-Pak, Inc., 72 B.R. 430, 431 (Bankr.S.D.Tex. 1987). In general, a party seeking the removal of a trustee must prove that there has been some actual injury or fraud. In re Acadiana Electrical Serv., 66 B.R. 164, 165 (Bankr.W.D.La.1986); United States ex rel. People's Banking Co. v. Derryberry (In re Hartley, 50 B.R. 852, 859 (Bankr. N.D.Ohio 1985). See also Matter of Freeport Italian Bakery, Inc., 340 F.2d 50, 54 (2d Cir.1965). A trustee should not be removed for mistakes in judgment where that judgment was discretionary and reasonable under the circumstances, In re Haugen Constr. Serv., Inc., supra, 104 B.R. at 240, and courts should consider the best interests of the estate, rather than those of a single movant-creditor, when determining whether to remove a trustee. Baker v. Seeber (In re Baker), 38 B.R. 705, 708 (D.Md.1983); Gross v. Russo (Matter of Russo), 18 B.R. 257, 273 (Bankr. E.D.N.Y.1982).
Id. at 108.
Notwithstanding the foregoing, the pressing issue before the Court is not whether Calabrese should be permanently removed from Pending Cases as Chapter 13 Trustee. The Court agrees with the parties that Calabrese is entitled to an evidentiary hearing after a period of discovery. However, despite the agreement of the parties that Calabrese is entitled to that evidentiary hearing, there exists a tension between the UST's call for expedited action and Calabrese's assertion that sixty (60) days for discovery is a bare minimum of what she needs to fairly present her case.[9] Therefore, the Court believes that the issues requiring prompt attention are (i) whether the Court should suspend *595 Calabrese from her duties pending an evidentiary hearing on whether she should be permanently removed as Chapter 13 Trustee of the Pending Cases, (ii) whether to appoint the UST as acting Chapter 13 Trustee of the Pending Cases, and (iii) where to locate the source of this Court's jurisdiction to order the foregoing. Inasmuch as this Court was able to find no reported decisions in which a Bankruptcy Court considered such relief, the issue appears to be of first impression.
Temporary suspension of Calabrese as Chapter 13 Trustee of the Pending Cases should only be employed if that form of relief appears best suited to preserve the rights of the parties pending trial, without prejudicing the rights of others. The classic methodology for preserving the status quo pendente lite is the preliminary injunction. Therefore, although the relief to be granted here is not in the nature of a preliminary injunction, the Court looks to preliminary injunction standards employed by the this Circuit as a reasonable and equitable approach to determine whether such a temporary suspension of Calabrese would be the appropriate relief under the circumstances. More specifically, the Court must determine (i) whether there is a reasonable likelihood that the UST Motions will be allowed, (ii) whether absent the temporary suspension there is a risk of irreparable harm to those whose interests the UST represents, namely the parties in interest in the Pending Cases, (iii) whether such injury is outweighed by any injury that such a temporary suspension may do to the rights of Calabrese, and (iv) whether the public interest would be adversely affected by such a temporary suspension. See Knapp Shoes, Inc. v. Sylvania Shoe Mfg. Corp., 15 F.3d 1222, 1225 (1st Cir.1994); Teradyne, Inc. v. Mostek Corp., 797 F.2d 43, 51-52 (1st Cir. 1986); Planned Parenthood League of Massachusetts v. Bellotti, 641 F.2d 1006, 1009 (1st Cir.1981).
This Court finds that there is a reasonable likelihood that the UST Motions will be allowed, and makes that finding for the following reasons. First, Calabrese claims that, notwithstanding her use of a computer accounting system for her duties, she maintains records of the 800 Pending Cases (and, therefore, inclusive of the necessarily thousands of financial transaction entries of claims, receipts and disbursements) part by computer and part by hand (Transcript of Hearing of March 17, 1995 [the "Transcript"], p. 20). The UST's allegation that over $200,000.00 (20%) of the funds that she holds are listed in her computer records as "error receipts" was uncontroverted. And, Calabrese suggests that her preparation of reports of funds held by her (in late 1994) were left to await some "baseline" yet to be established for 1993. Transcript, p. 20. None of these admissions or uncontroverted allegations by Calabrese bode well for the likelihood that she can persuade the Court that her records are readily subject to audit. Second, Calabrese admits that she failed to provide the UST with monthly reports for several months. Transcript, pp. 18-20. Her hurried and incomplete effort to supply the reports in advance of the hearing does not negate her previous failure to render herself accountable to the UST and suggests that Calabrese has been unwilling (or unable) to permit the UST the review to which the UST is entitled. Third, Calabrese does not contest the UST's allegation that she has frequently submitted orders of confirmation that were in varying respects defective[10] and has not timely made distributions or filed motions to dismiss cases where dismissal was required. She merely says that on the cases subject to the Department of Revenue complaint she "started making disbursement on the claims; filed a motion to dismiss; or will move to dismiss each of the cases." Oppositions, p. 2. This is hardly a strong statement of denial.
In view of the colorable allegations of Calabrese's failure to (i) properly maintain the books and records necessary to the orderly administration of the Chapter 13 program in *596 the Western Division of this District (ii) file with the UST timely and verifiable reports of her financial transactions, and (iii) properly administer the cases in her charge, many of which allegations are uncontroverted[11] and are, therefore, deemed by the Court under the circumstances as acknowledged by her for the purpose of this interim order, the Court finds that it is reasonably likely that the UST will succeed in showing breach of fiduciary duty and at least the risk of actual harm to parties in interest in the Pending Cases.
The Court also finds that absent the temporary suspension, there is a risk of irreparable harm to parties in interest. Although there has been absolutely no evidence which would support a finding of defalcation, this Court takes judicial notice that a delay in the administration of a Chapter 13 case can have devastating consequences. In contrast to the administration of a Chapter 7 case, the administration of a Chapter 13 case involves payment through the Chapter 13 Trustee of post-petition debts that the Debtor pays through the Chapter 13 Trustee. Unjustifiable delays in the making of these payments defeats the purpose of the Chapter 13 proceeding itself. When payments are not made to creditors pursuant to the plan, despite the Debtor's compliance with plan requirements, the debtor's credit standing may be further damaged and the reorganization process irreparably harmed. Furthermore, if the Chapter 13 Trustee takes no action despite the debtor's default in making plan payments, otherwise patient creditors may find that they have been restrained from going forward to collect their debts without realizing that no funds have been paid for their benefit to the Chapter 13 Trustee.
The risk of the foregoing harm to creditors outweighs any risk of harm to Calabrese arising from her temporary suspension. The potential economic harm to Calabrese from a temporary suspension could arise in two ways. First, if this Court does not otherwise provide, Calabrese could suffer a loss of compensation, pursuant to 28 U.S.C. § 586(e). Second, with a loss in the use of her files, Calabrese's defense of the UST Motions could be hampered. The Court will, therefore, ameliorate the risk of harm by ordering, as set forth below, that (i) the UST alone serve as acting Chapter 13 Trustee (subject, of course, to delegation within his office), pending a final order on the UST Motions, (ii) all compensation that would be otherwise be payable on account of disbursements made by the UST on Pending Cases be separately escrowed, (iii) Calabrese be granted a lien in the escrowed account to the extent of her interest, (iv) upon the issuance of a final order, if any, denying the UST Motions, the escrowed fund be turned over to Calabrese as if she had made the disbursements, less only the such amount as the Court may determine was the cost savings to Calabrese and (v) upon the issuance of a final Order allowing the UST Motions, the escrowed account be turned over to the UST, less only such amount as the Court shall determine is due to Calabrese, pursuant to 28 U.S.C. § 586(e), or otherwise. The Court will further order that (i) Calabrese's files be removed from her possession at the cost of the UST, chargeable to her interest in the escrow account only if the UST Motions are allowed, and (ii) the files shall be maintained in the office of the UST in Worcester and be made available to Calabrese for inspection and copying by Calabrese or her agents during reasonable business hours and upon 48 hours prior notice. Finally, this Court's Order will suspend the restrictions of Local Rule 26(D), so that any discovery disputes can be brought to the Court's attention on an expedited basis.
Furthermore, this Court is satisfied the action taken by the Court today does not adversely affect the public interest. It is in the public interest that the Chapter 13 program in the Western Division of this District be efficient and perceived as accountable. The Court's action today attempts to assure that those goals are met, even on a temporary basis.
Finally, this Court must address the source of its jurisdiction to enter the order issued today. Section 324 provides for *597 nothing other than permanent removal. However, this Court doubts it is possible that, in light of the concerns stated above, Congress would have intended that this Court be powerless to address a threat of harm to the debtors and creditors of the Pending Cases[12]. In view of the absence of express statutory direction, 11 U.S.C. § 105 plays its critical role. That section provides:
(a) The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.
11 U.S.C. § 105. Of course, a bankruptcy court's authority to enter orders, employing the flexibility afforded by § 105(a) is not unlimited. Official Unsecured Creditors' Committee v. Stern (In re SPM Mfg. Corp.), 984 F.2d 1305, 1311 (1st Cir.1993) ("[S]ection 105(a) [does not] authorize courts to create substantive rights that are otherwise unavailable under the Code, or to expand the contractual obligations of parties."); In re GSF Corp., 938 F.2d 1467, 1474 (1st Cir.1991); In re Plaza de Diego Shopping Center, Inc., 911 F.2d 820 (1st Cir.1990) ("[T]he bankruptcy court's equitable discretion is limited and cannot be used in a manner inconsistent with the commands of the Bankruptcy Code").
The Court is especially mindful of the Plaza case. In that case, this Circuit held that the bankruptcy court had no authority under § 105(a) to appoint a Chapter 11 Trustee, absent refusal of the United States Trustee to act. 911 F.2d 820. However, this Court believes that the order contemplated herein is contained within the sound limitations of § 105(a) and that the facts are distinguishable from the Plaza case. It is true that the power to appoint a Chapter 13 Trustee is, pursuant to 28 U.S.C. § 586(b) established solely in the UST. But this Court is not making a permanent appointment. The Court is making only a temporary appointment of the UST as acting Chapter 13 Trustee of the Pending Cases, pendente lite and based on extraordinary circumstances. The issue now before the Court is not the subject of any provision of the Bankruptcy Code, and, therefore, the Court's order is hardly inconsistent with any provision of the Code. Furthermore, the UST can be hardly heard to complain if the Court's logical choice for acting Chapter 13 Trustee is the UST himself. The Court would also note that within the recent past the UST has served as acting Chapter 13 in the Eastern Division of this District when, for an extended period of time, there was a vacancy in that position.
Based on the foregoing factors and considerations, the Court is constrained to order the following relief, pendente lite:
1. Calabrese is hereby removed, on a temporary basis, pendente lite, as the Chapter 13 Trustee of the Pending Cases, and the UST is substituted as acting Chapter 13 Trustee, until further order of the Court;
2. Calabrese is ordered to forthwith make available for removal by the UST, at the expense of the UST, all files, accounts, accountings, and books and records relating to the Pending Cases (the "Pending Case Documents") and further to forthwith turn over to the UST all moneys, deposits and bank accounts relating to the Pending Cases (the "Pending Case Proceeds");
3. The UST shall cause to be paid into one or more segregated accounts (the "Proceeds Accounts") all of the Pending Case Proceeds and all other moneys received by him thereafter and relating to the Pending Cases and shall keep separate records relating to all receipts and disbursements therefrom;
4. The UST shall also maintain a specially segregated interest bearing account (the "Compensation Account") into which the UST shall deposit all compensation which would have been due to Calabrese, pursuant to 28 U.S.C. § 586(e) or otherwise, as *598 if she had made all of the disbursements from the Proceeds Accounts;
5. Calabrese is hereby granted a lien in the Compensation Account to the extent of her interest;
6. Upon the issuance of a final order, if any, denying the UST Motions, the proceeds of the Compensation Account, including interest, shall be turned over to Calabrese as if she had made all disbursements from the Proceeds Accounts, less only such amount as the Court may determine was a cost savings to Calabrese as a result of the disbursements made by the UST;
7. Upon the issuance of a final order allowing the UST Motions, the Compensation Account shall be turned over to the UST, less only such amount as the Court shall determine is due to Calabrese, pursuant to 28 U.S.C. § 586(e), or otherwise, reduced by the cost of the removal from her possession of the Pending Case Documents;
8. The Pending Case Documents and all other documents arising thereafter with respect to the Pending Cases shall be maintained in the offices of the UST in Worcester, Massachusetts and will be made available to Calabrese or her agents during reasonable business hours and upon 48 hours prior notice;
9. The UST is ordered to notify each party in interest in the Pending Cases of his substitution as acting Chapter 13 Trustee as soon as reasonably possible;
10. The deadline for completion of discovery in this matter is set for June 30, 1995, subject to further extensions as may be approved by the Court, upon Motion filed prior to the said deadline;
11. In the event of any motion filed by the parties relating to a discovery dispute, the said motion shall be heard on an expedited basis, without regard to the provisions of Local Rule 26(D).
12. A pre-trial conference is set for July 18, 1995 at 10:00 am. in Worcester, Massachusetts.
NOTES
[1] The motion also claims that the payment to Calabrese was improperly granted because she never properly noticed the UST.
[2] On July 12, 1994, in response to a wide array of defective confirmation orders submitted to the Court for allowance (almost all of such defects prejudicing the rights of debtors), this Court ordered Calabrese to show cause why she should not be removed from 21 separate cases. At the hearing, held on July 18, 1994, Calabrese was not removed from those cases, but was ordered to (i) file weekly progress reports on each case not then closed and (ii) submit all future proposed confirmation orders to the UST for approval prior to submission of the orders to the Court for allowance. The UST claims that many of the orders submitted to the UST for approval thereafter were similarly defective.
[3] The UST claims that, as of September 30, 1994, Calabrese had not reconciled her trust accounts for the preceding seven (7) months.
[4] Every standing trustee is audited annually by a public accounting firm chosen by the Department of Justice.
[5] Pursuant to Bankruptcy Local Rule 26, the Oppositions were due on or before March 3, 1995. In addition, notwithstanding their filing with the Court on March 16, 1995 at 9:45 a.m., the Oppositions were not served on the UST until minutes before the hearing on March 17, 1995, robbing the UST of a fair opportunity to respond. Because of the gravity of the matters before the Court, the Oppositions were considered by the Court. However, this was a peculiar way to persuade the Court that Calabrese was performing her duties competently and expeditiously.
[6] The hearing was originally scheduled for March 10, 1995. However, on March 8, 1995, Calabrese requested that the hearing be continued until March 17, 1995, because (i) she had a previously scheduled medical appointment on March 10, 1995 and (ii) her recently retained counsel, Michael B. Roitman, required additional preparation time. The motion was allowed. On March 17, 1995, Mr. Roitman appeared for Calabrese. Calabrese was not present.
[7] The parties appear to agree that the UST acted within the limits of his discretion when he made this determination. See also 28 C.F.R. § 58.2 (1986); Richman v. Straley, et al., 48 F.3d 1139 (10th Cir.1995).
[8] Neither party has yet suggested a solution of this type.
[9] Of course, additional time would be consumed by the evidentiary hearing itself, the rendering of a decision by the Court and the exercise of any appellate rights.
[10] Calabrese can hardly contest the problems which led to this Court's Order of July 18, 1994 with respect to 21 such cases. As to confirmation orders since that time, several of the orders referred to in the UST Motions are described in the Oppositions to be resolved because now moot. Calabrese does not specifically controvert the UST's allegation that the confirmation orders were defective when originally presented.
[11] Even Calabrese says "[s]he contests many, if not most, of the allegations contained in the [UST Motions]." Transcript, P. 16). Pointedly, Calabrese does not contest all of the allegations.
[12] Over 800 cases likely constitute over 1,000 individual debtors and well over 10,000 creditors. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572547/ | 2 So.3d 269 (2009)
SOLOMON
v.
STATE.
No. 2D08-414.
District Court of Appeal of Florida, Second District.
January 28, 2009.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917891/ | 27 Wis.2d 651 (1965)
SCHWALBACH and wife, Plaintiffs and Respondents,
v.
ANTIGO ELECTRIC & GAS, INC., Defendant and Respondent:
INTERNATIONAL TELEPHONE & TELEGRAPH CORPORATION, Defendant and Appellant.
Supreme Court of Wisconsin.
April 30, 1965.
June 1, 1965.
*654 For the appellant there was a brief by Smith, Puchner, Tinkham & Smith of Wausau, and oral argument by Richard P. Tinkham.
For the respondents Lawrence and Gertrude Schwalbach there was a brief by Graunke & Boone of Wausau, and oral argument by Walter A. Graunke and Clinton A. Boone.
For the respondent Antigo Electric & Gas, Inc., there was a brief by Schmitt, Wurster, Tinglum & Nolan of Merrill, and oral argument by Sverre Tinglum.
BEILFUSS, J.
The principal issue is whether the credible evidence is sufficient to sustain the jury findings (1) that a malfunction of the pilot relay caused the explosion, and (2) that International was negligent in the manufacture of the pilot relay.
International also contends that the verdict is inconsistent insofar as it found Antigo negligent as to inspection of the pilot relay but not causally so, and that the answers to damage questions cannot be sustained because of the insufficiency of the proof and erroneous ruling as to admission of evidence.
In testing the sufficiency of the evidence to sustain a jury verdict, the following rules apply:
"When a jury verdict is attacked we inquire only whether there is any credible evidence that, under any reasonable view, supports the verdict. This is especially so when the verdict has the trial court's approval." Cheetham v. Piggly Wiggly Madison Co. (1964), 24 Wis. (2d) 286, 290, 128 N. W. (2d) 400.
"When several inferences may reasonably be drawn from credible evidence, one of which will support a claim of one *655 of the parties and the other inferences will not, it is for the jury to determine the proper inference to be drawn from the conflicting evidence. Although we could sustain a contrary result if found by the jury, it is our duty not to set aside a verdict when it is approved by the trial court, as here, and when there is credible evidence to sustain it." Dickman v. Schaeffer (1960), 10 Wis. (2d) 610, 616, 103 N. W. (2d) 922.
A companion and qualifying rule is that a verdict cannot stand on conjecture, unproved assumptions, or mere possibilities.[1]
While we have reviewed the entire record we report only such facts that support or tend to support the verdict under the rules stated above.
We first consider the issues involving the explosion.
In 1961, Antigo sold and installed a Coleman gas furnace for the plaintiffs in the basement of their farm home in the village of Eland, Shawano county, Wisconsin.
The furnace was designed to use liquid petroleum gas (heavier than air), which was supplied from a storage tank located in the yard. It came equipped with a pilot relay. A pilot relay is an electrically operated safety device. Its function is to shut off the supply of gas when the pilot light is not burning.
Two valves are principally involvedone is a manually operated valve that can shut off the gas at its source at the tankthe other is an automatic valve that controls the flow of fuel to the burner pot of the furnace. If the room *656 temperature is below the thermostat setting this valve automatically opens and fuel is supplied to the burner; when the room temperature reaches the thermostat setting, the valve automatically shuts off. If (for a variety of reasons) the pilot light is not burning and room temperature is below the thermostat setting, the automatic valve would open and fuel would run into the burner or fire pot and eventually overflow, creating a dangerous condition because of the combustible character of the fuel.
The function of the pilot relay is to prevent this situation. It is to shut off or close the automatic valve when the pilot light is out. The pilot light is supposed to be burning at all times except when intentionally extinguished. The pilot relay acts only when the pilot light is out. Adjacent to the pilot light is a thermocoupler. The pilot light supplies continuous heat to the thermocoupler. If the pilot light is not burning the thermocoupler then cools and transmits an electrical impulse to pilot relay. It breaks a contact in the pilot relay which then in turn closes the automatic valve and cuts off the supply of fuel to the burner.
Between the installation in May, 1961, and the explosion in October, 1963, Antigo made several service calls to plaintiffs' home to check the furnace.
In April of 1963, Antigo, in response to a service call, replaced the pilot relay on plaintiffs' furnace with one taken from a demonstrator furnace in Antigo's showroom. This pilot relay was manufactured by General Controls in 1959 and was mounted on a Coleman gas furnace. In the showroom the pilot relay had been demonstrated five or six times and functioned properly on each occasion.
In June and July, 1963, plaintiffs called Antigo and complained of a smell of gas. Antigo checked all the lines for leaks and found none. The pilot relay was not checked after it was installed in plaintiffs' home.
*657 In October, 1963, a violent explosion in the basement demolished the plaintiffs' home and their furnishings.
The day after the explosion an employee of Antigo, a Professor Harrison, and others went to the scene of the explosion to determine the cause of the explosion. It was found that the pilot relay was not functioning. The pilot relay was removed from the furnace. An examination revealed that the contact points were not in a position to shut off the valve supplying fuel to the furnace.
Professor Harrison is an associate professor of mechanical engineering at the University of Wisconsin. He is a registered engineer. He has taught courses relating to the design of automatic controls and worked for a company manufacturing automatic controls. He has coauthored two books on automatic controls. These texts are widely used. He does research and consultation work, and has been a consultant in respect to accidents involving automatic controls.
Professor Harrison testified that he tested the pilot relay electrically both at the scene of the explosion and at his office and found it was closed and not operating as a safety device. It was his opinion that it was not damaged in the explosion. The relay is a sealed unit with the seal intact at the time it was examined. It did not bear any marks or evidence to indicate it might have been mishandled or damaged in the explosion so as to cause it to malfunction. He further testified that a nonfunctioning pilot relay can create a highly dangerous situation because of the explosive characteristics of the liquid gas. It was his opinion that the pilot relay was faulty in design in that it did not have a "window" for visual inspection and that it was faulty in its manufacture because of not enough clearance between the contact points (it had a clearance of 40/1000 of an inchHarrison stated he would not design or approve *658 one with less than 20/1000), and that the pin to push the points apart was too short.
Harrison then testified that in his opinion his investigation revealed that other possible causes of the explosion were eliminated; that the pilot relay was not functioning and was the cause of the explosion. It was his further opinion that the pilot relay was faulty when it left the factory and that it never worked properly. When confronted with the testimony that this pilot relay had worked properly in demonstrations in Antigo's showroom, he receded from his opinion that it did not function properly when it left the factory but adhered to his opinion that it was not functioning prior to the explosion and caused the explosion.
A Mr. Laurence Biggle, an employee of International, was called as an expert witness. For many years he has designed and tested automatic gas controls. It was his opinion that the pilot relay was properly tested and approved before it left the factory, that it could have been damaged in the explosion and that the explosion could have been caused by other gas leaks in the system. The main gas valve was disassembled. Some small foreign particles were found under the diaphragm. Biggle testified this could cause a gas leakHarrison said it would not.
The jury could accept or reject the testimony of the experts. The credibility of the witnesses and the weight to be given their testimony was within the province of the jury.
Mr. Biggle did not express an opinion as to what specifically caused the explosion but rather testified as to ways it could have happened.
International contends that Professor Harrison's opinions were based upon assumptions that were either not established or demonstrated not to be true.
A review of the record reveals that Professor Harrison did not deviate from his opinion that the pilot relay was not properly manufactured as a safety device, that its design *659 was inadequate for visual testing, that the pilot relay malfunctioned prior to the explosion, and that it was the cause of the explosion. While he did concede that the pilot relay functioned in the demonstrations, he did not concede that the method of testing was adequate or complete.
Professor Harrison's testimony if accepted by the jury, together with the testimony of Antigo's employees that they checked the system on several occasions and had never found a leak in any other part of the system, is sufficient credible evidence to permit an inference that the pilot relay did not function properly before the explosion and was the cause of the explosion. Upon this evidence they could further find that the pilot relay was manufactured in a negligent manner.
In Ryan v. Zweck-Wollenberg Co. (1954), 266 Wis. 630, 636, 64 N. W. (2d) 226, this court stated:
"It is a definitely settled principle of law in this state that a manufacturer who places a manufactured article in trade and commerce not inherently, but because of its negligent construction, imminently dangerous to life and limb, is liable to one who sustains injuries by reason of such negligent construction. Flies v. Fox Bros. Buick Co. (1928), 196 Wis. 196, 207, 218 N. W. 855; and Marsh Wood Products Co. v. Babcock & Wilcox Co. (1932), 207 Wis. 209, 223, 240 N. W. 392."
International contends that the verdict is inconsistent in that the jury found Antigo negligent as to inspecting the pilot relay and then found this negligence was not a cause. Antigo does not challenge the jury's finding of negligence but maintains that its negligence was not causal.
Antigo did not check the pilot relay to determine whether it was working properly when it was installed in April, 1963, nor any time thereafter when they were called for service. Harrison testified the pilot relay could have ceased to operate properly at any time between the installation in *660 April and the explosion in October. Mr. Duff, Sr., the principal officer of Antigo, testified that he had replaced several (about 50) pilot relays on Coleman gas furnaces throughout his twenty or more years in the business and that a pilot relay could operate all right when checked and fail to work one-half hour later. This testimony, if accepted by the jury, coupled with the fact that a visual inspection was impossible was sufficient evidence to permit the jury to find that the negligence in failing to check the pilot light would not have revealed a malfunction and was not a substantial factor in producing the explosion.
The jury found the plaintiffs' damages to be (a) house $7,500, (b) furniture, household furnishings, and appliances$4,000, (c) loss of use of the house$875, (d) demolition of house and cleaning up debris$1,425, and (e) loss of food and canned goods$300.
International challenges the jury award for the house, furniture, household furnishings, and appliances and for the loss of use of the home.
The Schwalbach home was built in 1901 with an addition to it about twenty years later. Subsequent additions (a glassed-in-porch), repairs, and renovations were made by the plaintiffs. The home was modernized, well kept, and in good repair. In the ten years immediately prior to the explosion the plaintiffs had expended about $5,600 in renovation and repair of the house.
Two real-estate brokers who were qualified as appraisers testified in behalf of the plaintiffs. A Mr. Wendorf testified the house had a fair market value of $9,700 before the explosion and no value after the explosion. He based his opinion upon cost of replacement less a 25 percent depreciation. A Mr. Nuske testified the fair market value was a replacement cost of $12,900 less 25 percent for depreciation. Neither of these expert witnesses considered comparable sales in arriving at their opinion. Expert witnesses for the *661 defendants did consider comparable sales and testified to substantially lower values.
The trial court properly instructed the jury as to the definition of "fair market value" as the price arrived at between a willing but not obligated buyer and seller. The replacement-cost-less-depreciation method of determining fair market value is commonly used and is permissible. The value arrived at by this method is not conclusive but is evidentiary and, together with other evidence, can be considered by the jury in arriving at their finding of fair market value. The jury award of $7,500 for the loss of the house is within the credible evidence and must be sustained.
A part of the furniture of the plaintiffs was inherited by Mr. Schwalbach. Most of the furniture, furnishings, and appliances were purchased new by the plaintiffs over a period of years. The cost of these items new was in excess of $6,000.
Wendorf testified that in his opinion the fair market value of these items was $5,000 before the explosion and no value after. On cross-examination he stated that in this instance replace value and fair market value were the same. Upon further cross-examination and examination by the court as to the definition of "fair market value," he revised his opinion and then testified the furniture and appliances had a fair market value of $2,300. Mr. Nuske testified in much the same manner and likewise revised his opinion of fair market value to be $2,300. Again witnesses for the defendants testified to lower values based upon second-hand furniture sales. The jury found the loss for this personal property to be $4,000. The trial court rightfully concluded that evidence did not sustain this finding and reduced the award to $2,300. We find no abuse of discretion by the trial court in reducing the award to this amount and this order of the trial court is approved.
*662 The evidence in the record as to the loss of use of the home reveals only the following: The plaintiffs testified that they purchased a used trailer home, placed it upon the premises and used it as living quarters while the house was being rebuilt. The cost of the trailer was $1,005 and it had or would have, at such time as the house was completed, a resale value of $800. The installation costs for electrical and telephone service was $69.80. Upon this evidence the jury found the loss of use to be $875.
The proper measure of damages for loss of use of the dwelling house in this instance is an amount equal to the fair rental value of a house of like kind and quality in the area of Eland for such length of time as was reasonably necessary to reconstruct a house comparable to the one destroyed, plus the reasonable value of necessary incidentals occasioned by moving.
The evidence in the record does not meet this measure of damages. While the evidence offered may have some evidentiary value it is not sufficient to sustain the award of $875. The order of the court and judgment rendered insofar as it allows a recovery of $875 for loss of use of the house is reversed and a new trial is awarded on this single issue. We are reluctant to order a new trial limited to this relatively minor issue but we feel compelled to do so. It is our hope that this issue can be negotiated and adjusted by the parties before the retrial.
International contends the trial court erred in refusing to admit into evidence an application for insurance (Exhibit 33), signed by Mr. Schwalbach, wherein he stated the value of the house was $2,500 and the furniture was $1,500 as an admission against interest. The trial judge in ruling on the admissibility of the exhibit stated that the application for insurance did not necessarily constitute a statement or opinion of value, that anyone can insure his property for any amount less the actual value if he so desires. He opined that *663 if the exhibit was a proof of loss it would be a statement of value and admissible, but that an application for insurance for a stated value did not bind nor necessarily indicate the applicant's opinion as to value and as such was not an admission against interest. We agree. It was not error to exclude the exhibit.
By the Court.Judgment reversed, and new trial ordered on issue of damages for the loss of use of the house. Judgment in all other respects affirmed. Costs allowed to respondents.
NOTES
[1] Wadzinski v. Cities Service Oil Co. (1957), 275 Wis. 84, 80 N. W. (2d) 816; Arledge v. Scherer Freight Lines, Inc. (1955), 269 Wis. 142, 68 N. W. (2d) 821; DeWitz v. Northern States Power Co. (1955), 269 Wis. 548, 69 N. W. (2d) 431; Fonferek v. Wisconsin Rapids Gas & Electric Co. (1954), 268 Wis. 278, 67 N. W. (2d) 268; Pazdernik v. Pride (1940), 235 Wis. 391, 291 N. W. 798; Pinter v. Wenzel (1920), 173 Wis. 84, 180 N. W. 120; Quass v. Milwaukee Gas Light Co. (1919), 168 Wis. 575, 170 N. W. 942. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917858/ | 272 So. 2d 746 (1972)
STATE of Louisiana, Through the DEPARTMENT OF HIGHWAYS, Plaintiff-Appellant,
v.
John L. SMITH et ux., Defendants-Appellees.
No. 3929.
Court of Appeal of Louisiana, Third Circuit.
September 19, 1972.
*747 Johnie E. Branch, Jr., Baton Rouge, for plaintiff-appellant.
William E. Skye, Edward E. Roberts, Jr., Alexandria, for defendants-appellees.
Before FRUGE, HOOD and DOMENGEAUX, JJ.
DOMENGEAUX, Judge.
The plaintiff Highway Department expropriated 1.981 acres of defendants' 17.142 acre tract, taking all of their highway frontage along Louisiana Highway 1 to a depth of approximately 116.5 feet. The tract taken contained certain improvements, including a nightclub and a residence, stipulated by counsel to be worth $40,811.00.
Pursuant to court order, the plaintiff deposited the sum of $56,346.00 into the registry of court upon filing its suit. That sum was withdrawn by the defendants, who filed an answer asserting that they were entitled to the sum of $111,481.00, representing the value of the property taken, plus $2,943.00 in severance damages.
The case went to trial in that posture and ended in a judgment in favor of defendants in the sum of $47,478.00, representing a market value of the land and improvements of $103,824.00, less the amount already withdrawn by them from the registry of court, $56,346.00. The judgment included the sum of $49,290.00 for the improvements taken, which the parties had stipulated to be worth $40,811.00. This was an inadvertent error on the part of the trial judge, who used the higher figure, representing all of the improvements on defendants' land, whereas he should have used the lower figure, representing only those improvements actually taken. Accordingly, we shall reduce that portion of the judgment representing the improvements to the stipulated sum of $40,811.00. We turn now to an examination of the value of the land, as the trial court's conclusion with regard thereto was appealed by both plaintiff and defendants.
Each side qualified two expert witnesses to testify on its behalf regarding the value of the land. The state, in addition placed in evidence the written reports of its two experts, Darrel V. Willet and T. J. Toups, although only Mr. Willet actually testified on the question of value. The defendants offered the testimony of Habeeb Monsur, Jr., and it was stipulated that had they called their second expert, W. C. Webb, his testimony would not have differed from that of Monsur. All of the appraisers agreed that the highest and best use of defendants' land to a depth of 200 feet, which included the portion taken, was commercial. Beyond that it was agreed that the highest and best use was agricultural and transitional residential.
At the request of plaintiff, its appraisers employed three distinct methods of arriving at a valuation. The first of these was the average land basis, which involves a determination of the average per acre value of all of defendants' land and the multiplication of the acreage taken by the determined value per acre. The second was the contributory value basis which is arrived at by deducting the value of the and remaining after the expropriation from the value of the entire tract before the expropriation and then adding an amount commensurate with the benefits that the remaining land will receive as a result of the new construction. The final method, and the one used by the trial judge in reaching his decision, was what is commonly known as the front land-rear land approach. This method recognizes that land fronting on a public highway is more valuable on the market than land not having such frontage and assesses the value accordingly. The basic legal question before *748 us is whether the trial court erred in selecting this last approach, from amongst those employed by plaintiff's experts, for averaging with the value offered by defendants' experts.
The property expropriated in this case was taken under the provisions of the "Quick Taking Statute" (LSA-R.S. 48:441-460) which, in relevant part, provides that the measure of compensation (market value) is to be determined as in general expropriation suits. LSA-R.S. 48:453. We find the general basis for determining the value of expropriated property expressed in LSA-R.S. 19:9 as follows:
In estimating the value of the property to be expropriated, the basis of assessment shall be the value which the property possessed before the contemplated improvement was proposed, without deducting therefrom any amount for the benefit derived by the owner from the contemplated improvement or work.
To the same effect, see La.Civil Code Art. 2633.
The rules set out in that statute have long been recognized by, and indeed formed, the jurisprudence of this court. In State, Department of Highways v. Landry, La.App., 171 So. 2d 779; writ refused, 247 La. 676, 173 So. 2d 541, we stated that:
... For, in general, the market value of the particular portion of a tract expropriated is determined by the actual market value of the portion taken, not by its average per-acre value as a pro rata portion of the parent tract.
. . . . . .
We regard the proposition as settled by Louisiana jurisprudence and statute, therefore, that landowners are entitled to receive the full and actual market value of highway frontage expropriated for further highway purposes, without deduction therefrom because a new highway frontage will be provided, by reason of the taking, for formerly-rear portions of the parent tract. To allow such a deduction from the market value of the property taken, would be to allow deduction from this value for benefits which will be derived because of the contemplated improvement for which the expropriation was made, in direct contravention of LSA-R.S. 19:9, the legislative provision forbidding landowners from being deprived for such reason of the true market value of their property which is expropriated for public purposes.
Writs were denied by our Supreme Court in the Landry case with the statement that, "On the facts found by the Court of Appeal there appears no error of law in its judgment." Landry, supra.
The position espoused in Landry was reiterated in State, Department of Highways v. LeDoux, La.App., 184 So. 2d 604, wherein we said:
We consider the Louisiana jurisprudence to be settled, therefore, that generally the market value of the particular part of a tract expropriated is determined by the actual market value of the portion taken, and not by its average peracre or square-foot value as a pro rata portion of the parent tract. Also, a landowner is entitled to receive the full and actual market value of highway frontage expropriated for further highway purposes, without deduction therefrom because of the fact that by reason of the taking a new highway frontage will be provided for formerly rear portions of the parent tract.
In their excellent work on the subject, Eminent Domain in Louisiana, Professors Melvin G. Dakin and Michael R. Klein recognize the jurisprudence, of which the above cited cases are part, on page 173, as follows:
... When there is a partial taking and the land expropriated has a different highest and best use than the remainder of the landowner's tract, it appears that the courts will value the land taken separately from the remainder on the *749 basis of its own highest and best use and will not consider the value of the land taken in relation to the whole tract.71
71 Columbia Gulf Transmission Co. v. Fontenot, 187 So. 2d 455 (La.Ct.App. 1966); State v. LeDoux, 184 So. 2d 604 (La.Ct.App.1966); State v. Bertrand, 184 So. 2d 611 (La.Ct.App.1966); State v. Landry, 171 So. 2d 779 (La.Ct. App.1965), writ refused, 247 La. 676, 173 So. 2d 541 (1965); State v. Waterbury, 171 So. 2d 790 (La.Ct.App.1965); State v. Caillier, 157 So. 2d 274 (La.Ct. App.1963), writ refused, 245 La. 572, 159 So. 2d 285 (1964); Colonial Pipeline Co. v. Babineaux, 154 So. 2d 594 (La.Ct.App.1963): State v. Moyse, 151 So. 2d 149 (La.Ct.App.1963); Texas Gas Transmission Corp. v. C. M. Thibodeaux Co., 148 So. 2d 337 (La.Ct.App. 1962).
We see, then, that the front landrear land concept of awarding compensation is so well entrenched in both the statutory and jurisprudential law of Louisiana that in cases where it becomes the appropriate tool it may be used. This being a proper case for its application, the trial judge did not err in relying upon those estimates of value based on its principles.
Plaintiff cites two cases wherein this court recently elected not to employ the front land-rear land concept. These are State, Department of Highways v. Medica, La.App., 257 So. 2d 450; and State, Department of Highways v. Monsur, La.App., 258 So. 2d 162; Writ refused, 261 La. 463, 259 So. 2d 914. Writs were denied in the latter case by our Supreme Court on the basis that, "... the result is correct." Three justices dissented from the denial of writs.
At no time has this court, or to our knowledge any other court of this state, said that the front land-rear land approach must be used exclusively. All that the statutes and jurisprudence require, as above pointed out, is that the landowner be paid just compensation for the land actually taken, and without considering any benefits that he might derive from the new construction. This certainly does not rule out the use of methods other than the front land-rear land approach to the determination of just compensation in such other cases as make their use more desirable. On the other hand, neither does it rule out the use of that method in cases, such as the one before us, that readily lend themselves to its application.
In the case at bar the landowners were using the portion of their property fronting on Louisiana Highway 1 for commercial purposes, admittedly its highest and best use, in that they maintained a lounge or nightclub thereon. All of their property fronting on the said highway was taken by plaintiff. Neither of those conditions existed in either the Medica or the Monsur cases, supra, and for that and the other reasons advanced in the foregoing paragraphs, we do not now follow the dicta contained in Medica. Rather, we follow the well settled jurisprudence of this court, and reject plaintiff's contention that the trial court erred in assessing a higher value to that portion of defendants' land fronting on the highway, and thereby considering only the highest of the three estimates made by its appraisers.
Likewise we cannot accede to the contention urged by both parties, that the trial court erred in averaging the estimates of plaintiff's experts with those of defendants' experts to reach a conclusion regarding the market value of the property taken. Each of the appraisers who testified referred to a number of comparable sales, or as Mr. Monsur perhaps more accurately chooses to call them, "value indicators", in presenting his opinions. Each of those appraisers adjusted the prices paid in his chosen comparable sales to reflect the differences between them and the subject property.
The trial judge was obviously impressed with the capability, expertise, and sincerity of the appraisers, with each of whom he was well acquainted. He evidently determined that their testimony was entitled to equal weight, and this he had a *750 right to do. Having so decided, it was not error for him to average the valuations placed on the land by the various experts to determine its market value. Louisiana Power and Light Company v. Gaupp, 255 La. 563, 232 So. 2d 273.
The final issue involves the expert witness fees fixed by the trial judge for defendants' witnesses. He fixed their fees at $750.00 for preparation and consultation, and $75.00 for their courtroom appearances, for a total of $825.00 each. The fixing of expert witness fees in such cases is a matter resting mainly within the sound discretion of the trial court. Columbia Gulf Transmission Co. v. Fontenot, La. App., 187 So. 2d 455, writs refused, 249 La. 717, 190 So. 2d 234. We find no abuse of that discretion here, and accordingly the awards will be maintained.
For the above and foregoing reasons, the judgment of the district court is amended so as to reduce it from the sum of $47,478.00 to the sum of $38,999.00 and as thus amended is affirmed. Costs of this appeal are assessed against plaintiff-appellant.
Amended and affirmed.
HOOD, J., dissents and assigns written reasons.
HOOD, Judge (dissenting).
I am unable to agree with my colleagues that the front land-rear land concept of awarding compensation is consistent with the letter or spirit of our expropriation laws, or that it is fair to either the landowner or to the expropriating authority.
The constitution of Louisiana provides that "... private property shall not be taken or damaged except for public purposes and after just and adequate compensation is paid." La.Const., Art. 1, Sec. 2; see also La.Const., Art. 4, Sec. 15.
The "just and adequate" compensation to which an owner of property taken in expropriation proceedings is entitled is the full and perfect equivalent of the property taken, that is, the loss caused the owner by the taking, so that the owner shall be put in as good position pecuniarily as he would have been if the property had not been taken. Louisiana Power & Light Company v. Greenwald, 188 So. 2d 618 (La.App. 2 Cir. 1966), writs refused 249 La. 740, 190 So. 2d 243 (1966); Housing Authority of Shreveport v. Green, 200 La. 463, 8 So. 2d 295 (1942); State v. Barrow, 238 La. 887, 116 So. 2d 703 (1959); State, Through Department of Highways v. Stoer, 133 So. 2d 851 (La.App. 2 Cir. 1961); State, Department of Highways v. Poulan, 160 So. 2d 387 (La.App. 2 Cir. 1964). See also 7 UCLA Law Review 795 (1960), Eminent Domain: Compensation for Appropriated Property: Restricted Use as Affecting Compensation.
In Gulf States Utilities Company v. Norman, 183 So. 2d 421 (La.App. 3 Cir. 1966), we said:
"The basic purpose in all cases, however, is to determine the just and adequate compensation required by our constitution. Whatever approach or formula of valuation used, it should take into consideration `all factors which lead to a replacement of the loss caused by the taking. This means substantially that the owner is placed in as good a position pecuniarily as he would have been had his property not been taken.'" (Emphasis added).
The United States Supreme Court said in Bauman v. Ross, 167 U.S. 548, 574, 17 S. Ct. 966, 976, 42 L. Ed. 270 (1897):
"The just compensation required by the constitution to be made to the owner is to be measured by the loss caused to him by the appropriation. He is entitled to receive the value of what he has been deprived of, and no more. To award him less would be unjust to him; to award him more would be unjust to the public." (Emphasis added).
The rule stated in these cases is applied in all other states, and it has been applied *751 generally in this state, except in a few cases, including the instant suit, where the so called "front land-rear land rule" was applied. In my opinion the rule set out in the cited cases should be applied in all expropriation suits in such a manner that it will mean what it says. The landowner should be placed in as good a position pecuniarily as he would have been had his property not been taken. He should not be placed in a worse position, but neither should he receive a windfall or be placed in a much better position pecuniarily than he would have been had his property not been expropriated.
The "front land-rear land rule," which the majority has applied in the instant suit, is the progeny of the recent decision which our court rendered in State, Department of Highways v. Landry, 171 So. 2d 779 (La. App. 3 Cir. 1965). Under that rule the front land, that is, the part of the property fronting on the highway, and extending back an arbitrarily fixed distance, is given a higher value because of its access to the highway, and the rear land is valued at a much lower figure. When the property is taken for the purpose of widening and improving the highway, the landowner is awarded the high front land value, a substantial part of which is for the right of access, although he never loses his right of access. I feel that that rule is wrong in principle and in law, and that rarely, if ever, can it operate to place the landowner in substantially the same position pecuniarily as he would have been had his property not been taken. Under such a rule the landowner will receive either too much or too little for his property. It would be pure accident, if, by chance, he should receive just and adequate compensation for the property taken.
I believe that the rule commonly known as the "average land basis rule" should be applied here. Under that rule, each part of the parent tract which has the same physical characteristics is appraised separately, and the landowner is awarded the value of the property taken, based on the average per acre (or square foot or some other unit) value of the class or classes of land included in the taking. In addition to the value of the property taken, the landowner also is awarded the severance damages to his remaining property resulting from the taking or from the construction of the improvements. That rule was followed consistently in Louisiana before Landry, and it was applied more recently in State, Department of Highways v. Medica, 257 So. 2d 450 (La.App. 3 Cir. 1972); and State, Department of Highways v. Monsur, 258 So. 2d 162 (La.App. 3 Cir. 1972). The rule was stated in Medica as follows:
"In expropriation suits, where the property affected is composed of different classes of land, with each class having different physical characteristics, each such class may be appraised separately, and the value of the property taken may be computed on the basis of the appraisals made of the various classes of property. Where the affected property is not composed of different classes of land, however, then it should be appraised as a unit, or on a per acre or square foot basis, and if there is a partial taking the value of the part taken should bear the same proportion to the total value as the area taken bears to the total area included in the parent tract. If the remaining property sustains a decrease in value as a result of the taking, of course, the owner is entitled to severance damages in addition to the value of the property taken."
In the instant suit the Highway Department expropriated 1.981 acres of defendants' 17.142 acre tract. Prior to the taking the parent tract had a frontage of 752.92 feet on Highway One, with an average depth of 991.7 feet. The part taken is a strip across the front of the parent tract, extending from the highway to an average depth of about 116.5 feet. The property expropriated is to be used to widen the highway, and to improve it by converting it from a two-lane black-topped road to a divided four-lane concrete thoroughfare.
*752 Defendants will continue to have free access to the widened and improved highway, just as they did to the old one before the property was taken.
The two appraisers called by the Highway Department appraised the parent tract before the taking, exclusive of improvements, at $96,995.00, and $90,853.00, respectively. Using the higher figure, this amounts to an average value of $5658.00 per acre for the entire tract, or a value of $11,208.50 for the part taken.
The two appraisers called by defendants did not value the parent tract as a whole. Instead, they divided the property into two partsthe "front land" and the "rear land." They appraised the front land, that is, the part of the parent tract which fronted on the highway and extended rearward to a depth of 200 feet, at $82,819.00, and they valued the remaining property, the rear land, at $6,000.00 per acre. This amounts to an appraisal of $164,971.00 for the entire 17.142 acre parent tract before the taking, or an average of $9,623.79 per acre. They appraised the 1.981 acres of land which was taken, all of which was considered to be front land, at $67,671.00, or $34,160.00 per acre.
According to my figures, the property which defendants' appraisers considered to be front land (to a depth of 200 feet) comprised a total of 3.45 acres, and they valued that front land at an average of $24,005.51 per acre. I have already shown that they valued the front 116.5 feet of the "front land" at $34,160.00 per acre. It appears, therefore, that defendant's appraisers actually considered the "optimum" or "ideal" depth of the property to be 116.5 feet, rather than 200 feet, or that the value per acre or unit goes up progressively as the depth is reduced.
The trial judge, applying the "front landrear land rule," awarded defendants the sum of $54,534.00 for the 1.981 acre strip of land taken, exclusive of improvements. This amounts to an award of $27,124.00 per acre for the property expropriated. The additional sum of $49,290.00 was awarded for the improvements taken. My colleagues have reduced the award for improvements to $40,811.00, but they have affirmed the award for the value of the land taken.
After this taking and the construction of the new highway, defendants will be left with a tract of land comprising a total of 15.161 acres, fronting on a new four-lane concrete highway. They will still have their front land, with the same highway frontage they had before, and with the same free access to the new highway as they had to the old one. They can extend their remaining front land to an arbitrary depth of 200 feet, or to any other depth which they consider to be optimum or ideal. The only thing they have lost as a result of the taking is a little of their "rear land." The parent tract extended from the old highway to an average depth of 991.7 feet, whereas their remaining property extends to an average depth of 875.2 feet from the new highway. If the front 200 feet is set apart as being "front land," then before the taking defendants' "rear land" had a depth of 791.7 feet, and after the taking their rear land had a depth of 675.2 feet. They now have exactly 1.981 acres less rear land than they had before. The highest value placed by any appraiser on the rear land was $6,000.00 per acre, and yet defendants have been awarded $27,124.00 per acre for the 1.981 acres of land which they have lost. Defendants, thus, have received a windfall in this case. They are in a much better position pecuniarily than they were before the property was taken, at the expense of the public, contrary to the above cited established principles of law.
One author has stated, appropriately, that "where the extent of the loss cannot be measured by the usual standard of `fair market value' without a resulting windfall to one of the parties, some other standard of valuation should be applied." 7 UCLA Law Review 797.
The error which my colleagues have made, I think, is that they have included in *753 the award, and have compelled the Department of Highways to pay to defendants, a sum of money as damages for loss of access to the highway, whereas defendants in fact have never lost their access to the highway, and they thus have suffered no such damage.
The evidence shows that the entire parent tract had uniform physical features and characteristics, and that there was no reason other than access to the highway, for appraising one part of the property at a higher figure than another part. The only reason assigned by defendants' appraisers, and by my colleagues, for giving a higher value to the "front land" than was given to the "rear land" was that the front land had access to the abutting highway. The part of the "front land" which was taken was appraised at $34,160.00 per acre solely because it had access to the abutting highway. The "rear land" was appraised at only $6,000.00 per acre because it did not have access to the highway. The difference between those two figures, amounting to $28,160.00 per acre, or $55,784.96, is the value which defendants' appraisers placed on the "right of access." This is obvious, because if access to the parent tract should have been destroyed by the erection of barricades or by the abandoning of the highway, then the part of the property which formerly was "front land" would have no more value than the so-called "rear land."
My colleagues did not award defendants as much as the latters' appraisers said the property taken was worth, but they did award them $54,534.00 for the 1.981 acres taken. The highest value placed on that property by any appraiser, without adding in the value of access, was $6,000.00 per acre, or $11,886.00. The majority thus determined that the value of the "right of access" to the property taken was at least the difference between those two figures, or $42,648.00. They have awarded defendants at least that amount, $42,648.00, as the value of the right of access, in addition to the value of the land, although defendants never lost their right of access.
There are many factors or circumstances which affect and play some part in determining the value of a tract of land. Some of them are inherent features of the land itself, such as its elevation, soil quality, trees and drainage. Others are extrinsic features, such as the proximity of the land to a municipality or an airport, zoning regulations, the purposes for which neighboring property is used and the economic growth or stability of the area. Although these extrinsic features affect the value of the land, the landowner does not own them, and he is not entitled to be compensated if he loses them. Where the land abuts an existing street or highway, however, serious questions have been presented as to whether the landowner acquires a "right of access" to and from that thoroughfare, and, if so, whether he is entitled to be compensated if that right of access is taken from him.
The origin of the concept of access as a right of an abutting property owner is somewhat obscure. Bacich v. Board of Control of California, 23 Cal. 2d 343, 144 P.2d 818 (1943). Several authors point to specific cases which they feel originated the concept of access as a right.[1] Most often cited are the New York Railway cases: Story v. New York Elevated R. R., 90 N.Y. 122 (1882); Lohr v. Metropolitan Elevated R. Co., 104 N.Y. 268, 10 N.E. 528 *754 (1887); Kane v. Metropolitan El. Ry. Co., 125 N.Y. 164, 26 N.E. 278 (1891).[2]
Regardless of the origin of this concept, however, the great weight of authority in the United States today is that an abutting property owner's right of access to an existing public street or highway is a private property right, and that once he has acquired that right he ordinarily cannot be deprived of it without just compensation. 25 Am.Jur. Highway, Sec. 154, page 448. See also Jones Island Realty Company v. Middendorf, supra; State v. Department of Highways, supra; English Realty Co. v. Meyer, 228 La. 423, 82 So. 2d 698 (1955); Cucurullo v. City of New Orleans, 229 La. 463, 86 So. 2d 103 (1956); State v. O'Neal, 149 So. 2d 421 (La.App. 3 Cir. 1963).
In Donovan v. Pennsylvania Company, 199 U.S. 279, 302, 26 S. Ct. 91, 98, 50 L. Ed. 192 (1905), the Supreme Court said:
"The general doctrine is correctly stated in Dillon on Municipal Corporations: `For example, an abutting owner's right of access to and from the street, subject only to legitimate public regulation, is as much his property as his right to the soil within his boundary lines.... When he is deprived of such right of access, or of any other easement connected with the use and enjoyment of his property, other than by the exercise of legitimate public regulation, he is deprived of his property.'"
The right of access is an incorporeal property right which arises solely because the property abuts the street or road. It consists of an abutting owner's right of reasonable egress from his property to the general system of streets and roads, reasonable ingress to his property from the same system of streets and roads, and his right that his friends and customers have the same reasonable ingress and egress. 12 South Carolina Law Quarterly 377 (1960), supra; 56 Northwestern University Law Review 587 (1961), supra; 33 Oregon Law Review 16 (1953), supra; Washington University Law Quarterly 310 (1959), supra.
This right of access does not attach to a specific street or road, but rather it consists of the property owner's right of reasonable access to the general system of streets and roads. If the property abuts on an existing road, thus providing ready and easy access to the general system of streets and roads, then the jurisprudence seems to be that the landowner has the right to continue to have ready ingress and *755 egress to the general system of roads, and he is entitled to recover damages if the taking results in the loss or impairment of reasonable access to his remaining property.
Before the concept of "right of access" developed, cases arose where the construction of street improvements resulted in the complete loss or destruction of access of an abutting tract of land to the street, although no part of the abutting property was taken. This occurred when streets were elevated or lowered to such an extent that access to the abutting property became impossible, or where no-access highways were constructed. Initially in those cases the courts held that the owner of the adjacent property could not recover anything as a result of his loss of access. Property was conceived to be a corporeal commodity, and a "taking" denoted a physical invasion of the commodity. Since no property had been taken, the courts reasoned that no award could be made to the landowner. 33 Oregon Law Review 25-27, 30 (1953), supra; 47 Texas Law Review 734-737 (1969), supra.
Later, after the right of access had been recognized as an incorporeal property right, some courts made awards to owners of abutting property on the theory that an incorporeal property right had been taken, and there thus had been a "taking." That view, however, totally ignored the appurtenant nature of the right of access, and as a result the intangible nature of the right complicated judicial efforts to determine if a taking had occurred. Often when a court declared that no compensation was due for the loss or impairment of access, it was difficult to ascertain whether the court had decided that access was not property, or that the governmental action did not constitute a taking. 47 Texas Law Review 734-737 (1969), supra. See also 12 South Carolina Law Review Quarterly 377 (1960), supra.
Eventually, many states amended their expropriation laws to allow compensation for the damaging, as well as for the taking, of private property. With these provisions, courts began to award compensation to the abutting property owner for the loss or impairment of access, whether or not there had been a partial taking. Such awards, however, were made on the basis that the landowner's remaining property (or his entire tract if there was not a partial taking) had been damaged by the loss, destruction or impairment of reasonable access. The courts reasoned that since damages could be recovered for loss of access without a taking, severance damages to the remaining property could be recovered where there had been a partial taking. 8 Utah Law Review 24 (1962)The Limited-Access Highway, Some Aspects of Compensation; 33 Oregon Law Review 26 (1953), supra; 3 Willamette Law Journal 52 (1964)Limited-Access Highways, Rights of Abutting Landowners. These decisions gave proper recognition to the appurtenant character of the right of access. The concept of awarding "damage" for loss or impairment of access, rather than attempting to award the market value of a right of access under the theory that it is being taken, provides a more certain guide for assuring the property owner and the expropriating authority that just and adequate compensation will be awarded.
In Gilmore v. State, 208 Misc. 427, 143 N.Y.S.2d 873 (Ct.Cl.1955), the court said:
"... the right of claimants as such property owners to compensation is measured and ascertained not by the value of the easements separate and without reference to the dominant tenement to which they are attached, but by the damage which the dominant tenement sustained as a result and as a consequence of their loss. It follows that in making an award where easements are taken or interfered with to such an extent that in a legal sense they are taken, there would be no compensation for the easements taken beyond a nominal sum, and the right of claimants to recover would rest chiefly upon proof of consequential damages; that is, the real injury, if any, suffered by the landowner in any particular *756 case of the appropriation of property in the form of an easement lies in the effect produced upon the land to which the easement appropriated was appurtenant." (Emphasis added).
Louisiana recognized early that the right of access, once established, becomes a property right, and that the abutting property owner is entitled to be compensated for loss or impairment of that right. The courts were uniform in holding, however, that compensation for the loss or impairment of access would be made only as severance damages to the remaining property, where there has been a partial taking, or as damages to the entire tract where no part of the abutting property was taken. The loss or impairment of access was never awarded as an element of the value of the property taken, until the so-called "front land-rear land rule" was conceived and applied in a few recent cases.
Prior to the constitution of 1879, the organic law of this state, like that of all other states, simply provided that "private property shall not be taken for public purposes without adequate compensation." Under this rule, a taking of the property was a condition precedent to liability, and the sole measure of compensation due was the value of the property taken. Mere consequential damage to property, when the property itself was not taken, was not recoverable, and much less any damages resulting to individual owners, including loss or impairment of access. McMahon v. St. Louis, A. & T. R. Co., 41 La.Ann. 827, 6 So. 640 (1889).
The provision which first extended our law to compensate damages to property sustained by reason of public usage was incorporated in the Constitution of 1879, article 156. It was subsequently retained in the succeeding constitutions of 1898, 1913 and 1921. Prior to inclusion in a Louisiana constitution, the same principle was enunciated in article 545 of the Code Napolean, which provided that no one can be compelled to part with his property unless by reason of public utility and on consideration of an equitable and previous indemnification. This article was incorporated in the Civil Codes of 1808, 1825 and 1870. LSA-C.C. art. 497; Britt v. City of Shreveport, 83 So. 2d 476 (La.App. 2 Cir. 1955); Griffin v. Shreveport and A. R. Co., 41 La.Ann. 808, 6 So. 624 (1889); Jarnagin v. Louisiana Highway Commission, 5 So. 2d 660 (La.App. 2 Cir. 1942); State, Through Department of Highways v. Terry, 194 So. 2d 144 (La.App. 1 Cir. 1967).
Our Supreme Court said in Cucurullo v. City of New Orleans, supra:
"Unquestionably, plaintiff's premises were damaged by the complete and permanent elimination of the driveway. Even appellant's experts testified that the loss of the driveway resulted in a diminution in the rental and sale value of the property.
"Moreover, the city, having caused the loss in connection with and necessitated by its construction of public works is legally liable therefor. Section 2, Article 1 of the Louisiana Constitution, LSA, states: ` * * * Except as otherwise provided in this Constitution, private property shall not be taken or damaged except for public purposes and after just and adequate compensation is paid.' And our jurisprudence recognizes the liability of public agencies for interfering with right of ingress and egress respecting private properties. Harrison v. Louisiana Highway Commission, 202 La. 345, 11 So. 2d 612 and Patin v. City of New Orleans, 223 La. 703, 66 So. 2d 616." (Emphasis added).
The same court said in Cerniglia v. City of New Orleans, 234 La. 730, 101 So. 2d 218 (1958), that:
"No part of plaintiffs' property was taken; their cause of action is founded on Article 1, Section 2 of the Louisiana Constitution of 1921, providing compensation for damage in cases of expropriation." (Emphasis added).
*757 In Hebert v. State, Department of Highways, 238 So. 2d 372 (La.App. 3 Cir. 1970), we said:
"Even though no portion of an owner's property is actually taken, he may recover damages if his ingress and egress are substantially impaired ...".
In Efurd v. City of Shreveport, 235 La. 555, 105 So. 2d 219 (1958), the city constructed a viaduct over and along the street which formerly abutted plaintiff's property, with the result that access from plaintiff's property to the street was completely cut off. Plaintiff sued for damages, and our Supreme Court, holding that he was entitled to recover, said:
"It is well settled that when private property is damaged for public purposes, the measure of compensation is the diminution in the market value of the property damaged." (Emphasis added).
The jurisprudence seems to be settled in this state, therefore, that the landowner may be compensated for the loss or impairment of access to an abutting street, but the award for such loss or impairment is made solely as damages. If there is a partial taking, accompanied by the loss of access to the remaining property, then the award for loss of access is made as severance damages to the remaining property. If the construction of public improvements results in destroying the landowner's access, then he may be entitled to recover damages, even though none of his property was taken.
The right of access has no existence, and it has no value apart from the land. It, of course, is valuable to the person who owns the abutting property, but it is of no value to anyone else. No one would buy a right of access to a tract of land which he does not own or cannot use. A right of access cannot be peddled or sold separately from the land on the open market, and thus it has no "market value," as that term is used in expropriation proceedings. Due to this characteristic, the value of access to the landowner is ascertainable only by determining the amount by which it increases the market value of the land to which it attaches. 42 Minnesota Law Review 114 (1957-58), supra; 3 Arizona Law Review 51 (1961)Access Loss Distinguished from Traffic Flow Diversion; 12 South Carolina Law Quarterly 390 (1959-60), supra; 11 Kansas Law Review 392 (1962-63), supra; 3 Stanford Law Review 304 (1957), supra; 3 Willamette Law Journal 56 (1964-65), supra; Britt v. City of Shreveport, supra.
Since a "market value" cannot be assigned to a right of acess, then it logically follows that no award of market value can be made for the "taking" of that right of access. The only award which can be made for the loss or impairment of access is in the nature of damages. The amount of an award of damages for loss of access should be the amount by which the loss diminishes the market value of the land to which it is appurtenant. That is the traditional test for determining severance damage to the landowner's remaining property. In determining severance damages, our courts universally apply the "before and after rule." The damages are computed by determining the value of the remaining property before the taking and its decreased value after the taking. The difference constitutes the severance damages suffered by the owner of the remaining property.
As early as 1887 our Supreme Court said in McMahon v. St. Louis, A. & T. R. Co., supra, that:
"As in the case of a taking the measure of compensation is the value of the property taken, so in the case of damages the measure of compensation is the diminution in the value of the property."
Under the damage provision of our constitution, it is necessary to show special damages peculiar to the property in question, that is, damage of a different kind than that suffered by the general public. This is similar to the requirements in other states. 7 UCLA Law Review 531 (1960), supra; 20 Southwestern Law Journal 393 *758 (1966), supra. Access, however, is a private property right, which is special and individual to each owner. It is not common to the public generally. The destruction or impairment of access thus may cause special damage to the abutting property. Jones Island Realty Company v. Middendorf, supra. When this right of access is destroyed or impaired to the extent that it is rendered unreasonable due to expropriation, the owner is entitled to be compensated for the resulting damage to his remaining property. State v. Department of Highways, 200 La. 409, 8 So. 2d 71 (1942).
An important aspect of the definition of the "right of access" is the word "reasonable." The overwhelming weight of authority in the United States is to the effect that an abutting property owner is not entitled to access to and from his land at every point where it joins or touches the highway. He is entitled only to reasonable access from his property to the general system of public streets or highways and back again. 39 Am.Jur.2d, Sec. 178, page 553; 12 South Carolina Law Quarterly 377 (1960), supra; 27 Washington Law Review 125 (1952), supra; 38 Nebraska Law Review 416 (1959), supra.
Our Supreme Court stated in State v. Department of Highways, supra, that:
"... an owner is not entitled, as against the public, to access to his land at all points in the boundary between it and the highway, although entire access cannot be cut off. If he has free and convenient access to his property, and his means of ingress and egress are not substantially interfered with by the public, he has no cause of complaint."
If the landowner had reasonable access before the expropriation, and he continues to have reasonable access after the taking, then he ordinarily is not entitled to be compensated for loss of access, since he suffered no such loss. He had a right of access before, and he continued to have a reasonable right of access after the taking.
The question of whether the landowner is left with "reasonable" access after the taking is a factual issue which must be determined according to the facts of each case. The initial and most difficult issue to resolve is where the police power ends and the power of eminent domain begins.[3] Another question presented is whether the harm suffered by the landowner is merely different in degree, not kind, from that suffered by the general public.[4] An issue frequently presented is whether the landowner is required to travel by a "circuitous route" after the taking in order to reach the general system of roads. Many courts have held that "mere circuity of travel" is non-compensable as an element of damage.[5] Another question is presented where the street improvement results in an alteration of the general traffic flow. A claim that government action has diverted the main stream of traffic away from the abutting land, and that such diversion of traffic has reduced the value of the abutter's premises, has been held generally to be a non-compensable *759 element of damage, the reason being that the traffic flow is not encompassed within the right of access.[6]
The jurisprudence of this state is settled that diversion of traffic flow from one highway to another is not compensable as an element of damages, where access to the premises has not been substantially impaired. Hebert v. State, Department of Highways, 238 So. 2d 372 (La.App. 3 Cir. 1970); Patin v. City of New Orleans, 223 La. 703, 66 So. 2d 616 (1953); Thomas & Warner, Inc. v. City of New Orleans, 230 La. 1024, 89 So. 2d 885 (1956). In Patin v. City of New Orleans, supra, for instance, the court determined that the property of the plaintiff landowners had diminished in value by $10,000.00 as the result of the construction of an overpass. It awarded plaintiffs damages of only $2500.00, however, because it found that three-fourths of the damage was due to "diversion of traffic," which it held to be non-compensable.
In State, Department of Highways v. Hunt, 219 So. 2d 602 (La.App. 1 Cir. 1968), a part of defendants' property was expropriated for the construction of a complex limited access highway interchange. Although defendant lost his highway frontage, he was provided with access by means of an abutting service road. The court, in holding that he was not entitled to severance damages for loss of access, said:
"The mere fact that remaining property fronts on a service road rather than a main traffic artery as a result of an expropriation is not per se compensable. State, Through Department of Highways v. Sumrall, La.App., 167 So. 2d 503. A landowner may not be awarded damages for lack of direct highway access when he is provided reasonable access after the taking. Inconvenience to the landowner, diversion of traffic or change in attending conditions are not proper elements of severance damages unless they diminish the value of the owner's remaining property."
In the instant suit there has been no loss or impairment of access. There has been no diversion of traffic flow. Defendants still have reasonable access to the abutting highway and to the general system of streets and roads. And, they have suffered no damage at all as the result of the taking and construction of the new highway. The above mentioned issues thus are not presented in this case. I mention them, however, to emphasize the fact that defendants have not suffered any damages at all due to loss of access to the remaining property. Their right of access has not been taken, nor has it been destroyed or impaired. My colleagues have required the Highway Department to pay for something (the right of access) which it did not acquire and which defendants did not convey.
The majority states that the front land-rear land concept of awarding compensation is "well entrenched" in the law of this state. As authority for that statement they quote from Eminent Domain in Louisiana, by Professors Melvin G. Dakin and Michael R. Klein, and they cite nine Louisiana cases.
I find nothing in the quoted statement of Professors Dakin and Klein which indicates that the front land-rear land rule is the law of this state. Neither do the authors say that where there is a partial taking of frontage property, the expropriating authority should be required to pay the landowner for the loss of his "right of access," even though it does not take such a right and the landowner does not lose or suffer an impairment of it. One of the authors, Professor Dakin, expressed views in a later article, which appear to be contrary to those of the majority in this case. In commenting *760 on three cases decided by the Third Circuit Court of Appeal, in which the front land-rear land rule was applied, Professor Dakin said:
"Louisiana has a statute which declares that, in estimating value of property expropriated, it shall be done `without deducting therefrom any amount for the benefit derived by the owner from the contemplated improvement or work.' When applied to the taking of frontage property incident to widening an existing highway, where the property taken is part of a larger tract which will have the same frontage on the newly widened right-of-way, the paradoxical result is reached that the condemnor must pay for taking away a benefit which it immediately reconfers but may nonetheless take no credit therefor against the award. On the other hand, if severance damages are claimed in connection with such a taking, special benefits conferred on the remainder by the improvement may be offset. Thus, the overall compensation could differ as to similar tracts of land depending on the way in which the claim is made. The condemnor sought to temper the results in LeDoux by estimating the award as a pro rata portion of the entire tract valued on an average basis, but the Third Circuit rejected the approach." (Emphasis added). 27 La.L.Rev. 469, 476 (1967).
I do not agree with the author's suggestion that the condemnor has taken away the right of access and has immediately reconferred it to the landlord. I feel that in the instant suit the right of access has never been taken away by the condemnor. Defendants have never lost that right. They still have it. They have never suffered any impairment of it. And, they still have the same amount of front land as they had before the taking. I agree with Professor Dakin, however, in what I consider to be his expressed view that the front land-rear land rule unavoidably leads to some unfair and ridiculous results, and that those results may be made to vary "depending on the way in which the claim is made."
I concede that in three of the nine Louisiana cases cited by my colleagues the front landrear land rule was applied. One of them, of course, is State, Department of Highways v. Landry, supra. The other two are: State, Department of Highways v. LeDoux, 184 So. 2d 604 (La.App. 3 Cir. 1966); and State, Department of Highways v. Bertrand, 184 So. 2d 611 (La.App. 3 Cir. 1966).[7] Another case cited by them, State, Department of Highways v. Caillier, 157 So. 2d 274 (La.App. 3 Cir. 1963), contains language which can be interpreted as approving the principle of the front land rear land rule. Although I do not think the court intended to create such a novel rule of law in that case, I felt at the time that a rehearing should be granted because of the misleading language which had been used. I do not feel that any of the other five cases cited to support the majority's conclusions are applicable here.
*761 Three of the other cases relied on by my colleagues involved expropriation of servitudes for gas pipe lines. Columbia Gulf Transmission Company v. Fontenot, 187 So. 2d 455 (La.App. 3 Cir. 1966); Colonial Pipeline Company v. Babineaux, 154 So. 2d 594 (La.App. 3 Cir. 1963); and Texas Gas Tranmission Corporation v. C. M. Thibodeaux Company, 148 So. 2d 337 (La.App. 1 Cir. 1962). They did not involve a taking of frontage land for highway purposes, and no issue was presented relating to the loss or impairment of the landowner's right of access. The remaining two cases cited by the majority merely support the existing rule that where the parent tract consists of different types of land, having different characteristics, each class may be appraised separately and the awards may be based on those appraisals. In State v. Moyse, 151 So. 2d 140 (La.App. 1 Cir. 1963), for instance, the parent tract, comprising 253 acres, consisted of three entirely different classes of property, with different established uses, different shapes and with different zoning restrictions. I find nothing in the opinion which supports the so-called front landrear land rule. The last case, State, Department of Highways v. Waterbury, 171 So. 2d 790 (La.App. 3 Cir. 1965), was not a highway widening case. A new four-lane highway, with service roads, was constructed through and across the landowner's 152.6 acre tract of land. All appraisers agreed, and the court found, that the property was best suited for the development of subdivisions, and it was valued as subdivision property, making deductions for development costs. One appraiser prepared a plat of a proposed subdivision of the entire tract, and he valued each lot separately. The court apparently accepted that method of determining the value of the property taken. It applied the settled rule that where the property taken is composed of different classes of land, each class may be valued separately. No issues were presented relating to the loss or impairment of access to any abutting roads.
There, of course, are many cases in Louisiana where the courts have applied the average land basis rule. In all such cases, of course, they also considered and awarded severance damages, where appropriate, in order to insure that the landowner would receive just and adequate compensation and would be placed in the same position pecuniarily as he would have been had his property not been taken. A few of them are: State, Department of Highways v. Barton, 231 So. 2d 403 (La.App. 4 Cir. 1970); State v. Hyland, 148 So. 2d 886 (La.App. 1 Cir. 1962); State v. Cities Service Refining Corporation, 135 So. 2d 636 (La.App. 3 Cir. 1961); State v. Williams, 131 So. 2d 600 (La.App. 3 Cir. 1961); State, Department of Highways v. Medica, supra; State, Department of Highways v. Monsur, supra.
In the Barton case, supra, the rear portion of the parent tract was taken. The court rejected an argument that the "rear land" was worth less than the "front land," and it awarded the average per square foot value of the entire tract, stating that "the owners are entitled to compensation on the basis of its proportionate actual value as a part of the whole." In State v. Hyland, supra, the court said:
"... Generally speaking this is not the proper method of evaluating a small tract which is taken from a larger undeveloped tract. It should be valued by considering what value the portion taken bore to the value of the whole tract. Orgel on Valuation under Eminent Domain, Vol. I Second Edition, Section 52, p. 274; Colonial Land Co. Ltd. v. Board of Com'rs of Pontchartrain Levee Dist., 170 La. 1057, 129 So. 635."
In State v. Cities Service Refining Corporation, supra the 120 acre parent tract was divided by an existing blacktop public highway. The 80 acres lying north of that highway was appraised separately from the 40 acres lying south of it, because of the different characteristics of those tracts. The landowner was awarded for each part expropriated the average per acre value of the class of property from which it was *762 taken, even though a part of the property taken fronted on the existing highway. And, in State v. Williams, supra, the Department of Highways took 8.171 acres out of defendants' 120 acre parent tract, which "fronted for three-fourths of a mile along a much-traveled hard-surfaced highway." The parts taken apparently included parts of the "front land." The court found the entire parent tract to have a value of $2,117.00 per acre, and the award made to the landowner was based on that average value.
The cases of State, Department of Highways v. Medica, supra, and State, Department of Highways v. Monsur, supra, involved two adjacent tracts of land. Both tracts were the same size, they had the same characteristics, and they both fronted on the same existing highway. The Highway Department took largely "rear land" out of the Medica tract, and mostly "front land" from the Monsur tract. The trial courts applied the "average land basis rule" in Medica, and the "front landrear land rule" in Monsur. We held that the "average land basis rule" should have been applied in both cases, and accordingly the award to the landowners in Monsur was amended so as to allow them to recover for the property taken the average per acre value of the parent tract.
I agree with the following views which were expressed by the Court of Appeals of Kentucky in Frenel v. Commonwealth, Department of Highways, 361 S.W.2d 280 (Ct. App.Ky.1962):
"We have said on at least two occasions that the value of a tract of land taken by condemnation is to be measured with reference to the entire tract....
"`Frontage' value may be considered nothing more than the value that derives from convenient, direct access to the highway. The right of such access ordinarily is appurtenant to the entire tract, and so long as the tract continues under single ownership it cannot be said that the value attaches to the front portion of the tract any more than to the back. The value from the right of access can attach specifically to the front portion only by a conveyance of the right along with a conveyance of the front portion which results in destroying or lessening the access to the highway from the back portion. But in the ordinary highway widening situation the right of access is not taken by the condemnation and the front portion is not devoted to a use that impairs the access of the back portion on the contrary, it is converted to a use which leaves all of the right of access attaching to the back portion. No part of the right of access is taken along with the front portion, by the condemnation and no new right of access is created for the back portion; the formerly existing right of access simply adheres to the back portion. So no `frontage' value has been taken by the condemnation nor has the value of the remainder of the tract been enhanced by any newly created frontage rights." (Emphasis added).
The Court of Appeals of Arizona observed, correctly I think, in Deer Valley Industrial Park Dev. & L. Company v. State, 5 Ariz.App. 150, 424 P.2d 192 (1967), that:
"It is abundantly clear in cases such as this that a substantial portion of the value of the property in question arises by reason of its right of access to the public road upon which it fronts. In insisting that the two parcels of land taken here should be compared to parcels of land of similar size sold in this area, it is significant that the property owners' appraisers have selected sales of smaller parcels of land which in each case included the frontage rights, which frontage rights pertained to property of substantially less depth than that of the 160 acres involved here. These smaller parcels of land presumably have been separated out of larger parcels of land and sold for their frontage value. When this is done, rights of access attaching to the rear portions of the larger parcels have been separated from their access rights *763 to the highway, in a quid pro quo exchange, so that in effect the buyers have paid additional value for the totality of the access rights of the larger parcels of land. To compare the sale of these smaller parcels to the taking here seems to this court to be completely unrealistic and not within the contemplation of either our constitution or our statutory provisions pertaining to eminent domain.
"... Common sense, derived from experience, leads this court to conclude that our legislature, by adopting the subject rule of damage, A.R.S., § 12-1122, subsec. A, did not intend that property owners be paid in full for valuable frontage rights, and yet at the same time retain these frontage rights." (Emphasis added).
The above authorities show, I think, that the so-called "front landrear land rule" is not "entrenched" in the statutory and jurisprudential law of Louisiana, or of any other state. Aside from the fact that it is not the law, however, there are equitable and practical reasons why it cannot be applied with fairness to the parties.
In the instant suit the majority has determined that the "market value" of the land taken is $54,534.00, or the sum of $27,124.00 per acre. The "market value" found by the court however, is the highest price which the strip of frontage land taken would bring if sold at private sale. If the property being taken here should be sold at private sale, the purchaser would acquire the mineral rights and he would acquire the exclusive right of access. He would have the right to prevent any further access to that property from defendants' remaining land. He could erect fences, barricades or buildings in this strip of land if he saw fit to do so. The value which the appraisers and my colleagues have placed on the land taken thus is its value if sold with all of those rights. In this expropriation, however, the Department of Highways acquires no such right or title. It acquires title to the property subject to the reservation in perpetuity in favor of defendants of all minerals and royalties, and subject to the landowners' right to continue to have free access to the property and to the improved highway which is to be constructed on it.[8]
The Highway Department thus is being required to pay the highest price which a purchaser at private sale would pay for full title to the property. Yet, the Department is acquiring the land subject to the reservation of all minerals and the reservation by the seller-landowner of the right of access. I agree that "market value" is a proper test for an award, but here the market value should be the amount which the property taken would bring if sold subject to the same reservations as are imposed on the Highway Department. I have already pointed out that the highest value which any appraiser put on the property taken without the right of access is $6,000.00 per acre.
In Orgel on Valuation under Eminent Domain (1953), at page 247, the author quotes with approval from City of Grand Rapids v. Barth, 248 Mich. 13, 226 N.W. 690 (1929). In that case the court said:
"... but the appellants claim that they should be paid as damages occasioned by taking the front 16 feet of their respective properties the fair market value obtainable therefor by its sale as a parcel separated from the remaining portion of the property....
"But the rule for which the appellants contend is not the correct rule by which a property owner's damage should be *764 assessed, when only a portion of the parcel is taken. The fallacy in appellants' proposed method of fixing the amount of damages lies in overlooking the fact that widening Fulton street does not deprive their properties of frontage on that street as would a sale of the front sixteen feet for private use. They will still have a right of ingress and egress on Fulton street, and their easement as to light and air on that side will still be pertinent to their properties.
"... If these defendants sold to a private owner the front 16 feet of their lots, the property rights which they would convey to their grantees would be very different and more valuable than the property rights which the city is attempting to take by condemnation, and just compensation or the fair measure of damages is not the same in the one instance as in the other....
"Under the rule of compensation asserted by the appellants, they would not only `be made whole,' but they would profit rather handsomely at the public's expense."
In a case such as the instant suit, when the front landrear land rule is applied, a difficult problem would be presented if the Highway Department should erect a barricade along the improved highway, after the taking, preventing defendants from obtaining access to it, and defendants thereafter should claim severance damages for loss of access. The Department will have paid a substantial sum of money for defendants' right of access, and the question presented would be whether it should be required to pay more if it exercises the right it has already paid for. No such question could arise if the average land basis rule were used, with an award of severance damages, if appropriate.
In the event the front landrear land rule becomes a part of our jurisprudence, will it be applied to reduce the compensation due the landowner when only parts of the "rear land" are taken?
If the order of expropriation issued in this suit had stipulated that the land was being taken subject to the reservation in favor of the landowners of the right of access to the improved highway, I assume that the appraisals of the property taken would have been made with such a reservation, and that the award to the landowners would have been less. It seems illogical to me to impose the front landrear land rule which is unjust to start with, and which eventually may compel such a reservation in future orders of expropriation in order to get fair awards, when all parties can be assured of just and adequate awards, without a change of procedure, by using the average land basis rule.
In the instant suit the evidence indicates that the 17.142 acre parent tract was uniform in character, and that it could not logically be divided into different classes of land. Under those circumstances, I believe that the court should first determine the value of the entire parent tract, and that the award to defendants then should be based on the average per acre value of that tract, that is, the amount awarded should bear the same proportion to the total value of the parent tract as the number of acres taken bears to the total acreage. Defendants' appraisers have valued the property at $6,000.00 per acre, without access, and at $9,623.19 with access. I feel that the award for the taking should not exceed the higher per acre value, which would amount to an award of $19,065.14 for the land taken.[9] I thus would reduce the award for the property taken from $54,534.00 to the above mentioned figure. I *765 agree with my colleagues as to the amount of the additional award for improvements taken.
The evidence convinces me that defendants have sustained no severance damages as a result of the taking, particularly since their right of access has not been destroyed or impaired, and they still have the same amount of "front land" as they had before the taking. I think the court should inquire into and determine whether there has been a loss or impairment of access, however, in order to determine whether any severance damages to the remaining property have been sustained.
My principal objection to the majority opinion of course, is that the front land rear land concept of awarding compensation to the landowners has been used here, with the result that an unjust award has been made. I think the average land basis rule should have been applied. This dissent is much too lengthy, but since our court has rendered differing opinions on this issue which cannot be reconciled, I felt that it was appropriate for me to express my views fully.
For these reasons, I respectfully dissent.
NOTES
[1] Washington University Law Quarterly 310, 312 (1959)LimitedAccess Highways; Public Interests v. Access Rights of Abutting Owners; 11 Kansas Law Review 388 (1962-63)Control of Access by Frontage Roads, Police Power or Eminent Domain? 38 Nebraska Law Review 407, 412 (1959)Control of Highway Access; 27 Washington Law Review 111, 117 (1952)The Limited Access Highway; 20 Southwestern Law Journal 393, 395 (1966)The Landowner's Right of Access to the Abutting Street, a Damaging for the Public Use.
[2] For other discussions of the origin of access as a right of the abutting property owner, see: 16 Buffalo Law Review 603, 604, 634-635 (1966-67)Compensation for Loss of Access in Eminent Domain in New York, a Re-evaluation of the No-compensation Rule with a Proposal for Change; 3 Stanford Law Review 298, 300 (1951)Freeways and the Rights of Abutting Owners; 56 Northwestern University Law Review 587, 596 (1961)Frontage Roads, To Compensate or Not to Compensate; 12 South Carolina Law Quarterly 377, 381 (1959-60)Control of Highway AccessIts Prospects and Problems; 42 Minnesota Law Review 106, 112 (1957-58)Eminent Domain, Compensation for Partial Taking of Farm Land in Constructing Limited Access Highways; 13 Missouri Law Review 19, 31 (1948)The Limited Access Highways from a Lawyer's Viewpoint; 42 Minnesota Law Review 106, 114 (1957-58), supra; 34 North Carolina Law Review 130, 132 (1955-56); 35 Indiana Law Journal 508, 518 (1959-60)Right of Way Acquisition, Damage Problem Created by the Limited Access Highway; 33 Oregon Law Review 16, 35 (1953)Limiting Access to Highways; 47 Texas Law Review 733, 736 (1968-69) The Property Right of Access Versus the Power of Eminent Domain. See also State v. Department of Highways, 200 La. 409, 8 So. 2d 71 (1942); Jones Island Realty Company v. Middendorf, 191 La. 456, 185 So. 881 (1939); Iowa State Highway Commission v. Smith. 248 Iowa 869, 82 N.W.2d 755 (1957); Petition of Burnquist, 220 Minn. 48, 19 N.W.2d 394 (1945); Adams v. Chicago B & N R. Co., 39 Minn. 286, 39 N.W. 629 (1888); Schnider v. State, 38 Cal. 2d 439, 241 P.2d 1 (1952); Muhlker v. New York & H. R. Co., 197 U.S. 544, 25 S. Ct. 522, 49 L. Ed. 872 (1905); Standwood v. City of Maiden, 157 Mass. 17, 31 N.E. 702 (1892).
[3] For discussions of police power versus the right of eminent domain, see 1959 Washington University Law Quarterly 315 (1959), supra; DuPuy v. City of Waco, 396 S.W.2d 103 (Tex.Sup.Ct.1965); New Orleans Gas-Light Company v. Hart, 40 La.Ann. 474, 4 So. 215 (1888); 12 South Carolina Law Quarterly 404 (1960), supra; 14 Baylor Law Review 70 (1962)Eminent Domain v. Police Power as Related to the Abutting Owner's Right of Access; Bacich v. Board of Control of California, supra; Smith v. State Highway Commission, 185 Kan. 445, 346 P.2d 259 (1959); 11 Kansas Law Review 390 (1963), supra; 43 Iowa Law Review 264 (1958), supra.
[4] See 27 Washington Law Review 121 (1952), supra; 12 South Carolina Law Quarterly 393 (1960), supra; Warren v. Iowa State Highway Commission, 250 Iowa 473, 93 N.W.2d 60 (1958).
[5] See 38 Nebraska Law Review 149 (1959), supra; 20 Southwestern Law Journal 397 (1966), supra; 27 Washington Law Review 121 (1952), supra; Jones Beach Boulevard Estate v. Moses, 268 N.Y. 362, 197 N.E. 313 (1935).
[6] 47 Texas Law Review 751 (1969), supra; 38 Nebraska Law Review 417 (1959), supra; 56 Northwestern University Law Review 593 (1961), supra; 27 Washington Law Review 123 (1952), supra; Nelson v. State Highway Board, 110 Vt. 44, 1 A.2d 689 (1938); State v. Linzell, 163 Ohio St. 97, 126 N.E.2d 53 (1955); Pennysavers Oil Company v. State, 334 S.W.2d 546 (Tex.Civ.App.1960); Wilson v. Greenville County, 110 S.C. 321, 96 S.E. 301 (1918).
[7] I was the author of the majority opinions in the companion cases of State v. Bertrand, supra, and State v. LeDoux, supra, in both of which cases the front landrear land rule was applied. I explained in a footnote in LeDoux, however, that I had consistently disagreed with the front landrear land concept, but that I had voted for rehearings in the Landry and the Caillier cases, supra, that writs had been denied by the Supreme Court in both of those cases, and that I felt bound by the majority decisions in those cases. After the LeDoux and Bertrand cases were decided, however, our court rendered decisions in State, Department of Highways v. Medica, 257 So. 2d 450 (La.App. 3 Cir. 1972), and State, Department of Highways v. Monsur, 258 So. 2d 162 (La.App. 3 Cir. 1972), in both of which cases we specifically rejected the front landrear land concept of awarding compensation, and instead we applied the average land basis rule. Since our court has rendered opinions recently on this issue which are directly opposite to those rendered in the earlier cases of Landry, LeDoux and Bertrand, I no longer feel bound by the decisions rendered in those earlier cases.
[8] The order of expropriation does not recite that the right of access is reserved to the landowners. The land taken must be used only for highway purposes, however, and the project plans show that there will be free access to the improved highway. The award properly should be based on that premise. If it should be determined on that basis, then defendants would be entitled to recover damages if access to their remaining property is ever destroyed or materially impaired.
[9] Actually, the $6,000.00 per acre figure should be used here, since the landowners' right of access will not be lost or impaired. In using the higher per acre value, the defendants are being allowed to receive compensation for part of the value of the right of access, although they will suffer no loss or impairment of that right. The right of access does affect the value of the entire tract, however, so I prefer to include it in valuing the entire tract when the average land basis rule is applied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917867/ | 376 Mich. 198 (1965)
135 N.W.2d 916
McCOY
v.
DeLIEFDE.
Calendar No. 71, Docket No. 50,618.
Supreme Court of Michigan.
Decided July 13, 1965.
Small & Shaffer (Zoe E. Shaffer, of counsel), for plaintiff.
Frederick W. Poel, Jr., for defendant John DeLiefde.
Cholette, Perkins & Buchanan (Edward D. Wells, of counsel), for defendant James Friar.
KELLY, J. (dissenting in part).
Plaintiff's declaration (filed June 24, 1960) in four counts charged James Jacob DeLiefde in count 1, John DeLiefde in count 2, and James Friar in count 3, of injuring plaintiff, while pheasant hunting, by "negligently, carelessly, and recklessly" firing a shotgun, resulting in the shot striking and injuring plaintiff, and in count 4 made the same charge against all three defendants on the theory of joint liability.
*201 January 2, 1963, defendants John DeLiefde and James Friar filed motions for summary judgment alleging in the affidavit in support thereof that plaintiff's August 15, 1962, deposition (requiring 28 pages of the printed appendix) established under oath: "That said Robert McCoy testified, of affiant's own knowledge, under oath, at said deposition that said James Friar did not shoot him, and that it was his claim that John DeLiefde did not shoot him and there was never any question in his mind but what it was James Jacob DeLiefde who shot him, and he knew that when the suit was started and also when the declaration was prepared; that he knew definitely from his own observation that John DeLiefde or James Friar could not have shot him; that the shot came from the exact position where Dr. James Jacob DeLiefde was standing."
In a written opinion of the court on the motions for summary judgment, Hon. Raymond W. Fox, circuit judge, held:
"By a deposition of the plaintiff under date of August 15, 1962, plaintiff has positively stated under oath that it was defendant James Jacob DeLiefde who shot him. * * *
"At the hearing of the motion for summary judgment, an affidavit was filed by Zoe E. Shaffer, attorney for the plaintiff. In this affidavit counsel swears that at least three witnesses will testify that the shot which injured plaintiff came from the location of the three defendants but that they were uncertain as to which of the three shot, but that they knew one of them did. This, of course, is negative testimony to the degree that the witnesses cannot say which of the three shot, but plaintiff has testified by deposition that he knows which of the three shot and that it was Dr. James DeLiefde.
"There are no contradictory statements by the plaintiff, nor has he filed any affidavit contradicting his testimony in the deposition. Under such circumstances, *202 it is the opinion of this court that plaintiff is bound by his own testimony. See 80 A.L.R. 624, 50 A.L.R. 979, and see also Bolman v. Louisville & Nashville Railroad Company (CA 6), 295 F2d 809. * * *
"However, the rule is clear and unambiguous, and in the absence of any affidavit by either the plaintiff or any witness in his behalf, it seems to follow that the motion for summary judgment should be granted. For the foregoing reasons, as to counts 2 and 3 a judgment of no cause of action is rendered in accordance with Rule 117, GCR 1963."
Appellant states:
"We submit this ruling (the trial court's) is clearly error. Appellant admits he stated in the discovery deposition that he claimed James Jacob DeLiefde shot him but that statement when viewed as a whole makes it abundantly clear that this statement is the conclusion of appellant based on what he observed at the time of the accident. At the same time appellant also stated that he did not see the shot fired, that he did not see the gun, and that he did not see who shot the gun, that he heard the shot, and based on what he heard and saw before the shot was fired appellant concludes the shot was fired by defendant James Jacob DeLiefde."
The deposition discloses an unusually clear and positive recitation as to what occurred at the time of and just previous to the accidental shooting.
In this deposition plaintiff relates that he was not acquainted with the three defendants when he first saw them 800 to 900 feet west of him; how he watched the three spread out 20 or 30 feet apart as each proceeded east toward him, veering first to the south and then to the north, and then finally coming together as they crossed a ditch, passing him at that time about 15 feet away, then turning east into the cornfield and again spreading out 25 feet apart as they turned south; how he moved south following *203 them for a distance of about 150 feet, being about 15 feet behind them, and during this time he could clearly see all three as he could "see right across the corn field; the corn was dry and hanging so you could see"; how a black dog was following at Dr. DeLiefde's heels at all times; how Dr. DeLiefde was dressed, wearing "a red leather cap" and that he had on "real thick glasses, thick rims" and had a "bushy long hair cut"; that plaintiff was standing facing east when he was shot; that he heard Dr. DeLiefde's son holler "hen pheasant" and observed the doctor's dog walking around the doctor counterclockwise, with the doctor turning his body looking down at the dog; that he saw Dr. DeLiefde "instantly" before the shot was fired that almost immediately hit him; that while he did not see the doctor shoot he was positive the doctor shot him as he had "hunted a long time and know where a shot comes from"; that he knew where all three defendants were positioned when the shot was fired and he knew it had to be the doctor that shot him.
Appellant's counsel explains as follows:
"Appellant's counsel, not appellant, was the pleader in the case. Appellant's lawyer pleaded inconsistent causes of action because after listening to the statement of appellant and the other witnesses the lawyer was confronted with uncertainty as to the facts and occurrences which caused appellant's injury. One fact came through all the statements. One of the three defendants fired the shot which injured appellant, but it is uncertain who fired the shot." (Emphasis added.)
No explanation, however, is offered why the names of the witnesses are not divulged or why their affidavits were not offered to sustain appellant's counsel's contention.
The court did not err in holding that "in the absence of any affidavit by either the plaintiff of any *204 witness in his behalf," judgment of no cause of action is rendered as to counts 2 and 3.
Count 4 charging joint liability is based on the charge that "defendants were engaged jointly in the negligent activity of hunting in a corn field wherein their visibility was impaired," and "that all of said defendants and each of them knew or should have known that it was extremely dangerous to the rights and safety of plaintiff and others to hunt and fire a gun under such circumstances and that to do so would be acting in utter disregard of the rights and safety of plaintiff and others, that nevertheless all of the said defendants, without due caution and regard for the rights and safety of plaintiff and others did hunt in said corn field, together in concert and with a common design."
In the opinion holding that the motions of John DeLiefde and James Friar for summary judgment should also be granted as to count 4, the court held:
(a) "The rule as to joint liability seems to be that where two or more persons are negligent and plaintiff does not know which party's negligence caused his injury, that plaintiff can recover of both," would not apply under the court's ruling in re counts 2 and 3 finding "from the deposition of plaintiff that it was Dr. James Jacob DeLiefde" who shot at the pheasant and hit plaintiff;
(b) "There is no claim that hunting in a cornfield constitutes a violation of any statute or ordinance, nor is there any claim that it is a criminal or unlawful act. There is no allegation that the defendants John DeLiefde and/or James Friar concurred in the unlawful act of shooting a hen pheasant, nor is there any allegation or claim that they concurred in James Jacob DeLiefde shooting, if he did, without observing where the plaintiff was."
Referring to plaintiff's attorney's affidavit in opposition to the motions to the effect that the corn *205 was "thick, in excess of seven feet high", appellees state:
"The affidavits are not made on the personal knowledge of the plaintiff's attorney; they are based at best on hearsay of other witnesses. No affidavit of any of these witnesses was filed. For the reasons previously discussed, we submit the affidavits of plaintiff's attorney are a nullity.
"Plaintiff has repeatedly testified that he could see through the corn, and this is uncontradicted. The very bases [basis?] of the plaintiff's case thus falls, since the uncontradicted testimony of plaintiff is that one could see through the corn field and the respective parties could see each other."
The court did not err in entering the order granting summary judgment.
Affirmed. Costs to appellees.
DETHMERS and O'HARA, JJ., concurred with KELLY, J.
SOURIS, J.
I agree with Mr. Justice KELLY's conclusion that, since plaintiff unequivocally had deposed that defendants John DeLiefde and James Friar did not fire the shot which struck him, and since plaintiff did not counter defendants' motions for summary judgment by offering any other evidence, by affidavit or otherwise, that either of them did, the trial court did not err in dismissing those counts of the declaration specifically charging those two defendants with having shot plaintiff negligently.
The trial court erred, however, in dismissing count 4 of plaintiff's declaration by which plaintiff sought to hold all three defendants jointly liable. Plaintiff's theory of defendants' joint liability is that all three of them had engaged negligently in the concerted activity of hunting, the alleged negligence *206 consisting of hunting and firing firearms in a field where the corn was so high and thick that it was very difficult to know if another hunter were in the line of fire.
The fact that only one of the defendants might by his direct act have injured plaintiff does not necessarily absolve the other defendants. In Mahnke v. Freer (1901), 126 Mich. 572, plaintiff brought suit against four defendants who had allegedly been driving their four horse-drawn carriages rapidly along a street. Plaintiff, riding a bicycle, collided with one of the carriages and was injured. All testimony indicated that it was defendant Freer's carriage which struck plaintiff. The Court found no error when the trial court charged as follows:
"If, at the time, the plaintiff was in the exercise of due care, and there was a concert of action on the part of the defendants to race their horses, the plaintiff could recover against all the defendants; but, before he could recover against any of them, the jury must find that their negligence was * * * [a] proximate cause of the injury. If, however, they found that such negligence did not extend to all the defendants, then the verdict might be rendered against such defendant as was in fault, if the plaintiff himself was using due care." 126 Mich. 572, 576.
A similar situation was presented by Benson v. Ross (1906), 143 Mich. 452 (114 Am St Rep 675). There, plaintiff brought suit against three defendants, alleging that while the three were taking turns firing a rifle, one of them shot him.
"Defendants' testimony tended to show that, some time before the accident, the two defendants Ross had ceased to participate in the firing, and that William J. Ross had requested Haight to shoot no more. The circuit judge seems to have deemed it essential to plaintiff's case to show that the shot was fired by one of the two contesting defendants, or by his *207 affirmative direction. We think this view of the defendants' responsibility too restricted.
"There was testimony tending to show that the three defendants were acting in concert in an act, not only violating a city ordinance, but palpably and grossly negligent. If the jury found such concert of action, all would be liable as joint tort-feasors. Jenne v. Sutton, 43 NJLaw 257 [39 Am Rep 578]; Mahnke v. Freer, 126 Mich. 572, 576; Conradt v. Clauve, 93 Ind 476 [47 Am Rep 388]. Whether the defendants' testimony was sufficient to overcome the evidence offered on plaintiff's behalf was a question for the jury." 143 Mich. 452, 453.
Although the Benson Court observed that the defendants there were acting not only negligently but also in violation of a city ordinance, this latter factor is not a prerequisite to imposition of negligence liability if the former be present. This is demonstrated by Gaufin v. Valind (1934), 268 Mich. 269. There, defendants appealed from a jury verdict awarding damages to plaintiff for injuries she sustained when she was struck by a can thrown from a truck during a parade. Defendants were a wholesale grocer and Valind, a representative of a canning company. Employees of the grocer and Valind had decorated the truck, had driven it in the parade, and had thrown cans therefrom for advertising purposes. No reference to any statutory violation was made, and the Court approved this jury instruction, and others:
"`If two persons act in concert or with a common design or purpose, and one of them commits a negligent act by which a third person is injured without fault or negligence on the part of the third person, then the two so acting in concert are joint wrong-doers and both are liable for the injury, so done, because both owed the common duty to the injured person to do no negligent act towards him.'" 268 Mich. 269, 272.
*208 Whether, upon trial, plaintiff can prove facts to support his allegations is, of course, a question the determination of which must await that event. Plaintiff did succeed in Gaufin:
"The evidence was sufficient to justify a finding of community of interest in the display as made and the manner in which it was sought to be made effective, and warranted the instruction as given." 268 Mich. 269, 273.
Thus, even if it be admitted that it was defendant James DeLiefde who shot plaintiff, this in itself would not necessarily absolve the other defendants from liability. Plaintiff's count 4 stated a cause of action within the authority of Benson, Mahnke, and Gaufin, supra, since it alleged that all three defendants were jointly engaged, negligently, in a concerted activity as a result of which plaintiff was injured. Thus was created a genuine issue of material fact (GCR 1963, 117.2), namely, whether defendants had so acted, and neither plaintiff's deposition nor defendants' attorney's affidavit sufficed to eliminate this issue on defendants' motions for summary judgment, which issue plaintiff was entitled to have resolved by a jury.
Affirmed in part and reversed in part. No costs, neither party having completely prevailed.
T.M. KAVANAGH, C.J., and SMITH and ADAMS, JJ., concurred with SOURIS, J.
BLACK, J.
Excepting the conclusions reached in the first paragraph of Justice SOURIS' opinion, I concur fully with him.
Summary judgment as entered should be reversed outright, with costs to plaintiff. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917875/ | 135 N.W.2d 66 (1965)
Ronald SHACTER, a minor, by Joseph Shacter, his father and natural guardian, Respondent,
v.
Theodore RICHTER, Leo Breitman and Joseph Blockey, Relators.
Ronald SHACTER, Respondent,
v.
Robert SPEETER, Sr., and Robert Speeter, Jr., Relators.
No. 39668.
Supreme Court of Minnesota.
April 23, 1965.
*67 Meagher, Geer, Markham & Anderson, Thomas L. Adams, O. C. Adamson, II, Peterson & Holtze, Minneapolis, for relators.
Hvass, Weisman & King, Minneapolis, for respondent.
MURPHY, Justice.
This matter is before us on a writ of prohibition which raises the issue as to whether the trial court exceeded its jurisdiction in consolidating two separate actions for trial.
From the facts contained in the record before us, it appears that the first action grew out of injuries sustained by the plaintiff on November 5, 1959, when he was injured in an automobile accident while riding as a passenger in a car driven by defendant Theodore Richter and owned by defendant Leo Breitman, which collided with an automobile driven by defendant Joseph Blockey. The second action grew out of an automobile accident which occurred 3½ years later, on April 22, 1963, when the plaintiff was injured while he was riding as a passenger in a car driven by his brother which collided with a vehicle operated by defendant Robert Speeter, Jr., who was driving with the permission and consent of his father, defendant Robert Speeter, Sr.
The affidavit of plaintiff's counsel in support of the motion to consolidate the actions for trial states that "the injuries sustained in the second accident involved an aggravation of injuries sustained in the first accident." Plaintiff argued that the actions should be consolidated in the interest of "saving trial time and expense to the parties, as well as to the District Court of Hennepin County." On petition of defendants, who assert that the district court exceeded its legitimate power and authority in ordering the consolidation, we subsequently issued the writ of prohibition.
The actions were consolidated pursuant to Rule 42.01, Rules of Civil Procedure, which provides:
"When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay."
Defendants argue that the application of this rule is circumscribed and limited by Rule 20.01, which permits joinder of claims and parties. So far as applicable here, that rule provides:
"Persons may join in one action as plaintiffs if they assert jointly, severally, or in the alternative any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of fact or law common to all of them will arise in the action. All persons may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any *68 question of law or fact common to all of them will arise in the action."
The defendants ask us to hold in effect that consolidation under Rule 42.01 may be ordered only where the actions arise out of the same transactions and might have been joined in the first instance. It should be observed at the outset that Rule 42.01 is the same as Federal Rule 42(a). In 2B Barron & Holtzoff, Federal Practice and Procedure (Rules ed.) § 941, p. 172, it is pointed out that consolidation may be used under circumstances where several actions are ordered "to be tried together but each retains its separate character and requires the entry of a separate judgment. This type of consolidation does not merge the suits into a single action, or cause the parties to one action to be parties to another." It is apparently in this sense that the trial court ordered the consolidation, assuming that the separate issues with reference to liability could be fairly tried together and that there could also be a determination as to how much each defendant contributed to the plaintiff's injuries. The trial court apparently concluded that the consolidation was permissible in that there was a common question of fact as to damages.
The defendants contend that there is no authority for consolidation under the circumstances and further that the consolidation would be prejudicial in that they would find themselves at trial in the unenviable position of adversaries, each attempting to prove the negligence and wrongful conduct of the others. They argue that prohibition is available as a remedy, claiming that the order for consolidation is not only beyond the power of the court, but an abuse of discretion which leaves them with no other adequate remedy at law. State ex rel. Stenstrom v. Wilson, 234 Minn. 570, 48 N.W.2d 513; State ex rel. Hierl v. District Court, 237 Minn. 456, 54 N.W.2d 5; Weidel v. Plummer, 243 Minn. 476, 68 N.W.2d 245.
1. In support of their argument that the trial court went beyond its power in ordering consolidation, defendants rely on certain New York authorities which are on all fours with the facts in this case. These cases are Gamble v. Fraleigh, 1 Misc. 2d 347, 146 N.Y.S.2d 146; Abbatepaolo v. Blumberg, 7 A.D.2d 847, 182 N.Y.S.2d 83; and Pride v. Perras, 6 A.D.2d 842, 176 N.Y. S.2d 573. In the latter case, the court said (6 A.D.2d 842, 176 N.Y.S.2d 574):
"* * * The injuries sustained did not arise from the same accident, but from two unrelated accidents as a result of unrelated acts of negligence and at different times. The convenience of one trial does not overcome the prejudice that may result to appellants, and the confusion which the jury will encounter in trying to determine the extent of the injuries attributable to each, and the compensation therefor. Gamble v. Fraleigh, 1 Misc. 2d 347, 146 N.Y.S.2d 146; Nissenblatt v. Doyle, 6 Misc. 2d 205, 163 N.Y.S.2d 271."
These cases are without force here because the New York court was controlled by § 96-a of the New York Civil Practice Act,[1] which provided:
"The court may order that two or more actions * * * growing out of the same set of facts be tried or heard together, without consolidation, whenever it can be done without prejudice to a substantial right."
It should be noted that the foregoing provision permitted actions "growing out of the same set of facts" to be tried together, a condition not found in Rule 42.01 by which we are governed.
The subject of consolidation of actions is treated in a comprehensive annotation in 68 A.L.R. 2d 1372. Some of the authorities *69 gathered therein relate to actions brought for injuries to person or property arising out of the same wrongful act or caused by the same wrongful act usually against the same defendant by different plaintiffs. The cases cited in which different party defendants are named in an action by the same plaintiff relate to damages arising out of the same accident. The situation in which plaintiff seeks consolidation of two separate causes of action arising out of two separate occurrences involving two separate sets of defendants is unique and has not been considered by this court since the adoption of the Rules of Civil Procedure. There is some discussion of the general subject in Professor Wright's article in 36 Minn.L.Rev. 601, in which he refers to a related question considered in McGannon v. Chicago & N.W. Ry. Co., 160 Minn. 143, 199 N.W. 894. This source of authority is of no help in considering the application of Rule 42.01.
The plaintiff argues that the "common question of law or fact" test expressed in Rule 42.01 gives the trial court wide discretion in carrying out the policy which the rules comprehend to avoid unnecessary trials, prevent delay, save expense to the parties, and eliminate injustice which may follow from divergent results in separate actions. Plaintiff relies on Adams v. Allstate Ins. Co., 58 Wash.2d 659, 364 P.2d 804; Stanford v. Tennessee Valley Authority (M.D.Tenn.) 18 F.R.D. 152; and McNeil v. American Export Lines, Inc. (E.D.Pa.) 166 F. Supp. 427. In the McNeil case separate actions involving separate transactions against different defendants were consolidated. From an examination of the abbreviated opinion in that case, it would appear, however, that there was some substantial connection between the two actions consolidated. In the other authorities it would also appear that there was a sufficient connection or unity between the actions joined which would warrant a joint trial without prejudice to the defendants. In each of the authorities relied upon by plaintiff there appeared to be a substantial community of common questions of law or fact which reasonably warranted the consolidations approved. They are authority for the proposition, however, that the mere fact that the parties are different and that the actions arise from separate occurrences will not prevent consolidation where there is, as the rule says, a common question of law or fact.
We cannot agree with the defendants that the test for consolidation is whether the parties might have been originally joined in the same action. Rule 42.01 gives the trial court wide discretion in ordering consolidation. While the concepts of joinder and consolidation complement each other and overlap, they are nonetheless distinct. Consolidation is wider in scope. The fact that the dimensions of the separate actions may not be in all respects the same does not prevent consolidation if there exists between them the "common question of law or fact." Here, as in Stanford v. Tennessee Valley Authority, supra, the common question relates to damages. In that case the court said (18 F.R. D. 155):
"The apparent contention of the defendants is that they would be prejudiced by a joint trial because of the difficulty in determining the responsibility of each defendant on account of its alleged contribution to the plaintiffs' damage.
"Concededly, in cases of this nature, there is the inherent difficulty of segregating and determining the nature and extent of the contribution made by each party to the common nuisance. This difficulty, however, would not be altogether removed if the claims were tried separately. If the claim against one defendant should be separately tried, the jury would still be confronted with the necessity of determining whether the plaintiffs' damage was caused by the defendant before the Court, or whether it was caused by the other defendant not before the Court. *70 There would also exist the necessity of determining the extent that the activities of the defendant on trial contributed to the plaintiffs' damage as contrasted with the activities of the defendant not on trial."
It should be conceded that Rule 42.01 is a flexible rule and that the procedure it contemplates is permissive and rests with the discretion of the trial court. Since there is a fact question common to both actions, we cannot say that under the rule the trial court exceeded its power in making its order for consolidation.
2. It is next contended by defendants that prohibition is an appropriate remedy to interfere with the trial court's order. For reasons already stated, they assert that there is no other remedy for the prejudice which they say will result if both cases are tried together. It should be recognized that the right of parties to a fair trial, free from prejudice and confusion, should not be sacrificed to the policy of convenience and economy and that in granting a motion to consolidate, the trial court must balance convenience against the possibility of prejudice.
In the concurring opinions in Lambach v. Northwestern Refining Co., Inc., 261 Minn. 115, 111 N.W.2d 345, and in Lott v. Davidson, 261 Minn. 130, 109 N.W.2d 336, we pointed out that because of varying rules as to presumptions, standards of care, conflicting rules of evidence, and disparate instructions, as well as other elements of trial, consolidation has in some cases resulted in "more complicated trials, with perverse verdicts." (261 Minn. 129, 111 N.W.2d 354.)
3. We must assume, however, that the trial court is not only familiar with the views of this court, but that it is also aware of standards of fairness which should guide discretionary acts. Although there are members of this court who doubt the wisdom of the consolidation in this particular case, we must nevertheless assume that the trial court, having carefully examined the issues, was satisfied that both actions could be fairly tried in the same proceeding. Since the court had jurisdiction to make the order and there is no showing of an obvious or certain danger of miscarriage of justice which would necessarily require us to interfere within the purview of State ex rel. Hierl v. District Court, supra, and State ex rel. Stenstrom v. Wilson, supra, the order should be sustained. The trial court was apparently satisfied that the proceeding may be so ordered and controlled as to be free of prejudice to the parties. It is not for an appellate court to anticipate or prohibit errors of the trial court or to interfere with its discretionary orders as to trial procedure.
Writ discharged.
SHERAN, Justice (concurring specially).
If the order for consolidation was made in contemplation of separate trials to determine liability with respect to the November 5, 1959, accident; then liability with respect to the April 22, 1963, accident; and, finally, damages as against defendants previously found liable to plaintiff, it would not constitute, in my opinion, an abuse of discretion justifying prohibition. In such event, the defendants sued on account of one of the accidents would not be burdened by required participation in proceedings to determine liability in the other. Only those defendants found liable would be required to contest plaintiff's claim for damages resulting from the composite injury, and the district court would not be foreclosed from requiring joint trial of the damage issue in a case where the total and intertwined loss has been caused by successive tortfeasors.
*71 Separate trial of issues of liability and damages is within the contemplation of Rule 42.02.[1]
Where a unitary injury results from successive but separate torts, there is as between the tortfeasors a common question of fact, i. e., to what extent did the injuries result from the first accident and to what extent from the second. This may not be a logical certainty, but experience suggests that it is a practical one. In separate trials, the plaintiff suffering from an injury due to two unrelated accidents can be expected to attribute the bulk of his trouble to the defendant at hand; and that defendant can be expected to insist that the absent party was the one whose wrong really caused the loss. Once liability is established, a more fair allocation of responsibility for the damage caused by one and aggravated by another might be expected if the plaintiff and the successive tortfeasors litigate the damage question at one time. At least, it has not been made to appear that the trial court was clearly exceeding the bounds of his discretion in so deciding.
While I agree with the view expressed in the dissenting opinion that a consolidated trial of the liability issue against both sets of defendants would be onerous, it has not been made to appear clearly that this was planned. We can assume, I think, that the order for consolidation was made so that the liability issues could be tried separately and the damage issue only tried jointly. I therefore agree with the majority conclusion that the writ should be discharged.
OTIS, Justice (concurring specially).
I agree with the concurring opinion of Mr. Justice Sheran.
KNUTSON, Chief Justice (dissenting).
I cannot agree with this decision. Our Rule 42.01 provides for the consolidation of causes of action having a common question of fact or law. The rule is complementary to the rules dealing with joinder of claims and parties.[1] The rule was never intended to permit consolidation of two or more causes of action based on separate and independent torts. Why should a defendant in one tort action be compelled to take part in protracted litigation involving an entirely separate tort? Certainly there is no common question of fact or law as far as liability of these tortfeasors is concerned. Nor can I see that there is any common question of law or fact as to damages. Each tortfeasor is liable for the damages caused by his separate tort. While consolidation of these actions may give plaintiff a strategic advantage in that a common jury may conceivably award more damages against both tortfeasors than it would against either or against both if tried in separate actions, that is not the purpose of our consolidation rule. Nor does expediency justify depriving a tortfeasor of the right to have his liability and damages determined on *72 the evidence involving his conduct alone without having it confused with the liability of another and separate tortfeasor. Certainly, if plaintiff broke an arm in one collision and a leg in another, no one would contend that the two actions ought to be tried together if they had no connection with each other. I cannot see any more justification for holding they ought to be tried together merely because the same limb happens to be hurt in both accidents.
I think the writ ought to be made absolute.
NELSON, Justice (dissenting).
I join in the dissent of Mr. Chief Justice Knutson.
NOTES
[1] The Civil Practice Act and the New York Rules of Civil Procedure were replaced by New York Civil Practice Law and Rules, effective September 1, 1963.
[1] For discussion of the feasibility of separate trials for liability and damage issues, see Separate Trials on Liability and Damages in "Routine Cases": A Legal Analysis, 46 Minn.L.Rev. 1059; Weinstein, Routine Bifurcation of Jury Negligence Trials: An Example of the Questionable Use of Rule Making Power, 14 Vanderbilt L.Rev. 831; Miner, Court Congestion: A New Approach, 45 A.B.A.J. 1265. See, also, Separation of Issues of Liability and Damages in Personal Injury Cases: An Attempt to Combat Congestion by Rule of Court, 46 Iowa L.Rev. 815; Trial Practice: Separate Trials on the Issues of Liability and Damages, 17 Okla.L.Rev. 114; Original Separate Trials on Issues of Damages and Liability, 48 Va.L.Rev. 99.
[1] See, 2 Youngquist & Blacik, Minnesota Rules Practice, Authors' Comment No. 3, p. 375. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917876/ | 272 So. 2d 545 (1973)
Donald L. SMITH et al., Appellants,
v.
E. Wilson PURDY et al., Appellees.
John L. SCOTT and Elaine Scott, Appellants,
v.
E. Wilson PURDY et al., Appellees.
Nos. 72-647, 72-663.
District Court of Appeal of Florida, Third District.
February 5, 1973.
*546 Barry L. Zisser, Kennelly & Zisser, Jacksonville, Walton & Garrick, Miami, for appellants.
Stuart L. Simon, County Atty., and R.A. Cuevas, Jr., Asst. County Atty., Hall & Hedrick, Michael D. Sikes, Miller & Russell, Jerry A. Burns, Abney & Whittling, Miami, Smith, Mandler, Smith & Parker, Miami Beach, for appellees.
Before BARKDULL, C.J., and CHARLES CARROLL and HENDRY, JJ.
CARROLL, Judge.
Prior to conducting an execution sale of certain shares of corporate stock, belonging to a judgment debtor which had been levied upon a writ of execution, the sheriff of Dade County filed this action against the several judgment creditors who had delivered writs of execution to his office, seeking a declaratory judgment to determine the priorities thereof.
The order of priority was found by the court to be as follows:
"1st. Defendant Equilease Corporation.
"2nd. Defendant Aquachem Company, Inc.
"3rd. Defendant Omnibus Group, Ltd. Corporation.
"4th. Defendants Nicholos J. and Maria S. Valiante.
"5th. Defendants Smith, Setzer, Zisser and McCurry.
"6th. Defendants-intervenors John L. and Elaine Scott."
Appeal No. 72-647 was filed by judgment creditors Donald L. Smith, Barry L. Zisser, Rexford S. Setzer, Jr., and Edgar W. McCurry, Jr., whose writs of execution had been delivered simultaneously to the sheriff. Their executions were issued out of the circuit court of Broward County, where each of said four creditors had obtained a judgment against Pace Industries, Inc., a Delaware corporation. Appeal No. 72-663 was filed by the intervenor defendants John L. Scott and Elaine Scott. The judgment was superseded. The appeals were consolidated here.
Facts of the case, to which the parties stipulated, as set out in the complaint (with omission of references therein to exhibits) were as follows:
"On October 7, 1971, at 10:03 a.m., four writs of execution were received at the Plaintiff's office, for Defendants, Smith, Setzer, Zisser, and McCurry. * * * These four writs were forwarded with a cover letter by Donald L. Smith, Esq., dated September 28, 1971, directing the Plaintiff to docket and index said writs. * * *
"On November 1, 1971, Plaintiff received a letter from Mr. Smith, dated October 29, 1971, requesting that the above four executions be returned unsatisfied as soon as possible. * * *
"Accordingly, the four writs of Defendants, Smith, Setzer, Zisser and McCurry were returned on November 1, 1971, unsatisfied at the request of the attorney who initially forwarded them to the Plaintiff's office. * * *
"On November 2, 1971, at 9:46 a.m., a writ of execution in favor of Defendant, Equilease Corp., was delivered to the Plaintiff's office. * * *
"On November 24, 1971, at 12:56 p.m., a writ of execution in favor of Defendant, Aquachem Company, Inc., was delivered to the office of Plaintiff. * * *
On November 30, 1971, at 3:33 p.m., a writ of execution in favor of Defendant, Omnibus Group, Ltd., was delivered to the office of Plaintiff. * * *
"On January 27, 1972, at 12:41 p.m., a writ of execution in favor of Defendants, Nicholas J. Valiante and Mary S. Valiante, his wife, was delivered to the office of the Plaintiff. * * *
*547 "The attorney on behalf of Defendant, Aquachem, Michael D. Sikes, Esq., instructed the Plaintiff to levy on some 19,600 shares of stock of Stellar Industries to satisfy a judgment in favor of Defendant, Aquachem against Defendant, Pace Industries, Inc. Accordingly, the Plaintiff levied on such stock, and has advertised the same for Sheriff's Sale scheduled for February 9, 1972. The notice of Sheriff's Sale, and advertisements therefor, listed only the names of those Defendants whose writs of execution remained in the Plaintiff's office, i.e., Defendants, Equilease, Aquachem, Omnibus Group, Ltd. The advertisement for this sale has been published four times, on January 11, 18, 25 and February 1, 1972.
"On February 1, 1972, Plaintiff received a letter from Mr. Smith, dated January 27, 1972, and the four executions on Defendants, Smith, Setzer, Zisser, and McCurry, which had previously been returned `unsatisfied'. The letter asked that these writs be redocketed and indexed."
The determinative question on appeal by the Smith group of judgment creditors is whether, by withdrawing their unsatisfied executions from the office of the sheriff, they lost their position of first priority with respect to the levy which was made after other executions had been delivered to the sheriff, and during the time when the Smith group executions were not in the possession of the sheriff.
The trial court answered that question in the affirmative, and correctly so ruled in our view. The law provides that a judgment will operate as a lien on personal property of the judgment debtor within the county from the time that a writ of execution based thereon is delivered to the sheriff. Goodyear Tire & Rubber Co. v. Daniell, 72 Fla. 489, 73 So. 592; Black v. Miller, Fla.App. 1969, 219 So. 2d 106. Where several executions against a judgment debtor are delivered to the sheriff each will become a lien on the personal property of the judgment debtor within the county. Priority of the liens will follow the sequence of delivery of the executions to the sheriff, the first delivered being first in priority and the last delivered being last. If a levy is then made, such execution should be on the first writ of execution which was so delivered to the sheriff, that is, levies on such executions should be made in accordance with the priorities thus established. In 13 Fla.Jur., Executions, § 38 it is said: "If more than one execution has been delivered to the sheriff of a county, he should execute them in the order in which they are delivered. The first delivered should be the first executed." Ibid § 106; Love v. Williams, 4 Fla. 126.
However, application of that rule as to priorities when a levy is made necessarily must be with reference to writs of execution which are in the hands of the sheriff at the time of the levy.
Withdrawal by the Smith group of their executions from the sheriff while the executions were unsatisfied did not work a dissolution of the executions, since by law the effectiveness thereof continues during the life of the judgment unless it is sooner satisfied. §§ 56.021 and 56.041 Fla. Stat., F.S.A. Also, it would appear that the temporary withdrawal of the executions from the sheriff (such as for the purpose of seeking execution thereon elsewhere) would not vitiate the lien of the judgment on personal property of the judgment debtor in the county, which delivery of the execution to the sheriff had created. See Mercer v. Hooker, 5 Fla. 277, 278; Ryan's Furniture Exchange v. McNair, 120 Fla. 109, 162 So. 483, 487. But while the effectiveness of an execution will continue, during its authorized period of existence, as long as it remains unsatisfied, it does not necessarily follow that a position of priority which a judgment creditor may have obtained through delivery of his execution to the sheriff cannot be lost by withdrawal of the execution *548 from the sheriff while it is unsatisfied. This is so because in order to execute on such a writ, by a levy of execution, it is necessary that the writ be in the hands of the sheriff. Here the executions of the Smith group were not in the possession of the sheriff when the levy was made. Therefore the levy necessarily was upon and with reference to those writs which were in the hands of the sheriff.
We hold also that appeal No. 72-663 by appellants John L. Scott and Elaine Scott is without merit. Treating the redelivery of the Smith group executions to the sheriff of Dade County as fixing the time of priority thereof, the trial court assigned them priority ahead of the subsequently delivered writ of execution of the Scotts. The latter argue that since their writ of execution (although delivered later) was docketed by the sheriff before he docketed the executions redelivered by the Smith group (due to their delay in supplying the docketing fees) the Scotts' execution should have priority over those of the Smith group. We cannot agree. Under the law, priority of writs of execution is established by the order of delivery thereof to the sheriff. Section 30.17(1) Fla. Stat., F.S.A. provides that the sheriff shall keep an execution docket containing a list of all executions. Section 30.231, which provides for sheriff's fees for service of summons, subpoenas and executions requires, through subsection (1)(d)1, that the sheriff shall charge $5.00 for docketing and indexing each writ of execution. However, those statutes relating to docketing of executions do not provide that delivery of an execution to a sheriff shall not create a lien on personal property of the judgment debtor within the county until such time as the sheriff makes a docket entry thereof. The time and order of delivery of executions to the sheriff, rather than the time of docketing the writs, creates the liens on personal property and fixes the priority of liens.
No reversible error having been made to appear the judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572485/ | 499 S.W.2d 467 (1973)
STATE of Missouri, Respondent,
v.
Ransom McNeil JACKSON, Appellant.
No. 56714.
Supreme Court of Missouri, Division No. 2.
October 8, 1973.
John C. Danforth, Atty. Gen., Karen I. Harper, Asst. Atty. Gen., Jefferson City, for respondent.
*468 Bell, Wilson, Fullwood & Harris by James A. Bell, St. Louis, for appellant.
HENRY I. EAGER, Special Commissioner.
This is an appeal from a conviction for first degree murder and a life sentence. The notice of appeal was filed prior to January 1, 1972, and we have jurisdiction. No point is made concerning the sufficiency of the evidence for submission, and we need not state the facts in great detail.
On May 1, 1970, at about 10:30 p. m., several Negro youths were seen dragging a young Negro female up (or down) an alley in the vicinity of St. Vincent and Nebraska Streets in the City of St. Louis. She was ultimately dragged out of that branch of the alley, across Nebraska Street and into the alley on the other side. There were at least three of these youths. Two of them held the girl's arms and pulled her and, for at least part of the time, one, identified as this defendant, walked near her feet and kept a lookout, peering from side to side. The girl was beaten about the face and head, her clothing was torn into pieces and scattered, and she was almost naked; she struggled constantly to free herself, and screamed. Several of the witnesses heard her scream "Andre, leave me alone. I won't tell." Various witnesses testified that this defendant was generally known as "Andre" and was called and spoken to by that name. All of the girl's possessions were taken from her and stolen or scattered in the alley. Defendant was identified as a participant by at least five of the witnesses; two saw him beat the girl with his fists. In the final stages of the assault the girl "almost" got away, but defendant grabbed her and pulled her back; he then drew a pistol, held it close to the back of her head and shot her. Two of the witnesses saw this and testified specifically to it; one of them was only a few feet away. Various others heard the shot. Defendant then ran away down the alley. The girl died very shortly from the gunshot wound. The girl was one Dorothy Lashly. The cause of death was confirmed by autopsy. Defendant did not testify at the trial. Two of his relatives testified that he was at home on the evening in question, supposedly at the time of the crime. Most of the State's witnesses lived in the neighborhood and knew the defendant, either personally or by sight, from rather frequent observations.
A pre-trial hearing was held on defendant's motion to suppress his oral confession. The substance of defendant's testimony there was: that he was 18 years old, 17 on May 1, 1970; that he was first arrested on May 6, and that without any explanation of his rights, but with the advice that if he could not afford a lawyer "they" would provide one for him, he was interrogated that night for three hours and again the next morning for an extended period, and released a little later; (his testimony did not show specifically what that interrogation concerned but he did testify he was told that if he told what happened on the night of May 1 he would be "set free"; no statements made by the defendant at that time are involved here). He was arrested again on the evening of May 11 at his home, taken to police headquarters, and booked. He testified: that his "rights" were not explained to him then nor was the Miranda card read; that he was told he had a right to a lawyer, but he "didn't think he needed one," and did not request one; (after some minor contradiction on this point the above was substantially confirmed); that he asked to see his aunt; that he was interrogated that night for two and one-half hours and again the next morning for an extended period; that he was threatened with beating "in a way * * * the usual things"; that he had been arrested before and had "heard these warnings," and that he has had his "rights" explained to him; that on a previous conviction he had served 90 days; that on this occasion he answered questions but did not say that he shot the girl.
*469 The police detective who wrote the statements of defendant on May 11, 1970, testified at the pre-trial hearing that defendant was then advised of his constitutional rights by Sgt. Dwyer who read each one from the official card and asked defendant, after each separate one, if he understood it; that as to each, defendant answered that he did; that he was asked if he wanted an attorney to which he answered he did not; that no one threatened him in any way, mentally or physically, and no one promised him he could go free if he answered the questions; that the interrogation took perhaps 45 minutes and that there was none the next morning; that on the next morning defendant was placed in a showup at which time he declined to make further statements. The only statements offered in evidence were those taken on the evening of May 11.
After hearing the evidence the Court ruled the matter in an oral opinion, as follows: "Let the record in this case show that the Court has been presented with a motion to suppress an alleged oral confession. In support of that motion the defendant himself took the stand and testified. This Court heard this defendant admit that he is a ninth grade graduate, that he went as far as the ninth grade in school. This Court interprets that to be one year of high school. This Court further understood this defendant and felt that he was quite articulate in his manner of testimony, that he had currently a background of confrontation with the police where on prior occasions he was given the alleged constitutional warnings, that he had so indicated his knowledge of his constitutional rights by indicating that on prior occasions he was advised that he had a right to have an attorney, that on a prior occasion he was advised of his right to remain silent. These are words and expressions that come from the defendant himself. The Court feels that he is knowledgeable as to police activity because he knew where he was; he knew that he was in the homicide Division, and so testified. On the other hand, the officer has indicated that while this oral confession was being obtained the so-called Miranda warnings or constitutional rights were given in his presence. The Court finds as a matter of fact that the defendant was advised of his constitutional rights, and as a conclusion of law the Court finds that the Miranda warnings were given in compliance with the constitutional rights, and the motion to strike the alleged oral confession will be overruled. * * * I want the record to show that the Court wants to add to his findings of fact and conclusions of law that the defendant had an intelligent and actual understanding of his warning rights and that he knew what he was doing and the fact that he may or may not remain the fact he may remain moot and silent. The Court finds that he did affirmatively and knowledgeably waive his rights and he understood his rights."
At the trial two of the officers who were present at the interrogation on May 11 (there being others also) testified: that defendant was advised of his rights by reading from the official Miranda card (read again at the trial) and asked after each statement if he understood it; that as to each part he said that he did; that he further stated, after the advice, that he did not want a lawyer; that he said he would make a statement; that defendant stated, in answer to questions, that he and others had been drinking wine, that he and three others saw this girl walking on the street, that one of his companions went over and talked to her and then began struggling with her; that the other three, including defendant, ran over and began hitting the girl with their fists; that the struggle continued in the alley and across Nebraska to the other alley; that he, the defendant, drew a .22 caliber automatic pistol from his pocket and shot the girl one time in the head, holding the gun about six inches from her head; that he then ran and threw the gun into some "unknown location." The officers further testified that Officer Riley wrote the statement in longhand, *470 and read it back to the defendant; that there were no promises, threats or coercion.
This evidence was heard by the jury and one of the instructions submitted to the jury the issue of the voluntariness of the confession. There was no evidence at the trial to contradict the testimony of the officers.
The defendant raises three points here: (1), and we quote: "That the court erred when it held a hearing on the confession and without ruling whether or not said confession was voluntarily given or not and ruled said confession to be admissible." (2) that a mistrial should have been granted when the Circuit Attorney, in argument, referred to the defendant as a "Dirty Murderer"; and (3) that it was prejudicial error to admit in evidence a photograph of the deceased girl lying in the morgue.
On the first point we note that the only contention is that the Court did not make a sufficient finding that the confession was voluntary before admitting it. Reliance is upon Jackson v. Denno, 378 U.S. 368, 84 S. Ct. 1774, 12 L. Ed. 2d 908 (1964); Sims v. Georgia, 385 U.S. 538, 87 S. Ct. 639, 17 L. Ed. 2d 593 (1967); Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966); Escobedo v. Illinois, 378 U.S. 478, 84 S. Ct. 1758, 12 L. Ed. 2d 977 (1964); Reck v. Pate, 367 U.S. 433, 81 S. Ct. 1541, 6 L. Ed. 2d 948 (1961), and Shotwell Mfg. Co. v. United States, 371 U.S. 341, 83 S. Ct. 448, 9 L. Ed. 2d 357 (1963). Escobedo and Shotwell are of no real relevance here. The teaching of Miranda is well known,that a person in custody must be informed of his constitutional rights as there stated before he can be interrogated, if his statements are to have any validity. The holdings in Denno and Sims are to the effect that the trial court must first hold a hearing outside the presence of the jury on the voluntariness of a confession and must find it to be voluntary before it may be admitted in evidence, considering all the circumstances. In Sims, the Court said 385 U.S. loc. cit. 544, 87 S. Ct. loc. cit. 643: "Although the judge need not make formal findings of fact or write an opinion, his conclusion that the confession is voluntary must appear from the record with unmistakable clarity." Primarily, the right being protected in these instances is that arising under the Fifth Amendment, as extended to the states under the Fourteenth Amendment. In Reck v. Pate, supra, it was indicated that the trial court should consider the physical and mental condition of defendant when deciding the issue of coercion. Such has also been noted in other cases.
More recently in Lego v. Twomey, 404 U.S. 477, 92 S. Ct. 619, 30 L. Ed. 2d 618 (1972) the Court said that the defendant was entitled to "a reliable and clear-cut determination that the confession was in fact voluntarily rendered," and that this may be found from a preponderance of the evidence. The latter point was the principal issue on appeal, but we do not note any express finding of the trial court that the confession was voluntary. The Court overruled the motion to suppress, noting certain testimony, and stated that it did not believe the testimony about defendant being beaten by the police. Apparently the general finding against the motion, coupled with the oral statement, were deemed sufficient as a finding of voluntariness. See also Hackathorn v. Decker, 369 F.2d 150 (5th Cir. 1966), where the Court held that the overruling of a motion to exclude the confession was a sufficient finding of voluntariness. And see also State of Texas v. Graves, 380 F.2d 676 (5th Cir. 1967).
There would seem to be no magic in the use of the word "voluntary," if the same meaning and intent are clearly expressed by other language in a finding of the trial court. We so hold. And see: State v. Stidham, 449 S.W.2d 634, loc. cit. 643 (Mo.1970). We have set out the oral opinion and findings verbatim. We note that the Court found: defendant was articulate in his testimony, that on prior occasions he had been given the constitutional warnings, *471 that in this instance he was advised of his constitutional rights, that defendant had an intelligent and actual understanding of his rights, knew what he was doing and knew that he might remain silent; also, that he affirmatively and knowledgeably waived his rights. The Court merely substituted its own language in place of the word "voluntary," but the meaning was and is the same. We hold that this was, in fact, a clear finding that the confession was voluntary, and that it would be hypertechnical to hold otherwise. Defendant's first point is denied.
The Court submitted the question of the voluntariness of the confession to the jury. No point is raised here on the fact that it did so, nor on the propriety of the instruction. Therefore, we do not discuss that submission, but we do note the concurring opinion of Judge Donnelly in State v. Bridges, 491 S.W.2d 543 (Mo.1973), suggesting that perhaps the issue should not be submitted to the jury at all, and that the practice should be reviewed by this Court when the question is properly presented. We do not consider that it is properly presented here.
Defendant's next point is that the Court should have granted his motion for a mistrial when the Assistant Circuit Attorney referred to the defendant in his argument as a "dirty murderer." The quoted phrase is not correct. What the attorney said was a "no-good murderer" and this was stated in a context substantially as follows: that the girl had struggled and fought as she was dragged, that they took her personal property, that she had done nothing wrong, that she had a right to live, and that she gave up that right to a "no-good murderer."
Defendant cites five cases, only one of which is later than 1895. Nothing would really be gained by discussing them in detail. They are State v. Fischer, 124 Mo. 460, 27 S.W. 1109 (1894); State v. Bobbst, 131 Mo. 328, 32 S.W. 1149 (1895); State v. Ulrich, 110 Mo. 350, 19 S.W. 656 (1892); State v. Young, 99 Mo. 666, 12 S.W. 879 (1890), and State v. Dixon, 253 S.W. 746 (Mo.1923). They disapprove of such terms as "this infamous, lecherous scroundrel" (Bobbst), "low and contemptible brute, unworthy [of] the respect of the community" (Fischer); "sugar-loaved, squirrel-headed Dutchman" (Ulrich); "a mean, low down, wicked, dirty devil" (Young); and "some dirty, low-down hound and scoundrel like the defendant" (Dixon). The courts frown upon expressions of mere personal abuse unconnected with the evidence, and also upon personal opinions or beliefs of the prosecutor not formed from or justified by the evidence. However, a prosecutor may state an opinion or conclusion which he fairly draws from the evidence, as of defendant's guilt. State v. Feltrop, 343 S.W.2d 36 (Mo.1961); State v. Woods, 406 S.W.2d 593 (Mo.1966); State v. Burchett, 302 S.W.2d 9 (Mo.1957); State v. Paglino, 319 S.W.2d 613 (Mo.1958); State v. Moore, 428 S.W.2d 563 (Mo.1968); State v. Chester, 445 S.W.2d 393 (Mo.App.1969). And a belief of guilt may be stated where it is fairly apparent the opinion is based upon the evidence. Burchett, Woods, Feltrop, Paglino, Moore, supra. Here, if the jury believed the State's witnesses, defendant was a murderer, and the jury so found. It is apparent to us that the prosecutor was merely indicating a belief of guilt drawn directly from the State's evidence, and the addition of the term "no-good," while perhaps unnecessary, was also fairly justified by the evidence. The statement was assuredly one which the Court might permit in the exercise of the wide discretion vested in it on such matters. State v. Camper, 391 S.W.2d 926 (Mo.1965). And, the making of such a statement could add little, if anything, to the effect on the jury of the State's evidence showing the exaggerated criminal acts of the defendant. Under the circumstance the statement was not only permissible, but it was not prejudicial.
Defendant's last point asserts error on the admission of a photograph of the deceased girl taken in the morgue. The exhibit is not here, but the trial court described *472 it in some detail as follows: "* * * the photo shows the upper part of the body from the lower abdomen not including the private female organs off to the top of the head, and it shows one portion of a breastit shows the right breast that is bared, and the other breast partially bared. It shows numerous marks and abrasions about the face." The objection was that the exhibit was inflammatory and that it did not "prove or disprove anything in this case * * *." The prosecutor explained the State's theory and position. Two of the witnesses saw the body in the morgue and identified the slain girl; one testified that her face was bruised and swollen. So far as this record shows there was nothing more inflammatory about this exhibit than there would be in almost any photograph of a dead body.
Defendant cites State v. Floyd, 360 S.W.2d 630 (Mo.1962), State v. Robinson, 328 S.W.2d 667 (Mo.1959), and State v. Pearson, 270 S.W. 347 (Mo.1925). In Floyd, the photo was held to prove nothing. In Robinson, the photo was apparently most obscene and offensive, and it was held it added nothing to the evidence. In Pearson, the complaint was of the waiving of bloody garments unnecessarily before the jury, a wholly different situation.
The trial courts have a wide discretion in determining the admissibility of photographs. State v. Stevens, 467 S.W.2d 10 (Mo.1971); State v. Crow, 486 S.W.2d 248 (Mo.1972); State v. Duisen, 428 S.W.2d 169 (Mo.1967). It has generally been held that even though a photograph may be inflammatory it is admissible if it tends to prove any material element of the State's case; this includes the issues of identity, condition and location of the body, nature or location of wounds, and the cause of death; and, generally, if the photograph corroborates the oral testimony of the state or refutes defense testimony it is admissible. State v. Duisen, 428 S.W.2d 169 (Mo.1967); State v. McDaniel, 336 Mo. 656, 80 S.W.2d 185 (1935); State v. Stevens, 467 S.W.2d 10 (Mo.1971); State v. Crow, 486 S.W.2d 248 (Mo.1972); State v. Clark, 494 S.W.2d 26 (Mo.1973). And a photo is not made inadmissible because the oral testimony may have described what is shown in the photo. Stevens, supra. In the above cases photographs much more inflammatory than the one here in question were held admissible; if the photo is relevant, it is not excluded because it may be inflammatory, unless the situation is so unusual that the extent of prejudice overrides the relevancy and probative value of the photo.
The photograph here tended to corroborate the State's witnesses concerning the beating of the girl about her head and face (actually a part of the res gestae), and it helped to establish her identity and the corpus delicti; it showed at least a portion of her wounds, the part which was preliminary to the fatal shot. We do not regard the photo as substantially inflammatory or prejudicial but, in any event, and as stated in Duisen, supra, it could not have inflamed the minds of the jury any more than they were "otherwise inflamed by the uncontroverted evidence of these utterly revolting acts of the defendant." There was no prejudicial error in the admission of this photograph.
Since we find no prejudicial error in any of defendant's points, the judgment is affirmed.
PER CURIAM:
The foregoing opinion by HENRY I. EAGER, Special Commissioner, is adopted as the opinion of the Court.
All of the Judges concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2584938/ | 187 P.3d 750 (2008)
BOSTWICK
v.
BALLARD MARINE, INC.
No. 80827-9.
Supreme Court of Washington, Department I.
July 8, 2008.
Disposition of petition for review. Denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572503/ | 499 S.W.2d 206 (1973)
Gentry POWELL, Sr., et al., Appellants,
v.
U. L. UNDERBRINK, Appellee.
No. 15137.
Court of Civil Appeals of Texas, San Antonio.
July 3, 1973.
Rehearing Dismissed as Moot September 19, 1973.
*207 Wiley, Plunkett, Gibson & Allen, Dayton G. Wiley, Jerry A. Gibson, San Antonio, for appellants.
W. W. Watkins, Brown, Kronzer, Abraham, Watkins & Steely, Houston, Gonzalez, Spicer, Gonzalez & Fleming, San Antonio, for appellee.
CADENA, Justice.
Defendants, Gentry Powell, Sr., and Gentry Powell, Jr., appeal from a judgment, following a jury trial, awarding plaintiff, U. L. Underbrink, $93,223 for personal injuries sustained by him when his pick-up truck collided with one of defendants' cows which had escaped from defendants' pasture and wandered onto the highway.
Fourteen special issues were submitted to the jury. In answer to the first five issues, the jury found that defendants were negligent in permitting their cows to run at large on the highway and in failing to maintain a fence adequate to keep the cows within the pasture, and that such negligence was a proximate cause of the plaintiff's injuries. Defendants present no challenge to these findings, nor do they question the finding that plaintiff did not fail to keep a proper lookout.
Defendants' attack upon the judgment is embodied in 12 points which assert: (1) the trial court's refusal to submit issues inquiring whether plaintiff had failed to turn to the left "... at such a time that a person using ordinary care would have done," and whether such failure was a proximate cause of plaintiff's injuries (Points 1 and 2); (2) the jury's failure to find plaintiff guilty of contributory negligence in failing to make proper application of his brakes cannot stand because the evidence established such contributory negligence as a matter of law or, in the alternative, such findings are so contrary to the overwhelming weight and preponderance of the evidence as to be manifestly unjust (Points 10, 11 and 12); (3) there is no evidence or, in the alternative, insufficient evidence, to support the jury's award, in answer to Special Issue No. 12, of $71,000 for past and future physical pain and suffering, past and future mental anguish, and past and future loss of earnings (Points 3, 4, 5 and 6); and (4) the evidence is legally and factually insufficient to support the award, embodied in the finding to Special Issue No. 14, of $20,000 for future medical expenses (Points 7, 8 and 9). Defendants do not question the jury's conclusion, in answer to Special Issue No. 13, that plaintiff's reasonable and necessary medical expenses in the past totaled $2,223.
The accident occurred about six o'clock one morning while it was still dark. Plaintiff was proceeding in a southwesterly direction along the highway, at a speed of 50-52 m.p.h., with his lights on high beam. As he reached the crest of a hill and began his descent on the other side, he saw a number of cows about 200-250 feet ahead of him. The cows, which were "all over the road" and in the "right hand bar ditch," were "running up the hill" toward *208 plaintiff's truck. At this time he did not see any cows in the left "bar" ditch. He described the confrontation with the cows as a "startling" and "frightening" experience, and estimated that it took him one or two seconds to begin applying his brakes. When he realized that he would be unable to stop in time to avoid a collision, he released his brakes and turned sharply to the left into the left ditch. For the first time he saw that there were some cows in the ditch, about 40-50 feet behind the lead cows on the pavement. In order to avoid hitting the cows in the ditch, he turned to the right, back onto the pavement. As he reached the edge of the pavement, one or more cows jumped directly in front of his truck. He then applied his brakes again, but struck a cow, causing his truck to overturn. Plaintiff was thrown clear of the truck.
Plaintiff testified that he left about 50 feet of skid marks on the highway, and that the distance between the beginning of the skid marks and the point at which he struck the cow was 170-200 feet. He estimated that he traveled a distance of about 100 feet in the ditch, without applying his brakes, before he again turned onto the highway in order to avoid hitting the cows in the ditch, and that at the time he struck the cow he was moving at a speed of about 35 m.p.h.
Defendants timely, but unsuccessfully, requested the submission of a special issue inquiring whether plaintiff had failed to turn to the left at such time as an ordinary prudent person would have done.
Defendants argue that by continuing to proceed down the highway after he saw the cows, plaintiff caused the cows to scatter into the left ditch, and that if he had turned to the left immediately, instead of attempting to apply his brakes, the cows would have remained on the paved portion of the highway. We find no evidence in the record which tends to indicate that the approach of plaintiff's vehicle caused the cows to scatter or to leave the pavement and go into the left ditch.
Defendants call our attention to Mid-Tex Development Co. v. McJunkin, 369 S.W.2d 788 (Tex.Civ.App.Dallas 1963, no writ). In that case, one of the defendants was proceeding in a northerly direction along Beckley Street, a four-lane street, while plaintiff was traveling south on the same street. A vehicle operated by a second defendant turned into Beckley Street from an intersecting street, entering the same north-bound lane in which the first defendant's truck was proceeding. The first defendant applied his brakes but was unable to avoid striking the vehicle of the second defendant. As a result of this collision, the rear wheels of the truck became detached, and one of the wheels rolled onward and across the street, striking plaintiff's south-bound vehicle. The evidence was held sufficient to support a jury finding to the effect that the first defendant, the driver of the truck, failed "to make `that turn to his left which a person of ordinary prudence would have made under the same or similar circumstances' ...." 369 S.W.2d at 791.
McJunkin is not controlling here. We recognize, of course, the common law duty of a driver to turn his vehicle in order to avoid a collision. 1 Texas Pattern Jury Charges, Section 5.05, comment. In McJunkin, the driver failed to turn in order to avoid colliding with the vehicle which had suddenly appeared in his path and, as a result of such failure to turn, he collided with such vehicle. That is, the driver failed to take reasonable action to avoid the danger which was apparent to him. The McJunkin holding would, perhaps, be applicable here if plaintiff in this case, instead of turning to the left, had continued straight ahead and hit one of the cows on his side of the highway. But in this case, plaintiff took the action necessary in order to avoid the danger which was known to him. He turned to the left and succeeded in avoiding a collision with the cows on the highway. After he had successfully avoided the known danger, he was confronted with a new danger which *209 also resulted from defendants' negligence the presence of cows in the left ditch. The presence of this second danger was unknown to plaintiff until after he had avoided the known danger, and there is no evidence which would support the conclusion that plaintiff should have known of such second danger.
Since defendants' first point, complaining of the trial court's refusal to submit the "turn to the left" issue, is without merit, defendants' second point, asserting that the court erred in failing to inquire whether plaintiff's failure to turn to the left sooner was a proximate cause of plaintiff's injuries, must also be overruled.
By their tenth and eleventh points, defendants argue that the finding that plaintiff did not fail to make proper application of his brakes cannot stand because the evidence establishes as a matter of law that plaintiff did so fail or, in the alternative, that the jury's answer to the special issue is contrary to the overwhelming weight and preponderance of the evidence.
Special Issue No. 10, relating to the application of brakes, is somewhat lacking in clarity. It is impossible to determine, from the language of the issue, whether the inquiry concerns proper application of brakes when plaintiff first saw the cows on the highway, before he turned to the left; or whether it relates to plaintiff's failure to apply the brakes after he steered his vehicle into the ditch; or whether it relates to proper application of brakes after the cows jumped in front of plaintiff's vehicle following his turn to the right to get back on the pavement. Cf. Tuloma Gas Products Co. v. Lehmberg, 430 S.W.2d 281 (Tex.Civ.App.San Antonio 1968, writ ref'd n.r.e.).
While it may be reasonably argued that, under the evidence, the jury might have properly found that plaintiff failed to make a proper application of his brakes on one or the other "occasion in question", we cannot say that the evidence compels that conclusion, or that the evidence establishes improper application of brakes as a matter of law.
Nor can we say that the jury's failure to find improper application of brakes is contrary to the overwhelming weight and preponderance of the evidence. With reference to plaintiff's conduct while still on the highway, the evidence justifies the conclusion that, under all the circumstances, plaintiff did not delay unduly in applying his brakes. With respect to plaintiff's failure to apply his brakes while in the ditch, there is no evidence indicating that plaintiff had sufficient time to bring his vehicle to a stop before hitting one of the cows in the ditch. Further, there is testimony to the effect that, when plaintiff made his decision to turn to the right instead of attempting a sudden stop while traveling in the ditch, there was ample unobstructed space on the right to enable plaintiff to avoid a collision by turning in that direction. There is nothing to indicate that, after plaintiff turned to the right and some cows suddenly jumped in front of his vehicle, plaintiff did not promptly apply his brakes. The evidence does, perhaps, raise an issue of fact concerning proper application of brakes, but that issue was submitted to the jury and resolved in favor of plaintiff.
Defendants call our attention to plaintiff's testimony that, on a prior occasion, while traveling at a speed of 50-55 m.p.h., he stopped the truck within 150 feet when a vehicle suddenly "pulled out" in front of him. However, plaintiff testified that on such occasion, he had "anticipated" that the car would pull out in front of him, and that the stopping distance of 150 feet represented the distance his truck had traveled after he applied the brakes and before coming to a stop.
Point 12 asserts that a negative answer to the question (Special Issue No. 11) inquiring whether plaintiff's failure to make a proper application of his brakes was a proximate cause of his injury would have been contrary to the weight and preponderance of the evidence. Special Issue No. 12 *210 was conditionally submitted, requiring an answer only if the jury found improper application of the brakes. Since the jury failed to make an affirmative finding in response to the application of brakes issue, and since we have held that such negative finding was justified by the evidence, Point 12 presents no ground for reversal.
Points 3, 4, 5 and 6 assail, on the basis of legal and factual insufficiency of the evidence, the award, in answer to Special Issue No. 12, of $71,000 as compensation for past and future physical pain and mental anguish and past and future loss of earnings.
The medical testimony is to the effect that plaintiff sustained fractures of two ribs and "a mild compression fracture of the left lumbar." X rays revealed a narrowing of the disc space between the fifth lumbar vertebra and the sacrum. While the doctor opined that this was probably "an old pre-existing condition that never gave any symptoms," he testified that the accident aggravated this condition and caused it to become extremely painful. Plaintiff remained in the hospital for six weeks, during which time, according to the doctor, he experienced pain every time he took a breath, was hardly able to turn in the bed, and could get out of his hospital bed only with great difficulty, due to "pain in his low back and numbness down both legs and down to both feet." According to the doctor, at the time of trial, some 38 months after the accident, plaintiff was "still hurting extensively from the accident." The medical testimony supports the conclusion that plaintiff suffered a "very serious" injury and that he would continue to experience pain in the future, which pain could be alleviated to some extent by medication, physical therapy, and the use of a back brace. The doctor added that little relief would result from surgery.
After plaintiff was released from the hospital, he spent several months bedridden at his home. He was unable to drive for 10 months after the accident, and when he first drove a vehicle in order to keep an appointment with his doctor, he had to stop twice because of the pain. If he is sitting or lying down and gets up, he is forced to wait for a short time until the feeling returns to his legs before he is able to walk.
Plaintiff testified that he had experienced continuous pain and that, at the time he testified, more than three years after his injury, he was still experiencing great pain. Prior to the accident, plaintiff was a strong and agile man, capable of doing heavy manual labor. Since the accident he is noticeably weaker, walks with a limp and sometimes, when he is walking, his leg "gives way." Several witnesses stated that plaintiff is unable to engage in physical labor or recreation, that he is unable to do the amount of yard work and repairs around his home that he did previously, and that he constantly complains of pain.
Plaintiff testified that the constant pain and his inability to find gainful employment cause him to worry a great deal and keep him from sleeping at night.
At the time of the accident plaintiff was averaging $150 a week, or $7,800 a year, as foreman of a work gang. He testified that, despite his supervisory capacity, it was necessary for him to do much physical labor. During the 38 months intervening between the time of the accident and the time of trial, plaintiff had been unable to find gainful employment. This would represent an actual loss of earning of $23,700.
At the time of trial, and for some months previously, plaintiff, who had completed one year of college in his earlier years, had returned to college, hoping to obtain a teacher's certificate. This was made possible by financial help which he received from welfare agencies.
Defendants urge, in connection with plaintiff's claimed diminution of earning capacity, that the fact that he attends classes at college two days a week, driving to and from school, walking around the campus, and sitting in classes demonstrates that he could sell insurance, as he did for some ten years prior to the time he became *211 foreman of a work gang in 1968. The evidence shows that, even after ten years of selling insurance, his average annual income did not exceed $6,000, or $1,800 less than he was earning at the time of his injury after being a work foreman for only a few months. The evidence demonstrates that selling insurance involves a great deal of driving and walking. The medical testimony is to the effect that plaintiff is unable to engage in heavy manual labor, which is the type of employment which has yielded him the greatest income in the past.
At the time of trial plaintiff's life expectancy was 19.3 years.
We cannot say that the evidence outlined above is legally or factually insufficient to support an award of $71,000 for physical pain and suffering, mental anguish and past and future loss of earning capacity.
Points 3, 4, 5 and 6 challenge the legal and factual sufficiency of the evidence to support the answer to Special Issue No. 12, awarding plaintiff $20,000 for future medical expenses.
In order to recover for future medical expenses, a plaintiff must show a reasonable probability that such expenses will be necessary in the future. Fisher v. Coastal Transport Co., 149 Tex. 224, 230 S.W.2d 522 (1950); V. J. Keefe, Inc. v. Huddleston, 459 S.W.2d 224 (Tex.Civ.App. Beaumont 1970, no writ).
There is ample evidence to support the conclusion that in reasonable probability plaintiff will incur medical expenses in the future in order to alleviate pain and lack of motion in his back. Insofar as the probable reasonable amount of such medical expenses, the medical testimony is to the effect that plaintiff "will need less than $200.00 annually" for medication. This prediction was based on the fact, to the doctor's knowledge, plaintiff did not like to take medication and preferred "to bear his pain stoically," and that the doctor did not think that plaintiff will resort to physical therapy. The doctor added that, "At the worst, if he became bedridden due to aggravation of his symptoms, and required physical therapy, I would think that the upper limit of the amount required would not go over $2,000 annually." The doctor added that the likelihood that plaintiff would need surgery in the future "will be less than fifty percent."
At the time of trial, plaintiff had incurred medical and hospitalization expenses in the amount of $2,223. This amount, which represented his total medical expenses during the 38 months intervening between the date of the injury and the time of trial, included the cost of his hospitalization and the total amount of doctors' bills.
Even if the evidence is viewed in the light most favorable to plaintiff, the most that can be said is that plaintiff will probably need "less than $200" annually. The other figure mentioned by the doctor, which he said "would not go over $2,000" per year is, at best a surmise on the part of the doctor grounded on the assumption that the "worst" would happen. At best, it is a statement of possibility, rather than probability, and there is nothing in the record to indicate that plaintiff's condition will probably take a turn for the worse.
The only testimony of probative force, then, is to the effect that plaintiff will probably need "less than $200" per year in the future for medical expenses. Such evidence furnishes no basis for arriving at any fixed amount. We hold that there is no evidence to support the award of $20,000 for future medical expenses. Cf. City of Dallas v. Pierson, 450 S.W.2d 99 (Tex.Civ.App.Dallas 1970, no writ).
The judgment of the trial court is reformed to provide that plaintiff, U. L. Underbrink, recover from defendants, Gentry Powell, Sr., and Gentry Powell, Jr., the sum of $73,223. As so reformed, the judgment of the trial court is affirmed. One fifth of the costs of this appeal are taxed against plaintiff, and the remaining four fifths to be paid by defendants. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572635/ | 971 S.W.2d 901 (1998)
STATE of Missouri, Respondent,
v.
Vincent CRUZ, Appellant.
No. WD 53999.
Missouri Court of Appeals, Western District.
July 21, 1998.
*902 Gary E. Brotherton, Asst. Public Defender, Columbia, for appellant.
Jeremiah W. (Jay) Nixon, Atty. Gen., Seth A. Albin, Asst. Atty. Gen., Jefferson City, for respondent.
Before HANNA, P.J., and LAURA DENVIR STITH and EDWIN H. SMITH, JJ.
LAURA DENVIR STITH, Judge.
Vincent Cruz appeals his convictions for two counts of burglary and two counts of stealing over $150.00. On appeal, Mr. Cruz claims that the trial court plainly erred in allowing the prosecuting attorney, in the rebuttal portion of his closing argument, to inform the jurors that when determining Mr. Cruz's guilt they must answer to the community for their decision. He also contends that the trial court committed plain error in allowing Carolyn Wible to offer hearsay testimony that, to her knowledge, Robert Armstrong did not give anyone permission to enter her home. Finding no plain error, we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Defendant Vincent Cruz paged David Kindred at approximately 7:15 a.m. on September 18, 1995. Although David had been in the process of driving Thomas Pace to school, when he got the page he and Thomas instead drove to a QuickTrip, where they met with defendant Cruz. From there, David Kindred drove the other two to a hotel on Front Street, where Thomas Pace stole a minivan from the parking lot. David and defendant Cruz then drove some 45 minutes until they reached 11410 and 11420 Northwest Robinhood Lane in rural Platte County. Thomas Pace followed in the minivan.
Carolyn Wible is the owner of the home at 11410 Robinhood Lane. She lives at the address with her fiance, Robert Armstrong. Ms. Wible and Mr. Armstrong went to work that morning, leaving the house vacant. Ms. Wible testified at trial that she did not give anyone permission to enter or take anything from her home. Ms. Wible further testified that, to her knowledge, neither did Mr. Armstrong.
Defendant Cruz and David Kindred nonetheless approached the front door of Ms. Wible's house and defendant unsuccessfully attempted to break down the door. In the process of his attempt, defendant managed to break a panel on the door and to leave his footprint on the panel. Eventually, David Kindred climbed through a window on the side of the house and opened the door for defendant. The two took six guns valued at $2000.00, ammunition, an ammunition bag, and electronics. They put the items in Mr. Kindred's car.
Carolyn Reed lives next door to Carolyn Wible at 11420 Robinhood Lane. She also left for work before defendant arrived, leaving no one in her house. She gave no one permission to enter or take anything from the house. At the same time that defendant and David Kindred were burglarizing the Wible home, Thomas Pace broke into Ms. Reed's house and began carrying out electronic equipment. After leaving Ms. Wible's house, defendant helped Thomas carry a television and speakers out of Ms. Reed's house. When the three had completed this task, they all drove to 403 Oakley, which was the home of another friend, Falconer Leslie. After they unloaded some of the stolen items, Thomas Pace finally went to school, while defendant and David Kindred drove to defendant's home at 1826 Cambridge.
Defendant's girlfriend, Swana Lansdown, helped David Kindred take some of the stolen items to her home at 1803 Cambridge and unload them. A neighbor, Eddie Sankaruala, became suspicious when he saw them unloading the items and called the police. The two had left by the time police arrived at 1803 Cambridge, but Swana Lansdown's father gave the police permission to search the house. The police found three of Mr. Armstrong's *903 guns, ammunition, an ammunition bag that contained an address tag with Robert Armstrong's name and his Robinhood Lane address, and a stereo. They also obtained a number of fingerprints for later analysis. The police obtained additional fingerprints at Falconer Leslie's home.
The police arrested David Kindred later on the day of the burglaries. He gave a statement in exchange for a more lenient sentence. He revised his statement twice as the police found more evidence. In each of these statements, David indicated that defendant Cruz was involved in the burglary and stealing. Defendant was arrested two days later. He denied his involvement in the crimes. When tests revealed that a partial print on the ammunition collected by the police belonged to him, defendant claimed that he must have left his print there when David attempted to sell him the stolen ammunition. He said he looked through the ammunition but decided not to buy any.
Defendant was tried on two counts of burglary in the second degree and two counts of stealing. He was found guilty on all counts. The court sentenced him to four years imprisonment on each of the two counts of burglary, and to three years imprisonment on one count of stealing and two years on the other, and ordered each sentence to run consecutively. This appeal followed.
II. INFLAMING THE PASSIONS OF THE JURY IN THE REBUTTAL PORTION OF THE PROSECUTOR'S CLOSING ARGUMENT
As his first point on appeal, Mr. Cruz claims that the trial court erred in allowing the prosecuting attorney, Mr. Ketchmark, to state in closing argument that:
"you 12 individuals who are empowered and have the duty to set the standard that this community has to go by, in dealing with people like Mr. Cruz, who come up from Jackson County and break into our homes, steal out items, take `em back down and do whatever with them. It's you all that have to answer to the community and set the standard."
(emphasis added.) Defense counsel did not object to this argument, but defendant now requests that this Court find that the trial court plainly erred in not sua sponte granting a mistrial based on this statement by the prosecutor. Plain error is only found where the comment resulted in manifest injustice, however, and "statements made in closing arguments rarely affect substantial right or result in manifest injustice or the miscarriage of justice so as to result in plain error requiring reversal of a conviction." State v. Higgins, 619 S.W.2d 94, 95 (Mo.App.1981).
Furthermore, courts hesitate to find plain error in a failure to sua sponte correct a statement made during closing arguments because "trial strategy looms as an important consideration in deciding whether to object during closing argument." State v. Cobb, 875 S.W.2d 533, 537 (Mo. banc 1994). The court, therefore, runs the risk of creating error if it interferes with argument sua sponte. For this and similar reasons, errors occurring in closing arguments justify "relief under plain error only when the errors are determined to have a decisive effect on the jury. The burden is on the defendant to demonstrate the decisive effect" of the statement. State v. Girardier, 801 S.W.2d 793, 796 (Mo.App. 1991).
We agree with defendant that the prosecutor's remark in this case differs in kind from the cases cited by the state for the proposition that a prosecutor can ask the jury to send a message to the community that particular conduct will not be tolerated. Here, the prosecutor said that the jury, not lawbreakers, would have to answer to the community. A similar comment, also implying that the jury would have to justify an acquittal to their friends, was condemned in State v. Thomas, 780 S.W.2d 128, 134-35 (Mo.App. 1989), on the basis that it implied to the jury that it should decide the case based on how the community would respond to the verdict rather than based on the evidence in the case. The comment in this case could be subject to the same interpretation. If, as the State suggests, the prosecutor simply wanted to tell the jury that they should send a message to the community, then, in the future, *904 the prosecutor should be more careful in the wording of his argument.
We do not agree that this single comment by the prosecutor requires reversal and remand for a new trial, however. The cases defendant cites, and others which reverse based on comments in closing argument, involve situations in which the conduct was egregious because, for example, the prosecutor continued to make inappropriate comments despite the trial court's repeated orders to stop. See State v. Tiedt, 357 Mo. 115, 206 S.W.2d 524, 528 (1947). Here, by contrast, the prosecutor's remark was an isolated one and was not emphasized. "[B]rief, isolated, nonrepetitive remarks of state counsel in closing remarks rarely call for plain error relief." Higgins, 619 S.W.2d at 96.
Moreover, here, there was substantial evidence of guilt, including the presence of defendant's fingerprint on the ammunition and a footprint matching his on the door of one of the houses. David Kincaid had also implicated defendant in the burglaries on a number of occasions. Thomas itself found that the prosecutor's isolated comment, even if erroneous, was not prejudicial and could not have improperly inflamed the jury in light of the significant other evidence of guilt. Thomas, 780 S.W.2d at 134-35. See also State v. Collins, 520 S.W.2d 155, 157 (Mo.App.1975). That reasoning is particularly applicable where, as here, we review solely for plain error. Because we cannot say that "the State's remarks had a decisive effect on the jury," State v. Davis, 825 S.W.2d 948, 952 (Mo.App.1992), we reject Point I.
III. ADMISSIBILITY OF TESTIMONY REGARDING MS. WIBLE'S KNOWLEDGE WHETHER MR. ARMSTRONG GAVE ANYONE PERMISSION TO ENTER OR TAKE ITEMS FROM THEIR HOME
Next, defendant argues that the trial court plainly erred and abused its discretion when it allowed Carolyn Wible to testify that, "to her knowledge," her boyfriend Mr. Armstrong did not give anyone permission to enter or remove anything from their residence. He claims that Ms. Wible's testimony was offered to prove the unlawful entry element of burglary and stealing and that it thus is inadmissible hearsay. As the State notes, however, defendant did not object to the testimony at trial, and therefore, any error in its admission it is not preserved for appeal. State v. Walden, 861 S.W.2d 182, 187 (Mo.App.1993).
The defendant requests that we review for plain error. We decline to do so. The admission of unobjected-to hearsay almost never rises to the level of plain error. Id. It certainly did not do so on the facts of this case. The alleged hearsay[1] concerned only whether Mr. Armstrong gave anyone permission to enter the home. Defendant did not claim that Mr. Armstrong gave him permission to enter the home, however; his defense was one of mistaken identity and denial of any involvement with the burglary and stealing. Therefore, whether or not Mr. Armstrong gave anyone permission to enter his home was irrelevant, and admission of evidence on this issue could not have prejudiced defendant.
For all these reasons, we affirm.
HANNA, P.J., and EDWIN W. SMITH, J., concur.
NOTES
[1] In fact, it is questionable whether her testimony was hearsay at all. The prosecution specifically indicated, in response to defendant's objection, that he was only asking whether "to her knowledge," Mr. Armstrong had given permission to others to enter, emphasizing that he only wanted her to testify to her personal knowledge. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917916/ | 101 B.R. 590 (1989)
Susan COMBS, Appellant,
v.
Charles E. RUBIN, trustee, Appellee.
No. 88-0969-CV-W-9.
United States District Court, W.D. Missouri, W.D.
June 15, 1989.
Jerald S. Meyer, Barker, Rubin & Sonnich, Kansas City, Mo., for appellee.
Ryan E. Karaim, Niewald, Waldeck, Norris & Brown, Kansas City, Mo., for appellant.
ORDER REMANDING FOR LIMITED ADDITIONAL FACTUAL DETERMINATION JUDGMENT OF BANKRUPTCY COURT DECLARING DEBTOR TO HAVE A ONE-HALF INTEREST IN CERTAIN REAL PROPERTY
BARTLETT, District Judge.
Appellant Susan Combs, mother of the debtor in bankruptcy, appeals from the United States Bankruptcy Court's[1] July 29, 1988, judgment declaring that the debtor holds a one-half interest in certain real property. 92 B.R. 880. Appellant contends that the debtor holds no interest in the property at issue.
Standard of Review
This court has jurisdiction pursuant to 28 U.S.C. § 158(a). Bankruptcy Rule 8013 provides that on appeal the district court "may affirm, modify, or reverse a bankruptcy court's judgment, order or decree or remand with instructions for further proceedings. Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given the opportunity of the bankruptcy court to adjudge the credibility of the witnesses." The Advisory Committee Notes state that Rule 8013 accords to the findings of a bankruptcy judge the *591 same weight given the findings of a district judge under Rule 52, Federal Rules of Civil Procedure.
A finding is clearly erroneous when the reviewing court is "left with the definite and firm conviction that a mistake has been committed." Anderson v. Bessemer City, 470 U.S. 564, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985). The court further stated:
If the district court's account of the evidence is plausible in light of the record reviewed in its entirety, the Court of Appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the fact finder's choice between them cannot be clearly erroneous.
Id., 105 S.Ct. at 1511-12.
The district court must independently determine questions of law or mixed questions of law or fact. In re Multiponics, Inc., 622 F.2d 709, 713 (5th Cir.1980); In re Hammons, 614 F.2d 399, 403 (5th Cir. 1980). The bankruptcy court's conclusions of law are freely reviewable on appeal. Clay v. Traders Bank of Kansas City, 708 F.2d 1347, 1350 (8th Cir.1983).
Background
The parties submitted a stipulation of facts to the bankruptcy court and the stipulation was incorporated by reference as the bankruptcy court's findings of fact pursuant to Bankruptcy Rule 7052. The stipulation in its entirety is as follows:
1. Charles E. Rubin is the duly qualified and acting Trustee herein.
2. Kathy Ann Glass, defendant herein, is the debtor in the above-captioned bankruptcy proceeding.
3. Susan Combs, defendant herein, is the 60-year-old mother of the debtor.
4. Susan Combs and her husband purchased some real estate and a home [in] approximately 1970, which they utilized as their place of residence. That real estate is described as:
All that part of Lot 19, HIGHVIEW, beginning 147 feet South of the Southeast corner of 24th Street and Denver; thence East to the East Line of said Lot 19; thence South 33 feet; thence West to the East line of Denver Avenue; thence North 31 feet to the point of beginning, a subdivision in Kansas City, Jackson County, Missouri.
Subject to all easements, restrictions, reservations and covenants, if any, now of record.
5. Mr. and Mrs. Combs made mortgage payments continuously following the date of their purchase of the above described property.
6. On May 15, 1980, Mr. Combs died.
7. Following the death of Mr. Combs, defendant Combs became sole owner of the property in question.
8. On or about May 26, 1981, defendant Combs deeded the above described real estate to her three children and herself as joint tenants for the sole purpose of avoiding probate and ensuring that the property would pass to her children upon her death. There was never any consideration paid to Susan Combs by her children for the deed revision.
9. Shortly after the May 26, 1981 deed revision for estate planning purposes, two of Susan Combs' children became divorced. As a result, the names on the Missouri Deed of Trust were no longer accurate, and Susan Combs and her three children agreed that it would be best for all parties involved to revise the deed once again.
10. On or about April 1, 1982, the real estate was deeded back to Susan Combs. There was no consideration transferred between the parties for this transfer of title.
11. On or about May 20, 1983, the deed was revised one more time. This time title was deeded to Susan Combs and Kathy Ann Glass as joint tenants with the right of survivorship.[[2]] This transfer *592 was made solely for estate planning purposes, and there was no consideration paid by Kathy Ann Glass.
12. Following the 1983 revision for estate planning purposes, defendant Combs has made the mortgage payments on the property out of her own funds.
13. Kathy Glass presently lives on the property in question and has paid defendant Combs rent for each and every month she has resided on the property. The debtor Kathy Glass has not made any mortgage payments.
14. Mortgage payments are presently around $200.00 per month.
15. Equity in the home is presently approximately $35,000.00, and can be determined with more specificity if necessary.
16. The property in question is a residence and partition in kind between the estate and the co-owner is impracticable.
17. Sale of the estate's undivided interest in said property would realize significantly less for the estate than a sale free and clear of the interest of defendant Susan Combs.
18. Said property is not used for the purposes listed in 11 U.S.C. § 363(h)(4).
On these facts the bankruptcy judge concluded that the debtor Kathy Glass had a one-half interest in the real property at issue and that the interest passed to the bankruptcy estate as of the date of bankruptcy.[3] The bankruptcy judge also rejected Combs' contention that Glass's beneficial interest by reason of a "resulting trust" was held by Susan Combs. Finally, the bankruptcy judge rejected Combs' argument that Glass had no interest in the property because Glass had not contributed to its purchase price.
On appeal, Combs argues that the bankruptcy court erred 1) by finding that Glass, and thus the trustee, had a one-half interest in Combs' property, 2) by finding no resulting trust existed and, alternatively 3) assuming a joint tenancy existed by finding that Glass's contributions were equal to Combs' contributions thus finding the two women equal co-owners.
Discussion
The trustee in bankruptcy can sell property only when the estate has an interest in such property. 11 U.S.C. § 363(h). The interest of the estate is derived through the debtor pursuant to 11 U.S.C. § 541(a)(1) which states that any legal or equitable interest the debtor holds in property at the time of filing the bankruptcy petition becomes property of the estate. However, the nature of the interest is determined by non-bankruptcy state law. In re Livingston, 804 F.2d 1219, 1221 (11th Cir.1986). Therefore, the question on appeal is whether under Missouri law the debtor had any ownership interest in the property in question.
Appellant asserts that under Missouri law the intention of the parties is the principal controlling factor in determining whether or not a joint tenancy in certain property is created. Thus, because she now contends that neither she nor her daughter intended to transfer a present ownership interest on May 20, 1983, appellant urges reversal of the bankruptcy court's judgment.
The stipulation provides that "[t]his transfer was made solely for estate planning purposes, and there was no consideration paid by Kathy Ann Glass." ¶ 11. It is unclear whether this statement means 1) that Combs intended to transfer a valid present interest to Glass so that Glass would, in fact, be a joint tenant holding an undivided one-half interest in the property and would receive by survivorship Combs' interest in the property upon Combs' death without the necessity of probate or 2) that Combs did not intend to transfer any present interest to Glass but believed (erroneously) that executing a deed purporting to make Glass a joint tenant in 1983 would permit Combs' 100 percent interest to pass from Combs to Glass upon Combs' death.
*593 Because these two interpretations lead to different conclusions about the nature of Glass's interest before Combs' death, this case will be remanded to the bankruptcy judge for his factual determination of whether Susan Combs intended in May 1983 to transfer a present ownership interest to Glass. Because it will be in both the transferor and transferee's interest to claim that Combs did not intend in 1983 to transfer a present interest, the bankruptcy court should carefully examine all circumstances bearing on the intent question.
Accordingly, it is hereby ORDERED that this case is remanded for a factual finding on whether Susan Combs intended in May 1983 to transfer a present ownership interest to Glass.
NOTES
[1] Dennis J. Stewart, Chief Bankruptcy Judge, Western District of Missouri.
[2] Missouri permits joint tenancies to be created by conveyance from the owner of the property to himself and another. Creek v. Union Nat. Bank in Kansas City, 266 S.W.2d 737, 752 (Mo. 1954).
[3] The bankruptcy judge also denied the trustee's motion for sale of the property of the co-owner pursuant to § 363(h) but this issue was not appealed by either party. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917941/ | 101 B.R. 39 (1989)
In re Kevin R. WHEELER, Debtor.
Theresa A. (Wheeler) LANKER, Plaintiff,
v.
Kevin R. WHEELER, Defendant.
Bankruptcy No. 88-30536 HCD, Adv. No. 88-3101.
United States Bankruptcy Court, N.D. Indiana, South Bend Division.
June 16, 1989.
*40 George Biddlecome, Elkhart, Ind., for plaintiff.
L. Benjamin Pfaff, Elkhart, Ind., for defendant.
MEMORANDUM OF DECISION
HARRY C. DEES, Jr., Bankruptcy Judge.
This matter is before the court on the plaintiff, Theresa A. Lanker's, COMPLAINT OBJECTING TO DISCHARGE ("Complaint") filed June 27, 1988. The plaintiff contends that the debtor's failure to execute the documents necessary to create and perfect a security interest on behalf of the plaintiff, as ordered by the DECREE OF DISSOLUTION OF MARRIAGE entered February 19, 1988 constitutes fraud rendering the underlying debt of $5,066.01[1] non-dischargeable pursuant to 11 U.S.C. § 523. Alternatively, the plaintiff contends that the debtor's post-petition disposition of the 1983 Harley-Davidson motorcycle, which was property of the estate, prohibits the debtor from receiving a discharge pursuant to 11 U.S.C. § 727(a)(2). A hearing on the matter was held on January 24, 1989. After a briefing period during which no briefs were submitted, the matter was taken under advisement. Based on the record and for the reasons set out below the court DENIES the debtor's entire discharge pursuant to 11 U.S.C. §§ 727(a)(2)(B) and (a)(4)(A). The discharge granted to the debtor by this court on July 8, 1988 is hereby REVOKED to comport with the findings herein.
Jurisdiction
This matter concerns a complaint to determine dischargeability of a certain debt or alternatively, an objection to discharge and as such are core proceedings within the meaning of 28 U.S.C. § 157(b)(2)(I) and (b)(2)(J). Pursuant to 28 U.S.C. § 157(a) and General Rule 45 of the Rules of the United States District Court for the Northern District of Indiana, this case has been referred to the undersigned bankruptcy judge for hearing and determination. After reviewing the record, the court makes the following entry. This entry shall serve as findings of fact and conclusions of law *41 as required by Federal Rule of Civil Procedure 52 made applicable to bankruptcy proceedings by Bankruptcy Rules 7052 and 9014.
Findings of Fact
1. The plaintiff, Theresa A. (Wheeler) Lanker, was previously married to the debtor/defendant, Kevin R. Wheeler.
2. The plaintiff filed a petition for dissolution of their marriage on April 24, 1987 in Elkhart Superior Court II, Elkhart, Indiana, Hon. Stephen E. Platt, Cause No. 20D02-8704-DR243. At that time, the debtor was adamantly against the divorce and distraught because he was still in love with the plaintiff.
3. On more than one occasion before the divorce was finalized, the debtor offered the plaintiff $500.00 in settlement of her claim to the marital estate. The plaintiff rejected each offer and stated that the debtor threatened that ". . . if you won't accept you'll never see any amount of money or anything other than large lawyer bills for yourself. . . ." The debtor was unable to remember if he said this but did not deny it.
4. The plaintiff testified that prior to the divorce the debtor threatened to hide his motorcycle, which was an asset of the marital estate in which there was $3,100.00 of equity according to the debtor's Schedule B-4, Property Claimed as Exempt. The debtor was unable to remember if he said this, but did not deny it.
5. The Decree of Dissolution of Marriage ("Decree") between the parties was entered on February 19, 1988.
6. Both the plaintiff and the debtor were represented by counsel in the dissolution action.
7. The debtor did not appeal the property settlement embodied in the February 19, 1988 Decree.
8. In the property settlement, the plaintiff was awarded the car (encumbered by a lien and the duty to pay off the lien) the dog, and various items of personal property. The debtor was awarded the marital home, the Harley-Davidson motorcycle, both encumbered by liens, and various items of personal property. Additionally, the court awarded the plaintiff a judgment for $1,000.00 for the disposition of the marital personal property of the parties. The court concluded that there was $5,293.02 of equity in the marital home and $2,839.00 of equity in the motorcycle. The court found that the plaintiff should be awarded one-half of the value of the equity in these items and awarded the plaintiff a judgment against the debtor in the amounts of $2,646.51 for the equity in the marital home and $1,419.50 for the equity in the motorcycle. The court further ordered that in payment and satisfaction of said judgments that they should be secured by a mortgage creating a lien against the marital real property and a lien against the title to the motorcycle, respectively. Both liens were to be subordinate to the purchase money security interest lenders. In order to fulfill these obligations the debtor was ordered to execute any and all documents reasonably necessary to accomplish the forgoing. Finally, the attorney for the plaintiff, George W. Biddlecome, Esq., was awarded a judgment against the debtor for $2,100.00 which covered the plaintiff's attorney fees for the dissolution action.[2]
9. The debtor failed to timely execute the necessary documents as ordered by Judge Platt in his February 19, 1988 Decree.
10. As a result of this failure, a hearing was set for March 28, 1988 at which the debtor was ordered to appear to execute the necessary documents.
11. The debtor failed to appear at the March 28, 1988 hearing.
12. The debtor admitted that he was served by the Sheriff with notice of the hearing, that he knew he was to appear at *42 the hearing, but nevertheless failed to show.
13. As the result of the debtor's failure to appear at the March 28, 1988 hearing to execute the necessary documents, a Commissioner was appointed who executed some of those documents.
14. Counsel for the debtor, L. Benjamin Pfaff, Esq., was present at the March 28, 1988 hearing and was aware that a Commissioner had been appointed.
15. The debtor testified that he did not know that a Commissioner had been appointed to execute the documents.
16. The debtor filed his chapter 7 petition on March 29, 1988, before the plaintiff had an opportunity to perfect the security interest in the marital home or the motorcycle granted to her in the Decree.
17. The debtor testified that he decided to file his bankruptcy petition upon the advice of his counsel and after the Decree was entered by Judge Platt.
18. His reasoning was that ". . . he could not afford that bill."
19. The only debts listed by the debtor on his schedules include:
Secured Claims:
Creditor Basis for Claim Amount
Security Federal Savings Residential mortgage $ 40,329.26
and Loan
First National Bank and Automobile loan 6,000.00[3]
Trust Company
First National Bank and 1983 Harley-Davidson 1,200.00
Trust Company Motorcycle
Unsecured Claims:
Theresa Wheeler 5,066.01
George W. Biddlecome Attorney fees 2,100.00
Richard N. Meyers, D.D.S. Dental services 150.00
Debtor's Schedule A-2 and Schedule A-3.
20. On the debtor's STATEMENT OF INTENTIONS the debtor stated that he would reaffirm both the debt for the marital home and the debt for the motorcycle. To this date, no reaffirmation agreements have been filed.
21. The debtor is a truck driver.
22. The debtor's yearly income for 1986 was $21,000.00 and for 1987 it was $18,693.80.
23. The debtor's SCHEDULE OF CURRENT INCOME AND CURRENT EXPENDITURES FOR INDIVIDUAL DEBTOR reflects the following information:
Total Estimated Current Monthly Income: $1,100.00
Schedule of Current Expenses:
House payment $364.37
Real Estate Taxes 24.63
Utilities 166.96
electric $106.96
telephone 27.00
cable TV 33.00
Home maintenance 50.00
Insurance 62.29
life 21.00
health 8.80
*43
motorcycle $12.33
homeowners 20.16
Motorcycle payment $97.87
Transportation 35.00
Food 200.00
Clothing 30.00
Medical, dental, etc. 25.00
Laundry and cleaning 15.00
Entertainment 25.00
______
TOTAL: $1,096.12
=========
24. The debtor testified that he sold the Harley-Davidson motorcycle sometime before January 23, 1989 and before the plaintiff was able to secure a lien against it as set out in the Decree.
25. The motorcycle was still property of the estate at the time the debtor sold it.
26. The trustee formally abandoned the motorcycle from the property of the estate on April 10, 1989.
27. The debtor admitted that he did not pay off the bank with the proceeds from the sale of the motorcycle nor did he turn over $1,419.50 of the proceeds to the plaintiff in satisfaction of the judgment entered against him by the Decree.
28. The debtor's total unsecured claims amount to $7,316.01.[4]
29. If the debtor had complied with the Decree and executed the necessary documents establishing a second mortgage against the marital home in the amount of $2,646.51 and a lien against the motorcycle in the amount of $1,419.50, the amount of unsecured debt would only have been $3,250.00.[5]
30. As the result of the alleged disposition of the motorcycle, the debtor's monthly expenses are reduced by $97.87 for the motorcycle payment and $12.33 for the insurance leaving his total monthly expenses at $985.92.
31. The difference between the debtor's monthly income and expenditures is a surplus of $114.08.[6]
Discussion
The plaintiff contends in her COMPLAINT OBJECTING TO DISCHARGE that the debtor's failure to execute the documents as ordered by Judge Platt in the February 19, 1988 Decree of Dissolution of Marriage constitutes fraud as proscribed by 11 U.S.C. § 523 and, further, constitutes conduct prohibited by 11 U.S.C. § 727(a)(2). She alleges that the purpose of his failure to execute the documents was designed exclusively to deprive her of her equity in the marital assets as ordered by Judge Platt.
The plaintiff does not specify what subsection of § 523(a) she relies upon and merely alleges "fraud" as a grounds for her objection to the discharge of the debtor. Therefore, the court will discuss § 523(a)(2)(A) and (a)(4), both of which cover fraudulent conduct as well as the § 727(a) claim. In re Turner, 82 B.R. 465, 467-68 (Bankr.W.D.Tenn.1988) (court held that even though the creditor set out no statutory authority for its request for relief, the court would nevertheless presume *44 reliance upon its choice of the most pertinent code sections).
As a preliminary matter, the court must allocate the burden of proof. It has been uniformly held that the burden of proving that a debt falls within one of the statutory exceptions to discharge falls upon the party opposing or objecting to discharge. Hill v. Smith, 260 U.S. 592, 593, 43 S.Ct. 219, 219, 67 L.Ed. 419 (1923); Belfry v. Cardozo (In re Belfry), 862 F.2d 661, 662 (8th Cir. 1988); Long v. Long (In re Long), 93 B.R. 791, 794 (Bankr.M.D.Ga.1988). The burden then is upon the plaintiff. A party attempting to show fraud by the debtor must do so by clear and convincing evidence. First National Bank of Red Bud v. Kimzey (In re Kimzey), 761 F.2d 421, 423-24 (7th Cir.1985) (the case involved objections to the discharge of particular debts under §§ 523(a)(2)(A) and (a)(6)); Chittenden Trust Company v. Mayo (In re Mayo), 94 B.R. 315, 329 (Bankr.D.Vt.1988) (court concluded that in the absence of Congressional guidance, conflicting case law, and only one analogous United States Supreme Court case that a successful § 727 proceeding is a cataclysmic attack on the debtor's fresh start and is the equivalent of an all out nuclear war on the debtor; therefore, the clear and convincing standard is proper); Georgetown Village Apartments v. Fontana (In re Fontana), 92 B.R. 559, 561 (Bankr.M.D.Ga.1988); Household Finance Corporation v. Herke (In re Herke), 92 B.R. 962, 963 (Bankr.S.D.Fla.1988). The statutory exceptions are narrowly construed in favor of the debtor, Gleason v. Thaw, 236 U.S. 558, 562, 35 S.Ct. 287, 289, 59 L.Ed. 717 (1915); Murphy & Robinson Investment Company v. Cross (In re Cross), 666 F.2d 873, 879-80 (5th Cir.1982), to promote the Congressional objective of ensuring that the debtors have a fresh start ". . . unhampered by the pressure and discouragement of pre-existing debt." Lines v. Fredrick, 400 U.S. 18, 20, 91 S.Ct. 113, 114, 27 L.Ed.2d 124 (1970) (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S.Ct. 695, 699, 78 L.Ed. 1230 (1934)).
The weight of that burden is crushing in that fraudulent intent is often impossible to prove. That difficulty was characterized by Justice DeWitt in the case of Merchants National Bank v. Greenwood, 16 Mont. 395, 41 P. 250 (1895) wherein he stated:
"Fraud conceals itself. It does not move upon the surface in straight lines. It goes in devious ways. We may with difficulty know `whence it cometh and whither it goeth.' It `loveth darkness rather than light, because its deeds are evil.' It is rarely that we can lay our hand upon it in its going. We are more likely to discover it at its destination, before we know that it has started upon its sinuous course. When we so discover it, the searchlight of a judicial investigation goes back over its trail and lightens it from beginning to end. As the woodsman follows his game by slight indications, as a broken twig or a displaced pebble, so fraud may become apparent by innumerable circumstances, individually trivial . . . but in their mass `confirmation strong as proofs of holy writ.'"
41 P. at 259.
The question of whether a debtor had the requisite intent to cause denial of his discharge is one of fact. First Texas Savings Association, Inc. v. Reed (In re Reed), 700 F.2d 986, 992 (5th Cir.1983). Fraudulent intent may be inferred by the court from the conduct of the debtor and the surrounding circumstances. United States v. Powell, 413 F.2d 1037, 1083 (4th Cir.1969); First National Bank of Midlothian v. Harrell (In re Harrell), 94 B.R. 86, 91 (Bankr.W.D.Tx.1988).
The court will now discuss the various statutory exceptions to discharge alleged by the plaintiff.
Section 523(a)(2)(A)
Eleven U.S.C. § 523(a)(2)(A) provides
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained, by
*45 (A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition.
11 U.S.C. § 523(a)(2)(A) (1989).
In order for the plaintiff to prevail under this subsection she must show
1) that the debtor made a representation to the plaintiff,
2) that he knew the representation was false,
3) that it was made with the intent to deceive,
4) that the plaintiff relied on the representation, and
5) that the plaintiff suffered a loss as a result of the representation.
Barker v. Clemens (In re Clemens), 83 B.R. 945, 950 (Bankr.N.D.Ohio 1988); Burroughs v. Pashi (In re Pashi), 88 B.R. 456, 458 (Bankr.N.D.Ga.1988). The plaintiff has proffered no evidence and the court can find none from its independent search of the record, that the debtor made a representation to the plaintiff, that he knew to be false, with the intent to deceive upon which the plaintiff relied.
There is no question that the plaintiff suffered a loss as the direct result of the debtor's refusal to execute the necessary documents as ordered by the Decree and his thereafter, immediate filing for relief under the Bankruptcy Code. There also is evidence from which the court may be able to discern an intent to defraud the plaintiff and circumvent the effect of the Decree. However, absent clear and convincing evidence from the plaintiff that the debtor made a representation he knew to be false, the plaintiff's claim under § 523(a)(2)(A) must fail. As there has been no allegation of the use of a statement regarding the debtor's or an insider's financial condition, then § 523(a)(2)(B) is also inapplicable on these facts.
Section 523(a)(4)
The circumstances and conduct relating to an allegation of fraud under § 523(a)(4) differ dramatically from those required for a finding of fraud under § 523(a)(2)(A). That section reads
Exceptions to discharge
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt
(4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny;
11 U.S.C. § 523(a)(4) (1989).
The phrase "while acting in a fiduciary capacity" clearly qualifies the words "fraud or defalcation." 3 Colliers on Bankruptcy (MB) ¶ 523.14 at 523-96 (15th ed. Supp. June 1988). Therefore, it is incumbent upon the plaintiff to establish that she shared a fiduciary relationship with the debtor from which the fraudulent conduct arose.
The issue of whether the debtor is a fiduciary for the purposes of § 523(a)(4) is a question of federal law, Nes Smith Electric Company, Inc. v. Kelley (In re Kelley), 84 B.R. 225, 229 (Bankr.M.D.Fla.1988), although state law may be considered in the determination of whether or not a fiduciary relationship exists. Driggs v. Black (In re Black), 787 F.2d 503, 506 (10th Cir. 1986); Feldman v. Kaufman (In re Kaufman), 85 B.R. 706, 710 (Bankr.S.D.N.Y. 1988).
The concept of "fiduciary capacity" under § 523(a)(4) is limited to technical or express trusts, rather than those implied by law. Barclays American/Business Credit, Inc. v. Long (In re Long), 774 F.2d 875, 878 (8th Cir.1985); United American Insurance Company v. Koelfgen (In re Koelfgen), 87 B.R. 993, 996 (Bankr.D.Minn. 1988). "Express or technical trusts are formed by direct and positive acts of both parties, manifested by some instrument in writing, whether by deed, will or otherwise." Id. Most courts have held that the trust or fiduciary relationship must have existed prior to the conduct giving rise to the claim. Kelley, 84 B.R. at 229; Koelfgen, 87 B.R. at 996. Thus, the debtor must have been a trustee or fiduciary before the wrong and not a trustee ex maleficio. Davis v. Aetna Acceptance Co., 293 U.S. *46 328, 333, 55 S.Ct. 151, 153, 79 L.Ed. 393 (1934); Kelley, 84 B.R. at 229.
In this case the plaintiff alleges that the debtor is a constructive trustee. She contends that, but for the debtor's flagrant disregard of Judge Platt's Decree, her claim would have been secured by a second mortgage on the marital real estate and a second lien on the title of the motorcycle.
In support of this theory the plaintiff proffers the case of Dodd v. Postel's Estate, 214 Ind. 39, 14 N.E.2d 539, 545 (1938). The facts of that case are as follows. Lewis and Emma Postel were divorced and by agreement, the marital assets were divided equally. Sometime after the death of Lewis, Emma discovered that he had fraudulently concealed assets and failed to include them in the agreement dividing the marital assets. After the commencement of this action, Emma died and Dodd was substituted in her place. The court found on the facts presented that Lewis was a trustee of the property of Emma and was under the highest duty to disclose all of the property so held by him. The court then held that Emma's claim was not a collateral attack on the original judgment which would be precluded but was instead in aid of the former judgment and a new trial should be granted.
It has generally been agreed that ". . . a constructive trust is not sufficient to create a fiduciary relationship under discharge provisions of the Bankruptcy [Code]." National Bank of Detroit v. Olson (In re Olson), 9 B.R. 52, 55 (Bankr.E. D.Wis.1981) (quoting Angelle v. Reed (In re Angelle), 610 F.2d 1335, 1339 (5th Cir. 1980)). The formal requirements for a valid trust in Indiana are controlled by statute which states:
A trust in either real or personal property is enforceable only if there is written evidence of its terms bearing the signature of the settlor or his authorized agent.
Ind.Code. 30-4-2-1(a) (1972).
It does not appear from the face of the Decree of Dissolution of Marriage that a trust was established. In Postel's Estate, Lewis, the husband fraudulently concealed assets from the distribution of marital property prompting the court to imply a constructive duty to disclose prior to his failure to disclose. On the facts of the case at bar, fraud by the debtor, if so found, did not occur until after the Decree was entered and the debtor filed his bankruptcy petition. Even if the court were to find that a constructive trust existed, it would not be a trust created before the act of wrongdoing but as a result of the act of wrongdoing which would not establish the requisite § 523(a)(4) fiduciary relationship. Kelly, 84 B.R. at 229; Compare with Brown v. Brown (In re Brown), 21 B.R. 377, 379-80 (Bankr.E.D.Cal.1982) (court held that divorce decree fixing the plaintiff ex wife's interest in the debtor's monthly pension checks at 9/22, and his failure to so remit to her 9/22 of the monthly check was not a property settlement but a division of community property and found the debtor to be a constructive trustee of the plaintiff's portion so that his failure to so remit amounted to a breach of fiduciary duty whereby the debt was held nondischargeable pursuant to § 523(a)(4).) and Teichman v. Teichman (In re Teichman), 774 F.2d 1395, 1400 (9th Cir.1985) (court found that community property settlement awarding the plaintiff ex wife 43% of the debtor's Air Force pension did not create a valid trust for § 523(a)(4) purposes and even though under California law a constructive trust could be found as the result of the failure of the debtor to turn over to the plaintiff 43% of each monthly pension payment, the trust would be imposed only after the debtor failed to turn over the plaintiff's portion of the pension check and would not render the debt nondischargeable because the debtor was not a fiduciary at the time of the default pursuant to § 523(a)(4), the court found that the debtor was never intended to hold the money for the plaintiff's benefit so no estate was conveyed to the husband as trustee).
The court agrees that as a general rule, § 523(a)(4)'s fiduciary relationship should not apply in connection with a property settlement agreement and a divorce decree. Obligations other than maintenance, alimony, *47 or support should only be excepted from discharge as fiduciary obligations where the intent of the parties at the time of the agreement was to establish a fiduciary relationship.
Therefore, the court finds that the plaintiff has failed to establish that the requisite fiduciary relationship existed on February 19, 1988 when the Decree was entered to support a finding of nondischargeability of a debt pursuant to 11 U.S.C. § 523(a)(4).
Section 727(a)(2)
The final proposition before the court arises from the plaintiff's claim that the debtor's entire discharge should be denied pursuant to § 727(a)(2)(B) which reads:
(a) The court shall grant the debtor a discharge, unless . . .
(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed . . .
(B) property of the estate, after the date of the filing of the petition.
11 U.S.C. § 727(a)(2)(B) (1989).
The plaintiff alleges that the debtor's disposition of the motorcycle after the filing of the petition precludes the court from granting a discharge to the debtor because his disposition of the motorcycle, failure to comply with the Decree, and the timing of the filing of his bankruptcy petition amounted to a conscious scheme to circumvent Judge Platt's order and was done with intent to hinder, delay, and defraud the plaintiff in her pursuit of the judgment awarded to her in the Decree.
A discharge in a chapter 7 case is afforded the debtor under 11 U.S.C. § 727 unless his conduct falls within any of the ten exceptions enumerated in that section. "There is no constitutional right to a discharge in bankruptcy; it is a privilege to be exercised only so long as the judicial process which provides it is not abused." Sicherman v. Lah (In re Lah), 88 B.R. 141, 145 (Bankr.N.D.Ohio 1988). In this case, the debtor has abused that process. While the court must be ever vigilant to the Congressional mandate that requires a balancing between the "fresh start" policy and preventing a dishonest debtor from avoiding the consequences of wrongful pre-or post-petition conduct, abuse cannot be tolerated. Mayo, 94 B.R. at 322.
The solicitude of Congress, however, stops at the debtor who does not measure up to that appealing image (`honest but unfortunate debtor') and who has engaged in grossly irresponsible or fraudulent conduct, has been recalcitrant during the case or has over utilized the privilege.
Riesenfeld, Creditors' Remedies and Debtors' Protection, p. 729 (3rd ed. 1979).
Because intent is difficult to prove, it may be inferred by the conduct of the debtor as well as from circumstantial evidence. Harrell, 94 B.R. at 91; Striffler v. Tarle (In re Tarle), 87 B.R. 376, 378 (Bankr.W.D.Pa.1988). In order for the discharge to be denied, the evidence when considered in light of all of the facts must lead the court to the conclusion that the debtor has violated the spirit of the Bankruptcy Code. Jones v. Jones (In re Jones), 97 B.R. 36, 38 (Bankr.D.Mont.1989); Fox v. Cohen (In re Cohen), 47 B.R. 871, 874 (Bankr.S.D.Fla.1985).
In a case such as this, where the facts must be found based on conflicting testimony of adversarial witnesses, the court must determine whose testimony is more plausible. That necessarily requires the court to look to the demeanor and credibility of the witnesses. In this case, the court is inclined to accept the plaintiff's rendition of the facts as more closely related to the actual circumstances surrounding this episode. The debtor's testimony lacked integrity and credibility. His answers were often evasive and his "selective memory" was obvious during the cross-examination by counsel for the plaintiff.
The court concludes that the particular judgment resulting from the Decree that is now before the court is in the form of a property settlement which under proper circumstances, would be dischargeable. *48 Here, however, the character of the judgment is not at issue; rather it is the conduct and attitude of the debtor.
The court finds the material facts are as follows:
1) the debtor threatened the plaintiff that if she did not take the $500.00 offer of settlement she would never see any money, only big lawyer fees;
2) the debtor threatened to hide the motorcycle;
3) the debtor failed to execute the necessary documents as ordered by the Decree on February 19, 1988;
4) the debtor, with knowledge of the hearing to execute those documents set for March 28, 1988 and of the purpose of the hearing, failed to appear;
5) the debtor filed his chapter 7 petition the next day, March 29, 1988;
6) the debtor did not appeal the property settlement but filed a bankruptcy petition instead;
7) the debtor testified that he sold the motorcycle before the plaintiff could exercise her right to secure her judgment as set out in the Decree;[7]
8) the debtor did not pay off the lien to the bank with the proceeds of the motorcycle;[8]
9) the debtor failed to reaffirm the debts for the marital home and motorcycle as set out in his Statement of Intentions;[9]
10) the timing of the filing of his bankruptcy petition precluded the plaintiff from creating and perfecting her rights in the marital assets as set out in the Decree;
11) the debtor has excess income over expenses that could support a plan of reorganization;
12) the debtor's total unsecured debt is $7,316.01;
13) but for the debtor's liability stemming from the Decree, the debtor's only unsecured debt would be $150.00 which is substantially less than the $90.00 filing fee for a chapter 7 case and the $600.00 which he paid to his bankruptcy attorney.
Based on these facts the court finds it easy to infer intent from the debtor's course of conduct to hinder, delay, or defraud the plaintiff by concealing or transferring the motorcycle which was property of the estate. The court is left with the inescapable conclusion of a conscious scheme of the debtor to use bankruptcy to frustrate the Decree of the divorce court, which violates the spirit of the Bankruptcy Code.
On these facts, to grant the debtor a discharge would be to reward him for his efforts to thwart the property settlement embodied in the Decree and his intent to *49 deprive the plaintiff of her rightful share of the marital assets.
The court finds that the debtor's disposal of the motorcycle constitutes an actual transfer of valuable property which reduced the assets available to the creditors which was made with fraudulent intent. Lee Supply Corporation v. Agnew (In re Agnew), 818 F.2d 1284, 1287 (7th Cir.1987); Jones, 97 B.R. at 38.
However, if it is determined that contrary to the debtor's testimony at the January 23, 1989 dischargeability hearing that he did not actually sell the motorcycle then the issues become one of fraud upon the court and perjury. While the potential untruth of the debtor's sworn testimony may open him up to liability under other theories, it is enough here to mount a direct challenge to his discharge.
Eleven U.S.C. § 727(a)(4)(A) states in pertinent part:
(a) The court shall grant the debtor a discharge, unless
(4) the debtor knowingly and fraudulently, in or in connection with the case
(A) made a false oath or account.
11 U.S.C. § 727(a)(4)(A) (1989).
The purposes of this section is to provide the trustees and creditors with reliable and accurate information about the debtor. First Florida Bank v. Just (In re Just), 97 B.R. 98, 100 (Bankr.M.D.Fla.1989). However discharge should not be denied where the untruth was the result of mistake or inadvertence. Id. Instead, the false oath or account must be made intentionally and with regard to a material matter in the case, or in a manner evidencing a reckless and cavalier disregard for the truth. Id.; Discenza v. MacDonald (In re MacDonald), 50 B.R. 255, 259 (Bankr.D.Mass. 1985). A false oath may be made by the debtor by signing sworn documents that bear false information, at an examination during the case at a meeting of creditors, Lissack Enterprises, Inc. v. Braidis (In re Braidis), 27 B.R. 470, 472 (Bankr.E.D.Pa. 1983), a Rule 2004 examination, Just, 97 B.R. at 100, or at an evidentiary hearing such as the dischargeability hearing at issue here. Id.
The court finds that if the debtor did not sell the motorcycle but instead lied about the transfer, then this conduct amounted to intent by the debtor to hinder, delay, or defraud his creditors by concealing property of the estate after the filing of the petition. 11 U.S.C. § 727(a)(2)(B) (1989). The court further finds that if the debtor gave false testimony to the court at the hearing on January 23, 1989 concerning the disposition of the motorcycle then the debtor has knowingly, wilfully, and fraudulently made a false oath or account in violation of 11 U.S.C. § 727(a)(4)(A).
Additionally, if the plaintiff had succumbed to both the stringent §§ 523 and 727 analyses, the facts in the case would have been ripe for a § 707(b)[10] substantial abuse claim. The court concludes that there is ample evidence in the record to support dismissal for substantial abuse. 11 U.S.C. § 707(b) (1989). In re Ploegert, 93 B.R. 641, 642 (Bankr.N.D.Ind.1988); In re Wegner, 91 B.R. 854, 858 (Bankr.D. Minn.1988).
The debtor's debts are primarily consumer debts. The debtor's monthly income is $1,100.00 and his monthly expenses are $985.92 leaving a monthly surplus of $114.08. On a minimum 36 month chapter 13 plan of reorganization the debtor could make total payments of $4,106.88 against his total unsecured claims of $7,316.01.
Additionally, if the debtor had complied with Judge Platt's Decree and had executed the necessary documents securing *50 the property settlement award to the plaintiff from the Decree[11] then the debtor's unsecured debt would only be $3,250.00.[12] This amount is substantially less than a 36 month chapter 13 plan would allow.[13]
By availing himself of the power of the automatic stay granted to the debtor upon the filing of a voluntary petition in bankruptcy, the debtor was able to preclude the plaintiff from perfecting her security interest in the marital home and left her unable to pursue the debtor to create and perfect her security interest against the title to the motorcycle, because the property was protected by the automatic stay. 11 U.S.C. § 362(a)(4) (1989); but see Zachary v. Zachary (In re Zachary), 99 B.R. 916 (Bankr.S.D.Ind.1989) (court held that lien granted to wife pursuant to the divorce decree representing her interest in the marital real estate was not a judicial lien that attached to an interest of the debtor that could be avoided pursuant to 11 U.S.C. § 522(f)(1)). As a result, the debtor's attempt to claim $3,100.00 of the unencumbered equity in the motorcycle against his personal property exemption appeared legitimate and went unquestioned by the Trustee. Ind.Code 34-2-28-1(a)(2) (1986 Supp.).
Conclusion
Accordingly, the court finds that the debtor concealed or transferred valuable property of the estate after the filing of the petition with the intent to hinder, delay, or defraud the plaintiff within the meaning of 11 U.S.C. § 727(a)(2)(B). The court further finds that the debtor knowingly, wilfully, and fraudulently made a false oath or account in violation of 11 U.S.C. § 727(a)(4)(A).
SO ORDERED.
NOTES
[1] See n. 2, infra.
[2] These figures comprise the sum of $5,066.01, set out in the Complaint ¶ 6 as follows:
$2,646.51 one-half equity in the marital home
1,419.50 one-half equity in the motorcycle
1,000.00 judgment for disposition of marital
personal property
_________
$5,066.01
=========
[3] The automobile and underlying indebtedness were awarded to the plaintiff by the February 19, 1988 Decree, wherein the debtor was to be held harmless by the plaintiff.
[4]
$5,066.01 Theresa Wheeler
2,100.00 George W. Biddlecome, Esq.
150.00 Richard N. Meyers, D.D.S.
_________
$7,316.01
=========
[5]
$2,100.00 George W. Biddlecome, Esq.
1,000.00 Theresa Wheeler, personal property
judgment from the Decree
150.00 Richard N. Meyers, D.D.S.
_________
$3,250.00
=========
[6]
$1,100.00 total monthly income
985.92 total monthly expenses
_________
$ 114.08 surplus
=========
[7] It has come to the court's attention that on March 31, 1989, well after the dischargeability hearing, the First National Bank & Trust Company ("Bank") filed its PETITION FOR RELIEF FROM AUTOMATIC STAY AND ABANDONMENT OF COLLATERAL. The Bank claimed that the debtor executed a promissory note on October 21, 1987 secured by the 1983 Harley-Davidson motorcycle and that its interest was perfected on the Certificate of Title for the Motorcycle. The Bank alleged that the last payment made by the debtor on the note was made on March 1, 1989 for the payment due January 15, 1989. In a document entitled STIPULATION FOR RELIEF FROM AUTOMATIC STAY ("Stipulation") filed April 26, 1989, and signed by counsel for the Bank, counsel for the debtor and the Trustee, the parties stipulated that the Bank would be granted relief from the stay to repossess and liquidate the motorcycle but that the Bank would not exercise such right in the event that the debtor pay the note secured by the motorcycle current within 30 days and continue making the payments when due. The Stipulation also contained a "drop dead" clause allowing the Bank to repossess and liquidate if the debtor defaulted on the Stipulation. The Stipulation was approved and entered as an order of the court on May 3, 1989. The debtor is either lying to the court about his current possession of the motorcycle or lied to the court at the January 23, 1989 hearing when he testified under oath that he sold the motorcycle. This conduct further supports the court's finding that the debtor has abused the spirit of the Bankruptcy Code.
[8] Since the bank holding the lien on the motorcycle was presumably a purchase money lender who probably held the title to the motorcycle, the court does not understand how the debtor could convey clear title to the motorcycle unless by some form of fraudulent conduct.
[9] See n. 7, supra.
[10] 11 U.S.C. § 707 Dismissal.
(a) The court may dismiss a case under this chapter only after notice and a hearing and only for cause, including ...
(b) After notice and a hearing, the court, on its own motion or on a motion by the United States trustee, but [and] not at the request or suggestion of any party in interest, may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts if it finds that the granting of relief would be a substantial abuse of the provisions of this chapter. There shall be a presumption in favor of granting the relief requested by the debtor.
[11] See, Zachary v. Zachary (In re Zachary), 99 B.R. 916 (Bankr.S.D.Ind.1989) wherein Judge Tinder held that a dissolution decree does not create a judicial lien that can be avoided by a debtor pursuant to 11 U.S.C. § 522(f)(1).
[12] See, n. 5, supra.
[13] See, n. 6, supra.
$114.08 surplus income per month
× 36 months
_______
$4,106.88 available to creditors over the life of
a chapter 13 plan.
========= | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572553/ | 323 F.Supp. 1258 (1971)
Seraphine JOHNSON, by her next friend, Mrs. Josie Pearl Johnson, Plaintiff,
v.
ITT-THOMPSON INDUSTRIES, INC., Defendant.
No. WC 7063-K.
United States District Court, N. D. Mississippi, W. D.
March 4, 1971.
*1259 Michael H. Cox, Holly Springs, Miss., for plaintiff.
J. Fraser Humphreys, Jr., Memphis, Tenn., for defendant.
MEMORANDUM OPINION
KEADY, Chief Judge.
This is an action brought by a black resident of Holly Springs, Mississippi, under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., alleging that defendant, a corporation, has engaged in racial discrimination in its employment practices at its Holly Springs plant. Plaintiff brings the suit as a class action on behalf of herself and all others similarly situated. Defendant has now moved in the alternative to dismiss the suit, to strike portions of the complaint, to dismiss the class action, or to define and restrict the class. Following argument and briefing, the case is now before the court for decision on defendant's motions.
We begin with a chronology of pertinent events. The complaint alleges that on July 28, 1970, she "called Thompson factory (defendant) and asked if they were hiring anybody. I was told that they were hiring only white people." On August 8 she filed a written charge with the Equal Employment Opportunity Commission (EEOC) incorporating the above allegations. On September 30 plaintiff's counsel made written demand on EEOC for a notice of right to sue in federal district court, which was issued on October 15. On November 8 plaintiff commenced the instant suit, alleging that defendant unlawfully refused to hire her solely on account of her race and that defendant had been and was then engaging in numerous acts of racial discrimination in its employment practices, including assignment of blacks to inferior and less desirable jobs and departments, failure to promote blacks as readily as equally-qualified whites, subjection of black employees to inferior shifts, working conditions and disciplinary measures, and discharge of black employees without good cause solely because of race.
Defendant's first ground for dismissal is that it was not served with a copy of the EEOC charge before suit was filed, and thus never had occasion to attempt to conciliate the dispute with plaintiff as contemplated by the statute creating the EEOC machinery. 42 U.S.C. § 2000e-5(a). Defendant argues that service upon the accused employer of the EEOC charge is a jurisdictional prerequisite to the filing of suit.
Although not precisely in point, a recent Fifth Circuit case is highly persuasive that defendant's position is not well taken.[1] In Beverly, the court held that a plaintiff may maintain a Title VII suit in federal court even though EEOC has found that there is no reasonable cause to believe that discrimination occurred. Since the statute does not require any conciliation efforts by EEOC *1260 until after it has found reasonable cause to believe there was discrimination, the Beverly decision indicates that failure of EEOC even to attempt to conciliate is not a jurisdictional bar to maintenance of a Title VII suit in federal court by the aggrieved employee. To the same effect is Dent v. St. Louis-San Francisco Ry. Co., 406 F.2d 399 (5 Cir. 1969), where the court specifically held that conciliation efforts by EEOC are not required as a jurisdictional prerequisite of a Title VII suit.
Based on Beverly and Dent, this court would have little hesitation in deciding that it was compelled to rule that service of the EEOC charge on the employer is not a jurisdictional prerequisite. Nevertheless, the Fifth Circuit has indicated in at least one case that the question may not be without difficulty. In Miller v. International Paper Co., 408 F.2d 283 (5 Cir. 1969), the court reiterated its earlier holdings that actual attempts at conciliation by EEOC are not jurisdictional prerequisites for filing of a Title VII suit by the aggrieved employee. The court also stated, however, at p. 291:
"The union's second contention is that, even assuming that they were named in the EEOC charge, they were never served with a copy of the charge and, therefore, cannot be sued. This argument has much in common with the conciliation-prerequisite theory previously considered. Nevertheless, we have decided not to consider this question" (because of other considerations in the case).
When the identical question was recently presented to Judge Smith of this district, he, too, did not rule on the issue because he found that the employer in that case had actual notice of the matter alleged in the EEOC charge even before the charge was filed and the issue of failure to serve the charge on the employer was thus moot.[2] In spite of the absence of clear and binding precedent, we are constrained to agree with the courts in Beverly and Dent, supra, which held that there are only two jurisdictional prerequisites to a Title VII suit: (1) the filing of a charge of discrimination with EEOC within 90 days of the alleged incident of discrimination; and (2) actual filing of suit by plaintiff within 30 days of receipt of a right-to-sue letter from EEOC at the end of the 60-day conciliation period. 42 U.S.C. § 2000e-5(c) (e). Although conciliation is certainly a favored policy of the entire Title VII scheme, it is also well known that EEOC is an understaffed and overworked agency which often is unable within the 60-day limit to assist the parties in seeking a conciliation.[3] Moreover, as the Fifth Circuit stated in Miller, supra:
"The plaintiff is not responsible for the acts or omissions of the Commission. He, and the members of his class, should not be denied judicial relief because of circumstances over which they have no control. The plaintiff exhausted administrative remedies and satisfied the requirements of the Act by filing a complaint with the Commission and awaiting its advice. He is not required to show that the Commission has endeavored to conciliate. To insist that he do so, would require him to pursue an administrative remedy which may be impossible to achieve. If the Commission makes no endeavor to conciliate, the remedy is ineffective and inadequate." Miller, supra, at p. 290, quoting from Quarles v. Philip Morris, 271 F.Supp. 842, 846-847 (E.D.Va.1967).
Since it is not necessary to federal jurisdiction that EEOC attempt to conciliate, neither is service of the charge on the employer a jurisdictional requisite. Where, as here, EEOC made no attempt whatsoever to conciliate, there would have been no reason to require service *1261 of the charge on defendant. In the absence of EEOC and its presumed expertise in conciliation, Title VII does not require private negotiations between the parties themselves, although such might take place at any other time just as well as during the 60-day conciliation period. Also, we note that while defendant now complains it was not given a chance to conciliate, it made no attempt to request a reopening of the conciliation proceeding after receiving a copy of the right-to-sue letter; it had a right to do this at any time within 20 days after receipt of the letter.[4] The mere fact that plaintiff's counsel made a premature request for a right-to-sue letter from EEOC is immaterial in the instant case since the letter did not actually issue until after the 60-day conciliation period had elapsed, and there is no showing that the premature request had any effect on EEOC's action or lack of it. For the foregoing reasons, defendant's motion to dismiss because it was not served with the EEOC charge must be denied.
Defendant next moves the court to strike from plaintiff's complaint parts (b) through (g) of ¶ 8, which allege racial discrimination within the plant on the ground that they are immaterial and impertinent because plaintiff, never having been in defendant's Holly Springs plant, has no knowledge or information to support such charges. This argument is effectively rebutted by the Fifth Circuit decision in Carr v. Conoco Plastics, Inc., 295 F.Supp. 1281 (N.D.Miss.1969), aff'd per curiam 423 F.2d 57 (5 Cir. 1970), cert. den. 400 U.S. 951, 91 S.Ct. 241, 27 L.Ed.2d 257 (1971). In that case, the district court held that a prospective employee who alleged racial discrimination in the defendant's refusal to hire him could also bring suit to eradicate all racial discrimination against black employees within the plant. As Judge Smith stated:
"It is foolhardy to say that once plaintiffs have removed racial discriminatory practices at the door, they are required to start anew in order to remove those that exist on the inside. Such a practice would result in a multiplicity of suits and a waste of time and money for all interested parties." Carr, supra, 295 F.Supp. at p. 1289.
In affirming per curiam, the Fifth Circuit characterized the above statements as an excellent exposition of the applicable principles of law and accepted the district court's opinion as its own. Carr, supra, 423 F.2d at p. 58. The rule of the Carr case does not conflict with the recent ruling of the Fifth Circuit in Sanchez v. Standard Brands, Inc., 431 F.2d 455 (5 Cir. 1970), where the Court stated:
"The specific words of the charge need not presage with literary exactitude the judicial proceedings which may follow * * * [I]t is only logical to limit the permissible scope of the civil action to the scope of the EEOC investigation which can reasonably be expected to grow out of the charge of discrimination." (pp. 465-466)
To us this language means that EEOC may investigate, and a federal-court plaintiff may allege, all acts of discrimination broadly and reasonably relevant to the acts alleged in the EEOC charge, and that under the Carr rule the allegations of racial discrimination within defendant's Holly Springs plant are sufficiently relevant to the hiring policy discrimination set out in the charge to enable her to include the matters alleged in ¶ 8(b)-(g) of her complaint. Defendant's motion to strike those portions is, therefore, denied.
The same reasoning applies to defendant's motion to dismiss the class action. Ever since Oatis v. Crown Zellerbach Corp., 398 F.2d 496 (5 Cir. 1968), a single Title VII plaintiff has been allowed to seek relief on behalf of the entire class of persons potentially affected by the discriminatory practices which he alleges. Since the Carr case compels us to hold that plaintiff has *1262 standing to assert all of the allegations of the present complaint, we must also hold that she is a proper representative of the entire class, and defendant's motion to dismiss the class action will be denied, subject to the court's discretion under Rule 23(c) (1), F.R.Civ.P., to later reduce or further define the class in light of evidentiary developments. If conflicts of interest should arise between present and prospective employees, these may be resolved by realignment of parties under Rule 23(c) (4), as suggested by the Fifth Circuit in Carr, supra.
Accordingly, an order overruling defendant's motions to dismiss the action, to strike portions of the complaint, to dismiss the class action, and to define or restrict the class, shall be entered.
NOTES
[1] Beverly v. Lone Star Lead Construction Co., 437 F.2d 1136 (5 Cir. 1971).
[2] Brown v. Twin-County Electric Power Ass'n, No. GC 6935-S (unreported opinion).
[3] See the discussion of this problem in Judge Gewin's opinion in Miller, supra, 408 F.2d at pp. 288-289, Note 22.
[4] See 29 C.F.R. § 1601-25a. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572570/ | 2 So.3d 945 (2006)
EX PARTE TERRY HARRIS.
No. CR-06-0189.
Court of Criminal Appeals of Alabama.
December 13, 2006.
Decision of the Alabama Court of Criminal Appeal without opinion. Mand. pet. dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917837/ | 178 B.R. 480 (1995)
In re ADVENT MANAGEMENT CORPORATION, a California corporation, Debtor.
TAYLOR ASSOCIATES, Appellant,
v.
Lawrence A. DIAMANT, Chapter 7 Trustee, and United States Trustee, Appellees.
BAP No. CC-94-1413-HMeV. Bankruptcy No. LA-89-03782-JD/KM. Adv. No. LA-91-61036-KM.
United States Bankruptcy Appellate Panel of the Ninth Circuit.
Argued and Submitted November 17, 1994.
Decided February 16, 1995.
*481 *482 Neil J. Rubenstein, San Francisco, CA, for appellant.
Gregg D. Lundberg, Irving M. Gross, Los Angeles, CA, for appellees.
Before HAGAN, MEYERS and VOLINN, Bankruptcy Judges.
OPINION
HAGAN, Bankruptcy Judge:
Lawrence Diamant ("trustee") is the Chapter 7 trustee for the debtor, Advent Management Corporation ("Advent"). The trustee commenced an action against Taylor Associates ("Taylor") to recover sums alleged to be either avoidable preferences under section 547,[1] or fraudulent transfers under section 548. The bankruptcy court granted partial summary judgment to the trustee, holding, inter alia, that the transfers to Taylor were transfers of an interest of the debtor in property. Taylor filed two motions for reconsideration. Both motions were denied. Taylor appeals the denial of the second motion. We AFFIRM.
FACTS
1. Facts Underlying the Disputed Transfers.
This action involves a three-sided transfer. Prior to bankruptcy, Taylor provided temporary services to Coastal Insurance Company ("Coastal"). Taylor received payment for these services from Advent, the sole owner of Coastal. It is these payments that are the subject of this adversary proceeding.
Coastal underwrote insurance policies, including auto insurance policies for high-risk drivers. However, Coastal had no employees and few of the physical assets necessary to conduct the business. Advent possessed "virtually all" of the employees and most of the furniture, fixtures, and equipment needed for operations. Advent handled all of Coastal's day-to-day administrative operations.
Advent had an unwritten agreement with Coastal regarding compensation for its services as Coastal's managing agent. Advent received 25% of premiums earned and approximately 100% of the policy fees earned, in addition to unallocated loss adjustment expenses representing 6% of the premiums written.
However, in addition to these funds, Coastal diverted over $48 million in assets to Advent. These transfers were recorded in Coastal's books as "advances." There was no written agreement or memorialization of the transfers, they were not collateralized, and there was no interest charged. A report of the California Auditor General concluded the advances were "payments on expenses its affiliates had not fully incurred yet and might never incur if the policies they were writing were not renewed each month." Auditor General's Report, Taylor's Excerpts of Record (hereinafter "Taylor's ER") at 462. The "Task Force Report on Coastal Insurance Company," prepared by the California Department of Insurance, indicated some of the "advances" to Advent went into personal loans to officers and directors, and personal and other expenses associated with Advent's operations. Task Force Report, Taylor's ER at 620-626.
On February 2, 1989, Coastal was taken over by the California Department of Insurance. The Insurance Commissioner for the State of California ("Commissioner") was appointed as conservator for Coastal, and later as Coastal's liquidator. Advent filed its chapter 7 petition on February 23, 1989.
2. Procedural Posture.
On March 14, 1991, the trustee commenced the underlying adversary proceeding against Taylor for the recovery of a number of these payments. This initial complaint sought the return of a number of allegedly preferential transfers under section 547. After conducting discovery, the trustee concluded Taylor had never been a creditor of the debtor, and filed his first amended complaint pleading an additional cause of action to recover fraudulent *483 transfers under section 548. The first amended complaint requested return of 36 payments made in the one year prior to Advent's bankruptcy. In his motion for summary judgment, the trustee requested the return of two additional payments. The total amount transferred in all 38 payments was $193,112.09. Taylor's answer to the first amended complaint admitted that 14 of the transfers to Taylor were transfers of Advent's property. The trustee filed a motion for summary judgment on October 7, 1992. Taylor opposed the motion. Taylor contended, among other things, that there was a genuine issue of material fact as to whether the transfers were transfers of property of Advent. The bankruptcy court asked Taylor's counsel if Taylor wished a continuance to conduct further discovery on this issue, and counsel declined.
The court granted partial summary judgment in favor of the trustee. The court's findings, entered on March 8, 1993, found that the 38 transfers were transfers of property of Advent. The court concluded the trustee's evidence of a transfer from Advent's general account constituted a prima facie showing the money was Advent's property, and Taylor failed to come forward with evidence sufficient to create a genuine issue of material fact.
Taylor obtained new counsel, who on March 18, 1993, filed a motion seeking: (1) leave to amend its answer to the first amended complaint; (2) an order altering or amending the prior order, reconsidering the prior order, or alternatively granting relief from the order for excusable neglect; and (3) an order reopening discovery (hereinafter, "first motion to reconsider"). The basis for the motion was that newly-discovered evidence (three reports by public entities, including the two cited above) raised a genuine issue of material fact as to whether the transfers were of property of Advent. The motion was also based on the argument that Taylor's previous counsel erred, first in admitting that 14 transfers were transfers of property of the debtor, and second in declining additional discovery. Taylor contended the transfers were transfers of money misappropriated from Coastal by Advent, and consequently Advent held those monies in constructive trust for Coastal.
A hearing on the first motion to reconsider was held on May 5, 1993. The court denied all aspects of the motion. The court found that the previous counsel had not admitted the 14 transfers or declined additional discovery by mistake, but as a strategic decision regarding the conduct of the case. The court also concluded Taylor would be unable to trace the funds sufficiently to establish the existence of a constructive trust.
With specific regard to the motion to reconsider the prior summary judgment ruling, the court noted it could be analyzed under either Rule 59(e)[2] or Rule 60(b). The court held the three reports could have been discovered through due diligence at the time of the summary judgment hearing, and concluded relief under Rule 59(e) was therefore not appropriate. The court also rejected the conclusion it should reconsider under Rule 60(b), because there was no excusable neglect; the previous counsel had made a strategic decision not to contest the issue. The order denying the first motion to reconsider was entered on July 8, 1993.
Taylor filed its "Notice of Motion and Motion for Reconsideration of Order Re: `Property of the Debtor'" on January 28, 1994 (hereinafter, "second motion to reconsider"). This motion was based on the Ninth Circuit Court of Appeals decision in Mitsui Manuf. Bank v. Unicom Computer Corp. (In re Unicom Computer Corp.), 13 F.3d 321 (9th Cir. 1994). In Unicom, the Court of Appeals dealt with an action to recover an avoidable preference under section 547. The debtor had wrongfully obtained a check that should have been paid to a creditor. Subsequently, the debtor paid the creditor the amount the debtor had wrongfully received, and then filed its petition in bankruptcy. The Court of Appeals held that the trustee for the debtor could not recover the transfer as a preference, because the funds were held subject to *484 a constructive trust on the creditor's behalf and thus were not property of the debtor as is required by section 547(b). The court's reasoning was as follows: (1) "property of the debtor" means property that would have been property of the estate under section 541 but for the transfer, 13 F.3d at 324; and (2) property held in constructive trust is not property of the estate, and therefore is not property of the debtor, 13 F.3d at 324-25.
The trustee objected, presenting a number of arguments in response to Taylor's motion. The trustee contended Taylor could not trace the funds allegedly held by Advent in constructive trust, and therefore that Taylor was not entitled to argue that a constructive trust exists. The trustee also argued that the evidence showed that Advent was rightfully entitled to some of the monies received from Coastal, and therefore Taylor could not avoid the tracing requirement.
The bankruptcy court denied Taylor's second motion to reconsider. At oral argument, the court held that Unicom's holding was limited to the circumstance where the recipient of the transfer was also the beneficiary of the constructive trust. Because Taylor was not the beneficiary of the constructive trust, the court concluded Taylor could not interpose Coastal's alleged constructive trust as a defense. The court noted that there was no evidence Coastal ever tried to establish a constructive trust against the funds. Additionally, the court held Taylor failed to trace the funds Taylor received to funds Advent held in constructive trust for Coastal.
Taylor and the trustee stipulated to an interlocutory appeal. The bankruptcy court entered an order staying the proceeding until either the application for an interlocutory appeal was denied, or the appellate court issued a final order. The Panel granted leave to appeal.
3. Evidence Regarding the Constructive Trust.
After Coastal was taken over by the California Department of Insurance, the trustee and the Commissioner (as liquidator of Coastal) entered into a "Stipulation to Compromise Controversies." The purpose of this stipulation was to resolve various competing claims between Coastal and Advent, and to divide responsibility for pursuing claims against third parties. This stipulation contained two provisions relevant to this appeal. First, Advent would have "allegedly" been entitled under the "purported" unwritten agreement to 25% of premiums collected postpetition. Stipulation to Compromise Controversies, Taylor's ER at 22-23. The Commissioner agreed to tender to the trustee $4.9 million, representing 25% of all premiums collected postpetition, in exchange for the trustee waiving all right to any other administrative fees.
Second, the stipulation addressed the claims Coastal had against Advent's bankruptcy estate. The stipulation states that there was a "substantial controversy" about the "payment, transfer, and advances of funds" between Advent and Coastal, and that the resolution of the exact amount of the claims "may be impossible to determine." Id., Taylor's ER at 25-26. The trustee and the Commissioner agreed that Coastal should have "an allowed unsecured claim in the amount of $48,990,434.62." Id., Taylor's ER at 26. "Except for the allowed Coastal Claim . . ., the Commissioner and the Trustee hereby waive, release and absolve each other from any and all claims, demands, damages and liabilities of every kind and nature. . . ." Id.
The Task Force Report made the following comments regarding the tracing of the funds diverted by Coastal to Advent:
In most instances . . . the examiners were not able to correlate specific deposits with specific disbursements. (AMC [Advent] commingled the advances from Coastal with the funds they received from Coastal for earned commissions and policy fees. These commingled funds were then used to make various expenditures.) Nevertheless, it is readily apparent that Coastal Insurance Company was the source of nearly all of the funds available to AMC. As a consequence, it is logical to assume that the disbursements made by AMC were made with Coastal monies.
Task Force Report, Taylor's ER at 617. A few pages later, the Task Force Report *485 states, "While we cannot directly relate the advanced funds to specific AMC expenditures, the volume and dollar amounts of the advances are such that one can say with certainty that a portion of the advanced funds diverted from Coastal were used for the following expenditures of AMC." Id., Taylor's ER at 620. The Task Force Report indicates that, in the account from which Taylor was paid, 93% of the funds deposited in 1988 came from Coastal.
The Declaration of Roger Shlonsky, an accountant retained by Taylor, was introduced in support of Taylor's first motion to reconsider. In it, Mr. Shlonsky states:
Based upon my review of the above mentioned documents, it is my opinion that it cannot be fairly concluded that the cash used to pay Taylor, within the one year period prior to Advent Management Corporation's ("AMC") filing of its chapter proceeding [sic], belonged to AMC. . . . It is possible that a portion of the Coastal deposits into AMC's general bank account may have related to the payment of a management fee to which AMC may have been entitled. . . . Due to the facts [sic] that virtually all of the monies deposited into AMC's general bank account came from Coastal and there was a significant diversion of Coastal funds to AMC, it is not reasonable to assume that all of the funds in the general bank account belonged to AMC. In order to determine whether the funds in AMC's general bank account belonged to AMC or to Coastal, one would have to (1) determine the source of each deposit; (2) determine the reasons for each deposit; (3) determine reasons for each withdrawal; and (4) obtain a copy of the Managing Agent Agreement ("Agreement") between Coastal and AMC. The Agreement is necessary to determine the amount of funds received from Coastal which represented compensation to which AMC may have been entitled. In the absence of such information, it cannot be fairly concluded that the funds in the general bank account used to pay Taylor belonged to AMC and represented AMC's property.
Declaration of Roger Shlonsky, Trustee's Excerpts of Record 6 at 403-04.
ISSUE
The trustee and Taylor stipulated to the following issue on appeal:
[W]hether, in view of the holding in Unicom, and in light of the evidence presented to the Court in the Trustee's motion for summary judgment and the later motion for reconsideration, the Court should have held that there was a genuine issue of fact as to whether the transferred funds were "property of the debtor," thereby precluding summary adjudication on this issue in favor of the Trustee.
Stipulation for Interlocutory Appeal, Taylor's ER at 892.
STANDARD OF REVIEW
This case appears on its face to be a denial of a motion under Rule 60(b). (Taylor relied in part upon Rule 60(b) in its second motion to reconsider.) Normally, "an appeal from a denial of a Rule 60(b) motion brings up only the denial of the motion for review, not the merits of the underlying judgment." Martinelli v. Valley Bank (In re Martinelli), 96 B.R. 1011, 1013 (9th Cir. BAP 1988).
However, the present case does not involve Rule 60(b), nor should this restriction upon review be applied here. Rule 60(b), made applicable here by Rule 9024 of the Federal Rules of Bankruptcy Procedure, by its terms applies only to a "final judgment, order, or proceeding". F.R.C.P. 60(b) (emphasis added). A grant of partial summary judgment is not inherently final. Service Employees Int'l Union, Local 102 v. County of San Diego, 35 F.3d 483, 485 (9th Cir.1994). Rather, the motion would appear to be more properly considered within the reach of Rule 54(b), made applicable here by Rule 7054(a) of the Federal Rules of Bankruptcy Procedure:
[Absent certain circumstances not relevant here], any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties . . . is subject to revision at any time before the entry of judgment adjudicating all the *486 claims and the rights and liabilities of all the parties.
F.R.C.P. 54(b). Therefore, the limitations on review of an appeal from denial of a Rule 60(b) motion are not relevant here.
Nor should such a limitation be imposed in the present case. Because the grant of partial summary judgment regarding "property of the debtor" is an interlocutory order, it will be merged into any final judgment and may be appealed at that time. See Balla v. Idaho State Board of Corrections, 869 F.2d 461, 468 (9th Cir.1989). A decision not to meet the merits of the partial summary judgment would merely postpone review of the issue, since Taylor was not bound to bring its appeal at this time.
Such a decision would, for this reason, also materially undermine the purpose behind permitting this interlocutory appeal. The parties stipulated that an interlocutory appeal regarding the application of Unicom would materially advance the termination of the case, and be in the interests of the parties as well as the interest of judicial economy. The bankruptcy court entered an order finding that a decision regarding Unicom's application would materially advance the termination of the case. These interests, reflected in the Panel's grant of an interlocutory appeal, are not served if the appeal does not reach the merits. The parties would be forced to litigate the issue to a final judgment and take an appeal as of right, the very thing this interlocutory appeal was granted to prevent. Accordingly, we will reach the merits of the order granting partial summary judgment.
The grant of (partial) summary judgment is reviewed de novo. United States v. Daniel (In re R & T Roofing Structures & Commercial Framing, Inc.), 887 F.2d 981, 984 (9th Cir.1989). "The appellate court must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Id.
DISCUSSION
While the parties have stipulated to a single issue on appeal, in fact this appeal consists of two distinct issues. The first is whether a party who is not the beneficiary of a constructive trust may assert the existence of a constructive trust to render property not "property of the debtor" for the purpose of section 548. If it may, the second issue is whether Taylor met its burden of presenting evidence sufficient to avoid summary judgment.
1. Property Allegedly Subject to a Constructive Trust is "Property of the Debtor" Unless and Until the Constructive Trust Beneficiary Successfully Establishes the Existence of a Constructive Trust.
A. The Nature of a Constructive Trust.
A constructive trust is an equitable remedy imposed to prevent unjust enrichment. See, e.g., Murphy v. T. Rowe Price Prime Reserve Fund, Inc., 8 F.3d 1420, 1422-23 (9th Cir.1993) (citing California case law); Taylor v. Fields, 178 Cal. App. 3d 653, 665, 224 Cal. Rptr. 186 (1986). California has codified the definition of a constructive trust in two statutes. The first provides that "[o]ne who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner." Cal.Civ.Code § 2223 (West Supp.1994). The second provides:
One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.
Cal.Civ.Code § 2224 (West Supp.1994).
B. Definition of "Transfer of an Interest of the Debtor in Property."
Section 548 provides that "[t]he trustee may avoid any transfer of an interest of the debtor in property", where that transfer is fraudulent under section 548. 11 U.S.C. § 548(a). This parallels section 547, which permits the trustee to avoid "any transfer of an interest of the debtor in property", where *487 that transfer is preferential under section 547. 11 U.S.C. § 547(b).
The term "interest of the debtor in property" is not defined. Begier v. I.R.S., 496 U.S. 53, 58, 110 S. Ct. 2258, 2263, 110 L. Ed. 2d 46 (1990).
Because the purpose of the avoidance provision is to preserve the property includable within the bankruptcy estate the property available for distribution to creditors "property of the debtor" subject to the preferential transfer provision is best understood as that property that would have been part of the estate had it not been transferred before the commencement of bankruptcy proceedings.
Id.; see also Unicom, 13 F.3d at 324. Accordingly, the courts refer to section 541 to determine what interests, if any, would have been property of the estate had the transfer not taken place. Begier, 496 U.S. at 58-59, 110 S. Ct. at 2263; Unicom, 13 F.3d at 324.
Unicom continues this analysis as follows.
The relevant statute broadly and somewhat unhelpfully defines property of a debtor's estate as including "all legal or equitable interests of the debtor in property". 11 U.S.C. § 541(a)(1). However, it does not include "any power that the debtor may exercise solely for the benefit" of another, 11 U.S.C. § 541(b)(1), nor does it include "[p]roperty in which the debtor holds . . . only legal title and not an equitable interest". 11 U.S.C. § 541(d). Thus, something held in trust by a debtor for another is neither property of the bankruptcy estate under section 541(d), nor property of the debtor for purposes of section 547(b). Begier, 496 U.S. at 58-59, 110 S. Ct. at 2263; Sierra Steel, Inc. v. S & S Steel Fabrication (In re Sierra Steel, Inc.), 96 B.R. 271, 273 (9th Cir. BAP 1989).
In the instant case, of course, we are dealing with a particular type of trust, viz., a constructive trust that allegedly arose by operation of state law. Although we have never expressly held that the same rule (viz., funds held in trust are property neither of the debtor nor of the bankruptcy estate) should apply as well to situations involving funds held by a debtor in constructive trust, the rule would seem to apply with equal force to both situations. For example, the legislative history to section 541 indicates that property held in constructive trust should not be considered property of the debtor:
Situations occasionally arise where property ostensibly belonging to the debtor will actually not be property of the debtor, but will be held in trust for another. For example, if the debtor has incurred medical bills that were covered by insurance, and the insurance company had sent the payment of the bills to the debtor before the debtor had paid the bill for which the payment was reimbursement, the payment would actually be held in a constructive trust for the person to whom the bill was owed.
H.R.Rep. No. 595, 95th Cong., 1st Sess. 368 (1977), reprinted in 1978 U.S.C.C.A.N. 5787, 6324; S.Rep. No. 989, 95th Cong., 2d Sess. 82 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5868. See also Danning v. Bozek (In re Bullion Reserve of N. Am.), 836 F.2d 1214, 1217 n. 3 (9th Cir.) (dictum), cert. denied, 486 U.S. 1056, 108 S. Ct. 2824, 100 L. Ed. 2d 925 (1988); In re Sierra Steel, Inc., 96 B.R. at 273.
Unicom, 13 F.3d at 324-25. This analysis is consistent with prior precedent. See, e.g., Krommenhoek v. A-Mark Precious Metals, Inc. (In re Bybee), 945 F.2d 309, 315 (9th Cir.1991) ("Property in which the debtor possessed only legal title cannot be recovered for the benefit of the bankruptcy estate."); Golden Mortgage Fund # 14 v. Kennedy (In re Golden Triangle Capital, Inc.), 171 B.R. 79, 81-82 (9th Cir. BAP 1994) ("It is well settled that property in the debtor's hands that belongs to another does not become property of the estate".).[3]
*488 C. Advent Would Have Had a Vested Ownership Interest in the Funds Unless and Until Coastal Obtains a Constructive Trust.
Cases such as Unicom and Golden Triangle address the situation where the beneficiary of the constructive trust defends an action to recover the property by asserting the existence of the constructive trust. Court recognition of the existence of the constructive trust removes the property from within the definition of "property of the estate." In these cases, the act of litigating the defense establishes the existence of the constructive trust.
However, "[a] constructive trust is not the same kind of interest in property as a joint tenancy or a remainder." Torres v. Eastlick (In re North American Coin & Currency, Ltd.), 767 F.2d 1573, 1575 (9th Cir. 1985), amended, 774 F.2d 1390 (9th Cir.1985), cert. denied, 475 U.S. 1083, 106 S. Ct. 1462, 89 L. Ed. 2d 719 (1986). A constructive trust is a remedy; as such, it is inchoate until its existence is established by court order. Elliott v. Frontier Properties (In re Lewis W. Shurtleff, Inc.), 778 F.2d 1416, 1419 (9th Cir.1985) ("No state court decree imposing a [constructive] trust exists in the present case; thus appellants' entitlement to such a remedy is inchoate, at best."); North American Coin, 767 F.2d at 1575; Airwork Corp v. Markair Express, Inc. (In re Markair, Inc.), 172 B.R. 638, 642 (9th Cir. BAP 1994). See also Chbat v. Tleel (In re Tleel), 876 F.2d 769, 772 n. 7 (9th Cir.1989) ("[W]here a constructive trust has only been requested by Chbat and has not even been imposed by a state court, a claim of constructive trust may not represent as firm an interest in property as a resulting trust.") (emphasis in original). As the panel stated in Markair:
Because it is a remedy, a constructive trust cannot affect rights in the res until it is imposed. A constructive trust imposed by state law pre-petition would therefore exclude the res from the debtor estate. If the remedy remains inchoate post-petition, however, it is subordinate to the trustee's strong arm power. . . . The incipient beneficiary of a constructive trust has no rights greater than any other creditor of the debtor who has not reduced his claim to judgment and perfected it.
172 B.R. at 642 (first emphasis in original; second emphasis added) (citation omitted). See also XL/Datacomp, Inc. v. Wilson (In re Omegas Group, Inc.), 16 F.3d 1443, 1451 (6th Cir.1994) (alleged beneficiary of constructive trust had no equitable interest in property, because a constructive trust does not exist until the alleged beneficiary obtains a judicial declaration impressing such a trust).
The inchoate nature of a constructive trust as reflected in these cases is based on the fact that a constructive trust can only be established by litigation, and the litigation must be successful before the property right is absolute. Numerous case holdings demonstrate that a constructive trust is dependent on the beneficiary litigating the right to a constructive trust. Because it is a remedy, the right to a constructive trust is subject to the statute of limitations on the underlying action that gives rise to the right to a constructive trust. E.g., Davies v. Krasna, 14 Cal. 3d 502, 516, 121 Cal. Rptr. 705, 535 P.2d 1161, 1170 (1975). The beneficiary is not entitled to a constructive trust if it cannot trace the trust res into its succeeding transfigurements. E.g., Heckmann v. Ahmanson, 168 Cal. App. 3d 119, 136, 214 Cal. Rptr. 177 (1985). The beneficiary's interest in the constructive trust res is cut off if the trust res is sold to a bona fide purchaser for value. E.g., Ehret v. Ichioka, 247 Cal. App. 2d 637, 643, 55 Cal. Rptr. 869 (1967). The beneficiary's interest is also terminated by the levy of a judgment creditor, even where an action is proceeding to establish the constructive trust and the judgment creditor knows that a constructive trust is alleged. CHoPP Computer Corp., Inc. v. United States, 5 F.3d 1344 (9th *489 Cir.1993), cert. denied, ___ U.S. ___, 115 S. Ct. 63, 130 L. Ed. 2d 20 (1994) (interpreting California law). Where there is no order recognizing a constructive trust prepetition, a trustee in bankruptcy may avoid a constructive trust in real property through the exercise of the strong arm powers of section 544(a)(3). Nat'l Bank of Alaska, N.A. v. Erickson (In re Seaway Express Corp.), 912 F.2d 1125, 1127-29 (9th Cir.1990); Tleel, 876 F.2d at 771-74. In bankruptcy, it does not end the matter for a court to find that state law would impose a constructive trust over certain property; the constructive trust will not be given effect if it is against the federal bankruptcy policy favoring ratable distribution to all creditors. Unicom, 13 F.3d at 325 & n. 6; Golden Triangle, 171 B.R. at 82.
Taylor's argument attempts to separate the existence of grounds supporting the imposition of a constructive trust from the litigation necessary to establish the trust. Unlike cases such as Unicom, proving Advent obtained the property under circumstances that would support imposition of a constructive trust does not litigate the issue of whether a constructive trust would be imposed, because that litigation must be done by the beneficiary. Assuming the factual grounds exist for imposing a constructive trust, Coastal's right to such a trust may be limited by any number of circumstances: Coastal may have waived its right to that remedy (see note 3 supra); Coastal may never file an action; if filed, Coastal's action may be barred by the statute of limitations; any action that is filed might be settled on terms that do not impose a constructive trust; Coastal may file an action and establish a right to a constructive trust, but nonetheless have its trust subsumed by the policy favoring ratable distribution to creditors. In other words, Taylor can at best establish that the funds, if returned, might eventually be subjected to a constructive trust. Unless and until Coastal actually litigates that action to a favorable judgment, however, its right to a constructive trust is a mere possibility. Absent the transfer to Taylor, Advent would have full ownership of the funds. Only Coastal's successful establishment of a constructive trust could deprive Advent of that ownership interest.
D. Advent's Interest in the Funds Would Have Been Property of the Estate Under Section 541.
The issue in this case therefore turns upon whether Advent's ownership interest in the funds, in the absence of the transfer to Taylor, would have been property of the estate. We conclude that it would. Section 541 provides that the estate consists of "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C. § 541(a)(1). Absent the transfer to Taylor, Advent's interest in the property is complete. Only a successful action by Coastal could nullify Advent's interest.
In Neuton v. Danning (In re Neuton), 922 F.2d 1379 (9th Cir.1990), the debtors, a husband and wife, filed bankruptcy and listed in their schedules an interest in a trust of unknown value. The trust granted a life estate in the husband's mother, with a share of the trust income to go to her living children upon her death. The debtors' interest in the trust was therefore contingent (upon the husband surviving the mother) and unvested (until the mother died). The mother died after bankruptcy was filed, and the issue was whether the trust proceeds were property of the estate. The Ninth Circuit Court of Appeals held that the contingent beneficial interest in the trust became property of the estate on the date the bankruptcy was filed. 922 F.2d at 1382-83 (collecting cases).
Had there been no transfer to Taylor, Advent's interest in the funds would have been both uncontingent and vested. Only if Coastal both asserts and demonstrates its right to a constructive trust would Advent not have had full ownership of the funds. Advent would have had, at the time the bankruptcy was filed, a greater interest in the funds than did the debtors in Neuton. Such a fully vested property interest is squarely within the broad scope of section 541.
Because Advent had an ownership interest unless and until Coastal establishes it did not, the transfer to Taylor was a transfer of an interest of the debtor in property. Advent *490 was entitled to summary judgment on this issue as a matter of law.
E. Taylor Does Not Face a Potential Double Liability Under This Analysis.
Taylor argues that this conclusion places it at risk of being forced to pay twice: first, to return the funds to Advent's bankruptcy estate as a fraudulent transfer or an avoidable preference; and second, to return the funds to Coastal as property subject to a constructive trust. We reject this argument. Taylor's only liability to Coastal is as a constructive trustee. Where the avoidance action is brought prior to any action by Coastal to impose a constructive trust, any verdict requiring Taylor to pay the funds over to the Advent bankruptcy estate will deprive Taylor of any funds subject to Coastal's alleged constructive trust. If Taylor does not have any property subject to a constructive trust, it is not liable to Coastal on that ground.
Nor is a defendant such as Taylor at risk of double liability if the beneficiary brings a successful constructive trust action prior to the bankruptcy estate's avoidance action. This is for precisely the reasons set forth in this opinion: once the beneficiary litigates to a favorable judgment the right to a constructive trust, that constructive trust property right becomes choate. The property would not have been property of the estate but for the transfer, because the debtor held the property in constructive trust for the beneficiary. Because the property would not have been property of the estate, there was no transfer of an interest of the debtor in property. Because no "interest of the debtor in property" was transferred, the bankruptcy estate cannot recover the property under either section 547 or 548.
F. The Recognition of a Constructive Trust as a Defense to Recovery of a Fraudulent Transfer is Inconsistent with Federal Bankruptcy Law and Policy.
The Ninth Circuit Court of Appeals has held that the mere fact state law would impose a constructive trust does not end the analysis of whether such a trust should be recognized in bankruptcy. "In the event that circumstances warrant the remedy of a constructive trust, however, this equitable remedy must be weighed against bankruptcy's equitable policy of ratable distribution". Golden Triangle, 171 B.R. at 82; see also Unicom, 13 F.3d at 325 & n. 6. As the Court of Appeals stated in North American Coin, 767 F.2d at 1575:
A constructive trust is not the same kind of interest in property as a joint tenancy or a remainder. It is a remedy, flexibly fashioned in equity to provide relief where a balancing of interests in the context of a particular case seems to call for it. . . . Moreover, in the case presented here it is an inchoate remedy; we are not dealing with property that a state court decree has in the past placed under a constructive trust. We necessarily act very cautiously in exercising such a relatively undefined equitable power in favor of one group of potential creditors at the expense of other creditors, for ratable distribution among all creditors is one of the strongest policies behind the bankruptcy laws. See In re Visiting Home Services, Inc., 643 F.2d 1356, 1360 (9th Cir.1981); Hassen v. Jonas, 373 F.2d 880, 881 (9th Cir.1967).
767 F.2d at 1575 (citation omitted). Once grounds to impose a constructive trust have been demonstrated, the burden of proof shifts to the trustee to establish that it would be inequitable as a matter of federal bankruptcy law to impose a constructive trust. Unicom, 13 F.3d at 325.
Taylor argues the trustee has failed to prove it is inequitable to impose a constructive trust here. There is no need for the trustee to introduce additional evidence on this issue; the facts presented by Taylor demonstrate that it violates federal bankruptcy policy to recognize a constructive trust under these circumstances. As just noted, the courts are reluctant to recognize a constructive trust to the detriment of creditors of the debtor, even where the constructive trust is sought by the trust's beneficiary. Here, the question is not whether a constructive trust should be imposed. The question is whether the possibility property may eventually be subjected to a constructive trust entitles fraudulent transferees or preferred creditors to escape the reach of avoidance actions.
*491 If a party can defend a fraudulent transfer action on the ground that someone else may be entitled to a constructive trust, neither the creditors of the debtor nor the beneficiary of the alleged trust will be benefitted. The only benefit will be to the recipient of the fraudulent transfer, who is insulated from returning the transfer to the estate without necessarily incurring any obligation to return the property to the beneficiary. The Bankruptcy Code does not require such an inequitable result. It would violate the federal bankruptcy policy favoring ratable distribution to creditors for Taylor to be able to keep an alleged fraudulent transfer because Coastal might assert title to that property.[4]
2. Taylor Has Failed to Establish That a Constructive Trust Exists.
Even had we concluded Unicom permits a party to retain a transfer otherwise avoidable under section 547 or 548 because the property was held in constructive trust for a third person, we would nonetheless affirm. Taylor failed to trace the funds as is required to establish a constructive trust.
The trustee has presented evidence to show that the funds paid to Taylor were paid from Advent's general account. The evidence introduced indicates that the vast majority of the funds in that account were obtained from Coastal. The evidence also indicates that Advent did not merely receive illegal advances from Coastal, but that some of those payments were monies to which Advent was apparently legitimately entitled under the (admittedly unwritten) management agreement. Assuming that the manner in which funds were wrongfully advanced to Advent would subject those funds to a constructive trust, the issue turns upon the burden of proof to trace funds that are alleged to be held in constructive trust.
Both the Ninth Circuit Court of Appeals and California courts have consistently held that a party seeking to establish a trust over commingled funds must trace those funds. See, e.g., Danning v. Bozek (In re Bullion Reserve of North America), 836 F.2d 1214, 1217 n. 3 & 1218 (9th Cir.), cert. denied, 486 U.S. 1056, 108 S. Ct. 2824, 100 L. Ed. 2d 925 (1988); Toys "R" Us, Inc. v. Esgro, Inc. (In re Esgro, Inc.), 645 F.2d 794, 797-98 (9th Cir.1981); Elliott v. Bumb, 356 F.2d 749, 754 (9th Cir.), cert. denied sub nom. Schutzbank v. Elliott, 385 U.S. 829, 87 S. Ct. 67, 17 L. Ed. 2d 66 (1966); Heckmann, 168 Cal. App.3d at 136, 214 Cal. Rptr. 177; Pay Less Drug Stores v. Bechdolt, 92 Cal. App. 3d 496, 501-02, 155 Cal. Rptr. 58 (1979); Ichioka, 247 Cal.App.2d at 642-43, 55 Cal. Rptr. 869. See also Cal.Civ.Code § 2224 ("One who gains a thing [under specified conditions] . . . is . . . an involuntary trustee of the thing gained") (emphasis added).
Taylor contends Unicom has lessened or eliminated the need for it to trace specific disbursements. It bases this on footnote 5 of the opinion, which states in its entirety:
On the facts of this case we hold that, to the extent Mitsui [the trust beneficiary] was required to "trace" its money wrongfully *492 withheld by Unicom, see In re Esgro, Inc., 645 F.2d at 797-98; In re Sierra Steel, Inc., 96 B.R. at 273-74, it has done so.
13 F.3d at 325 n. 5. Taylor notes that in Unicom, the check wrongfully obtained by the debtor was deposited in the debtor's general checking account. On the basis of this factual similarity, Taylor contends it has traced the funds to the extent necessary.
Unicom nowhere discusses tracing other than in the footnote. It does not say tracing is unnecessary, but that it has been done to the extent necessary. It does not reject or distinguish prior Ninth Circuit precedent, but suggests that precedent has been complied with. Unicom thus does not demonstrate any intent to lessen the normal standards required for tracing. Facts may have existed, for example, for the court to conclude that the "lowest intermediate balance" rule applied.[5] We do not find Unicom to require a lessened standard of tracing.
The trustee presented evidence to show that the transfers were made from a general account of Advent. This is sufficient to shift the burden to Taylor to demonstrate the existence of a genuine issue of material fact by tracing the funds allegedly held in constructive trust. In Bullion Reserve, the defendant in an action to recover a preferential transfer under section 547 contended that bullion he received from the debtor, BRNA, was not property of the debtor because it had been purchased with money fraudulently obtained from other participants. The Court of Appeals stated: "Here, the money BRNA used to purchase bullion came from comingled bank accounts under BRNA's control. Because this money could have been used to pay other creditors, it presumptively constitutes property of the debtor's estate." 836 F.2d at 1217. In a footnote, the court stated:
This presumption may be overcome in a variety of ways. For example, under a constructive trust theory, a program participant could claim any funds traced through BRNA's comingled accounts. See Elliott v. Bumb, 356 F.2d 749, 754 (9th Cir.), cert. denied, 385 U.S. 829, 87 S. Ct. 67, 17 L. Ed. 2d 66 (1966). But here, Bozek is unable to trace his funds to the bullion he received from BRNA.
836 F.2d at 1217 n. 3. See also R & T Roofing, 887 F.2d at 988 (preferential transfer case; the trustee's showing that the payments had been made from a commercial business account shifted the burden to the opposing party to demonstrate an issue of fact as to whether the funds could be characterized as trust assets); Golden Triangle, 171 B.R. at 84 (Ashland, J., concurring).
Taylor has failed to conduct any tracing. In fact, the evidence presented by Taylor indicates tracing is not possible. See, e.g., Task Force Report, Taylor's ER at 614 (task force unable in most cases to correlate specific deposits with specific disbursements); Declaration of Roger Shlonsky, Trustee's ER 6, at 403-04 (setting forth the information that would be required in order to determine whether the funds in the general account belonged to Advent or to Coastal). The funds are presumed to have been Advent's sole property, subject to Taylor demonstrating they were not by tracing the funds. The trustee met his burden on summary judgment, and Taylor failed to rebut it.[6] The grant of summary judgment is affirmed.
CONCLUSION
We therefore affirm the bankruptcy court. A constructive trust, as an inchoate remedy, *493 can only be established through litigation by the beneficiary. Taylor is not the beneficiary of the trust, and therefore cannot create Coastal's right to a constructive trust. Unless and until Coastal brings and succeeds with such litigation, Advent would have had full ownership interest of the funds but for the transfer to Taylor. The transfer of funds was therefore a transfer of an interest of the debtor in property under both section 547 and 548. Moreover, the policy favoring ratable distribution to creditors would override whatever right Taylor might have to attempt to establish a constructive trust on Coastal's behalf. Summary judgment was proper on the issue of whether there was a transfer of an interest of the debtor in property, because Advent was entitled to such judgment as a matter of law.
In addition, and independent of the above, Taylor failed to trace the funds it holds to funds held in constructive trust. Tracing is necessary to establish the trust. Unicom did not lessen or abrogate this requirement. On summary judgment, the trustee demonstrated that the funds were derived from an account held by Advent, thereby meeting his burden to show the funds were Advent's property. Taylor failed to create a genuine issue of material fact that the funds were held in constructive trust for Coastal. Summary judgment was proper on the issue of whether there was a transfer of an interest of the debtor in property, because there was no genuine issue of material fact.
NOTES
[1] Hereinafter, all references to "section" are to the respective section of Title 11, United States Code.
[2] Unless otherwise noted, all references to "Rule" are to the respective rule of the Federal Rules of Civil Procedure.
[3] As noted in the facts, the Commissioner on behalf of Coastal entered into a stipulation that: (1) Coastal's claims against Advent would be allowed as unsecured claims; and (2) that Coastal otherwise waived any and all other rights and claims against the bankruptcy estate. Such a compromise would mean Coastal has waived whatever right it may have had to assert a constructive trust. Because Coastal cannot assert a constructive trust against the property, the property would be property of the estate but for the transfer to Taylor. Consequently, the transfer to Taylor would be a transfer of property of the debtor under section 548. This alone would have been sufficient to require affirmance of the bankruptcy court. However, the parties have not raised this argument, nor addressed the issue of whether the stipulation has received the necessary court approval to be a binding agreement. F.R.B.P. 9019(a). Accordingly, we will treat the argument as waived.
[4] The essence of Taylor's argument is that a constructive trust should be recognized, but for the benefit of Taylor, not Coastal. We question whether it is compatible with the equitable nature of the constructive trust remedy, the purpose of which is to avoid unjust enrichment, to use it for the sole benefit of someone other than the one who was harmed.
Nor are we persuaded that the overall result is inequitable to Taylor. Taylor allegedly received a transfer that was either a fraudulent transfer under section 548, or an avoidable preference under section 547. If Taylor is forced to return these payments to the Advent bankruptcy estate, it will be left with a claim of questionable value against either the Advent bankruptcy estate, Coastal, or both. We are sympathetic to Taylor's plight. However, the burden borne by Taylor is neither greater nor lesser than that borne by other creditors of Advent and/or Coastal who never received payment in the first place. If Taylor is permitted to retain the funds, it will receive full payment at the expense of other innocent creditors. It is not inequitable that Taylor should be required to pay back the funds; it is inequitable that Taylor should be permitted to keep the funds, when other creditors will receive little or nothing. Cf. Lewis W. Shurtleff, 778 F.2d at 1419-20 ("[A]lthough the equities clearly favor the appellants [the alleged beneficiaries of a constructive trust] as against Frontier [the alleged constructive trustee], the balance of the equities between the appellants and Frontier's other creditors is far from clear.")
We do not render any opinion on the effect the policy favoring ratable distribution to creditors might have on any action brought by Coastal to enforce a constructive trust on its own behalf.
[5] This rule is described in R & T Roofing, 887 F.2d at 987. In summary, if a party mingles wrongfully obtained funds with its own funds, and disbursements are made from the commingled account, there is a presumption that the disbursements were of the party's own money, not trust funds. Id. (citing cases). If the account balance is depleted below the amount held in trust, however, the amount withdrawn is treated as lost; subsequent deposits do not become trust property; and the beneficiary has a trust only as to the amount of the lowest intermediate balance in the account. Id.
[6] Taylor contends that it need not show the funds it holds came from specific dollars wrongfully transferred from Coastal to Advent, just that (1) there were wrongful transfers from Coastal to Advent, and (2) that the funds Taylor holds were funds transferred from Coastal to Advent. There is no merit to this argument. "[T]he remedy of constructive trust is defeated if plaintiffs are unable to trace the trust property into its succeeding transfigurements." Heckmann, 168 Cal.App.3d at 136, 214 Cal. Rptr. 177 (emphasis added). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917839/ | 135 N.W.2d 107 (1965)
Inez J. ERICKSON, Administratrix of the Estate of Joel Morris Erickson, Deceased, and Inez J. Erickson, Appellees,
v.
Duane Rodger THOMPSON, Appellant.
No. 51556.
Supreme Court of Iowa.
May 4, 1965.
*108 Ross H. Sidney, of Austin, Grefe & Sidney, Des Moines, for appellant.
Larson & Larson, Story City, and Clark & Clark, Ames, for appellees.
*109 PETERSON, Justice.
This is a law action for damages by plaintiff, for herself and Joel Morris Erickson's Estate. It stems from an automobile wreck which happened at the intersection of Highway No. 69 and an east and west gravel road, about five and one-half miles north of Ames in Story County. Plaintiff sued defendant, Duane Rodger Thompson, alleging he caused Mr. Erickson's car to be pushed across the highway into the opposite southbound lane of the highway, striking a car driven by one J. C. Gates, and causing fatal injuries to Mr. Erickson. Jury rendered a verdict for defendant. Upon plaintiff's motion the trial court granted a new trial. Defendant appeals.
I. On March 6, 1963, at about 3:00 P.M., Mr. Erickson was driving a "Chevy" II Fordor sedan north on primary highway 69. He had reached the intersection where the collision occurred. Mr. Erickson was alone in his auto. Defendant, Duane Rodger Thompson, was following decedent driving a Ford station wagon some distance to the rear. Both cars were going north. Mr. Gates was on the opposite side of the highway driving south.
Mr. Morgan was proceeding north ahead of Mr. Erickson. Morgan turned off at the intersection above referred to and proceeded on the gravel road in an easterly direction. The only witnesses to what happened were Mr. and Mrs. Gates who were traveling south, and pulling some farm machinery behind the car. Defendant Thompson was driving the Ford station wagon following Mr. Erickson.
Outside of the testimony of Mr. and Mrs. Gates, the only other evidence on behalf of plaintiff was the testimony of the highway patrolman, the deputy sheriff and Morgan. The patrolman did not see the accident. He came to the scene a short while after the occurrence. He testified he examined the skid marks of Mr. Thompson's car. He said the skid marks started about 100 to 110 feet south of the intersection. They were clear and noticeable for at least the last 10 to 15 feet before the point of impact.
Mr. Gates testified he thought Mr. Erickson was driving slowly back of the Morgan car, which turned to the east immediately ahead of him. Mr. Thompson, the defendant, was the only witness on behalf of himself and he testified Mr. Erickson was stopped on the highway. He said he had driven over the crest of a hill about 600 feet to 700 feet south of the intersection.
When defendant drove over the crest he was going about 65 miles per hour. He then saw the cars in the distance, but not distinctly. He proceeded along highway 69, and when he came within 100 to 110 feet of the Erickson car he slowed up materially. He then noticed the Erickson car was stopped and that the gap between his car and the Erickson car was rapidly closing. When he was from 10 to 15 feet of the Erickson car he realized, since the car was stopped, that he might strike it. He could not drive to the left because Mr. Gates was driving south on that side of the roadway. He tried to drive to the right into the ditch, but there was apparently some snow or ice on the paving because his wheels would not turn. He then hit the Erickson car. It was pushed across the road into the Gates car and both cars went into the ditch on the west side of the paving. Mr. Thompson's car went into the ditch on the east side of the paving. He was somewhat dazed and was sitting in his car when the highway patrol officer came to the scene a short time afterwards. The officer sent him to the hospital. However, he was not seriously injured.
The matter of negligence of defendant was clearly a matter for the jury and the trial court so instructed, clearly and definitely.
The important question in this case is whether the trial court abused its discretion in granting a new trial. The court has broad and wide discretion in this field. Abuse must clearly appear before this court *110 is justified in interfering and reversing such order by a trial court. Jordan v. Schantz, 220 Iowa 1251, 264 N.W. 259; Gregory v. Suhr, 221 Iowa 1283, 268 N.W. 14; Williams v. Kearney, 224 Iowa 1006, 278 N.W. 180; Mitchell v. Brennan, 213 Iowa 1375, 241 N.W. 408; Eby v. Sanford, 223 Iowa 805, 273 N.W. 918.
It may be inferred from defendant's own testimony he had an unobstructed view of decedent's car from an elevated distance. Two disinterested witnesses fix the distance at 600 feet, and another at 600 to 700 feet. He admits he was traveling 65 miles an hour. He says he was unable to tell when he first saw the Chevy II whether it was moving or stopped, yet he proceeded without attempting to effectively reduce his speed until it was too late to avoid striking decedent's car, sending it into the opposite lane of this busy highway. This is persuasive evidence of defendant's negligence.
It appears not to be of vital importance whether decedent's car was stopped or moving slowly when defendant struck it from the rear. Defendant in effect admits he was alerted to the fact it may have been stopped when he was such a distance from it that the collision could have been avoided had he exercised reasonable care. From then on he had no right to assume it was moving.
Only defendant testified decedent was stopped. Morgan, a college graduate-school teacher, said he was sure decedent did not come to a stop. Gates, the southbound driver, testified decedent was still moving and he did not see him stop. Mrs. Gates testified that the last she saw immediately before the impact decedent's car was over on the east half of the highway, still moving. All three witnesses were disinterested.
It does not clearly appear it was an abuse of discretion for the trial court to feel the verdict was contrary to the evidence, or was not sustained by sufficient evidence, a ground for new trial by statute or rule for over 105 years. See rule 244(f), Rules of Civil Procedure, 58 I.C.A., and statutes superseded thereby. We have no difficulty finding in the instructions to the jury adequate basis for the grant of a new trial in the interest of justice.
II. The action was in two counts or divisions; the first by the widow as administratrix of decedent's estate for the pecuniary loss thereto. The second was by the widow individually for her own loss of consortium between the times of his injury and death (just three months during which decedent, with two fractures in his skull, never regained consciousness). It is apparent, in view of the short period between injury and death, the widow could not have sustained a large amount of damages under the second count. Also, decedent and his wife were 59 and 56, respectively, at the time of injury and had been married only 2½ years.
The court included in a single instruction (No. 6) what plaintiff (there were really two plaintiffs) in each count must prove in order to recover on both causes of action. In this vital instruction, probablyas is usually truethe most important of all, the jury was told: "In order for plaintiff-administratrix and plaintiff herself in her own right to recover against defendant, she must prove by a preponderance of the evidence each and all of the following propositions."
Propositions 1, 2 and 3 are, respectively, that defendant was negligent in one or more of the four respects charged; such negligence was the proximate cause of the injuries and damages sustained; decedent was not guilty of contributory negligence. The fourth proposition is: "4. That decedent's estate suffered damages as a result of the negligence of defendant, and the amount thereof, and that plaintiff herself suffered damages as a result of the negligence of defendant" (emphasis added).
Instruction 6 goes on to require a finding plaintiff-administratrix must prove each and all of the foregoing propositions by a preponderance *111 of evidence in order to recover and a like finding in order for plaintiff in her own right to recover. The instruction then states, "However, if you find that she has failed to prove * * * one or more of the foregoing propositions, then she cannot recover against defendant."
The quoted parts of this instruction erroneously require proof that both the estate and the widow herself suffered damages in order for either to recover. Of course the estate should not have been compelled to prove, in order to recover on Count I, damages claimed by the widow in Count II. Nor, of less importance, should the widow have been compelled to prove, in order to recover on her Count II, damages claimed by the estate in Count I. Each count stated a separate cause of action and should have been so treated in the instructions. It is usually unwise to attempt to state in a single instruction what must be proved in order to recover on more than one cause of action.
The least that may fairly be said of instruction 6 is that it may have been very confusing to the jury. Whether viewed as erroneous, as we believe it was, or merely confusing, it may account for the verdict.
III. Instruction 8 deals with the familiar requirement of section 321.285, Code 1962, I.C.A., "no person shall drive any vehicle * * * at a speed greater than will permit him to bring it to a stop within the assured clear distance ahead."
Instruction 8 states: "The second charge of negligence made by plaintiff-administratrix against defendant is that he failed to drive his automobile at a careful and prudent speed and at a speed greater than that which would permit him to bring it to a stop within the assured clear distance ahead."
Thus the jury was told plaintiff charged defendant failed to drive at a speed greater than would permit him to stop within the assured clear distance. In fact plaintiff charged defendant did drive at a speed greater than would permit him to stop within such distance. It is obvious instruction 8 should have stated the charge as made or the word "not" or "no" should have been inserted before "greater" in the quoted portion of the instruction. But this is only a small part of the fault to be found with the instruction.
Instruction 8 goes on to quote the statutory prohibition against driving at a speed greater than will permit stopping within the assured clear distance. It continues, "a violation of this requirement constitutes negligence unless such failure to observe the law is caused by the failure of another to observe the law or by a sudden emergency not of the driver's own making." The instruction then defines "assured clear disstance ahead" in the familiar language approved by us many times.
The instruction concludes by saying defendant would be negligent if he drove at a speed greater than would permit stopping within the assured clear distance "unless such failure was caused in whole or in part by some violation of the law by decedent. The burden is upon plaintiff to prove by a preponderance of evidence defendant failed in his duty as above set out."
The inclusion of the proviso or exception commencing with "unless such failure," in each of the last two paragraphs, and the last sentence, was error under this record. No issue was raised that this crash was caused by the failure of a third party to observe the law. If defendant had made such allegation the burden would have been upon him to prove it, not upon plaintiff to disprove it. McMaster v. Hutchins, supra, 255 Iowa 39, 47-48, 120 N.W.2d 509, 513-4, and citations. Although plaintiff was of course required to prove defendant's negligence was the proximate cause and decedent's freedom from contributory negligence, she was not required to go further and prove the failure of a third party to observe the law was not a cause of the collision. Ibid.
*112 As to an emergency not of the driver's own making, this is one of the four legal excuses for violation of a statutory requirement recognized in Kisling v. Thierman, 214 Iowa 911, 916, 243 N.W. 552, and the many precedents that have followed it. This record indicates defendant made no claim in the trial court of any legal excuse. If defendant claimed a legal excuse the burden would have been upon him to prove it, not upon plaintiff to disprove it. Pinckney v. Watkinson, 254 Iowa 144, 151, 116 N.W.2d 258, 262, and citations; McMaster v. Hutchins, infra, and citations; Overturf v. Bertrand, 256 Iowa ___, 128 N.W.2d 182, 187. The effect of instruction 8, including as it does the italicized sentence, supra, was to require plaintiff to disprove a legal excuse which was not claimed.
Further, to be available as a legal excuse an emergency must not be of the driver's own making in whole or in part. No jury could properly find there was an emergency here not, "at least in considerable part," of defendant's own making. Wachter v. McCuen, 250 Iowa 820, 827, 96 N.W.2d 597, 601; Winter v. Moore, 255 Iowa 1, 4-8, 121 N.W.2d 82, 83-86; Mass v. Mesic, 256 Iowa ___. 127 N.W.2d 99, 101; Overturf v. Bertrand, supra, 256 Iowa ___, 128 N.W.2d 182, 187-188. The order appealed from correctly points out there was no sufficient evidence of an emergency not of defendant's own making. The reference in instruction 8 to such an emergency was therefore error.
With regard to the exception or proviso in the last paragraph of the instruction, supra, to "some violation of the law by decedent," assuming this was not objectionable, although the matter was really one of freedom from contributory negligence, the jury should have been told somewhere what provisions of law decedent was required to observe and not left to guess what they were. Nowhere was the jury so instructed.
IV. One of the charges of negligence in both counts of the petition was defendant's failure to have his vehicle under control and reduce the speed to a reasonable and proper rate in approaching an intersection of public highways, in violation of Code section 321.288, I.C.A. There was clearly ample evidence to warrant submission of this charge. It was error not to submit it. The fact there was another, later charge of negligence in the petition merely lack of control, which was submitted, does not render the error nonprejudicial. The jury should have been told of the statutory requirement, including the duty to reduce speed to a reasonable and proper rate in approaching the intersection.
V. The first charge of negligence which was submitted was defendant's alleged following decedent's vehicle more closely than was reasonable and proper, in violation of section 321.307. The order appealed from recites, correctly as we believe, it was error to submit this charge because of insufficient evidence to support it. Also that submission of the charge tended to confuse the jury as to the real controversy.
Submission of a charge of defendant's negligence where there is insufficient supporting evidence is usually deemed prejudicial to defendant, not to plaintiff. Nevertheless it is conceivable that submitting this first charge did tend to confuse the jury and divert its attention from the vital issues properly in the case.
VI. The fact plaintiff did not object to the instructions because of the matters above pointed out does not prevent our consideration of them in determining whether it has been shown the order for new trial was a clear abuse of discretion. Schneider v. Keokuk Gas Service Co., 250 Iowa 37, 43, 92 N.W.2d 439, 443; Coleman v. Brower Constr. Co., 254 Iowa 724, 732, 119 N.W.2d 256, 260-261; McMaster v. Hutchins, supra, 255 Iowa 39, 48, 120 N.W. *113 2d 509, 514; Coulthard v. Keenan, 256 Iowa ___, 129 N.W.2d 597, 601.
Nor is it necessary reversible error was committed upon the trial. If such were the rule the trial court's power to correct a failure of justice would be meaningless. Hall v. West Des Moines, supra, 245 Iowa 458, 463, 62 N.W.2d 734, 737; Nicholson v. City of Des Moines, 246 Iowa 318, 330, 67 N.W.2d 533, 540; Coulthard v. Keenan, supra, 256 Iowa ___, 129 N.W.2d 597, 602, and citations. See also Larew v. Iowa State Highway Comm., 254 Iowa 1089, 1094, 120 N.W.2d 462, 464.
Four of the five decisions cited in defendant's reply brief affirm such an order as we have here. In the fifth, Mazur v. Grantham, 255 Iowa 1292, 1302, 125 N.W.2d 807, 813, we concluded the order for new trial was primarily based on claimed errors of law we could not sustain, rather than a miscarriage of justice.
Another precedent, cited in defendant's opening brief, Jacobsen v. Gamber, 249 Iowa 99, 86 N.W.2d 147, "more nearly resembles the cases in which the order for a new trial is based on an erroneous determination of a law question. Such cases present primarily the law question involved rather than the exercise of discretion. In re Estate of Murray, 238 Iowa 112, 114, 26 N.W.2d 58, 60, and citation." Coleman v. Brower Construction Co., supra, 254 Iowa 724, 733, 119 N.W.2d 256, 261. It may fairly be asserted able counsel for defendant cites no authority which supports a reversal. Their briefs closely resemble those of appellant in several recent cases which, without a dissenting vote, affirm such an order as this.
Affirmed.
GARFIELD, C. J., and LARSON, SNELL and MOORE, JJ., concur.
THOMPSON, THORNTON and STUART, JJ., concur specially.
HAYS, J., not sitting.
THORNTON, Justice (concurring specially).
In this case the plaintiff-appellant did invoke the broad inherent power of the court to grant a new trial in the interest of substantial justice. It should be pointed out such power referred to in rule 344(f) 3, Rules of Civil Procedure, is not the same as the power to grant a new trial under rule 244, Rules of Civil Procedure.
In her motion for a new trial plaintiff points particularly to Instruction No. 8. It is erroneous substantially as pointed out in the majority opinion. That alone is sufficient to sustain the grant of a new trial. Instruction No. 6 is also in error and the specification of negligence on following too closely should not have been submitted as there was insufficient evidence to sustain a finding thereon.
I disagree with that part of Division I that reads as follows, "It does not clearly appear it was an abuse of discretion for the trial court to feel the verdict was contrary to the evidence, or was not sustained by sufficient evidence, a ground for new trial by statute or rule for over 105 years. See Rule 244(f), * * *." What rule 244(f), Rules of Civil Procedure, states is, "That the verdict, report or decision is not sustained by sufficient evidence, or is contrary to law;".
We should remember we are considering a defendant's verdict. The burden of proof is on plaintiff. In this case, she must prove an alleged act of negligence was a proximate cause of the damage and injury. From the evidence produced by plaintiff, that of Mr. and Mrs. Gates in the south-bound car in the west lane, the jury could find the Morgan car that turned right off of Highway 69 into the gravel road did not give a signal for the right turn. Record, page 57, lines 25-26; Record, page 52, lines 4-11; Record, page 61, lines 8-16; and Record, page 63, line 34, to page 64, line 1. *114 This caused plaintiff's decedent to brake his car suddenly to avoid the Morgan car. Record, page 52, lines 32-33; Record, page 58, line 1; and Record, page 59, lines 18-19 and 25-27.
The jury could also find the Morgan car had not completed the turn and was not off the pavement at the time of collision. Record, page 54, lines 1-2; page 60, lines 33-34; and page 61, line 1.
From this the jury could properly find the proximate cause of the accident was the failure of the Morgan car to signal for the right turn, thus causing decedent to brake his car suddenly and pull to the left, that such was the cause of the accident, not defendant striking decedent's car from the rear.
It should be remembered the distance from the top of the hill south of the intersection was 600 feet from the intersection, the length of two normal city blocks, and the speed limit on the highway 70 miles per hour.
THOMPSON and STUART, JJ., join in this special concurrence. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917841/ | 178 B.R. 373 (1995)
In re Ralph RIEDER, Debtor.
In re FELLOW, READ & ASSOCIATES, INC., Plaintiff,
v.
Ralph RIEDER, Defendant.
Bankruptcy No. 91 B 15260 (SMB). Adv. No. 92-8745A.
United States Bankruptcy Court, S.D. New York.
February 28, 1995.
*374 Hecker, Brown, Sherry & Johnson, (Richard Ford Wells, of counsel), Camden, NJ, for plaintiff.
*375 Siegel, Sommers & Schwartz (Ronald R. Sussman, Eric Haber, of counsel), New York City, for defendant.
MEMORANDUM DECISION DISMISSING COMPLAINT SEEKING DETERMINATION OF DISCHARGEABILITY OF DEBT
STUART M. BERNSTEIN, Bankruptcy Judge.
Fellows, Read & Associates, Inc. (the "Plaintiff") seeks a determination that three debt obligations of Ralph Rieder (the "Debtor"), embodied in three guarantees delivered to the Plaintiff in 1989, are not dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A). On December 15, 1994, the Court conducted a trial, and three witnesses testified. As more fully set forth below, the Plaintiff failed at trial to demonstrate that it relied upon the Debtor's guarantees, or that it suffered any damages as a proximate result of the delivery of the guarantees.[1] Consequently, the complaint is dismissed.[2]
FACTS
At all relevant times, the Plaintiff provided civil engineering services to persons and entities involved in the business of, inter alia, land development. The Debtor was a shareholder and officer of Riedhal, Inc., a real estate developer doing business in New Jersey. In 1987, two years prior to the events in question, the Plaintiff and Riedhal entered into three agreements (see Plaintiff's Exhibit 5) under which the Plaintiff agreed to prepare preliminary and final plans and applications for approval of three separate projects Edinburg Estates, American Boss and Livingston Parkway which Riedhal was seeking to develop. Each contract established a payment schedule and entitled the Plaintiff to stop rendering services on that project if it was not paid. By the summer of 1989, Riedhal had fallen behind in paying its debt to the Plaintiff, and owed the Plaintiff the aggregate sum of $184,439.12 on the three projects.
On or about September 13, 1989, the Plaintiff's president, Joseph R. Read, met with Riedhal's Vice President and Chief Financial Officer, George Karasick, to work out a payment schedule for the outstanding debt. The Plaintiff refused to proceed with any further work absent a payout agreement. Read and Karasick eventually agreed that the debt would be paid over a three month period in essentially three equal parts pursuant to terms set forth in three separate promissory notes. Riedhal was to sign each of the notes along with R.K. & Drucker U.S.A, Inc. ("Drucker"), a prospective merger partner of Riedhal. In addition, Read insisted that the notes be "personally endorsed by the appropriate [corporate] officials." (Plaintiff's Exhibit 6.)
By October 11, 1989, Read had still not received the notes. He wrote to the Debtor on that day[3] and advised him that if he did not receive the properly executed notes by October 13, 1989, the Plaintiff would withdraw the payout proposal, demand payment of the entire outstanding balance and refuse to attend or testify at the Washington Township Planning Board hearing scheduled for October 18, 1989. (Plaintiff's Exhibit 7.) Washington Township had jurisdiction over the American Boss Project, but apparently had no jurisdiction over the other two projects. (See Plaintiff's Exhibit 6 at 1.)
The letter produced the intended result. Shortly thereafter, the Plaintiff received the three notes, dated September 13, 1989, in the sums of $63,618.98, $63,060.67 and $63,613.28, due November 30, 1989, December 31, 1989 and January 31, 1990, respectively. All three notes were made by Riedhal and Drucker, *376 and personally guaranteed by the Debtor. (See Plaintiff's Exhibits 1-3.)
After receiving the guaranteed promissory notes, the Plaintiff attended the single planning board meeting, and also rendered some services on the other two projects. The Plaintiff stopped doing any work once Riedhal and Drucker defaulted, and after the Debtor filed his case, the Plaintiff sought a determination that the guaranteed debt was not dischargeable.
DISCUSSION
A. Introduction
The parties do not dispute that the Plaintiff holds a contract claim against the Debtor based upon the guarantees. That contract claim, however, is dischargeable. Instead, the Plaintiff contends that the delivery of the guarantees also constituted an implied representation that the Debtor had the financial wherewithal to pay the guarantees if called upon to do so, that this implied representation was false, and the Debtor knew or should have known that he would be financially unable to pay the guarantees. The Plaintiff claims that it relied upon this representation, primarily by preparing for and attending the planning board meeting. Finally, the Plaintiff alleges that it suffered damages in the full amount of the aggregate guarantees as a result of its reliance upon the Debtor's fraudulent misrepresentation.
Section 523(a)(2)(A) excepts from discharge any debt for money, property or services "to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's . . . financial condition." A party proceeding under this subsection must establish five elements: (1) a representation, (2) falsity, (3) scienter, (4) reasonable or justifiable reliance and (5) damage. Kovitz v. Tesmetges (In re Tesmetges), 74 B.R. 911, 914 (Bankr.E.D.N.Y.1987), aff'd, 86 B.R. 21 (E.D.N.Y.), aff'd without op., 862 F.2d 304 (2d Cir.1988). The proponent must prove each element by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 290, 111 S. Ct. 654, 661, 112 L. Ed. 2d 755 (1991); New York v. Sokol (In re Sokol), 170 B.R. 556, 560 (Bankr.S.D.N.Y.1994). Exceptions to discharge must be literally and strictly construed against the creditor and liberally in favor of the debtor. Community Mutual Savings Bank v. Landrin (In re Landrin), 173 B.R. 307, 310 (Bankr.S.D.N.Y.1994); First Am. Bank v. Bodenstein (In re Bodenstein), 168 B.R. 23, 27 (Bankr.E.D.N.Y.1994); Schwalbe v. Gans (In re Gans), 75 B.R. 474, 481 (Bankr.S.D.N.Y.1987).
B. Representation
The parties strongly dispute the nature of the representation that a guarantor makes when he executes and delivers a guarantee. As a rule, one who undertakes to perform an obligation, such as to pay a debt, impliedly represents that he intends to perform. Restatement (Second) of Torts § 530, Comment c (1977); see Manufacturers Hanover Trust Co. v. Pannell (In re Pannell), 27 B.R. 298, 302 (Bankr.E.D.N.Y.1983) (quoting Channel Master Corp. v. Aluminium Ltd. Sales, Inc., 4 N.Y.2d 403, 407, 176 N.Y.S.2d 259, 151 N.E.2d 833 (1958)). The Plaintiff contends that the Debtor impliedly misrepresented his financial ability to perform his obligation, and this constitutes fraud.[4]See In re Gans, 75 B.R. at 486.
The Debtor counters with an argument he fails to support. He contends that a guarantor does not represent his ability to perform. Instead, the guarantor simply represents that he will subject whatever assets he has to the payment of the guarantee, but does not represent that he has those assets.
*377 The Court sees no basis to distinguish guarantees from other contractual promises. Accordingly, one who undertakes to guarantee a debt impliedly represents that he intends to perform his obligation if called upon to do so. The guarantee is a promise, and assuming the existence of the other elements of the fraud claim, one who knowingly delivers a guarantee he cannot pay commits actionable fraud. Hence, the Plaintiff proved the first element of its fraud claim.
C. Falsity and Scienter
The implied representation of financial ability was false, and the Debtor knew it. The elements of falsity and scienter overlap in this case. Proof of the Debtor's knowledge of his inability to perform demonstrates both the falsity of his implied representation as well as his knowledge of that falsity. In this regard, few admit to fraudulent intent, and the Court must divine fraudulent intent from the totality of the circumstances. In re Gans, 75 B.R. at 486. See Cordeiro v. McDermott (In re McDermott), 139 B.R. 50, 52 (Bankr.D.R.I.1992).
The evidence compels a finding that the Debtor knew when he signed the guarantees that he would not be able to honor them. The Debtor admitted in his supplemental answers to the Plaintiff's interrogatories that he lacked the financial ability to pay the guarantees when he delivered them and when they became due. Although he testified that he anticipated cash flow from other sources or projects to pay the approximate $184,000.00 obligation over the three month payout, his assumptions were speculative, and never panned out. Further, Riedhal was already several months behind in paying the Plaintiff, and there was no objective basis to believe that the situation would change during the next three months.
Finally, the Debtor claimed in his post-trial memorandum, at page 7, that the Plaintiff could not have reasonably relied on any representation by the Debtor because the Plaintiff was "certainly aware that a real estate developer such as Defendant could be at substantial risk during the period when the real estate market was in a depressed condition."[5] If the Plaintiff should have anticipated this "substantial risk," a fortiori, the Debtor, a real estate developer, should have foreseen it. Accordingly, the Plaintiff proved the second and third elements of its claim.
D. Reasonable Reliance
The Plaintiff failed, however, to prove that it actually or reasonably relied on the Debtor's representation of his financial ability to perform. Mr. Read's testimony indicates that the Plaintiff was concerned that Riedhal might be stripped of assets, and that the Plaintiff would only hold a claim against a corporate shell:
Q: Why was the personal guarantee of Ralph Rieder included on the notes?
A: Because I asked for it and demanded it as part of the agreement.
Q: Why was that important to you?
A: Because I'm never sure with development corporations whether they will merge, spin off or consolidate with some other corporation and leave no assets in the corporation.
So whenever possible we would take as a Promissory Note a personal guarantee from the principal and the corporation to forestall any problems later on.
(Tr. at 31-32.)[6]
Mr. Read subsequently testified:
Q: What did the personal guarantee of Ralph Rieder mean to you as President of Fellows, Read & Associates?
. . . .
A: The significance of Mr. Rieder's signature was that it was a personal guarantee of the obligation that if the corporation or corporations on the notes didn't pay *378 them I had the ability to look to Mr. Rieder personally to pay them.
(Tr. at 37-38) (emphasis added.)
The Court finds from this testimony that the Plaintiff was not relying upon Rieder's financial ability to pay the notes in the event of a default. Instead, the Plaintiff feared a stripping of Riedhal's assets, and accepted the guarantees with the expectation that he could sue the Debtor if they were not paid. The distinction, though subtle, is important. The maker of a false representation is not liable for fraud to one who does not rely on its truth, but rather, upon the expectation that the maker will be liable for damages. Restatement (Second) of Torts § 548 and Comment a (1977). Read demanded a personal guarantee to give the Plaintiff the "ability to look" to the Debtor for payment, and not because he necessarily believed that the Debtor had the ability to pay the debt. As a consequence, the Plaintiff failed to prove that it actually relied upon the Debtor's implied representation of financial ability.
Further, the Plaintiff failed to prove that it was reasonable to rely upon an implied representation of financial ability. At the outset, the parties dispute whether "reasonable" reliance as opposed to any reliance is an element of a claim under § 523(a)(2)(A). The law in this district and circuit, however, requires that the reliance must be reasonable. See, e.g., Bethpage Fed. Credit Union v. Mickel (In re Mickel), 164 B.R. 456, 461 (Bankr.E.D.N.Y.1994); Hawkins Bros., Inc. v. Hesston Credit Corp. (In re Hawkins), 1992 WL 381040 at *9 (Bankr. D.Vt. Dec. 11, 1992); Allstate Life Ins. Co. v. Guerrerio (In re Guerrerio), 143 B.R. 605, 611 (Bankr.S.D.N.Y.1992); Citibank, N.A. v. Wiener (In re Wiener), 144 B.R. 17, 21 (Bankr.E.D.N.Y.1992); Farina v. Balzano (In re Balzano), 127 B.R. 524, 530 (Bankr. E.D.N.Y.1991); In re Tesmetges, 74 B.R. at 914; In re Esposito, 44 B.R. 817, 824 (Bankr. S.D.N.Y.1984).[7] This requirement also comports with the common law of fraud. Katara v. D.E. Jones Commodities, Inc., 835 F.2d 966, 970-71 (2d Cir.1987); Restatement (Second) of Torts § 537(b) (1977); William L. Prosser, Law of Torts § 108, at 715 (4th ed. 1971). See Hirsch v. Enright Refining Co., 751 F.2d 628, 632-33 (3d Cir.1984) (noting that the New Jersey law was "not entirely clear", but that the general rule in the United States requires "that reliance must be justified.")
"Reasonableness" depends on the circumstances, and often "imposes a duty on the plaintiff to make at least a reasonable inquiry as to the validity of the alleged representations made by the defendant-debtor." In re Tesmetges, 74 B.R. at 916; accord In re Wiener, 144 B.R. at 21. The Court does not suggest that a creditor must inquire beyond the debtor's express representations of financial ability (or intention) to perform when nothing has been brought to the creditor's attention indicating that those representations are false. On the other hand, where no express representations are made, and the creditor does not have any basis to assume the truth of the implied representations, reliance without inquiry is not reasonable.
Such is the case here. The Plaintiff demanded the Debtor's guarantees without speaking to him. By that time, Riedhal was already several months in default. (Tr. at 53.) The Debtor did not discuss the guarantees with Read, or make any other representations regarding his financial ability to pay them. Further, the Plaintiff did not discuss the Debtor's financial ability, or that of the corporate makers, with anyone else. Apparently content to rely on the Debtor's reputation as a "large" real estate developer (Tr. at *379 36-37), Mr. Read demanded guarantees, proscribed their format and accepted them without inquiry or question.
Mr. Read, a sophisticated supplier of engineering services to land developers, got exactly what he demanded. He neither received nor had any information to form a reasonable basis to believe that the Debtor would be able to pay $184,000.00 over the succeeding three months when Riedhal had failed to pay this same debt over the several preceding months. He could have asked, he should have asked, but he didn't ask, about the Debtor's financial wherewithal, and it was unreasonable for him under the circumstances to rely upon the mere delivery of the guarantees as a representation by the Debtor that he had the financial ability to honor them.
E. Damages
The Plaintiff also failed to prove that it suffered any damages in reliance on the guarantees, much less damages equal to the entire amount of the guaranteed obligation. The Plaintiff does not claim that the underlying contractual debt for past services, which the Debtor guaranteed as part of a workout after the services were rendered, is not dischargeable. In addition, the Plaintiff did not prove the value of the additional services that it rendered after receiving the guarantees. Mr. Read testified that after he received the notes and before the default, the Plaintiff prepared for and attended a planning board meeting in connection with one of the projects, and continued working on the other two projects. (Tr. at 42-43.) He failed to quantify these services, except to state that attendance at the planning board involved a "very small percentage" of the Plaintiff's overall efforts. (Tr. at 56.)[8]
Instead, the Plaintiff relies upon a quantum meruit theory, arguing that Riedhal (and the Debtor) got the benefit of all of these services after the guarantee, and the debt covering these services is, therefore, not dischargeable. Mr. Read testified at trial that the engineer's attendance at the planning board meeting, and the planning board's approval, represent the culmination of all of the engineer's work. (Tr. at 30.) Further, state licensing laws prevent any other engineer from signing the Plaintiff's plans or presenting them to the planning board. (Tr. at 49.) Hence, Riedhal and the Debtor received the full value of these accumulated services when the Plaintiff testified before the planning board on October 18, 1989, and this post-guarantee benefit satisfies the proximate cause requirement.
The Plaintiff's damage theory suffers from numerous factual and legal shortcomings. First, Riedhal and the Debtor did not receive the benefit of all of the prior work on the three projects merely because the Plaintiff attended one planning board meeting relating to one project. The Plaintiff's scope of services, under each original agreement with Riedhal, included attendance at six planning board meetings. (Plaintiff's Exhibit 5 at 3.) This totals eighteen such meetings for the three projects. While the Plaintiff's participation at this one planning board meeting was important, attendance at all of the meetings, culminating in planning board approval, was critical.[9]
Second, the guaranteed debt arose in connection with three different projects, but the October, 1989 meeting only concerned the American Boss project. The unpaid engineering services corresponding to that project totalled $62,203.84. (Plaintiff's Exhibit 6 at 1.) The balance of the debt approximately $122,000.00 related to other projects, and even under the Plaintiff's quantum meruit theory, the Plaintiff's participation in the Washington Township Planning Board meeting did not confer any benefit on Riedhal or the Debtor in connection with the Plaintiff's engineering services on the other projects.
*380 Third, the Plaintiff's theory contravenes the unambiguous language in § 523(a)(2)(A) and the inherent sequential order of the elements of fraud. This subsection excepts from discharge (1) a debt (2) for services (3) obtained by fraud. Thus, the misrepresentation must come first, the reliance second and the damage last.
The Plaintiff's damage theory ignores the sequence of events. The Plaintiff rendered its engineering services the debt encompassed by the guarantees before the Debtor made any implied misrepresentation. Hence, the misrepresentation could not have induced the services which underlie the guaranteed debt. The Plaintiff's only post-guarantee services consisted of preparing for and attending the October, 1989 planning board meeting, and doing some work on the two other projects. These services, however, were not covered by the guarantees, and further, the Plaintiff never proved their value.
In re McDermott, 139 B.R. 50, on which the Plaintiff relies, is not contrary. In that case, the debtor fraudulently incurred a debt in August 1989, but did not execute the corresponding promissory note until January 1991. The Court viewed the 1989 events and held that the obligation that arose at that time was not dischargeable. See id. at 53. The Court did not consider the 1991 promissory note to be a representation, and did not find that the creditor relied on it. The 1991 note was merely evidence of the earlier obligation which was the focus of the Court's decision.
In contrast, the Plaintiff in this case ignores the earlier contract debt and focuses on the 1989 guarantees. In this respect, the Plaintiff's claim is like one who challenges the dischargeability of a debt under a settlement agreement. Absent novation or release, courts look beyond the settlement to the underlying debt to determine its dischargeability. See In re West, 22 F.3d 775, 778 (7th Cir.1994); Greenberg v. Schools, 21 B.R. 1011, 1014 (S.D.Fla.1982), aff'd on op. below, 711 F.2d 152 (11th Cir.1983). A settlement does not convert a tort claim into a contract claim, In re Guerrerio, 143 B.R. at 611, and conversely, the payout agreement in this case did not convert the accrued contract claim into a tort claim.
CONCLUSION
For the foregoing reasons, the Plaintiff has failed to sustain its burden of proof under 11 U.S.C. § 523(a)(2)(A), and the complaint will be dismissed. The foregoing shall constitute the Court's findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure, made applicable by Rule 7052 of the Federal Rules of Bankruptcy Procedure.
SETTLE JUDGMENT ON NOTICE.
NOTES
[1] In its post-trial reply brief, the Plaintiff attached certain documents not offered at trial, and made arguments based on these documents. This was improper, and the Court has not considered this evidence or the related arguments.
[2] The Plaintiff also sought a money judgment against the Debtor. This is a no asset estate, however, and the Court declines to enter a money judgment on the contract claim arising from the breach of the guarantee. The Plaintiff is nevertheless free to file proof of such a claim with the clerk.
[3] Prior to the October 11 letter, Read dealt with Karasick regarding the payout. He did not explain at trial why he wrote to the debtor instead of Karasick.
[4] The Plaintiff did not try this case on the theory that the Debtor misrepresented his intention to perform, although the intention to perform and the ability to perform are closely related. Nevertheless, the Plaintiff's theory of the case comes dangerously close to being self-defeating. Dischargeability proceedings grounded on false representations of financial condition must proceed under § 523(a)(2)(B), and require a writing. See Schwalbe v. Gans (In re Gans), 75 B.R. 474, 484-85 (Bankr.S.D.N.Y.1987); Seepes v. Schwartz (In re Schwartz), 45 B.R. 354, 356-57 (Bankr. S.D.N.Y.1985); In re Kiernan, 17 B.R. 362, 365 (Bankr.S.D.N.Y.1982). This may be why such cases proceed on a "misrepresentation of intention" rather than a "misrepresentation of financial ability" theory. In light of the Court's ultimate disposition, it need not resolve the issue.
[5] This is an extraordinary statement by the Debtor. At the time he executed the guarantees, he already had $90 million in personal guarantees outstanding. Any dip in the already depressed market would send him hurtling toward irreversible insolvency.
[6] "Tr." refers to the transcript of the December 5, 1994 trial.
[7] The Southern District case law that the plaintiff cites does not support the contrary proposition. In Hong Kong Deposit & Guaranty Co. v. Shaheen (In re Shaheen), 111 B.R. 48 (S.D.N.Y.1990), the district court affirmed a bankruptcy court judgment declaring a debt non-dischargeable under § 523(a)(2)(A). Although the district court did not refer to "reasonableness" when summarizing the five elements of fraud, id. at 51, the district court discussed the "reasonableness" requirement as an element of the claim, and concluded that the bankruptcy court's finding that the creditor's reliance was reasonable was not clearly erroneous. Id. at 53. In Smith v. Meyers (In re Schwartz & Meyers), 130 B.R. 416 (Bankr. S.D.N.Y.1991), Bankruptcy Judge Brozman reviewed the split in authority but found it unnecessary to resolve the issue, concluding instead that the creditor had failed to demonstrate actual reliance. Id. at 426.
[8] The Plaintiff maintained hourly time records, and could have produced this information at trial. (Tr. at 57.)
[9] A planning board generally grants conditional approval initially, and the developer must satisfy the conditions before he obtains final approval. This can take several months, and during that period, the developer must continue to work with his engineer. (Tr. at 205-06). The record does not reflect whether the planning board in this case ever granted final approval. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917848/ | 178 B.R. 400 (1995)
In re The GLOBE STORE ACQUISITION CO., INC., Debtor.
PENNSYLVANIA POWER & LIGHT COMPANY, Movant,
v.
The GLOBE STORE ACQUISITION CO., INC., Respondent.
BROADWAY THEATER OF NORTH-EASTERN PENNSYLVANIA INC., Plaintiff,
v.
The GLOBE STORE ACQUISITION CO., INC., Defendant.
Bankruptcy No. 5-94-00148. Adv. No. 5-94-00063A.
United States Bankruptcy Court, M.D. Pennsylvania, Wilkes-Barre Division.
January 13, 1995.
*401 Nicholas J. Lepore, Philadelphia, PA, for debtor.
Augustus Martin, Allentown, PA, for PP & L, movant.
Robert Cecchini, Dunmore, PA, for Broadway Theater, plaintiff.
OPINION AND ORDER
JOHN J. THOMAS, Bankruptcy Judge.
Before the Court are actions against The Globe Store Acquisition Co., Inc., (hereinafter "Debtor"), by the Pennsylvania Power & Light Company, (hereinafter PP & L), and by the Broadway Theater of Northeastern Pennsylvania, Inc., (hereinafter "Theater"), seeking to impose a trust upon the Debtor so that funds in possession of the Debtor would be considered "trust funds" properly belonging to PP & L and the Theater.
There are factual differences in the relationship of PP & L and the Debtor when compared to the relationship of the Theater and the Debtor. Nevertheless, the resolution of the issues between the parties rests on a similar analysis of the impact of the law of trusts on this case.
Procedurally, PP & L filed a Motion for Relief from Automatic Stay in order to pursue the Debtor for funds in its possession.
Historically, on November 10, 1980, an agreement was entered into between the predecessor of the Debtor, The Globe Store, and PP & L, wherein the Globe Store would act as agent for PP & L. In its capacity as agent, the Globe Store was to receive payments for PP & L service bills from PP & L customers who chose to pay their utility bills in such fashion. The agreement went on to say, "It is understood that you will keep an accurate record of payments received and properly receipt customer's bills. Daily, you will transmit to our Allentown offices your collections, bill stubs and other pertinent information in accordance with mutually agreed upon remittance procedures." For this service, the Globe Store received a commission for each collection made.
The Globe Store, as well as its unrelated successor, the Debtor herein, operated a large department store in downtown Scranton, Pennsylvania. The department store apparently provided a convenience to shoppers so that they could pay their utility bills while they were downtown presumably doing shopping in the store.
Although the Globe Store was a predecessor to the Debtor, there was no express assumptions of any liabilities by the Debtor regarding the Globe Store's contracts that are relevant here, specifically the PP & L agreement. Nevertheless, the relationship between the parties continued on similar terms.
On a continuing basis, the Debtor received payment of PP & L invoices by checks made payable to "Pennsylvania Power & Light" as well as cash. The Debtor forwarded all PP & L checks directly to PP & L for endorsement and deposit. The cash received by the Debtor was deposited in its general operating account and then paid over to PP & L by Debtor's check. This was apparently the same procedure utilized by the predecessor Globe Store in its dealings with PP & L.
The Debtor, of course, argues that the commingled fund is property of the Debtor and disbursement of that property is governed by applicable provisions of the Bankruptcy Code. PP & L argues that the moneys received by the Debtor were trust funds and therefore belonged to the beneficiaries of the trust, i.e. PP & L.
The relationship between the Theater and the Debtor was slightly different. The Theater was an independent nonprofit institution that offered four theater productions to the public over the course of a given "season". These tickets could be purchased either at the Theater or at the Debtor herein. They could be purchased with cash, all major credit cards, or a Globe credit card (the Debtor's credit card). Within twenty-four (24) hours of the purchase of the tickets, the customer *402 would be mailed the tickets and, if the Globe credit card was used, the charge for the ticket would appear on the Globe department store statement to the customer. The Globe charge account required a minimal payment on a monthly basis with the balance accruing interest at the finance charge specified in the customer's contract with the Debtor. The account statement would reflect all purchases made by the customer over the previous month whether those purchases were normal department store purchases or the aforesaid theater tickets.
The Debtor agreed with the Theater to pay for total ticket sales arranged through the Globe credit card by making four payments annually with each payment made to the Theater shortly before the Theater required those funds for payment to the individuals appearing on stage. The Debtor did not charge the Theater any fees for this service but apparently retained the use of the customer's money together with whatever interest was paid until Theater payments were required. Detailed records of ticket sales were maintained by the Debtor although all funds received on account were deposited in the general operating account of the Debtor.
The Theater now seeks payment of One Hundred Thirty-Seven Thousand Five Hundred Twenty and 50/100 Dollars ($137,520.50) arguing that the Debtor held this fund "in trust" for the Theater since the Debtor retained only the legal title to the property and not the equitable interest under 11 U.S.C. § 541(d).
DISCUSSION
We start from the well-settled principle that debtors do "not own an equitable interest in property . . . [they] hold [] in trust for another," and that therefore funds held in trust are not "property of the estate." Begier [v. Internal Revenue Service], 496 U.S. [53] at 59, 110 S.Ct. [2258] at 2263 [110 L. Ed. 2d 46 (1990)]; see also 11 U.S.C. § 541(d); Universal Bonding Ins. Co. v. Gittens & Sprinkle Enters., 960 F.2d 366, 371 (3rd Cir.1992). In general, "to establish rights as a trust recipient, a claimant must make two showings: (1) demonstrate that the trust relationship and its legal source exist, and (2) identify and trace the trust funds if they are commingled." Goldberg v. New Jersey Lawyers' Fund, 932 F.2d 273, 280 (3rd Cir. 1991); In re Columbia Gas Sys. Inc., 997 F.2d 1039, 1063 (3rd Cir.1993) ("beneficiaries of trust funds bear the burden of identifying and tracing their trust property"), cert. denied, ___ U.S. ___, 114 S. Ct. 1050, 127 L. Ed. 2d 372 (1994). Goldberg teaches that we look to state law to determine whether the claimant has shown a trust relationship, but that we look to federal law to determine whether the claimant has traced and identified the trust funds. Goldberg, 932 F.2d at 280; see also Universal Bonding, 960 F.2d at 369; In re Markos Gurnee Partnership, 163 B.R. 124, 129 & n. 4 (Bankr.N.D.Ill.1993); In re Visiting Nurse Ass'n v. Bowen, 143 B.R. 633, 641 (W.D.Pa.1992) ("Once a bankruptcy court makes a determination concerning whether a debtor has any legal or equitable interest in property based upon applicable state law, whether the property will come into the estate is federal question") (internal quotations and citations omitted), aff'd, 986 F.2d 1410 (3rd Cir.1993) (table). City of Farrell v. Sharon Steel Corporation, 41 F.3d 92, 95-96 (3rd Cir.1994).
Under Pennsylvania Law, "every person who receives money to be paid to another or to be applied to a particular purpose is a trustee, if so applied, as well as when not so applied". In re Vosburgh's Estate, 279 Pa. 329, 332, 123 A. 813, 815 (1924).
" . . . [A] trust relationship exists when the parties manifest an intention to create a trust . . . absent a document definitively establishing a trust relationship, we look to the language of the parties, their conduct, and other circumstances surrounding the transaction probative of their intent." In re Columbia Gas Systems, Inc., 997 F.2d 1039, 1059 (3rd Cir.1993).
The Debtor's relationship with PP & L was a continuation of a relationship that PP & L had with the Debtor's predecessor, the Globe Store. This Court finds that the agreement initiated in the relationship between PP & L and the Globe Store, the *403 predecessor company, continued to govern the relationship of PP & L to the Debtor, at least by implication.
PP & L customers would make checks payable to PP & L and would deliver them to the Debtor for transmittal to PP & L. The physical possession of the checks was delivered to the Debtor obviously with the intention to turn those checks over to PP & L. Those checks were in fact turned over to PP & L. The parties do not dispute this. At issue between the parties is whether the cash turned over by PP & L customers to the Debtor should also have been turned over to PP & L since, PP & L argues, only the legal interest to that fund was turned over to the Debtor and not the beneficial interest.
The Debtor, on a daily basis would make a check payable for all of its PP & L cash receipts to PP & L. Cash receipts from PP & L customers were commingled by the Debtor in its operating account. Commingling, while indicative of a Debtor/Creditor relationship, (In re Columbia Gas Systems, Inc., Id.) is not necessarily determinative. Begier v. Internal Revenue Service, 496 U.S. 53, 110 S. Ct. 2258, 110 L. Ed. 2d 46 (1990).
A resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest therein, unless the inference is rebutted or the beneficial interest is otherwise effectively disposed of. Restatement of the Law of Trusts 2d § 404.
PP & L customers turned over cash to the Debtor with what this Court finds was the intention that this money be turned over to PP & L in payment of utility bills. The Debtor, on a daily basis, paid PP & L these bills without interest.[1]
This Court is satisfied that the relationship between PP & L and the Debtor was that of beneficiary and trustee respectively and, therefore, we will proceed to the second of the two "showings" required of the claimant to succeed with its request. That showing requires that the trust funds be "identified and traced" if they are commingled.
The record establishes that the PP & L cash receipts were deposited in the general operating account of the Debtor. There is no dispute as to the amount of money involved which has been agreed to be Fifteen Thousand Eight Hundred Seventy-Eight and 93/100 Dollars ($15,878.93). The Third Circuit has adopted what is known as the "lowest intermediate balance test". In re Columbia Gas Systems, Inc., supra at 1063. "The lowest intermediate balance rule, a legal construct, allows trust beneficiaries to assume the trust funds are withdrawn last from a commingled account. Once trust money is removed, however, it is not replenished by subsequent deposits. Therefore, the lowest intermediate balance in a commingled account represents trust funds that have never been dissipated and which are reasonably identifiable." In re Columbia Gas Systems, Inc., supra at 1063.
A review of the record indicates that the balance in the operating account of the Debtor fluctuated from approximately One Hundred Ninety Thousand Seven Hundred Nine and 98/100 Dollars ($190,709.98) to a balance of One Hundred Thirty-Three and 40/100 Dollars ($133.40) when an Eight Hundred Eight and 96/100 Dollars ($808.96) check was returned presumably for insufficient funds from the period of the last receipt of PP & L utility bills to the date of bankruptcy. This leads us to the conclusion that only nominal funds remained in the account to award to PP & L. Accordingly, PP & L's Motion for Relief from the Automatic Stay is granted so as to allow PP & L to pursue the Debtor to recover the sum of One Hundred Thirty-Three and 40/100 Dollars ($133.40).
The evidence concerning the Theater receipts represents a more amorphous relationship between the Debtor and the Theater.
The "settlor" of the alleged trust did not turn anything over to the Debtor except a *404 promise to pay on his/her credit card in order to receive tickets for theater productions. Those ticket buyers received within 24 hours by mail or otherwise their tickets and were then obligated to pay for them on a monthly installment basis if they charged their bill on the Debtor's charge at the Debtor's standard interest charge. The ticket holder would have followed the same procedure had they utilized their own Mastercard, Visa or other acceptable credit card. In each case, the ticket holder was bound by the agreement it had with the card company.
The Debtor had an arrangement with the Theater that a proportion of total charges would be paid to the Theater on or before certain dates. These payments to the Theater were made without regard to the ticket holder's payments on the charge cards. The ticket holder's charge account would not only reflect the purchase of the tickets but any other charges made on the Debtor's charge card at that store.
Interest was paid by the ticket holder to the Debtor for extended payments. The Debtor paid no interest to the Theater nor was it obligated to pay interest to the Theater.
Although the Debtor understood that it was obliged to pay the Theater for the tickets that it financed, this obligation appears to be no different than the duties the Debtor would have to pay its other suppliers of merchandise.
The Theater argues that the Debtor's receipt of funds from the ticket holder created "a constructive trust".
"A constructive trust has been defined to be a relationship with respect to property subjecting the person by whom the title to the property is held to an equitable duty to convey it to another on the ground that his acquisition of the retention of the property is wrongful and that he would be unjustly enriched if he were permitted to retain the property . . . a constructive trust is imposed not to effectuate intention but to redress wrong or unjust enrichment. A constructive trust is remedial in character." City of Philadelphia v. Heinel Motors, 142 Pa.Super. 493, 16 A.2d 761, 765-66 (1940) citing Restatement of the Law of Trusts, Vol. 1, p. 5, Chap. 1, section 1(e).
While we are mindful that an entity which receives something for no consideration, and not as a gift, is unjustly enriched, we are compelled to observe that if that were the only standard, then every creditor in every bankruptcy estate could claim to be the beneficiary of a constructive trust and therefore not subject to the distribution schedules outlined by the Bankruptcy Code.
"In general, Courts favor a prorated distribution of funds when such funds are claimed by creditors of like status". In re Goldberg, 932 F.2d 273, 279 (3rd Cir.1991).
"Cases granting one party distribution priority over the other depend upon definite proof that specific funds in an account have been traced". Id. at 280.
While the Theater argues that it has established "a constructive trust", even if this Court were so to find, it would still be required to find that the funds have been "identified and traced". While the PP & L customer made deposits specifically earmarked for PP & L bills which found their way into the general operating account of the Debtor that was specifically ascertainable, the Theater ticket holder made charge card payments, some portion of which were attributable to the purchase of tickets. Neither the ticket holder or the Debtor attempted to allocate the monthly payment received between the ticket purchase and the general department store purchases.
The evidence at trial indicated that of all purchases on the Globe Store department card, on the average five percent (5%) would remain unpaid. Although specific records were kept of which charge card holders charged ticket purchases, the records could not indicate, with specificity, which ticket holders fully paid for ticket purchases and which ones did not since charges were commingled.
Although we are sympathetic to the plight of the Theater, a nonprofit institution providing a community service to the people of the Scranton area, we cannot allow that consideration to influence the decision in this case. We therefore conclude that the funds paid by *405 the many ticket purchasers pursuant to the Debtor's charge account agreement were funds received as property of the Debtor's estate and not in trust for the benefit of the Theater. Attached is our Order.
ORDER
The Motion for Relief from Automatic Stay filed by the Pennsylvania Power & Light Company is granted to allow PP & L to pursue the Debtor to collect the sum of One Hundred Thirty-Three and 40/100 Dollars ($133.40).
Moreover, judgment is entered in favor of Debtor and against the Broadway Theater of Northeastern Pennsylvania, Inc. on the complaint of the Theater.
NOTES
[1] "Interest payments indicate a Debtor-Creditor relationship because they are usually contractually negotiated quid pro quo for a loan". In re Columbia Gas Systems, Inc., 997 F.2d 1039, 1061 (3rd Cir.1993). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917851/ | 376 Mich. 106 (1965)
135 N.W.2d 417
In re YOUNG ESTATE.
YOUNG
v.
WEHMEIER.
Calendar No. 68, Docket No. 50,706.
Supreme Court of Michigan.
Decided June 7, 1965.
*108 Victor H. Wehmeier, for guardian.
Carl Z. Millen, for beneficiary.
O'HARA, J.
The issue presented upon this appeal is whether the order of the circuit court of Wayne county vacating an order of the probate court of that county should be affirmed or reversed.
What should be clearly understood is that the issue is not whether the probate court of Wayne county had the authority to enter the order which it did. This point is conceded by the able circuit judge in his opinion. We quote:
"So far as the jurisdiction of probate court * * * it is this judge's view that it may order that which clearly benefits the estate presently. * * * It is my further view that the change must be clearly shown to be of present, immediate benefit, * * * one of necessity to the management of the estate."
The facts: Robert Lee Young was adjudged mentally incompetent on August 1, 1956. Theretofore in 1953, one Nellie King and Robert Lee Young claimed to have entered into a common-law marriage. A slight impediment to such an arrangement existed at the time both were married to other people. Later in 1953, Mr. Young was divorced by his wife. In 1955, Mrs. King was divorced by her husband. Nothing in the interim indicates that either party repudiated the claimed common-law marriage. In fact, it was reasserted. In March, 1954, Robert Young, while fully competent, took out 2 insurance policies of $500 and $3,000, respectively, and named Nellie (King) Young the beneficiary, reserving the right of change thereof. One Betty Crooks, not *109 specifically identified in this record, was appointed successor guardian for Robert Young on August 1, 1956. Mayhaps, for all we know she is Betty Jane Young, Robert's divorced wife. On July 28, 1958, Mr. Young was committed to Ypsilanti State hospital where he remains as a public charge. On September 29, 1959, Betty Crooks resigned as guardian, and on December 9th of that year she was replaced by the present plaintiff, Attorney Wehmeier.
Meanwhile, on November 21, 1956, Nellie E. Young filed a bill of complaint in Wayne circuit court seeking to affirm (before the effective date of Act No 44 of the Public Acts of 1956[1] requiring, in addition to consent after January 1, 1957, a license and solemnization) her common-law marriage. Her claimed common-law husband by then having been adjudged incompetent, his guardian, the present plaintiff, appealed the decree of affirmance to us. We vacated the decree of affirmance on the ground that neither party to the alleged common-law marriage was shown to have denied or doubted the marriage relationship, and that jurisdictional facts to entertain the bill were not alleged in the circuit court. We added:
"The question is not presented to us, nor do we intend to infer one way or the other, whether there was a common-law marriage existing between Nellie E. Young and Robert L. Young in 1956." Young v. Wehmeier, 369 Mich. 110, at p 113.
Summarizing these facts then we have a situation wherein a married couple the Youngs become estranged, but not divorced. The husband conceives an affection for another woman estranged from her husband. They proclaim a common-law marriage, despite the aforementioned impediment thereto. The impediment is subsequently removed by 2 divorces. *110 The husband, the incompetent here, while still in possession of his faculties, takes out 2 insurance policies, the death benefit of which is payable to the object of his affection his alleged common-law wife. He is adjudged incompetent and ends up a public charge in a State maintained mental institution. His guardian seeks to change his designated beneficiary on insurance policies issued after his estrangement from his subsequently divorced wife. His guardian asserts to the probate court that such change is to the benefit of the guardianship estate. The probate judge authorizes the change. The beneficiary, by him named while he was competent, employs counsel and asserts her right to remain his beneficiary. Denied relief in the probate court, she appeals. The circuit judge, on review, asks the eminently logical question "What benefit to this guardianship estate will result from this change?" The guardian asserts on the petition previously filed in probate court (1) that he (the guardian) has been unable to accumulate a reserve for unusual expenses; (2) that in the event of his ward's death, there would be no funds for his suitable burial; (3) that his, the ward's alleged common-law wife has shown no interest in him and no longer "visits him in the hospital." Therefore, it is to the best interest of the ward that his estate be made the beneficiary of the policies instead of the one selected by the ward while competent.
The circuit court says, in legal effect, and we paraphrase his position: I see no present benefit that would accrue to ward's estate from this proposed change. You guardian have presently the authority to cash in the policy or borrow upon it if there is a present need for it. No benefit from this change would accrue to the ward until after he departs this world. This is the only effect of a change of beneficiary.
*111 What the circuit judge did not say, and what is an obvious inference from the record, the real reason for the proposed change is to cut off the alleged common-law wife from any benefit she might receive upon the ward's death. The guardian heretofore, by appeal to this Court, defeated affirmation of the common-law marriage. He now seeks to divert the death benefits from the claimed common-law wife as beneficiary to the ward's estate.
We do not propose in this proceeding to untangle whatever equities may exist as between a divorced wife and an alleged common-law wife. Judge Bowles clearly perceived the issue. He allowed the guardian, over objection, to make a record, by his own testimony, to supplement the grounds he alleged in the probate petition and to try to establish a present ascertainable benefit to the incompetent ward's estate. That record established nothing more than was alleged in the petition except possibly that $1,925 of the ward's estate was expended on the appeal from the circuit court decree affirming the common-law marriage between the ward and the designated beneficiary. This Court is the arbiter of legal controversy. Its functions do not extend to adjusting expected post-mortem benefits between a divorced wife and an alleged common-law wife under the circumstances here shown.
We are in accord with the finding of the circuit judge:
"On the facts [of which he was the sole judge, including the permissible inferences therefrom] we do not find an immediate or compelling need for such change."
The language of the Wisconsin supreme court[2] well expresses our position:
*112 "While a guardian probably may surrender a benefit certificate or insurance policy and consent to a reduction in the amount thereof for the purpose of paying a policy loan to stop the running of interest charges, and while a guardian may undoubtedly surrender a policy of his ward upon payment to him of the cash surrender value thereof for the purpose of providing necessary funds for the support and maintenance of his ward or for what, at the time, may seem to be in the interest of his ward (Maclay v. Equitable Life Assurance Society, 152 U.S. 499 [14 S. Ct. 678, 38 L ed 528]), no case is cited to our attention, and we have found none, which supports the contention that a guardian of an incompetent may designate a beneficiary in a policy issued to his ward while the latter was competent. No case has been found in which such a contention has ever been made. In our opinion a guardian has no more authority to designate a beneficiary in a policy of insurance upon the life of a ward than he would have to change the will of his ward by executing a codicil thereto or by executing a wholly new will."
The order of the circuit court vacating the probate court order is affirmed. Costs to the appellee.
DETHMERS, KELLY and BLACK, JJ., concurred with O'HARA, J.
SOURIS, J. (concurring).
I concur in affirming the order of the circuit court simply on the ground that the circuit judge was correct in concluding that the guardian had failed to establish any present need for changing the beneficiary of the incompetent's insurance policies.
I do not subscribe my Brother O'HARA'S opinion because I do not consider it necessary to decision in this case, nor do I consider it otherwise desirable, to adopt summarily the holding of the Wisconsin supreme court in Kay v. Erickson, 209 Wis 147 (244 *113 NW 625, 84 A.L.R. 361). Perhaps someday we will have to decide whether in this State an incompetent's guardian under some circumstances can change the beneficiary named in an insurance policy issued on the life of the incompetent, but I am not at this time prepared to say that I would agree with the decision in Kay v. Erickson. In any event, we need not make that decision now.
T.M. KAVANAGH, C.J., and SMITH and ADAMS, JJ., concurred with SOURIS, J.
NOTES
[1] CLS 1961, § 551.2 (Stat Ann 1957 Rev § 25.2). REPORTER.
[2] Kay v. Erickson, 209 Wis 147, at p 152 (244 N.W. 625, at p 626, 84 A.L.R. 361). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917856/ | 135 N.W.2d 618 (1965)
Adolph T. BERGER et al., Appellants,
v.
AMANA SOCIETY et al., Appellees-Cross-Appellants.
No. 51623.
Supreme Court of Iowa.
June 8, 1965.
*619 Swift & Swift, Marengo, Edward J. Von Hoene, Williamsburg, and Messer & Cahill, Iowa City, for appellants Adolph T. Berger et al.
David G. Bleakley, Harold D. Vietor, and Shuttleworth & Ingersoll, Cedar Rapids, for appellees-cross-appellants Amana Society et al.
D. C. Nolan, Iowa City, for intervenors-appellees and cross-appellants.
GARFIELD, Chief Justice.
Plaintiffs, minority Class A stockholders in defendant Amana Society, and their attorneys applied to the district court for an allowance of attorney fees and reimbursement for the attorneys' expenses in prosecuting a stockholders' derivative action against the corporation, its officers and directors. Following trial in equity an allowance was made from which applicants have appealed and defendants and intervenors, who joined with defendants, have cross-appealed.
These appeals are the fourth taken to this court in the action referred to. The first appeal was from an adjudication of law points under rule 105, Rules of Civil Procedure, 58 I.C.A. Berger v. Amana Society, 250 Iowa 1060, 95 N.W.2d 909, 70 A.L.R. 2d 830. The second was from the district court's decision following trial on the merits. Id., 253 Iowa 378, 111 N.W.2d 753. The third was from the judgment and decree implementing the two prior opinions, supra. 254 Iowa 1036, 120 N.W.2d 465.
Before 1932 Amana Society existed as a nonprofit corporation under Iowa laws. In that year it was organized as a corporation for profit. The corporate charter was renewed in 1952 with somewhat, but not greatly, different provisions regarding capital stock. Two thousand shares of Class A stock were authorized, each of a par value of $50. This renewed charter provided that when a holder of Class A stock desired to sell or, if he died or removed from the corporate property, the stock must be offered to the corporation which "shall purchase and pay for the same at the true value thereof within 30 days from the date the stock is so tendered." No one could hold more than one share of Class A stock and it could be issued only to members of the former Society or their heirs.
The stockholders adopted an amendment to the 1952 charter on December 12, 1955, which radically changed the stock structure by authorizing issuance of 300,000 shares of Class B common stock of a par value of 50 cents each. The Class A stock was changed to 100,000 shares also of the par value of 50 cents each. Each share of Class A stock outstanding on December 12, 1955, was changed into 100 shares.
The 1955 amendment also radically changed the manner the corporation must pay for shares of Class A stock when tendered or upon death or removal of the holders. Instead of payment by the corporation at true value of the stock, the holder must accept an equal number of shares of Class B stock at a par value of 50 cents a share. Holders of Class B stock were given equal rights with Class A shareholders in rights to vote, receive dividends and distribution of assets.
We held upon the first appeal, supra, the corporation could not issue additional stock *620 which impaired the contract rights of non-assenting stockholders to have their shares redeemed at their true value. Upon the second appeal, after trial on the merits, we held the directors of the corporation did not fully and fairly disclose to the stockholders the effect of the 1955 amendment and it should be held inoperative at least until adopted by the stockholders after being fully and fairly informed thereon.
Following the trial on the merits the district court held fees for plaintiffs' attorneys could be allowed only for services on the first appeal, reserving for future hearing proof as to their value. Plaintiffs urged it was error not to allow fees for the entire case; defendants asserted error in the allowance of any fees. Because it is important upon the present appeal we quote the following portion of our opinion on the second appeal dealing with the question of attorney fees (pages 387-388 of 253 Iowa, page 758 of 111 N.W.2d):
"This action is clearly a stockholders' derivative action brought for the purpose of preserving two heretofore fundamental attributes of corporate structure, or in fact, one attributethe keeping of the corporation a close one, by confining all corporate control in hands of members of the instant religious belief, by making Class A stockholders the speaking representatives of the faithful. While it is true, the contractual right to cash redemption amounts to a benefit for the recipients thereof, of more or at least of equal importance is that, by this means, control remains in the hands of the members of the religious group. That this has been a matter of prime importance to the Society from the start thereof down to at least 1952 cannot seriously be denied. It still appears to be a prime corporate attribute, at least in the eyes of some stockholders.
"The legal questions involved in the allowance of attorney fees in actions of this kind, are fully and clearly set forth in State ex rel. Weede v. Bechtel, 244 Iowa 785, 56 N.W.2d 173, and authorities therein set forth; See also, Bosch v. Meeker Co-op. L. & P. Ass'n, 257 Minn. 362, 101 N.W.2d 423.
"The trial Court recognized plaintiffs' right to attorney fees for services in the interlocutory appeal even though it nullified the results thereof. Those, this court is now restoring and, in addition, has granted further relief by nullifying the amendment in toto and thereby reserving the corporate control in hands of the Class A stockholders. The amount of fees allowable depends upon the substantial benefit gained by the corporation or its stockholders and the time and skill of the attorneys. This is a matter for the trial court to take testimony upon and determine" (emphasis added).
Of course our prior opinions, supra, are the law of the case upon this appeal. Berger v. Amana Society, 254 Iowa 1036, 1038, 1040, 120 N.W.2d 465, 466, 467.
After hearing testimony for five days in support of the application for fees and the resistance to it, the trial court found no substantial or economic benefit was gained by the corporation or its stockholders by this litigation and that nothing could be allowed the attorneys upon the theory of such benefits. However, the court concluded the part of our second opinion quoted above established that the attorneys were entitled to some fees and the amount thereof depended on their time and skill.
The court allowed $15 per hour for the time of Mr. (now district judge) Hamilton, Mr. Cahill, who succeeded Judge Hamilton in the same firm, and Mr. Von Hoene. Only $12 per hour for Mr. Swift was allowed because he was hard of hearing and in semi-retirement during much of the eight to nine year period since he was consulted on behalf of plaintiffs. The court also allowed the combined attorneys an additional $1500 for the three days trial of the merits in the district court and a *621 like additional sum for the three appeals to this court.
The trial court also allowed an additional $200 a day each ($2200 in all) to Mr. Von Hoene and Mr. Cahill for the 5½ days devoted to trial of this application. Total allowed for fees was $59,341. Claimed expenses of $1351 were also allowed the attorneys.
Upon this appeal applicants contend it was error to find the corporation or its stockholders were not benefited by this litigation. They also think the trial court permitted defendants and intervenors to relitigate matters decided adversely to them upon prior appeals to us.
Defendants' and intervenors' cross-appeals challenge the allowance to Mr. Swift as unreasonably large. They also assert no added allowance should have been made for the trial on the merits or the prior appeals to us. Also that nothing should have been allowed for time spent on this claim for fees. They would reduce the allowance for fees by at least $14,728, to not more than $44,613.
Our review is de novo. Rule 334, Rules of Civil Procedure. We give weight to the fact findings of the trial court but are not bound by them. See rule 344(f) 7, R.C.P.
I. We cannot agree no substantial benefit was conferred on the stockholders as a class by this litigation.
As the first of our prior opinions points out, 652 shares of Class A stock were outstanding when this suit was commenced. Under the 1955 amendment, held invalid, 100 shares of new Class A stock would be issued to each holder of one share, 65,200 shares in all. As against this, 300,000 shares of Class B stock were authorized. "It is evident that the Class A shareholders, who have heretofore had the sole voting rights, may now be outvoted by a large majority, nearly five to one. It is also evident that, since the Class B stock will share equally in dividends and distributive rights, the value of the Class A stock has been very materially reduced" (page 1065 of 250 Iowa, page 912 of 95 N.W.2d).
Our opinion upon the second appeal expressly holds that nullifying the 1955 amendment reserved to the Class A shareholders control of the corporation (page 388 of 253 Iowa, page 758 of 111 N.W.2d). Our third opinion confirms this holding (page 1041 of 254 Iowa, page 468 of 120 N.W.2d).
Under the 1955 amendment the corporation could issue to outsiders for as little as 50 cents per share all the 300,000 shares of Class B stock except 65,200 shares which would go to the Class A shareholders. Thus 234,800 B shares could be sold to new shareholders for a total price payable to the corporation of only $117,400. So in a sense approximately 78 per cent of the assets of the corporation could be sold to outsiders for only $117,400.
There is much basis for finding the true value of the 652 Class A shares was as much as $10,000 per share at the time this action was commenced. (It would be $100 per share after the proposed 100 to one split.) There is evidence such value was as much as $15,000. If the former figure is accepted, nullification of the 1955 amendment prevented at least the possibility that corporate assets of a true value of about $5,000,000 would be held by outsiders and the corporation would receive as little as $117,400 from the transaction.
It is true the power the amendment would confer on the corporation to do what is just stated might not have been exercised. Issuance of Class B stock and the price to be paid for it must be determined by two-thirds vote of the Class A and B stock. Also each A and B stockholder was to have a pre-emptive right, for a reasonable time fixed by the directors, to purchase his pro rata share of any B stock to be sold. But the officers and directors who were instrumental *622 in formulating the 1955 amendment and seeking its adoption seem to have been quite determined in their defense of it. If there were no thought of exercising the power therein conferred, no good reason is apparent why the corporate charter should be thus amended. Invalidation of the amendment prevented what appears to have been a substantial chance the Class A stock would be greatly reduced in value by exercise of the power therein conferred to issue B stock.
It cannot be denied that the right of each Class A stockholder to have his stock redeemed at its true value within 30 days from the date of its tender to the corporation is a valuable right belonging to every stockholder. The amendment would have taken this right from all Class A shareholders and substitute for it the right to receive Class B stock of the par value of 50 cents per share. Preservation of the original right of redemption by this litigation is certainly a substantial benefit to every stockholder. And there is reason to conclude that an adjudication which requires a corporation to honor an important long-standing contractual obligation to its shareholders is a benefit to the corporation itself as well as to the shareholders.
It clearly appears and the trial court recognized that before this litigation the corporation's directors were redeeming stock tendered to it at its book value which was much less than its true value. It was a benefit to the shareholders as a class to have this fact brought out by this litigation and have it adjudicated that the corporation's obligation under its charter was to redeem the stock at true value. For the meaning of such terms as actual, true, fair or real value of corporate stock under statutes requiring its purchase at such value see Robbins v. Beatty, 246 Iowa 80, 91-92, 67 N.W.2d 12, 18-19, and citations; Woodward v. Quigley, 256 Iowa ___, 133 N.W.2d 38, 40.
Our second opinion in this case (253 Iowa 378, 387, 111 N.W.2d 753, 758) holds, "This action is clearly a stockholders derivative action * * *." Plaintiffs were successful in the three prior appeals in obtaining the relief sought. The holding this is clearly a stockholders' derivative action and the fact it was successful imply a substantial benefit to the corporation or the shareholders as a class therefrom. "An action brought by a stockholder is derivative if the gravamen of the complaint is injury to the corporation or to the whole body of its stock or property and not injury to the plaintiff's individual interest as a stockholder." 19 Am.Jur.2d, Corporations, section 526. See also Id., section 532.
Indeed defendants admit in argument "It would appear this court in (its second opinion) * * * believes that the contractual right of Class A stockholders to have their stock redeemed for cash was a substantial benefit * * *."
The burden of defendants' argument, which the trial court accepted, is that exercise of the shareholders' right to have their stock redeemed at its true value results in a drain on the corporation's funds which are needed in its business and a gradual liquidation of the corporation and that nullification of the amendment, designed to abrogate such right of redemption, was a detriment to the corporation and its shareholders rather than a benefit.
It may be conceded performance of this obligation under its charter takes money of the corporation. It takes money to pay most financial obligations. But we cannot agree it was a detriment to the corporation and its stockholders to have it adjudicated that the method proposed here to avoid performance of the obligation to redeem was illegal and its adoption was procured by inequitable conduct of its directors. If the obligation of the charter to redeem stock at true value is to be changed it must be accomplished by a legal method, legally adopted.
Any drain on the corporate treasury from the redemption of stock at true value would *623 be obviated by sale of an equal amount of stock at such value. There is no reason to conclude this litigation has prevented such sale of stock.
Some A shareholders expressed the opinion at the hearing on attorney fees that the litigation was a detriment, not a benefit, to the corporation and its shareholders. This is understandable. Contrary testimony would be to their financial disadvantage in that a finding of benefit to either the corporation or its shareholders would increase the allowance of fees.
II. Under the part of our opinion on the second appeal heretofore quoted, the amount of attorney fees allowable depends upon the substantial benefit to the corporation or its stockholders and the time and skill of the attorneys. We have tried to point out the stockholders as a class were substantially benefited in several important respects. Also that the corporation itself was benefited in at least some of these respects, particularly prevention of the chance that equitable ownership of as much as 78 per cent of the corporation could go to outsiders for as little as $117,400, a small fraction of its value. Of course control of the corporation could go to outsiders through the issuance of B stock to them regardless of the price the corporation received for it. Some of these benefits, including that just mentioned, are pecuniary in nature even though no fund was created thereby and it may be difficult to compute their actual value in money.
It is to be noted, however, nothing in our second opinion requires the benefits therein referred to, gained by the corporation or its shareholders, to be pecuniary. On the contrary, the opinion cites with obvious approval Bosch v. Meeker Coop. L. & P. Ass'n, supra, 257 Minn. 362, 101 N.W.2d 423, a leading precedent for the proposition that substantial benefits to the corporation or its stockholders from a derivative action may be nonpecuniary.
The Bosch opinion holds (at page 427 of 101 N.W.2d), "* * * a substantial benefit must be something more than technical in its consequence and be one that accomplishes a result which corrects or prevents an abuse which would be prejudicial to the rights and interests of the corporation or affect the enjoyment or protection of an essential right to the stockholder's interest" (emphasis added).
Gilbert v. Hoisting & Portable Eng., Local Union No. 701, 237 Or. 130, 384 P.2d 136, 139-140, 390 P.2d 320, cert. den. 376 U.S. 963, 84 S. Ct. 1125, 11 L. Ed. 2d 981, states: "Defendants contend, however, that attorneys' fees are allowed in such cases only if the prosecution of the suit results in a pecuniary benefit. Although there is authority supporting defendants' contention, more recent cases have permitted recovery where there was a non-pecuniary benefit to the corporation. We believe that these recent cases announce the sounder rule."
The annotation in 39 A.L.R. 2d 580, 587, says: "With few exceptions, attorneys' fees and other expenses incurred by sucessful litigants, and in some instances by unsuccessful litigants, in actions involving the internal affairs of a corporation, but wherein no pecuniary recovery was sought, have been charged against the corporation."
19 Am.Jur.2d, Corporations, section 589, page 113, says the rule just quoted has been applied in some instances. Among the authorities cited for the statement are Bosch v. Meeker Coop. L. & P. Ass'n, supra, and our opinion on the second appeal in the present case. This latter citation is accompanied by the explanation that it was a "derivative action to nullify allegedly fraudulent amendment of articles of incorporation."
III. As before stated, the trial court's allowance of attorney fees is based solely on the time and skill of the attorneys, with nothing allowed for benefits to the corporation or its stockholders. Since we hold substantial benefits resulted to the stockholders *624 and to some extent to the corporation from this litigation, it follows that applicants are entitled to a considerably larger award for fees than that made by the trial court and it is our duty to fix it.
Mr. Swift's services down to, but not including, prosecution of this application for fees extended over a period of some eight years with total hours of more than 1550. Mr. Von Hoene's services extended over a period of some seven years, with total time of about 1840 hours. The combined services of Judge Hamilton and Mr. Cahill extended over a period of nearly seven years, with a total of 272 and 160 hours, respectively, excluding time apparently spent on this application. Judge Hamilton and, after he became a judge, Mr. Cahill apparently did most of the actual trial work even though they put in considerably less time than Mr. Swift or Mr. Von Hoene. Total expenses of $1351 were incurred by the three sets of attorneys.
The fact, heretofore noted, that plaintiffs were successful on all three previous appeals of this case is an indication of the skill of their attorneys, especially when considered with the ability, standing and tenacity of opposing counsel and the difficulty of the case.
In stating the time the attorneys devoted to the case we have excluded that apparently devoted to this application for fees. As before indicated, one of the propositions defendants-cross-appellants rely upon for partial reversal is that nothing should be allowed for the time so spent. Plaintiffs ignore the proposition. No authority is cited by anyone bearing on the question and we have found none directly in point. On principle, however, we think attorney fees should not be charged to the corporation for services in connection with this application.
These services were not rendered for the benefit of the corporation or the stockholders as a class but for the benefit of applicants themselves. No good reason appears why the corporation should pay for the attorneys' services in prosecuting this claim in addition to paying its own attorneys for resisting it. Nothing in our second opinion in the case or the precedents there cited indicates the corporation should be charged for the attorneys' services in connection with this application. On this proposition we agree with cross-appellants. Our conclusion finds support, by analogy, in Mahon v. Mahon, 256 Iowa ___, 133 N.W.2d 697, 701-702, and citations, and Thorn v. Kelley, 256 Iowa ___, 134 N.W.2d 545, 549.
Both sides argue other claimed errors it is said the trial court committed. For instance, applicants argue in effect that several elements other than benefits and time and skill of the attorneys should be considered in fixing their fees, citing the extended annotation on amount of attorney's compensation in 143 A.L.R. 673. See also 7 Am.Jur.2d, Attorneys at Law, sections 235-250. The ready answer to this argument is that our second opinion expressing the law of the case declares, as before stated, the amount allowable depends upon the substantial benefit to the corporation or its stockholders and the time and skill of the attorneys.
We have considered and expressed our view upon the main propositions relied upon by each side. Our review is on the merits de novo, not for the correction of errors at law, as in law cases. We are primarily concerned with whether the judgment is right and, if not, to direct the entry of one we believe is. See rule 334, R.C.P.; Rasmussen v. Rasmussen, 252 Iowa 414, 422, 107 N.W.2d 114, 119, and citations; Maytag Co. v. Alward, 253 Iowa 455, 468, 112 N.W.2d 654, 661, 96 A.L.R. 2d 162.
We do not favor an allowance for attorney fees based almost wholly on the hours devoted by each attorney to this litigation at the minimum rates specified by county or state bar associations. Nor do we make a separate allowance for each attorney. We understand the application asks a joint, not several, allowance for the services *625 of all the attorneys. Further, Mr. Swift testified with apparent approval of the other applicants, "we are asking for these fees in a lump sum for all three of us and we will distribute them."
We conclude fees for the attorney applicants should be fixed at $125,000 and they should be reimbursed for their expenses totaling $1351.
Costs of this appeal are taxed three-fourths to defendants-cross-appellants and one-fourth to intervenors-cross-appellants. Reversed on appeal of applicants; modified and affirmed on appeal of cross-appellants; remanded for judgment consistent with this opinion.
All Justices concur except THOMPSON, J., who takes no part. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917864/ | 135 N.W.2d 687 (1965)
Edwin HOWE, Respondent,
v.
Duane C. NELSON, Joseph Johnson and Great Northern Insurance Company, garnishee, Respondents,
United Services Automobile Association, garnishee, Appellant.
No. 39649.
Supreme Court of Minnesota.
June 4, 1965.
*688 Mordaunt, Walstad, Cousineau & McGuire, Minneapolis, for appellant and also respondent Duane Nelson.
Dudley, Smith, Copeland & O'Connor, St. Paul, for Edwin Howe.
Howard S. Cox, Minneapolis, for Joseph Johnson.
Cragg & Barnett, Minneapolis, for Great Northern Ins. Co.
FRANK T. GALLAGHER, C.
This is an appeal by United Services Automobile Association (United Services) from a final order of the district court in *689 garnishment proceedings supplemental to execution. The matter was heard before the court without a jury upon issues made by the supplemental complaint of Edwin Howe, the answer of Great Northern Insurance Company (Great Northern), and the answer and cross-claim against Great Northern of United Services. The conflict essentially is between the two insurance companies, each contending that the other is primarily liable to pay a judgment secured by Howe in a prior personal injury action against Joseph Johnson and Duane Nelson. The district court held the judgment of the Federal district court in a declaratory judgment action brought by United Services to determine coverage was res judicata as to the issues raised in the supplemental proceedings, and that therefore United Services is primarily liable to pay Howe's judgment.
The dispute reached its present posture through a complicated sequence of events. Duane Nelson, on October 28, 1960, borrowed Joseph Johnson's 1955 Packard automobile with Joseph's consent and was involved in an accident which injured Edwin Howe. At that time, Nelson carried an automobile liability policy with United Services on a car owned by him. One of the provisions of that policy stated that Nelson would be covered should he drive another car but that such coverage would be only excess coverage over any primary coverage afforded him by other liability insurance. The Packard had been acquired by Joseph in April 1960 and had been used by him in his hometown of Amboy, Minnesota, until he left during early summer to secure a job in the Twin Cities. When he departed, he left the car with his parents for their use, taking his other car, a Volkswagen.
During July 1960, Joseph's father, Russell Johnson, decided that the car should be insured since it had not been added to Joseph's policy on his Volkswagen. Russell therefore approached his insurance agent, an agent for Great Northern, who had procured a policy for Joseph on his Volkswagen as well as one for Russell on his car, a Cadillac. On being told that Russell wanted the Packard insured, the Great Northern agent added coverage of the Packard to Russell's policy, representing on the endorsement that the car was Russell's although he had been told that it was Joseph's. Sometime in October, Joseph returned to Amboy, picked up the Packard, and returned to Minneapolis with it. Thereafter occurred Nelson's accident.
After Howe had commenced a personal injury action in the Minnesota district court against Nelson and both Johnsons, United Services brought a declaratory judgment action in Federal district court to determine coverage among the insurance policies issued to Nelson, Russell, and Joseph. In that action, in which all parties concerned were joined, United Services asked the court to "enter a declaratory judgment construing the provisions of said policies of insurance so as to determine the respective rights and liabilities of the plaintiff and the defendants herein." Specifically, United Services claimed that Russell Johnson had an insurable interest in the Packard and that his Great Northern policy provided coverage as if it had been owned by him. United Services further claimed that, because of this coverage, Great Northern was obligated to pay any judgment that might be rendered against Joseph Johnson or against Nelson, under Russell's omnibus insured clause. This clause would not come into effect unless the Packard were found to be an "owned automobile" within the meaning of the policy.[1] In the alternative, *690 should the court fail to grant those claims, United Services prayed the court to reform Joseph Johnson's policy to include the Packard.
The Federal court held in a memorandum opinion[2] that Russell Johnson had an insurable interest in the Packard, notwithstanding his lack of a property interest in the car, and that Great Northern must defend him in the state court action. Following this judgment, United Services moved the court for amended conclusions of law and judgment. In its motion, United Services asked the court to expand its holding to say that Great Northern had primary coverage and United Services only excess coverage, and that Great Northern must satisfy any judgment against Russell Johnson, Joseph Johnson, or Duane Nelson.[3] The court denied this motion, and no appeal was taken within the allowed time.
After the appeal time had elapsed, United Services attempted to use the declaratory judgment implementing statute, 62 Stat. 964, 28 U.S.C.A. § 2202, which provides for coercive or further declaratory relief based on a declaratory judgment, to support a further motion to amend the conclusions of law and thereby to prolong the time for appeal. In a "MOTION FOR FURTHER NECESSARY OR PROPER RELIEF BASED UPON DECLARATORY JUDGMENT" United Services repeated the substance of its prior motion and added the request that Great Northern be "estopped" from denying liability coverage for Joseph on Russell's policy in the state case.[4] In its memorandum and order denying the motion, the court noted that the relief requested did not differ from that requested in the earlier motion. It recognized this requested relief as an expansion of the original holding to include a conclusion that Joseph Johnson was covered as an omnibus insured under Russell's policy. This the court refused to grant because it found no knowledge by the insurance agent that Joseph would be using the car. Following this denial, United Services attempted to appeal from the judgment and the subsequent orders. The appeal was dismissed *691 as taken out of time and being without merit.
Thereafter, the state court case came to trial and resulted in a verdict for Howe against Nelson and Joseph Johnson for $20,000, Russell Johnson having been dismissed as a defendant prior to trial. Nelson was also ordered to indemnify Joseph to the extent of the judgment. Great Northern's counsel represented Russell in those proceedings; Nelson was represented by United Services' counsel; and Joseph Johnson was represented by his own counsel. After Howe unsuccessfully attempted to satisfy his judgment from Nelson and Joseph, he instituted garnishment proceedings against Great Northern and United Services. Both companies disclosed that they owed nothing to Nelson and Joseph Johnson. Howe then began supplemental proceedings.
The state district court decided the issues in those proceedings in favor of Great Northern on the basis of the Federal and state court files in the two prior actions. The court viewed the Federal court decision that Great Northern must defend Russell Johnson and that Joseph Johnson's policy could not be reformed to include the Packard as res judicata as to the issues of coverage with which it was faced. Accordingly, it concluded that Great Northern had no policy under which liability attached, and that United Services therefore afforded primary coverage.
On this appeal, United Services contends that the Federal district court judgment is not res judicata as to two defenses it wishes were omnibus insureds under Russell Johnson's policy and that therefore his policy to raise. The first is that Nelson and Joseph affords primary coverage. The second, alternative defense is that Joseph Johnson's policy should be reformed to accurately reflect his ownership of the Packard so that it is insured in his name and he is afforded primary coverage. Under the view we take of the case we need not reach or decide the merits of those defenses.
The doctrine of res judicata includes two different effects of a judgment as an estoppel estoppel by judgment and estoppel by verdict or collateral estoppel.[5] Estoppel by judgment operates as an absolute bar to a subsequent suit on the same cause of action, concluding the parties and their privies not only as to every matter that was litigated but also as to any other claim or defense which might have been litigated.[6] Estoppel by verdict applies, in a subsequent suit on a different cause of action, only to issues litigated and necessarily decided in a prior suit and only against parties appearing in the same capacity as in the prior suit.[7]
Estoppel by verdict could be applied in in this case because of the similarity of the defenses raised in Federal court and on this appeal, notwithstanding differences of labeling and emphasis. We think, however, the analysis more appropriate and better calculated to produce future clarity is that of estoppel by judgment.
The res judicata effect of a judgment in a declaratory judgment action is essentially no different from the res judicata effect of any other judgment.[8] This *692 effect has been recognized by Restatement, Judgments, § 77, which states generally that a declaratory judgment is binding between the parties in subsequent actions. Section 77, comment b, however, qualifies this statement by saying that the parties are precluded from relitigating only the matters declared by the judgment and:
"Where a plaintiff seeks a declaratory judgment, he is not seeking to enforce a claim against the defendant. He is seeking rather a judicial declaration as to the existence and effect of a relation between him and the defendant. The effect of the judgment, therefore, unlike a judgment for the payment of money, is not to merge a cause of action in the judgment or to bar it. The effect of a declaratory judgment is rather to make res judicata the matters declared by the judgment, thus precluding the parties to the litigation from relitigating these matters."
This comment, while it urges a salutary caution in granting the effect of res judicata to declaratory judgments, should not be read, as United Services contends, to repudiate any estoppel-by-judgment effect of those judgments. Its reasoning has obvious application to one situation. Where a subsequent suit for money damages is brought by the prevailing party in a declaratory judgment action, the cause of action for damages should not be considered merged into a judgment that merely declares abstract rights.[9] But to extend that reasoning to conclude that a declaratory judgment cannot effect an estoppel by judgment goes much too far. The claim upon which a declaratory judgment is based can be ascertained by inspecting not only the judgment but also the whole record,[10] as is done generally in res judicata cases.[11] The declaratory judgment, like other judgments, may have either the effect of estoppel by verdict[12] or estoppel by judgment.[13] Thus, the prevailing party in a declaratory judgment action to construe an insurance policy or a will should be able to rely on that judgment to estop the defeated party from again attempting to have the same instrument construed in a subsequent declaratory judgment action. So, too, should the prevailing party be estopped from attempting to relitigate in order to win more rights under the instrument.
The problem is only slightly more complex where, as here, the plaintiff in a declaratory judgment action would normally be the defendant in a coercive suit for money damages. Such a plaintiff should be estopped from bringing successive declaratory judgment actions in which he raises issues that might have been disposed of in the first suit. So, too, should he be estopped by a declaratory judgment adverse to him from raising defenses in a subsequent coercive action against him that were adjudicated or might have been raised in the prior suit. In this situation, the inquiry must be whether the coercive suit is based on the cause of action that was sought to be defeated in the declaratory suit.[14]
We think that in the instant case the grounds for liability asserted by Howe are the same grounds that United Services attempted to negate in Federal court. In *693 the Federal action United Services asked the court "to determine the respective rights and liabilities of the plaintiff and the defendants herein." The court fully complied with that request. It held only that Russell Johnson had an insurable interest in the Packard and that Great Northern must defend him. However, implicit in the court's reasoning in its opinion that Russell could have an insurable interest in the Packard without owning a property interest was a conclusion that the Packard was a nonowned automobile within the meaning of Russell's Great Northern policy. From that conclusion, it followed that neither Joseph nor Nelson could be "insureds" under that policy, and further that United Services must bear primary coverage for Nelson's accident. Moreover, the court's silence in the face of United Services' prayer for reformation of Joseph's policy in the complaint must be taken as a construction of that policy to exclude the Packard.
We are convinced, therefore, that the Federal court fully construed all three insurance policies involved in the present litigation. The obvious advantages of an early adjudication of insurance coverage in a personal injury context should not be undercut by a retrial of legal relationships already adjudicated.[15] The complaining party's remedy is appeal from that judgment.
United Services clearly went to Federal court in order to fully litigate the issues of insurance coverage. It had its chance to present all its defenses in the forum of its choice and should not now be permitted, as defendant in a coercive action, to relitigate those issues or to bring up new issues that could have been litigated then.
Affirmed.
NOTES
[1] The following are insureds under Part I of the policy:
"(a) With respect to the owned automobile,
"(1) the named insured and any resident of the same household,
"(2) any other person using such automobile, provided the actual use thereof is with the permission of the named insured;
"(b) With respect to a non-owned automobile,
"(1) the named insured,
"(2) any relative, but only with respect to a private passenger automobile or trailer, provided the actual use thereof is with the permission of the owner;
"(c) Any other person or organization legally responsible for the use of
"(1) an owned automobile, or
"(2) a non-owned automobile, if such automobile is not owned or hired by such person or organization."
[2] United Services Auto. Assn. v. Howe (D.Minn.) 208 F. Supp. 683.
[3] "Plaintiff moves the Court to amend the Conclusions of Law to state that,
"`This Court finds that an insurable interest exists in Russell Johnson and that the coverage of the Great Northern Insurance Company is the primary coverage and the Great Northern Insurance Company must assume its obligation to defend any suits arising out of the policy and to satisfy any judgment rendered against Russell S. Johnson, Joseph W. Johnson, Duane Nelson or all of them up to the limits of policy number 22M922421 and that in accordance with that policy the Great Northern Insurance Company pay all attorneys' fees, costs and disbursements and interests.
"`Further that the United Services Automobile Association policy is excess coverage to the coverage provided by the Great Northern Insurance Company.'"
[4] In addition to repeating the substance of the prior motion, the motion read: "The Plaintiff moves the Court for an order of the Court as follows:
"That the Great Northern Insurance Company is estopped by its conduct from denying liability coverage or in asserting lack of insurable interest as to Joseph W. Johnson in the case venued in the Minnesota State Court entitled Edwin Howe v. Duane Nelson, Russell S. Johnson and Joseph W. Johnson, and further that the Great Northern Insurance Company is estopped from denying coverage to said Joseph W. Johnson in that action or from denying payment of any judgment or settlement up to the limits of policy No. 22M922421 [Russell Johnson policy]."
[5] Smith v. Smith, 235 Minn. 412, 51 N.W.2d 276, 32 A.L.R. 2d 1135; Wolfson v. Northern States Management Co., 221 Minn. 474, 22 N.W.2d 545; Gustafson v. Gustafson, 178 Minn. 1, 226 N.W. 412.
[6] Melady-Briggs Cattle Corp. v. Drovers State Bank, 213 Minn. 304, 6 N.W.2d 454; Kinzel v. Boston & Duluth Farm Land Co., 124 Minn. 416, 145 N.W. 124.
[7] Lustik v. Rankila, 269 Minn. 515, 131 N.W.2d 741; Wolfson v. Northern States Management Co. supra.
[8] See, Herd v. Lyttle, 310 Ky. 788, 222 S.W.2d 834; 2 Anderson, Actions for Declaratory Judgments, § 459; Annotation, 10 A.L.R. 2d 782. Cf. County Bd. of Education v. Borgen, 192 Minn. 512, 257 N.W. 92.
[9] Winborne v. Doyle, 190 Va. 867, 59 S.E.2d 90; Cooke v. Gaidry, 309 Ky. 727, 218 S.W.2d 960, 10 A.L.R. 2d 778.
[10] See, e. g., Prudential Ins. Co. v. Rader (D.Minn.) 98 F. Supp. 44; North Shore Realty Corp. v. Gallaher (Fla.App.) 99 So. 2d 255.
[11] O'Neil v. Rueb, 215 Minn. 296, 10 N.W.2d 363; Fox v. Fox, 154 Minn. 169, 191 N.W. 420.
[12] Britt v. Trailmobile Co. (6 Cir.) 179 F.2d 569; Lyle Cashion Co. v. McKendrick, 227 Miss. 894, 87 So. 2d 289.
[13] Lynch v. Lynch, 250 Iowa 407, 94 N.W.2d 105; 36 U. of Detroit L.Rev. 616. Cf. Swanson v. Tearney, 87 Cal. App. 2d 191, 196 P.2d 49.
[14] See, Note, 62 Harv.L.Rev. 787, 843.
[15] See, Borchard, Declaratory Judgments (2 ed.) pp. 651 to 653. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572607/ | 576 N.W.2d 398 (1998)
227 Mich. App. 276
Sarah A. TRAXLER, Minor, by her next friend Steven Traxler, Deanna Traxler and Scott Traxler, Plaintiffs-Appellees,
v.
FORD MOTOR COMPANY and Ford Motor Company of Canada, Defendants-Appellants, and
Spalding and Evenflo Companies and Evenflo Juvenile Furniture Company, Defendants.
Docket Nos. 200704, 200856.
Court of Appeals of Michigan.
Submitted September 9, 1997, at Grand Rapids.
Decided January 13, 1998, at 9:05 a.m.
Released for Publication March 26, 1998.
*399 Rhoades, McKee, Boer, Goodrich & Titta by Bruce W. Neckers, Paul A. McCarthy, and Molly M. McNamara, Grand Rapids, for plaintiffs-appellees.
Dawson & Clark, P.C., Detroit by Kathleen A. Clark and John R. Prew, Dickinson, Wright, Moon, Van Dusen & Freeman, Grand Rapids by Richard A. Glaser, John M. Thomas, and Michael J. O'Reilly, Dearborn, for defendants-appellants.
Before GRIFFIN, P.J., and WAHLS and GRIBBS, JJ.
WAHLS, Judge.
Defendants Ford Motor Company and Ford Motor Company of Canada (hereinafter Ford) appeal by leave granted from an order of default. We affirm in part, reverse in part, and remand.
This case stems from an automobile accident in 1990. At the time of the accident, two-month-old Sarah Traxler was strapped into a child safety seat in the back of her parents' 1986 Ford Tempo. Her mother was driving, and her father was seated next to her in the back seat. As the Traxlers were waiting to make a left turn, they were rear-ended by another vehicle traveling at approximately fifty miles an hour. The force of the collision caused the driver's seat of the Traxler's car to move rearward into the back seat, striking Sarah in the head. Sarah was left with severe and permanent injuries. Apparently, no one else was injured in the crash.
Plaintiffs filed suit against the driver of the other vehicle, the maker of the child safety seat, and Ford. This appeal involves only Ford.[1] Plaintiffs' theory regarding Ford's liability revolved around the design of the *400 driver's seat in the Ford Tempo. Their discovery requests thus focused on Ford's design process, on Ford's knowledge regarding the tendency of its seats to give way in rear-end collisions, and on other lawsuits filed against Ford alleging front-seat design defects. Discovery took place over more than two years and was marked by Ford's numerous objections and by plaintiffs' repeated motions to compel. Most of plaintiffs' motions to compel were withdrawn before the trial court could hear them, apparently because the parties agreed to work out their differences between themselves. Eventually, however, the trial court heard and granted one of plaintiffs' motions to compel. In granting the motion, the trial court warned Ford that its failure to comply with the discovery order would result in a default. In response to the trial court's order, Ford provided plaintiffs with sixty-two boxes of documents. After reviewing this new information, plaintiffs asked the trial court to order a default against Ford. They argued that the documents produced as a result of the trial court's order should have been produced far earlier and that the delay had prejudiced them to the point that default was the only appropriate remedy. The trial court agreed and entered an order of default against Ford. In its written opinion, the trial court lambasted Ford for its conduct during discovery:
What plaintiffs' counsel discovered when they read those documents was disgusting; no other word would be accurate. For over two years, Ford had concealed very significant documents and information, and, worse, had blatantly lied about those documents and about the information in them; any word other than "lied" would understate what Ford did.... After carefully reviewing plaintiffs' discovery requests and some of Ford's responses (hundreds of pages), studying several rounds of briefs, and listening to counsels' very helpful oral argument, this Court had to agree that an outrageous fraud has been perpetrated by Ford ... and that the sanction of a default ... is the appropriate response.
Ford raises several issues on appeal. It argues that the trial court (1) did not have the power to impose a default, (2) erred in finding that Ford committed fraud, and (3) erred in denying Ford's request for an evidentiary hearing. In addition, Ford argues that the trial court failed to consider alternative sanctions, failed to consider how Ford's errors were made and who made them, and made findings of fact that were not supported by the record. We begin by addressing the extent of a trial court's power to sanction discovery abuses.
The scope of a trial court's powers is a question of law. We review questions of law de novo. Smith v. Henry Ford Hosp., 219 Mich.App. 555, 557, 557 N.W.2d 154 (1996). The Michigan Court Rules specifically authorize a default judgment as a sanction for certain discovery abuses. Such abuses include a failure to comply with a discovery order, MCR 2.313(B)(2)(c), failure to serve answers to interrogatories, MCR 2.313(D)(1)(b), and, under certain circumstances, failure to supplement responses to discovery requests, MCR 2.302(E)(2). Ford argues that, even assuming the trial court's factual findings were correct, none of these rules apply in this case. We disagree.
First, it is clear that the trial court did not find a violation of a discovery order, and thus, MCR 2.313(B)(2)(c) does not apply directly. Second, there is no allegation that Ford failed to serve answers to plaintiffs' various interrogatories, and thus MCR 2.313(D)(1)(b) does not appear to apply.[2] However, assuming the trial court's factual findings were correct, we believe that MCR 2.302(E) does apply.[3] That subrule states, in part:
*401 (1) Duty to Supplement....
(a) A party is under a duty seasonably to amend a prior response if the party obtains information on the basis of which the party knows that
(i) the response was incorrect when made; or
(ii) the response, though correct when made, is no longer true and the circumstances are such that a failure to amend the response is in substance a knowing concealment.
* * * * * *
(2) Failure to Supplement.
If the court finds, by way of motion or otherwise, that a party has not seasonably supplemented responses as required by this subrule the court may enter an order as is just, including an order providing the sanctions stated in MCR 2.313(B), and, in particular, MCR 2.313(B)(2)(b). [MCR 2.302(E).]
Here, the trial court concluded that Ford "lied" and was guilty of "an outrageous fraud." Any response that can be characterized as fraudulent or as a lie was obviously incorrect when made. Thus, to the extent that the trial court found that Ford's responses constituted lies or fraud, Ford had a duty to seasonably supplement those responses. On the basis of the trial court's findings, Ford clearly failed to fulfill this duty. Therefore, the trial court had the power to order a default pursuant to MCR 2.302(E)(2).
Ford next argues that the evidence in the record does not support the trial court's conclusion that Ford lied or committed fraud. We disagree. We review a trial court's findings of fact for clear error. Triple E Produce Corp. v. Mastronardi Produce, Ltd., 209 Mich.App. 165, 171, 530 N.W.2d 772 (1995). A finding of fact is clearly erroneous when, although there is evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made. Id. In this case, we are not left with a definite and firm conviction that a mistake has been made. On the contrary, the record makes it clear that Ford failed to disclose relevant, non-privileged information in its responses to plaintiffs' early discovery requests. While Ford objected to plaintiffs' discovery requests, we do not believe that those objections were sufficient to excuse Ford's conduct.
The parties and the trial court address numerous examples of Ford's conduct during discovery. Here, we simply address two interrogatories that are illustrative. We begin with an interrogatory and a response that highlight Ford's position during the early stages of discovery:
35. How many 4-door Ford Tempos were sold in 1986 by Ford dealers in the United States and Canada?
35. Ford objects to this Interrogatory on the ground that it is overly broad, vague, irrelevant, oppressive and not calculated to lead to the discovery of admissible evidence. Without waiving its objections and in the spirit of discovery, Ford states 176,976 Four-Door Tempo vehicles were sold in the United States and Canada.
This exchange is significant for two reasons. First, it illustrates the fact that Ford objected to interrogatories even where its objections were groundless on their face; how can an interrogatory that asks for a simple numerical answer be overly broad or vague? What is the purpose of objecting on the ground that a request is oppressive when the objection is followed by the answer to the request? How could Ford argue that information regarding the number of products sold is irrelevant or not calculated to lead to the discovery of admissible evidence in a products liability suit? Clearly, Ford's objections were boilerplate, and plaintiffs were justified in ignoring them when they were followed by an answer that was responsive to their request. Ford's response also highlights the fact that, "in the spirit of discovery," Ford provided apparently complete answers to at least some of plaintiffs' requests, *402 despite its objections. The significance of these observations becomes clear when we review one of the more important interrogatories. The parties and the trial court offer contrasting interpretations of the following interrogatory and answer:
10. State whether the same left front driver's seat and right front passenger seat tracks and seat backs, as identified previously in this set of interrogatories as having been installed on the subject vehicle, were ever installed on any other Ford Motor Company vehicle, including but not limited to Mustang, [Capri], Escort, Lynx station wagon, Thunderbird, Cougar, Taurus, Sable, Topaz, and Tempo, of any model year. If the answer is yes, state which vehicles, which model years and which seat (driver or passenger).
ANSWER:
10. Ford objects to this Interrogatory on the ground that it is overly broad, vague, irrelevant, oppressive and not calculated to lead to the discovery of admissible evidence. Without waiving its objections and in the spirit of discovery, Ford states that the seat track assemblies used in the Tempo are unique to the Tempo/Topaz car lines only.
The trial court and plaintiffs characterized Ford's response similarly. According to the trial court:
That answer was not true. Plaintiffs have learned that the Tempo/Topaz seat was derived from the Escort/Lynx seat and that that seat had been used in numerous other models. Ford admits that now, but only after having been caught in a lie.
How Ford answered plaintiffs' interrogatories about seats reveals much about its handling of discovery in this case. Ford insists that it is true that "the seat track assemblies used in the Tempo are unique to the Tempo/Topaz car lines only." That may be, but the question asked of Ford was not so limited. Ford was asked whether the front "seat tracks and seat backs" installed in 1986 Tempos "were ever installed on any other Ford Motor Company vehicle." If they were, particulars were requested. Ford objected to the interrogatory ... and then responded that "the seat track assemblies used in the Tempo are unique to the Tempo/Topaz car lines only." What it did was craftily reformulate the question to ask only what it wanted to say, namely: that the seat track assemblies, not the seats themselves, were unique, thereby creating the misleading impression that the seats had not been used in any other vehicles. With that impression, plaintiffs would not expect to be told about tests and lawsuits involving the seats and other models, even though the seats were, it now turns out, the same. That was as dishonest as saying in so many words that the seats, not just the seat track assemblies, were unique to the vehicle.... Ford's answer was not simply a precise answer to a poor question; it was a dishonest answer, carefully crafted to mislead the reader. An impression can be so strong and so obviously what someone wanted to impart that it is a statement to that effect, in this case, a false statement.
As will be discussed below, we are concerned with the evidentiary basis for some of the trial court's conclusions. However, none of its findings are clearly erroneous. Ford's arguments to the contrary are not well taken. According to Ford:
[T]he trial court leapt to his conclusion that Ford's answer was "dishonest" and a "lie" by focusing on only one sentence of one response to one interrogatory. Ford's response to Interrogatory 10 also objected that the interrogatory was overly broad and that answering it would be unduly burdensome. There is no [sic] almost no burden associated with simply saying that the entire seat is unique to the Tempo/Topaz. Therefore, if that is what Ford meant to say, there would have been no objectionable burden and no point to the objection. The only interpretation of the entire response that gives effect to the objection and the partial answer is that only the seat track was unique and that the other numerous components of the seatsuch as seatbacks, seat cushions, frames, recliner mechanisms, attachment bolts, springs, fabric, etc.were so widely used that it would be unduly burdensome for Ford to try to identify all of the models *403 and model years in which all of those components were used. [Emphasis in original; parentheticals omitted.]
Ford's position is belied by its answers to other interrogatories. As noted above, Ford made some objections that were groundless on their face. Thus, with respect to some interrogatories, there was no interpretation of the entire response that could give effect to both Ford's objection and its answer. Under these circumstances, Ford is not entitled to a presumption that its objections had any significance whatsoever. Ford's position also lacks any logical appeal. If Ford meant to say that only the seat tracks were unique, and that the other components were so common that answering the interrogatory would be unduly burdensome, it needed only say so. Instead, Ford gave what it now claims was a "partial" answer, which clearly omitted relevant information. By doing so, Ford created the appearance that it was lying or intentionally concealing relevant information. We cannot conclude that the trial court's findings in this regard were clearly erroneous.
Next, Ford raises a number of arguments regarding the trial court's decision to order a default, rather than some less serious sanction. Default is a drastic measure and should be used with caution. Mink v. Masters, 204 Mich.App. 242, 244, 514 N.W.2d 235 (1994). Another panel of this Court articulated the factors that a trial court should consider before ordering a default:
Before imposing the sanction of a default judgment, a trial court should consider whether the failure to respond to discovery requests extends over a substantial period of time, whether an existing discovery order was violated, the amount of time that has elapsed between the violation and the motion for a default judgment, the prejudice to [the party requesting default], and whether wilfulness has been shown. The court should evaluate other options before concluding that a drastic sanction is warranted. [Thorne v. Bell, 206 Mich.App. 625, 632-633, 522 N.W.2d 711 (1994) (citations omitted).]
In addition, "[t]he sanction of default judgment should be employed only when there has been a flagrant and wanton refusal to facilitate discovery and not when failure to comply with a discovery request is accidental or involuntary." Mink, supra at 244, 514 N.W.2d 235. We review discovery sanctions for an abuse of discretion. Thorne, supra at 633, 522 N.W.2d 711.
First, Ford argues that the trial court ordered a default without considering alternative sanctions. This argument finds no support in the record. The trial court clearly recognized its duty to consider alternative sanctions; it simply concluded that any lesser sanction was insufficient to remedy the damage caused by Ford's misconduct. Next, Ford argues that the trial court's conclusions regarding the prejudice caused by Ford's conduct are not supported by the record. We disagree. As will be discussed, we are concerned about the trial court's evidentiary basis for its conclusions regarding this issue. However, we do not believe that the trial court's findings regarding prejudice are clearly erroneous.
Finally, Ford argues that, to the extent that it erred in its discovery responses, the trial court failed to consider how those errors occurred. Again, we disagree. It is clear that the trial court considered the nature of Ford's errors and concluded that they were not simple mistakes or oversights. Instead, the trial court concluded that Ford had lied and perpetrated "an outrageous fraud." We find no evidence in the record to contradict the trial court's findings, and they are not clearly erroneous. Ford's related argument, that the trial court failed to consider whether a default should be ordered against Ford for the conduct of its attorneys, is without merit. The trial court had the authority to order a default against Ford even if its attorneys were responsible for the misconduct. See White v. Sadler, 350 Mich. 511, 522, 87 N.W.2d 192 (1957) ("the neglect of an attorney is generally regarded as attributable to his client"). See also American Way Service Corp. v. Comm'r of Ins., 113 Mich.App. 423, 434-435, 317 N.W.2d 870 (1982).
We have discussed the prejudice caused by Ford's conduct and Ford's culpability *404 for that conduct only briefly because we are compelled to remand this case for an evidentiary hearing regarding these issues. Ford argues, and we agree, that it is entitled to an evidentiary hearing where it may introduce evidence (1) that its failure to comply with plaintiffs' discovery requests was accidental or involuntary and (2) that plaintiffs were not prejudiced by Ford's mistakes. We believe that due process requires such a hearing:
Due process in civil cases generally requires notice of the nature of the proceedings, an opportunity to be heard in a meaningful time and manner, and an impartial decisionmaker. The opportunity to be heard does not mean a full trial-like proceeding, but it does require a hearing to allow a party the chance to know and respond to the evidence. [Cummings v. Wayne Co., 210 Mich.App. 249, 253, 533 N.W.2d 13 (1995).]
Here, the parties should be permitted to introduce evidence regarding Ford's conduct during discovery and the extent of any prejudice to plaintiffs. After the evidentiary hearing, the trial court must determine whether Ford's misconduct constituted a flagrant and wanton refusal to facilitate discovery.[4]Mink, supra at 244, 514 N.W.2d 235. In addition, the trial court should again consider whether a default is an appropriate sanction in light of the available alternatives. Thorne, supra at 633, 522 N.W.2d 711.
Finally, in order to avoid confusion on remand, we address the parties' dispute regarding the standard of proof required to support a finding of fraud. Ford argues that the trial court improperly applied the "preponderance of the evidence" standard in finding that Ford committed fraud. Indeed, it is unclear whether a court should apply the preponderance of the evidence standard or the "clear and convincing evidence" standard in considering an allegation of fraud.[5] However, this issue is essentially irrelevant: A trial court need not find fraud to justify an order of default. Rather, the relevant consideration is whether Ford's conduct constituted a "flagrant and wanton refusal to facilitate discovery." Mink, supra at 244, 514 N.W.2d 235. We see no reason to require clear and convincing evidence to support such a finding. Thus, on remand, the trial court must consider whether the factors set out in Thorne and Mink are met by a preponderance of the evidence.
For the foregoing reasons, we affirm the trial court's conclusion that it had the power to order a default where Ford lied or committed fraud. However, we reverse the trial court's order of default against Ford and remand for an evidentiary hearing in accordance with this opinion. We do not retain jurisdiction. No costs are taxable, neither party having prevailed in full.
RICHARD ALLEN GRIFFIN, P.J., concurred.
GRIBBS, Judge (concurring in part and dissenting in part).
I agree with the majority opinion in most respects: I agree that the trial court had the power to order default pursuant to MCR 2.302(E)(2), that its findings of fact regarding Ford's lies and dishonest answers were not clearly erroneous and that its conclusions that Ford perpetrated an outrageous fraud and "engaged in a calculated campaign of concealment and deceit" were not clearly erroneous. However, I respectfully dissent from the majority's decision to remand for an evidentiary hearing. Accordingly, I would affirm the trial court's order of default against Ford and remand for a determination of plaintiffs' damages.
As the majority notes, the relevant consideration on remand is "whether Ford's conduct constituted a `flagrant and wanton *405 refusal to facilitate discovery.'" Mink v. Masters, 204 Mich.App. 242, 244, 514 N.W.2d 235 (1994). However, in a comprehensive, single-spaced 11-page opinion[1] the *406 *407 *408 *409 *410 trial court already found and ably explained its conclusion that Ford committed "wanton and flagrant violation of its discovery obligation." As the majority concedes, the trial court's conclusion is supported by the record. The sole remaining issue is whether the trial court abused its discretion by entering the default against Ford Motor Company. It could not be clearer from the trial court's opinion that it has already found that Ford's conduct was deliberate, conscious, and by careful design. The prejudice to the plaintiffs also has been carefully spelled out in the trial court's opinion. Accordingly, it cannot be said that the trial court's conclusion was an abuse of discretion. MCR 2.313(B)(2). Thorne v. Bell, 206 Mich.App. 625, 633, 522 N.W.2d 711 (1994); Dean v. Tucker, 182 Mich.App. 27, 32, 451 N.W.2d 571 (1990); Omlie Industries, Inc. v. Industro Motive Corp., 77 Mich.App. 48, 257 N.W.2d 677 (1977).
A careful reading of the record and of the trial court's opinion reveals more than sufficient evidence to warrant its conclusion that Ford's failure to comply with discovery requests was not accidental or involuntary. Plaintiffs filed four motions to compel answers to interrogatories. Ford promised to respond to the motions. Ford's failure to respond adequately was not fully brought to the court's attention until July 3, 1996, with plaintiffs' fifth motion to compel. After review of all motions and responses, the court ordered Ford to supplement its answers and to provide responsive documents within twenty-eight days of the order (entered thirteen days after the hearing on the motion). In response to the order, Ford produced sixty-two boxes containing 120,000 pages of new documents on August 12, 1996. For the first time in two years, Ford provided information regarding historical testing documents.
Contrary to the trial court's July 16 order, Ford continued to conceal and withhold documents relating to its Seat Back Task Force and it appears that plaintiffs became aware of the existence of such task force activity through an independent investigation. In response to plaintiffs' September 30, 1996, motion for default, Ford for the first time provided some of its Seat Back Task Force documents to plaintiffs and claimed its two year concealment was due to an "alleged claim of privilege." In its detailed, written opinion, the trial court found that Ford does "not deny its shortcomings of its discovery responses. It tries only to excuse them as unintentional or not prejudicial, and it argues strenuously that the Court lacks authority to punish, by default or otherwise, it for what it did." (Emphasis added.) The opinion specified in detail various deceptions, including the failure to reveal the Seat Back Task Force study, pursuant to the court order of July, 1996, but only in response to plaintiffs' Motion for Default:
The impact of Ford's deception was made abundantly clear by its latest discovery disclosures. Plaintiffs had asked Ford to identify and produce all tests done to establish the integrity of the seats used in 1986 Ford Tempos, as well as the same or similar seats used in other vehicles. Ford responded that it had performed 48 rear impact tests on the Tempo/Topaz seat between *411 1984 and 1994. The discovery disgorged in response to this Court's July order revealed that there have been hundreds of such tests performed on the same seats in numerous other models. Those tests are all highly relevant to this case and were requested by plaintiffs. By the way it responded to plaintiffs' interrogatories that the Tempo/Topaz seat was unique, Ford hid all those other tests.
Concealing those tests concealed something highly significant to this case. In those tests, the front seats routinely collapsed into the back seat on the slightest impact. Throughout this case, Ford has insisted that its seats, including those in 1986 Tempos, are designed to "yield." Ford has persistently taken great exception to any characterizations of seats having "failed," "broke", or "collapsed," but the test reports just disclosed repeatedly use those very terms to describe what happened to Ford seats in collisions just like that which occurred in this case. What Ford disclosed also revealed that, years ago, it had developed, but never used, a seat capable of withstanding much greater rear-end impacts than that which injured Sarah. Until last August, Ford has disclosed none of that.
Ford also failed to disclose that it had convened a Task Force to study seat back performance, that that Task Force had had numerous tests performed on Ford seat backs, and that a report was drafted, but apparently never issued. Ford attempts to justify its withholding of that information by contending that, for years, the existence of the Task Force and its work were thought to be privileged. The Task Force was finally disclosed because Ford and its counsel now conclude that the same are "probably not privileged." The claim of privilege is disingenuous. Absolutely nothing disclosed about the Task Force and its activities supports any appearance of a privilege. Furthermore, highly revealing of the claim of privilege is how Ford handled that claim. The proper response would have been to note the existence, but not disclose the particulars, of the information, and then decline to produce it because of a privilege. Martin, et al., Michigan Court Rules Practice (3d ed.), Rule 2.314, p.383. The Court could then have ruled on the claim. Ford's counsel knew the right way. Ford's silence was not the assertion of a privilege, but the deliberate concealing of information known to be discoverable. The claim of a mistaken belief in a privilege is an unpersuasive rationalization.
One more example of Ford's mendacity will suffice. Another of plaintiffs' 1994 interrogatories asked Ford to identify all lawsuits against it which complained about defects in the seat backs and/or seat tracks of the 1986 Ford Tempos and other Ford vehicles utilizing the same or similar seats. At first, Ford identified only 2 such lawsuits. Later Ford reported that there had been 48 lawsuits, but no particulars were ever disclosed. The recently-produced documents reveal that Ford has defended the Tempo/Topaz seat in 91 lawsuits. Some 19 of those lawsuits were brought on behalf of minor children who were injured due to seat failures, several of them having been back seat passengers injured just like Sarah Traxler, by a collapsing front seat. *412 Even more startling is the revelation in the documents disclosed in response to this Court's July order that Ford has defended hundreds of lawsuits involving the same seat in other models. Nothing was disclosed about those numerous lawsuits until August, 1996. Ford's explanation for its initial inaccurate response is its supposed belief that plaintiffs were asking only about lawsuits involving 1986 Tempos, a model and year which generated only a pair of lawsuits. That is nonsense, to put it bluntly. Plaintiffs' interrogatory asked for all lawsuits complaining about design or manufacturing defects in the front seats "of the 1986 Ford Tempo automobile, as well as for any other automobile employing the same or similar seat[s]" [emphasis in original].
The majority opinion accepts Ford's arguments that it is "entitled" to an evidentiary hearing to demonstrate that Ford's actions were accidental or involuntary and that plaintiffs were not prejudiced by Ford's mistakes. I respectfully disagree because the trial court already found and supported its findings that (1) Ford never requested an evidentiary hearing, (2) Ford's activity in this lawsuit was clearly deliberate and intentional, and (3) prejudice to plaintiffs was clearly established.
Ford never filed a motion for an evidentiary hearing. The only mention by Ford of an evidentiary hearing was during oral argument on plaintiffs' motion for default, when defense counsel expressed a willingness to participate in an evidentiary hearing if needed and left the decision to the trial court.[2] Issues raised the first time on appeal are not subject to appellate review. People v. Grant, 445 Mich. 535, 546, 520 N.W.2d 123 (1994).
But most important, the reasons for the remand, as argued by Ford and articulated by the majority, have already been carefully and thoroughly dispelled by the trial court. The trial court specifically found that Ford's actions were "more than an intentional refusal to facilitate discovery," that there was a "flagrant and wanton refusal to facilitate discovery." The trial court made clear its finding that Ford "engaged in a calculated campaign of concealment and deceit," that Ford "consistently" and "blatantly lied" and that Ford repeatedly "perverted" the discovery process with "dishonest answers[s], carefully crafted to mislead the reader." The trial court also thoroughly documented the many needless motions, follow-up inquiries and clarifications demanded of plaintiffs, and specifically found that Ford's actions unnecessarily complicated and delayed for years the trial in this case:
Ford's conduct has badly prejudiced plaintiffs and this Court. Plaintiffs' counsel has had to spend considerable effort and incur great expense acquiring from other sources information which Ford should have disclosed. More significantly, Ford's misconduct has frustrated plaintiffs in the development of information vital to a persuasive presentation of their claims. What Ford has belatedly revealed about its testing of the car seat at issue in this case, what it appears to have learned from those tests, the availability of a safer seat, and the fact that a safer seat was never used, all go directly to what a plaintiff must prove in a case like this one and what the Supreme Court expects to be disclosed during discovery. See Prentis v. Yale Mfg. Co., 421 Mich. 670, 688-689 [365 N.W.2d 176] (1984). It is readily apparent from Ford's recent briefs that it has a favorable "spin" on that information. To enable plaintiffs to respond, discovery needs to start anew. Plaintiffs' experts need to start all over, and a tremendous amount of follow-up inquiries must be made of Ford and its pertinent personnel. *413 That would put off trial until next year, which would be very unfair to plaintiffs.
* * * * * *
This case is already three years old, and the price of additional delay will be paid by plaintiffs, not Ford. With the passage of more time, it will be harder for plaintiffs to prove their case. Witnesses will scatter even more, and memories will become even dimmer. One of Ford's excuses for the delays in scheduling depositions was the retirement and move of many employees. That will happen more as time passes. Witnesses who remain available will remember less, and what they remember will be subject to challenge because of age. Whatever the jury is told about the delay, experience teaches that delay itself creates doubts in the minds of jurors. As a case ages, it becomes less persuasive. Since the burden of proof is on plaintiffs, they will feel the consequences of age. For that reason, even ordering Ford to pay all the costs of discovery henceforward, will not offset the prejudice to plaintiffs, but punish them, a real perversion. Ford's misconduct having impaired plaintiffs' ability to prove liability, even if reimbursed all their expenses, plaintiffs will remain significantly disadvantaged with Ford still benefitting. That is ineffectual, to say the least, in dealing with what Ford did. Furthermore, a default[ ]is very appropriate because it focuses directly on that which Ford has damaged: plaintiff's [sic] ability to prove liability.
As the majority agrees, the trial court's findings and conclusions are supported by the record. Because of Ford's egregious and intentional conduct, because plaintiffs have been severely harmed by the prolonged and needless delay and concealment that will necessitate beginning discovery all over again, and because Ford has been provided years of due process in this matter, I would affirm.
NOTES
[1] The driver of the other vehicle apparently settled with plaintiffs. The manufacturer of the child safety seat was dismissed below on plaintiffs' motion.
[2] Plaintiffs argue that Ford's answers were incomplete and that they therefore constituted a failure to answer. By its express terms, MCR 2.313(D)(1)(b) applies only to a failure to serve answers or objections to interrogatories. Thus, it appears that MCR 2.313(D)(1)(b) applies only where a party completely fails to answer, rather than where a party's answers are somehow deficient.
[3] We recognize that the trial court did not rely on MCR 2.302(E) when it ordered a default against Ford. However, we need not reverse where the trial court reached the correct result, albeit for the wrong reason. Cox v. Dearborn Heights, 210 Mich.App. 389, 391, 534 N.W.2d 135 (1995). Thus, we may properly consider the applicability of MCR 2.302(E).
[4] Our conclusion that the trial court's original findings were not clearly erroneous does not preclude the trial court from making different findings on remand.
[5] Generally, fraud must be proved by "clear and convincing" evidence rather than by the preponderance of the evidence. Foodland Distributors v. Al-Naimi, 220 Mich.App. 453, 459, 559 N.W.2d 379 (1996). But see Mina v. General Star Indemnity Co., 218 Mich.App. 678, 684-685, 555 N.W.2d 1 (1996), rev'd in part on other grounds 455 Mich. 865, 568 N.W.2d 80 (1997) ("we are unable to say with any degree of certainty exactly what standard of proof courts should apply in fraud cases.")
[1] The text of the trial court's thorough, revised opinion, issued January 27, 1997, is repeated here in full:
"What is truth?" is the core question posed by every lawsuit. People v. Barbara, 400 Mich. 352, 357 [255 N.W.2d 171] (1977). Lawsuits are not activities to generate fees, games to be won, or theater to entertain. Lawsuits are searches for the truth of who did what and who is to be accountable for the consequences. Given the complexities of human affairs, the truth cannot always be found, but the fair search for it is why courts, lawyers and lawsuits exist. When it is found, the truth must be revered, and one answer to the question, "What is truth?" must always be, "What is expected," which means that when it is known, the truth must always be spoken. It wasn't in this case. That is why defendant Ford Motor Company is being defaulted.
When the truth is concealed or deliberately distorted, the reaction must be outrage. Anything less accepts dishonesty and by accepting it encourages it. That is why "[c]ourts have never been inclined to condone or reward those who choose to perjure themselves. Nor should they, since the pernicious effects of perjury are evident to all. Upon disclosure, perjury should be condemned by the courts and the guilty party dealt with accordingly," Lamky v. Lamky, 29 Mich.App. 17, 22 [185 N.W.2d 203] (1970). Unless the price for dishonesty is unbearable, the temptation to it "would be not a little increased." Nagi v. Detroit United Ry., 231 Mich. 452, 460 [204 N.W. 126] (1925); and People v. Adams, 430 Mich. 679, 695 fn. 11 [425 N.W.2d 437] (1988). Perjury" is utterly reprehensible." In the Matter of Grimes, 414 Mich. 483, 494 [326 N.W.2d 380] (1982); and People v. Adams, supra, at 695, 425 N.W.2d 437. It tears at the very fabric of the legal system and at the objective of the rule of law, which is to keep peace in the community by fairly resolving the disputes endemic to communal life. Reverence for the truth is an essential component of fairness. If the public ever comes to believe that the courts do not abhor dishonesty, they will not accept the courts' decisions as fair and will not be willing to submit their disputes to them.
It is because Ford has been caught concealing a great deal of significant information and blatantly lying that this Court is entering a default against it. No lesser penalty is proportional to the offense. A default, not a default judgment, is being entered because Ford remains entitled to a jury assessment of plaintiffs' damage claims. Wood v. DAIIE, 413 Mich. 573 [321 N.W.2d 653] (1982), but a default is appropriate. It should be axiomatic that hiding information and lying cannot be tolerated and must be answered with sanctions which unmistakably say so. Regrettably, Ford needs to hear more. It insists that this Court is powerless to deal with its misconduct. That is not so. There is ample precedent recognizing the propriety of what this Court is doing in this case.1
Statement of Proceedings
When she was two months old, Sarah Traxler was severely injured when the automobile in which she was a passenger was rear-ended by another automobile. Although securely fastened in a child restraint seat, Sarah suffered severe brain injuries when the back of her mother's seat collapsed onto her. In all likelihood, Sarah's physical and mental capabilities will never develop beyond those of a 3-year old. She and her parents sued the manufacturer of the child restraint seat2 and Ford, the manufacturer of her parent's car, a 1986 Ford Tempo. Their claims against Ford are that it was negligent in not designing seats to withstand the forces imposed on them in routine collisions.
This case is now weeks from trial. It was mediated very favorably to plaintiffs, settlement efforts failed, and trial is looming. What happened during discovery is why a default is being entered. Discovery was not only extensive, it was arduous. It is apparent from the motions on file that Ford seldom answered an interrogatory, produced a document, or scheduled a deposition without burdening plaintiffs' counsel with delays and the need to fight for everything owed. A very common response to plaintiffs' interrogatories was to object to them as overbroad and, then, "in the spirit of discovery," to answer them very narrowly, effectively reformulating the questions so that the answers revealed nothing pertinent. (A particularly pertinent example is discussed below.) Ford also played word games. For example, when plaintiffs asked for information about seats "collapsing rearward," Ford responded that it could not answer the question because the word "collapse" is ambiguous and argumentative. Ford could not locate documents, and witnesses and/or counsel were seldom available for depositions. Only dogged persistence by plaintiffs' counsel got anything. Every discovery request had to be followed with motions to compel and, then, with prolonged and wearing negotiations. In the best tradition of a civil profession, plaintiffs' counsel "worked with" Ford. Unfortunately, Ford used that willingness to evade.
Last summer, in July, Ford's discovery tactics resulted in this Court issuing an order which said and did the following:
"After a careful review of them, this Court finds (i) that plaintiffs' discovery requests at issue are appropriate, MCR 2.302(B)(1), and (ii) that, especially when placed in the context of the difficult time plaintiffs have had throughout this case obtaining information from defendants, the responses to those requests are obstructionist. Those responses appear to be a calculated effort to burden plaintiffs' counsel and to so narrowly redefine the standard of "relevant to the subject matter" in MCR 2.302(B)(1) and disingenuously invoke, given Ford's capabilities, the standard of "undue burden or expense" in MCR 2.302(C), that much of considerable potential significance to this case can be withheld by defendants. That Ford has produced much already is a product of plaintiffs' persistence and patience, not cooperation by Ford. Accordingly, as authorized by MCR 2.313(A)(2)(c):
IT IS HEREBY ORDERED AND ADJUDGED that plaintiffs' Fourth Motion to Compel against Ford Motor Company and Ford Motor Company of Canada, which motion is dated May 26, 1996, and was filed on May 31, 1996, be, and the same hereby is, GRANTED. Defendants Ford Motor Company and Ford Motor Company of Canada are to provide within 28 days hereof full and complete responses to the disputed particulars of plaintiffs' Second Request for Admissions, Fourth Set of Interrogatories, and Fifth Request for Production of Documents. If, in the judgment of this Court, appropriate responses are not provided within that time, a default will be entered against said defendants and, as to them, trial will proceed solely on the issue of damages. See MCR 2.313(B)(2)(c) and MCR 2.313(D)(1)(b). Entry of a default is the only credible response to persistent obstructionism by a litigant with Ford's economic strength. See, Wood v. DAIIE, [infra]; Thorne v. Bell, [infra]; and Frankenmuth Mut. Ins. Co. v. ACO, Inc., 193 Mich.App. 389, 396-397 [484 N.W.2d 718] (1992). Any lesser sanction is no penalty and will invite, not deter continued misconduct."
Ford did not fight that order. It did not appeal nor did it seek reconsideration. Instead, Ford promptly turned over 120,000 pages of documents. What plaintiffs' counsel discovered when they read those documents was disgusting; no other word would be accurate. For over two years, Ford had concealed very significant documents and information, and, worse, had blatantly lied about those documents and about the information in them; any word other than "lied" would understate what Ford did.3 Those revelations prompted plaintiffs to ask this Court to enter a default judgment against Ford. Their counsel had run out of patience. After carefully reviewing plaintiffs' discovery requests and some of Ford's responses (hundreds of pages), studying several rounds of briefs, and listening to counsels' very helpful oral argument, this Court had to agree that an outrageous fraud has been perpetrated by Forda few telling examples are discussed belowand that the sanction of a default, but not a default judgment, is the appropriate response.4
Plaintiffs' recent briefs and their counsel's illuminating oral argument do an outstanding job of identifying the deception perpetrated by Ford. The higher courts which will be reviewing this Court's decision are invited to study those briefs and the transcript of that argument. Nothing but needless prolixity will be achieved by restating here everything said so persuasively there. Those briefs and the transcript are all part of the record. Suffice to say here, Upjohn Co. v. New Hampshire Ins. Co., 438 Mich. 197, 207, fn. 7 [476 N.W.2d 392] (1991), that a few examples amply demonstrate that Ford consistently concealed information legitimately requested by plaintiffs and consistently lied in its response to appropriate discovery requests. Ford does not deny the shortcomings of its discovery responses. It tries only to excuse them as unintentional or not prejudicial, and it argues strenuously that this Court lacks authority to punish, by default or otherwise, it for what it did. Obviously, the Court sees things much differently.
Early in the discovery process, back in August, 1994, plaintiffs had submitted interrogatories to Ford asking whether it had used the seats in Sarah's parents' car, a 1986 Ford Tempo, in other vehicles, as well. If it had, discovery would have to include seeking information about those other vehicle models. If the seat had been used only in Tempos, discovery could be limited to that model. Ford answered that the seats used in the Tempo "are unique to the Tempo/Topaz car lines only." That answer was not true. Plaintiffs have learned that the Tempo/Topaz seat was derived from the Escort/Lynx seat and that that seat had been used in numerous other models. Ford admits that now, but only after having been caught in a lie.
How Ford answered plaintiffs' interrogatories about seats reveals much about its handling of discovery in this case. Ford insists that it is true that "the seat track assemblies used in the Tempo are unique to the Tempo/Topaz car lines only." That may be, but the question asked of Ford was not so limited. Ford was asked whether the front "seat tracks and seat backs" installed in 1986 Tempos "were ever installed on any other Ford Motor Company vehicle." If they were, particulars were requested. Ford objected to the interrogatory as "overly-broad, vague, irrelevant, oppressive and not calculated to the discovery of admissible evidence," and then responded that "the seat track assembles used in the Tempo are unique to the Tempo/Topaz car lines only." What it did was craftily reformulate the question to ask only what it wanted to say, namely: that the seat track assemblies, not the seats themselves, were unique, thereby creating the misleading impression that the seats had not been used in any other vehicles. With that impression, plaintiffs would not expect to be told about tests and lawsuits involving the seats and other models, even though the seats were, it now turns out, the same. That was as dishonest as saying in so many words that the seats, not just the seat track assemblies, were unique to the vehicle. "It is generally recognized that `fraud' may be consummated by suppression of facts and of the truth, as well as by open false assertions." USF & G v. Black, 412 Mich. 99, 125 [313 N.W.2d 77] (1981). Ford's answer was not simply a precise answer to a poor question; it was a dishonest answer, carefully crafted to mislead the reader. An impression can be so strong and so obviously what someone wanted to impart that it is a statement to that effect, in this case, a false statement.
The impact of Ford's deception was made abundantly clear by its latest discovery disclosures. Plaintiffs had asked Ford to identify and produce all tests done to establish the integrity of the seats used in 1986 Ford Tempos, as well as the same or similar seats used in other vehicles. Ford responded that it had performed 48 rear impact tests on the Tempo/Topaz seat between 1984 and 1994. The discovery disgorged in response to this Court's July order revealed that there have been hundreds of such tests performed on the same seats in numerous other models. Those tests are all highly relevant to this case and were requested by plaintiffs. By the way it responded to plaintiffs' interrogatories that the Tempo/Topaz seat was unique, Ford hid all those other tests.
Concealing those tests concealed something highly significant to this case. In those tests, the front seats routinely collapsed into the back seat on the slightest impact. Throughout this case, Ford has insisted that its seats, including those in 1986 Tempos, are designed to "yield." Ford has persistently taken great exception to any characterizations of seats having "failed," "broke," or "collapsed," but the test reports just disclosed repeatedly use those very terms to describe what happened to Ford seats in collisions just like that which occurred in this case. What Ford disclosed also revealed that, years ago, it had developed, but never used, a seat capable of withstanding much greater rear-end impacts than that which injured Sarah. Until last August, Ford had disclosed none of that.
Ford also failed to disclose that it had convened a Task Force to study seat back performance, that the Task Force had had numerous tests performed on Ford seat backs and that a report was drafted, but apparently never issued. Ford attempts to justify its withholding of that information by contending that, for years, the existence of the Task Force and its work were thought to be privileged. The Task Force was finally disclosed because Ford and its counsel now conclude that the same are "probably not privileged." The claim of privilege is disingenuous. Absolutely nothing disclosed about the Task Force and its activities supports any appearance of a privilege. Furthermore, highly revealing of the claim of privilege is how Ford handled that claim. The proper response would have been to note the existence, but not disclose the particulars, of the information, and, then, decline to produce it because of a privilege. Martin, et al., Michigan Court Rules Practice (3d ed.), Rule 2.314, p. 383. The Court could then have ruled on the claim. Ford's counsel knew the right way. Ford's silence was not the assertion of a privilege, but the deliberate concealing of information known to be discoverable. The claim of a mistaken belief in a privilege is an unpersuasive rationalization.
One more example of Ford's mendacity will suffice. Another of plaintiffs' 1994 interrogatories asked Ford to identify all lawsuits against it which complained about defects in the seat backs and/or seat tracks of the 1986 Ford Tempos and other Ford vehicles utilizing the same or similar seats. At first, Ford identified only 2 such lawsuits. Later, Ford reported that there had been 48 lawsuits, but no particulars were ever disclosed. The recently-produced documents reveal that Ford has defended the Tempo/Topaz seat in 91 lawsuits. Some 19 of those lawsuits were brought on behalf of minor children who were injured due to seat failures, several of them having been back seat passengers injured just like Sarah Traxler, by a collapsing front seat. Even more startling is the revelation in the documents disclosed in response to this Court's July order that Ford has defended hundreds of lawsuits involving the same seat in other models. Nothing was disclosed about those numerous lawsuits until August, 1996. Ford's explanation for its initial inaccurate response is its supposed belief that plaintiffs were asking only about lawsuits involving 1986 Tempos, a model and year which generated only a pair of lawsuits. That is nonsense, to put it bluntly. Plaintiffs' interrogatory asked for all lawsuits complaining about design or manufacturing defects in the front seats "of the 1986 Ford Tempo automobile, as well as for any other automobile employing the same or similar seat[s]" [emphasis added].
Applicable Law
The Court has authority to default Ford for its perverting of the discovery process. Common sense says so. So do the Michigan Court Rules, the case law, and the Michigan Revised Judicature Act. According to MCR 2.313(D)(1), a trial court "may order such sanctions as are just," including the "rendering [of] a judgment by default," MCR 2.313(B)(2)(c), against a party which fails to answer interrogatories. An order compelling discovery is not a prerequisite. LaCourse v. Gupta, 181 Mich.App. 293, 296 [448 N.W.2d 827] (1989), lv. app. den. 434 Mich. 921 (1990). Since a blatantly deceptive answer is worse than no answerthe lack of an answer is not misleading"it would be an absurd anomaly" if the authority to punish failing to answer interrogatories did not apply equally to giving deliberately false answers. Cummings v. Wayne County, 210 Mich.App. 249, 251 [533 N.W.2d 13] (1995); and MCR 1.105. A trial judge "must have the discretion" to treat doing something inadequately or improperly as a failure to do it at all. Cf. Banaszewski v. Colman, 131 Mich.App. 92, 95 [345 N.W.2d 647] (1983). In addition, the courts have, independent of court rules, "inherent authority to sanction misconduct." That authority "is rooted in a court's fundamental interest in protecting its own integrity and that of the judicial process." Cummings v. Wayne County, supra, at 252, 533 N.W.2d 13. See also Bellok v. Koths, 163 Mich.App. 780, 783 [415 N.W.2d 18] (1987), lv. app. den. 430 Mich. 854 (1988). Assigning to the trial courts "the front-line responsibility for the administration of justice" requires authorizing them to shoot back, so to speak, with the sanctions of dismissal or default. North v. Department of Mental Health, 427 Mich. 659, 661-662 [397 N.W.2d 793] (1986). The Legislature agrees. It has conferred "jurisdiction and power to make any order proper to fully effectuate the circuit court's jurisdiction and judgments." M.C.L. § 600.611; M.S.A. § 27A.611. In sum, this Court has authority to default Ford.
Admittedly, having authority to do something does not necessarily mean that it is proper in every instance to utilize that authority. Specifically with regard to the issue at hand, the sanction of a default "is a drastic measure and should be used with caution." Mink v. Masters, 204 Mich.App. 242, 244 [514 N.W.2d 235] (1994). The court is to consider various things. Was there a "flagrant and wanton refusal to facilitate discovery[?]," Thorne v. Bell, 206 Mich.App. 625, 633 [522 N.W.2d 711] (1994); and Mink v. Masters, supra, or some other "inexcusable" conduct? Equico Lessors, Inc. v. Original Buscemi's, Inc., 140 Mich.App. 532, 535 [364 N.W.2d 373] (1985). Did that conduct frustrate appropriate attempts to discover information vital to the proper development and presentation of the case, Bellok v. Koths, supra, at 783, 415 N.W.2d 18, or did it otherwise prejudice the other party, e.g., by impairing a mediation presentation? Barlow v. Crane-Houdaille, Inc., 191 Mich.App. 244, 252 [477 N.W.2d 133] (1991). Finally, after considering available alternatives, "[i]s the drastic sanction of default `just and proper within the context of the particular case'[?]" Houston v. Southwest Detroit Hospital, 166 Mich.App. 623, 629-630 [420 N.W.2d 835] (1987), lv. app. den. 431 Mich. 852, 447 N.W.2d 151 (1988); and Bellok v. Koths, supra. The trial court need not necessarily impose lesser sanctions before ordering a dismissal or default. What the court must do is consider "whether the imposition of lesser sanctions would not better serve the interests of justice." North v. Department of Mental Health, supra, at 662, 397 N.W.2d 793. If not, dismissing a misbehaving plaintiff's case or defaulting a misbehaving defendant is proper.
Applicable Law Applied
Ford's conduct in this case satisfies all of the criteria for the drastic sanction of a default. Concealing information and lying are, there can be no dispute, inexcusable behavior. Such conduct is more than an intentional refusal to facilitate discovery, which is sufficient to warrant entry of a default. Concealing information and lying is a flagrant and wanton refusal to facilitate discovery; nothing could be more obvious. That alone probably warrants a default. Because perjury is reprehensible, engaging in it, especially, engaging in a prolonged course of it, is so offensive to the maintenance of a sound judicial process that the severest punishment may be required regardless of the perjury's effect on the case. Cf., MCR 6.508(D)(3)(b)(iii), and People v. Anderson (Aft. Rem.), 446 Mich. 392, 405, 406 [521 N.W.2d 538] (1994). Whether that is so need also not be decided in this case, however, because all of the criteria for entry of a default have been met.5
Ford's conduct has badly prejudiced plaintiffs and this Court. Plaintiffs' counsel has had to spend considerable effort and incur great expense acquiring from other sources information which Ford should have disclosed. More significantly, Ford's misconduct has frustrated plaintiffs in the development of information vital to a persuasive presentation of their claims. What Ford has belatedly revealed about its testing of the car seat at issue in this case, what it appears to have learned from those tests, the availability of a safer seat, and the fact that a safer seat was never used, all go directly to what a plaintiff must prove in a case like this one and what the Supreme Court expects to be disclosed during discovery. See Prentis v. Yale Mfg. Co., 421 Mich. 670, 688-689 [365 N.W.2d 176] (1984). It is readily apparent from Ford's recent briefs that it has a favorable "spin" on that information. To enable plaintiffs to respond, discovery needs to start anew. Plaintiffs' experts need to start all over, and a tremendous amount of follow-up inquiries must be made of Ford and its pertinent personnel. That would put off trial until next year, which would be very unfair to plaintiffs.
Ford's misconduct has also harmed this Court and the public interest. "Aside from its advantage to a party in discovering the opponent's claim, ... [discovery] ... has a public purpose ... arising from reducing the time of the trial by narrowing the issues, obtaining admissions of fact, fixing the claims of the parties when the incident is fresh in their minds, and otherwise fostering accuracy and celerity of trial, and also from inducing settlements, which are made more easy when the respective claims are known." Ewer v. Dietrich, 346 Mich. 535, 542-543 [78 N.W.2d 97] (1956). Because of what Ford did, those benefits are unavailable, unless discovery is reopened. More significantly. Ford's misconduct "constitutes an abuse of the judicial process itself and not just a matter of inequity between the parties ... `[T]ampering with the administration of justice ... is a wrong against the institutions set up to protect and safeguard the public, institutions in which fraud cannot complacently be tolerated consistently with the good order of society.'" Cummings v. Wayne County, supra, at 252, 533 N.W.2d 13 [quoting Buchanan Home & Auto Supply Co. v. Firestone Tire & Rubber Co., 544 F. Supp. 242, 244-245 (D.S.C., 1981) ].
No lesser sanction is sufficient. To the extent Ford's dishonesty resulted in plaintiffs' counsel having to look elsewhere for the requested information, assessing against Ford the actual costs of those searches will offset that prejudice, assuming that what amounts to just a fine is ever a sufficient response to perjury. The other prejudice to plaintiffs' case cannot be so readily rectified, however. If a default is not entered, plaintiffs must be allowed to follow-up all of the data just disclosed, e.g., fully explore the Seatback Performance Task Force and the numerous tests conducted on seats. As previously noted, that means re-starting discovery and putting off next month's trial. However, the courts of Michigan are under orders to eliminate "the injustice of delayed justice" because "[n]o greater wrong hath man judicial wrought than that of overlooking, if not encouraging delays and more delays of justice." Hearn v. Schendel, 355 Mich. 648, 653 [95 N.W.2d 849] (1959).
This case is already three years old, and the price of additional delay will be paid by plaintiffs, not Ford. With the passage of more time, it will be harder for plaintiffs to prove their case. Witnesses will scatter even more, and memories will become even dimmer. One of Ford's excuses for the delays in scheduling depositions was the retirement and move of many employees. That will happen more as time passes. Witnesses who remain available will remember less, and what they remember will be subject to challenge because of age. Whatever the jury is told about the delay, experience teaches that delay itself creates doubts in the minds of jurors. As a case ages, it becomes less persuasive. Since the burden of proof is on plaintiffs, they will feel the consequences of age. For that reason, even ordering Ford to pay all the costs of discovery henceforward, will not offset the prejudice to plaintiffs, but punish them, a real perversion. Ford's misconduct having impaired plaintiffs' ability to prove liability, even if reimbursed all their expenses, plaintiffs will remain significantly disadvantaged with Ford still benefitting. That is ineffectual, to say the least, in dealing with what Ford did. Furthermore, a default[ ]is very appropriate because it focuses directly on that which Ford has damaged: plaintiff's ability to prove liability.
In sum this is a case in which the drastic sanction of a default is just and proper. This is, in fact, a case in which anything less than that sanction would be improper. Numerous times, our Court of Appeals has sustained a trial court's defaulting a defendant or dismissing a plaintiff's case, which is the equivalent of a default, because of that party's wanton and flagrant violation of its discovery obligations. In Mink v. Masters, supra; and Chrysler Corp. v. Home Ins. Co., 213 Mich.App. 610, 612 [540 N.W.2d 485] (1995), the Court of Appeals affirmed defaults as a discovery sanction. Dismissals as a sanction were affirmed in Barlow v. Crane-Houdaille, Inc., supra; Welch v. J. Walter Thompson, U.S.A., Inc., 187 Mich.App. 49 [466 N.W.2d 319] (1991), lv. app. den. 439 Mich. 852, 480 N.W.2d 908 (1991); LaCourse v. Gupta, supra; Enci v. Jackson, 173 Mich.App. 30 [433 N.W.2d 313] (1988); Bellok v. Koths, supra; and Edge v. Ramos, 160 Mich.App. 231 [407 N.W.2d 625] (1987), lv. app. den. 428 Mich. 907 (1987). The misconduct in this case being far worse, a comparable penalty is certainly within the discretion of this Court.
Defaulting Ford does not deprive it of its right to a jury assessment of its liability. Cf., Enci v. Jackson, supra, at 35, 433 N.W.2d 313. The right in civil cases to a trial by jury is not absolute. That right can be lost by not asking soon enough or by not timely paying the required fee. MCR 2.508(D)(1). A jury trial can also be lost by waiting too long to answer, MCR 2.603(A)(1), or by not complying with some applicable court rule or a pertinent court order. MCR 2.504(B)(1). Finally, a litigant with a legally inadequate case is not entitled to a jury determination, but must be satisfied with a judge's ruling. MCR 2.116(I)(1). See also Skinner v. Square D Co., 445 Mich. 153, 174-175 [516 N.W.2d 475] (1994); and Moll v. Abbott Laboratories, 444 Mich. 1, 26-28 [506 N.W.2d 816] (1993). In other words, not only can the right to a trial by jury be waived by litigants, that right can be lost by inappropriate conduct during the course of a case awaiting trial. That is what has happened in this case. This Court is not taking from Ford a jury trial to which it is entitled. Ford forfeited that trial by its conduct.
One final point needs to be addressed. Ford contends, quite vigorously, that this Court is effectively estopped from now defaulting it because the Court ruled back in July that it would default Ford if it did not disclose the information which it had belatedly disclosed. This Court disagrees just as vigorously. Ford is not being defaulted because it did not obey this Court's order in July. Ford is being defaulted because the information recently disclosed reveals that, prior to that order ever being entered, Ford had engaged in a calculated campaign of concealment and deceit. This Court cannot possibly be barred from appropriately reacting to that shameful campaign because it was discovered only when this Court insisted that Ford obey the rules.
Conclusion
"A primary purpose of discovery is to enhance the reliability of the fact-finding process by eliminating distortions attributable to gamesmanship." People v. Burwick, 450 Mich. 281, 298 [537 N.W.2d 813] (1995). Necessarily, therefore, the courts must insist that discovery be conducted in a way which "promote[s] the discovery of the true facts and circumstances of a controversy, rather than aid in their concealment." Hallett v. Michigan Consolidated Gas Co., 298 Mich. 582, 592 [299 N.W. 723] (1941); and Ewer v. Dietrich, supra, at 542, 78 N.W.2d 97. Because condoning the deliberate frustration of discovery will conceal information and promote gamesmanship, such misconduct must be penalized swiftly and sternly. Justice is not served by anything less. LaCourse v. Gupta, supra.
[Footnotes to trial court's opinion:]
1. It is unfortunate that there are so many published cases with have dealt with obstructionism during discovery. The prevalence of it reinforces why it must be sternly punished. Otherwise, the inclination to it will not be deterred.
2. To simplify the upcoming trial of this case, plaintiffs have agreed to dismiss the babyseat's manufacturer.
3. Courts must often form opinions as to the merits of matters before them, "often, as to the bona fides of the parties." People v. Houston, 179 Mich.App. 753, 759-760 [446 N.W.2d 543] (1989), lv. app. den. 434 Mich. 855 (1990). "If the judge did not form judgments of the actors in those courthouse dramas called trials, he could never render decisions." Liteky v. United States, 510 U.S. [540, 551], 114 S. Ct. 1147, 1155, 127 L. Ed. 2d 474 (1994).
4. The parties were informed in October, 1996, by letter of the Court's decision. Drafting and re-drafting an opinion was going to take time. The Court wanted the parties to know its decision as soon as possible so they could meaningfully prepare for mediation, settlement negotiations, and trial. The parties' counsel were told at oral argument that they would promptly be informed of the Court's decision, but that an opinion would be delayed. The Court apologizes for how long it has taken to issue this opinion. It has been in trial consistently since mid-October.
5. Unnecessary decisions are inappropriate because the risk of error is too great. Unnecessary decisions are often incorrect because they are made without the crucial focus provided by knowing that they will actually make a difference in a case. Cohens v. Virginia, 6 Wheat. 264, 299, 5 L. Ed. 257, 290 (1821), quoted in Breckon v. Franklin Fuel Co., 383 Mich. 251, 267 [174 N.W.2d 836] (1970); and Alar v. Mercy Memorial Hospital, 208 Mich.App. 518, 532, 529 N.W.2d 318 (1995). In judging, as in many things, it is, to paraphrase Samuel Johnson, only the imminence of a hanging which can adequately concentrate the mind. Boswell, Life of Johnson [September 1, 1777]. A striking example of why courts should not make unnecessary decisions is United States v. Williams, 872 F.2d 773 (6th Cir., 1989). Prior to that case, dozens of published opinions had volunteered that a certain factual scenario, a scenario not involved in any of those cases, would call for a certain outcome. In Williams, the Sixth Circuit was actually confronted with that other scenario. When it was, the law so often previously espoused was revealed to be wrong. See Staples v. United States, 511 U.S. 600, 636, fn. 22, 114 S. Ct. 1793, 1813, fn. 22, 128 L. Ed. 2d 608 (1994).
[2] As plaintiffs note in their brief on appeal, defense counsel made two passing references to an evidentiary hearing during oral argument of plaintiffs' Motion for Default Judgment, but left the decision to the trial court:
Defense Counsel: If the Court wanted more examples of that, Ford would be happy to provide an evidentiary hearing and have the people from Ford's discovery group or anyone else the Court wished to inquire [sic] list additional items.
Defense Counsel: [i]f the Court feels it needs more information, your Honor, can we respectfully request the right to have an evidentiary hearing on two issues ...
I believe it is apparent that Ford expressly left the decision to hold an evidentiary hearing to the trial court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572692/ | 576 N.W.2d 772 (1998)
254 Neb. 392
STATE of Nebraska ex rel. Stan DOBROVOLNY, Appellee and Cross-Appellant,
v.
Scott MOORE, Secretary of State of Nebraska, Appellant and Cross-Appellee.
No. S-96-1162.
Supreme Court of Nebraska.
April 3, 1998.
Michael F. Coyle, Special Assistant Attorney General, and Michael L. Schleich, of Fraser, Stryker, Vaughn, Meusey, Olson, Boyer & Bloch, P.C., Omaha, for appellant.
Denzel R. Busick, of Luebs, Leininger, Smith, Busick & Johnson, Grand Island, for relator.
*773 WHITE, C.J., and CAPORALE, WRIGHT, CONNOLLY, GERRARD, STEPHAN, and McCORMACK, JJ.
CAPORALE, Justice.
The respondent-appellant, Scott Moore, Secretary of State of Nebraska, declared the effort to place a taxing measure on the ballot by initiative petition unsuccessful because of the lack of an adequate number of valid signatures. The relator-appellee, Stan Dobrovolny, seeks a declaration that the requirements for signatures of registered voters on such petitions, as contained in Neb. Rev.Stat. § 32-1409(1) (Cum.Supp.1996), are unconstitutionally vague on their face and as applied. He further prays that the secretary be compelled to place such a measure on a ballot. The district court ruled § 32-1409(1) unconstitutional and ordered that the secretary determine the sufficiency and validity of the signatures in accordance with prior law and place the measure on the ballot at a future general election if all constitutional and other requirements have been met. Inasmuch as the constitutionality of a statute is questioned, the secretary appealed directly to this court, asserting, in summary, that the district court erred in ruling § 32-1409(1) unconstitutional. The relator has cross-appealed, asserting, in summary, that the district court erred in failing to (1) find that the secretary wrongly determined the number of signatures required, (2) find that the requisite number of valid signatures had been obtained, and (3) order the measure placed on the ballot at the 1996 general election or, in the alternative, order that a special election be held. For the reasons hereinafter set forth, we reverse, and remand with the direction that the cause be dismissed.
The relator is president of Nebraskans for Equal Taxation, an organization devoted to altering Nebraska's tax structure. He circulated an initiative petition to place on the ballot a constitutional amendment entitled "Property Tax Relief Amendment."
In accordance with the law detailed in State ex rel. Bellino v. Moore, 254 Neb. 385, 576 N.W.2d 793 (1998), the secretary certified that 10 percent of the registered voters constituted 98,939 voters and determined that 87,488 of the signatures submitted by the relator's group were valid. The relator's group submitted no evidence to the secretary to rehabilitate any of the invalidated signatures. However, in the district court the relator presented statistical evidence suggesting that between 54.6 percent and 59.5 percent of the rejected signatures were valid.
The issues presented by the secretary's appeal and the relator's cross-appeal are the same as those presented in State ex rel. Bellino, supra, and are resolved adversely to the relator by the rules set forth therein. We therefore, as stated in the first paragraph hereof, without deciding whether one may present in the district court evidence not presented to the secretary, reverse the judgment of the district court and remand the cause with the direction that it be dismissed.
REVERSED AND REMANDED WITH DIRECTION TO DISMISS. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1061702/ | COURT OF APPEALS OF VIRGINIA
Present: Judges Haley, Beales and Alston
Argued at Alexandria, Virginia
GERALD JERMAINE PEARSON
MEMORANDUM OPINION * BY
v. Record No. 2422-10-4 JUDGE RANDOLPH A. BEALES
JANUARY 17, 2012
CITY OF FALLS CHURCH
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY
James F. Almand, Judge
Allison H. Carpenter, Assistant Public Defender (Sara M. Bieker,
Assistant Public Defender; Office of the Public Defender for
Arlington County and the City of Falls Church, on brief), for
appellant.
John E. Foster (Office of the City Attorney, on brief), for appellee.
Gerald Jermaine Pearson (appellant) was charged with two counts of injuring or
tampering with a vehicle, in violation of Virginia Code § 18.2-146, and one count of trespass in
violation of City of Falls Church City Code § 28-72 1 (City Code § 28-72). The jury convicted
appellant of trespass and found him not guilty of the remaining count of tampering. 2 On appeal,
appellant argues that the trial court erred in failing to grant his motion to declare City Code
§ 28-72 unconstitutional and invalid on the grounds that it is “facially unconstitutional” and that
it violates the Dillon Rule. In addition, appellant argues that the evidence was insufficient as a
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
1
“It shall be unlawful for any person to walk, ride or drive upon the land owned, leased
or occupied by another person, between the hours of 11:00 p.m. and 7:00 a.m., without the
consent of the person entitled to possession of such premises.” City Code § 28-72.
2
Appellant’s motion to strike the other count of tampering with a vehicle was granted.
matter of law to sustain his trespassing conviction because the City of Falls Church (the City)
failed to prove the element of time as required under City Code § 28-72. For the following
reasons, we conclude that the trial court did not err, and, therefore, we affirm this conviction on
appeal.
I. BACKGROUND
At trial, appellant was convicted of violating City Code § 28-72 by trespassing onto the
property of Koons Auto Body Shop in the City of Falls Church between the hours of 11:00 p.m.
and 7:00 a.m. on December 20, 2009. The record on appeal contains a written statement of facts
in lieu of a transcript of the trial proceedings. See Rules 5A:7(a)(7); 5A:8(d). The written
statement of facts reflects the following evidence and arguments presented at trial.
John Morris, the manager of Koons Auto Body Shop, testified that he did not give
appellant permission to be on the lot of Koons Auto Body Shop in the early morning hours of
December 20, 2009, at approximately 1:00 a.m. Morris described the body shop, stating that the
back part of the body shop lot has an eight-to-ten-foot chain-link fence surrounding it, with
barbed wire at the top. 3 He also testified there were security cameras on 24 hours a day, seven
days a week – and they were monitored from 10:00 p.m. until 5:00 a.m. each night.
Officer Alan Freed of the Falls Church Police Department, who “responded to a call” that
someone was on the Koons property, also testified for the City. During Officer Freed’s direct
examination at trial, the prosecutor asked, “Were you in uniform and displaying your badge of
authority in the early morning hours of December 20th, 2009 within the confines of the City of
Falls Church?” (Emphasis added). Officer Freed responded, “Yes sir.” The prosecutor then
asked Officer Freed, “Did you have the opportunity to come into contact with the defendant
3
Morris also testified that the two sliding gates separating the aisles in the front lot from
the back lot had been left open on the date in question to allow snow plows through to plow the
lot (although the snow plows apparently did not, in fact, actually plow the lot at that time).
-2-
Gerald Jermaine Pearson?” Officer Freed responded, “Yes sir.” Officer Freed identified
appellant as who he encountered within the property of Koons Auto Body Shop on that date.
Officer Freed also testified that appellant was wearing a long black coat “as described by the
people that were giving us the information.” 4
Appellant moved to strike the trespass charge on the basis that the City failed to present
sufficient evidence of the time of day that Officer Freed found appellant in the Koons lot, even
though “between the hours of 11:00 p.m. and 7:00 a.m.” is an element of this crime, as stated in
City Code § 28-72. In response to appellant’s motion, the prosecutor stated that the trial court’s
recollection would control, but believed he remembered asking Officer Freed “what brought his
attention to the early morning hours of December 20, 2009 and the officer responded at
1:04 a.m. he had received a call of people on the property and that’s what he responded to.”
(Emphasis added). Furthermore, the written statement of facts states that nothing indicated “that
the correct time of responding to the call and taking the Defendant into custody was other than
approximately 1 a.m. in the early morning hours of Sunday, December 20, 2009.” Thus, the trial
court denied the motion to strike.
Appellant did not present any witnesses in the guilt phase of the trial. At the close of the
evidence, appellant renewed his motion to strike the City’s evidence on the trespass charge,
arguing that the evidence was insufficient to support a finding of guilt. The court denied that
motion, stating that the issue of timing on the trespass charge was factual and, thus, should be
decided by the jury.
4
The statement of facts reflects that, after appellant was taken into custody during the
early morning hours of December 20, 2009, the magistrate signed arrest warrants for automobile
tampering at 5:33 a.m. and 5:36 a.m. and also signed a summons for trespassing at 5:45 a.m.
According to the statement of facts, “The summons and warrants of arrest were not admitted into
evidence and were not presented to the jury, but are part of the record per Rule 5A:7.” See Rule
5A:7(a)(7) (explaining that the record on appeal includes “the transcript of any proceeding or a
written statement of facts, testimony, and other incidents of the case”).
-3-
The jury found appellant guilty of trespass under City Code § 28-72, and the trial court
denied appellant’s post-trial motion to set aside this verdict.
II. ANALYSIS
City Code § 28-72 – the ordinance challenged by appellant – states, “It shall be unlawful
for any person to walk, ride or drive upon the land owned, leased or occupied by another person,
between the hours of 11:00 p.m. and 7:00 a.m., without the consent of the person entitled to
possession of such premises.”
A. Constitutional Challenge to City Code § 28-72
In his first assignment of error, appellant argues that the trial court erred in failing to
grant his motion to declare City Code § 28-72 unconstitutional and invalid on the ground that it
is “facially unconstitutional” in violation of the Fourteenth Amendment’s Due Process Clause.
(Emphasis added). However, appellant’s facial challenge to City Code § 28-72 is barred because
appellant did not have standing. In addition, appellant did not include an as-applied challenge to
the ordinance in his assignments of error, as is required under Rule 5A:12 and controlling case
law.
As a general rule, a defendant has standing to challenge the
constitutionality of a penal statute only when his own speech or
conduct was constitutionally protected or when the language of the
statute “as applied” to his conduct was impermissibly vague; if his
conduct was not constitutionally protected and was clearly
proscribed by the language of the statute, he has no standing to
mount a facial challenge charging that the statute could be
unconstitutional if applied to other conduct of other people under
other circumstances.
Stanley v. Norfolk, 218 Va. 504, 506, 237 S.E.2d 799, 800 (1977) (emphasis added). 5 “This
general rule reflects two ‘cardinal principles’ of our constitutional order: the personal nature of
5
“A limited exception has been recognized for statutes that broadly prohibit speech
protected by the First Amendment. This exception has been justified by the overriding interest in
removing illegal deterrents to the exercise of the right of free speech. County Court v. Allen,
-4-
constitutional rights and the prudential limitations on constitutional adjudication.” Cottee v.
Commonwealth, 31 Va. App. 546, 553, 525 S.E.2d 25, 29 (2000).
Here, appellant’s assignment of error specifically alleges that City Code § 28-72 is
“facially unconstitutional,” but it does not raise an as-applied challenge. (Emphasis added).
Because appellant’s “conduct was not constitutionally protected and was clearly proscribed by
the language of the” city ordinance, 6 “he has no standing to mount a facial challenge.” Stanley,
218 Va. at 506, 237 S.E.2d at 800.
Moreover, appellant’s attempts at making an as-applied challenge in his appellate brief –
even though an as-applied challenge is not alleged in his assignment of error on appeal – are
barred under Rule 5A:12(c)(1)(i). In a facial challenge, like appellant’s, the issues are limited to
the validity of the statute itself.
Thus, appellant does not have standing to mount a facial challenge, and his as-applied
challenge is barred under Rule 5A:12. Consequently, this Court simply may not address the
merits of appellant’s arguments regarding the constitutionality of City Code § 28-72. Stanley,
218 Va. at 506, 237 S.E.2d at 800.
B. The Validity of City Code § 28-72 Under the Dillon Rule
Appellant also argues that the trial court erred in failing to grant his motion to declare
City Code § 28-72 invalid because it violates the Dillon Rule, which states that “municipal
442 U.S. 140, 154-155 (1979). The First Amendment exception does not apply here in this
challenge under the Due Process Clause of the Fourteenth Amendment.
6
Appellant’s conduct was “clearly proscribed” by City Code § 28-72. An
eight-to-ten-foot chain-link fence with barbed wire along the top surrounded the Koons Auto
Body Shop lot. Appellant was observed – and then arrested – by Officer Freed “in the early
morning hours” of December 20, 2009 inside the Koons Auto Body Shop lot. Morris, the
manager of the body shop, testified that appellant did not have permission to be inside the
property at that time. Therefore, appellant was on land owned by another (Koons), between the
hours of 11:00 p.m. and 7:00 a.m., without the consent of Koons Auto Body Shop, in violation of
City Code § 28-72.
-5-
governments have only those powers which are expressly granted by the state legislature, those
powers fairly or necessarily implied from expressly granted powers, and those powers which are
essential and indispensable.” City of Virginia Beach v. Hay, 258 Va. 217, 221, 518 S.E.2d 314,
316 (1999) (citing Commonwealth v. County Board of Arlington County, 217 Va. 558, 574, 232
S.E.2d 30, 40 (1977)).
A challenge to the authority of a locality to adopt a criminal ordinance is a legal issue that
is considered by the appellate court de novo. See King v. County of Arlington, 195 Va. 1084,
1088, 81 S.E.2d 587, 590 (1954). On appeal, “[i]f the statute and ordinance can be harmonized
. . . the courts have a duty ‘to harmonize them and not nullify the ordinance.’” Strout v. City of
Virginia Beach, 43 Va. App. 99, 102, 596 S.E.2d 529, 530 (2004) (quoting King, 195 Va. at
1088, 81 S.E.2d at 590).
1. Express Authority to Enact City Code § 28-72
Appellant argues that the City has no express power or implied power to regulate
trespassing from 11:00 p.m. to 7:00 a.m. However, it is clear that the City has the express power
to enact City Code § 28-72 pursuant to Virginia Code § 15.2-1102, which states in relevant part:
[a] municipal corporation shall have . . . all powers . . . pertinent to
the conduct of the affairs and functions of the municipal
government, the exercise of which is not expressly prohibited by
the Constitution and the general laws of the Commonwealth, and
which are necessary or desirable to secure and promote the
general welfare of the inhabitants of the municipality and the
safety . . . peace [and] good order . . . and the enumeration of
specific powers shall not be construed or held to be exclusive or as
a limitation upon any general grant of power, but shall be
construed and held to be in addition to any general grant of power.
(Emphasis added).
Certainly, City Code § 28-72’s regulation of trespass in the City of Falls Church from
11:00 p.m. to 7:00 a.m. is “necessary [and] desirable to secure and promote the general welfare”
-6-
of its people and “the safety . . . peace [and] good order” of the City. 7 Virginia Code
§ 15.2-1102. Many crimes are committed at night, and City Code § 28-72 is an ordinance
reasonably intended to help detect and prevent those crimes from occurring. City Code § 28-72
plainly furthers the reasonable objective of preventing crime, protecting life and property, and
preserving the peace. Accordingly, the City had the express authority – under Virginia Code
§ 15.2-1102 – to prohibit trespass from 11:00 p.m. to 7:00 a.m. Thus, City Code § 28-72 is
validly enacted under the Dillon Rule.
2. Implied Authority to Enact City Code § 28-72
Furthermore, the City also has the implied power to enact City Code § 28-72. We
disagree with appellant’s arguments that the City did not have the implied power to enact this
ordinance because it impermissibly deviates from the Commonwealth’s own trespassing statute
found in the Code of Virginia.
Appellant argues that the legislature did not contemplate any deviation from Virginia
Code § 18.2-119 (the Commonwealth’s trespassing statute) without an express delegation to
localities. However, the Supreme Court of Virginia held that
the mere fact that the State, in the exercise of its police power, has
made certain regulations with respect to a subject does not prohibit
a local legislature from dealing with the subject. Both the State
and its local governmental agency may have concurrent
jurisdiction over the same subject matter relating to local affairs.
King, 195 Va. at 1088, 81 S.E.2d at 590 (emphasis added). Under King, Virginia and the City of
Falls Church have “concurrent jurisdiction” over trespass crimes in the City. Id. The fact that
7
Appellant argues that City Code § 28-72 also violates the Dillon Rule because it is a
“strict liability” trespass ordinance that does not expressly mention the element of intent.
However, City Code § 28-72 creates no more of a strict liability offense than the
Commonwealth’s own trespass statute, Code § 18.2-119, which also lacks an express
requirement of intent. See Jones v. Commonwealth, 18 Va. App. 229, 232, 443 S.E.2d 189, 191
(1994); see also Campbell v. Commonwealth, 41 Va. (2 Rob.) 791, 791 (1843); Reed v.
Commonwealth, 6 Va. App. 65, 70, 366 S.E.2d 274, 278 (1988).
-7-
Virginia has enacted the Commonwealth’s trespassing statute does not prohibit the City of Falls
Church from also addressing trespass in its own local criminal ordinance.
Appellant also argues that City Code § 28-72 contravenes the General Assembly’s
express intent to prohibit trespassing in Virginia Code § 18.2-119, based upon common law
elements of trespass. Appellant contends that the City of Falls Church recognized this intent and
enacted another city ordinance (City Code § 28-73), which almost exactly mirrors the
Commonwealth’s trespassing statute’s use of the common law elements of trespass. By then
also creating an additional ordinance in City Code § 28-72, appellant believes the City has acted
against the General Assembly’s intent.
However, while City Code § 28-73 mirrors the Commonwealth’s trespassing statute
almost exactly, City Code § 28-72 addresses essentially the same behavior – but in a specific
time frame – and this additional requirement is not inconsistent with the Commonwealth’s
trespassing statute.
Under the Supreme Court’s opinion in King, a locality may adopt “local legislation not
inconsistent with the provisions in the state law.” 195 Va. at 1089, 81 S.E.2d at 590 (emphasis
added). Here, the time requirement of City Code § 28-72 is “not inconsistent” with the
Commonwealth’s trespassing statute. Id. (emphasis added). Like the Commonwealth’s
trespassing statute, City Code § 28-72 prohibits the public from going onto the property of
another without the right to do so. The only additional provision is that City Code § 28-72
prohibits trespass by going on another’s property between 11:00 p.m. and 7:00 a.m. without the
owner’s consent.
In King, the Supreme Court explained:
“The mere fact that the state, in the exercise of the police power,
has made certain regulations does not prohibit a municipality from
exacting additional requirements. So long as there is no conflict
between the two, and the requirements of the municipal bylaw are
-8-
not in themselves pernicious, as being unreasonable or
discriminatory, both will stand. The fact that an ordinance
enlarges upon the provisions of a statute by requiring more than
the statute requires creates no conflict therewith, unless the statute
limits the requirement for all cases to its own prescription. Thus,
where both an ordinance and a statute are prohibitory and the
only difference between them is that the ordinance goes further in
its prohibition, but not counter to the prohibition under the statute,
and the municipality does not attempt to authorize by the
ordinance what the legislature has forbidden or forbid what the
legislature has expressly licensed, authorized, or required, there is
nothing contradictory between the provisions of the statute and the
ordinance because of which they cannot coexist and be effective.
Unless legislative provisions are contradictory in the sense that
they cannot coexist, they are not deemed inconsistent because of
mere lack of uniformity in detail.” 37 Am. Jur., Municipal
Corporations, § 165, p. 790. See also, McQuillin on Municipal
Corporations, 3d Ed., Vol. 6, § 23.07, p. 392 ff.
King, 195 Va. at 1090-91, 81 S.E.2d at 591 (emphasis added).
Like the ordinance in King, City Code § 28-72 supplements the Commonwealth’s
trespassing statute, but does not contradict it. Therefore, City Code § 28-72 does not contravene
the General Assembly’s intent in enacting the Commonwealth’s trespassing statute.
Furthermore, this Court also has a “duty ‘to harmonize’” City Code § 28-72 and the
Commonwealth’s trespassing statute if at all possible. Strout, 43 Va. App. at 102, 596 S.E.2d at
530 (quoting King, 195 Va. at 1088, 81 S.E.2d at 590).
Accordingly, because the City had the express and implied power to enact City Code
§ 28-72, it is valid under the Dillon Rule.
C. Sufficiency of the Evidence
Appellant also argues that the evidence was insufficient as a matter of law to sustain his
trespassing conviction because the City failed to prove the element of time – i.e., that appellant
was on the property from 11:00 p.m. to 7:00 a.m. – as required under City Code § 28-72.
When considering the sufficiency of the evidence on appeal, “a reviewing court does not
‘ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable
-9-
doubt.’” Crowder v. Commonwealth, 41 Va. App. 658, 663, 588 S.E.2d 384, 387 (2003)
(quoting Jackson v. Virginia, 443 U.S. 307, 318-19 (1979)). “Viewing the evidence in the light
most favorable to the [City], as we must since it was the prevailing party in the trial court,” Riner
v. Commonwealth, 268 Va. 296, 330, 601 S.E.2d 555, 574 (2004), “[w]e must instead ask
whether ‘any rational trier of fact could have found the essential elements of the crime beyond a
reasonable doubt,’” Crowder, 41 Va. App. at 663, 588 S.E.2d at 387 (quoting Kelly v.
Commonwealth, 41 Va. App. 250, 257, 584 S.E.2d 444, 447 (2003) (en banc)). See also
Maxwell v. Commonwealth, 275 Va. 437, 442, 657 S.E.2d 499, 502 (2008). “This familiar
standard gives full play to the responsibility of the trier of fact fairly to resolve conflicts in the
testimony, to weigh the evidence, and to draw reasonable inferences from basic facts to ultimate
facts.” Jackson, 443 U.S. at 319. It is this Court’s duty to look to the evidence which supports
the conviction and to permit the conviction to stand unless the factfinder was plainly wrong.
Williams v. Commonwealth, 278 Va. 190, 193, 677 S.E.2d 280, 282 (2009).
Appellant contends that the City built its case that he trespassed between 11:00 p.m. and
7:00 a.m. on insufficient circumstantial evidence. Specifically, he argues that Morris, the
manager of Koons Auto Body Shop, was not present at the time of the incident, argues that
Officer Freed was never asked and did not testify to a specific time during which the incident
occurred, and argues that the phrase “early morning hours” testified to by Officer Freed could
extend beyond 7:00 a.m., the outer limit on City Code § 28-72’s criminalized time frame.
However, the jury was entitled to disagree with appellant’s arguments as long as it did
not “arbitrarily disregard a reasonable hypothesis of innocence.” Cooper v. Commonwealth, 54
Va. App. 558, 573, 680 S.E.2d 361, 368 (2009). There was abundant testimony presented at trial
that a “rational trier of fact,” Kelly, 41 Va. App. at 257, 584 S.E.2d at 447, could have
considered along with all “reasonable inferences” that may be drawn from that evidence in the
- 10 -
City’s favor, so as to have found that appellant was trespassing between the hours of 11:00 p.m.
to 7:00 a.m. Jackson, 443 U.S. at 319. That evidence is as follows:
Morris testified that the security cameras at Koons Auto Body Shop were monitored
every day – including the date of the incident, December 20, 2009 – from 10:00 p.m. to 5:00 a.m.
Officer Freed testified that on December 20, 2009, he “responded to a call” at Koons Auto Body
Shop. When viewing this evidence in the light most favorable to the City, as the prevailing party
below, Riner, 268 Va. at 330, 601 S.E.2d at 574, it is a “reasonable inference” that Officer Freed
responded to a call initiated by the persons who were responsible for monitoring Koons’s
security cameras from 10:00 p.m. to 5:00 a.m. Jackson, 443 U.S. at 319. Moreover, the jury
heard Officer Freed testify that appellant was wearing a long black coat “as described by the
people that were giving us the information.” It is also a “reasonable inference,” id., that the
“people that were giving [Officer Freed] the information” about appellant’s long black coat were
the same people who monitored the security cameras between 10:00 p.m. and 5:00 a.m. These
three pieces of evidence – testified to by Morris and Officer Freed – establish a “reasonable
inference” that appellant was on the Koons property without consent on December 20, 2009
between 10:00 p.m. and 5:00 a.m. Id.
However, the jury heard even more evidence which further narrowed the window of time
in which appellant was caught trespassing on Koons’s property. Officer Freed identified
appellant as a man he encountered in the lot of Koons Auto Body Shop. He also testified that he
arrested appellant and placed him into custody “in the early morning hours” of December 20,
2009. (Emphasis added). It is a “reasonable inference” that the arrest occurred between
12:00 midnight and 5:00 a.m. on December 20, 2009 because those are the only morning hours
in which the security cameras at Koons Auto Body Shop were monitored. Id. This inference is
even more reasonable in light of the portion of the statement of facts stating that there was
- 11 -
nothing indicating “that the correct time of responding to the call and taking the Defendant into
custody was other than 1 a.m. in the early morning hours of Sunday, December 20, 2009.”
(Emphasis added).
The jury made “reasonable inferences from” all of these “basic facts” presented at trial
and reasonably concluded the “ultimate fact” that appellant was trespassing between 11:00 p.m.
and 7:00 a.m. on December 20, 2009. Id. Accordingly, a rational trier of fact could have
examined all of this evidence and found the essential elements of trespass under City Code
§ 28-72 beyond a reasonable doubt. Kelly, 41 Va. App. at 257, 584 S.E.2d at 447.
For the first time on appeal, appellant emphasizes that December 20, 2009 was one of the
shortest days of the year and that a major snowstorm occurred around that date. He argues that
these facts would indicate it was more difficult on that date for an individual to ascertain or
remember the time of day with precision. However, these arguments were not preserved below
and, consequently, under Rule 5A:18, they are barred on appeal. 8
Viewing the evidence in the light most favorable to the City, “as we must since it was the
prevailing party in the trial court,” Riner, 268 Va. at 330, 601 S.E.2d at 574, the evidence at trial
and all “reasonable inferences” that may be drawn from that evidence are sufficient to support
8
Under Rule 5A:18, the “same argument must have been raised, with specificity, at trial
before it can be considered on appeal.” Correll v. Commonwealth, 42 Va. App. 311, 324, 591
S.E.2d 712, 719 (2004). “Making one specific argument on an issue does not preserve a separate
legal point on the same issue for review.” Edwards v. Commonwealth, 41 Va. App. 752, 760,
589 S.E.2d 444, 448 (2003) (en banc), aff’d by unpublished order, No. 040019 (Va. Oct. 15,
2004). Here, appellant’s motion to strike after the City’s evidence was limited, in pertinent part,
to the following: “[T]he City’s evidence was insufficient as a matter of law as to the Trespass
charge on the basis that the City failed to present evidence of the time of day that Officer Freed
found Mr. Pearson in Koon’s lot, where ‘between the hours of 11:00 p.m. and 7:00 a.m.’ is an
element of the City Code § 28-72 Trespass ordinance.” The motion makes a reference to Officer
Freed’s testimony, but says nothing about December 20 being one of the shortest days of the
year or a snowstorm. In addition, the renewed motion to strike only states that the evidence was
insufficient. Neither motion addresses – and therefore preserved – these arguments under Rule
5A:18.
- 12 -
the jury’s guilty verdict that appellant was trespassing between 11:00 p.m. and 7:00 a.m.
Jackson, 443 U.S. at 319. We certainly cannot say that no rational factfinder could conclude as
the jury did here.
III. CONCLUSION
In summary, appellant does not have standing to mount a facial challenge and his
as-applied challenge is barred. Thus, this Court cannot address the merits of appellant’s
constitutional challenge to City of Falls Church Code § 28-72.
Furthermore, City Code § 28-72 is not invalid under the Dillon Rule because the City of
Falls Church acted under its express and implied authority when it enacted City Code § 28-72
pursuant to Virginia Code § 15.2-1102 because it is reasonably necessary to promote “the safety
. . . peace and good order” in the City of Falls Church by prohibiting trespass at night in an effort
to decrease crime at night. Virginia Code § 15.2-1102. City Code § 28-72 also satisfies the
requirements of the Dillon Rule because it is “not inconsistent” with Virginia Code § 18.2-119,
the Commonwealth’s trespassing statute. King, 195 Va. at 1089, 81 S.E.2d at 590.
Finally, the jury was not “plainly wrong,” Williams, 278 Va. at 193, 677 S.E.2d at 282, in
finding sufficient evidence to convict appellant under City Code § 28-72. Given the evidence
presented at trial and the “reasonable inferences” the jury is entitled to make, Jackson, 443 U.S.
at 319, we cannot say that no “rational trier of fact” could have concluded appellant was on the
lot of Koons Auto Body Shop without consent sometime between 11:00 p.m. and 7:00 a.m.
Therefore, viewing the evidence under the required appellate standard of review, we believe that
the jury was certainly able to have found the essential elements of trespass under City Code
§ 28-72 beyond a reasonable doubt. Kelly, 41 Va. App. at 257, 584 S.E.2d at 447. Accordingly,
for the foregoing reasons, we affirm.
Affirmed.
- 13 - | 01-03-2023 | 10-09-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572769/ | 2 So.3d 1172 (2009)
STATE of Louisiana, Appellee
v.
Travis L. COOPER, Appellant.
No. 43,809-KA.
Court of Appeal of Louisiana, Second Circuit.
January 14, 2009.
*1175 Louisiana Appellate Project, by W. Jarred Franklin, for Appellant.
Paul J. Carmouche, District Attorney, Geya D. Prudhomme, John Ford McWilliams, Jr., Assistant District Attorneys, for Appellee.
Before GASKINS, PEATROSS & LOLLEY, JJ.
PEATROSS, J.
Defendant, Travis Cooper, pled guilty to one count of armed robbery, in violation of La. R.S. 14:64, and was sentenced to 11 years' imprisonment at hard labor. Defendant now appeals. For the reasons stated herein, the conviction and sentence of Defendant are affirmed.
FACTS
On August 3, 2004, Corporal Raymond Bordelon of the Shreveport Police Department received a call from dispatch informing him that an armed robbery had taken place at the Cash Depot store in the 3300 block of Youree Drive. Officer Bordelon and his partner responded to the call; but, when they arrived at the store, the perpetrators had already left. The victim, an employee of the store named Sonja Hoppaugh, told Officer Bordelon that a tall black male, wearing a green sweatshirt and a cloth over his face, had pointed a sawed-off shotgun at her and demanded money. The perpetrators stole several thousand dollars in cash and checks from Ms. Hoppaugh, as well as her purse and her vehicle.[1]
About an hour after the first call was made, Officer Jason Person of the Shreveport Police Department received a second call from dispatch. A resident had called the police, noting that a vehicle had pulled up behind a house on a residential street and people were getting out of the vehicle and running away. Officer Person was one of the first responding officers at the location of the vehicle. Officer Person walked around the vehicle, noting that the doors were open, paperwork was strewn on the ground and a thin rubber glove was lying on the ground near the vehicle. After several other officers arrived at the scene, Officer Person began to canvass the surrounding area.
*1176 About two blocks away from the abandoned vehicle, Officer Person noticed Defendant and several other suspects getting into a small car. Officer Person stated later that his attention was drawn to the suspects because of "the size of them getting into this little car." Officer Person added that one of the men turned around, made eye contact with him and made a worried facial expression. Officer Person later testified that this combination of events led him to believe that the men in the small car were the suspects.
As the suspects were driving away, Officer Person saw that the vehicle had a taillight out, so he activated his overhead lights to stop the vehicle. The suspects continued to drive approximately two blocks and then pulled over. Officer Person first spoke with the driver, who began "rambling" in response to his questions. The Officer then asked the driver and the other suspects to exit the vehicle, later testifying that "they were piled up in that car and I couldn't see what was going on inside the car[.]" The suspects each told Officer Person that they had just come from a house, but none gave consistent answers when questioned about the color of the house and the interior furnishings. Officer Person later testified that, because of the suspects' nervous behavior, inconsistencies in their stories and bulges in their pockets, he began conducting pat-down searches to make sure that none of the suspects were carrying weapons.
During his pat-down search of Defendant, Officer Person felt a "large bulge" in Defendant's pocket, which Defendant told him was $40 in cash. Officer Person then asked Defendant if he could remove the object from Defendant's pocket and Defendant gave his verbal consent. Officer Person then removed a large group of bills and a green plastic glove from Defendant's pocket.[2]
Meanwhile, Corporal Bordelon transported Ms. Hoppaugh to the scene where Officers Person and Crisp were detaining the suspects, who had already been handcuffed by Officer Person. Ms. Hoppaugh stayed in the car while the officers instructed the suspects to step out of the car. When the first suspect stepped out of the vehicle, Ms. Hoppaugh stated to Officer Bordelon that she was not sure, but she thought he was the man who had the shotgun. Ms. Hoppaugh then recognized the suspect's pants and stated, "that's the pants that they were wearing, that he was wearing." After Ms. Hoppaugh made the tentative identification, Officer Michael McConnell took Defendant and the other suspects to the police station.
On September 28, 2004, the State filed a bill of information charging Defendant with two counts of armed robbery, in violation of La. R.S. 14:64. The bill's first count alleged that Defendant, armed with a sawed-off shotgun, had robbed Nicky's Mexican Restaurant on June 20, 2004. The second count alleged that Defendant had robbed Cash Depot, while armed with a shotgun, on August 3, 2004.[3] Defendant filed two motions to suppress, both of which challenged the identification process employed by the officers. A hearing was held on August 1, 2007, after which Defendant filed a supplemental motion to suppress challenging the stop, detention and the identification. On September 18, 2007, the trial court issued a ruling denying Defendant's motions to suppress.
*1177 Trial was set for November 5, 2007; and, on November 6, 2007, Defendant entered a plea of guilty as to the second count of armed robbery and the State dismissed the first count. Defendant reserved his right to pursue appellate review of the trial court's denial of the motions to suppress by entering the guilty plea pursuant to State v. Crosby, 338 So.2d 584 (La. 1976). Defendant received an agreed upon sentence of 11 years at hard labor, without the benefit of parole, probation or suspension of sentence. This appeal ensued.
DISCUSSION
Assignment of Error Number One (verbatim): The trial court erred in denying the Defendant's Motions to Suppress.
First, Defendant argues that his lengthened detention by the officers pursuant to a traffic stop was improper and that any evidence obtained should have been suppressed. Second, Defendant contends that the pat-down search was unreasonable because there was no reasonable basis for Officer Person's belief that the suspects were armed. Additionally, Defendant asserts that Officer Person's search of his pocket was not supported by the "plain feel" exception to the warrant requirement. Finally, Defendant argues that the identification process of Defendant was improperly suggestive and should have been suppressed.
The State counters that the traffic stop was lawful under Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968), since Officer Person had observed a traffic violation, i.e., the vehicle's taillight was out. The State argues that jurisprudence does not require that an officer have reasonable suspicion of criminal activity prior to asking questions during a traffic stop and that, since Officer Person articulated facts which justified a belief that he was in danger, his frisk of the suspects' clothing was lawful. The State asserts that the time limitation for traffic stops contained in La. C. Cr. P. art. 215.1 does not apply since Officer Person had developed additional reasonable suspicion of criminal activity subsequent to the stop.
In reviewing the correctness of the trial court's pretrial ruling on a motion to suppress, the appellate court may review the entire record, including testimony at trial. State v. Young, 39,546 (La.App. 2d Cir.3/2/05), 895 So.2d 753, citing State v. Sherman, 04-1019 (La.10/29/04), 886 So.2d 1116; State v. Green, 94-0887 (La.5/22/95), 655 So.2d 272; State v. Brooks, 92-3331 (La.1/17/95), 648 So.2d 366; State v. Martin, 595 So.2d 592 (La.1992). Great weight is placed upon the trial court's ruling on a motion to suppress with regard to the findings of fact because it had the opportunity to observe the witnesses and weigh the credibility of their testimony. State v. Crews, 28,153 (La.App. 2d Cir.5/8/96), 674 So.2d 1082, citing State v. Jackson, 26,138 (La.App. 2d Cir.8/17/94), 641 So.2d 1081. This court reviews the trial court's ruling on a motion to suppress under the manifest error standard in regard to factual determinations, while reviewing its findings of law de novo. State v. Hemphill, 41,526 (La.App. 2d Cir.11/17/06), 942 So.2d 1263, writ denied, 06-2976 (La.3/9/07), 949 So.2d 441, citing State ex rel. Thibodeaux v. State, 01-2501 (La.3/8/02), 811 So.2d 875; State v. Jones, 36,553 (La.App. 2d Cir. 1/29/03), 840 So.2d 7, writ denied, 03-0956 (La.10/3/03), 855 So.2d 309.
In general, a plea of guilty waives non-jurisdictional defects in the proceedings prior to the plea. Subject to the trial court's discretion, however, a defendant may enter a plea of guilty while simultaneously reserving identified preplea errors for appellate review. State v. Crosby, supra. The function of a Crosby plea is to permit a fair and efficient review *1178 of a central issue when the pre-plea ruling on that issue, if erroneous, would mandate reversal of any resulting conviction. Id. A motion to suppress is typical of a pre-plea ruling subject to a Crosby reservation. Id.; State v. Thomas, 28,790 (La.App. 2d Cir.10/30/96), 683 So.2d 1272.
Search and Seizure
The right of every person to be secure in his person, house, papers and effects against unreasonable searches and seizures is guaranteed by the Fourth Amendment to the United States Constitution and Article I, § 5, of the 1974 Louisiana Constitution. It is well settled that a search and seizure conducted without a warrant issued on probable cause is per se unreasonable unless the warrantless search and seizure can be justified by one of the narrowly drawn exceptions to the warrant requirement. State v. Thompson, 02-0333 (La.4/9/03), 842 So.2d 330; State v. Tatum, 466 So.2d 29 (La.1985); State v. Ledford, 40,318 (La.App. 2d Cir.10/28/05), 914 So.2d 1168.
The right of law enforcement officers to temporarily detain and interrogate persons reasonably suspected of criminal activity is well established. La. C. Cr. P. art. 215.1; Terry v. Ohio, supra; State v. Fauria, 393 So.2d 688 (La.1981); State v. Taylor, 363 So.2d 699 (La.1978). The decision to make an investigatory stop must be based on reasonable cause to believe that the suspect has been, is or is about to be, engaged in criminal activity. State v. Washington, 621 So.2d 114 (La. App. 2d Cir.1993), writ denied, 626 So.2d 1177 (La.1993); State v. Patterson, 588 So.2d 392 (La.App. 4th Cir.1991); State v. Thibodeaux, 531 So.2d 284 (La.App. 3d Cir.1987). Reasonable cause for an investigatory stop is something less than probable cause, but the officer must have "articulable knowledge" of particular facts which, in conjunction with reasonable inferences drawn therefrom, provide reasonable grounds to suspect the detainee of criminal activity. State v. Flowers, 441 So.2d 707 (La.1983), cert. denied, 466 U.S. 945, 104 S.Ct. 1931, 80 L.Ed.2d 476 (1984); State v. Knowles, 40,324 (La.App. 2d Cir.12/30/05), 917 So.2d 1262; State v. Washington, supra; State v. Thibodeaux, supra; State v. Rodriguez, 396 So.2d 1312 (La.1981).
Public safety requires some flexibility for police to investigate and prevent crime. State v. Wesley, 28,012 (La. App. 2d Cir.4/3/96), 671 So.2d 1257. Police officers are justified in ordering passengers out of cars for the purpose of officer safety. It may be a slight inconvenience, but it is not a serious intrusion upon privacy interests. State v. Landry, 588 So.2d 345 (La.1991). To assess the validity of an investigatory stop, the critical inquiry focuses on the officer's knowledge at the time of the stop. State v. Williams, 421 So.2d 874 (La.1982); State v. Wesley, supra. Flight, nervousness or a startled look may be a factor under La. C. Cr. P. art. 215.1 in finding reasonable cause to stop. State v. Furlow, 34,339 (La.App. 2d Cir.2/28/01), 780 So.2d 602, writ denied, 01-0889 (La.3/15/02), 811 So.2d 895.
When an officer stops a person whom he reasonably believes to be involved in criminal activity, he is justified in conducting a frisk of that individual's outer clothing for dangerous weapons, if the officer reasonably suspects that he is in danger. La. C. Cr. P. art. 215; State v. Furlow, supra; Terry v. Ohio, supra. Such a search must not extend beyond the means necessary to ascertain whether the individual is armed. Terry v. Ohio, supra. An officer does not need to show that the detained individual was probably armed and dangerous; rather, an officer need *1179 only demonstrate a substantial possibility of danger. Id.
One of the specifically established exceptions to the warrant requirement is a search conducted pursuant to consent. Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973); State v. Strange, 04-0273 (La.5/14/04), 876 So.2d 39; State v. Wilson, 467 So.2d 503 (La.1985), cert. denied, 474 U.S. 911, 106 S.Ct. 281, 88 L.Ed.2d 246 (1985); State v. Hudnall, 39,723 (La.App. 2d Cir.5/11/05), 903 So.2d 605. Oral consent is valid. State v. Hudnall, supra; State v. Crews, supra.
The burden is on the state to prove that the consent was given freely and voluntarily. State v. Crews, supra. Voluntariness is a question of fact to be determined by the trial court under the facts and circumstances of each case. This determination is to be given great weight on appeal because of the trial court's opportunity to observe witnesses and assess credibility. State v. Hudnall, supra; State v. Jennings, 39,543 (La.App. 2d Cir.3/2/05), 895 So.2d 767; State v. Paggett, 28,843 (La.App. 2d Cir.12/11/96), 684 So.2d 1072.
Probable cause for an arrest exists when the facts and circumstances known to the officer and of which he has reasonably trustworthy information are sufficient to justify a man of ordinary caution in the belief that the person to be arrested has committed a crime. State v. Wilson, supra; State v. White, 543 So.2d 124 (La.App. 2d Cir.1989). The measure of probable cause to arrest is not that a police officer have proof sufficient to convict. State v. Scott, 389 So.2d 1285 (La. 1980). In State v. Johnson, 422 So.2d 1125 (La.1982), the Louisiana Supreme Court found that probable cause is determined by the setting in which the arrest took place, together with the facts and circumstances known to the arresting officer from which he might draw conclusions warranted by his training and experience. Considering the circumstances, it must be more probable than not that the defendant's activity consisted of criminal behavior. State v. Fauria, supra; State v. Massey, 535 So.2d 1135 (La.App. 2d Cir.1988).
In the case sub judice, Officer Person observed that the suspects violated a traffic regulation, i.e., the vehicle's broken taillight; thus, his initial stop of the suspects was proper. State v. Stoutes, 43,181 (La.App. 2d Cir.4/2/08), 980 So.2d 230. Officer Person noted that the suspects fit the general description of the perpetrators and that the suspects were in the vicinity of the vehicle which had been abandoned by the offenders. He also saw that the number and size of the suspects was incongruous with the small car that they entered, that one of the suspects looked startled upon seeing a police officer and that all of the suspects acted nervous after the stop. Finally, Officer Person observed that the driver gave rambling answers in response to his questions and that none of the suspects could supply consistent answers as to their previous whereabouts. Officer Person's belief that the suspects may have been involved with the armed robbery earlier that day was, therefore, a reasonable inference which was based on particularized facts.
Given the violent nature of the offense and the fact that the suspects outnumbered Officer Person four to one, he was reasonable in suspecting that he was in danger and in conducting a frisk of the suspects' clothing for weapons. Since Officer Person asked Defendant if he could reach into Defendant's pocket to remove the bulging item, and Defendant consented, Officer Person's search of Defendant's pocket was proper under the consent exception to the warrant requirement.
*1180 The trial court in this case had the opportunity to assess the credibility of Officer Person's testimony in its factual determination of whether Defendant's consent had been given freely and voluntarily. The record does not reflect any indication that Defendant's consent was not voluntarily given. Thus, we find that the trial court did not err in failing to suppress this evidence.
Identification
In a lineup identification of a suspect, the lineup is deemed unduly suggestive if the defendant is displayed in such a way that the attention of the witness is unduly focused on the defendant. State v. Davis, 407 So.2d 702 (La.1981). The suggestiveness of a lineup procedure, however, does not automatically null the identification by the witness. Id. The possibility of misidentification is what renders a suggestive lineup violative of due process, not its suggestiveness per se. Id.
The identification is admissible, regardless of the suggestiveness of the lineup, if the totality of the circumstances demonstrates conclusively that the identification was reliable. Id. The reliability of an identification should be analyzed by the reviewing court according to the factors set forth in Manson v. Brathwaite, 432 U.S. 98, 97 S.Ct. 2243, 53 L.Ed.2d 140 (1977). The Manson factors include: (1) the opportunity of the witness to view the assailant at the time of the crime; (2) the witness' degree of attention; (3) the accuracy of the witness' prior description of the assailant; (4) the level of certainty demonstrated by the witness; and (5) the length of time between the crime and the confrontation. See State v. Brealy, 00-2758 (La. App. 4th Cir.11/7/01), 800 So.2d 1116.
When a defendant's identity is disputed, the State carries the burden of negating reasonable probability of misidentification in order to meet the test set forth in Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979). State v. Hughes, 05-0992 (La.11/29/06), 943 So.2d 1047; State v. Lewis, 43,402 (La. App. 2d Cir.8/13/08), 990 So.2d 109. A tentative identification is not necessarily unreliable. For example, in State v. Wright, 410 So.2d 1092 (La.1982), the witness could not positively identify the defendant, either at trial or in the photographic lineup. The Wright court held that the degree of identification affects the weight of the evidence. Id. Testimony which pertains to partial or tentative identifications or statements that the offender "resembles" the accused are admissible into evidence. Id.
When Defendant was presented to Ms. Hoppaugh, he was in handcuffs and Ms. Hoppaugh identified the first suspect to step out of the vehicle. Officer Bordelon's testimony in the record suggests that the suspects were presented to Ms. Hoppaugh one at a time, which would have focused Ms. Hoppaugh's attention on the first suspect to step out of the car. The totality of the circumstances, however, indicates that the identification was admissible. In this case, the assailant wore a cloth over his face, so Ms. Hoppaugh would not have been able to see his face. Ms. Hoppaugh was, however, able to describe Defendant's height, build and clothing to the police, in addition to recognizing the pants Defendant was wearing. The record reflects that not much time had elapsed between the robbery and the detention of the suspects, which also decreases the likelihood of misidentification. Finally, the fact that Ms. Hoppaugh made only a tentative identification goes to the weight of the evidence, rather than admissibility. Accordingly, we find no error in the trial court's ruling.
*1181 This assignment of error is without merit.
CONCLUSION
For the foregoing reasons, the conviction and sentence of Defendant, Travis L. Cooper, are affirmed.
AFFIRMED.
NOTES
[1] At his guilty plea hearing, Defendant admitted to maintaining a lookout while his brother, John F. Cooper, went into the business through the ceiling and robbed Ms. Hoppaugh at gunpoint.
[2] The stolen checks were later recovered at 6108 Lexington. The abandoned vehicle was found at the 6100 block of Lexington.
[3] On October 6, 2004, the State filed an amended bill of information changing the name of the victim in count two from Cash Depot to Sonya Hoppaugh. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573507/ | 396 S.W.2d 922 (1965)
P. T. WHITLOCK GAS & OIL, INC., et al., Appellants,
v.
Roland V. BROOKS et al., Appellees.
No. 16603.
Court of Civil Appeals of Texas, Dallas.
November 5, 1965.
Rehearing Denied December 3, 1965.
*924 Jackson, Walker, Winstead, Cantwell & Miller, Louis P. Bickel and Jack D. Sides, Jr., Dallas, for appellants.
Lyne, Blanchette, Smith & Shelton, George C. Dunlap and Searcy M. Ferguson, Jr., Dallas, for appellees.
BATEMAN, Justice.
The appellee Roland V. Brooks recovered a judgment for $15,000 as damages for personal injuries to his wife, Naomi, resulting from a collision between an automobile driven by her and a truck owned by P. T. Whitlock Gas & Oil, Inc. and driven by John W. Fitzgerald. The judgment was against the Whitlock company and its driver, Fitzgerald, both of whom appeal.[1]
By their first point of error on appeal they assert that the jury was an improperly constituted tribunal in that one of its members, Samuel A. Davis, was guilty of misconduct during the voir dire examination of the jury panel. It is contended that Davis concealed a personal injury claim he had previously had, and that if he had not done so appellants' counsel would have challenged him peremptorily. Rule 232, Vernon's Texas Rules of Civil Procedure.
On the voir dire examination counsel for appellants first asked the general question of the entire panel, whether any of them had had "a damage suit or a suit against another person, firm or corporation, which arose out of an automobile accident." A member of the panel (not Davis) spoke of having been sued "in an automobile accident," and the attorney asked him if he had had such a claim of his own, whether a lawsuit was involved or not. This was answered in the negative, and the attorney then asked this question:
"All right. This questionit isn't very well stated hereI want to find out from the members of the panel, and I will take it a row at a time, I believe we can do it a little bit faster, if any of them have had a claim against any other person, firm or corporation, such as this, or maybe an insurance company if it was an on the job accident, something like that, on account of being hurt whether it be on the job, on a train, a bus, or slip and fall in a store, or in an automobile accident, whether you had a claim, be there a lawyer employed, or not, or has a member of your immediate family had a claim, that is your husband, your wife, your children, your mother or father, or close friend, such as this. Mr. Mitchell has told us he was sued. I am actually inquiring on the other side of the proposition; anyone bring a claim, including a suit? Is there anyone in the front row including "
It will be noted that no inquiry was made as to whether any member of the panel had been injured, but only as to whether he had had a claim. The juror Davis was in the first row and could hear the attorney. He said nothing and did not raise his hand. On the hearing of appellants' motion for new trial he testified that on April 17, 1964 he gave Liberty Mutual Insurance Company a release in connection with a back injury he received on June 3, 1963 while working for the Coca Cola Company; that he was treated for an injury but later *925 "they" decided it wasn't an injury but a congenital defect; that he never made a claim for any money, but the personnel manager and a representative of Liberty Mutual Insurance Company came to him and offered him $2,500 which he accepted and for which he gave the release. He stated that he did not remember the exact question asked by appellants' attorney, but understood that he was asking whether he (Davis) had ever been involved in a lawsuit "or charged with a felony." He also said that he believed in his own mind that he had never made a "claim" against anyone. He said he had never asserted a claim, or filed a lawsuit or hired a lawyer. He said that if he had been asked concerning his injuries he would have tried to answer the questions as truthfully as he knew how. He further said that he did not discuss his back condition or pain with the other jurors until after the verdict had been returned.
The trial judge heard Davis' testimony, and even interrogated him at some length himself, and then by overruling the motion for new trial impliedly found that the alleged misconduct did not occur. If the evidence thereon be viewed as conflicting, the finding of the trial judge is final and binding on us. Barrington v. Duncan, 140 Tex. 510, 169 S.W.2d 462. But, as we read this record, there is no substantial conflict in the evidence. No direct or specific questions were asked this prospective juror individually regarding his past claim experience, and it is obvious that he had no clear understanding of the general question as applying to anything other than a positive demand for monetary compensation for an injury. He had made no such demand and therefore, in his own mind at least, had not had a "claim" against anyone. We think the trial court was entirely justified in believing from the evidence that Davis did not understand the question as meaning what counsel for appellants doubtless understood it to mean. That being true, no misconduct was shown. Thompson v. Quarles, Tex.Civ.App., 297 S.W.2d 321, 325, wr. ref. n. r. e.; McCarthy Oil & Gas Corp. v. Cunningham, Tex.Civ.App., 255 S.W.2d 368, wr. ref. n. r. e.; Barron v. State, Tex.Civ.App., 378 S.W.2d 144, no wr. hist.
Moreover, it was shown that when all of the jurors wrote on separate pieces of paper the amounts they thought should be awarded for Mrs. Brooks' injuries Davis wrote "$5,000," being among the four who wrote the lowest amounts, and thereafter agreed on $15,000 as a compromise. This indicates to us that if any misconduct did occur in this respect appellants have not shown themselves to have been harmed by it. Rule 434, T.R.C.P.
Appellants' first point is overruled.
By their second point of error the appellants complain of the refusal of the trial court to submit three requested special issues inquiring as to whether Mrs. Brooks "suddenly and unexpectedly slowed the speed of her vehicle," and, if so, whether this was negligence and a proximate cause of the collision.[2]
The court submitted issues as to whether Mrs. Brooks brought the automobile which she was driving to a sudden stop and, if so, whether this was negligence and a proximate cause. The jury answered the first of these issues in the negative, and appellees maintain that this was the only issue of contributory negligence raised by the evidence. We agree with appellees.
The evidence shows that prior to the collision both vehicles were traveling north *926 on Stemmons Expressway in the City of Dallas, Mrs. Brooks' car being in front of the truck, and that shortly after they entered upon the "exit road" leading into Commerce Street the truck collided with the automobile at or near its read end. Mrs. Brooks testified that as she approached the exit road she slowed down from approximately 35 miles per hour to around 20 or 25 miles per hour; that as she went down the exit road she had "made the curve and straightened up completely" when the truck hit them the first time, and that the truck hit them a second time.
The appellant Fitzgerald testified that he was driving a gasoline truck and was in the same lane and some 25 to 35 feet behind Mrs. Brooks as they approached the Commerce Street exit; that Mrs. Brooks couldn't make up her mind whether she wanted to make a right turn or go straight ahead and suddenly turned right at the Commerce Street exit and stopped, after which he "jumped the curb" with his tractor and his trailer "slid into her"; that he could see she was stopped before the collision, although her tail lights were not on; that when he noticed she had stopped he was about 35 feet behind her; that she was slowing up and then he was slowing up, "and all at once she pulled in there and stopped right at the exit."
Mrs. Brooks' daughter, Rosilind, 17, was a passenger in her mother's car and testified that before her mother turned into the exit she was going "about 30 miles an hour, maybe 35," and that she slowed down to about 20 miles an hour when she turned into the exit road, and was going between 15 and 20 miles an hour when she was hit.
Appellant Fitzgerald was recalled and testified: "Well, we started about the same time, I guess, or something like that, and when she made her turn, then she stopped right there in front of me, and I jumped the curb with my cab, and I pulled my trailer brakes down and my trailer slid around into her." He then testified on cross-examination:
"Q. Mr. Fitzgerald, you just testified when Mr. Bickel asked you a question, he said she was either stopped or slowed, isn't that the question he asked you?
"A. She stopped.
"Q. She stopped. That is your testimony now?
"A. Yes, sir, she stopped."
As we read this testimony, it presents two conflicting versions of what Mrs. Brooks' car was doing at and immediately prior to the collision. The testimony of appellees' witnesses would indicate that it was being gradually slowed down from 30 or 35 miles per hour to 15 or 20 miles per hour as she made the turn into the exit road and that it was moving when hit by the truck. Appellants' evidence, however, indicated that it had been brought to a sudden stop prior to the collision. We find no evidence in the record, and our attention has been directed to none, to the effect that there was a sudden and unexpected slowing down of Mrs. Brooks' car. Appellants' version, that Mrs. Brooks brought her automobile to a sudden stop in the path of the following gasoline truck, was submitted to the jury and answered adversely to appellants. We are of the opinion that the requested special issues were not raised by the evidence and were properly refused. Appellants' second point is overruled.
By their third point of error the appellants complain that no special issue was submitted to the jury as to whether Mrs. Brooks sustained bodily injuries in the collision, and that the absence of this essential issue was called to the trial court's attention by appellants in their objections to the charge.
Of course, proof of such injury was essential to that part of appellees' case. *927 The burden was on Brooks to prove that his wife had been injured, and this question was put in issue by appellants' general denial. Rule 92, T.R.C.P.; Texas & Pacific Ry. Co. v. Van Zandt, 159 Tex. 178, 317 S.W.2d 528.
It was also held in the Van Zandt case that, when there is a controverted issue of fact as to whether the plaintiff has been injured, it is not a sufficient submission of that ultimate and essential fact issue, over proper objection, to inquire whether a particular negligent act or omission was a proximate cause of the plaintiff's injuries, if any, or what amount of money will compensate the plaintiff for the injuries, if any, sustained by him; that in such cases the issue should be submitted directly and unequivocally inquiring as to whether injury was sustained; that to hold otherwise would be to deny the defendant the right of trial by jury guaranteed by Section 15 of Art. I of the Texas Constitution, Vernon's Ann.St. and that the mere denial of the right raises an inference of probable harm. In the light of these rules, we now examine the testimony in this case concerning Mrs. Brooks' alleged injuries to determine whether there was error in not submitting the issue.
There was an abundance of testimony to the effect that Mrs. Brooks was injured, although all of it was testimony which the jury would have had a right to believe or not believe. The testimony of Mrs. Brooks and her husband as to her injuries was that of interested parties and merely raised the issue. The testimony of their married daughter, Mrs. Peterson, and two of the minor passengers in the car as to what they observed as to her physical condition was obviously based entirely on subjective symptoms, i. e., what Mrs. Brooks said and did to indicate pain and disability, and would likewise only serve to raise and support the issue, not determine it.
The only medical testimony offered was that of Dr. P. M. DeCharles, who testified that in his opinion Mrs. Brooks' trouble with her back was due to an old degenerative disk syndrome and not caused by the accident in question, but that in his opinion her neck injuries were due to the accident. However, he further stated that he did not see any x-ray pictures of her taken immediately after the collision or any x-ray pictures taken prior to the collision and that he had seen similar neck injuries which were not caused by accident. All of the doctor's testimony was of course opinion evidence of an expert, which the jury had every right to believe but was not compelled to believe.
Mrs. Brooks testified that after the collision Mr. Fitzgerald walked over to her and asked if anybody was hurt, and she told him that she "had no idea." Mr. Fitzgerald testified that when he asked her if anybody was hurt she told him she didn't think anybody was hurt bad, that they were all "scared". She later told the investigating police officer that she intended to drive back to her home in Longview, Texas that same afternoon, but testified that after reaching Terrell, Texas some time after dark she decided to stay overnight, principally because of the fact that the tail lights on her automobile were not working. Mr. Brooks testified that she told him on the telephone that night that they were "bruised pretty bad" but that she believed she would be all right, that she was feeling pretty bad but wasn't "critical" and would be in the next day. Mrs. Brooks did not consult a physician concerning her alleged injuries until a week or a week and a half after the accident. She went to see Dr. Spaulding, her family physician, but only went to see him one time, after which she went to a chiropractor seven or eight times. She first called on Dr. DeCharles approximately five months after the collision.
As pointed out in the Van Zandt case, it is not always necessary to submit the issue as to whether the plaintiff was in fact injured as a result of the accident in question, for in some cases the evidence is *928 undisputed. However, our study of the evidence in this case persuades us that the trial court erred in not submitting such an issue, and that appellants were thereby denied their constitutional right to a trial by jury of an essential element of appellees' case. Appellants' third point is sustained.
In their fourth and last point of error appellants charge jury misconduct and endeavor to demonstrate that in arriving at their finding of $15,000 damages for Mrs. Brooks' bodily injuries there was discussion of and inclusion in their answer six improper elements, to-wit: (1) attorney's fees, (2) automobile damage, (3) past and future doctor and medical expenses, (4) professional testifying fee of a medical witness, (5) income taxes and (6) liability insurance.
The juror Marinan Graham, produced by appellants, testified that all these matters were discussed and several of them taken into consideration in arriving at the sum awarded. She said that she took attorney's fees and automobile repair expenses into consideration and that other members of the jury stated that they were also taking them into consideration; that automobile damages were discussed by the jury and included in the amount awarded. She also said that an extra amount was included in the award because of the opinion of the jury that income taxes would have to be paid out of the amount awarded; also that past and future medical and doctors' expenses were discussed and included in the award, as well as the fee of Dr. DeCharles for testifying at the trial. She said that another juror, Mrs. Morris, brought up liability insurance and that it was "discussed pro and con."
The appellees then produced the testimony of the foreman, Frank T. Hearst, and jurors S. T. Bridges, Sam A. Davis and John E. Riker; and without unduly lengthening this opinion by detailing their testimony, let it suffice for us to say that the effect of it was to deny categorically Miss Graham's testimony. The foreman testified that each time any of these foreign matters came up he stopped the discussion and admonished the other jurors that those were not matters to be discussed or considered by them, but that they were to be governed by the court's instructions contained in the charge. The trial court had a right to believe this testimony and, so believing, to conclude that no misconduct occurred requiring a reversal. Walker v. Thompson, Tex.Civ.App., 287 S.W.2d 556, wr. ref. n. r. e.; St. Paul-Mercury Indemnity Co. v. Bearfield, Tex.Civ.App., 296 S.W.2d 956, wr. ref. n. r. e.
In a situation like this, the general rule is that a conflict in testimony is to be resolved by the trier of the facts; in other words, it was for the trial judge to weight the conflicting testimony and determine whether or not there was any jury misconduct. He heard the jurors testify and was in much better position to resolve the conflicts than are we. Under these circumstances the decision of the trial court that jury misconduct did not occur is final and binding on us. Barrington v. Duncan, 140 Tex. 510, 169 S.W.2d 462, and Brawley v. Bowen, Tex.Sup.1965, 387 S.W.2d 383. Appellants' fourth point is overruled.
Because of the error of the trial court in refusing to submit to the jury a special issue inquiring as to whether Mrs. Brooks sustained bodily injuries, we reverse the judgment appealed from and remand it for another trial.
Reversed and remanded.
NOTES
[1] Brooks also sued as next friend of four minors who were passengers in the Brooks car. The jury found that none of these children was entitled to any damages; it was ordered that they take nothing; and they do not appeal. Hence, they will not be noticed further.
[2] The point of error does not actually specify the substance of any of the requested issues, but merely refers to them as "controverted ultimate fact issues," and is therefore too general to comply with Rule 418, T.R.C.P. However, a reading of the statement and argument under the point discloses to us the specific error complained of, and we therefore consider the point. Fambrough v. Wagley, 140 Tex. 577, 169 S.W.2d 478; Rule 422, T.R.C.P. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2584876/ | 187 P.3d 231 (2008)
220 Or. App. 457
HAYNES
v.
HUNTSINGER.
Court of Appeals of Oregon.
June 11, 2008.
Affirmed without opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2584892/ | 187 P.3d 752 (2008)
SHAFER
v.
DEPARTMENT OF LABOR AND INDUSTRIES.
No. 81049-4.
Supreme Court of Washington, Department II.
July 9, 2008.
Disposition of petition for review. Granted. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572608/ | 2 So. 3d 944 (2006)
EX PARTE STEVE TOLBERT.
No. CR-06-0140.
Court of Criminal Appeals of Alabama.
October 27, 2006.
Decision of the Alabama Court of Criminal Appeal without opinion. Mand. pet. denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572614/ | 323 F. Supp. 55 (1971)
John HILL and Gary Matson, by their next friend, Mrs. Sandra Lang, Plaintiffs,
v.
Robert LEWIS, Individually and as Principal of 71st High School, Cumberland County, North Carolina, Defendant.
Civ. No. 895.
United States District Court, E. D. North Carolina, Fayetteville Division.
February 12, 1971.
*56 James B. Craven, III, of Everett, Everett & Creech, Durham, N. C., for plaintiffs.
Lester G. Carter, Jr., Carter & Faircloth, Fayetteville, N. C., for defendant.
ORDER
BUTLER, Chief Judge.
Plaintiffs, students of the 71st High School, Cumberland County, North Carolina, seek a preliminary injunction pursuant to 42 U.S.C. § 1983, 28 U.S.C. § 1343, and the First and Fourteenth Amendments to the Constitution of the United States, restraining the defendant, individually and as principal of 71st High School, from suspending the plaintiffs, or others similarly situated, for the exercise of their constitutional rights, specifically their right to wear black armbands as a form of symbolic speech in protest against the war in Vietnam. From the affidavits and the evidence presented at the hearing of this cause, the court finds the following facts pending a final determination on the merits.
1. 71st High School is part of the Cumberland County school system. The school is located approximately four miles from the Fort Bragg Military Reservation and within eight miles of Pope Air Force Base. In October, 1969, the high school had 1,653 students enrolled, 636 (38%) with a parent on active military duty and an additional 264 (16%) with a parent who is a federal employee.
2. On Monday, October 13, 1969, Debbie Redifer, a senior at 71st High School, went to the defendant's office and requested that he convene a student assembly on October 15, 1969, stating that she had engaged a speaker to address the students in opposition to the war in Vietnam. The defendant informed her that in his opinion an assembly for that purpose would not be in the best interest of a school where approximately 40% of the students' parents were actively serving in the military service. Debbie had expressed strong opposition to the Vietnam war and participated the previous Saturday in a protest march in Fayetteville.
During the day the defendant received telephone calls from parents informing him that a student bus driver had requested the passengers on her bus to wear black armbands on October 15th in support of the National Moratorium. The parents objected to the driver using her position to influence students on her bus. Debbie Redifer was identified as the bus *57 driver, and the defendant informed her that some irate parents objected to this type of influence on the students.
3. The conferences with Debbie Redifer were the first indication that there might be some demonstrations on the campus on October 15, 1969. There was talk among the students that there might be one group wearing black armbands and another wearing red, white, and blue armbands"a group of protestors against the protestors"and a third group wearing black gloves. Some of the teachers and students believed there might be a confrontation between the groups that would disrupt the school.
4. On Tuesday, October 14, 1969, there was continued talk of potential disorder and disruption of the school to occur the next day. Some of the students indicated resentment against the moratorium; others indicated support for the moratorium; still others indicated support for symbolic protest against nonwar related issues.
5. At the close of school on October 14, students distributed leaflets on campus addressed to students and teachers requesting support of the National Moratorium on October 15, and stating "wear a black armband Wednesday." The leaflets were also placed on the windshields of automobiles in the parking lot.
6. Because of these facts, the school officials, fearing the possibility of substantial disruptions and violence placed a printed bulletin in the teachers' boxes instructing them not to admit any student wearing an armband into class and to send to the office anyone who refused to remove the armband.
7. On October 15, between twenty five and fifty students came to school with armbands. Some of the armbands were black, others were red, white, and blue, still others were white with a red peace symbol. Also, some students wore black gloves or black scarves. Armbands were distributed to other students after they entered the school building. Upon a request by a teacher or other school official to remove an armband the student usually complied. There were isolated examples of refusals to comply, and frequently the students were disrespectful and belligerent to teachers and other school officials.
8. Before the start of the 8:15 classes there were several groups of students partially blocking hallways. Some students formed haphazard columns and moved slowly and noisily down the halls. The protesting students were soliciting others to join their ranks. Some students were chanting. The halls were much noisier than usual. Tension was high. The 8:15 bell, sending students to class, seemed to ease the situation.
9. Throughout the day students wearing armbands were given the option of removing armbands or going to the principal's office. In most cases the armband was removed and the student admitted to class. One student was parading through the halls with an American flag. Some students indicated respect for the flag, others disrespect.
The disposition of the case depends upon an interpretation of Tinker v. Des Moines Independent Community School District, 393 U.S. 503, 89 S. Ct. 733, 21 L. Ed. 2d 731 (1969). If the present case is governed by Tinker, plaintiffs must prevail. But if the principles enunciated in Tinker are not applicable then the injunction will not be issued. We hold Tinker distinguishable from the case at bar.
The Court held in Tinker that a regulation prohibiting the wearing of armbands to school and providing for the suspension of any student refusing to remove the armband was an unconstitutional denial of a student's right of expression of opinion, without the demonstration by school officials of any facts which might reasonably have led them to forecast substantial disruption of or material interference with, school activities, and without any showing that disturbances or disorders in fact occurred. Tinker makes certain premises absolutely *58 clear. First, "the wearing of an armband for the purpose of expressing certain views is the type of symbolic act that is within the Free Speech Clause of the First Amendment." Id., at 736. Second, "undifferentiated fear or apprehension of disturbance is not enough to overcome the right to freedom of expression." Id., at 737. Third, the burden of proof is on the school officials to demonstrate any facts which might reasonably have led them to forecast substantial disruption of or material interference with school activities. And fourth,
conduct by the student, in class or out of it, which for any reasonwhether it stems from time, place, or type of behaviormaterially disrupts class-work or involves substantial disorder or invasion of the rights of others is, of course, not immunized by the constitutional guarantee of freedom of speech. Id., at 740.
The Court in Tinker found that the wearing of armbands was entirely divorced from any actually or potentially disruptive conduct by those participating in it, under the circumstances of that case. Id., at 736. The present case is factually distinguishable. Tinker did not involve aggressive, disruptive action or group demonstrations. Tinker did not concern speech or action that intrudes upon the work of the school or the rights of other students. In Tinker there were no threats or acts of violence on school premises. In Tinker the fear of disruption did not motivate the prohibition of armbands. The regulation was directed against "the principle of the demonstration" itself. Id., at 738, n. 3. The record in Tinker failed to disclose evidence that school officials had reason to anticipate that the wearing of the armbands would substantially interfere with the work of the school or impinge upon the rights of other students. In Tinker the prohibition was directed at the wearing of black armbands. Tinker involved a small number of participants, and students were dismissed for the sole reason they wore the proscribed armbands.
In the case at bar there were several groups of protesters. At least three different viewpoints were represented by these groups. At least twenty five to fifty students were involved, with antagonistic views. The evidence here shows advance advertisement of the demonstration, active group participation, marching in the hallways, recruitment of other students to join the several groups, chanting, belligerent and disrespectful attitude towards teachers, incidents of flag disrespect, and threats of violence.
Here the order prohibiting the wearing of armbands extended to all armbands and not to a particular symbol, and was motivated by reasonable apprehension of disruption and violence. The record here discloses substantial evidence which reasonably led to the forecast of substantial disruption and material interference with school activities and infringement upon the rights of other students. Indeed, despite the precautions taken, the potential of disruption and violence was still present on October 15.
There was more than undifferentiated fear or apprehension of disturbance. The 71st High School demography is relevant. More than a third of the students were the children of military personnel and it was reasonable to assume that many of them supported the national war effort as the result of personal family interests. Others were war protesters. The wearing of armbands to symbolize the divergent factions in such a school under the tense situation that had developed would have further polarized the groups.
On October 15 the disruption occurred. There was confusion, disorder and demonstrations in the halls. At least one class was disrupted to the extent that law enforcement officials were called. The situation has been described as "explosive" and "volatile", with the fear of fights and disorder. The student mood was termed as "very tense" with some students "clearly hostile". Several witnesses stated their belief that violence had been averted by the action of the defendant and other school officials. One *59 teacher, with twenty-two years of experience, called the events of October 15 "a nightmare", stating that she could not be in her class on the next Moratorium Day without the protection of law enforcement officers. Another teacher expressed the feeling that the situation could have developed into one of the worst school riots in North Carolina history.
The North Carolina Constitution provides:
"The General Assembly * * * shall provide by taxation and otherwise for a general and uniform system of public schools, wherein tuition shall be free of charge to all children of the State between the ages of six and twenty-one years. * * *" Art. IX, § 2.
The largest item in the State's budget is for the support of public education. For the fiscal year 1969-70 it is estimated that the taxpayers of the State will contribute $463 million for the purpose of providing public education for the school children of North Carolina. The taxpayers of the local school units in North Carolina will provide an additional $162 million, and the federal government will supplement the state and local funds to the extent of $97 million. The total estimated school expenditures in North Carolina for 1969-70, exclusive of debt service, is $722 million, an average of $653.80 for each child in attendance. The educational opportunities thus provided are free of charge to all children who desire an education. Fortunately, the vast majority of children attend school for that purpose. Surely, their constitutional right to an education under school conditions conducive to that end must be paramount to any rights of those who would disrupt the process. In the balancing of First Amendment rights the duty of the State to operate its public school system for the benefit of all its children must be protected even if governmental regulations incidentally limit the untrammeled exercise of speech, symbolic or otherwise, by those who would impede the education of those who desire to learn. The interest of the State is superior to the rights of the protestants.
Mr. Justice Black made a pertinent comment in his dissent in Tinker at page 745:
"The original idea of schools, which I do not believe is yet abandoned as worthless or out of date, was that children had not yet reached the point of experience and wisdom which enabled them to teach all of their elders. It may be that the Nation has outworn the old-fashioned slogan that `children are to be seen not heard,' but one may, I hope, be permitted to harbor the thought that taxpayers send children to school on the premise that at their age they need to learn, not teach."
Plaintiffs seek an order enjoining the defendant from suspending or otherwise taking disciplinary action against the plaintiffs and other students similarly situated for the peaceful exercise of their First Amendment rights as evidenced by the wearing of black armbands, or from otherwise interfering with the free exercise of said rights. The evidence fails to show that plaintiffs or others similarly situated have been suspended or otherwise disciplined for wearing armbands. Tinker makes it clear that First Amendment rights are available to teachers and students. "It can hardly be argued that either students or teachers shed their constitutional rights to freedom of speech or expression at the schoolhouse gate." Id. at 736. Tinker makes it clear that no suspension or disciplinary action can be upheld for the peaceful expression of opinion. Title 42 U.S.C. § 1983 provides a cause of action for relief of those who have been deprived of their constitutional rights. Defendants' liability for any violation of plaintiffs' rights in the future is clear. From the present record before the court, no such violation has yet occurred. There is no hint that such a violation is imminent; now, therefore, it is ordered that the preliminary injunction be, and the same is hereby, denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572616/ | 2 So. 3d 1254 (2009)
Millard P. DUMESNIL, III
v.
SOUTHWEST LOUISIANA ELECTRIC MEMBERSHIP CORP.
No. 08-982.
Court of Appeal of Louisiana, Third Circuit.
February 4, 2009.
*1255 Gerald C. deLaunay, Perrin, Landry, deLaunay, Dartez & Ouellet, Lafayette, LA, for Plaintiff/Appellant, Millard P. Dumesnil, III.
Michael W. Adley, Judice and Adley, Lafayette, LA, for Defendant/Appellee, Southwest Louisiana Electric Membership Corp.
James T. Guglielmo, Guglielmo, Lopez, Tuttle, Hunter & Jarrell, Opelousas, LA, for Third Party Defendant/Appellee, M.P. Dumesnil Construction Co.
Court composed of ULYSSES GENE THIBODEAUX, Chief Judge, ELIZABETH A. PICKETT, and BILLY HOWARD EZELL, Judges.
PICKETT, J.
The plaintiff, Millard P. Dumesnil III, appeals a judgment of the trial court, rendered in accord with a jury verdict, finding the defendant, Southwest Louisiana Electric Membership Corporation (SLEMCO) free from fault in the accident in which the plaintiff was injured. We affirm the judgment of the trial court.
FACTS
M.P. Dumesnil Construction Company (M.P.D.) was contracted to lay a water line for St. Martin Parish Water District #3. Work in the vicinity of Louisiana Highway 92 and Duchamp Road in St. Martin Parish required the boring under each roadway and the connection of the bores by a trench to accommodate the water line. On August 11, 2004, Robert Dupre, an employee of M.P.D., began digging a trench to connect the two bore-holes. One bore-hole had been completed the day before, and a crew from M.P.D. was working on the second bore-hole. In the process of digging the trench, Mr. Dupre dug adjacent to a power pole owed by the defendant, SLEMCO. A few minutes after the trench progressed past the pole, the side of the trench adjoining the pole collapsed uncovering several feet of the pole which had formerly been buried. This required that Mr. Dupre go back and dig out the caved-in mud in order to maintain the required depth of the trench. In another few minutes, the pole leaned over causing the high-voltage electric transmission line attached thereto to come in contact with two workers at the site: Jeffery A. Weaver, a Dow Chemical Company employee, who was killed, and Millard P. Demesnil III, an M.P.D. employee, the plaintiff herein, who suffered severe electrical burns.
Subsequently, Mr. Dumesnil filed this suit against SLEMCO alleging that SLEMCO was negligent in the design and installation of its transmission system and in not installing guy wires on the pole that fell over. The case was tried to a jury over five days. The jury found SLEMCO *1256 not at fault in the accident, and the plaintiff appeals.
LAW AND DISCUSSION
Due to the nature of the product in which they deal, the duty owed by electric transmission companies which maintain and employ high power lines to distribute electricity is higher than that of the "ordinary man." In Foley v. Entergy Louisiana, Inc., 06-0983, pp. 11-12 (La.11/29/06), 946 So. 2d 144, 154-55 (emphasis ours) our supreme court set out a thorough analysis on the subject:
In cases of injury occurring as a result of contact with overhead power lines, principles of negligence, rather than absolute or strict liability, apply, and we assess the liability of the various parties to the accident under a duty-risk analysis. Hebert v. Gulf States Utilities Company, 426 So. 2d 111, 114 (La.1983); Kent v. Gulf States Utilities Company, 418 So. 2d 493 (La.1982). To establish the liability of an electric utility company using the duty-risk analysis, the plaintiff has the burden of proving: (1) that the defendant power company owed a duty to the plaintiff; (2) that the power company breached that duty; (3) that the power company's conduct was a cause-in-fact of the plaintiff's injuries; (4) that the power company's substandard conduct was a legal cause of plaintiff's injuries; and (5) that the plaintiff suffered actual damages. Perkins v. Entergy Corporation, 00-1372, 00-1387, 00-1440, p. 7 (La.3/23/01), 782 So. 2d 606, 611; Fowler v. Roberts, 556 So. 2d 1, 4 (La.1989) on reh'g, 556 So.2d at 13 (La.1990); Fleniken v. Entergy Corporation, 00-1824 (La.App. 1 Cir. 2/16/01), 780 So. 2d 1175, 1184, writ denied, 01-1268, 01-1305, 01-1317 (La.6/15/01), 793 So. 2d 1250, 1253, 1254.
In Simon v. Southwest Louisiana Electric Membership Corporation, 390 So. 2d 1265, 1267 (La.1980), we summarized the duty of an electric utility company in cases involving injury sustained through contact with high voltage lines. Given the inherently dangerous nature of electricity, we held that electric companies that use and maintain high voltage power lines are required to exercise the utmost care to reduce hazards to life as far as is practicable. Id. If it should be reasonably anticipated that persons may come into contact with electric lines, the owner and/or operator of those lines is required to insulate them, or to give adequate warning of the danger, or to take other proper and reasonable precautions to prevent injury. Id. However, an electric company is not under a duty to safeguard against occurrences that cannot be reasonably expected or contemplated: "[O]perators of power lines are not required to anticipate every possible accident which may occur and are not the insurers of safety of persons moving around power lines in the course of everyday living." Simon, 390 So.2d at 1268. When an accident or occurrence could not have been reasonably anticipated, it is not within the scope of the duty owed by the electric company to the injured party because there is no ease of association between the risk presented by the electric company's conduct under the overall circumstances and the resulting injury. Hebert, 426 So.2d at 114.
Nevertheless, an electric company is held to the standard of a reasonable person with superior attributes, and is required to recognize that there will be a certain amount of negligence that must be anticipated. See Levi v. Southwest Louisiana Electric Membership Cooperative (SLEMCO), 542 So. 2d 1081, 1084-1086 (La.1989); Pillow v. Entergy *1257 Corporation, 36,384, p. 5 (La.App. 2 Cir. 9/18/02), 828 So. 2d 83, 87, writ denied, 02-2575 (La.12/13/02), 831 So. 2d 987. Pursuant to this duty, an electric company has an obligation to make reasonable inspections of wires and other instrumentalities in order to discover and remedy hazards and defects. Levi, 542 So.2d at 1084. This duty includes the obligation to inspect its lines to determine if uninsulated high voltage lines pose a risk of harm, and if the utility relies on insulation by isolation, it has a duty to make certain its lines remain isolated. Hebert, 426 So.2d at 116; Fleniken, 00-1824 at 13, 780 So.2d at 1186.
After reviewing the testimony and the evidence we cannot say that the jury was manifestly erroneous in finding SLEMCO free from fault in causing this accident. The plaintiff argues that the pole was unbalanced and should have been supported by a guy-line; and that, if the pole had been so supported, it would not have fallen over. It was established that the pole which was involved in the accident was larger and was buried deeper than required. It had been in place for approximately twelve years and showed no sign of leaning, much less falling over.
Robert Dupre, the "trackhoe" operator who dug the trench, testified that he originally dug the trench eighteen inches wide by about five feet deep, approximately thirty inches from the pole. He stated that after he had trenched some distance past the pole, the side of the trench next to the pole fell into the trench. As a result of the collapse, he had to go back and "dig it out," widening the trench to about three feet at the site of the pole. Widening of the trench exposed one to three feet of the pole which had heretofore been buried, depending upon whose testimony one believes. At no time after exposing the buried portion of the pole did Dupre notify his supervisor, Jimmie Meyers, that he had exposed a previously buried portion of the pole. Neither did he take any steps to support the pole. Nor had Dupre obtained permission from Meyers to dig the trench. It was Meyers' job to designate where the trench was to be dug.
Jim Lackey, SLEMCO's Director of Engineering, testified that although there was no guy-line on the pole, it was kept in balance by the use of a "slack span" and the depth to which the pole was buried. Lackey testified as follows:
If the pole is not in balance, then it is going to fall down. The pole, before the What happens is that there is The slack span does cause some tension about less than 100 pounds of tension in that line. The slack span: there is about 100 pounds of tension in that line. That 100 pounds of tension is countered, or counter-balanced by the ground, the forces acting on the pole in the ground. So at that point in time, the forces are balanced by the foundation, and our foundation was the packed dirt around the pole. Now when we remove the foundation, the pole becomes imbalanced at that point in time, and it does have to fall.
....
What I am saying is: The forces were not balanced when the foundation was removed.
Dr. Michael Aucoin, a plaintiff's expert with an Ph.D. in electrical engineering from Texas A & M, was shown pictures taken at the site the day of the accident. When questioned at trial he stated that "[b]ased upon the photographs it appears that the excavation was directly adjacent to the pole." He was then asked if trenching next to a pole to the depth depicted in the photographs would raise any concerns, he stated: "as an engineer I would be *1258 concerned about excavating down to near the bottom of a pole, right adjacent to the pole." Dr. Aucion concluded that had the trench not been dug, the pole would not have fallen.
In LaCombe v. Bank One Corp., 06-1374 (La.App. 3 Cir. 3/7/07), 953 So. 2d 161, writ denied, 07-0746 (La.6/1/07), 957 So. 2d 177, a panel of this court reminded us that factual determinations by the trial court must be reviewed under the manifest error standard of review. We stated the following:
In Salvant v. State, 05-2126, p. 5 (La.7/6/06), 935 So. 2d 646, 650 (footnote omitted), the supreme court reminded us of the following:
Under the manifest error standard of review, a factual finding cannot be set aside unless the appellate court finds that it is manifestly erroneous or clearly wrong. Smith v. Louisiana Dept. of Corrections, 93-1305 (La.2/28/94), 633 So. 2d 129, 132; Stobart v. State through Dept. of Transp. and Development, 617 So. 2d 880, 882 (La.1993); Rosell v. ESCO, 549 So. 2d 840, 844 (La.1989). In order to reverse a fact finder's determination of fact, an appellate court must review the record in its entirely and (1) find that a reasonable factual basis does not exist for the finding, and (2) further determine that the record establishes that the fact finder is clearly wrong or manifestly erroneous. Id. The appellate court must not re-weigh the evidence or substitute its own factual findings because it would have decided the case differently. Id.; Pinsonneault v. Merchants & Farmers Bank & Trust Co., 01-2217 (La.4/3/02), 816 So. 2d 270, 278-79. Where there are two permissible views of the evidence, the fact finder's choice between them cannot be manifestly erroneous or clearly wrong. Id. However, where documents or objective evidence so contradict the witness's story, the court of appeal may find manifest error or clear wrongness even in a finding purportedly based on a credibility determination. Rosell, supra at 844-45. But where such factors are not present, and a fact finder's finding is based on its decision to credit the testimony of one or two or more witnesses, that finding can virtually never be manifestly erroneous or clearly wrong. Id.
LaCombe, 953 So.2d at 166.
Additionally, we note that as in this case, "[w]hen the district court has allowed both parties to present their experts before making its factual determinations, the fact finder's choice of alternative permissible views cannot be considered to be manifestly erroneous or clearly wrong." Toston v. Pardon, 03-1747, p. 12 (La.4/23/04), 874 So. 2d 791, 800.
Our review of the testimony and evidence convinces us that the jury was presented with adequate evidence with which to support its conclusion that SLEMCO was free from fault in causing this accident. Accordingly, for the reasons stated, the judgment of the trial court is affirmed. Costs of this appeal are assessed against the appellant, Millard P. Dumesnil, III.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572633/ | 323 F. Supp. 996 (1971)
HYDRAULICS UNLIMITED MFG. CO., a Colorado Corporation, Plaintiff,
v.
B/J MANUFACTURING CO., Inc., a Kansas Corporation, James V. Copeland and Benjamin R. Neier, Defendants.
Civ. A. No. C-2632.
United States District Court, D. Colorado.
January 6, 1971.
Order January 29, 1971.
*997 Brenman, Ciancio, Rossman, Baum & Sobol, by Martin Zerobnick, and Drake & Crandell, by Ralph F. Crandell, Denver, Colo., for plaintiff.
Van Valkenburgh & Lowe, by H. B. Van Valkenburgh, Denver, Colo., for defendants.
MEMORANDUM OPINION AND ORDER
ARRAJ, Chief Judge.
Plaintiff, as licensee, seeks to avoid the provisions of a nonexclusive license agreement governing the use of a patent. It asks a declaration of the patent's invalidity, seeks to recover royalties paid to the defendants pursuant to the license agreement and asks treble damages for alleged price discrimination.
The matter is presently before us on defendants' motions to quash service of process and to dismiss the complaint for improper venue, lack of personal jurisdiction and lack of a justiciable controversy. Plaintiff is a Colorado corporation with its principal place of business at Eaton, Colorado. The individual defendants are citizens and residents of Kansas. B/J Manufacturing Co., Inc., is a Kansas corporation, partly owned by the individual defendants, which maintains its business offices, stock and equipment solely in Kansas. Although B/J is not licensed to do business in Colorado and has appointed no resident agent, apparently it does deliver goods sold by solicitation from Kansas to Colorado. Plaintiff predicates jurisdiction upon diversity of citizenship.
From the pleadings and affidavits the following facts appear: Defendants Copeland and Neier made application for a patent covering a "Feed Mixer" in August 1961. In December 1962 they threatened plaintiff with suit for infringement. Following preparatory negotiations in Kansas, a nonexclusive license agreement providing for the payment of five percent of plaintiff's gross sales as royalties was executed between the parties on March 8, 1963. Plaintiff *998 signed the agreement in Colorado; Copeland and Neier executed it in Kansas. From the date of execution of the license agreement until December 1969, when the patent was assigned to B/J Manufacturing Co., Inc., plaintiff paid the individual defendants $139,403.16 in royalties. After the assignment Hydraulics paid B/J an additional $4,557.03 in royalties for sales through July 31, 1970. Since that date, no royalty payments have been made. Defendants have not threatened or filed suit for infringement, nor have they sought to recover royalties that may be due. Additionally, the defendants have not attempted to exercise their contractual right to examine plaintiff's records to ascertain the amount of royalties owing. In sum, none of the defendants has taken action since plaintiff's cessation of payments under the license agreement. Thus, plaintiff's initiation of suit was the first intimation of controversy between the parties.
None of the defendants was personally served in Colorado. They assert the receipt of royalty payments from Colorado, plaintiff's execution of the license agreement there and the sale and shipments of goods into the state are insufficient contacts to confer personal jurisdiction on this court.
In certain circumstances, extraterritorial service of process may validly issue from this court under the provisions of Federal Rule of Civil Procedure 4(e), which provides:
Whenever a statute or rule of court of the state in which the district court is held provides (1) for service of a summons * * * upon a party not an inhabitant of or found within the state * * * service may * * * be made under the circumstances and in the manner prescribed in the statute or rule.
Admittedly, and as appears from the facts, paragraph (b) of the Colorado "long arm" statute, C.R.S. 37-1-26 (Supp.1965), affords the only basis for serving the defendants with process and is the sole ground upon which plaintiff can rely for personal jurisdiction. That statute provides, in pertinent part:
(a) Engaging in any act enumerated in this section by any person, whether or not a resident of the state of Colorado, * * * submits such person, * * * to the jurisdiction of the courts of this state, concerning any cause of action arising from:
(b) The transaction of any business within this state;
* * * * * *
The constitutional test for personal jurisdiction has been expounded by the Supreme Court in a series of decisions, commencing with International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945). Although the Court found the corporation present in Washington because of continuous and systematic business activities, it adopted a different jurisdictional test for the due process clause. Due process, the Court stated,
* * * requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." 326 U.S. at 316, 66 S.Ct. at 158.
The test, continued the Court,
* * * cannot be simply mechanical or quantitative. * * * Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. 326 U.S. at 319, 66 S.Ct. at 160.
This test recognizes the importance of the benefits enjoyed by a nonresident defendant who is accorded the protection of the forum state's law and emphasizes the necessity for fairness in considering the relative interests, hardships and advantages which accrue to the parties because of the defendant's activity. See *999 Developments in the LawState-Court Jurisdiction, 73 Harv.L.Rev. 909, 923-25 (1960). Thus, if plaintiff's injury does not arise out of activity done in the forum state, it would seem that contacts with that state should be greater if the burden of forcing the defendant to defend there is not to offend "traditional notions of fair play and substantial justice."
The factual situation in McGee v. International Life Insurance Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957), concerned a claim which arose from a single incident of business activity initiated within the forum state by the defendant. The Supreme Court found that sufficient to provide the minimum contacts for personal jurisdiction under the due process clause. See Kurland, The Supreme Court, the Due Process Clause and the In Personam Jurisdiction of State Courts, 25 U.Chi.L.Rev. 569, 606-610 (1958) and cases cited therein. The following year, however, the Supreme Court narrowed that holding in Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958). There, the Court rejected Florida's assertion of in personam jurisdiction over a Delaware trustee appointed by a Florida settlor. The Court stated that jurisdiction could not be upheld on the basis of the "unilateral activity of those who claim some relationship" with the nonresident. 357 U.S. at 253, 78 S.Ct. at 1239. The Court continued:
It is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. 357 U.S. at 253, 78 S.Ct. at 1240.
The Court explained the McGee decision by noting that the defendant initiated its contacts with the forum state by soliciting an insurance agreement there. Thus, the contacts between state and defendant must be more than incidental since jurisdiction is not exercised because the forum state has become the "center of gravity" of the litigation or because it is most convenient. 357 U.S. at 254, 78 S. Ct. 1228.
Although the jurisdictional question must be resolved by considering the salient facts of the particular case, some principles stand out clearly from these decisions. We think the defendant must purposely initiate or acquiesce in activity conducted within the forum state on its behalf. It must also avail itself of the protection of the forum state's law. Once that activity has been initiated, a single incident, substantial in nature, which gives rise to the plaintiff's claim will suffice to confer personal jurisdiction upon the courts of the forum state. See, e. g., McGee v. International Life Insurance Co., supra; Clinic Masters, Inc. v. McCollar, 269 F. Supp. 395 (D.Colo.1967); Knight v. District Court of Seventeenth Judicial District, 162 Colo. 14, 424 P.2d 110 (1967); see generally Annot., 20 A.L.R. 3d 1201 (1968). For example, in the Clinic Masters and Knight cases the defendant had been present in Colorado for extended negotiations which culminated in the execution of a contract here that later gave rise to plaintiff's claim. The defendant's contacts with Colorado were so substantial that jurisdiction was properly assumed even though a single incident of business activity was involved. Jurisdiction has also been found where the business activity giving rise to the claim, though insubstantial, was related to extensive business activities carried on by the defendant within the state. See, e. g., Minnesota Automotive, Inc. v. Stromberg Hydraulic Brake & Coupling Co., 309 F. Supp. 614 (D.Minn.1970); Samson Cordage Works v. Wellington Puritan Mills, Inc., 303 F. Supp. 155 (D. R.I.1969); Japan Gas Lighter Ass'n v. Ronson Corp., 257 F. Supp. 219 (D.N.J. 1966).
In the instant case plaintiff must rely upon these activities of the defendants to support its jurisdictional contention: (1) the shipment to Colorado of goods ordered in response to solicitations carried out in Kansas; (2) plaintiff's signature *1000 of the license agreement in Colorado; and (3) the payment of royalties in Kansas.
As we noted previously, none of the negotiations preceding execution of the license agreement was conducted in Colorado. They were apparently concluded in Kansas where the defendants signed the agreement. Since the royalty payments are made pursuant to terms of the license agreement plaintiff in essence relies upon the "one-act" execution of that agreement to substantiate personal jurisdiction over the defendants under the long arm statute. In these circumstances, the presence or absence of negotiations by the defendant in the forum state often determines whether his activity is substantial enough to satisfy the due process test. In Circle A Drilling Co. v. Sheehan, 251 F. Supp. 242 (D.Colo.1966), this court was confronted with a similar situation. Plaintiff's suit on a promissory note negotiated and signed in Montana was dismissed for lack of personal jurisdiction despite the negotiation and execution in Colorado of a contract which served as partial consideration for the note. The court, speaking through Judge Doyle, commented that:
The note was executed in Montana. Presumably all negotiations took place there; at least, it is nowhere intimated that any negotiations concerning the note took place in Colorado. The only contact with Colorado, if such can be deemed a "contact", is the fact that part of the consideration was, presumably, a contract executed in Colorado. Such contact does not satisfy "traditional notions of fair play and substantial justice."
* * * * * *
Were the instant suit filed on the contract, assuming substantial negotiations in Denver, a different conclusion might well result. (Citation omitted.) (Emphasis added.) 251 F.Supp. at 244.
Where, as here, no negotiations have been conducted in the forum state, the minimum contacts necessary for personal jurisdiction are found wanting. We must consider then whether the remaining factors plaintiff has advanced support its contention that we have in personam jurisdiction.
Considering the royalty payments apart from the agreement to which they relate, merely because they were derived from commerce generated in Colorado is too insubstantial and remote a factor to provide the requisite contacts between the defendants and the state of Colorado. If other factors, such as extended negotiations, the defendants' presence, or substantial and related business activity in Colorado were shown, a different conclusion might be indicated. See Clinic Masters, Inc. v. McCollar, supra; Circle A Drilling Co. v. Sheehan, supra; Knight v. District Court of Seventeenth Judicial District, supra; but see Southern Machine Co., Inc. v. Mohasco Industries, Inc., 401 F.2d 374 (6th Cir. 1968). In the present circumstances we cannot, however, accept plaintiff's proposition that payment alone is a sufficient minimum contact. To so hold would do violence to the notion of due process and expand our jurisdiction to include those having no more relation to this forum than the receipt of payments in envelopes post-marked in Colorado. We think due process requires more than that.
Finally, the asserted sale of goods by the defendants in Colorado is too speculative to provide the requisite jurisdictional contacts since solicitations were made from Kansas and since the defendants maintain no sales or service personnel here. Cf. Minnesota Automotive, Inc. v. Stromberg Hydraulic Brake & Coupling Co., supra. There has been no showing of the volume or extent of defendants' sales or the relation of those sales to the license agreement. For personal jurisdiction purposes, we consider the "quality and nature of [that] activity" too indirect and remote from the license agreement upon which plaintiff has brought suit. International Shoe *1001 Co. v. Washington, 326 U.S. at 319, 66 S. Ct. 154; see also Circle A Drilling Co. v. Sheehan, 251 F.Supp. at 244. Alone, or in combination with the equally tenuous "contact" existing by virtue of the license agreement itself, these sales are not an activity which will permit an exercise of in personam jurisdiction by this court.
From the facts before us, we are unable to find "some act by which the defendant purposefully avail[ed] itself of the privilege of conducting activities within [the state of Colorado]." Hanson v. Denckla, 357 U.S. at 253, 78 S.Ct. at 1240. Not only has there been no showing that the defendants initiated contacts with this forum, but it appears they purposely avoided making such contacts. In these circumstances, we do not think the mere existence of a contract executed by a Colorado resident, which plaintiff relies upon in essence, is sufficient to confer personal jurisdiction over an absent nonresident defendant. To hold otherwise would offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. at 316, 66 S.Ct. at 158. Doubtlessly, it is no more unfair to require plaintiff to prosecute this suit in Kansas than it is to require defendants to respond here. Thus, this court finds that it is without jurisdiction over the person of the defendants in this diversity action and that their motion to dismiss should be granted.
Because of the conclusion we have reached on defendants' motion to dismiss for lack of personal jurisdiction, it is unnecessary for us to consider the remaining matters they have raised.
It is therefore
Ordered that defendants' motion to dismiss be and the same hereby is granted.
ORDER
Following dismissal of this action for lack of personal jurisdiction, plaintiff filed what it denominated a "motion for new trial" on January 18, 1971. Since plaintiff's objective is to set aside our order of dismissal, we will treat its motion as one for relief pursuant to Federal Rule of Civil Procedure 60(b).
The only contentions urged by plaintiff that require comment relate to the presence of defendants Neier and Copeland in Colorado. We have ruled previously on the other matters advanced by plaintiff and nothing before us necessitates a reconsideration of them. On the basis of two letters written between Hydraulics and the defendants' patent counsel in December 1962, which plaintiff tendered with its motion as exhibits, plaintiff claims the defendants initiated business contacts with this forum and conducted negotiations here which culminated in the license agreement in issue. We think defendants' response successfully refutes those contentions.
Neier and Copeland journeyed to Colorado on November 28, 1962, to examine plaintiff's feed mixer for possible infringement of a patent for which they had applied. During that visit no charge of infringement was made. While the defendants were in Colorado, the plaintiff proposed a licensing arrangement. Since defendants had not previously contemplated licensing their product, they postponed consideration of plaintiff's proposal until after their return to Kansas. In a letter dated December 11, 1962, they advised plaintiff of their willingness to grant the license. As detailed by defendants' exhibits 2 through 15, subsequent negotiations and execution of the agreement were conducted by an exchange of correspondence and documents between the parties or their representatives in Kansas and Colorado respectively. Thus, none of the crucial steps took place wholly within the State of Colorado.
In sum, then, plaintiff contends that a one day trip to Colorado and defendants' tour of its plant in Eaton, Colorado, are sufficient business contacts to confer in personam jurisdiction on this court pursuant to Colo.Rev.Stat.Ann. § 37-1-26(1) (b) (Supp.1965). We think *1002 that assertion is erroneous. Since neither Copeland nor Neier came to Colorado to "sell" plaintiff a license agreement and since no negotiations were conducted here, their obvious purpose was not to avail themselves of the privilege of conducting business here. In these circumstances, the minimum contacts necessary for an exercise of personal jurisdiction do not exist. See Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958). Plaintiff has shown us no reason to grant it relief from the order of dismissal previously entered.
It is therefore
Ordered that plaintiff's motion for relief be and the same hereby is denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572623/ | 323 F. Supp. 79 (1971)
MITSUBISHI SHOJI KAISHA LTD.
v.
MS GALINI, her engines, etc., et al.
Civ. A. No. 69-H-1198.
United States District Court, S. D. Texas, Houston Division.
February 22, 1971.
*80 Joseph Newton, Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, Tex., for plaintiff.
J. E. Davey, Eikel & Davey, David C. Redford, Royston, Rayzor & Cook, Houston, Tex., for defendants.
SINGLETON, District Judge.
Opinion and Order:
This is a cargo contamination suit, designated as a case of admiralty and maritime jurisdiction within Rule 9(h), Federal Rules of Civil Procedure. On November 1, 1968, there was delivered to and shipped on board the M/S GALINI a certain shipment of Mexican maize said by plaintiff to be in good condition at the time and destined for several Japanese ports. When the cargo was discharged in Japan, it was found to be contaminated. Plaintiff, a Japanese concern, was to notify party in a bill of lading pursuant to which the cargo was shipped and ultimately became a holder in due course of the bill of lading. Defendant Vygla Steamship Co. is the owner of the M/S GALINI. Defendant Andre & Cie, S.A. is the charterer. Pending at this time are a motion to stay the proceedings pending arbitration by the charterer, a motion to quash service and dismiss by the shipowner, and a motion for default judgment by plaintiff.
SHIPOWNER'S MOTION TO QUASH
Vygla Steamship Company moves to quash because the Philen Shipping Company of Brownsville, Texas, on whom the complaint was served, is not its agent and further because it does not have sufficient business contacts with Texas.[1] It appears from the papers on file that the M/S GALINI is a Liberian flag vessel. The owner is a corporation organized under the laws of Panama whose principal place of business is in Athens, Greece. The M/S GALINI is the only vessel owned by the Vygla Steamship Company. It has not had any regular routes to Texas ports since January, 1963, but since that time it has visited ports in Texas on six isolated occasions,[2]*81 including the one on which the grain at the heart of the present controversy was loaded. In each instance, the M/S GALINI was chartered by a third party who had business at the Texas port to where the M/S GALINI traveled.
Prior to the M/S GALINI's trip to Brownsville in 1968, it first went to New Orleans, Louisiana, where grain fittings were installed in the vessel by the Strachan Shipping Company. Strachan had previously purchased them from a lumber company headquartered in Jackson, Mississippi, but which has an office in Leesville, Louisiana, a city within one hundred miles of New Orleans. Neither of these companies have offices in Texas. These facts are important in light of a survey report prepared for plaintiff by another Japanese corporation finding that the damage to the grain was caused by green wood having been used in the construction of the grain feeders in each hatch, a condition aggravated by the enforced closure of all deck openings during stormy weather encountered by the ship in transit.
The guiding standard in resolving the question of jurisdiction vel non is Article 2031b, V.A.T.S.,[3] which provides:
"Sec. 3. Any foreign corporation * * * that engages in business in this State * * * and does not maintain a place of regular business in this State or a designated agent upon whom service may be made upon causes of action arising out of such business done in this State * * * shall be deemed equivalent to an appointment by such foreign corporation * * * of the Secretary of State of Texas as agent upon whom service of process may be made in any action * * * arising out of such business done in this State * * *.
"Sec. 4. For the purpose of this Act, and without including other acts that may constitute doing business, any foreign corporation * * * shall be deemed doing business in this State by entering into contract by mail or otherwise with a resident of Texas to be performed in whole or in part by either party in this State, or the committing of any tort in whole or in part in this State." (Emphasis added)
The Texas Long Arm Statute has been held on numerous occasions to reach just as far as Fourteenth Amendment Due Process will permit. Coulter v. Sears, Roebuck and Co., 426 F.2d 1315 (5th Cir. 1970); Eyerly Aircraft Co. v. Killian, 414 F.2d 591 (5th Cir. 1969); Atwood Hatcheries v. Heisdorf & Nelson Farms, 357 F.2d 847 (5th Cir. 1966); Lone Star Motor Import, Inc., v. Citroen Cars Corp., 288 F.2d 69 (5th Cir. 1961); AMCO Transworld, Inc. v. M/V BAMBI, 257 F. Supp. 215 (S.D.Tex.1966); Trinity Steel Co. v. Modern Gas Sales and Service Co., 392 S.W.2d 861 (Tex.Civ.App. Texark., 1965, n.r.e.). And due process will permit when the nonresident has "minimum contacts" with the state "that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, etc., 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945). McGee v. International Life Insurance Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957), where jurisdiction in a suit by a California plaintiff in a California court was sustained even though the only contact with California by the insurance company was the solicitation of one reinsurance policy, *82 teaches that there need only be one contact to satisfy the demands of due process if that contact is sufficiently substantial. McGee, supra, proved to be the high-water mark of the trend toward expanding jurisdiction. See Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958). The latter-mentioned case held that "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Id. at p. 253, 78 S.Ct. at p. 1240.
Here, the one contact with the State of Texas by the shipowner is that the grain, later found to be contaminated, was loaded at a Texas port. The gravity of this single contact, however, sufficiently warrants a finding that there is jurisdiction. The business of the shipping company is to go where the charterer directs. The charterer in this suit directed the vessel to pick up grain at Brownsville, Texas. Thus, the shipping company by that act engaged in business in Texas. If the shipowner were not doing business in Texas, then it was not doing business anywhere, except in places where it maintained offices. See Hoodye v. Bruusgard Krosterud Skibs A/S Drammen, Norway, 197 F. Supp. 697 (S.D.Tex.1961).
Defendant relies on a number of cases for the proposition that if the only contact that a shipping company has with a state is through its tramp ships making sporadic visits at ports, such does not constitute sufficient minimal contacts. Pappas v. S.S. ARISTIDIS, 249 F. Supp. 692 (E.D.Va.1965); Alcalde v. The LOS MAYAS, 184 F. Supp. 873 (E. D.Va.1960); George H. McFadden & Bros. v. The M/S SUNOAK, 167 F. Supp. 132 (E.D.Va.1958); Higgins v. California Tanker Co., 166 F. Supp. 569 (E.D.Pa.1957); Novitski v. Lykes Steamship Co., 90 F. Supp. 971 (E.D.Pa. 1950); Dawson v. Alaska S.S. Co., 12 F.R.D. 527 (S.D.N.Y.1952). In none of these cases does it clearly appear, as here, that the plaintiff's cause of action is integrally connected with the contact urged as the basis for jurisdiction. The very reason that the M/S GALINI came to Texas was to honor its obligation under a contract which was to be performed, in part, in Texas. Vygla Steamship Company was "doing business" in Texas in the strictest sense of the term.[4]
The motion to dismiss and to quash service will, therefore, be denied.
CHARTERER'S MOTION TO STAY
By its own terms, the bill of lading is "subject to all terms, conditions, and exceptions of the charter party dated at London, England, October 4, 1968, and any addenda thereto." Moreover, the bill of lading provides in clause one that it is subject to the Carriage of Goods at Sea Act,[5] which it expressly deems to be incorporated into it. Any term of the bill of lading which is repugnant to COGSA is, again by the bill's own terms, "void to that extent but no further."[6]
The charter party, entered into by Vygla Steamship Co. and Andre & Cie contains a "Centrocon" Arbitration Clause which provides:
"All the disputes from time to time arising out of this contract shall * * be referred to the final arbitrament of two arbitrators carrying on business in London * * *. Any claim *83 must be made in writing within three months of final discharge, and where this provision is not complied with the claim shall be deemed to be waived and absolutely barred."
Plaintiff, in opposing the motion to stay, first contends that it was not a party to the charter party agreement and is, therefore, under no obligation to arbitrate. It is, of course, no doubt true that, as a general matter, arbitration is a creature of contract and a party cannot be compelled to arbitrate unless he has agreed to do so. All Ports Stevedoring Corp. v. Cargill, Inc., C.A. 68-H-781 (S.D.Tex.1969). Nevertheless, the instant case appears to be an exception to this principle. As was held in Son Shipping Co. v. De Fosse & Tanghe, 199 F.2d 687 (2nd Cir. 1952), where the terms of the charter party are, as here, expressly incorporated into a bill of lading, they are part of the contract of carriage and are binding upon those making a claim for damages for the breach of that contract just as they would be if the dispute were between the charterer. All Ports Stevedoring Corp. v. Cargill, Inc., supra. See also Lowry & Co. v. SS Le Moyne D'Iberville, 253 F. Supp. 396 (S.D.N.Y. 1966).
Plaintiff next contends that the arbitration clause cannot be enforced in any event because it is in conflict with COGSA. Specifically, plaintiff refers to 46 U.S.C. § 1303(8)[7] and relies heavily on Indussa Corp. v. S.S. Ranborg, 377 F.2d 200 (2nd Cir. 1967) and Carbon Black Export v. The SS Monrosa, 254 F.2d 297 (5th Cir. 1958), cert. dism., 359 U.S. 180, 79 S. Ct. 710, 3 L. Ed. 2d 723 (1959). In each of these cases, it was held that Congress meant, by Section 1303(8), to invalidate any contractual provision in a bill of lading for a shipment to or from the United States that would prevent a claimant able to obtain jurisdiction in an American court from having that court entertain the suit and apply the substantive rules Congress had prescribed. In other words, the court, in each case, declined to enforce an agreement to litigate, in the event of a dispute, in the courts of a foreign country. Plaintiff thus contends that this holding would a fortiori control here. This contention cannot be sustained for several reasons. First, there is a factor in this case missing from those cited by plaintiff. Here, the arbitration agreement has been congressionally endorsed by the Federal Arbitration Act.[8] Section 2 of the act declares valid arbitration agreements in maritime transactions and transactions involving commerce. Section 3 provides that any suit brought in federal court upon any issue which by agreement is referable to arbitration shall be stayed on application of one of the parties. The language of Section 3, where made applicable by the terms of Section 2, is compulsory. Kirschner v. West Company, 185 F. Supp. 317 (E.D.Pa.1960), appeal dism. 300 F.2d 133 (3rd Cir. 1962). In the cases cited by plaintiff, there was no compelling congressional mandate in favor of giving effect to agreements to litigate before foreign tribunals. Secondly, the cases cited by plaintiff are merely indicative of the reluctance of federal courts to enforce agreements ousting them of jurisdiction. An arbitration agreement, on the other hand, does not deprive a federal court of its jurisdiction. Uniao De Transportadores etc. v. Companhia De Navegacao etc., 84 F. Supp. 582 (E.D. N.Y.1949), citing American Sugar Refinery v. The Anaconda, 138 F.2d 765, 767 (5th Cir. 1943). Finally, the court in Indussa Corp. v. S.S. Ranborg, supra, did itself recognize the inapplicability of its holding to arbitration clauses:
"Our ruling does not touch the question of arbitration clauses in bills of *84 lading which require this to be held abroad. The validity of such a clause in a charter party, or in a bill of lading effectively incorporating such a clause in a charter party, has been frequently sustained. See Lowry & Co. v. S.S. Le Moyne D'Iberville, 253 F. Supp. 396 (S.D.N.Y.1966), appeal dismissed for want of jurisdiction, 372 F.2d 123 (2 Cir. 1967), slip opinions 1103, and cases cited. Although the Federal Arbitration Act adopted in 1925, 43 Stat. 883, validated a written arbitration provision `in any maritime transaction', § 2, and defined that phrase to include `bills of lading of water carriers,' § 1, COGSA, enacted in 1936, 49 Stat. 1207, made no reference to that form of procedure. If there be any inconsistency between the two acts, presumably the Arbitration Act would prevail by virtue of its reenactment as positive law in 1947, 61 Stat. 669. See Knauth, Ocean Bills of Lading, supra, at 238-239." (377 F.2d 204, Fn. 4)
Plaintiff's argument that arbitration clauses are per se contrary to COGSA has, indeed, been rejected. Pincoffs et al. v. M/V Longfellow etc., et al., A.N. 1563 (S.D.Tex.1958); Uniao De Transportadores etc. v. Companhia De Navegacao etc., supra.
It is apparent, therefore, that the motion to stay must be granted.
PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT
Since the time plaintiff moved for default, a motion based on defendants' failure to answer or otherwise plead, defendants filed the motions discussed above. In that circumstance, the motion for default judgment will be denied.
It is, therefore, ordered that the motion of defendant Andre & Cie, S.A. to stay pending arbitration be, and the same is hereby, granted and that further proceedings herein be, and the same are hereby, stayed pending arbitration;
Further ordered that all parties shall now proceed to arbitration pursuant to the arbitration clause of the charter party, with jurisdiction hereof hereby retained by the court;
Further ordered that the motion of Vygla Steamship Company to quash service of process and to dismiss be, and the same is hereby, denied;
Further ordered that the motion of plaintiff for default judgment be, and the same is hereby, denied.
The clerk of this court shall file this Memorandum and Order and send true copies to counsel of record.
NOTES
[1] The affidavit of Apostolas Michael Tziras, a director of Vygla Steamship Company, reflects that the company has no agent for service of process. From the plaintiff's statement on page 1 of the Memorandum in Opposition to Shipowner's Motion to Quash Service that "the parties have agreed to treat this motion as if process upon the shipowner had been delivered to the Secretary of State of Texas as called for" in Art. 2031b, V.A.T.S., it does not appear that plaintiff seriously contests that fact.
[2] Arrived Galveston, November 17, 1964, and departed November 27, 1964.
2. Arrived Galveston, June 27, 1965, and departed June 30, 1965.
3. Arrived Brownsville, July 1, 1965, and departed July 6, 1965.
4. Arrived Houston, August 14, 1966, and departed August 20, 1966.
5. Arrived Houston, October 5, 1967, and departed October 20, 1967.
6. Arrived Brownsville, October 16, 1968, and departed November 1, 1968.
[3] Article 2031b, V.A.T.S. governs in this instance because of Rule 4(e), F.R.Civ. P. The Admiralty Rules were merged with the Federal Rules of Civil Procedure in 1966.
[4] Defendant's reliance on Pacific Employers Insurance Co. v. Parry Navigation Co., 195 F.2d 372 (5th Cir. 1952) is unpersuasive. That decision, being before McGee, supra, and other cases, e. g. Coulter v. Sears, Roebuck and Co., supra, following the trend toward expanded jurisdiction, is of doubtful authoritative value.
[5] 46 U.S.C. §§ 1300-1315
[6] Such a provision, of course, harmonizes with 46 U.S.C. § 1300 which provides that "[e]very bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea to or from ports of the United States, in foreign trade, shall have effect subject to the provisions of this chapter."
[7] "Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and obligations provided in this section, or lessening such liability otherwise than as provided in this chapter, shall be null and void and of no effect."
[8] 9 U.S.C. § 1 et seq. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572631/ | 971 S.W.2d 153 (1998)
Lucia Helena HILL, Appellant,
v.
Dennis Michael HILL, Appellee.
No. 07-97-0156-CV.
Court of Appeals of Texas, Amarillo.
June 24, 1998.
*155 James W. Wester, Sally Holt Emerson, Underwood, Wilson, Berry, Stein & Johnson, P.C., Amarillo, for appellant.
Jon R. Waggoner, Boren R. Waggoner, Amarillo, for appellee.
Before DODSON and QUINN and REAVIS, JJ.
QUINN, Justice.
Lucia Helena Hill (Lucia) appeals from a final divorce decree. The latter ended her marriage to Dennis Michael Hill (Michael). Her points of error fall into five general categories. The first concerns the trial court's failure to enter additional findings of fact and conclusions of law, the second, the court's failure to enter findings with respect to the classification of certain property as separate property, the third, the court's mischaracterization of certain property as separate property, the fourth, the court's failure to provide a just and right division of the community estate, and the fifth, the court's division of property "irrespective of the characterization" of the property. We modify the judgment and affirm it as modified.
Failure to File Additional Findings and Conclusions
Five days after the court signed the divorce decree, Lucia requested findings of fact and conclusions of law. Same were filed by the court approximately two weeks later. Thereafter, a request for additional findings and conclusions was tendered. Lucia wanted the court to specifically determine the "net values" of approximately 48 items of personalty ranging from the family's house to the soap and cleaning supplies located therein. So too was the trial judge asked to "state in writing what percentage of the net community estate each party should have received in order to achieve a just and right division of the community estate." In response, the court simply addressed the latter issue and stated that a "just and right division of the community estate would have given each party fifty percent (50%) of the net community estate." Before us, Lucia complains of the court's decision to forego assigning "net values" to the 48 items. Allegedly, the court was obligated to do this so that she could determine whether she received her fifty percent of the community estate. And, because the court did not do so, she allegedly suffered harm. We disagree and overrule the related point.
a. Authority
A trial court's duty to enter additional findings of fact and conclusions of law is finite. That is, it need only enter additional findings and conclusions on ultimate or controlling issues. ASAI Corp. v. Vanco Insulation Abatement, Inc., 932 S.W.2d 118, 122 (Tex.App.El Paso 1996, no writ); Kirby v. Chapman, 917 S.W.2d 902, 909 (Tex. App.Fort Worth 1996, no writ); Rafferty v. Finstad, 903 S.W.2d 374, 376 (Tex.App. Houston [1st Dist.] 1995, writ denied); Wallace v. Wallace, 623 S.W.2d 723, 726 (Tex.Civ. App.Houston [1st Dist.] 1981, writ ref'd n.r.e.). Furthermore, in matters of property division, the ultimate or controlling issue is whether the division was just and right. Rafferty v. Finstad, 903 S.W.2d at 376. The values of the property being divided, though related to the ultimate issue, is not a controlling issue. Id.; see Finch v. Finch, 825 S.W.2d 218, 221 (Tex.App.Houston [1st Dist.] 1992, no writ) (stating that the values are "evidentiary to the ultimate issue"); Wallace v. Wallace, 623 S.W.2d at 725 (stating the same). Thus, the court need not enter findings or conclusions with respect to them.
b. Application
Here, Lucia asked the court to enter findings which established the value of 48 items of property. To the extent that she wanted the court to assign values to the property, she was asking it to enter findings upon evidentiary, as opposed to ultimate or controlling, issues. Rafferty v. Finstad, supra; Finch v. Finch, supra; Wallace v. Wallace, supra. That was something which the court was not obligated to do. Thus, the court did not err in refusing the request.[1]
*156 Failure to Enter Findings Classifying Property as Separate
Lucia's next argument concerns the characterization of Norwest Bank Certificate of Deposit No. 4468(CD) and Norwest Savings Account No. 41659-2 (Account) as Michael's separate property. The two items were expressly "confirmed" to be his separate property in the divorce decree. However, the findings of fact and conclusions of law subsequently entered by the court expressly referred to neither. Instead, the court simply stated in the document that "[r]eference is made to this Court's Decree of Divorce dated February 14, 1997, as to its findings on the community and separate estates of the parties." Given these circumstances, Lucia posits that her ex-husband waived any right to claim that the CD and Account were his separate property on appeal. We disagree and overrule the related point of error.
a. Authority
According to Texas Rules of Civil Procedure 296 and 297, the court is obligated (in a non-jury trial) to enter findings of fact and conclusions of law when same are timely requested. Whether the findings and conclusions could be recited in the court's judgment was once a matter of debate, however. While some appellate courts determined that they could not, see, e.g., City of Houston v. Houston Chronicle Publ'g Co., 673 S.W.2d 316, 324 (Tex.App.Houston [1st Dist.] 1984, no writ), others held that they could. See, e.g., Farr v. Sun World Sav. Ass'n, 810 S.W.2d 294, 298 (Tex.App.El Paso 1991, no writ); Wallis v. Liberty Mut. Ins. Co., 465 S.W.2d 422, 426-27 (Tex.Civ.App.Dallas 1971, writ ref'd n.r.e.); Norris v. Vaughn, 278 S.W.2d 582, 585 (Tex.Civ.App.Amarillo 1955, no writ); 4 R. McDONALD & F. ELLIOT, TEXAS CIVIL PRACTICE IN DISTRICT AND COUNTY COURTS § 16.05 (1984) (stating that the particular form of the findings is not specified and their insertion in the judgment should satisfy the requirement). Indeed, this court itself noted long ago in Norris that though the better practice was to express them in a separate document, they could be included in the judgment. Norris v. Vaughn, 278 S.W.2d at 585 (quoting Stahl v. Westerman, 250 S.W.2d 325 (Tex.Civ.App.San Antonio 1952, no writ)).
Eventually, the preferred practice was adopted by the Texas Supreme Court in 1990. During that year, it enacted Rule 299a of the Texas Rules of Civil Procedure. The latter states that:
[f]indings of fact shall not be recited in a judgment. If there is a conflict between findings of fact recited in a judgment in violation of this rule and findings of fact made pursuant to Rules 297 and 298, the latter findings will control for appellate purposes. Findings of fact shall be filed with the clerk of the court as a document or documents separate and apart from the judgment.
Thus, the inclusion of findings in a judgment is now improper when the litigant requests same via Rule 296. Instead, the ultimate facts relied upon by the court in resolving the dispute must be specifically stated in a separate document.
Next, once findings are entered, they serve to "form the basis of the judgment upon all grounds of recovery and of defense embraced therein." Tex.R. Civ. P. 299. Furthermore, "the judgment may not be supported upon appeal by a presumed finding upon any ground of recovery or defense, no element of which has been included in the findings...." Id. In other words, one waives (for appellate purposes) a theory of recovery or defense unless the proponent of the theory secures a finding on the theory or an element of the theory.[2] And, the concept works to the detriment of both appellant and appellee. For instance, an appellant arguing that the trial court erred in rejecting his defense must make sure that he requested the court to make a finding upon the defense. If he does not, then the defense is waived. Augusta Dev. Co. v. Fish Oil Well Serv'g Co., *157 761 S.W.2d 538, 542 (Tex.App.Corpus Christi 1988, no writ). Similarly, if the appellee fails to request findings upon all his theories of recovery he is precluded from arguing that the court erred in failing to grant relief on the theories it omitted from its findings. Fielder v. Abel, 680 S.W.2d 655, 656 (Tex.App.Austin 1984, no writ).
b. Application
Here, Lucia timely requested findings of fact and conclusions of law and the trial court entered same. But, rather than set forth any findings about the separate and community estates of the litigants, the court merely referred them to the "findings" contained in the judgment. That it could not do. See Federal Deposit Ins. Corp. v. Morris, 782 S.W.2d 521, 523 (Tex.App.Dallas 1989, no writ) (stating that "the trial court may not rely upon a reference back to recitals in the judgment itself to satisfy" a request for findings and conclusions); Nagy v. First Nat'l Gun Banque Corp., 684 S.W.2d 114, 115-16 (Tex.App.Dallas 1984, writ ref'd n.r.e.) (holding that the court's findings, which simply incorporated that portion of the statement of facts which recited its reasons for deciding as it did, were not in compliance). Nevertheless, no one complained of the error. And, more importantly, the judgment itself did reveal the actual theory upon which the CD and Account were awarded to Michael. In it, the court "confirmed" that the two items were his separate property. Given this, Lucia's failure to object to the court's reference to the findings in the judgment, her failure to request additional findings on the matter, and our additional observation that what was said in the judgment did not conflict with anything in the formal findings entered by the court, we are unable to conclude that Michael waived his claim that the personalty in question was his separate property.
In so holding we implicitly recognize that findings contained in a judgment (contrary to Rule 299a) are not shorn of all authority. The rule itself reveals as much. Again, it states that the findings included in the judgment fall against those contained in a separate document, but only to the extent that they conflict. This logically indicates that if they do not conflict with each other, then those in the judgment have effect. Indeed, to conclude otherwise would be to render meaningless that portion of 299a which dictates how conflicts between the findings are to be resolved. That is, if findings contained in a judgment were irrelevant for all purposes, as suggested in Valley Mechanical Contractors, Inc. v. Gonzales, 894 S.W.2d 832 (Tex.App.Corpus Christi 1995, no writ) and Boland v. Natural Gas Pipeline Co. of Am., 816 S.W.2d 843 (Tex.App.Fort Worth 1991, no writ), then there would be no reason for the Texas Supreme Court to establish any type of priority between them. Simply put, why establish a hierarchy if one of the two items prioritized is a legal nullity. So, we choose to avoid assigning a frivolous purpose to the Supreme Court's decision to write Rule 299a as it did. See Tex. Gov't.Code Ann. § 311.021(2) (Vernon 1988) (stating that in construing a statute, it is presumed that the "entire" statute is intended to be effective); Burrhus v. M & S Supply, Inc., 933 S.W.2d 635, 640 (Tex.App.San Antonio 1996, writ denied) (stating that since rules of procedure have the same force and effect as statutes, they should be construed in much the same way as statutes). So too do we opt to assign meaning and purpose to all the words expressed in the rule. That is done by recognizing that findings in a judgment have probative value as long as they do not conflict with those in a separate document.[3]
Mischaracterization of Michael's Separate Property
Next, Lucia contends that the evidence is legally and factually insufficient to support the characterization of the CD and Account *158 as Michael's separate property. We agree in part and sustain the related point in part.
a. Authority
An attack on the legal sufficiency of a decision will be sustained only when there is no probative evidence to support the decision. In applying this test, we view the evidence and reasonable inferences therefrom in a manner most favorable to the judgment. We also disregard all contrary evidence and inferences. Estate of Claveria v. Claveria, 615 S.W.2d 164, 166 (Tex.1981); Brown v. Lair, 742 S.W.2d 432, 435 (Tex. App.Amarillo 1987, no writ). In assessing the factual sufficiency of the evidence, however, our focus is not so narrow. Rather, we examine both the favorable and contradictory evidence with an unbiased eye to determine whether the decision is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Estate of Davis, 920 S.W.2d 463, 465 (Tex.App.Amarillo 1996, writ denied).
Next, since the issue before us involves the characterization of the certain property as separate, several other principles are controlling. First, it is presumed that an item possessed by the spouses during marriage or at the dissolution of the marriage is community property. TEX. FAM.CODE ANN. § 3.003(a) (Vernon Pamph.1998). Furthermore, one arguing that it is not has the burden to prove the allegation by clear and convincing evidence. Id. at § 3.003(b).[4]
Second, when separate and community funds are commingled in a manner defying segregation, it is presumed that the entire fund consists of community property. Estate of Hanau v. Hanau, 730 S.W.2d 663, 667 (Tex.1987); Sibley v. Sibley, 286 S.W.2d 657, 659 (Tex.Civ.App.Dallas 1955, writ dism'd w.o.j.). However, the presumption can be dispelled through proof illustrating that the separate properties which went in never came out. This is called tracing. And, in tracing, we indulge in two more presumptions. The first is that the separate funds deposited in the account sink to the bottom, and the second, that community funds are withdrawn first. See Welder v. Welder, 794 S.W.2d 420, 434 (Tex.App.Corpus Christi 1990, no writ) (discussing the concept of tracing); Sibley v. Sibley, 286 S.W.2d at 659 (discussing same). In effect, to satisfy the burden of proof imposed on him, the claimant must show that separate funds were deposited into the account and that the balance of the account never reached zero. See Welder v. Welder, 794 S.W.2d at 433. Should the claimant do this, then it is presumed that the balance contains separate property equaling the amount of the separate funds initially deposited less withdrawals encroaching upon the deposit or deposits.[5]
b. Application
1. The CD
Michael testified that he purchased the CD with funds given to him as a gift by his grandmother. Because property received as a gift is the separate property of the recipient, Tex. Fam.Code Ann. § 3.001(2) (Vernon Pamph.1998), the testimony constituted some probative evidence supporting the court's decision to "confirm" that the CD was part of Michael's separate estate. Thus, the determination was legally sufficient.
As to the matter of factual sufficiency, we note Lucia's testimony. She contended that the instrument was not her husband's separate property. This came after admitting that she had "no knowledge of where that certificate of deposit came from." When it is weighed against Michael's testimony, we are unable to say that it was so overwhelming as *159 to render the court's determination wrong. Thus, the latter enjoys factually sufficient evidentiary support as well.[6]
2. The Account
Michael testified that prior to his marriage he had a savings account at Norwest Bank, which was later converted into the Account. Into it, he made two deposits of funds which he said were his separate property. One deposit, for $10,000, represented a portion of a gift from his father. Another, for $14,678, represented the proceeds from the sale of a house that he owned before his marriage to Lucia. See TEX. FAM. CODE ANN. § 3.001(1) (Vernon Pamph.1998) (stating that property owned by a spouse prior to marriage is the spouse's separate property). Receipts manifesting that both of these deposits were made were then admitted into evidence. This constitutes some probative evidence that the $24,678 sum deposited was Michael's separate property.
Also admitted was a summary of the transactions in the Account. According to that exhibit, the balance in the account at the time of marriage was $7,551.99. This sum was separate property given that it was Michael's before the marriage. The lowest this balance sank before the first separate property deposit was made was $4,901.99. Thus, when the $10,000 separate property deposit was made on May 27, 1993, the total amount of separate property in the account was $14,901.99. Between this deposit and the next separate property deposit, the lowest account balance was $7,935.87. When the next, and last, separate property deposit of $14,678.20 was made on July 22, 1993, the amount of separate property in the account rose to $22,614.07.
Throughout the life of the account many other deposits and withdrawals were made. Whether they involved separate or community funds is not revealed in the record. Nevertheless, we assume that the withdrawals consumed first the community and then the separate funds. Welder v. Welder, supra; Sibley v. Sibley, supra. Next, as the withdrawals of community funds were being made, they encroached on the $22,614.07 balance referred to above. According to the account summary, the balance of the separate property in the Account stood at $17,310.39 as of the date of divorce. And, that sum was the maximum amount which the court could have "confirmed" as Michael's separate property in the Account. Thus, the record is replete with evidence supporting the determination that the Account contained separate funds. Moreover, the contradictory evidence, such as it was, was not of such quantum so as to render the decision wrong.
Nevertheless, according to Michael's amended inventory and appraisement, the total balance in the Account immediately before the final divorce hearing was $18,200.49. As can be seen, the latter sum exceeded the monies subject to being traced as his separate property by $890.10. And, to the extent that the trial court awarded him the $890.10, it did so without any evidentiary support. So, we agree with Lucia's contention that the court's decision to award Michael the Account in toto lacked legally sufficient evidentiary support, but our agreement is limited to the $890.10 sum.
Failure to Properly Divide the Community Estate
The next complaint of Lucia which we address constitutes a sum of all her others. Through it she posits that because the court allegedly mischaracterized the CD and Account as Michael's separate property and failed to enter findings valuing the 48 items of property mentioned above, she was denied a just and right division of the estate. And, because she was allegedly denied such a division, *160 the cause must be remanded. We disagree and overrule the related point.
As discussed above, the court was not obligated to enter the findings alluded to. Furthermore, it did not err in declaring that the CD constituted Michael's separate property. And, to the extent that it erred in declaring that the entire Account comprised a part of his separate estate, the error implicated only $890.10 of the account. Yet, the discrepancy involving the $890.10 does not warrant remand for we can rectify it ourselves. See TEX.R.APP. P. 43.3 (authorizing us to enter the judgment which the trial court should have entered).
The parties agreed that each was entitled to half of the community estate, and the court expressly found that a just and fair division would result in giving each spouse half of the community estate. Thus, we will award Lucia an additional $445.05 as her share of the community estate.
Error in Dividing Property Irrespective of Its Community or Separate Character
Finally, Lucia argues that reversal is appropriate since the trial court (as stated in its conclusions of law) divided the property with an eye towards achieving fairness, "irrespective of the characterization of any item of property as either community or separate." In purportedly ignoring the characterization of each item of property, she continues, the court "did not refer to and acted unreasonably in applying the guiding rules and principles of property division under the Texas Family Code." Yet, in making the argument, Lucia fails to direct us to anything which illustrates that the court acted upon the conclusion to which she refers. Nor does our own review of the file indicate as much. Indeed, other than the matters of the CD and Account, Lucia nowhere illustrates that the court gave her ex-husband community or separate property which actually belonged to her or vice versa. And, as to the CD and Account, the trial court correctly "confirmed" that same were the separate property of Michael (save for $819.10 in the Account) and awarded it to him.
So, even if the court improperly stated that it divided the property irrespective of its characterization, nothing indicates that the court actually did that. Under that circumstance, we divine no harm. Nor has Lucia cited us to any. Thus, we reject her final proposition as well.
Accordingly, the final decree of divorce is modified to award Lucia $445.05 from Michael as her community share of savings account number XXXXX-X at Norwest Bank. In all other things the decree is affirmed.
NOTES
[1] We eschew Lucia's invitation to have us adopt Justice O'Connor's opinion in Rafferty. It is not only a dissenting opinion but also one which expressly recognizes that it deviates from settled law.
[2] If findings are entered upon less than all the elements of a theory, then the omitted elements are presumed found. TEX.R. CIV. P. 299. This, of course, assumes that evidence exists which supports the presumed findings.
[3] We are not the first to recognize that findings in a judgment still have affect despite Rule 299a. According to the Court of Appeals for the Eighth District, they can be considered in determining whether a litigant was harmed by the court's refusal to enter findings. Martinez v. Molinar, 953 S.W.2d 399, 401 (Tex.App.El Paso 1997, no writ). This is so because they still serve to reveal the basis underlying the trial court's decision even though they are not contained in a separate document. Id.
[4] This heightened burden of proof does not alter the standard of review for determining whether the decision had sufficient evidentiary support, however. Faram v. Gervitz-Faram, 895 S.W.2d 839, 842 (Tex.App.Fort Worth 1995, no writ).
[5] In application the theory would work like this. Assume that the wife deposited $50 dollars of separate funds into an account that already had $25 of community property. The $50 dollars would sink to the bottom. If a $35 check were then drawn against the account, the remaining $40 would be the wife's separate property. Should another $20 of community monies be deposited and a $40 withdrawal made, then the separate funds of the wife would equal $20. Should that $20 be removed, then the wife's separate property would be depleted even though $100 of community funds was deposited thereafter.
[6] Lucia refers us to Kirtley v. Kirtley, 417 S.W.2d 847 (Tex.Civ.App.Texarkana 1967, writ dism'd w.o.j.) and Parmeter v. Parmeter, 348 S.W.2d 51 (Tex.Civ.App.Dallas 1961, no writ) as support for the proposition that the uncorroborated testimony of Michael cannot "conclusively" prove that the CD was his separate property. While those two opinions do suggest as much, they also hold that the testimony of an interested witness is enough to warrant submission of the dispute to the fact finder. So, whether or not Michael's testimony alone would have been enough to warrant a directed verdict or summary judgment vis-a-vis the character of the CD, it nevertheless constituted evidence upon which the court could rely. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572650/ | 2 So. 3d 869 (2008)
R.W.
v.
G.W. and S.W.
2070540.
Court of Civil Appeals of Alabama.
July 3, 2008.
Shaunathan C. Bell, Fort Payne, for appellant.
*870 Daniel S. Campbell, Fort Payne, for appellees.
THOMAS, Judge.
R.W. ("the mother") is the mother of L.M.W. III and B.W. (sometimes hereinafter referred to collectively as "the children"). The DeKalb Juvenile Court terminated the mother's parental rights to the children on July 3, 2007. She timely appealed to the DeKalb Circuit Court. After an unexplained delay, the DeKalb Circuit Court ordered the DeKalb Juvenile Court to review the record and to determine whether it was adequate to support an appeal to this court pursuant to Rule 28, Ala. R. Juv. P. The DeKalb Juvenile Court certified the record as adequate, and the DeKalb Circuit Court transferred the appeal to this court.
The record reveals that the mother lost custody of both children as a result of her involvement with the Catoosa, Georgia, Department of Family and Children Services ("DFCS"). In April 2005, the Juvenile Court of Catoosa County, Georgia ("the Georgia Court"), awarded "permanent custody" of B.W. to L.E.W. and J.W. ("the paternal grandparents"). The judgment awarding the paternal grandparents permanent custody of B.W. stated that reunification with his parents was not the permanency plan for B.W. and that the parents were in agreement with the transfer of custody to the paternal grandparents. According to the judgment, the mother was awarded visitation with B.W., as agreed between her and the paternal grandparents. The judgment further provided that the court would review the case every 3 years until the child reached the age of 18.
In May 2005, the Georgia court awarded G.W. ("the paternal great-aunt") and her husband, S.W., "temporary custody" of L.M.W. III. According to the judgment awarding the paternal great-aunt and her husband custody of L.M.W. III, the permanency plan for L.M.W. III was reunification with his parents. The judgment listed two requirements for reunification: that the mother obtain and maintain stable housing and that she become and remain drug free. The mother was awarded visitation "as agreed to between the custodians and the [mother]." The judgment further stated that it "shall expire on April 8, 2007, unless sooner terminated" by the court.
According to the paternal great-aunt, who testified at the trial in the DeKalb Juvenile Court, in June 2005 the paternal grandmother became ill and B.W. came to live with the paternal great-aunt. When the paternal grandmother recovered from her illness, however, B.W. expressed a desire to continue to live with the paternal great-aunt and L.M.W. III. The paternal grandmother permitted B.W. to remain in the paternal great-aunt's custody.
In the spring of 2005, when the paternal great-aunt sought custody of L.M.W. III, who was then in the custody DFCS she and her husband had relocated to Georgia. However, according to the paternal great-aunt, a few months after receiving custody of L.M.W. III, she and her husband decided that they could no longer live in Georgia and they notified "the courts in Georgia" that they would be moving back to Alabama. The paternal great-aunt testified that "they said that was fine."
In July 2006, the paternal great-aunt and her husband filed in the DeKalb Juvenile Court what they styled as a "Petition to Domesticate and Modify" the judgment of the Georgia court regarding L.M.W. III and a separate "Petition to Domesticate and Modify" the judgment of the Georgia court regarding B.W. The paternal grandparents filed in the DeKalb Juvenile Court a "Consent to Relinquishment of Custody," *871 in which they consented to an award of the custody of B.W. to the paternal great-aunt and her husband.
On August 4, 2006, the paternal great-aunt and her husband filed a petition to terminate the rights of the mother[1] in the DeKalb Juvenile Court. After the mother was served, she filed an affidavit of substantial hardship and requested to be appointed counsel. The DeKalb Juvenile Court appointed counsel for the mother on October 10, 2006, and counsel filed an answer on November 20, 2006.
The mother filed a motion to dismiss on March 15, 2007, raising as grounds the lack of in personam jurisdiction over the mother and the lack of subject-matter jurisdiction. After a hearing on the motion before the commencement of the termination trial, the DeKalb Juvenile Court denied the motion to dismiss because, it said, the presence of the children in the State of Alabama was a sufficient basis for jurisdiction over the mother. As noted above, the DeKalb Juvenile Court ultimately terminated the mother's parental rights, and she appeals, arguing only that the DeKalb Juvenile Court did not have in personam jurisdiction over her.
However, because this court may notice the lack of subject-matter jurisdiction ex mero motu and because the lack of subject-matter jurisdiction renders a judgment entered without it void, see Ex parte Punturo, 928 So. 2d 1030, 1033 (Ala.2002), and C.J.L. v. M.W.B., 868 So. 2d 451, 452 (Ala.Civ.App.2003), we will consider whether the DeKalb Juvenile Court had subject-matter jurisdiction to entertain the paternal great-aunt's petitions to modify the existing custody determinations of the Georgia court or the petition to terminate the mother's parental rights.
"Congress and most state legislatures have passed legislation aimed at determining which of multiple states should litigate and modify child-custody determinations, namely, the Parental Kidnapping Prevention Act (`the PKPA'), 28 U.S.C. § 1738A, and [the Uniform Child Custody Jurisdiction and Enforcement Act,] Ala.Code 1975, § 30-3B-101 et seq. The PKPA states that continuing jurisdiction remains in a state that has made a child-custody determination provided that the state continues to have jurisdiction under the state's laws and the child or at least one `contestant' resides in that state. 28 U.S.C. § 1738A(d); see also Holloway v. Holloway, 519 So. 2d 531, 532 (Ala.Civ.App. 1987)."
C.J.L., 868 So.2d at 452.
As we have previously explained, the Uniform Child Custody Jurisdiction and Enforcement Act ("the UCCJEA"), codified at Ala.Code 1975, § 30-3B-101 et seq., controls decisions regarding whether a court of this state has jurisdiction to make a child-custody determination or to modify another state's child-custody determination. M.J.P. v. K.H., 923 So. 2d 1114, 1116-17 (Ala.Civ.App.2005). A "child-custody determination," as defined in the UCCJEA, includes any judgment providing for the legal or physical custody of a child or providing visitation with a child. § 30-3B-102(3). A "child-custody proceeding" is defined in the UCCJEA to include not only divorce actions involving the custody of a child, but also "neglect, ... dependency,... [and] termination of parental rights" actions in which the issue of child custody is addressed. § 30-3B-102(4).
*872 "Section 30-3B-201 of the UCCJEA outlines when a court of this state has jurisdiction to make an initial custody determination:
"`(a) Except as otherwise provided in Section 30-3B-204, a court of this state has jurisdiction to make an initial child custody determination only if:
"`(1) This state is the home state of the child on the date of the commencement of the proceeding, or was the home state of the child within six months before the commencement of the proceeding and the child is absent from this state but a parent or person acting as a parent continues to live in this state;
"`(2) A court of another state does not have jurisdiction under subdivision (1), or a court of the home state of the child has declined to exercise jurisdiction on the ground that this state is the more appropriate forum under Section 30-3B-207 or 30-3B-208, and:
"`a. The child and the child's parents, or the child and at least one parent or a person acting as a parent, have a significant connection with this state other than mere physical presence; and
"`b. Substantial evidence is available in this state concerning the child's care, protection, training, and personal relationships;
"`(3) All courts having jurisdiction under subdivision (1) or (2) have declined to exercise jurisdiction on the ground that a court of this state is the more appropriate forum to determine the custody of the child under Section 30-3B-207 or 30-3B-208; or
"`(4) No court of any other state would have jurisdiction under the criteria specified in subdivision (1), (2), or (3).'
". . . .
"The UCCJEA provides that a court of this state has jurisdiction to modify a custody determination of another state only if the Alabama court has jurisdiction to make an initial determination under § 30-3B-201(a)(1) or (2) and
"`(1) The court of the other state determines that it no longer has continuing, exclusive jurisdiction under Section 30-3B-202 or that a court of this state would be a more convenient forum under Section 30-3B-207; or
"`(2) A court of this state or a court of the other state determines that the child, the child's parents, and any person acting as a parent do not presently reside in the other state.'
"Ala.Code 1975, § 30-3B-203."
M.J.P., 923 So.2d at 1116-17.
Georgia has also enacted the UCCJEA. See Ga.Code Ann. § 19-9-40 et seq. (2001). The provisions governing initial child-custody jurisdiction, Ga.Code Ann. § 19-9-61, and exclusive, continuing jurisdiction, Ga. Code Ann. § 19-9-62, are identical to the corresponding provisions of Alabama's UCCJEA, i.e., § 30-3B-201 and § 30-3B-202, respectively. Thus, because the children, the paternal great-aunt, the paternal grandmother, and the mother all resided in Georgia at the time of the initial child-custody determinations, Georgia was the home state of the children and had jurisdiction to make the initial child-custody determinations. Because the mother still resides in Georgia, based on Ga.Code Ann. § 19-9-62(a)(1), the Georgia court would have exclusive, continuing jurisdiction over the initial child-custody determinations until it determined that "neither the child nor the child's parents or any person acting as a parent has a significant connection with this state and that substantial evidence is no longer available in this state concerning *873 the child's care, protection, training, and personal relationships." Nothing in the record reflects that the Georgia court has made such a determination.
Furthermore, the paternal great-aunt's attempt to "domesticate" the Georgia court's custody judgments was likely an incomplete attempt to "register" the child-custody determinations, which may be done pursuant to § 30-3B-305(a).[2] Even if the registration had been properly performed, pursuant to § 30-3B-306(b), "[a] court of this state shall recognize and enforce, but may not modify, except in accordance with Article 2 [§ 30-3B-201 through § 30-3B-210], a registered child custody determination of a court of another state."
Based on our reading of the UCCJEA provisions governing child-custody determinations both in Alabama and in Georgia, we cannot agree that the DeKalb Juvenile Court had subject-matter jurisdiction to entertain the paternal great-aunt's petitions to modify the Georgia court's judgments regarding custody of the children or the petition to terminate the parental rights of the mother, which would serve as a child-custody determination contrary to those judgments entered by the Georgia court and over which the Georgia court maintains exclusive, continuing jurisdiction. The judgment of DeKalb Juvenile Court was entered without subject-matter jurisdiction and is void. See Ex parte Punturo, 928 So.2d at 1035. A void judgment will not support an appeal. C.J.L., 868 So.2d at 454.
APPEAL DISMISSED.
THOMPSON, P.J., and PITTMAN, BRYAN, and MOORE, JJ., concur.
NOTES
[1] That petition also sought to terminate the parental rights of L.M.W. II ("the father"); the father never appeared in the termination action, and his rights were terminated by default. He did not appeal.
[2] Section 30-3B-305 sets out the requirements for registration of a child-custody determination of another state:
"(a) A child custody determination issued by a court of another state may be registered in this state, with or without a simultaneous request for enforcement, by sending to the appropriate court in this state:
"(1) A letter or other document requesting registration;
"(2) Two copies, including one certified copy, of the determination sought to be registered, and a statement under penalty of perjury that to the best of the knowledge and belief of the person seeking registration the order has not been modified; and
"(3) Except as otherwise provided in Section 30-3B-209, the name and address of the person seeking registration and any parent or person acting as a parent who has been awarded custody or visitation in the child custody determination sought to be registered." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572637/ | 323 F. Supp. 988 (1971)
Isidore FINK et al., Plaintiffs,
v.
Francis G. COATES et al., Defendants.
COLONIAL REALTY CORPORATION, Plaintiff,
v.
Francis G. COATES et al., Defendants.
Nos. 65 Civ. 2105, 65 Civ. 2106.
United States District Court, S. D. New York.
February 5, 1971.
Pomerantz, Levy, Haudek & Block, New York City, for plaintiffs; Abraham L. Pomerantz, William E. Haudek, Donald J. Miller, New York City, of counsel.
White & Case, New York City, for defendants; Orison S. Marden, P. B. Konrad Knake, Thomas McGanney, Jeffrey A. Barist, New York City, of counsel.
MEMORANDUM
BONSAL, District Judge.
Plaintiffs move for an order pursuant to Rules 56 and 16, F.R.Civ.P., granting partial summary judgment and simplifying the issues in favor of two of the plaintiff-intervenors in the Fink action and in favor of plaintiff Colonial *989 Realty Corporation, and in favor of all persons similarly situated, against Texas Gulf Sulphur Company (TGS) and Charles F. Fogarty.
These private actions arise out of events of November, 1963 through April, 1964 when TGS discovered valuable ore bodies in Timmins, Ontario.[1] Following announcement of the discovery, the Securities Exchange Commission (SEC) instituted an action against TGS and certain of its officers and directors (the SEC action). The SEC alleged violations of Section 10(b) of the Securities Exchange Act of 1934 (the 1934 Act), 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. 240.10b-5, promulgated pursuant thereto. The complaint brought by the SEC alleged in part that TGS had issued a materially false and misleading press release on April 12, 1964 with respect to its activities in Timmins, Ontario. The issue of liability was tried to this court, S.E.C. v. Texas Gulf Sulphur Co., 258 F. Supp. 262 (S.D.N.Y.1966). The Court of Appeals remanded, 401 F.2d 833 (2d Cir. 1968), cert. denied, Coates v. S.E.C., 394 U.S. 976, 89 S. Ct. 1454, 22 L. Ed. 2d 756 (1969), directing that this court reconsider the April 12, 1964 press release in light of its opinion. On remand, this court held that the April 12 press release was misleading to the reasonable investor in the exercise of due care, that the framers of the release failed to exercise due diligence in its issuance, and that TGS had violated Section 10(b) and Rule 10b-5, 312 F. Supp. 77 (S.D.N.Y. 1970).
These actions were instituted by former shareholders of TGS. The complaints allege that TGS and certain of its officers and directors, including defendant Fogarty, issued the April 12 press release, and that the release was knowingly false and misleading as to material facts, in violation of Section 10(b) and Rule 10b-5. It is alleged that the two plaintiffs-intervenors sold TGS shares on April 13 and 16, 1964, and that Colonial Realty Corporation sold calls on shares on April 16, 1964, in reliance on the April 12 press release. Plaintiffs seek money damages.
In this motion, plaintiffs claim collateral estoppel with respect to TGS and Fogarty in view of Reynolds v. Texas Gulf Sulphur Company, 309 F. Supp. 548 (D.Utah 1970), a consolidated action brought by other former shareholders under Section 10(b) and Rule 10b-5 against TGS and Fogarty, where Chief Judge Ritter found that the April 12 press release was "misleading, intentionally deceptive, inaccurate and knowingly deficient in material facts pertaining to the results of drilling," and violated Section 10(b) and Rule 10b-5. (309 F. Supp. at 562.) Plaintiffs here contend that because of Reynolds, TGS and Fogarty are estopped from denying the material falsity of the April 12 press release and their knowledge of its falsity.
Whether collateral estoppel applies here is governed by federal law. Zdanok v. Glidden Company, 327 F.2d 944, 956 (2d Cir.), cert. denied, 377 U.S. 934, 84 S. Ct. 1338, 12 L. Ed. 2d 298 (1964), citing Currie, "Mutuality of Collateral Estoppel: Limits of the Bernhard Doctrine"; 9 Stan.L.Rev. 281, 301, n. 40 (1957).
Plaintiffs conceded at argument that the granting of this motion was in the discretion of the court, but argued that, based on Zdanok, such discretion should be exercised in their favor.
TGS and Fogarty point out that the moving plaintiffs were not parties to Reynolds, and contend that an exception to the doctrine of mutuality should not be made in this case.
In Zdanok, collateral estoppel was granted based on a decision which had *990 been determined by the Court of Appeals and had been appealed to the United States Supreme Court. Reynolds is still on appeal to the Tenth Circuit, which has not rendered its decision.
In Zdanok, the defendant against whom the collateral estoppel was applied chose the forum of the prior action. In Reynolds, TGS and Fogarty opposed the Utah forum and unsuccessfully sought a transfer to another forum. Texas Gulf Sulphur Company v. Ritter, 371 F.2d 145 (10th Cir. 1967). The liability in Reynolds was relatively small compared to that sought in the actions pending in this court. See, Berner v. British Commonwealth Pacific Airlines, Ltd., 346 F.2d 532 (2d Cir. 1965), cert. denied, 382 U.S. 983, 86 S. Ct. 559, 15 L. Ed. 2d 472 (1966).
Zdanok involved an interpretation of a contract, whereas these are tort actions involving falsity, materiality, and scienter. While Reynolds held that the April 12 press release was "intentionally deceptive," this court found in the original SEC trial that:
"[I]t is apparent that the purpose of the April 12 press release was an attempt to meet the rumors which were circulating with respect to the Kidd 55 segment. (258 F.Supp. at 294).
* * * * * *
"Moreover, the circumstances under which the April 12 release was prepared indicate that defendants Fogarty and Mollison were under considerable pressure. * * * Stephens and Fogarty exercised reasonable business judgment under the circumstances." (258 F.Supp. at 296.)
In his concurring opinion in the Court of Appeals, Judge Friendly stated, "No one has asserted, or reasonably could assert, that the purpose for issuing a release was anything but good." (401 F. 2d at 866).
While Reynolds held that the release was "intentionally deceptive," there are no specific findings of fact or conclusions of law to this effect in the court's amended findings and conclusions.[2] As stated in McNellis v. First Federal Savings and Loan Ass'n, 364 F.2d 251, 257 (2d Cir.), cert. denied, 385 U.S. 970, 87 S. Ct. 504, 17 L. Ed. 2d 434 (1966),
"a reasonable doubt as to what was decided in the first action should preclude the drastic remedy of foreclosing a party from relitigating an essential issue." (Footnote omitted.)
Accordingly, in the court's discretion plaintiffs' motion for partial summary judgment is denied. There remain issues of fact to be tried, including material falsity, scienter, reliance and damages.
It is so ordered.
NOTES
[1] These events are not detailed here since they are set forth in the opinion of the District Court, S. E. C. v. Texas Gulf Sulphur Co., 258 F. Supp. 262, at 268-275, 293-294 (S.D.N.Y.1966); in the opinion of the Court of Appeals, 401 F.2d 833, at 840-841, 843-847 (2d Cir. 1968); and in the opinion of the District Court of Utah in Reynolds v. Texas Gulf Sulphur Co., 309 F. Supp. 548, at 551-556 (D.Utah 1970).
[2] Reynolds v. Texas Gulf Sulphur Company, 309 F. Supp. 566, Amended Findings of Fact and Conclusions of Law, filed 1/13/70. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572820/ | 2 So.3d 268 (2009)
ORONA
v.
STATE.
No. 2D08-4054.
District Court of Appeal of Florida, Second District.
February 2, 2009.
Decision without published opinion. Pet.denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572748/ | 2 So.3d 777 (2009)
Michael A. BLISS, Appellant,
v.
STATE of Mississippi, Appellee.
No. 2008-CP-00288-COA.
Court of Appeals of Mississippi.
February 10, 2009.
*778 Michael A. Bliss, pro se.
Office of the Attorney General by Laura Hogan Tedder, attorney for appellee.
Before KING, C.J., IRVING and ROBERTS, JJ.
ROBERTS, J., for the Court.
¶ 1. Michael A. Bliss pled guilty to possession of precursor chemicals with the intent to manufacture methamphetamine. Bliss requested that the Warren County Circuit Court place him in the drug court program. The circuit court accepted Bliss's guilty plea. Approximately one week later, Bliss was rejected from the drug court program. Subsequently, the circuit court sentenced Bliss to twenty years in the custody of the Mississippi Department of Corrections (MDOC) with four years suspended and sixteen years to serve followed by five years of post-release supervision. Bliss filed a motion for post-conviction relief and claimed he did not knowingly, voluntarily, and intelligently plead guilty. Additionally, Bliss claimed he received ineffective assistance of counsel during his guilty plea proceedings. The circuit court summarily dismissed Bliss's motion for post-conviction relief. Aggrieved, Bliss appeals and revisits his arguments before the circuit court. Finding no error, we affirm.
FACTS AND PROCEDURAL HISTORY
¶ 2. In the summer of 2005, Bliss was stopped for speeding. A Warren County Sheriff's Deputy smelled ether in Bliss's truck. Deputies searched Bliss's truck and found several items used to manufacture methamphetamine. Bliss told the deputies that he found the items in a trailer he was "fixing up."
¶ 3. Bliss consented to a search of the trailer. Deputies found ethyl ether, ammonium nitrate, sulfuric acid, heptane, and pseudoephedrine. Deputies also found some methamphetamine. The record does not contain a copy of Bliss's indictment. *779 In any event, Bliss pled guilty to possession of precursor chemicals with the intent to manufacture methamphetamine.
¶ 4. Bliss offered an "open" plea and asked the circuit court to place him in the drug court program.[1] The circuit court explained that it could not guarantee that Bliss would be accepted into the drug court program. The circuit court did not sentence Bliss at that time. Bliss went before the drug court and, for whatever reason, was not accepted into the drug court program. The record does not contain a transcript of that examination.
¶ 5. The circuit court later conducted a sentencing hearing. The record does not contain a copy of Bliss's sentencing hearing or a copy of his sentencing papers. However, Bliss claims the circuit court sentenced him to twenty years in the custody of the MDOC with four years suspended and sixteen years to serve followed by five years of post-release supervision.
¶ 6. Bliss filed a motion for post-conviction collateral relief. According to Bliss, he did not enter his guilty plea freely, voluntarily, and intelligently because he believed he would be placed in drug court. Bliss also claimed he received ineffective assistance of counsel in that his attorney incorrectly told him he would be placed in drug court. The circuit court summarily dismissed Bliss's motion. Bliss appeals.
STANDARD OF REVIEW
¶ 7. A trial court may dismiss a motion for post-conviction relief "[i]f it plainly appears from the face of the motion, any annexed exhibits and the prior proceedings in the case that the movant is not entitled to any relief[.]" Miss.Code Ann. § 99-39-11(2) (Rev.2007). In reviewing a circuit court's decision to dismiss a motion for post-conviction relief, we will not disturb the circuit court's factual decisions unless they are clearly erroneous. Williams v. State, 872 So.2d 711, 712(¶ 2) (Miss.Ct.App. 2004). However, we review questions of law de novo. Id.
ANALYSIS
I. VOLUNTARY GUILTY PLEA
¶ 8. "[A] plea is binding only if it is entered into voluntarily." Robinson v. State, 964 So.2d 609, 612(¶ 7) (Miss.Ct.App. 2007) (citing Myers v. State, 583 So.2d 174, 177 (Miss.1991)). There must be "a showing in the record that the guilty plea is voluntarily" given. Id. "A plea of guilty is not voluntary if induced by fear, violence, deception, or improper inducements." URCCC 8.04(A)(3). Bliss argues that his plea was involuntary because he believed he would be placed in the drug court program.
¶ 9. Bliss's claim fails because the circuit court judge never told him that he would, in fact, be placed in the drug court program. Instead, the circuit court judge told Bliss he may or may not be accepted into the drug court program. Specifically, the circuit court judge stated, "you're going to request to enter [d]rug [c]ourt, but that has not been guaranteed or anything else." The circuit court judge also asked Bliss whether anyone had promised him anything to persuade him to plead guilty. Bliss swore that no one had promised him anything to induce his guilty plea. Because the record does not contain a transcript of Bliss's drug court examination or a transcript of Bliss's sentencing hearing, it is unclear why Bliss was not accepted.
¶ 10. Moreover, the circuit court judge informed Bliss of the minimum and maximum sentences for possession of precursors *780 with the intent to manufacture methamphetamine. The circuit court judge went on to inform Bliss that, in the event that Bliss was not accepted into the drug court program, he could sentence Bliss to any term of incarceration within that range of sentences. It follows that, in so doing, the circuit court informed Bliss of the possibility that Bliss would not be accepted into the drug court program. Accordingly, we find no merit to this issue.
II. EFFECTIVE ASSISTANCE OF COUNSEL
¶ 11. Bliss claims his attorney rendered ineffective assistance of counsel because he led Bliss to believe that he would be placed in the drug court program. In order to succeed on this claim, Bliss must demonstrate "that his trial counsel's performance was deficient and the deficient performance prejudiced his defense." Davis v. State, 973 So.2d 1040, 1043(¶ 4) (Miss.Ct.App.2008) (citing Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984)). We start with the "presumption that counsel's conduct is within the wide range of reasonable conduct" and "that decisions made are strategic." Leatherwood v. State, 473 So.2d 964, 969 (Miss.1985). "If the attorney believes that it is in his client's best interest to plead guilty, it is his duty to inform him of that fact." Robinson, 964 So.2d at 612(¶ 8).
¶ 12. There is no merit to this issue. During his guilty plea hearing, Bliss swore that his lawyer had not promised him anything to get him to plead guilty. Bliss also swore that he was satisfied with the services of his attorney. "It is firmly established that mere allegations are insufficient to entitle a defendant to an evidentiary hearing on a post-conviction claim of ineffective assistance of counsel." Ealey v. State, 967 So.2d 685, 691(¶ 18) (Miss.Ct.App.2007) (citations omitted). Additionally, Bliss only submitted his own affidavit in support of his allegation. "Post-conviction claims of ineffective assistance are properly dismissed where the defendant offers only his affidavit in support of his allegations." Id. (citing Vielee v. State, 653 So.2d 920, 922 (Miss.1995); Brooks v. State, 573 So.2d 1350, 1354 (Miss.1990)).
¶ 13. THE JUDGMENT OF THE WARREN COUNTY CIRCUIT COURT DISMISSING THE MOTION FOR POST-CONVICTION RELIEF IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO WARREN COUNTY.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, GRIFFIS, BARNES, ISHEE AND CARLTON, JJ., CONCUR.
NOTES
[1] During Bliss's guilty plea hearing, the circuit court judge explained that an "[o]pen plea means that there's no agreement as to any sentence." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572859/ | 2 So.3d 946 (2006)
EX PARTE JERRY F. TERRY.
No. CR-06-0267.
Court of Criminal Appeals of Alabama.
December 5, 2006.
Decision of the Alabama Court of Criminal Appeal without opinion. Mand. pet. dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572764/ | 2 So.3d 287 (2007)
Willie Brooks MITCHELL, Appellant,
v.
STATE of Florida, Appellee.
No. 2D05-2852.
District Court of Appeal of Florida, Second District.
December 14, 2007.
*288 James Marion Moorman, Public Defender, and Siobhan Helene Shea, Special Assistant Public Defender, Bartow, for Appellant.
Bill McCollum, Attorney General, Tallahassee, and John M. Klawikofsky, Assistant Attorney General, Tampa, for Appellee.
KELLY, Judge.
Willie Brooks Mitchell appeals his judgment and life sentence for attempted first-degree murder and armed burglary of a dwelling with an assault or battery. Mr. Mitchell has raised a number of issues; however, because we find it dispositive, we address only his contention that the trial court should have suppressed the statement he made to police after he was taken into custody. See Abshire v. State, 642 So.2d 542 (Fla.1994) (addressing only one of eighteen issues raised by the appellant based on a finding that the issue was dispositive of the case); Neeley v. State, 883 So.2d 861 (Fla. 1st DCA 2004) (finding it unnecessary to address the second issue on appeal, where the first was dispositive). We reverse.
Mr. Mitchell contends the trial court should have suppressed his statement because the Miranda[1] warnings the police read him were inadequate in that they did not specifically inform him of the right to have counsel present during questioning. *289 This court recently considered this issue in Powell v. State, 969 So.2d 1060 (Fla. 2d DCA 2007), and held that the identical Miranda warnings did not adequately convey to a suspect the right to have counsel present during questioning.[2] In light of this court's decision in Powell, we agree with Mr. Mitchell that the warnings he received were inadequate and that the State should not have been permitted to use his statement as evidence in its case-in-chief. See United States v. Patane, 542 U.S. 630, 124 S.Ct. 2620, 159 L.Ed.2d 667 (2004). As we did in Powell, we certify the following question as one of great public importance pursuant to article V, section 3(b)(4), of the Florida Constitution and Florida Rule of Appellate Procedure 9.030(a)(2)(A)(v):
DOES THE FAILURE TO PROVIDE EXPRESS ADVICE OF THE RIGHT TO THE PRESENCE OF COUNSEL DURING QUESTIONING VITIATE MIRANDA WARNINGS WHICH ADVISE OF BOTH (A) THE RIGHT TO TALK TO A LAWYER "BEFORE QUESTIONING" AND (B) THE "RIGHT TO USE" THE RIGHT TO CONSULT A LAWYER "AT ANY TIME" DURING QUESTIONING?
Despite this error, we need not reverse if we can conclude beyond a reasonable doubt that admission of the statement was harmless. See Caso v. State, 524 So.2d 422, 425 (Fla.1988) ("The erroneous admission of statements obtained in violation of Miranda rights is subject to harmless error analysis."). To establish harmless error, the State must prove beyond a reasonable doubt that the error did not contribute to the conviction. State v. DiGuilio, 491 So.2d 1129, 1135 (Fla.1986). "Application of the test requires an examination of the entire record by the appellate court including a close examination of the permissible evidence on which the jury could have legitimately relied, and in addition an even closer examination of the impermissible evidence which might have possibly influenced the jury verdict." Id.; see also Crumbley v. State, 876 So.2d 599 (Fla. 5th DCA 2004).
The State's evidence at trial established that on the night of February 24, 1997, the victim, who was seventy-two years old, was at home in bed when she heard a noise in another bedroom and went to investigate. She testified that when she opened the door she saw a tall, thin, black man. The man, who was wielding a knife, grabbed her and began stabbing her, first in the neck and then in the head and hand, as he dragged her though the house and "ransacked every chest of drawers and [her] dresser." The attack lasted ten to fifteen minutes and left the victim with fourteen stab wounds, a punctured lung, a cut voice box, and fifteen stitches in her hand. She also lost two pints of blood.
Although the offense occurred in February 1997, Mr. Mitchell was not arrested until July 2003, and his trial did not commence until March 2005. The only evidence placing Mr. Mitchell inside the victim's home was his statement.[3] The victim *290 was never able to identify Mr. Mitchell as her assailant even though she stated that she got a good look at the intruder. When asked at trial and during her deposition to describe her assailant, the victim gave varying estimates of his age and stature; however, none of her descriptions matched Mr. Mitchell. No physical evidence linked Mr. Mitchell to the inside of the victim's home although the State did offer testimony that DNA and a fingerprint taken from a piece of broken glass found outside the home matched Mr. Mitchell. During cross-examination, the defense was able to cast doubt on the reliability of the DNA and fingerprint evidence. In closing argument, the State invited the jury to rely on Mr. Mitchell's statement if they doubted the physical evidence. Under these circumstances, we cannot conclude beyond a reasonable doubt that the admission of Mr. Mitchell's statement did not contribute to the verdict. Accordingly, we reverse and remand for a new trial.
Reversed and remanded.
DANAHY, PAUL W., Senior Judge, Concurs.
ALTENBERND, J., Concurs with opinion.
ALTENBERND, Judge, Concurring.
I fully agree that the outcome of this case is determined by this court's opinion in Powell. I also agree with the certified question.
I would have dissented in Powell, as reflected by my vote in M.A.B. v. State, 957 So.2d 1219, 1220 (Fla. 2d DCA 2007) (en banc) (Canady, J., concurring), review granted, 962 So.2d 337 (Fla.2007). In M.A.B., the active judges on this court voted to a tie on the sufficiency of the Miranda warning contained in a written form that is commonly used by law enforcement officers in this district. Judge Kelly also joined Judge Canady's concurring opinion in M.A.B. and dissented to the primary holding in Powell. Powell, 969 So.2d at 1068 (Kelly, J., concurring in part and dissenting in part). Because this court was uncertain whether the supreme court had jurisdiction to review a tie vote, the members of this court permitted Powell to issue as a panel opinion. See Powell, 969 So.2d at 1063 n. 5; see also Floridians For A Level Playing Field v. Floridians Against Expanded Gambling, 967 So.2d 832 (Fla.2007). Because this issue is now pending before the Florida Supreme Court in M.A.B., I conclude it is now appropriate to accept Powell as the law in this district and not to pursue further en banc consideration of this issue. In future cases raising this issue as in this case, I will join in all certified questions of this issue to the supreme court.
Powell effectively establishes a per se rule that the standard Miranda form used by many police departments is defective as a matter of law and that all statements made during an interview in which the defendant signs this form are inadmissible. The court will be permitted to affirm such cases only in the rare instance in which we can conclude that the admission of the confession was harmless beyond a reasonable doubt.
Miranda warnings are not, as a general rule, read to English majors or philosophers studying theoretical linguistics. While I cannot deny that the content of the warning is important, in my mind the critical function of such a warning is to communicate by both words and actions to *291 a person of average intelligence (1) that the giving of a statement to the police can have serious legal consequences, (2) that the person is not obligated to provide the statement, (3) that the matter is serious enough that the person may need to consult with a lawyer, and (4) that the State will provide a lawyer upon request and without continuing questioning if the person indicates he wants one and cannot afford one. The form we declared to be deficient in Powell, in my opinion, accomplishes this critical function.[4] I am simply not convinced that information beyond this basic warning is constitutionally essential.
Given the legal uncertainty surrounding these warnings and in light of the fact that police departments seem to create their own new versions of the Miranda warning on a regular basis, I would encourage the Attorney General or the legislature to consider creating standard forms for use throughout the state that are sufficient to withstand legal scrutiny.
At this time, there is no case that expressly conflicts with Powell. As a result, all trial courts in Florida are bound to follow Powell unless they conclude that another opinion of the district court in their district controls, see Chapman v. Pinellas County, 423 So.2d 578, 580 (Fla. 2d DCA 1982), or unless this court or the supreme court stays the legal authority of Powell pending review in the supreme court. Given the impact that the holding in Powell could have throughout the state, I hope that the matter can be resolved as soon as possible in the supreme court.
NOTES
[1] Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).
[2] The written warning stated as follows:
You have the right to remain silent. If you give up the right to remain silent, anything you say can be used against you in court. You have the right to talk to a lawyer before answering any of our questions. If you cannot afford to hire a lawyer, one will be appointed for you without cost and before any questioning. You have the right to use any of these rights at any time you want during this interview.
[3] We have not overlooked testimony given by Officer Groves that several hours after the attack he interviewed the victim at the hospital and she told him her attacker was six feet tall. As Mr. Mitchell correctly argues, that testimony was properly objected to as hearsay, and it should not have been admitted. Because it was not properly before the jury, we have not considered it in our harmless error analysis. See DiGuilio, 491 So.2d at 1135.
[4] I recognize that Miranda requires that even statements that are otherwise voluntary must be excluded from evidence if they are made without the required warning. See Oregon v. Elstad, 470 U.S. 298, 307, 105 S.Ct. 1285, 84 L.Ed.2d 222 (1985). I note, however, that if the Miranda warnings provided were hereafter deemed to be sufficient, there is nothing in this record to suggest these statements were anything but voluntary. The record in this respect is not well developed because Mr. Mitchell did not file a pretrial motion to suppress as generally required, see Fla. R.Crim. P. 3.190(i)(2), but rather raised the issue at trial. Nevertheless, the record suggests that these warnings were given to Mr. Mitchell while he was incarcerated for another crime and that Mr. Mitchell may have had more than a passing familiarity with his rights under Miranda in light of his prior record. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572766/ | 2 So.3d 1117 (2009)
RICHARD ROAD ESTATES, LLC, Petitioner,
v.
MIAMI-DADE COUNTY BOARD OF COUNTY COMMISSIONERS, Respondent.
No. 3D08-1400.
District Court of Appeal of Florida, Third District.
February 25, 2009.
*1118 Greenberg Traurig and Elliot H. Scherker, Miami, for petitioner.
R.A. Cuevas, Jr., Miami-Dade County Attorney, and Eduardo I. Sanchez, Assistant Miami-Dade County Attorney, for respondent.
Before WELLS and SHEPHERD, JJ., and SCHWARTZ, Senior Judge.
SCHWARTZ, Senior Judge.
Richard Road Estates, the owner of real property in southwest Miami-Dade County, seeks second tier certiorari review of a circuit court appellate division decision affirming the refusal of the Miami-Dade County Commission to grant a change in zoning of the petitioner's property from AU (agricultural zoning permitting one residence per five acres) to EU ("estate" zoning permitting one residence per one acre). We find the ruling a departure from the essential requirements of the law resulting in a miscarriage of justice to the petitioner, see Haines City Cmty. Dev. v. Heggs, 658 So.2d 523 (Fla.1995), and therefore grant relief.
The indisputable evidence is that (a) the previous agricultural nature of the area no longer prevails, so that (b) the surrounding property is now used as permitted either by EU or, if anything, even more liberal zoning.[1] In these circumstances, it is obvious that continuing the AU designation results in an instance of impermissible "reverse spot zoning," which cannot be sustained. *1119 Miami-Dade County v. Valdes, 34 Fla. L. Weekly D194, ___ So.3d ___, 2009 WL 129111 (Fla. 3d DCA Jan. 21, 2009), and cases cited; Debes v. City of Key West, 690 So.2d 700 (Fla. 3d DCA 1997), and cases cited. See also Tollius v. City of Miami, 96 So.2d 122 (Fla.1957).
The County's justification for the contrary result, which was accepted by the appellate division notwithstanding its acknowledgement that the outcome "seems unfair,"[2] was the desire to preserve the property's present status as an area into which excess rain water which would otherwise accumulate on the surrounding land is drained onto the petitioner's. Richard Road's property is thus forced to act, as it were, as an uncompensated storm sewer for the neighborhood. As a matter of constitutional law, however, a policy such as this one, which is unrelated to appropriate zoning principles, cannot support the action below. As we said in Debes, concerning a restriction of land use for a much worthier purpose keeping property available for affordable public housing:[3]
... [W]hile this aim may represent a desirable public policy-which might support, for example, the condemnation of property for that use, see State v. Miami Beach Redevelopment Agency, 392 So.2d 875 (Fla.1980)-it emphatically may not be promoted on the back of a private landowner by depriving him of the constitutionally protected use of his property. As the estimable Judge Cowart correctly and succinctly stated:
A property owner is entitled to have his property properly zoned based on proper zoning concepts without regard to the one particular use which the owner might then intend to make of the various uses permitted under a proper zoning classification. A zoning authority's insistence on considering the owner's specific use of a parcel of land constitutes not zoning but direct governmental control of the actual use of each parcel of land which is inconsistent with constitutionally guaranteed private property rights.
Porpoise Point Partnership v. St. Johns County, 470 So.2d 850, 851 (Fla. 5th DCA 1985); accord ABG Real Estate Dev. Co. v. St. Johns County, 608 So.2d 59, 63 (Fla. 5th DCA 1992), cause dismissed, 613 So.2d 8 (Fla.1993).
*1120 Debes, 690 So.2d at 700. See also CNL Resort Hotel, L.P. v. City of Doral, 991 So.2d 417 (Fla. 3d DCA 2008).
For these reasons, the decision of the appellate division is quashed. The cause is remanded with directions to quash the zoning resolutions in question.
Certiorari granted.
NOTES
[1] The record contains the following exchange between a commissioner and a County official:
COMMISSIONER SORENSON: ... Let me just look at the surrounding properties. Mr. Basu, the surrounding the property in the north is agriculture. Is that one house per five acres?
ACTING DIRECTOR BASU: No, that's an acre, acre.
COMMISSIONER SORENSON: It's an acre.
And the property to the east?
ACTING DIRECTOR BASU: East is one acre.
COMMISSIONER SORENSON: And the property to the south?
ACTING DIRECTOR BASU: South is AU right now.
COMMISSIONER SORENSON: It's AU. So it's one house per five acres on the south?
ACTING DIRECTOR BASU: Yes.
And caddy corner southeast is EU-1.
COMMISSIONER SORENSON: EU-1. So most of the area surrounding it is an acre?
ACTING DIRECTOR BASU: Yes ...
[2] The lower court said:
While it seems unfair to deny the Petitioner's application based on the illegal conduct of neighboring landowners who, under earlier regulations, were not required to fill or grade their land, flooding in the absence of infrastructure to contain the flooding presents a valid public policy concern. Petitioner argues that denying their petition because of inadequate existing infrastructure or because of flooding in the area amounts to a taking under the law. Accordingly, the Commission's resolution is unreasonable, arbitrary and confiscatory. As applied to its property, Petitioner argues that the resolution deprives them of equal protection of the laws and constitutes a taking of their property without due process of law contrary to the guarantees of our State Constitution ... While the Commission's decision appears unfair, a delay in the development of an applicant's property does not constitute a compensable temporary taking under the law.
But see CNL Resort Hotel, L.P. v. City of Doral, 991 So.2d 417, 421 (Fla. 3d DCA 2008) ("CNL did not assert that the City took its property without just compensation. CNL merely wanted the City to properly consider its private property rights before enacting its plan.").
It may be observed that in this case, as probably in every case, what seems (because it is) unfair also turns out to be wrong.
[3] Because, as a County official testified, "the surrounding properties ... don't have drainage rights to drain into this property.", Debes, in which the use sought to be promoted was perfectly lawful, is applicable in spades. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572768/ | 2 So.3d 541 (2008)
Michelle MARSHALL, individually and on behalf of her MINOR CHILDREN, Aaliyah Jamison, Brandi Marshall, and Jeremy Roberts, Dorothy Jones, Jim Adams, and Tina Andrews individually and on behalf of her Minor Children, et al.
v.
AIR LIQUIDE-BIG THREE, INC., Air Liquide Corporation, Air Liquide America, L.P., Global Lime Calciner of Louisiana, Inc., Global Lime, LLC, David Bergeron, and E. Roy Baggett.
No. 2008-CA-0668.
Court of Appeal of Louisiana, Fourth Circuit.
December 17, 2008.
*543 Eric R. Nowack, Shirin E. Harrell, Harrell & Nowak, LLC, New Orleans, LA, for Michelle Marshall, Tina Andrews, Dorothy Jones and Jim Adams.
Richard M. Simses, Abbott Simses & Kuchler, APLC, Houston, LA, Paul M. Lavelle, Abbott Simses & Kuchler, APLC, New Orleans, LA, for Commerce and Industry Insurance Company and American International Specialty Lines Insurance Company.
William T. McCall, Erik A. Fain, Guillory & McCall, L.L.C., Lake Charles, LA, James F. Martin, Pro Hac Vice, Cohn Baughman & Martin, Chicago, IL, for Ace American Insurance Company, Ace Property & Casualty Insurance Company f/k/a Cigna Property and Casualty Insurance Company, and Pacific Employers Insurance Company.
Mary S. Johnson, Jill T. Losch, Johnson Gray McNamara, LLC, Mandeville, LA, Richard W. Bryan, Paul D. Smolinsky, *544 Jackson & Campbell, P.C., Washington, DC, Erin Fury Parkinson, McGlinchey Stafford, PLLC, New Orleans, LA, for National Union Fire Insurance Company of Pittsburgh, PA and American International Specialty Lines Insurance Company, as the Alleged Insurers of Air Liquide-Big Three, In.
James M. Garner, Debra J. Fischman, Timothy B. Francis, Sher Garner Cahill Richter Klein & Hilbert, L.L.C, New Orleans, LA, for Air Liquide-Big Three, Inc., Air Liquide America Corporation and Air Liquide American, L.P.
(Court composed of Judge TERRI F. LOVE, Judge DAVID S. GORBATY, Judge ROLAND L. BELSOME).
DAVID S. GORBATY, Judge.
Defendants appeal a judgment wherein the trial court granted plaintiffs' Motion for Class Certification. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY:
Air Liquide America operated a facility at 6600 Old Gentilly Road, in eastern New Orleans. The company manufactured and bottled acetylene from the 1980's until it ceased operations sometime in the 1990's. As part of its operation, Air Liquide stored carbide lime, a by-product of the acetylene manufacturing process, in an on-site impoundment area, also known as a "sludge pond." Carbide lime contains calcium hydroxide, which at sufficient levels of exposure can potentially cause irritation to the respiratory, digestive and visual system.
The Air Liquide facility remained dormant from the 1990's until 2003 when Air Liquide contracted with Global Lime to remove the approximately 31,000 cubic yards of carbide lime from the impoundment area. The actual removal process began on September 15, 2003, and continued until some time in 2004. The removal process involved excavating and transporting the carbide lime by truck from Air Liquide to another disposal site. This removal process is what triggered the instant litigation.
Plaintiffs, either persons who resided near the facility or persons who worked in the area of the facility, claimed generally that in the course of the plant operation, carbide lime dust became airborne and drifted into the surrounding neighborhood. Additionally, once the removal process began, the trucks used to transport the carbide lime further dispersed dust into the air causing it to be deposited in the surrounding neighborhood. Plaintiffs filed suit on 6/28/05.
Defendants named in the original petition were Air Liquide-Big Three, Inc., f/k/a Lincoln Big Three, Inc., Air Liquide America Corporation, Air Liquide America L.P. (collectively referred to as "Air Liquide"), Global Lime Calciner of Louisiana, LLC, Global Lime, LLC (collectively referred to as "Global Lime"), David Bergeron, and E. Roy Baggett, d/b/a RBCHMM. Plaintiffs also sought to be certified as a class, and to that end, filed a Motion to Certify Class on 2/27/06.
In plaintiffs' First Supplemental and Amending Petition, filed on 10/10/06, defendants American International Specialty Lines, Commerce & Industry Insurance, ACE American Insurance Company, ACE Property and Casualty Insurance Company, Highlands Insurance Company, National Union Fire Insurance Company, Pacific Employers Insurance Company, J & B Trucking of Cameron, L.L.C, d/b/a J & B Trucking, ABC Company (an unknown trucking company), and Three C's Properties, *545 Inc., were added.[1]
Air Liquide; Commerce and Industry Insurance Company (Commerce & Industry) and American International Specialty Lines Insurance Company (American Int'lGlobal Lime) (alleged insurers of Global Lime); National Union Fire Insurance Company (National Union) and American International Specialty Lines Insurance Company (American Int'lAir Liquide) (alleged insurers of Air Liquide); and, ACE American Insurance Company and ACE Property & Casualty Insurance Company and Pacific Employers Insurance Company (collectively "ACE") (alleged insurers of Air Liquide); each filed oppositions to plaintiffs' Motion to Certify Class.
Following a hearing, a judgment was rendered on March 3, 2008. The trial court granted the motion to certify the class, defining the class as:
Any person, including named plaintiffs and their minor children, who resided or regularly worked within a one-mile radius of the Air Liquide America Facility located at 6600 Old Gentilly Road, New Orleans, Louisiana between September 2003 and the end of 2004, and who may have been exposed to calcium hydroxide coming from the Air Liquide facility.
The judgment also named Michelle Marshall, Dorothy Jones, Tina Andrews and Jim Adams as the class representatives. The trial court gave reasons for judgment.
Air Liquide, Commerce & Industry, American Int'lGlobal, and ACE each filed suspensive appeals. National Union and American Int'lAir Liquide filed a devolutive appeal.
STANDARD OF REVIEW:
The review of certification of class actions is bifurcated. The findings of fact are reviewed under the manifest error/clearly wrong standard, whereas the trial court's decision to certify a class based on the facts is reviewed under an abuse of discretion standard. Waiters v. Dept. of Social Services, 05-0324, -0325, -0326, p. 6 (LaApp. 4 Cir. 4/19/06), 929 So.2d 267, 273; Boudreaux v. Dept. of Trans, and Dev., 96-0137, p. 5 (La.App. 1 Cir. 2/14/97), 690 So.2d 114, 119.
Appellants argue that an appellate court may take a less deferential approach to reviewing the factual findings where the trial court fails to "articulate the theory or evidentiary facts upon which its conclusion is based," They cite Leal v. Dubois, 00-1285 (La.10/13/00), 769 So.2d 1182, and Bloxom v. Bloxom, 512 So.2d 839, 843 (La.1987) in support of this position. Appellants specifically argue that the trial court was bound to explain its reasons for accepting Dr. William Zegel's methodology, but instead only summarized it, thereby requiring this Court to review the facts de novo.
Plaintiffs counter that appellants do not cite to a single class-action case for this proposition. Rather, the cases cited by appellants discuss the deference given to a judgment in light of a complete trial record.
After reviewing the trial court's reasons for judgment, we find that the trial court sufficiently articulated the facts upon which it based its decision. Accordingly, we will employ the manifest error/clearly wrong standard to review those factual findings.
*546 In reviewing factual findings, the reviewing court should not set aside the factual findings of the trial court absent manifest error or unless those findings are clearly wrong. Arceneaux v. Domingue, 365 So.2d 1330 (La.1978). However, if a court of appeal determines that the trial court committed a reversible error of law or manifest error of fact, the court of appeal must ascertain the facts de novo from the record and render a judgment on the merits. LeBlanc v. Stevenson, 00-0157 (La.10/17/00), 770 So.2d 766. Although appellate courts should accord deference to the factfinder, they nonetheless have a constitutional duty to review facts. Ambrose v. New Orleans Police Dep't Ambulance Serv., 93-3099, p., 8 (La.7/5/94), 639 So.2d 216, 221. Because appellate courts must perform this constitutional function, they have every right to determine whether the trial court ruling was clearly wrong based on the evidence or clearly without evidentiary support. Id. at p. 8-9, 639 So.2d at 221. The reviewing court must do more than simply review the record for some evidence which supports or controverts the trial court's findings; it must instead review the record in its entirety to determine whether the trial court's finding was clearly wrong or manifestly erroneous. Stobart v. State of Louisiana, through Dep't of Transp. & Dev., 617 So.2d 880, 882 (La.1993). The issue to be resolved by a reviewing court is not whether the trier of fact was right or wrong, but whether the factfinder's conclusion was reasonable. Id. A basic principle which courts of review must follow is: if the trial court or jury's findings are reasonable in light of the record reviewed in its entirety, the court of appeal may not reverse, even if convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Id. at 882-883 (citing Housley v. Cerise, 579 So.2d 973 (La.1991)) (quoting Sistler v. Liberty Mutual Ins. Co., 558 So.2d 1106, 1112 (La.1990)).
Lastly, when there are two permissible views of the evidence, the fact finder's choice between them cannot be clearly wrong. Ambrose, supra, 93-3099, p. 6, 639 So.2d at 220-221.
LAW AND ANALYSIS:
We first note that a class action is nothing more than a procedural device; it confers no substantive rights. The purpose of a class action is to permit the institution and management of litigation involving a right of common character vested in a sufficient number of parties as to render their joinder impracticable in an ordinary proceeding. La.Code Civ. Proc. art. 597; Andry v. Murphy Oil, U.S.A, Inc., 97-0793, -0800, p. 3 (La.App. 4 Cir. 4/1/98), 710 So.2d 1126, 1128-29.
The only issue to be considered by the trial court and the appellate court is "whether the case at bar is one in which the procedural device is appropriate." Andry, supra. The trial court should not concern itself with whether the plaintiffs have stated a cause of action or the likelihood that they will prevail on the merits. Id.
Although four separate appeals were filed in this matter, all parties are alleging the same general errors by the trial court, i.e., plaintiffs failed to satisfy the elements of La.Code Civ. Proc. art. 591.
Louisiana Code of Civil Procedure art. 591 provides:
A. One or more members of a class may sue or be sued as representative parties on behalf of all, only if:
(1) The class is so numerous that joinder of all members is impracticable.
(2) There are questions of law or fact common to the class.
*547 (3) The claims or defenses of the representative parties are typical of the claims or defenses of the class.
(4) The representative parties will fairly and adequately protect the interests of the class.
(5) The class is or may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case. B. An action may be maintained as a class action only if all the prerequisites of Paragraph A of this Article are satisfied, and in addition:
(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 these findings include:
(a) The interest of the members of the class in individually controlling the prosecution or defense of the 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 litigation in the particular forum;
(d) The difficulties likely to be encountered in the management of a class action;
(e) The practical ability of individual class members to pursue their claims without class certification;
(f) The extent to which the relief plausibly demanded on behalf of or against the class, including the vindication of such public policies or legal rights as may be implicated, justifies the costs and burdens of class litigation; or
(4) The parties to a settlement request certification under Subparagraph B(3) for purposes of settlement, even though the requirements of Subparagraph B(3) might not otherwise be met. C. Certification shall not be for the purpose of adjudicating claims or defenses dependent for their resolution on proof individual to a member of the class. However, following certification, the court shall retain jurisdiction over claims or defenses dependent for their resolution on proof individual to a member of the class.
The party seeking class certification has the burden of proving that all requisite elements for certification exist. Thus, the plaintiff must show that the class is definable and that it satisfies the requirements of numerosity, commonality, typicality, and adequacy of representation. Watters, 05-0324, -0325, -0326, p. 10, 929 *548 So.2d at 275; Davis v. Jazz Casino Co., 03-0005, p. 4 (La.App. 4 Cir. 1/14/04), 864 So.2d 880, 886. Appellants argue that the trial court erred in certifying the class because plaintiffs failed to prove all of the necessary elements for certification.
Appellants' most notable objection to the certification of the class is rooted in the trial court's acceptance of the testimony of Dr. William Zegel. Dr. Zegel was retained by plaintiffs to prepare an analysis of the geographical breadth of carbide lime dust exposures caused by activities at the Air Liquide facility. The court accepted Dr. Zegel as an expert in chemical engineering and the movement of chemicals through the environment, including air dispersion modeling.
Appellants specifically and vehemently complain that the trial court erred in accepting Dr. Zegel's opinion. Thus, because Dr. Zegel's opinions should have been rejected, the trial court erred in certifying the class because the class could not be defined, specifically because the geographical parameters could not be ascertained to determine the requirement of numerosity.
Appellants claim that Dr. Zegel's air dispersion model was severely flawed because it was based on faulty information. These faulty calculations resulted in an impermissibly broad and overly inclusive geographical class, the result of which is indefinite geographical boundaries impacted by the alleged disbursement of carbide lime dust. It is thus impossible for potential class members to determine their eligibility as class members.
Dr. Zegel opined that most of the carbide lime dust was dispersed into the surrounding neighborhood off the backs of trucks transporting the substance away from the Air Liquide facility. However, appellants argue that Dr. Zegel's conclusions are wrong because he did not have accurate information on the number of trucks hauling each day, the rate of speed at which they traveled, and the types of trucks used, i.e., tankers or dump trucks.
Further, appellants submit that Dr. Zegel's opinion was flawed because he failed to use meteorological data necessary to calculate wind directions and speed. Instead of using actual data, Dr. Zegel calculated dust dispersion using a constant eight mile per hour wind from the south.
Lastly, Dr. Zegel failed to account for the moisture content in the carbide lime and the relative humidity on each day during the excavation and removal of the carbide lime. Clearly, according to appellants, the moisture content in the carbide lime and the daily humidity would have a direct correlation to the amount of dust created during excavation and transport.
The crux of this assignment of error is that the trial court erred in relying on plaintiffs' expert instead of defendants' experts to determine the geographical area of the class. Plaintiffs argue that Dr. Zegel's opinions are based on sound, tested scientific principles.
According to the testimony, Dr. Zegel's model and opinion were based on a threestep process. First, he analyzed the facts known and documented about the carbide lime removal process, including the available evidence from the Louisiana Department of Environmental Quality (EPA), Air Liquide and Global Lime records, and class representative testimony. From this analysis, Dr. Zegel could identify those physical locations and activities capable of creating emissions. He identified locations and activities which would emit dust: the impoundment site and the piles of carbide lime around it, the digging up and dropping of the materials, and trucks driving on unpaved and paved roads on and near the site.
*549 The second step in Dr. Zegel's analysis involved using an industry methodology developed by the EPA to determine how much dust was released into the air in each place by each activity.
Finally, Dr. Zegel applied the above results to the EPA Air Model of Air Impacts as the basis for his dispersion model. Dr. Zegel testified that his results represented a snapshot in time of the probable concentrations of carbide lime particulates that reached into the surrounding neighborhood on any given day.
Plaintiffs explain that Dr. Zegel's air model was based on a well-known EPA air modeling tool, which accounts for meteorological variations. In his testimony, he explained that he used carbide lime moisture content from an authoritative source, a specific silt content figure from another authoritative source, and NOAA data and data obtained from the Lakefront Airport to determine wind speeds.
Considering the standard of review for facts, and after reading the testimony given at the hearing, we cannot say that the trial court was manifestly erroneous in accepting Dr. Zegel's opinions, and, therefore we find that the trial did not abuse its discretion in considering those opinions when it certified the class.
Appellants also argue that the class definition is overly broad and vague such that it is impossible for the parties to identify an aggrieved group of members.
As noted above, the trial court defined the class as:
Any person, including named plaintiffs and their minor children, who resided or regularly worked within a one-mile radius of the Air Liquide America Facility located at 6600 Old Gentilly Road, New Orleans, Louisiana between September 2003 and the end of 2004, and who may have been exposed to calcium hydroxide coming from the Air Liquide facility.
Appellants claim that the definition is flawed, i.e., the geographical area is too large (this allegation is based on Dr. Zegel's air dispersion model previously addressed), and the phrase "resided or regularly worked" is vague, ambiguous, overbroad, and indeterminate.
Air Liquide specifically argues that no testimony was presented by any class representative who regularly worked within the one-mile radius. Presumably, Air Liquide is arguing that because there is no class representative for the "worked the area" designation, it is inappropriate to include such a designation in the potential class definition. However, Air Liquide acknowledges that Jim Adams, a proposed class representative, testified in his deposition that he worked for HANO in the area.[2]
Nonetheless, appellants argue that simply stating that one regularly worked in the area is not sufficient, because the term "regularly worked" is vague, ambiguous, overbroad, and indeterminate. The term could encompass a person who regularly worked one hour a day every week, every month, or once a year, but who never worked on days when the transport of the carbide lime occurred.
In Andry, supra at 97-0793, -0800, p. 6, 710 So.2d at 1130, this Court explained:
In light of the objective [purpose] of this procedural device, which is the efficient *550 resolution of common issues applicable to a large number of claims, it was reasonable for the court to establish a geographic boundary for the class that was broad enough to encompass all potential class members."
The Court concluded that if no evidence is presented to support some types of claims, the class action will allow those claims to be disposed of, as a group, very efficiently using other procedural devices such as summary judgment. Alternatively, we note that the trial court can alter, amend or recall its initial ruling on certification and may enlarge, restrict, or otherwise redefine the constituency of the class or the issues to be maintained in the class action at any time prior to a trial on the merits. La."Code Civ. Proc. art. 592 A(3)(c); also see Scott v. American Tobacco Co., 98-0452 (La.App. 4 Cir. 11/4/98), 725 So.2d 10.
We find no merit to appellants' argument on this issue.
Appellants also argue that the requirement of "common character" has not been met. To satisfy the "common character" requirement, the party seeking to certify the class must establish that questions of law or fact common to the members of the class predominate over any questions affecting only individual members. Cotton v. Gaylord Container, 96-1958, p. 18 (La.App. 1 Cir. 3/27/97), 691 So.2d 760, 771. Class actions are restricted to cases "in which it would achieve economies of time, effort and expense, and promote uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." McCastle v. Rollins Environmental Services of La., Inc., 456 So.2d 612, 616 (La.1984); Gaylord, supra at p. 19, 691 So.2d at 771.
Appellants argue that the record demonstrates that causation, dosage levels based on number of variables such as behavioral, meteorological and trucking variables, and physiological responses vary greatly across members of the prospective class. Citing Ford v. Murphy Oil, U.S.A, Inc., 96-2913 (La.9/9/91), 703 So.2d 542, they complain that the class action in this instance is impracticable. We find appellants' reliance on Ford is misplaced.
Ford involved a class of plaintiffs suing four separate entities claiming that each entity emitted pollutants over a period of time that had a synergistic, damage-causing impact on the community. Because each plaintiff would have to prove different facts to establish specific damages on specific dates caused by the defendants' liability, either individually or combined, the Supreme Court reversed the trial court's certification of the class. Ford v. Murphy Oil, U.S.A., Inc., 96-2913, -2917, -2929 (La.9/9/97), 703 So.2d 542. The Court further reasoned that class certification was inappropriate because four separate defendants were involved, necessitating each plaintiff to prove his damages caused by each defendant, and the fact that widely divergent types of personal, property and business damages were involved. Id. at 549.
To the contrary, although each plaintiff will have different medical issues, and that other factors such as smoking, length of exposure, etc., exist, in this case plaintiffs are only suing one facility, and the contractors, subcontractors, and insurance companies directly involved with that facility. Further, plaintiffs are only seeking monetary damages.
The Supreme Court specifically addressed the "common character" factor for class certification in McCastle v. Rollins Environmental Services of Louisiana, Inc., 456 So.2d 612 (La.1984). In McCastle, testimony was received that the members *551 of the class lived in a low income area. Plaintiffs believed that the noxious odors which caused them health issues were being emitted by a nearby land farm owned by defendant. The proposed class representatives testified that they suffered from physical ailments such as tightness of chest, difficulty in breathing, headaches and tearing of the eyes. The noxious fumes of which they complained were sometimes more prevalent and intense than at other times, a factor largely dependent on the wind conditions. The trial court dismissed plaintiffs' suit as a class action, and the First Circuit affirmed. The Supreme Court, however, reversed.
In an opinion written by Justice Dennis, the Court explained:
The single most important issue is whether the defendants' activities on their hazardous waste land farm deprived their neighbors of the liberty of enjoying their own land or caused them unreasonable inconvenience or damage. Offering the same facts, all class members will strive to establish that the hazardous waste materials placed in the soil by the defendants emitted gases, fumes and odors capable of causing harm and unreasonable inconvenience to persons in the neighborhood. Each class member stands in an identical position with respect to the following issues: (1) whether hazardous waste materials of the quality and quantity capable of causing the damage and unreasonable inconvenience alleged were present at the land farm on the pertinent dates, (2) whether the land farm emitted harmful and malodorous gases on the dates alleged, (3) whether the probable dispersion patterns of the gases and odors emitted include the areas within which the residences of the members of the class are located.
The court of appeal concluded that these common issues did not predominate over the potential individual issues of whether each member of the class was harmed or inconvenienced on the same dates or sustained the same amount of injury. Our appellate brethren fell into clear error. From the pleadings and showing it appears that on all the dates in question the land farm received similar hazardous waste from the same source and that the land farming operations were conducted consistently. Consequently, there exists as to the totality of issues a common nucleus of operative facts such as would justify allowing the class action to proceed. That individuals may have been injured or unreasonably inconvenienced by noxious gases on varying dates by the defendant's land farm operations does not constitute a material variation in the elements of the class members' claims. With respect to the question of damages, individual questions of quantum do not preclude a class action when predominant liability issues are common to the class.
Id. at 619-620 (citations omitted; emphasis added). McCastle is still good law; and we find it to be applicable to the case at hand. Defendants' arguments on this issue lack merit.
Appellants also claim the trial court erred in certifying the class because plaintiffs' failed to satisfy the class criteria for either La.Code Civ. Proc. art. 591(B)(1) or (B)(2). They argue that class certification under (B)(1) or (B)(2) is appropriate only in cases where there are no individual issues and where plaintiffs are seeking nothing but an injunction or to share equally in a limited fund. We disagree with appellants' interpretation of the statute.
*552 Appellants specifically claim that certification pursuant to 591(B)(1) is not appropriate because plaintiffs are only seeking money damages. In Waiters, this Court affirmed the certification of the single source, personal injury class seeking money damages. Watters, 05-0324, -0325, -0326 (LaApp. 4 Cir. 4/19/06), 929 So.2d 267. We have no reason to rule differently in this case; the case law cited by appellants' is either federal law or law from other state jurisdictions which we are not bound to follow.
Appellants also argue that common issues of law and fact do not exist. Thus, plaintiffs' have failed to satisfy the requirements of 591(B)(3). They argue that predominance involves a much more rigorous inquiry than commonality, and cite Ford v. Murphy Oil U.S.A, Inc., supra at 550 (class certification is inappropriate when any common issue "does not predominate over the individual liability issues"). As noted infra, the Ford class was not certified mainly because plaintiffs were attempting to sue four different defendants who allegedly emitted a vast variety of noxious chemicals, causing any number of different ailments. We once again find Ford inapplicable to the facts of this case.
The trial court in reasons for judgment stated: "With respect to Article 591(B), the Court finds common issues of fact and law exist and that, without class certification, individual lawsuits will be brought. If individual suits are prosecuted under the facts and law at issue, it is conceivable that various interpretations could result. Differing results effectively create different standards of conduct with respect to the defendants' actions and can affect the interests of other class members and their ability to protect said interests. Accordingly, the required elements of class certification under 591(B) are met."
In a per curiam issued by this Court following the grant of rehearing, the Watters court noted the trial court's reasons: "[c]ommon issues of fact and law exist. There is evidence that absent certification of a class herein individual lawsuits will be brought. Certainly individuals prosecuting separated [sic] actions on their own behalf under the facts and law at issue could conceivably result in varying interpretations. Such differing results have the effect not only of establishing different standards of conduct with respect to Defendant's alleged actions, but will almost inevitable [sic] affect the interests of other class members and impede their ability to protect those interest [sic]." Watters, supra at 05-0324, -0325, -0326, p. 17, 929 So.2d at 280. This Court accepted that reasoning as sound as do we when applied to the facts of this case.
Lastly, appellants argue that plaintiffs did not argue for certification pursuant to 591(B)(2), and the trial court did not base its ruling on 591(B)(2). They cite Defraites v. State Farm Mutual Automobile Ins. Co., 03-1081 (La.App. 5 Cir. 1/27/04), 864 So.2d 254 in support. In Defraites, the plaintiff was seeking injunctive relief and the court found he did not meet the criteria for certification pursuant to 591(B)(2). In this case, plaintiffs are not seeking injunctive relief, because there is nothing to enjoin. The activities by appellants of which plaintiffs complain ceased years ago. Article 591(B)(2) is not applicable to this case. We find no merit in appellants' argument.
Accordingly, for the reasons assigned herein, we affirm the judgment of the trial court.
AFFIRMED.
NOTES
[1] Various cross-claims and third-party demands were filed in this lawsuit, but are not germane to this appeal.
[2] We note that Air Liquide takes issue with the fact that Mr. Adams was "inexplicably absent" from the hearing. However, our review of the records reveals that Air Liquide had no objection at the hearing to submitting Mr. Adams' deposition in lieu of live testimony. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573489/ | 396 S.W.2d 913 (1965)
Edward PRINCE, Jr., et al., Relators,
v.
Paul G. PEURIFOY, Judge, et al., Respondents.
No. 16711.
Court of Civil Appeals of Texas, Dallas.
November 5, 1965.
*914 Andress, Woodgate, Richards & Condos, Wm. Andress, Jr., Dallas, for relators.
Thompson, Knight, Wright & Simmons, Richard E. Gray and Jerry L. Buchmeyer, Dallas, for respondents.
PER CURIAM.
Relators Edward Prince, Jr., George Cloudy, David R. Steetle, William E. Shell, David L. Brown and Patrick H. Poe have filed an application praying for a writ of mandamus directing Respondent Paul G. Peurifoy, Judge of the 95th District Court of Dallas County, Texas, to enter on the minutes of the court a form of written judgment with a writ of inquiry, which judgment Judge Peurifoy has signed but refuses to have entered on the minutes of the court. Also named as respondents are Texas Instruments Incorporated and Geophysical Service, Inc., both of Dallas County.
The record discloses that on August 6, 1965 Texas Instruments Incorporated and its wholly owned subsidiary, Geophysical Service, Inc., as plaintiffs, filed suit for injunction and damages against relators, all of whom are former employees of plaintiffs. In their petition plaintiffs allege that they are engaged in the business of geo-physical exploration, a highly technical business, in the development of which they acquired various trade secrets and confidential and proprietary business information; that the defendants, relators here, as employees of plaintiffs were in positions of confidence and trust and were instructed and trained in and had access to plaintiffs' trade secrets and proprietary information; and while in the employment of plaintiffs said defendants conspired to appropriate *915 and did appropriate plaintiffs' trade secrets and conspired to enter and did later enter into a competitive businessall in violation of their fiduciary relationship with plaintiffs to the latter's great damage.
On August 16, 1965 relators as defendants in said suit filed their answer and cross-action. Rules 85 and 97, Texas Rules of Civil Procedure. In the latter pleading relators as cross-plaintiffs sought judgment in their own behalf for damages because of plaintiffs' alleged false and malicious statements as set out in plaintiffs' petition and otherwise publicized; and because of the willful interference by plaintiffs of the defendants' business relationship with another company, which relationship defendants had established after their resignations as employees of plaintiffsall of which constituted unfair competition and caused defendants great damage for which they prayed judgment in their cross-action.
Relators as cross-plaintiffs caused citation to issue on their cross-action and the citation was served on plaintiffs, the return date named being September 13, 1965.
On September 14, 1965 relators as cross-plaintiffs, having ascertained that plaintiffs had not filed a written answer to the cross-action, presented to Judge Peurifoy a written form of default judgment with a writ of inquiry, which Judge Peurifoy signed.
On September 16, 1965 plaintiffs filed a written answer to defendants' cross-action.
The facts as above stated are undisputed. But the parties are not in agreement as to some of the particulars relative to the signing of the judgment.
In the record is an affidavit by Judge Peurifoy in which he states that on September 14, 1965 the deputy clerk presented him with a stack of judgments to be signed, among them being the form of default judgment with a writ here in controversy; that he inadvertently and accidentally signed the judgment; that he discovered his mistake immediately and laid the signed instrument aside, as he never intended to sign it and he did not deliver it to the clerk to be put on the minutes; that he never at any time announced or rendered default judgment on the cross-action; and that at the request of defendants' counsel he entered on the docket sheet in his own hand-writing the following notation: "9-14-65 Defendants requested default on cross-action. Held under advisement."
A photostatic copy of the docket sheet is reproduced in the record and it shows the above notation.
In answer to Judge Peurifoy's affidavit three affidavits were filed in behalf of defendantstwo by attorneys for defendants and one by the attorneys' secretary. The gist of their affidavits is that when it was learned on September 14, 1965 that plaintiffs had not filed a written answer to the cross-action one of the attorneys, who was in trial in another matter at the court house, dictated the form of judgment over the telephone to the secretary. A second attorney then brought the typed instrument to the court house and presented it to Judge Peurifoy and the judge signed it.
The two attorneys in their affidavits further state that they were not told by Judge Peurifoy that he had signed the judgment inadvertently and by mistake. However, the attorney who presented the typed document to Judge Peurifoy on September 14, 1965 stated in his affidavit that after signing the judgment Judge Peurifoy took the file from the clerk, looked at it and said, "I am going to have to think about this a little bit," and then took the file and the signed judgment into his office.
Judge Peurifoy in a second affidavit says that he does not question the attorney's sincerity, but that he, Judge Peurifoy, had given his best recollection as he remembered it. He reiterated that at no time had he pronounced a judgment on the cross-action.
*916 OPINION
We have concluded that the relators' application for writ of mandamus must be denied.
Relators take the position that in order to prevent a judgment by default with a writ of inquiry in the cross-action it was necessary for respondents as cross-defendants to file a written answer to the cross-action on or before September 13, 1965, the return day named in the citation served on respondents. In this relators are in error.
A formal written answer by respondents to relators' cross-action was not necessary. Kemp v. Westbrook, Tex.Civ.App., 358 S.W.2d 889, 894; Jones v. Kelley, Tex.Civ. App., 91 S.W.2d 969, 973; Overland Automobile Co. v. Cleveland, Tex.Civ.App., 250 S.W. 453; Taylor v. Ward, Tex.Civ.App., 102 S.W. 465; 52 Tex.Jur.2d 266.
Our Supreme Court has held that a defendant is not authorized to take a default judgment which adjudicates against the plaintiff the merits of the suit; and that a default judgment so taken is not merely voidable, but is void. Freeman v. Freeman, 160 Tex. 148, 327 S.W.2d 428, 431, 433.
Relators also take the view that since more than thirty days have elapsed since the judgment was signed it has become a final judgment over which Judge Peurifoy no longer has control under Rule 329-b, subd. 5, T.R.C.P. Therefore the judge has no discretionary authority to set aside, alter or amend the judgment, but is required as a ministerial act to see that it is placed on the minutes of the court. Again relators are in error.
Rule 301, T.R.C.P. provides that only one final judgment shall be rendered in any cause except where it is otherwise provided by law. Even in cases where the issues and causes of action are severable separate trials result only in interlocutory judgments, not final judgments, unless there has been a severance of the causes of action. Kirkland v. Martin, Tex.Civ. App., 376 S.W.2d 819; Pan American Petroleum Corp. v. Texas Pacific Coal & Oil Co., 159 Tex. 550, 324 S.W.2d 200; Harris v. Superior Ins. Co., Tex.Civ.App., 322 S.W.2d 665, 667; McCormack v. Morgan, Tex.Civ.App., 306 S.W.2d 439; Myers v. Smitherman, Tex.Civ.App., 279 S.W.2d 173; Dunn v. Tillman, Tex.Civ.App., 271 S.W.2d 702; Gallaher v. City Transportation Co. of Dallas, Tex.Civ.App., 262 S.W.2d 807 (writ refused). In this case relators do not claim that there has been a severance of the cross-action from the cause asserted by plaintiffs. A judgment solely on a cross-action without disposing of plaintiffs' cause of action is not a final judgment. Dimerling v. Grodhaus, 152 Tex. 548, 261 S.W.2d 561. The same is true when a judgment is rendered on plaintiff's cause of action without disposing of a cross-action. Browning v. Gomez et al., Tex. Civ.App., 315 S.W.2d 79, 81-82; Palmer v. Jeter, Tex.Civ.App., 339 S.W.2d 563.
In Kansas University Endowment Ass'n v. King, 162 Tex. 599, 350 S.W.2d 11, 19, our Supreme Court was dealing chiefly with the question of severability of issues and separate trials.[1] But it does state in substance that there can be only one final judgment in a case, and that a separate trial without severance results only in an interlocutory judgment.
Since the judgment on the cross-action is merely an interlocutory judgment, Judge Peurifoy still retains control of it even if it were to be recognized as a valid interlocutory order. He has discretionary authority to change his mind about the order, set it aside, amend it, or refuse to take whatever further steps may be necessary to make it a complete interlocutory order. And this control of the interlocutory judgment may be exercised by the judge *917 at any time before the judgment on the merits of the whole case becomes final, or until the cross-action is properly severed from the rest of the case. Kone v. Security Finance Co., 158 Tex. 445, 313 S.W.2d 281; Beard Drilling, Inc. v. Steeger, Tex. Civ.App., 361 S.W.2d 888, 897; Bachman Center Corp. v. Sale, Tex.Civ.App., 359 S.W.2d 290, 292; 33 Tex.Jur.2d 687.
This court is without power to compel a district judge by writ of mandamus to do any act involving or requiring an act which is discretionary on his part. Walker v. Lindsey, Tex.Civ.App., 298 S.W.2d 195; Houston Fire & Casualty Ins. Co. v. Gerhardt, Tex.Civ.App., 281 S.W.2d 176; Panhandle & S. F. Ry. Co. v. Denton, Tex. Civ.App., 280 S.W.2d 941; Texas Employers' Ins. Ass'n v. Stephenson, Tex.Civ. App., 178 S.W.2d 883; Yantis v. McCallum, Tex.Civ.App., 121 S.W.2d 610; Templeton v. Small, Tex.Civ.App., 37 S.W.2d 262.
The conflicts in the factual statements contained in the affidavits of the judge and those offered in behalf of relators are not as great as they might seem at first glance. The affidavits of the judge and of the attorney who obtained the signature of the judge are in substantial agreement as to this: The judge, immediately after signing the document, took it back from the clerk. The docket sheet annotation recites that the judgment was "Held under advisement." The attorney's affidavit quotes the judge as saying that "I will have to think about this a little bit."
If it be said that these are material conflicts in the affidavits as to the facts we must point out that such conflicts furnish an additional reason for our refusal of the application for mandamus. Ferris v. Carlson, Tex.Civ.App., 314 S.W.2d 295, 298; Brown v. Walker, Tex.Civ.App., 376 S.W.2d 854.
The application for writ of mandamus is denied.
NOTES
[1] We do not pass on the question whether relators' cause of action in this case is severable, for that question is not before us. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917859/ | 178 B.R. 426 (1995)
In re EL PASO REFINERY, L.P., Debtor.
Andrew B. KRAFSUR, Trustee for El Paso Refinery, L.P., Plaintiff,
v.
SCURLOCK PERMIAN CORPORATION, Defendant.
Bankruptcy No. 94-30051-LMC. Adv. No. 94-3016.
United States Bankruptcy Court, W.D. Texas, El Paso Division.
February 2, 1995.
*427 *428 *429 *430 Margaret A. Christian, Kemp, Smith, Duncan & Hammond, P.C., El Paso, TX, for Andrew B. Krafsur, Trustee.
R. Glen Ayers, Jr., Vinson & Elkins, L.L.P., Washington, DC, for Scurlock Permian Corp.
MEMORANDUM DECISION ON TRUSTEE'S COMPLAINT TO RECOVER PREFERENTIAL TRANSFER
LEIF M. CLARK, Bankruptcy Judge.
CAME ON for consideration the complaint of Andrew B. Krafsur, Trustee ("Trustee") for El Paso Refinery L.P. ("EPR"), to recover preferential transfers, 11 U.S.C. § 547, from Scurlock Permian Corporation ("SPC"). After hearing thereon, the court took this matter under submission. This decision now resolves this matter.
Jurisdiction
The Bankruptcy Court has jurisdiction over this proceeding under 28 U.S.C. § 1334(a), (b). This is a core proceeding under 28 U.S.C. § 157(b)(2)(F).
Factual Background
EPR operated a high conversion refinery in El Paso, Texas, and distributed gasoline, jet fuel, diesel and other petroleum products. Permian Operating Partnership supplied crude oil to EPR's refinery operations for a number of years. SPC was formed July 7, 1991 by acquisition and merger with Permian.
All of the crude oil supplied to EPR was sold on credit. The formal terms of the supply agreement were established prior to the creation of SPC, and were never formally amended throughout the relationship. SPC assumed the credit sales contract after the merger. Payment for crude oil was due on the 20th of each month following the month of delivery, and Permian used to invoice EPR accordingly. The credit to EPR was secured by, inter alia, a first lien on accounts receivable, inventory, contract rights, and proceeds, granted in 1986. SPC succeeded to those liens.
After the merger, SPC entered into an intercreditor agreement with Bank Brussels Lambert ("BBL"), giving BBL an interest in SPC's first lien. The agreement provided that the collateral secured by the lien was to be shared on a ratable basis, 54.53% for SPC and 45.47% for BBL. Before July 1, 1991, EPR had usually paid Permian on time or even early. Most of the money used to pay Permian, however, was borrowed from BBL, and by July 1991, BBL had advanced over $25,000,000.00 to EPR. Almost immediately after the merger, EPR began to fall behind with SPC. By the end of September 1991, EPR was "past due" to SPC by $37,450,000.00. EPR also owed BBL approximately $37,000,000.00 by this time. At SPC's request, *431 in September 1991, EPR began to pay weekly instead of monthly.
SPC, deciding that it could not expose itself to this level of debt, insisted on further protections. On November 12, 1991, at SPC's insistence, EPR asked BBL to issue an irrevocable letter of credit in favor of SPC, in the amount of $5,000,000.00, to secure repayment of any advances by SPC in excess of the $37,450,000.00 already past due, plus interest, for further continued shipments of crude oil. EPR gave BBL a contractually prioritized first lien on the refinery's hard assets to secure this letter of credit (and to induce its issuance).
On March 11, 1992, once again at SPC's insistence, EPR arranged for the issuance of another irrevocable letter of credit from BBL in favor of SPC, this one for $6,000,000.00. It too was designed to secure sales of crude by SPC to EPR. So long as sales of crude did not cause EPR's total indebtedness to SPC to exceed the $42,420,000.00 then owing to SPC plus the amount of this additional letter of credit, SPC would continue to ship crude to EPR. SPC, BBL, and other lenders participated in the loan for the $6,000,000.00 letter of credit, which loan was secured by another lien on the refinery's hard assets.
Even with these letters of credit in place, SPC was still not comfortable (or, from the debtor's point of view, satisfied). SPC demanded that EPR make its crude oil payments on a daily basis, via wire transfers from EPR's bank in El Paso to SPC's bank in Houston. SPC also leased the crude oil storage tanks adjacent to the refinery, so that EPR would no longer have any standing inventory of crude oil, but would have to request deliveries literally on a daily basis for its daily needs.[1] Title and risk of loss thus passed to EPR only when the crude oil passed through the outlet valve on the pipes, giving SPC complete control over the flow of crude oil into the refinery, and reducing EPR's reserves effectively to zero.
These three steps allowed SPC to closely monitor the credit position of EPR at all times. Crude oil was supplied to EPR on an as needed basis, provided that SPC was satisfied that the amount of crude oil credit advanced that day would be "protected" by either a cash payment or a cushion created by the letter of credit, or a combination of both.[2] Even with these daily payments, however, EPR's debt to SPC continued to grow. EPR owed SPC $37,450,000.00 by late September or early October 1992. The debt grew to $42,420,000.00 by March 1992, and by July 1992, had again increased to over forty-five million dollars. The amount owed to SPC on the date of the petition was $42,498,877.00, but only because, by then, SPC presented one of the letters of credit for payment.
On October 23, 1992, EPR filed a voluntary petition under chapter 11 of the Bankruptcy Code. Since that original filing, the case has been converted to chapter 7. An examiner with expanded powers was appointed during the chapter 11 case, but EPR was never terminated as debtor in possession, and so had the authority to pursue avoidance actions. EPR filed this preference suit against SPC, and, after the conversion to chapter 7, the chapter 7 trustee was formally substituted as plaintiff by court order on September 17, 1994.
The parties have stipulated to many of the facts. They agree that the preference period is the 90 days immediately preceding the bankruptcy filing, July 24, 1992 to October 22, 1994, that, at all times during the preference period, EPR was insolvent, that SPC is a creditor of EPR, and that SPC is now and was throughout the preference period an undersecured creditor.
The parties have also stipulated to what payments the Trustee is attempting to recover.[3]*432 During the preference period, payments were made to SPC by wire transfer on a near daily basis; the amounts varied from as little as $500,000.00 to as much as $3,500,000.00. The total of these daily payments was approximately $82,000,000.00. It is these daily payments that the Trustee seeks to recover as preferences. SPC, of course, alleges that these payments were not preferential in the first place, and also that, if they were, it has valid affirmative defenses.
Discussion
I. PREFERENCE PAYMENTS
A. THE ELEMENTS OF A PREFERENCE
To recover payments as preferential transfers, the Trustee must establish the elements of a preference set out in section 547(b). That section states:
a trustee may avoid any transfer of an interest of the debtor in property
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor before such transfer was made;
(3) made while the debtor was insolvent;
(4) made
(A) on or within 90 days before the date of filing of the petition; or
(B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and
(5) that enables such creditor to receive more than such creditor would receive if
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by the provisions of this title.
11 U.S.C. § 547(b).
A trustee's ability to avoid these kinds of transfers promotes equality of distribution, by ensuring that all creditors of the same class receive the same pro rata share of the debtor's estate. Matter of Smith, 966 F.2d 1527 (7th Cir.), cert. dismissed, ___ U.S. ___, 113 S. Ct. 683, 121 L. Ed. 2d 604 (1992). The power to avoid preferences also reduces the incentive for creditors to rush in and dismember a financially unstable debtor. Id. Neither the purpose of the transfer, nor the "state of mind" of either party is relevant. T.B. Westex Foods, Inc. v. FDIC (Matter of T.B. Westex Foods, Inc.), 950 F.2d 1187, 1195 (5th Cir.1992). The focus instead must be on the effect which the transfer has had upon the debtor's estate. T.B. Westex Foods, Inc., 950 F.2d at 1195 (citing 4 L. KING, COLLIER ON BANKRUPTCY ¶ 547.01 (15th ed. 1991)).
The trustee bears the initial burden of establishing all five elements of a preference action. Union Bank v. Wolas, 502 U.S. 151, 154-55, 112 S. Ct. 527, 529, 116 L. Ed. 2d 514 (1991); 11 U.S.C. § 547(g). Should the trustee meet this burden, the burden then shifts to the defendant to establish the elements of one of the exceptions contained in section 547(c). 11 U.S.C. § 547(g); see also Union Bank, 502 U.S. at 153-55, 112 S. Ct. at 529.[4]
The relevant date for determining whether a creditor has received a preferential payment is the date of the filing of the bankruptcy petition. In re Tenna Corporation, 801 F.2d 819 (6th Cir.1986); Sloan v. Zions First Nat'l Bank, N.A. (In re Castletons, Inc.), 154 B.R. 574, 579 (Bankr.D.Utah *433 1992). This date controls both the insolvency and the greater recovery elements.
In the present case, the Trustee's burden has been lightened considerably by the stipulations of the parties. There is no dispute that (1) the amounts paid during the preference period were a "transfer of an interest of the debtor in property," that (2) SPC was at all relevant times an undersecured creditor, that (3) the payments were made on "account of an antecedent debt,"[5] that (4) EPR was at all relevant times insolvent,[6] and that (5) all the contested payments were made "on or within 90 days before the date of the filing of the petition." These stipulations establish the first four of the five elements of section 547(b).
B. THE FIFTH ELEMENT
There still remains the fifth element, which requires a trustee to show that the transfer allowed the creditor to receive more than it would have received: 1) if the case were a case under chapter 7; 2) the transfer had not been made; and 3) the creditor received payment on its debt to the extent provided by the provisions of this title. 11 U.S.C. § 547(b)(5). In other words, a court must determine how things would have been had the transfers not been made, and the creditor had instead received its payment pursuant to the distribution scheme of the Bankruptcy Code.
1. THE GREATER PERCENTAGE TEST (IN GENERAL)
The fifth element does not actually require a full-blown reconstruction of the estate and liquidation analysis. A trustee need only prove that, as a result of the transfer, the creditor received a greater percentage recovery on its debt than it would otherwise have received had it looked solely to distribution from the chapter 7 estate for its payment. Palmer Clay Products Co. v. Brown, 297 U.S. 227, 56 S. Ct. 450, 80 L. Ed. 655 (1936); see V. Countryman, The Concept of Avoidable Preference in Bankruptcy, 38 VAND.L.REV. 713, 735-736 (1985).
The rationale behind the "Greater Percentage Test" is simple. A creditor who receives payment pre-petition de facto receives 100% payment on the debt which it is owed.[7] If that same creditor would not receive 100% payment on the debt in a chapter 7 liquidation, the creditor has been preferred by the payment, because it allowed the creditor to receive a greater percentage of its debt than it would be entitled to receive in the chapter 7 process, to the disadvantage of other similarly situated creditors.
The test is most easily understood in the context of an ordinary unsecured creditor that receives payment prepetition. We need only compare what such a creditor received via the transfer (a dollar for dollar satisfaction of unsecured debt), with what the same creditor would have received had that payment been retained by the estate, then redistributed with the remainder of the estate's assets to all similarly situated unsecured creditors. If the estate would not have had *434 enough to pay all unsecured creditor claims 100 cents on the dollar, then the creditor will have received a greater percentage via the transfer than it would otherwise have received via the bankruptcy process, and element five of a preference action will have been satisfied.
2. THE GREATER PERCENTAGE TEST (SECURED CREDITORS)
When the creditor is secured, the test has a few twists to it. If the creditor is fully secured or over secured (i.e. the value of the assets subject to the creditor's security interest are equal to or greater than the debt owed to that creditor), the creditor who receives a prepetition transfer will then recover no greater a percentage than it would have received in bankruptcy anyway, and so will not be deemed to have received a preference. Flynn v. Midamerican Bank and Trust Co. (In re Joe Flynn Rare Coins, Inc.), 81 B.R. 1009, 1018 (Bankr.D.Kan.1988); In re Fitzgerald, 49 B.R. 62, 65 (Bankr.D.Mass.1985); 4 L. KING, COLLIER ON BANKRUPTCY, ¶ 547.09, pp. 547-43 (15th ed. 1990). This type of creditor would receive 100% payment in a chapter 7 liquidation (because it is fully secured), so whatever it received via the transfer it would have received anyway in bankruptcy. See 11 U.S.C. § 725; see also COLLIER, supra. This is not our case, however. SPC is an undersecured creditor.
3. THE GREATER PERCENTAGE TEST (UNDERSECURED CREDITORS)
What about the creditor with a security interest in property owned by the debtor, the value of which is insufficient to satisfy the amount owed to the creditor? Whether a transfer to such a creditor will trip the "Greater Percentage Test" will depend on (1) to what claim the payment is applied (the application aspect) and (2) from what source the payment comes (the source aspect). This is so because, in bankruptcy, such a creditor holds two different claims, each of which is entitled to different treatment in bankruptcy. The first is its claim against the property securing the payment of the debt. The second is the amount of debt which exceeds the value of that property, which is by definition "unsecured." See 11 U.S.C. § 506(a). If the payment is applied to the unsecured claim of the creditor, then in the usual situation the creditor will have received more than it received in a chapter 7 liquidation, triggering the Greater Percentage Test and satisfying the trustee's burden on the fifth element. By the same token, if the source of the payment is the creditor's own collateral, then the creditor will have received no more than it would have received in chapter 7 anyway, so that the Greater Percentage Test will not be triggered, and the trustee will have failed to sustain her burden on the fifth element. Even a payment which has been applied to the unsecured claim of an undersecured creditor will not trigger the test if the source of the payment is the creditor's own collateral. Thus, both aspects of the test must be examined before a court can safely conclude that the Greater Percentage Test has or has not been satisfied in the case of an undersecured creditor such as SPC.
(A) THE "APPLICATION" ASPECT OF THE GREATER PERCENTAGE TEST
Turning first to the "application" aspect, if a payment received by an undersecured creditor is applied to the unsecured portion of the debt, then the effect of the transfer will be similar to the effect on the ordinary unsecured creditor who receives such a payment. Like the unsecured creditor, the undersecured creditor who has applied a transfer to the unsecured portion of its debt will have recovered a greater percentage on this claim if the estate cannot pay unsecured creditors 100% of these claims. Flynn v. Midamerican Bank and Trust Co. (In re Joe Flynn Rare Coins, Inc.), 81 B.R. 1009, 1018 (Bankr.D.Kan.1988); In re Fitzgerald, 49 B.R. 62, 65 (Bankr.D.Mass.1985); 4 L. KING, COLLIER ON BANKRUPTCY, ¶ 547.09, p. 547-43 (15th ed. 1990).
If the creditor applies the payment to the secured portion of the debt, on the other hand, the creditor effectively releases a portion of its collateral from its security interest (i.e., its secured claim is reduced, freeing up a corresponding amount of collateral). Now, the effect of the transfer is quite like that received by a fully secured creditor. The *435 payment will not have enabled the creditor to receive any greater percentage than it would have received in bankruptcy anyway, because, when payment was applied, a corresponding amount of collateral was released from the security interest, becoming at least theoretically available for bankruptcy distribution to unsecured creditors. If the creditor does not actually release collateral upon application of the payment, however, then the payment is ipso facto a payment on the unsecured portion of the claim. See 4 L. KING, COLLIER ON BANKRUPTCY, ¶ 547.09, p. 547-43 note 9 (15th ed. 1990).
There is no evidence in the record that SPC ever released collateral when it received payments from EPR. More to the point, it cannot be presumed to have done so. The security instruments provide that SPC's security interests encumber "any and all indebtedness," meaning that, so long as there was indebtedness in excess of collateral, all collateral was encumbered. If a given payment reduced total indebtedness, but failed to reduce it below the value of the collateral, then, per the terms of the security agreement, all of the collateral remained encumbered by all the debt. The payment can only be said to have reduced the unsecured portion of the debt, absent affirmative evidence that collateral was actually released by the creditor upon receipt of payment. This sort of thing does happen, of course, especially in the case of mortgage lenders who finance developers of single family housing. But there is no evidence in this case that such releases of collateral ever occurred here. Given the language of the security instruments, it was not for the Trustee to prove that such releases did not occur, but rather for SPC to prove that they did. There is no such proof here. Given the nature of the loan here, one would not expect there to have been releases of collateral anyway. This is just not that kind of loan. The fair presumption is that, from the application aspect, these payments trigger the Greater Percentage Test and satisfy the trustee's burden.
SPC counters that, even if these payments were applied to its unsecured claim, the Greater Percentage Test will not be triggered, because, despite the estate's overall insolvency, creditors in SPC's position might expect to be paid in full.[8] The competent evidence presented to the court will not sustain that contention, however. The Trustee testified that the estate's assets will not be sufficient to satisfy the unsecured claims, even if these monies had been retained by the estate and were now available for distribution. All that SPC offered in rebuttal was the suggestion that certain state court lawsuits now being pursued by the Trustee against SPC might well generate enough to pay all unsecured creditors in full. All that SPC offered in support of this proposition were the bankruptcy schedules and a reference to the state law complaint. That is not enough evidence to cast any serious doubt on the Trustee's overall evaluation of the value of the estate's assets and the likely distribution to be made to unsecured creditors. The facts and stipulations in this case thus establish that, insofar as the "application" aspect of the greater percentage test is concerned, a preference may have occurred. This does not conclude our analysis, however. We must still examine the source aspect.
(B) THE "SOURCE" ASPECT OF THE GREATER PERCENTAGE TEST
Even if the payment in question was applied to the unsecured portion of an undersecured creditor's claim, the creditor will not be deemed to have received a greater percentage as a result of the payment if the source of the payment is the creditor's own collateral. A creditor who merely recovers *436 its own collateral receives no more as a result than it would have received anyway had the funds been retained by the debtor, subject to the creditor's security interest. Upon bankruptcy, the selfsame collateral would simply be returned to that creditor by the trustee as part of the chapter 7 administration. 11 U.S.C. § 725; see Waslow v. MNC Commercial Corp. (In re M. Paolella & Sons, Inc.), 161 B.R. 107, 124 (Bankr.E.D.Penn.1993). Even undersecured creditors are entitled to that much in a chapter 7 liquidation. When such a creditor is paid from its proceeds prepetition, it has received precisely what it was entitled to receive anyway in the chapter 7 liquidation the value of its collateral. Thus, the undersecured creditor receives no more from a receipt of its proceeds than it would have under a chapter 7 liquidation. See 4 L. KING, COLLIER ON BANKRUPTCY, ¶ 547.09, p. 547-43 (15th ed. 1990).[9]
The evidence in this case establishes that the source of all the alleged preferential payments were "proceeds" of collateral in which SPC held a security interest.[10] However, this case contains peculiar facts that distinguish it from the usual receipt-of-proceeds case. Here, SPC entered into an intercreditor agreement with Bank Brussels Lambert (BBL) long before the preference period, in which SPC agreed to "share" its first lien security interest in inventory, accounts receivable, contract rights and proceeds with BBL. EPR appears not to have been a party to this agreement, and BBL appears not to have held any independent perfected security interest in this particular collateral. What impact, if any, does this agreement have on our analysis of the source aspect of the greater percentage test?
Recall that in the usual situation, a transfer of an undersecured creditor's own proceeds will not be preferential because the "source" of the transfer is the creditor's collateral, which the creditor would get back anyway via the chapter 7 distribution process. The intercreditor agreement could alter this "usual outcome" in one of two ways. First, if a trustee can enforce the intercreditor agreement in the bankruptcy case, then SPC would not receive 100% of the proceeds it received via the prepetition transfers. The terms of the intercreditor agreement would dictate that a percentage of those proceeds (45.47%, to be exact) ought to be delivered to BBL. SPC would thus have received more via the transfers than it would have received in the chapter 7 liquidation, satisfying the fifth element of the Trustee's preference action.
Alternatively, a percentage of the monies received by SPC (to be precise, 45.47%) might, as a result of the parties' stipulations regarding the meaning of the intercreditor agreement, not actually be SPC's proceeds at all. They might be BBL's proceeds, properly deliverable to BBL as part of the chapter 7 distribution process. SPC's receipt of those funds prepetition would thus have permitted SPC to receive more than it would otherwise have received in a chapter 7 liquidation, again satisfying the fifth element of the Trustee's preference action.
We can safely say at this stage, however, that at least that portion of monies paid to SPC prepetition representing SPC's collateral *437 under the intercreditor agreement (namely, 54.53% of proceeds) was undoubtedly monies that SPC would have received in a chapter 7 liquidation anyway, no matter how we interpret the intercreditor agreement or the parties' stipulations. SPC's liability has thus been reduced, at this stage, to no more than 45.47% of the total transfers, or approximately $37.7 million.
It now remains for us to determine whether the Trustee, by virtue of the intercreditor agreement, can establish the fifth element of his cause of action, under either of the approaches outlined above with regard to this remaining 45.47%. We turn to the first of those approaches in the next section.
(1) IMPACT OF INTERCREDITOR AGREEMENT ON THE SOURCE ASPECT OF THE GREATER PERCENTAGE TEST: CAN THE TRUSTEE ENFORCE THE INTERCREDITOR AGREEMENT?
Turning to the first approach, does the intercreditor agreement impose or confer any rights or obligations on the trustee in bankruptcy that would affect how he would distribute proceeds of accounts receivable and inventory in this bankruptcy case? If the trustee is supposed to (or allowed to) enforce the intercreditor agreement's sharing arrangement, and so distribute proceeds to SPC and BBL in accordance with the proportions set out therein, then SPC will have received more than it would have received in a chapter 7 liquidation had the transfers not been made, the trustee will have satisfied the fifth element, and a preference will have been established. The answer turns on whether the Trustee can enforce the terms of the intercreditor agreement.
A sharing agreement such as this is really a type of "subordination agreement." Creditor A, with a first lien agrees to settle for something less than first position, in favor of Creditor B. Perhaps Creditor A agrees that the Creditor B will receive lien proceeds ahead of Creditor A, or perhaps they agree to divide the collateral on some percentage basis notwithstanding Creditor A's lien priority. Regardless the distribution scheme selected, the effect is the same. One creditor surrenders priority or a portion of its priority, to the advantage of the other creditor.
Section 510(a) of the Bankruptcy Code says specifically that subordination agreements are, in general, enforceable in bankruptcy to the same extent that they are enforceable under applicable nonbankruptcy law. 11 U.S.C. § 510(a); see Matter of Bobby Boggs, Inc., 819 F.2d 574, 579 (5th Cir. 1987); In re Terrace Gardens Park Partnership, 96 B.R. 707, 716 (Bankr.W.D.Tex.1989). However, only the parties to the subordination agreement have standing to enforce its terms. Terrace Gardens Park Partnership, 96 B.R. at 716; see also In re Smith, 77 B.R. 624, 627 (Bankr.N.D.Ohio 1987). Unless the trustee in bankruptcy is a party to the agreement, the trustee lacks standing to insist that the subordination agreement be enforced. See In re Kors, 819 F.2d 19, 24 (2nd Cir. 1987); In re Chicago, South Shore and South Bend Railroad, 146 B.R. 421, 427 (Bankr. N.D.Ill.1992). The trustee in this case, as successor to EPR, is not a party to the intercreditor agreement, and so lacks standing to enforce the agreement. Only BBL can enforce the agreement.[11] As BBL has no independent lien of record, the trustee would have to make distribution of proceeds of EPR's inventory and accounts receivable only to the lienholder of record SPC. BBL would then have to pursue its own remedies directly against SPC. The intercreditor agreement, as a subordination agreement, has no impact on the chapter seven distributional process, and would not alter our original conclusion that all the transfers are insulated from preference attack because they all have their source in proceeds of SPC's collateral. *438 However, that is not the end of the matter. We turn to the second scenario to ask about the impact, if any, of the parties' stipulations regarding the meaning and interpretation of the intercreditor agreement for purposes of this case.
(2) IMPACT OF INTERCREDITOR AGREEMENT ON THE SOURCE ASPECT OF THE GREATER PERCENTAGE TEST: EFFECT OF PARTIES' STIPULATION AS TO BBL'S SECURITY INTEREST.
In the usual case, intercreditor agreements do not alter the validity of liens of record vis-a-vis third parties, because they represent only a contract between creditors signatory to the agreement. As to third parties (including trustees in bankruptcy), the agreement should be irrelevant, with only the record lienholder holding a lien enforceable against the world. EPR, outside of bankruptcy, had no right to rely on the intercreditor agreement to withhold any proceeds from SPC for the benefit of BBL and were EPR to have withheld monies for BBL, it would have been in default to SPC. The trustee, as successor in interest to EPR, would appear to have no greater rights than EPR.
In the present case, however, the analysis is altered by the parties' stipulations as to how the intercreditor agreement is to be interpreted for purposes of this case. The Trustee and SPC have agreed "that SPC and BBL held perfected security interests in EPR's inventory, accounts receivable, and their proceeds (as limited by applicable law), and that they shared any such collateral in the following proportion: 54.53% to SPC and 45.47% to BBL." The parties have thus stipulated that this intercreditor agreement is not simply a contract between two creditors. It has the effect of giving BBL a perfected security interest in the collateral and proceeds which are the subject of this analysis, enforceable against SPC.
The fact that BBL does not actually have a perfected security interest under state law is irrelevant. The parties have stipulated to the effect of the agreement for purposes of this case. SPC and BBL are to share the collateral in a specific proportion, and SPC by its stipulation has agreed that that proportion (and the intercreditor agreement that gives rise to it) is to be honored in this bankruptcy proceeding. If the transfers made to SPC had remained in the hands of EPR on the date of the bankruptcy filing, they would have been subject to this "perfected security interest" in favor of both SPC and BBL, and the trustee would give SPC just over 54% of those monies, with the balance being distributed to BBL, the holder of a "perfected security interest" in the balance of the collateral in question.
As we have already noted, some 54% of the total proceeds were indisputably SPC's, and its receipt of that proportion of the proceeds is insulated from preference attack. The parties have stipulated, however, that 45.47% of the proceeds were the subject of another creditor's security interest that of BBL.[12] As SPC received those monies, it received monies not sheltered by the source rule, which protects only transfers of a given creditor's own collateral. Those funds enabled SPC to recover a greater percentage than it otherwise would have received in a chapter 7 liquidation (in which the stipulation of the parties regarding BBL's security interest would be enforced). The Trustee has thus established the fifth element with respect to 45.47% of the transfers made to SPC during the preference period.
(C) CONCLUSION REGARDING THE GREATER PERCENTAGE TEST
We thus come full circle. In order to satisfy the fifth element of section 547(b), the trustee had but to establish that, as a result of the transfers in question, SPC received a "greater percentage" than it otherwise would *439 have received had the transfers not been made and SPC had instead been required to look to the chapter 7 distribution scheme for payment. Because SPC is an undersecured creditor, the application of the "greater percentage" test required the court to look first to the manner in which the payments were applied and second to the source of those payments. We have determined that, as to the "application" question, the transfers were applied to the unsecured portion of SPC's debt, resulting in SPC receiving a "greater percentage" as a result of the transfers. We then turned to the "source" question, to see whether, as a result of the source of the payments, SPC received only what it would have received in a chapter 7 liquidation anyway. Because the source of these transfers was proceeds of SPC's collateral, it appeared that SPC would be able to evade "flunking" the "greater percentage" test. However, because of the parties' stipulations regarding the meaning and interpretation of the intercreditor agreement (to say nothing of BBL's proof of claim on file in this case), SPC does "flunk" the test with respect to its receipt of 45.47% of those monies. The source rule will shelter 54.53% of the transfers (representing the return to SPC of SPC's own collateral), but will not protect the balance, which represented proceeds of BBL's collateral. SPC's receipt of BBL's collateral enabled SPC to receive more than it otherwise would have received in a chapter 7 liquidation, where the selfsame proceeds would have been distributed not to SPC but to BBL, per the parties' stipulation. The Trustee has thus satisfactorily established the fifth element of his case in chief.
Because the Trustee has made out his case for avoidance of 45.47% of the payments the subject of this preference action, it devolves on the defendant, SPC, to successfully establish, by a preponderance of the evidence, at least one of the affirmative defenses available to creditors to resist a recovery by the Trustee. These defenses are set out in section 547(c), and it is to those defenses that we now turn.
II. DEFENSES
SPC has pled two defenses under section 547(c). One is that the payments were made in the ordinary course of business. 11 U.S.C. § 547(c)(2). The other is that SPC gave new value for any payments received. 11 U.S.C. § 547(c)(4). Not pled by SPC was the "revolving loan on inventory" defense set out in section 547(c)(5), which might conceivably apply to this case. We need not address that question, other than to note its absence, for the court should not address defenses not pled. Even if the defense had been pled, however, the evidentiary record is insufficient to support the defense, because we have not been furnished the requisite information about inventory levels at the beginning and end of the preference periods, relative to the outstanding loan balance at those two points in time. Without that factual information, the court could not make findings under section 547(c)(5) anyway. We thus turn our attention to the defenses actually pled by SPC.
A. ORDINARY COURSE OF BUSINESS
As one defense to the Trustee's preference claim, SPC urges that the payments made during the 90 days preceding the bankruptcy petition were made in "the ordinary course of business." 11 U.S.C. § 547(c)(2). Section 547(c)(2) states:
a trustee may not avoid . . . a transfer to the extent that such transfer was
(A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee;
(B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and
(C) made according to ordinary business terms.
11 U.S.C. § 547(c)(2). SPC bears the burden of establishing each and every element of the defense. 11 U.S.C. § 547(g); Union Bank v. Wolas, 502 U.S. at 153-55, 112 S. Ct. at 529.
The ordinary course defense has three, distinct statutory elements. At one time, courts had considerable difficulty applying subparagraph (C) because of its apparent overlap with subparagraph (B). Most courts would simply ignore subparagraph (C), finding that so long as the preference payments *440 were made in the ordinary course of business affairs between the debtor and the transferee under subparagraph (B), the exception would be established without more. See Fred Hawes Organization v. Basic Distribution Corp. (In re Fred Hawes), 957 F.2d 239, 243 (6th Cir.1992). A minority view required each element to be separately proven by the party alleged to have received the preference, notwithstanding the apparent overlap. Id.
Now, little of this controversy remains. Most circuits have adopted the minority view. WJM, Inc. v. Massachusetts Department of Public Welfare, 840 F.2d 996 (1st Cir.1988); Fiber Lite Corp. v. Molded Acoustical Products, 18 F.3d 217 (3rd Cir.1994); Fred Hawes Organization v. Basic Distribution Corp., 957 F.2d 239 (6th Cir.1992); Matter of Tolona Pizza Products Corp., 3 F.3d 1029 (7th Cir.1993); U.S.A. Inns of Eureka Springs, Arkansas, Inc. v. United Savings and Loan Association, 9 F.3d 680 (8th Cir.1993); Clark v. Balcor Real Estate Finance, Inc. (In re Meridith Hoffman Partners), 12 F.3d 1549 (10th Cir.1993). The Seventh Circuit, in Tolona Pizza, explained that Subparagraph (B) contains a more subjective criteria, while subsection (C) furnishes a more objective test, giving content to both of these latter two elements of the defense. Matter of Tolona Pizza Products Corp., 3 F.3d at 1033.[13]
In the present case, the parties do not dispute the satisfaction of the subparagraph (A) element. The parties agree that the debt in question was incurred in the ordinary course of business for both SPC and EPR. Therefore, the court can turn directly to the more controversial subparagraphs, (B) and (C).
1. WERE THE TRANSFERS MADE IN THE ORDINARY COURSE OF BUSINESS OR FINANCIAL AFFAIRS OF EPR AND SPC?
Under subparagraph (B), the subjective prong, a court compares prior business dealings between the debtor and creditor with their dealings during the time of the preference period, to determine whether the debt/payment conduct during the preference period was ordinary when compared to other, presumably more regularized business dealings prior to the preference period. Fred Hawes Organization v. Basic Distribution Corp. (In re Fred Hawes), 957 F.2d 239, 244 (6th Cir.1992). The test is of necessity fact-specific. Id. Although not exhaustive, some of the factors which a court should examine include (1) the timing of the payments; (2) the amount of and manner in which a transaction was paid; and (3) the circumstances under which the transfer was made. Id. The implicit assumption in the test is that pre-preference period conduct will establish a sensible baseline against which to evaluate conduct during the preference period.
In the present case, however, it is difficult to find anything ordinary in the business dealings between EPR and SPC at any point in their relationship, in or out of the preference period. The parties' dealings from the beginning have been unbelievably dynamic. About the only thing close to "ordinary" were the terms of the underlying written agreement, which called for monthly billings for the previous month's invoices, to be paid on the 20th of the month following the invoice. These terms were generally followed until SPC came on the scene. Then the contract terms were almost never followed.
*441 Throughout the year leading up to the beginning of the preference period, EPR had trouble paying SPC on time, and SPC constantly altered the demands it placed on EPR. EPR was first required to pay weekly, then daily. Additional security was taken in the form of first one, then another letter of credit. At one point, SPC took control over the flow of crude oil by leasing tanks adjacent to the refinery. With this control over the flow of crude oil, on several occasions, SPC on a couple of occasions threatened to shut off the flow unless they received payment or additional security. By the end of the year, SPC was calling EPR on a daily basis to find out how much crude oil was needed, and deciding whether and how much to deliver only after evaluating EPR's old debt and SPC's current security position as of that day.
During the preference period, the relationship of the parties continued along much the same lines. EPR would make daily payments, and SPC would ship crude oil based upon its security and EPR's needs. Daily conversations were held between the parties. Threats of shutting down the supply continued, including one instance in which the flow was physically blocked by SPC. SPC continued to demand greater security for its shipments, and actually drew upon the $5 million letter of credit very early on during the preference period.
Nothing in the foregoing relationship, from July 1991, even vaguely resembles what one would call business conducted in accordance with "ordinary business terms." The only business terms were those dictated by SPC, and they were constantly changing on a monthly, weekly or even daily basis. The court is unable to find a realistic baseline for ordinary business relations between SPC and EPR, against which it could compare the dealings between SPC and EPR during the preference period. SPC has failed to meet its burden under subparagraph (B).
2. WERE THE TRANSFERS IN ACCORDANCE WITH ORDINARY BUSINESS TERMS?
Even if SPC had met its burden under subsection (B) (and it did not), SPC would still have to prove that the dealings between SPC and EPR comported with "ordinary business terms" in an objective sense. To establish that element, SPC was required to prove up the range of terms normally imposed in the business in which the debtor and the creditor are engaged (i.e., the "relevant industry"), and to show that the arrangements employed by SPC and EPR fell within that range. See Matter of Tolona Pizza Products Corp., 3 F.3d 1029, 1033 (7th Cir.1993). The proper analysis is as the Seventh Circuit phrased it:
"ordinary business terms" refers to the range of terms that encompasses the practices in which firms similar in some general way to the creditor in question engage, and that only dealings so idiosyncratic as to fall outside that broad range should be deemed extraordinary and therefore outside the scope of subsection (C).
Id. at 1034. The Third Circuit expressly adopted the Tolona Pizza test, though it substituted "unusual" for "idiosyncratic" in order to, in their opinion, be more faithful to the congressional intent expressed in the legislative history. See Fiber Lite Corp. v. Molded Acoustical Products, 18 F.3d 217, 224 (3d Cir.1994).
The parties stipulated to the terms of an "ordinary crude oil sales contract of SPC." These crude oil sales contracts are typically for substantially smaller volumes of crude oil deliveries per day and are either unsecured or secured only by a letter of credit. Sales contracts are almost never collateralized by liens on real property or other assets, are payable in lump sum payments on a monthly basis, and do not include gathering or handling fees. The contractual arrangement between SPC and EPR looked like anything but one of these "ordinary" contracts.
Mr. Roger Kragy, an employee of SPC, conceded that the terms of the relationship were not even normal for SPC, much less for the rest of the industry, and acknowledged that SPC treated no other account the way it did the EPR account. Mr. Mike Shelton, one of the senior officers of EPR, who has been in the refinery business for over 15 years and was familiar with crude oil sales contracts and the ordinary business terms employed in the industry, confirmed most of what Mr. Kragy had said, adding that the constant demands made by SPC for first weekly, then *442 daily payments, and always for additional security, were highly unusual.[14]
The stipulations and testimony confirm that the relationship between EPR and SPC fell well outside the range of ordinary business practices in the industry of crude oil supply to refineries. The impact of abrupt cutoffs in crude supply is so draconian that it was very easy to induce EPR to accede to things such as a daily payment scheme, SPC's complete control over flow, and increased security, as a prerequisite to a continuing supply. This sort of control and pressure made the EPR/SPC relationship highly unusual and idiosyncratic relative to the industry norm. Even SPC's own witness acknowledged that the relationship was "extraordinary." Thus, SPC has failed to meet its burden under the subsection (C) objective test.[15]
B. NEW VALUE
A second defense urged by SPC is the new value exception found at 11 U.S.C. § 547(c)(4). Under this exception a trustee may not avoid a preferential transfer:
(4) to or for the benefit of a creditor, to the extent that, after such transfer, such creditor gave new value to or for the benefit of the debtor
(A) not secured by an otherwise unavoidable security interest; and
(B) on account of which new value the debtor did not make an otherwise unavoidable transfer to or for the benefit of such creditor;
11 U.S.C. § 547(c)(4). This defense, sometimes called the "subsequent advance" exception, allows a creditor to claim a credit against preferential transfers for subsequent advances of "new value" made after a given transfer. The exception is meant to protect those creditors who continue to extend credit to the debtor, perhaps in implicit reliance on prior payments, for if there were no exception, the creditor would merely be increasing its bankruptcy loss. Also, the rule's protection encourages creditors to continue their credit arrangements with financially troubled debtors, thus possibly allowing those debtors to avoid bankruptcy altogether. Laker v. Vallette (Matter of Toyota of Jefferson, Inc.), 14 F.3d 1088, 1091 (5th Cir.1994).
1. IN GENERAL: AUGMENTATION AND REPLENISHMENT
A creditor seeking to find shelter within section 547(c)(4) must establish (1) that the creditor gave new value; (2) that the new value was given subsequent to the preferential transfer; (3) that the new value given was not "secured by an otherwise unavoidable security interest," and (4) that the debtor did not make "an otherwise unavoidable transfer to or for the benefit of such creditor" on account of the new value. Matter *443 of Toyota of Jefferson, 14 F.3d at 1091. The Fifth Circuit has explained that, when a creditor is paid from the estate's assets, but then extends new value, diminution of the estate will only occur to the extent that the transfer exceeds the new value extended, because the extension of new value effectively returns each payment to the estate. Toyota of Jefferson, 14 F.3d at 1092. Thus, the estate remains the same or in some instances will even be augmented. The important inquiry, says the Fifth Circuit, ought to be whether the new value replenishes the estate. Id. (citing Kroh Brothers Dev. Co. v. Continental Constr. Eng'rs, Inc. (In re Kroh Bros. Dev. Co.), 930 F.2d 648, 652 (8th Cir. 1991)). If, however, a creditor giving new credit receives "an otherwise unavoidable transfer" on account of that new credit extension, or if the new value is "secured by an otherwise unavoidable security interest," then the debtor's estate has not been "replenished" or "augmented," and the proffered new value will not qualify to "offset" the preferential transfers received. See Toyota of Jefferson, 14 F.3d at 1092; see also Successor Committee of Creditors Holding Unsecured Claims v. Bergen Brunswig Drug Co. (In re Ladera Heights Community Hospital, Inc.), 152 B.R. 964 (Bankr.C.D.Cal. 1993).
In the present case, SPC urges that its daily shipments of crude immediately following payments from EPR qualify as extensions of new value within the meaning of section 547(c)(4) and Toyota Jefferson. There is not much dispute that extensions of credit such as those found here can be new value. The parties also agree both that new value counts only to the extent that it is given after the transfers in question and that new extensions of credit were in fact given after preferential transfers were made. To qualify for the new value exception, however, the credit extensions must fit within the limitations set out in subparagraphs (A) and (B) of that section.
2. NEW VALUE DEFENSE IS NOT AVAILABLE TO THE EXTENT THAT NEW VALUE IS SECURED BY AN OTHERWISE UNAVOIDABLE SECURITY INTEREST
Subparagraph (A) of section 547(c)(4) provides that new value, to qualify, must not be "secured by an otherwise unavoidable security interest." Not much has been written on this provision, and what little has been written is largely superficial. Courts have repeated the general policy observation that qualified new value must be given on "an unsecured basis," so that the estate will effectively not be harmed by the preference. See Perlstein v. Rockwood Insurance Co. (In re AOV Industries, Inc.), 85 B.R. 183 (Bankr.D.C.1988); Chaitman v. Paisano Automotive Liquids (In re Almarc), 62 B.R. 684 (Bankr.N.D.Ill.1986). If the new value is secured, however, and that very security interest is itself not avoidable, then the new value will not count for purposes of the defense. Toyota of Jefferson, 14 F.3d at 1092.
The statute does not distinguish between creditors who are fully secured and creditors who are only partially secured. It simply disqualifies any new value that is secured. Thus, it appears from a plain reading of the statute that even creditors, such as SPC, who are undersecured, will find the new value they extend disqualified if the new credit is secured, pursuant to the terms of the lender's security instruments. Two courts have held that an undersecured creditor may still be able to claim the benefits of the new value defense. The holding of these cases is not inconsistent with the plain meaning of the statute. The key to their analysis is their focus on whether the new value was secured, not whether the creditor was "fully secured." See Matter of Prescott, 805 F.2d 719, 731 (7th Cir.1986) (what is important is that the new value be unsecured, not that the creditor in general be unsecured); Wolinsky v. Central Vermont Teachers Credit Union, 98 B.R. 669 (Bankr.D.Vt.1989) (the "new value" extended must be unsecured, not that the creditor in general be unsecured). Both the Prescott and the Wolinsky courts would, in this court's view, concur with the plain meaning interpretation of the statute announced here which draws no special distinction for undersecured creditors, and betrays no particular *444 ambiguity on its face.[16]See U.S. v. Ron Pair Enterprises, Inc., 489 U.S. 235, 242, 109 S. Ct. 1026, 1031, 103 L. Ed. 2d 290 (1989) (plain meaning is the preferred method of statutory construction for the Bankruptcy Code).
Holding that the new value defense is unavailable if the new value is secured, without regard to whether the secured creditor is itself undersecured, comports with commercial reality. In the usual situation involving a creditor with a blanket security interest on after-acquired property, who receives payment and makes new deliveries, a preference will not even take place because all of the transfers received by such a creditor will usually be proceeds from the sale of the very collateral (usually inventory) that secures the debt. As we have already seen, a creditor who merely recovers the proceeds of its collateral receives no preference because the transfer will never violate the Greater Percentage Rule. See 11 U.S.C. § 547(b)(5); see also discussion supra. Such an undersecured creditor will almost never need to resort to the defense in the first place.[17]
Suppose an undersecured creditor were to receive cash payments from a debtor that were not attributable to its collateral proceeds. Suppose the creditor insisted on such payments as a way to build up its collateral position, to reduce its exposure as an undersecured creditor. Then the transfers would be preferential, requiring the creditor to resort to the new value defense. But the defense would not be available to shelter its receipt of these transfers, because, in our scenario, new shipments would be secured by the creditor's existing security interest, usually via an after-acquired property clause.
And that is the right result. The new value defense is premised on the notion that the estate has suffered no harm from having made a preferential transfer (which presumptively diminishes the estate) if such transfers are offset by new value which has the effect of augmenting the estate. In our hypothetical, the estate will have been doubly diminished, first by the transfers, and then by the encumbrances of newly acquired inventory or other collateral, but only singly augmented by the extension of credit. The focus of the new value defense is not on whether the creditor extended what amounted to unsecured credit from the creditor's point of view (the position urged by SPC in this litigation), but rather on whether, from the point of view of the estate, the estate was replenished or augmented by the new value extended by the creditor. The estate is never augmented by new value that is secured.[18]*445 Creditors who lend on a secured basis and who get paid out of the proceeds of their collateral do not need the new value defense. Creditors who attempt to improve their position at the expense of unsecured creditors do not deserve the defense.
Our straightforward reading of section 547(c)(4)(A) generates no anomalous results, no ambiguities, no absurdities that would compel any departure from the plain meaning of the statute as the rule of decision in this case. Sheridan v. United States, 487 U.S. 392, 403, 108 S. Ct. 2449, 2456, 101 L. Ed. 2d 352 (1988).
The new value given by SPC in this case was its sale of crude oil on credit. Each time crude oil was sold to EPR, SPC also extended credit, essentially equivalent to the value of the crude oil shipment. SPC's loan documents included both an after-acquired property clause and a future advances clause, so that SPC's security interest automatically attached to all inventory acquired by EPR, including, of course, any crude oil sold by SPC to EPR during this preference period, while the advances themselves were automatically secured by the security agreement. SPC literally could not extend unsecured credit, unless it affirmatively waived its future advances and after-acquired clauses (and there is no evidence to indicate that it ever did).[19]
The present case, however, has been complicated by the intercreditor agreement and by the parties' stipulations as to its effect for purposes of this case. Recall that the parties have stipulated that the intercreditor agreement is to be interpreted to give both SPC and BBL a perfected security interest in the crude oil which was shipped to EPR on a daily basis. Recall also that the parties have stipulated that, under the intercreditor agreement, the parties shared the collateral in specific proportions, SPC's security interest attaching to 54.53% of the collateral and BBL's security interest attaching to the remaining 45.47%. Already this stipulation has had one consequence, rendering 45.47% of the transfers from EPR to SPC preferential. Now the stipulation has another, opposite and counterbalancing effect. By virtue of the stipulation, SPC did not have a security interest in all the crude oil which was shipped to EPR on a daily basis. SPC's after-acquired property clause only attached, by stipulation of the parties to this litigation, to 54.53% of the collateral. The balance was not encumbered by SPC's security interest though it was encumbered by BBL's "stipulated" security interest.
This changes our analysis dramatically. While all of the crude oil is collateral securing loans made or credit given under security interests held by either BBL or SPC, not all of the crude oil is collateral securing the credit extended by SPC, under its own security interest. This is not unlike the situation in which a supplier of inventory ships on an unsecured basis, with the inventory being financed by a working capital lender. The proceeds of the working capital lender's loan are expected to be used to buy inventory, *446 which turns on a regular (even constant) basis. The actual purchase may be from a vendor on unsecured terms (net thirty days plus ten, for example). Suppose the vendor decides not to ship any more unless the debtor agrees to start paying down old debt. The debtor complies, and the vendor then ships, again on an unsecured basis. Unfortunately, as soon as the shipment hits the debtor's doorstep, the working capital lender's lien attaches to the shipment (which has now become inventory). In much the same way, SPC, the vendor, shipped 45.47% of the crude oil feedstock to EPR on an unsecured basis, though the goods once shipped immediately became subject to another creditor's security interest, i.e., BBL's.
In our hypothetical, the new value extended by the vendor is goods sold on unsecured credit. The vendor ships goods but does not require the debtor to pay for those goods immediately upon delivery. Because the goods are sold on credit which is also unsecured, the vendor obtains no special rights as to the goods. The goods may become collateral, but the credit extended by the vendor is not thereby "secured credit" and so does not run afoul of section 547(c)(4)(A). The estate is augmented by the new value because the estate receives valuable and necessary goods, but is not required to expend estate assets to receive those goods. True enough, the working capital lender's inventory is also increased, but that is a different issue (in fact, that increase could result in a preference in favor of the lender, requiring that lender to look to section 547(c)(5) for a defense).[20] But the estate is still augmented by the sale of goods on unsecured credit by the vendor.
Like the vendor in the above example, SPC extended credit on an unsecured basis, at least with respect to 45.47% of the feedstock delivered to EPR. EPR received feed stock and an extension of unsecured credit from SPC, and the estate was augmented by that amount. True enough, that selfsame 45.47% of feedstock delivered did serve to collateralize BBL's loans (per the stipulations), but BBL is like the working capital lender in our hypothetical. The Trustee might well have[21] a preference claim against BBL by virtue of the SPC/EPR transactions, but, as in our hypothetical, that does not deprive SPC of the benefit of its new value defense vis-a-vis SPC. SPC thus far appears to have a "new value" defense equivalent to 45.47% of the new credit extended.
This does not end our analysis, however. We must still determine whether any of this new value is disqualified by virtue of the limitations set out in subsection (B) of section 547(c)(4).
3. NEW VALUE DEFENSE IS NOT AVAILABLE TO THE EXTENT THAT THE NEW VALUE WAS GIVEN ON ACCOUNT OF AN OTHERWISE UNAVOIDABLE TRANSFER TO OR FOR THE BENEFIT OF SPC
To qualify for the new value exception, it is not enough that the creditor gave new value *447 which is "not secured by an otherwise unavoidable security," under subsection (A). The new value must also not be given "on account of . . . an otherwise unavoidable transfer to or for the benefit of the creditor extending new value." 11 U.S.C. § 547(c)(4)(B).[22] In the present case, two irrevocable letters of credit were issued by BBL in favor of SPC. The first letter of credit was issued on November 12, 1991 in the amount of $5,000,000.00. The parties have stipulated that this letter of credit was issued to secure the payment of any amounts owed to SPC in excess of the $37,450,000.00 then past due, and that, as security for the issuance of the letter of credit, BBL was given a contractually prioritized first lien on assets of the Debtor. The second letter of credit was issued on March 11, 1992 in the amount of $6,000,000.00. Once again, the parties have stipulated that this letter of credit was issued to secure payment of any amounts owed to SPC, this time in excess of $42,420,000.00, and that, in return for the issuance of this letter of credit, BBL received a share of a security interest in the refinery assets held by other lenders.
The parties' stipulations explain the reason these letters of credit were issued in favor of SPC. They created what the parties referred to as an "LC Cushion," which was used by SPC as security for the amounts of crude oil delivered over and above the amount of their security interest, and limited its crude oil advances accordingly. If the indebtedness outstanding to SPC exceeded the $37,450,000.00 limit, then SPC would still ship crude, provided that its exposure did not exceed the $11 million letters of credit. Does this letter of credit arrangement disqualify SPC's new value under the subsection (B) limitation?
The plain language of subsection (B) requires simply that any new value given by a creditor must not be given 1) on account of; 2) an otherwise unavoidable transfer made by the debtor; 3) to or for the benefit of such creditor. 11 U.S.C. § 547(c)(4)(B). If a creditor's transfer of new value runs afoul of these limitations, then the alleged new value transferred is not truly new value, and the creditor will not receive any credit on account thereof.
(A) AN UNAVOIDABLE TRANSFER?
There can be little doubt that EPR made an otherwise unavoidable transfer in these letter of credit transactions. The offending "unavoidable transfer," for preference analysis, did not consist of the issuance of the letters of credit themselves, however. And it did not consist of BBL's honoring the letters of credit when they were called, either. Nor did it take place when SPC presented the letters of credit for payment. See Matter of Compton Corp. (Kellogg v. Blue Quail Energy, Inc.), 831 F.2d 586, 589 (5th Cir.1987) (citing In re W.L. Mead, Inc., 42 B.R. 57 (Bankr.N.D.Ohio 1984)). Rather, the offending transfer, for purposes of subsection (B) of section 547(c)(4), was EPR's pledge of property to secure the issuance of these letters of credit. Id. at 591. By giving BBL a new or increased lien, the Debtor directly transferred its property to BBL, for the indirect benefit of SPC. Id. It is that pledge of property to secure and induce the issuance of the letters of credit for the ultimate benefit of SPC (so that SPC would continue to ship crude to EPR) which counts as a disqualifying transfer within the meaning of the second element of subsection (B).
This transfer was obviously "otherwise unavoidable," for the letters of credit were issued by BBL on November 12, 1991 and March 11, 1991, well outside the preference period, and became secured at the point of their issuance. Matter of Compton, 831 F.2d at 591 (in a secured letter of credit transaction, the transfer of debtor's property takes place at the time the letter of credit is issued and received by the beneficiary, not at the time the issuer pays on the letter of credit). There is no evidence in the record to indicate *448 that the security interests given to secure these letters of credit were anything other than fully perfected, and nothing in the record to indicate that they were in any way fraudulent. The transfers, then, are clearly "otherwise unavoidable," within the meaning of the statute.
(B) TO OR FOR THE BENEFIT OF SPC?
Did EPR make these transfers (i.e., the pledge of collateral to secure the letters of credit) "to or for the benefit of [SPC]?" The case law gives virtually no guidance for interpreting this phrase as it is used in section 547(c)(4)(B), though two circuits have discussed the meaning of these same phrase as used in section 547(b)(1).[23]See American Bank of Martin County v. Leasing Service Corporation (In re Air Conditioning, Inc. of Stuart), 845 F.2d 293 (11th Cir.1988); Matter of Compton Corp. (Kellogg v. Blue Quail Energy, Inc.), 831 F.2d 586 (5th Cir.1987). See also Security Services, Inc. v. National Union Fire Insurance Company of Pittsburgh, P.A. (In re Security Services, Inc.), 132 B.R. 411 (Bankr.W.D.Mo.1991). In both Leasing Service and Compton, the circuit courts held that a transfer of collateral to a bank in connection with the issuance of a letter of credit in favor of a third-party creditor counted as a transfer "to or for the benefit of" the third-party creditor, because of the indirect benefit conferred on that creditor even though the direct benefit of the collateral transfer inured, of course, to the bank that had issued the letter of credit. Leasing Service, 845 F.2d at 295-96; Compton, 831 F.2d at 591. The Fifth Circuit noted that the language of the statute should be read so as to reach the substance of the transaction, and that the pledge of collateral enabled the bank to issue a letter of credit which it otherwise would not have been willing to issue, to the economic benefit of the third-party creditor. The third-party creditor thus enjoyed the benefits of a pledge of collateral, even though the collateral was not pledged directly to that creditor. Compton, 831 F.2d at 591-92 (discussing Palmer v. Radio Corporation of America, 453 F.2d 1133 (5th Cir.1971)).
In the present case, SPC received just such an indirect benefit from the transfer of the security interest to BBL, a transfer which induced BBL to issue letters of credit in favor of SPC, assuring SPC that any advances of credit at least up to $11 million would be repaid with a certainty. The only difference between the benefit conferred on SPC and the benefits conferred on creditors in Leasing Service and Compton is that, in SPC's case, the indirect benefit applies to extensions of new credit, while in Leasing Service and Compton the benefit applied to antecedent debt. That difference mirrors the function of the statutory language. A transfer which confers an indirect benefit with respect to an antecedent debt may nonetheless be preferential. 11 U.S.C. § 547(b)(1). A transfer which confers an indirect benefit with respect to an extension of new value may similarly disqualify that new value. 11 U.S.C. § 547(c)(4)(B). We should give the same phrase the same meaning when it is used in a different subsection of the same statute. Sorenson v. Secretary of Treasury, 475 U.S. 851, 860, 106 S. Ct. 1600, 1606, 89 L. Ed. 2d 855 (1986) (the normal rule of statutory construction assumes that "`identical words used in different parts of the same act are intended to have the same meaning.'"), citing Helvering v. Stockholms Enskilda Bank, 293 U.S. 84, 87, 55 S. Ct. 50, 51, 79 L. Ed. 211 (1934), quoting Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433, 52 S. Ct. 607, 609, 76 L. Ed. 1204 (1932). See also Dewsnup v. Timm, 502 U.S. 410, 422-24, 112 S. Ct. 773, 781, 116 L. Ed. 2d 903 (1992) (Scalia, J., dissenting).
We are not quite finished with our inquiry, however. The offending transfer will not actually be disqualifying unless it was made on account of the new value.
(C) ON ACCOUNT OF THE NEW VALUE?
Finally, we must ask whether the potentially disqualifying transfers of collateral to BBL to secure the issuance of letters of credit in favor of SPC were made "on account of" the new value. If the letters of credit transactions, including the transfer of the new or increased liens in favor of BBL, *449 were not made on account of the new value transferred by SPC to the Debtor, then the transactions will have no disqualifying effect on SPC's new value defense.
Here we enter virgin territory. The court has found no authorities that directly address the proper interpretation of this particular aspect of subsection (B). By the same token, however, the court finds nothing particularly remarkable in the language of the statute that would require the court to depart from a plain meaning analysis. The phrase "on account of" carries with it the connotation of causation ("because of x, I will do y"). Here, the parties have stipulated that the letters of credit were provided to secure payment of crude oil shipments made in the future. The first letter of credit was issued in November 1991 when the Debtor was $37,450,000.00 past due, and is stipulated as having been issued for the purpose of "securing payment of any amounts owed to SPC in excess of that amount. The second letter of credit, was issued when the Debtor became $5 million dollars past due over and above the $37,450,000.00 and, as stipulated by the parties, was also issued to secure payment of any amounts over $42,450,000.00. The stipulations further state that SPC would ship crude oil based upon the amount of "cushion" created by these letters of credit. Continuously before and all through the preference period, SPC would determine the amount available under the letters of credit before shipping any crude oil to EPR. If sufficient "credit" existed under these letters of credit to allow shipment, then SPC would ship crude oil, but the amount of that shipment was based upon how much of a "cushion" SPC enjoyed under the letters of credit.
Clearly, both letters of credit were issued for but one purpose to induce SPC to keep selling crude oil to EPR. And just as clearly, the collateral pledged by EPR to BBL to induce the issuance of these letters of credit was made on account of the new value EPR expected SPC to extend. EPR effectively prepaid for the credit SPC extended with the secured letters of credit. EPR pledged collateral for but one ultimate reason to induce SPC to continue to extend credit to EPR. And that credit is precisely the new value which SPC here wants to claim as a defense. This it may not do, for that new value is disqualified by the limitation of subsection (B).
This outcome, in addition to being faithful to the straightforward statutory language, is also consistent with the overarching policy of "augmentation and replenishment" that guides the application of the new value defense in general. See Toyota of Jefferson, 14 F.3d at 1091. In the present case, any advances of crude oil on credit up to the $11 million backed by the letters of credit could not have replenished or augmented the estate. See Prescott, 805 F.2d at 728; Meredith Manor, 902 F.2d at 258-59; Ladera Heights, 152 B.R. at 967; In re IRMF, Inc., 144 B.R. 886, 892-93 (Bankr.C.D.Cal.1992). All such "advances" were in reality prepaid by virtue of the letters of credit, for no one (including the trustee in bankruptcy) could prevent SPC from presenting those letters of credit for payment upon default, nor could anyone prevent BBL from honoring them upon presentment. Compton, 831 F.2d at 589-90; see Kroh Brothers Development Company v. Continental Construction Engineers, Inc. (Matter of Kroh Brothers Development Company), 930 F.2d 648 (8th Cir. 1991); Lease-A-Fleet v. Morse Operations, Inc. (In re Lease-A-Fleet), 141 B.R. 853 (Bankr.E.D.Pa.1992); Erman v. Armco, Inc. (Matter of Formed Tubes, Inc.), 46 B.R. 645 (Bankr.E.D.Mich.1985). Meanwhile, any such presentment would have the effect of depleting the bankruptcy estate. See Kroh Brothers, 930 F.2d at 653.[24]
It makes no practical difference that the transfer of property in question took place before the advances were made. True enough, from SPC's point of view, its advances were made on account of the letters of credit (and indirectly, on account of the pledge of property that made their issuance possible). But what is relevant for purposes of the statute is that, from EPR's point of *450 view, it pledged its property on account of the advances. But for SPC's insistence that letters of credit be issued in its favor as a direct precondition for its extending further credit, EPR certainly would not have further encumbered its assets to have the letters of credit issued. SPC was essentially insisting on prepayment as a precondition to further advances, and we can safely conclude, therefore, that it was "on account of" these advances that EPR pledged its property. The statute itself draws no distinction between prepayment and repayment, and neither should the court, for there is no functional difference between the two, either in terms of economic reality or in terms of the underlying policy of the statute (which is to reward only augmentation and replenishment).[25]
We need to recap, in order not to lose track. We have thus far determined that 45.47% of the payments made to SPC during the 90 days immediately preceding the bankruptcy filing were preferential under section 547(b). We have also determined that 45.47% of the crude oil sold by SPC on credit to EPR might qualify as "new value" under section 547(c)(4)(A). Now we have determined that the first $11 million of new value given during the preference period was given "on account of . . . an otherwise unavoidable transfer made by the debtor . . . to or for the benefit of such creditor," thus disqualifying that amount from consideration as "new value." The balance is still available to SPC for its new value defense. In the next section, we will calculate the results of these legal conclusions.
III. CALCULATION
In order to calculate a net preference amount where a new value defense has been urged and proven, it is not enough to know the amount of the preferential payments and the amount of the new value. The two cannot simply be offset against one another. Unlike the old "net result" rule in force under sections 60(a) and (c) of the Bankruptcy Act, section 547(c)(4) requires that the new value be given subsequent to the preferential payment ("to the extent that, after such [preferential] transfer, such creditor gave new value to or for the benefit of the debtor"). 11 U.S.C. § 547(c)(4). This "subsequent advance" rule requires that "each preferential transfer is avoidable until exceeded by subsequent advances of new value. If the amount of the subsequent new value provided by the creditor exceeds a [given] preferential transfer, the defense is complete as to that transfer. Surplus new value, however, cannot be used to offset later preferential transfers." In re Ladera Heights Community Hospital, Inc., 152 B.R. 964, 969-70 (Bankr.C.D.Cal.1993) (Fenning, B.J.); accord Matter of Toyota of Jefferson, 14 F.3d at 1092; see also In re Meredith Manor, Inc., 902 F.2d 257, 259 (4th Cir.1990); In re Jet Florida System, Inc., 841 F.2d 1082 (11th Cir.1988); In re Prescott, 805 F.2d 719, 728 (7th Cir.1986); In re Fulghum Const. Corp., 706 F.2d 171 (6th Cir.1983).[26]
*451 The attached chart sets out the results of the court's application of the subsequent advance rule to preferential payments and allowable new value defenses found in this decision. Column I represents the full amount of each payment made by EPR to SPC during the preference period and alleged to be a preference. Next to those amounts, in Column II, is an amount calculated to be 45.47% of the amount in Column I. The amounts in Column II are the amounts found by the court to be preferential (i.e., transfers made which, by virtue of the parties' stipulations regarding BBL's perfected security interest, are not proceeds of SPC's collateral). Column III represents the dollar value of crude oil shipped by SPC to EPR and claimed by SPC to be new value. The corresponding amounts in Column IV represent an amount calculated to be 45.47% of the amount in Column III, the amount which the court has found to qualify as potential new value because that portion is not secured by an otherwise unavoidable security interest in favor of SPC.
Finally, SPC cannot receive any credit for the first $11 million worth of new value because that amount was secured by the letters of credit, which were in turn secured by transfers which this court has found conferred an indirect benefit on SPC, such that transfers secured thereby disqualified the new value extended by virtue of section 547(c)(4)(B). Column V recalculates the amount of net new value actually available, based upon the amounts found in Column IV, but adjusted for the disqualifying $11 million letters of credit.[27] As it turns out, up until August 18, 1992, there is no qualified new value available because it is not until then, with a shipment of crude oil in the amount of $407,947.75, that the $11 million offset is finally exhausted. The new value credits only begin to kick in at that point against the preference balance. Prior to that point, the preference payments shown in Column II simply accumulate, unreduced by any credit (for no credit is available).[28] Thus, Column V shows negative numbers prior to August 18, 1992, as potential new value is subtracted from the $11 million in letters of credit then securing new advances by SPC to EPR. These negative numbers have no impact on the preference balance, but show the reader the impact of the letters of credit on the potential new value extensions. Beginning August 18, 1992, the numbers in Column V are positive, indicating actual net new value available as an offset in favor of SPC against the total preferential transfer balance.
Column VI carries the total preference balance forward, in a manner that most resembles a checking account balance. Each time a preference payment is made, this balance is increased correspondingly. Each new addition comes from Column II (the column which reflects what the court has determined to be preferential transfers pursuant to 11 U.S.C. § 547(b)). These preferences *452 simply accumulate and build in Column VI until August 18, 1992, for until that point, there are no qualifying new value credits available. On August 18, 1992, the total potential new value finally exceeds the $11 million in letters of credit, and a positive number shows up for the first time in Column V. Positive numbers in Column V operate to reduce the preference balance in Column VI.
Each new preference payment increases the preference balance. Each new net value reduces the preference balance. The preference balance carried forward thus reflects the previous preference balance plus any additional preference payments, and less any available credits for subsequent extensions of new value, in accordance with Ladera Heights.[29]
In this fashion, we achieve a final calculation which incorporates all the legal principles discussed in this opinion, applying them to the facts of the case. The net final number yielded by this process is $11,679,562.78.
Conclusion
For the foregoing reasons, the court concludes that the Trustee's complaint to recover preferential transfer succeeds in part and fails in part. SPC received a preferential transfer equal to 45.47% of the total payments made by wire transfer ($82,000,000.00) from EPR to SPC in the 90 day period prior to the bankruptcy filing. However, the remaining 54.53% of the payments were proceeds of SPC's collateral and so are not recoverable as preferences.
As for the defenses which have been raised by SPC, SPC failed to meet its burden under section 547(c)(2). SPC failed to prove that the wire transfers were made in the ordinary course of business between SPC and EPR or that the transfers conformed to ordinary business terms. SPC did meet its burden at least in part under its section 547(c)(4) defense. SPC has shown that 45.47% of the new credit extended to EPR by SPC could qualify as new value not secured by an otherwise unavoidable security interest. However, the first $11 million worth of such credit was disqualified as having been given on account of an otherwise unavoidable transfer made by EPR to or for the benefit of SPC, to wit the security interest granted BBL to induce the issuance of the letters of credit to SPC.
The court has made calculations under the "subsequent advance" rule and determined that after all preferential payments are considered and due credit is given for qualified new value extended, SPC has received a preference in the amount of $11,679,562.78. Judgment shall be entered in favor of the Trustee in that sum. *453
---------------------------------------------------------------------------------------------------------------------------------
| | I | II | III | IV | V | VI |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| Date | Total | Pref. Payment | New Credit | Gross New Value | Net | Preference |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| Transferred | Payment | (45.47% of Tot. Pay.) | Provided | (45.47% of New Cred.) | New Value[*] | Balance |
|=============|=============|=======================|===============|=========================|==================|================|
| 7-24-92 | $3,000,000 | $1,364,100 | | | ($11,000,000.00) | $1,364,100.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-25-92 | | | $1,118,902 | $508,764.74 | ($10,491,235.26) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-26-92 | | | $1,134,837 | $516,010.38 | ($9,975,224.88) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-27-92 | | | $1,111,832 | $505,550.01 | ($9,469,674.87) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| | | | | | | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-27-92 | $1,000,000 | $454,700 | | | | $1,818,800.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-28-92 | | | $1,117,383 | $508,074.05 | ($8,961,600.82) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| | | | | | | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-28-92 | $1,000,000 | $454,700 | | | | $2,273,500.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-29-92 | | | $957,589 | $435,415.72 | ($8,526,185.10) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| | | | | | | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-29-92 | $1,000,000 | $454,700 | | | | $2,728,200.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-30-92 | | | $1,003,110 | $456,114.12 | ($8,070,070.98) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| | | | | | | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-30-92 | $1,500,000 | $682,050 | | | | $3,410,250.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-31-92 | | | $1,118,185 | $508,438.72 | ($7,561,632.26) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| | | | | | | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 7-31-92 | $3,500.000 | $1,591,450 | | | | $5,001,700.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-01-92 | | | $1,120,670 | $509,568.65 | ($7,052,063.61) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-02-92 | | | $1,119,460 | $509,018.46 | ($6,543,045.15) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-03-92 | | | $1,101,078 | $500,660.17 | ($6,042,384.98) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| | | | | | | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-03-92 | $500,000 | $227,350 | | | | $5,229,050.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-04-92 | | | $1,111,019 | $505,180.34 | ($5,537,204.64) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| | | | | | | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-04-92 | $1,000,000 | $454,700 | | | | $5,683,750.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-05-92 | | | $1,057,084 | $480,656.09 | ($5,056,548.55) | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| | | | | | | |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-05-92 | $1,000.000 | $454,700 | | | | $6,138,450.00 |
|-------------|-------------|-----------------------|---------------|-------------------------|------------------|----------------|
| 8-06-92 | | | $1,004,223 | $456,620.20 | ($4,599,928.35) | |
---------------------------------------------------------------------------------------------------------------------------------
*454
-------------------------------------------------------------------------------------------------------------------------------------
| | I | II | III | IV | V | VI |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| Date | Total | Pref. Payment | New Credit | Gross New Value | Net | Preference |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| Transferred | Payment | (45.47% of Tot. Pay.) | Provided | (45.47% of New Cred.) | New Value* | Balance |
|=============|===============|=======================|===============|=========================|==================|==================|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/06/92 | $2,000,000.00 | $909,400.00 | | | | $7,047,850.00 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/07/92 | | | $960,662.00 | $436,813.01 | ($4,163,115.34) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/07/92 | $2,000,000.00 | $909,400.00 | | | | $7,957,250.00 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/08/92 | | | $935,514.00 | $425,378.22 | ($3,737,737.12) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/09/92 | | | $944,305.00 | $429,375.48 | ($3,308,361.64) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/10/92 | | | $876,567.00 | $398,575.01 | ($2,909,766.63) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/10/92 | $500,000.00 | $227,350.00 | | | | $8,184,600.00 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/11/92 | | | $955,811.00 | $434,607.26 | ($2,475,179.37) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/11/92 | $1,500,000.00 | $682,050.00 | | | | $8,866,650.00 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/12/92 | | | $851,978.00 | $387,394.40 | ($2,087,784.97) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/12/92 | $1,500,000.00 | $682,050.00 | | | | $9,548,700.00 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/13/92 | | | $771,402.00 | $350,756.49 | ($1,737,028.48) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/13/92 | $1,500,000.00 | $682,050.00 | | | | $10,230,750.00 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/14/92 | | | $950,683.00 | $432,275.56 | ($1,304,752.92) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/14/92 | $2,000,000.00 | $909,400.00 | | | | $11,140,150.00 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/15/92 | | | $907,487.00 | $412,634.34 | ($892,118.58) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/16/92 | | | $905,364.00 | $411,669.01 | ($480,449.57) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/17/92 | | | $909,034.00 | $413,337.76 | ($67,111.81) | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/17/92 | $1,000,000.00 | $454,700.00 | | | | $11,594,850.00 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/18/92 | | | $697,180.00 | $407,947.75 | $340,835.94 | $11,254,014.06 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/18/92 | $1,000,000.00 | $454,700.00 | | | | $11,708,714.06 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/19/92 | | | $811,480.00 | $368,979.96 | $368,979.96 | $11,339,734.10 |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| | | | | | | |
|-------------|---------------|-----------------------|---------------|-------------------------|------------------|------------------|
| 08/19/92 | $1,000,000.00 | $454,700.00 | | | | $11,794,434.10 |
-------------------------------------------------------------------------------------------------------------------------------------
*455
--------------------------------------------------------------------------------------------------------------------------------------------
| | I | II | III | IV | V | VI |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| Date | Total | Pref. Payment | New Credit | Gross New Value | Net | Preference |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| Transferred | Payment | (45.47% of Tot. Pay.) | Provided | (45.47% of New Cred.) | New Value* | Balance |
|================|=================|========================|=================|========================|=================|===================|
| 08/20/92 | | | $814,984.00 | $370,573.22 | $370,573.22 | $11,423,860.88 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/21/92 | | | $660,850.00 | $391,426.50 | $391,428.50 | $11,032,432.38 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/21/92 | $2,000,000.00 | $909,400.00 | | | | $11,941,832.38 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/22/92 | | | $791,692.00 | $359,982.35 | $359,982.35 | $11,581,850.03 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/23/92 | | | $964,669.00 | $438,634.99 | $438,634.99 | $11,143,215.04 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/24/92 | | | $879,016.00 | $399,688.58 | $399,688.58 | $10,743,526.46 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/24/92 | $1,000,000.00 | $454,700.00 | | | | $11,198,226.46 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/25/92 | | | $1,015,705.00 | $461,841.06 | $461,841.06 | $10,736,385.40 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/25/92 | $1,000,000.00 | $454,700.00 | | | | $11,191,085.40 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/26/92 | | | $437,964.00 | $199,142.23 | $199,142.23 | $10,991,943.17 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/26/92 | $500,000.00 | $227,350.00 | | | | $11,219,293.17 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/27/92 | | | $386,806.00 | $175,880.69 | $175,860.69 | $11,043,412.48 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/27/92 | $500,000.00 | $227,350.00 | | | | $11,270,762.48 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/28/92 | | | $429,873.00 | $195,463.25 | $195,463.25 | $11,075,299.23 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/28/92 | $1,500,000.00 | $682,050.00 | | | | $11,757,349.23 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/29/92 | | | $488,171.00 | $221,971.35 | $221,971.35 | $11,535,377.88 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/30/92 | | | $385,080.00 | $175,095.88 | $175,095.88 | $11,360,282.00 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/31/92 | | | $519,196.00 | $236,078.42 | $236.078.42 | $11,124,203.58 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 08/31/92 | $500,000.00 | $227,350.00 | | | | $11,351,553.58 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/01/92 | | | $391,208.00 | $177,882.28 | $177,882.28 | $11,173,671.30 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/01/92 | $1,000,000.00 | $454,700.00 | | | | $11,628,371.30 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/02/92 | | | $910,322.00 | $413,923.41 | $413,923.41 | $11,214,447.89 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/02/92 | $1,000,000.00 | $454,700.00 | | | | $11,669,147.89 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/03/92 | | | $1,150,944.00 | $523,334.24 | $523,334.24 | $11,145,813.85 |
--------------------------------------------------------------------------------------------------------------------------------------------
*456
--------------------------------------------------------------------------------------------------------------------------------------------
| | I | II | III | IV | V | VI |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| Date | Total | Pref. Payment | New Credit | Gross New Value | Net | Preference |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| Transferred | Payment | (45.47% of Tot. Pay.) | Provided | (45.47% of New Cred.) | New Value* | Balance |
|================|=================|========================|=================|========================|=================|===================|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/03/92 | $2,000,000.00 | $909,400.00 | | | | $12,055,213.65 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/04/92 | | | $1,184,115.00 | $538,417.09 | $538,417.09 | $11,516,796.56 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/04/92 | $3,000,000.00 | $1,364,100.00 | | | | $12,880,896.56 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/05/92 | | | $1,172,967.00 | $533,348.09 | $533,348.09 | $12,347,548.47 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/06/92 | | | $1,178,350.00 | $535,795.75 | $535,795.75 | $11,811,752.72 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/07/92 | | | $1,212,780.00 | $551,451.07 | $551,451.07 | $11,260,301.65 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/08/92 | | | $1,275,253.00 | $579,857.54 | $579,857.54 | $10,880,444.11 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/08/92 | $500,000.00 | $227,350.00 | | | | $10,907,794.11 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/09/92 | | | $1,131,401.00 | $514,446.03 | $514,448.03 | $10,393,346.08 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/09/92 | $1,000,000.00 | $454,700.00 | | | | $10,846,046.08 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/10/92 | | | $1,162,091.00 | $528,402.78 | $528,402.78 | $10,319,643.30 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/10/92 | $2,000,000.00 | $909,400.00 | | | | $11,229,043.30 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/11/92 | | | $1,207,671.00 | $549,128.00 | $549,128.00 | $10,679,915.30 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/11/92 | $3,500,000.00 | $1,591,450.00 | | | | $12,271,365.30 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/12/92 | | | $1,117,286.00 | $508,029.94 | $508,029.94 | $11,763,335.36 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/13/92 | | | $1,104,740.00 | $502,325.28 | $502,325.28 | $11,261,010.08 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/14/92 | | | $1,129,023.00 | $513,366.76 | $513,366.76 | $10,747,643.32 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/14/92 | $500,000.00 | $227,350.00 | | | | $10,974,993.32 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/15/92 | | | $996,310.00 | $453,022.16 | $453,022.16 | $10,521,971.16 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/15/92 | $1,000,000.00 | $454,700.00 | | | | $10,976,671.16 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/16/92 | | | $941,590.00 | $426,140.97 | $428,140.97 | $10,548,530.19 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/16/92 | $1,000,000.00 | $454,700.00 | | | | $11,003,230.19 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| 09/17/92 | | | $856,524.00 | $389,461.46 | $389,461.46 | $10,613,768.73 |
|----------------|-----------------|------------------------|-----------------|------------------------|-----------------|-------------------|
| | | | | | | |
--------------------------------------------------------------------------------------------------------------------------------------------
*457
---------------------------------------------------------------------------------------------------------------------------------------------------
| | I | II | III | IV | V | VI |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| Date | Total | Pref. Payment | New Credit | Gross New Value | Net | Preference |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| Transferred | Payment | (45.47% of Tot. Pay.) | Provided | (45.47% of New Cred.) | New Value* | Balance |
|===============|===================|=========================|==================|=======================|====================|=====================|
| 09/17/92 | $1,000,000.00 | $454,700.00 | | | | $11,066,468.73 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/18/92 | | | $891,813.00 | $405,507.37 | $405,507.37 | $10,662,961.36 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/18/92 | $2,500,000.00 | $1,136,750.00 | | | | $11,799,711.35 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/19/92 | | | $889,045.00 | $404,248.76 | $404,248.76 | $11,395,462.60 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/20/92 | | | $910,718.00 | $414,103.47 | $414,103.47 | $10,981,359.13 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/21/92 | | | $875,601.00 | $398,135.77 | $398,135.77 | $10,583,223.36 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/21/92 | $500,000.00 | $227,350.00 | | | | $10,610,573.36 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/22/92 | | | $785,851.00 | $357,326.45 | $357,326.45 | $10,453,246.91 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/22/92 | $1,000,000.00 | $454,700.00 | | | | $10,907,946.91 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/23/92 | | | $852,514.00 | $387,636.12 | $387,638.12 | $10,520,308.79 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/23/92 | $1,000,000.00 | $454,700.00 | | | | $10,975,008.79 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/24/92 | | | $700,936.00 | $318,715.60 | $318,715.60 | $10,656,293.19 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/24/92 | $1,000,000.00 | $454,700.00 | | | | $11,110,993.19 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/25/92 | | | $747,841.00 | $340,043.30 | $340,043.30 | $10,770,949.89 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/25/92 | $2,000,000.00 | $909,400.00 | | | | $11,580,349.89 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/26/92 | | | $795,062.00 | $361,514.69 | $361,514.69 | $11,318,835.20 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/27/92 | | | $873,268.00 | $397,074.96 | $397,074.96 | $10,921,760.24 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/28/92 | | | $888,014.00 | $403,779.97 | $403,779.97 | $10,517,980.27 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/28/92 | $750,000.00 | $341,025.00 | | | | $10,859,005.27 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/29/92 | | | $912,040.00 | $414,704.59 | $414,704.59 | $10,444,300.68 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/29/92 | $1,000,000.00 | $454,700.00 | | | | $10,899.000.68 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/30/92 | | | $992,977.00 | $451,506.64 | $451,506.64 | $10,447,494.04 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 09/30/92 | $1,000,000.00 | $454,700.00 | | | | $10,902,194.04 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/01/92 | | | $960,092.00 | $436,553.83 | $436,553.83 | $10,465,640.21 |
---------------------------------------------------------------------------------------------------------------------------------------------------
*458
---------------------------------------------------------------------------------------------------------------------------------------------------
| | I | II | III | IV | V | VI |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| Date | Total | Pref. Payment | New Credit | Gross New Value | Net | Preference |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| Transferred | Payment | (45.47% of Tot. Pay.) | Provided | (45.47% of New Cred.) | New Value* | Balance |
|===============|===================|=========================|==================|=======================|====================|=====================|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/01/92 | $1,500,000.00 | $682,050.00 | | | | $11,147,690.21 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/02/92 | | | $1,016,330.00 | $462,125.25 | $462,125.25 | $10,685,564.96 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/02/92 | $2,250,000.00 | $1,023,075.00 | | | | $11,708,639.96 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/03/92 | | | $1,055,082.00 | $479,745.79 | $479,745.79 | $11,228,894.17 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/04/92 | | | $1,049,241.00 | $477,089.88 | $477,089.88 | $10,751,804.29 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/05/92 | | | $1,049,860.00 | $477,371.34 | $477,371.34 | $10,274,432.95 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/05/92 | $1,000,000.00 | $454,700.00 | | | | $10,729,132.95 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/06/92 | | | $1,019,000.00 | $463,339.30 | $463,339.30 | $10,265,793.65 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/06/92 | $1,000,000.00 | $454,700.00 | | | | $10,720,493.65 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/07/92 | | | $982,341.00 | $446,670.45 | $446,670.45 | $10,273,823.20 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/07/92 | $1,500,000.00 | $682,050.00 | | | | $10,955,873.20 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/08/92 | | | $1,015,491.00 | $461,743.76 | $461,743.76 | $10,494,129.44 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/08/92 | $2,000,000.00 | $909,400.00 | | | | $11,403,529.44 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/09/92 | | | $1,065,463.00 | $484,466.03 | $484,466.03 | $10,919,063.41 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/09/92 | $2,500,000.00 | $1,136,750.00 | | | | $12,055,813.41 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/10/92 | | | $1,049,725.00 | $477,310.41 | $477,310.41 | $11,578,503.00 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/11/92 | | | $1,043,403.00 | $474,435.34 | $474,435.34 | $11,104,067.65 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/12/92 | | | $1,018,074.00 | $462,918.25 | $462,918.25 | $10,641,149.41 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/13/92 | | | $1,008,406.00 | $458,522.21 | $458,522.21 | $10,182,627.20 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/13/92 | $1,500,000.00 | $682,050.00 | | | | $10,864,677.20 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/14/92 | | | $1,029,782.00 | $468,241.88 | $468,241.88 | $10,396,435.32 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/14/92 | $1,000,000.00 | $454,700.00 | | | | $10,851,135.32 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| 10/15/92 | | | $1,015,042.00 | $461,539.60 | $461,539.60 | $10,389,595.72 |
|---------------|-------------------|-------------------------|------------------|-----------------------|--------------------|---------------------|
| | | | | | | |
---------------------------------------------------------------------------------------------------------------------------------------------------
*459
-----------------------------------------------------------------------------------------------------------------------------------------------------
| | I | II | III | IV | V | VI |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| Date | Total | Pref. Payment | New Credit | Gross New Value | Net | Preference |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| Transferred | Payment | (45.47% of Tot. Pay.) | Provided | (45.47% of New Cred.) | New Value* | Balance |
|==============|==================|=======================|=====================|===========================|====================|====================|
| 10/15/92 | $2,000,000.00 | $909,400.00 | | | | $11,298,995.72 |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| 10/16/92 | | | $1,012,859.00 | $460,546.99 | $460,546.99 | $10,838,448.73 |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| | | | | | | |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| 10/16/92 | $3,000,000.00 | $1,964,100.00 | | | | $12,202,548.73 |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| 10/17/92 | | | $1,081,359.00 | $491,693.94 | $491,693.94 | $11,710,854.79 |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| 10/18/92 | | | $1,091,682.00 | $496,387.81 | $496,387.81 | $11,214,466.98 |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| 10/19/92 | | | $773,514.00 | $351,716.82 | $351,716.82 | $10,862,750.16 |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| 10/20/92 | | | $365,714.00 | $166,290.16 | $166,290.16 | $10,696,460.00 |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| | | | | | | |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| | | | | | Total | $10,696,460.00 |
|--------------|------------------|-----------------------|---------------------|---------------------------|--------------------|--------------------|
| | | | | | | |
-----------------------------------------------------------------------------------------------------------------------------------------------------
NOTES
[1] Crude oil was delivered nightly via pipes connecting the tanks to the refinery.
[2] SPC used the letters of credit to set the limits on its crude oil advances. If the amount owed to SPC in excess of the $37,450,000.00 was less than the $11 million which they could access under the letters of credit, SPC would provide new crude oil supply. Payments to SPC would reduce the "old debt" which EPR was bound to pay, and thereby also increasing the amounts available to SPC under the letter of credit.
[3] During the preference period, SPC was paid from three sources. First it received amounts on a daily basis via wire transfer. Second, on August 20, 1992, SPC drew $5,000,000.00 from the smaller letter of credit. Third, SPC swept an equity account which contained over $716,695.00 on October 20 and 21, 1992. The Trustee does not seek to recover the latter two transfers.
[4] Of course, the defendant also shoulders the burden of going forward with evidence to rebut the trustee's case in chief, though it does not have the burden of proof. Thus, for example, were the trustee to put forward sufficient evidence to make out a prima facie case for the fifth element of her cause of action (i.e., that the transfer enabled the creditor to receive more than it would have received in a chapter 7 liquidation), the burden would then shift to the defendant to come up with evidence sufficient to call into question whether the trustee had sustained her burden of proof.
[5] The parties have stipulated that:
According to the agreement of the parties, payment for crude oil was due the 20th day of the month following the month of delivery. The payments made by EPR to SPC during the preference period were applied by SPC to the oldest outstanding invoices.
[6] SPC at trial attempted to put on evidence that the estate would have enough money to pay SPC in full, to rebut the fifth element of the Trustee's case. The Trustee complained that SPC was trying to escape its stipulation as to insolvency. The stipulation goes only to the third element of the Trustee's case, however. SPC was merely attempting to counter the trustee's argument that SPC had received more than it otherwise would have received in a chapter 7 liquidation. Says SPC, there are claims below SPC (the claims of EPR's limited partners) that will not be paid in full, so its stipulation as to insolvency is still valid. Whether SPC's factual contention has merit is discussed later in this decision.
[7] It does not matter whether the prepetition payment pays off the debt in full. That is not the issue. What is relevant is that the creditor can retire $1.00 of debt with $1.00 of payment. If a subsequent bankruptcy would force the creditor to retire $1.00 of debt with anything less than $1.00 in payment (as might happen if there are insufficient assets to pay all similarly situated creditors in full, for example), then the prepetition transfer conferred on the creditor a greater percentage recovery than would have the bankruptcy's distribution scheme had the transfer not been made.
[8] The purpose of the contention is to rebut the Trustee's allegation that, assuming payments were applied to the unsecured portion of SPC's claim, SPC received more than it would have received had the payments been redistributed via the chapter 7 process. Notwithstanding the estate's stipulated insolvency, a given creditor may be high enough up on the priority ladder that it could expect to be paid in full even though creditors lower down receive less than full payment. This most frequently occurs in cases involving payment to taxing authorities, which enjoy a priority junior only to administrative claims. Here, SPC maintains that the estate's overall insolvency may be visited on the holders of limited partnership interests, leaving open at least a theoretical possibility that a class of unsecured creditors senior to such interests might still be paid in full.
[9] Collier's says that a partially secured (undersecured) creditor generally receives preferential payments whenever they are paid pre-petition. The statement refers to the application aspect of the Greater Percentage Test. The partially secured creditor generally applies this payment to the unsecured portion of its claim, receiving 100% payment on that portion of its claim, while retaining the full value of its lien or security interest. The result is that the partially secured creditor receives 100% payment on a claim which would not receive 100% payment in bankruptcy, and also receives 100% payment on its secured claim as a result of its lien.
Collier's recognizes, however, that the situation is different if the source of payment is proceeds of the creditor's collateral, distinguishing between payment from property covered by the creditor's lien (proceeds) and property not covered by the lien (nonproceeds). Collier's may not use the precise terminology employed in this opinion, but it does subscribe to the same analytical framework.
[10] The uncontroverted testimony of SPC's expert, Ms. Kelly Biar, established that all of the funds used to make the payments which are the subject of this preference action were proceeds of a security interest in current assets (inventory, accounts receivable, contract rights, and proceeds). Ms. Biar is a certified public accountant and a manager with Price Waterhouse.
[11] Interestingly, BBL has filed a proof of claim in this case, in which it has apparently asserted its entitlement to approximately 46% of the collateral securing SPC's debt. The proof of claim has not been introduced into evidence in this case, but even if it had been, the analysis would not change. The trustee would look to the documentation supporting the proof of claim and discover that BBL holds no independently perfected security interest. The trustee would then have to object to the claim, leaving it to BBL to then pursue SPC (perhaps thereby forcing the trustee to file an interpleader to avoid multiple liability). But there is nothing in this analysis that would permit (or obligate) the trustee to enforce the intercreditor agreement in his own name.
[12] It is irrelevant for our inquiry that all the monies transferred to SPC were encumbered by someone's security interest. The point of the particularly narrow inquiry in which we have been engaged is not whether, in the broadest sense, the estate was diminished. The point instead is whether a particular creditor was preferred. As it turns out, one creditor's receipt of another creditor's collateral does diminish the estate vis-a-vis unsecured creditors, but that is not the reason the analysis here is correct. The fifth element of section 547(b) focuses a court's attention on the preferential impact of a given transfer. Without a doubt, transferring one creditor's collateral to another creditor has just such an impact.
[13] The court found that subsection (C) had two functions which in effect made it distinct from subsection (B). First, subsection (C) has an evidentiary function. The court said:
If the debtor and creditor dealt on terms that the creditor testifies were normal for them but that are wholly unknown in the industry, this casts some doubt on his testimony. Preferences are disfavored, and subsection (C) makes them harder to prove.
Id. 3 F.3d at 1032. Second, subsection (C) would protect other creditors by ensuring that one or more of the debtor's creditors did not work out a special deal before the preference period which would allow them to get paid, but also protect against a preference being found if only subsection (B) were used.
The court also found the mere existence of subsection (C) as relevant to the inquiry. The court said:
The functions we have identified, combined with a natural reluctance to cut out and throw away one-third of an important provision of the Bankruptcy Code, persuade us that the creditor must show that the payment he received was made in accordance with the ordinary business terms in the industry.
Id.
[14] The picture painted was one of absolute control on the part of SPC. If SPC's demands were not met, they would cut off the flow of crude. All of the crude supplied to the refinery came from tanks leased to SPC and adjacent to the refinery, and this gave SPC total control over the flow of crude oil into the refinery. SPC maintained personnel at the valve which controlled the flow to monitor and protect its crude. At one point and time SPC even locked the tanks, to maintain complete control.
[15] One argument raised by SPC at trial should be discussed briefly. SPC argued that all of the evidence produced showed that the relationship between SPC and EPR was "extraordinary" and not usual for the industry. From this position, SPC further argued that because of the especially extraordinary nature of the relationship, the usual industry should not apply. Indeed, SPC seemed to suggest that no actual baseline industry existed.
This argument while inventive would seem to turn subparagraph (C) on its head, if it were accepted by the court. It seems that SPC is arguing that because their relationship with EPR is so outside the ordinary course of business for oil crude suppliers (or any other type of supplier for that matter), they should be exempt from showing that they are within the ordinary course of business type relationships. The basic effect of their argument is "we can not meet the section 547(c)(2)(C) requirement, so, we should not have to meet it." The plain hard facts are that the type of relationship which SPC is arguing they had with EPR is the exact type of relationship that the subparagraph (C) was meant to protect against. Section 547(c)(2)(C) protects those types of relationships which do not vary from the ordinary business terms so greatly as to be called "unusual" or "idiosyncratic. Matter of Tolona, 3 F.3d at 1034, Fiber Lite, 18 F.3d at 224. Just because SPC calls its relationship extraordinary does not remove it from the grasp of subparagraph (C). To the contrary, this is exactly why the relationship does not meet the test for that element.
[16] If Prescott and Wolinsky in fact announce a different rule, then that rule must be rejected as inconsistent with the plain meaning of the statute. Only when a plain facial reading of the statute reveals ambiguities (either internally or in the larger context of the overall statutory scheme), or when the plain meaning of the language of the statute would lead to absurd results which could not have been intended by Congress, are we then free to depart from the plain meaning to look elsewhere for assistance in divining the statute's true meaning. Sheridan v. United States, 487 U.S. 392, 403, 108 S. Ct. 2449, 2456, 101 L. Ed. 2d 352 (1988). A creditor making new advances of the sort we find here does so in the context of a security agreement not unlike the one found here one containing a future advance clause rendering all such advances automatically secured. Absent affirmative proof that the creditor intended its credit to be unsecured, the usual (and justified) assumption is that the future advance clause rendered the advances secured. Should the creditor subsequently benefit by a windfall appreciation in its collateral value (e.g., the price of oil suddenly rockets to $60 per barrel with a new oil embargo), then we would not be surprised to find the creditor insisting that all of its indebtedness is secured including the indebtedness arising from these advances. Any other rule would require us to value the creditor's collateral position at the point of each extension of new value to test whether the creditor were undersecured, a decidedly unwieldy and impractical burden that this court doubts was what Congress had in mind when it wrote this particular provision. The plain meaning interpretation adopted by this court both comports with the reality of secured financing documents and avoids this sort of unwieldy litigation. No ambiguities or absurdities are suggested that require a departure from plain meaning.
[17] If it does need a defense, the one such a creditor will normally reach for is that found in section 547(b)(5), which looks to see whether the creditor has improved its position at the conclusion of the ninety day period relative to the beginning of that period. See 11 U.S.C. § 547(c)(5).
[18] Another example demonstrates why this is true. Suppose a creditor is owed $100,000 and has collateral valued at $50,000. Suppose as well that the debt is past due, so that there are current arrears of $25,000 (the creditor has not yet accelerated the note). Now suppose that, within the preference period, the debtor makes a payment of $5,000 to the creditor, and that the creditor ships $5,000 worth of goods to the debtor. The goods, by the terms of the security interest, become the collateral of the creditor upon the debtor's receipt (i.e., attachment takes place). Does the creditor get to shelter the preferential payment with the shipment of the goods? Of course not, because the estate has not been augmented. The $5,000 payment reduced the indebtedness to $95,000, but the shipment increased the indebtedness back to $100,000. Meanwhile, the collateral value available to the creditor increased by $5,000 (recall that, in this hypothetical, all proceeds are being retained, perhaps in a lockbox, and the payment made to the creditor comes from elsewhere which is why it is preferential). The estate (at least vis-a-vis unsecured creditors) has not been augmented. The additional $5,000 in new value is encumbered by a security interest, such that it will not be available to unsecured creditors.
Of course the creditor's deficiency claim has been reduced too, but that is not augmentation in the bankruptcy sense. After all, paydown of any unsecured debt occurs in all preferential transfers, yet we do not treat the paydown as itself also "new value" available as a defense. If we did, then, ipso facto, all recipients would have a new value defense, and the statute would be rendered a nullity.
[19] Here, it is worthwhile to recall that the burden of proof on each and every element of the new value defense devolved on SPC. Absent affirmative evidence of waiver, the court must give effect to the loan documents, which operate automatically.
[20] This is another important point to emphasize in terms of commercial expectations. In terms of absolute impact on the estate's assets available for distribution to unsecured creditors in a chapter 7 liquidation, two preferences have taken place. One preference is the transfer of payment to the vendor, while the other is the attachment of the security interest to the goods by virtue of the working capital lender's after-acquired property clause. The policy question is from whom ought the estate to be able to recover the preference, and who ought to be sheltered from such a recovery? The vendor has extended unsecured credit to the estate, in exchange for its receipt of a preferential transfer, and both Toyota of Jefferson and Ladera Heights tell us that such a creditor ought to be insulated from a preference recovery. The working capital lender whose collateral position has been gratuitously augmented by the vendor's extension of unsecured credit, on the other hand, remains vulnerable to a preference attack, except to the extent that the lender can find shelter in the section 547(b)(5) defense. That defense counsels that such a lender will suffer no liability to the estate so long as its overall inventory position, measured at the beginning and at the end of the preference period, has not been improved. Again, the right commercial result is achieved, for one presumes that the inventory of a going concern (even one in financial straits) turns. So long as the inventory actively turns but the creditor's position is not enhanced, the working capital lender will have a valid defense. Only when the lender's inventory position is allowed to grow will it suffer liability for a preference. And that, of course, is the right economic, as well as legal, result.
[21] More accurately, have had. The Trustee and BBL entered into a global settlement of all claims and disputes prior to the trial of this preference litigation.
[22] 11 U.S.C. § 547(c)(4)(B) provides:
(c) The trustee may not avoid under this section a transfer
(4) to or for the benefit of a creditor, to the extent that, after such transfer, such creditor gave new value to or for the benefit of the debtor
(B) on account of which new value the debtor did not make an otherwise unavoidable transfer to or for the benefit of the debtor.
[23] That subsection requires a trustee alleging a preferential transfer to show that the transfer was made "to or for the benefit of a creditor." 11 U.S.C. § 547(b)(1).
[24] Indeed, the depletion in fact occurred when the letters of credit were issued. Compton, supra; Kroh Brothers, supra.
[25] The court recognizes that the Fifth Circuit used the term "subsequently repaid" in its brief, one-sentence discussion of section 547(c)(4)(B). See Matter of Toyota of Jefferson, 14 F.3d at 1092. It would be a mistake to place too much weight on the circuit's choice of words, however, for the circuit was clearly not focused on the issue presented by the facts of our case. Indeed, the circuit court's approach to the facts presented in their case is consistent with the one we take here. The circuit court seems to have chosen the words it did primarily because the issue presented was whether subsequent preferential payments would disqualify all prior extensions of new value. The court quoted Professor Countryman's observation that subsequent payments which are themselves voidable as preferences are qualified precisely because they do not run afoul of the limitations of section 547(c)(4)(B). Id. The court then held that the final preferential payment in the case before them would not disqualify previous advances of new value. Id., at 1093. The rationale for the decision, however, was that the estate is still augmented. The court did not have before it the question presented by our facts may prepayments count as payment "on account of" the new value in question? It is the essence of letters of credit transactions that the debtor prepays for credit. It seems to this court that the timing of the transfer should not alter the "on account of" relationship between the transfer of property by the debtor and the extension of new value by the creditor. Nothing in Toyota of Jefferson, including the offhand reference discussed here, suggests otherwise.
[26] It should be noted that within our analysis of the "new value" defense we have followed the formula set out by the Fifth Circuit in Toyota of Jefferson and by Congress in the legislative history accompanying section 547(c)(4). See H.R.REP. No. 95-595, 95th Cong., 1st Sess. 374, reprinted in U.S.CODE CONG. AND ADMIN.NEWS 5787, 6330 (1978). In Toyota of Jefferson, the Fifth Circuit also accepted the view that the "new value" extended need not remain totally unpaid. Toyota of Jefferson, 14 F.3d at 1093. While recognizing that other circuits have so held, the Toyota of Jefferson, court found that section 547(c)(4) only requires the new value not be repaid by "an otherwise unavoidable transfer." Id. (citing In re Kroh Brothers Development Company, 930 F.2d 648, 652 (1990), for the holding that the "new value" must go unpaid).
In effect a court's analysis under the "subsequent advance" rule of section 547(c)(4) is most closely analogous to the balancing of a checking account. Each time a preferential payment is made the account is credited and the balance is increased accordingly. New value which is given on behalf of the creditor results in a debit of the account and thereby decreases the preference balance. However, there is one caveat. The preference balance can never retain a negative balance, even though the creditor may give "new value" greater than the current amount of preference. This is of course because to give the creditor the benefit of a negative balance would in effect give the creditor an offset for new value given prior to the payment of the preference, in express derogation of the statute. See 11 U.S.C. § 547(c)(4).
[27] The court has no reason to assume that the letters of credit are anything less than fully secured, especially in light of other orders that have been entered in this bankruptcy case which in effect presume just that.
[28] Because, to reiterate, all of the new value up to that point is disqualified by the letters of credit, or more precisely, by the fact that the letters of credit were collateralized for the direct benefit of BBL, but the ultimate benefit of SPC.
[29] If the new value ever exceeded the total amount of preference balance, the "account" would simply be reduced to zero. Following Ladera Heights, we would not "carry" the positive balance of new value forward. It would not "accumulate" as an available credit for subsequent new preferences. This never occurs here, however. Once qualifying new value begins to appear on August 18, 1992, it is immediately consumed by the total preference balance.
[*] Net of disqualified new value ($11 million) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572776/ | 2 So.3d 272 (2009)
FRASER
v.
STATE.
No. 4D07-2557.
District Court of Appeal of Florida, Fourth District.
February 4, 2009.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572882/ | 576 N.W.2d 438 (1998)
227 Mich. App. 649
James SAAD, d/b/a Quick Made Sign & Trophy, Plaintiff-Appellant,
v.
CITIZENS INSURANCE COMPANY OF AMERICA, Defendant-Appellee.
Docket No. 196748.
Court of Appeals of Michigan.
Submitted October 14, 1997, at Detroit.
Decided February 3, 1998, at 9:20 a.m.
Released for Publication April 30, 1998.
*439 Leland T. Schmidt, Mt. Clemens, for Plaintiff-Appellant.
Patterson, Phifer & Phillips, P.C. by Michael D. Patterson and Lisa A. Cylar, Detroit, for Defendant-Appellee.
Before MacKENZIE, P.J., and SAWYER and NEFF, JJ.
SAWYER, Judge.
Plaintiff appeals from an order of the circuit court granting summary disposition to defendant on the basis that the period of limitation had expired on plaintiff's claim under an insurance policy. We affirm.
Plaintiff suffered a theft loss on May 12, 1994, and sought coverage under an insurance policy issued by defendant. Notice of the loss was given to defendant on either May 12, 1994, or May 26, 1994.[1] On December 16, 1994, defendant mailed a notice to plaintiff formally denying the claim, which notice plaintiff alleges to have received on December 19. Thereafter, plaintiff brought suit on December 18, 1995.
The trial court granted summary disposition to defendant on the basis that the contractual period of limitation, one year, had expired on December 16, 1995, two days before suit was actually filed and one year after defendant mailed the denial to plaintiff. Plaintiff contends that the period of limitation did not expire until December 19, 1995, one year after plaintiff received the denial notice.
There is no dispute that the period of limitation was tolled from the time of the notice of loss until the claim was denied. See Tom Thomas Organization, Inc. v. Reliance Ins. Co., 396 Mich. 588, 242 N.W.2d 396 (1976). The question presented here is one of first impression: does the tolling end when the notice of denial is mailed by the insurer or when it is received by the insured?
Both sides present strong arguments for their positions, but cite no controlling authority. The cases cited either deal with specific statutes or involve cases in which the dispute was the adequacy of the notice, not the timing of the notice.
We do find the following statement by this Court in Hamdi v. Michigan Basic Property Ins. Ass'n, 190 Mich.App. 333, 337-338, 475 N.W.2d 467 (1991):
The limitations period began to run on February 15, 1988, the date of the loss. The period was then tolled three days later when plaintiff gave notice of his loss. On August 15, 1988, the period began to run again when defendant sent plaintiff a letter formally denying coverage. In re Certified Question [Ford Motor Co. v. Lumbermens Mut. Casualty Co., 413 Mich. 22, 319 N.W.2d 320 (1982) ]; Bourke v. North River Ins. Co., 117 Mich.App. 461, 324 N.W.2d 52 (1982). If plaintiff had taken no further action against defendant, the statutory period of limitations would have expired on August 12, 1988, and plaintiff's lawsuit would have been time-barred. See Kassab v. Michigan Basic Property Ins. Ass'n, 185 Mich.App. 206, 211, 460 N.W.2d 300 (1990).
*440 However, when plaintiff opted to appeal under defendant's internal appeals procedure, the limitations period was again tolled.... Defendant's appeals committee formally denied the appeal on October 14, 1988, thus causing the limitations period to recommence. [Emphasis added.]
While Hamdi is persuasive, it is not controlling. First, it dealt with the interpretation of a statute establishing a standard fire-loss policy. Second, the issue that resolved the case was whether the period of limitation was tolled while the internal appeal process was underway; the dates of sending and receiving the notices were not relevant to the resolution of the appeal.
We do note with interest, however, the Hamdi Court's reference to the period of limitation recommencing when the appeals committee formally denied the appeal. Indeed, in Thomas, supra, the Supreme Court refers to the period of limitation being tolled "until the insurer formally denies liability." Id. at 594, 242 N.W.2d 396. Thus, the emphasis is on the action taken by the insurer, not when the information is received by the insured.
Ultimately, it probably makes little difference, other than to the outcome of this case, which rule is adopted. While the parties do make reference to practical considerations concerning both rules, both insurers and insureds can adjust their procedures to either rule. If we adopt a "date mailed" rule, insureds merely have to calculate the filing deadline from the postmark on the notice. If a "date received" rule is adopted, then insurers will want to send their denials by certified or registered mail so that there will be a record of when the notice is received.
With these considerations in mind, we are satisfied that the trial court correctly interpreted the existing case law as providing a tolling until the claim is formally denied and that formal denial occurs when the insurer mails the notice of denial. Accordingly, the trial court properly granted summary disposition to defendant.
In light of our resolution of this issue, we need not consider the other issue raised by plaintiff in his brief.
Affirmed. Defendant may tax costs.
MacKENZIE, P.J., concurred.
NEFF, Judge (dissenting ).
I respectfully dissent. I hold that the operative date for purposes of the tolling provision of the contractual period of limitation is December 19, 1994, the date plaintiff received notice of the denial of his claim. Therefore, the filing of the complaint on December 18, 1995, was timely, assuming that notice of the loss was given on May 12, 1994, as plaintiff alleges. Because there is a dispute over the date plaintiff notified defendant of the loss and the trial court did not resolve the dispute, this case should be remanded to the trial court for a determination of the date on which notice was given.[1]
As the majority opinion notes, the question for decision is whether the tolling period ends when the insurer mails the notice of denial or when the insured receives it. This case is a good vehicle to decide this question because there appears to be no dispute that the denial notice was mailed on December 16, 1994, and received on December 19, 1994.
In the context of a contractual period of limitation, as here, the date of loss starts the period running, but it is tolled from the time of notice of loss to the insurer until the latter "formally denies liability." Tom Thomas Organization, Inc. v. Reliance Ins. Co., 396 Mich. 588, 593-594, 242 N.W.2d 396 (1976); see also In re Certified Question, Ford Motor *441 Co. v. Lumbermens Mut. Casualty Co., 413 Mich. 22, 319 N.W.2d 320 (1982). The question is whether liability is formally denied on the date the notice is mailed or when it is received. It is akin to asking whether a tree falling in the forest makes a sound if there is no one present to hear it.
The answer can be found in the purpose of the judicially created tolling provision; it is for the protection of policyholders and to allow a full year to bring suit. Hamdi v. Michigan Basic Property Ins. Ass'n, 190 Mich.App. 333, 336, 475 N.W.2d 467 (1991). By providing that the tolling period ends when the notice is mailed, the insured is deprived of the full period in the contract to bring suit and is compelled to attempt to anticipate action by the insurer with no real opportunity to do so. The insured cannot be aware of the denial until receipt of the notice. Therefore, if the tolling of the contractual period of limitation ends before receipt, i.e., on the date the denial is mailed, the insured is deprived of the full, one-year period in which to file suit. Here the insured had only 362 days to file suit, not 365, and the rule created by the majority is inconsistent with the purpose of tolling.
An additional factor should be considered. The rule created by the majority will, in some instances, result in unnecessary litigation in those cases in which the insured, fearing denial of the claim and desiring to preserve the right to proceed under the policy, files suit before receipt of notice only to find out that the insurer has decided to pay the claim. While this might be seen as a minor inconvenience because the litigation can be easily dismissed, it nevertheless creates an additional burden on the insured and the justice system.
I agree with the majority that insurers can easily guarantee that the date of receipt is capable of exact determination by sending denial notices via some form of restricted mail, a common practice in the insurance industry in other contexts. The inconvenience of such a practice would be minimal and would serve the purposes of protecting policy holders and the judicially created tolling concept as well as the broader purpose of discouraging unnecessary litigation.
I would reverse and remand.
NOTES
[1] There is a dispute concerning when notice of loss was given. However, resolution of that dispute is not required for resolution of this appeal.
[1] As pointed out in both the trial court opinion and the majority opinion here, if the tolling period ends when the denial notice is mailed, it does not matter in this case when plaintiff gave notice of the loss because he filed suit more than a year after tolling of the period of limitation ended and, by definition, after the period of limitation ran. However, if the tolling period ended when plaintiff received the denial notice, then the date of notice of loss becomes crucial. If notice was given on May 12, 1994, the period of limitation was tolled until December 19, 1994, and because suit was filed on December 18, 1995, it was timely. On the other hand, if notice was given on May 26, 1994, the period of limitation ran for two weeks before it was tolled. Receipt of the denial notice on December 19, 1994, would mean that the period of limitation would run December 5, 1995, and plaintiff's complaint filed on December 18 would be untimely. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572887/ | 2 So.3d 1168 (2009)
STATE of Louisiana, Appellee
v.
Shedrick Eugene ALEXANDER, Appellant.
No. 43,796-KA.
Court of Appeal of Louisiana, Second Circuit.
January 14, 2009.
*1169 James Edward Beal, Jonesboro, Louisiana Appellate Project, for Appellant.
Jerry L. Jones, District Attorney, R. Nicholas Anderson, Rosalind D. Jones, Assistant District Attorneys, for Appellee.
Before GASKINS, PEATROSS and LOLLEY, JJ.
LOLLEY, J.
The defendant, Shedrick Eugene Alexander, appeals the judgment of the Fourth Judicial District Court, Parish of Ouachita, State of Louisiana, where a jury found him guilty as charged. The trial court subsequently sentenced him to serve 15 years' hard labor for distribution of cocaine, the first 2 years to be served without benefit of probation, parole, or suspension of sentenced; 7½ years' hard labor for conspiracy to distribute cocaine; and, 5 years' hard labor for possession of cocaine, the sentences to be served concurrently. For the following reasons, we affirm.
FACTS
In April 2005, a police informant, Hershell Poole, went to a convenience store in Monroe, Louisiana, to buy crack cocaine from a man named Tony. Poole was wearing an audio device and had $200.00 in "buy money." Narcotics agents had set up surveillance across the street from the store where they could videotape the transaction.
While at the store, Poole was approached by Marie Leonard who asked what Poole was looking for. Poole indicated he wanted to buy $200.00 worth of crack cocaine. Leonard used a pay phone to set up a transaction that was to take place at her residence located across the street from the store. Poole gave her $100.00 in advance, and Leonard walked across the street to her residence. Next, Alexander arrived at Leonard's residence, and the money was exchanged for drugs. Leonard crossed the street and gave Poole five rocks of crack cocaine. She returned to Poole for the remaining cash and went back and gave Alexander the $100.00. As Alexander prepared to hand Leonard the remaining drugs, police arrested him. Three rocks of crack cocaine and the $200.00 in "buy money" were found on Alexander.
Alexander was charged by bill of information with distribution of cocaine, possession of cocaine, and conspiracy to distribute cocaine-violations of La. R.S. 40:967(A); La. R.S. 40:967(C); and, La. R.S. 14:26 respectively. Following a trial by jury, he was convicted as charged. A presentence investigation report was ordered. Alexander was sentenced to 15 years' hard labor for distribution of cocaine, the first 2 years to be served without benefit of probation, parole, or suspension of sentence; 7½ years' hard labor for conspiracy to distribute cocaine; and, 5 years' hard labor for possession of cocaine, the sentences to be served concurrently. On May 11, 2006, Alexander filed a timely motion to reconsider sentence which was eventually denied. This appeal ensued.
*1170 LAW AND DISCUSSION
In his first assignment of error, Alexander argues that the act of distribution of cocaine was the principal method by which he committed the conspiracy to distribute and therefore double jeopardy should have barred "the simultaneous prosecution for the lesser included offense by this individual." The state argues that it presented evidence of separate and distinct crimes, because distribution of cocaine does not require an agreement of two or more persons for the specific purpose of committing a crime, and conspiracy to distribute cocaine does not require proof that distribution actually took place.
A person cannot twice be put in jeopardy for the same offense. U.S. Const. amend. V; La. Const. art. 1, § 15; La. C. C. P. art. 591; State v. Knowles, 392 So.2d 651 (La.1980). Louisiana uses both the "Blockburger test" and the "same evidence test" in determining whether double jeopardy exists. State v. Ceasar, 37,770 (La.App. 2d Cir.10/09/03), 856 So.2d 236. In Blockburger v. United States, 284 U.S. 299, 52 S.Ct. 180, 76 L.Ed. 306 (1932), the Supreme Court held that, where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one is whether each provision requires proof of an additional fact which the other does not. Louisiana also uses the broader "same evidence" test which dictates that:
If the evidence required to support a finding of guilt of one crime would also have supported conviction of the other, the two are the same offense under a plea of double jeopardy, and a defendant can be placed in jeopardy for only one.
State v. Steele, 387 So.2d 1175, 1177 (La. 1980); see also State v. Robertson, 511 So.2d 1237 (La.App. 2d Cir.1987), writ denied, 516 So.2d 366 (La.1988). This test depends on the proof necessary for a conviction, not the evidence that is actually presented at trial. State v. Knowles, supra.
In State v. Kelley, 36,602 (La.App. 2d Cir. 01/29/03), 836 So.2d 1243, 1247, where the defendant was convicted of distribution of cocaine and conspiracy to distribute cocaine, this court held that double jeopardy did not prohibit the convictions. In so holding, this court reasoned as follows:
The offenses of distribution of cocaine and conspiracy to distribute cocaine do not contain identical elements. An individual is guilty of distribution of cocaine when he transfers possession or control of the cocaine to his intended recipient. The state must show (1) delivery or physical transfer; (2) guilty knowledge of the controlled dangerous substance at the time of transfer; and (3) the exact identity of the controlled dangerous substance. Conspiracy to distribute cocaine does not require these elements. To find one guilty of conspiracy to distribute cocaine, the state must show that there existed an agreement or combination of two or more persons for the specific purpose of transferring possession or control of the cocaine to an intended recipient.
* * *
In the instant case, the same evidence was not necessary for a conviction of both crimes because the crime of distribution of cocaine was completed after the conspiracy to distribute cocaine. (Internal citations omitted.)
In the case at hand, the same reasoning applies. The conspiracy to distribute was completed before the distribution took place. The telephone call from Leonard to Alexander created the necessary agreement, and delivery of the cocaine to *1171 Leonard's residence constituted an act in furtherance of the object of that agreement. At this point, the conspiracy was complete. The state showed that there existed an agreement between Leonard and Alexander for the specific purpose of transferring possession or control of the cocaine to an intended recipient, namely Poole.
The act of distribution of cocaine was clearly established with the testimony of Lt. Mike Rowlan, a narcotics case agent, which was corroborated by Poole, the informant. Both witnesses testified that Poole was provided with $200.00 as "buy money" and supplied with audio equipment. Lieutenant Rowlan maintained visual surveillance, as Poole completed the transaction of purchasing the controlled substance. The state showed a physical transfer by Alexander to Leonard and then Leonard to Poole. The state also proved that Alexander was aware that the crack cocaine he supplied was a controlled dangerous substance at the time of transfer.
Furthermore, La. R.S. 14:26(A) states in pertinent part that "if the intended basic crime has been consummated, the conspirators may be tried for either the conspiracy or the completed offense, and a conviction for one shall not bar prosecution for the other." Separate and distinct evidence was presented for both crimes, and the prosecution and conviction for both offenses did not subject the defendant to double jeopardy. Kelley, supra. Therefore, we find this assignment of error is without merit.
Next, Alexander argues that the 15-year sentence imposed in this case is grossly disproportionate to the severity of the crime, and serves no useful purpose for this second felony offender. The test imposed by the reviewing court in determining the excessiveness of a sentence is two-pronged. First, the record must show that the trial court took cognizance of the criteria set forth in La. C. Cr. P. art. 894.1. The trial judge is not required to list every aggravating or mitigating circumstance so long as the record reflects that he adequately considered the guidelines of the article. State v. Smith, 433 So.2d 688 (La.1983); State v. Lathan, 41,855 (La. App. 2d Cir.02/28/07), 953 So.2d 890, writ denied, XXXX-XXXX (La.03/28/08), 978 So.2d 297. The articulation of the factual basis for a sentence is the goal of La. C. Cr. P. art. 894.1, not rigid or mechanical compliance with its provisions. Where the record clearly shows an adequate factual basis for the sentence imposed, remand is unnecessary even where there has not been full compliance with La. C. Cr. P. art. 894.1. State v. Lanclos, 419 So.2d 475 (La.1982); State v. Hampton, 38,017 (La. App. 2d Cir.01/28/04), 865 So.2d 284, writs denied, XXXX-XXXX (La.03/11/05), 896 So.2d 57 and 2004-2380 (La.06/03/05), 903 So.2d 452. The important elements which should be considered are the defendant's personal history (age, family ties, marital status, health, employment record), prior criminal record, seriousness of offense and the likelihood of rehabilitation. State v. Jones, 398 So.2d 1049 (La.1981); State v. Haley, 38,258 (La.App. 2d Cir.04/22/04), 873 So.2d 747, writ denied, 2004-2606 (La.06/24/05), 904 So.2d 728.
Second, a sentence violates La. Const. art. 1, § 20, if it is grossly out of proportion to the seriousness of the offense or nothing more than a purposeless and needless infliction of pain and suffering. State v. Smith, 2001-2574 (La.01/14/03), 839 So.2d 1; State v. Dorthey, 623 So.2d 1276 (La.1993). A sentence is considered grossly disproportionate if, when the crime and punishment are viewed in light of the harm done to society, it shocks the sense of justice. State v. Weaver, XXXX-XXXX *1172 (La.01/15/02), 805 So.2d 166; State v. Robinson, 40,983 (La.App. 2d Cir.01/24/07), 948 So.2d 379.
At the sentencing hearing, the trial court noted that Alexander was 27 years old and this was his second felony offensehe had been convicted of possession of marijuana with intent to distribute in 2001. The trial court also noted that Alexander had a few misdemeanors. Alexander indicated that he started using drugs when he was about 17 and he considered himself an addict. The trial court observed that Alexander had three brothers and one sister and came from a good family. The trial court also noted that Alexander had never been married, but had four children by four different mothers. When the trial court asked Alexander why he dropped out of high school in the eleventh grade, he replied, "I fell in with TCCY as a juvenile." Alexander explained that was for simple robbery.
The trial court obviously took cognizance of the criteria set forth in La. C. Cr. P. art. 894.1. Considering his prior criminal record and that Alexander's sentencing exposure on the distribution charge was 30 years at hard labor, the sentence imposed in no way shocks the sense of justice. Alexander also greatly benefited with the sentences running concurrently. Accordingly, this assignment of error lacks merit.
CONCLUSION
For the foregoing reasons, Shedrick Eugene Alexander's convictions and sentences are affirmed.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572893/ | 576 N.W.2d 458 (1998)
CITY OF BIRCHWOOD VILLAGE, Appellant,
v.
Josephine Berg SIMES, Respondent.
No. C7-97-1915.
Court of Appeals of Minnesota.
April 7, 1998.
*459 Frederic W. Knaak, Holstad & Larson, P.L.C., St. Paul, for respondent.
Gregory G. Galler, Eckberg, Lammers, Briggs, Wolff & Vierling, P.L.L.P., Stillwater, for appellant.
Considered and decided by DAVIES, P.J., and KALITOWSKI and FOLEY, JJ.
OPINION
DANIEL F. FOLEY, Judge.[*]
The City of Birchwood Village appeals from summary judgment in favor of respondent Josephine Simes, a boat owner and resident, arguing that the district court erred when it ruled that state legislation establishing the White Bear Lake Conservation District (conservation district) preempts any ordinances enacted by the city regarding boat size. Because state legislation establishing the conservation district fully occupies that field of legislation, there is no room for local regulation, and we affirm.
FACTS
White Bear Lake is located in northeastern Ramsey County and west-central Washington County in Minnesota. The lake is surrounded by five cities: on the eastern side are the cities of Birchwood Village (city), Mahtomedi, and Dellwood, and on the western side is the city of White Bear Lake, as well as White Bear Township. For many years, local homeowners' associations have placed docks at the end of five streets that run directly into the lake. Members of the homeowners' associations place their boats at these docks.
In 1991 the Birchwood City Council adopted regulations governing the use of the docks, including a limitation on the size of boats that could be kept at the dock association slips. The initial regulations enacted in 1992 prohibited boats in excess of eighteen feet in length or six feet in width, but the boat width regulations were amended in 1996 to allow boats up to seven feet wide. Although the city adopted regulations governing boat size, the conservation district has never imposed size restrictions for boats moored or used on the lake.
In 1995 respondent purchased a boat measuring larger than allowed by the city regulations. When the city asked her to remove the boat from the dock, she refused. The city sought an injunction ordering respondent to remove the boat from the dock and prohibiting her from returning it to the dock. Respondent filed a counter-claim, alleging that the city's actions constituted tortious interference with contractual or business relations and defamation. The city moved for summary judgment on all issues.
Respondent argued that the city's regulations were preempted by Minn.Stat. *460 §§ 103B.651-.691 (1996), which established the conservation district. Respondent argued that the conservation district is the only municipality with authority to regulate the size of boats at docks on the lake. The city countered that it had authority to regulate the size of boats at docks pursuant to Minn. Stat. § 412.221, subd. 12 (1996), which prescribes the powers of city councils.
The district court dismissed respondent's counterclaims and sua sponte granted summary judgment for respondent, ruling that the city's regulations were preempted, as a matter of law, by the statute establishing the conservation district. The city now appeals.
ISSUE
Did the district court err when it ruled that state law establishing the White Bear Lake Conservation District preempted the city's regulations?
ANALYSIS
We review the grant of summary judgment to determine whether the district court erred in its application of the law. See Wartnick v. Moss & Barnett, 490 N.W.2d 108, 112 (Minn.1992). Statutory interpretation presents a question of law, which we review de novo. See Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985).
Absent express preemption, Minnesota courts apply the "occupation of the field" doctrine, to decide if state law impliedly preempts local ordinances. Mangold Midwest Co. v. Richfield, 274 Minn. 347, 356, 143 N.W.2d 813, 819 (1966). Preemption under this doctrine is based on the following reasoning:
[A] state law may fully occupy a particular field of legislation so that there is no room for local regulation, in which case a local ordinance attempting to impose any additional regulation in that field will be regarded as conflicting with the state law, and for that reason void, even though the particular regulation set forth in the ordinance does not directly duplicate or otherwise directly conflict with any express provision of the state law.
Id. (quoting People v. Commons, 64 Cal. App.2d Supp. 925, 148 P.2d 724, 727 (1944)). To determine when preemption applies, the following factors are considered:
(1) What is the "subject matter" which is to be regulated? (2) Has the subject matter been so fully covered by state law as to have become solely a matter of state concern? (3) Has the legislature in partially regulating the subject matter indicated that it is a matter solely of state concern? (4) Is the subject matter itself of such a nature that local regulation would have unreasonably adverse effects upon the general populace of the state?
Id. at 358, 143 N.W.2d at 820.
Here, the conflict is between the power of the Birchwood City Council and the conservation district to regulate the size of boats moored to private docks on the lake. Generally, municipalities have no inherent powers; their powers are limited to those expressly conferred by statute or implied as necessary to aid those powers that have been expressly conferred. Id. at 357, 143 N.W.2d at 820. But a municipality may act to protect the security of its community and is not limited to the objectives enumerated in the general welfare clause in its charter. Id.
Minn.Stat. § 412.221 (1996) enumerates the specific powers of the Birchwood City Council. They include the "power to establish harbor and dock limits and by ordinance regulate the location, construction and use of piers, docks, wharves, and boat houses on navigable waters * * *." Id., subd. 12 (1996).
The statute establishing the conservation district defines "municipality" to include the city of Birchwood, as well as the town of White Bear, the city of White Bear Lake, the city of Mahtomedi, and the city of Dellwood. Minn.Stat. § 103B.651, subd. 4 (1996). The statute also provides for the membership and powers of the conservation district board:
Subdivision 1. Membership. (a) The district shall be governed by the board composed of members elected by the governing bodies of the municipalities included in the district. Each municipality shall elect two members.
*461 * * * *
Subd. 2. Powers. * * * the district has the following powers to:
(1) regulate the types of boats permitted to use the lake;
(2) limit the use of motors, including their types and horsepower, on the lake;
(3) regulate, maintain, and police public beaches, public docks, and other public facilities for access to the lake within the territory of the municipalities;
(4) limit by rule the use of the lake at various times and the use of various parts of the lake;
(5) regulate the speed of boats on the lake and the conduct of other activities on the lake to secure the safety of the public and the most general public use;
(6) contract with other law enforcement agencies to police the lake and its shores;
(7) regulate the construction, installation, and maintenance of permanent and temporary docks and moorings consistent with federal and state law; * * *
Minn.Stat. § 103B.661, subds. 1, 2 (1996).
The district court determined that the statute creating the conservation district preempts any regulations imposed by the city. The court reasoned that the city did not have the authority to enact an ordinance regulating the size of boats moored to private docks on the lake because it surrendered that authority to the conservation district. Specifically, the district court relied on (1) the conservation district's power to "regulate the construction, installation, and maintenance of permanent and temporary docks and moorings"; (2) the requirement that the conservation district's governing board be composed of two members from each municipality, including the city of Birchwood Village; and (3) the purpose of the conservation district is to enact and enforce uniform regulations for the users of White Bear Lake. The well-reasoned memorandum of the district court is in full accord with existing law.
The city argues that because the legislation creating the conservation district does not expressly preempt local regulation, the district court erred. The city urges this court to adopt a narrow reading of the conservation district's authority, based on language in State v. Dailey, where the supreme court sought explicit language before finding intent to preempt:
We are averse * * * to hold that the legislature contemplates its own regulation to exclude municipal regulation, without most clear manifestation of such intent. It is imperative, if we are to give faithful effect to legislative intent, that the legislature should manifest its preemptive intent in the clearest terms. We can be spared the sometimes elusive search for such intent if it is declared by express terms in the statute. And where that is not done in the enactments of future legislatures, we shall be increasingly constrained to hold that statutes and ordinances on the same subject are intended to be coexistent.
Id., 284 Minn. 212, 214-215, 169 N.W.2d 746, 748 (1969). Specifically, the city argues that the statutory authority the district court relied on in Minn.Stat. § 103B.661, subd. 2(7), does not apply because it addresses the "construction, installation and maintenance" of docks, but not the size of boats that can be moored at the dock.
Dailey is distinguishable from this case. Dailey involved the existence of a municipal ordinance making prostitution a misdemeanor, and a statute making it a gross misdemeanor. Id. at 214, 169 N.W.2d at 748. The court ruled that the state statute proscribing prostitution did not preempt the local ordinance, despite the differences in procedure and penalty. Id. The court reasoned that within the past decade, the legislature had moved on several fronts to assist, but not replace, local government in addressing problems created by modern urban life. Id. Given that both the statute and the ordinance were meant to achieve the same goal the elimination of prostitution the court refused to find that the state legislation had preempted the local ordinance. Id.
Unlike the facts in Dailey, the municipalities surrounding White Bear Lake have chosen to confer authority on the conservation district to make decisions regarding the management of the lake. The powers granted to the board under Minn.Stat. § 103B.661, subd. 2, are extensive and include the authority *462 to regulate "the conduct of other activities on the lake to secure the safety of the public" and the "types of boats permitted to use the lake." Furthermore, the governing board includes elected officials from each municipality, including the city.
The city next argues that the statute does not explicitly give the conservation district the authority to regulate the "use" of private docks; whereas the enabling statute for the city council grants it the power to regulate the "location, construction, and use" of docks. Such a cramped reading of the board's authority is unwarranted; when the statute governing the conservation district is read as a whole, it represents an effort by the local municipalities to cede authority to the board to regulate all manner of activities affecting the lake. Unlike the facts in Dailey, where the state law and local ordinance were meant to eradicate the same problem, here, the city's ordinance is inconsistent with the principle of permitting the conservation district to establish uniform regulations governing activities on White Bear Lake.
Our reading of the statute is consistent with the principles of preemption enunciated in Mangold. The broad range of powers delegated to the conservation district is an effort by the state to preempt local authority and control. The enabling statute still provides the municipalities with a voice in issues relating to the lake because the governing board comprises elected officials from the surrounding municipalities. Furthermore, permitting each municipality to enact different regulations regarding the size of boats that may be moored to private docks would have an adverse effect on the public. For example, a boat that is permitted at one dock may not be permitted at a dock across the lake. Finally, regulations regarding the use of docks regulate, in effect, the types of boats that are permitted to use the lake an area of regulation that the statute explicitly confers on the conservation district.
DECISION
The district court properly granted summary judgment.
Affirmed.
DAVIES, Judge (dissenting).
I respectfully dissent.
This is an inappropriate case for application of "occupation of the field" preemption as contemplated by Mangold Midwest Co. v. Village of Richfield, 274 Minn. 347, 356, 143 N.W.2d 813, 819 (1966). To start with, the state legislation at issue simply grants to the White Bear Lake Conservation District the power to regulate activities on White Bear Lake. The legislature itself created no substantive regulation, and the Conservation District has not exercised power in any way relevant to the size of boats that may be docked in Birchwood Village. In effect, the majority rules that there can be preemption by a void, that a field may be fully "occupied" by an empty vessel. The majority suggests, too, that there is in this case "added regulation" by Birchwood Village where the city's regulation is added to nothing.
"Occupation of the field" under Mangold does not mean the taking away of power; it means, rather, "squeezed out" by the action of a superior authority. Article 1, Section 10, of the United States Constitution is revealing on this point. That section illustrates how power can be taken away from a subordinate government, even in the absence of relevant substantive law enacted by the superior government.
No state shall enter into any treaty, alliance or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; * * *.
* * * *
No state shall, without the consent of Congress, lay any duty of tonnage, keep troops or ships of war in time of peace, enter into any agreement or compact with another state or with a foreign power, or engage in war, unless actually invaded or in such imminent dangers as will not admit of delay.
When establishing the White Bear Lake Conservation District, the legislature included no comparable provision granting exclusivity of power to the Conservation District.
*463 There is, in addition, nowhere in the arguments or briefs of the parties, or in the opinion of the majority, a suggestion that the Birchwood Village ordinance conflicts with or overlaps any substantive rule promulgated by the White Bear Lake Conservation District. That leaves the field, at least for the time being, to the city, where it has always been.
Finally, the regulation involved in this case is fundamentally a local regulation that has no effect on the rest of White Bear Lake. At issue is the size of boats that may be permanently docked in Birchwood Village. At oral argument it was pointed out that transient boat docking was not involved; thus the issue of what size boat can be used on White Bear Lake generally was not at issue. The only concerns addressed by the Birchwood Village ordinance are potential windstorm harm to the marina from larger boats, crowding, sight-lines, and other totally local concerns.
Until such time as the White Bear Lake Conservation District acts, all ordinary municipal powers to regulate remain with the City of Birchwood Village.
NOTES
[*] Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572802/ | 2 So.3d 441 (2008)
Toni NIZZO
v.
Phyllis Forest WALLACE.
No. 08-CA-525.
Court of Appeal of Louisiana, Fifth Circuit.
November 25, 2008.
Writ Denied February 13, 2009.
*442 Charles J. Duhe, Jr., Desiree W. Adams, Attorneys at Law, New Orleans, LA, for Defendant/Appellant.
Richard E. King, Jennifer L. Simmons, Attorneys at Law, New Orleans, LA, for Defendant/Appellee.
Panel composed of Judges MARION F. EDWARDS, SUSAN M. CHEHARDY, and GREG G. GUIDRY.
GREG G. GUIDRY, Judge.
The Defendant, Renal Care Group, Inc. (Renal Care), appeals from a summary judgment denying coverage under a policy issued by the Defendant, Zurich American Insurance Company (Zurich), relative to a workplace altercation between two employees. We reverse and remand.
On March 15, 2006, the Plaintiff, Toni Nizzo, and Defendant, Phyllis Wallace, were involved in a quarrel at the place of their employment, Renal Care. The two were employed as dialysis nurses and were on duty at the time. The Plaintiff alleges that Wallace struck her, causing her to fall and injure her neck and arm.
In March of 2006, Nizzo filed suit against Wallace and against Renal Care asserting that Renal Care is vicariously liable for the Wallace's intentional acts under the doctrine of respondeat superior. In September of 2007, the Plaintiff added Zurich, Renal Care's Workers' Compensation and Employers Liability insurer, as a Defendant.[1]
In January of 2008, Zurich filed a motion for summary judgment denying coverage for the injury. Zurich asserted it does not owe a defense and indemnity to Renal Care because the liability policy excludes injuries resulting from intentional acts, for injuries occurring outside the course and scope of employment, and because Renal Care is not vicariously liable for the intentional acts of Wallace. Renal Care opposed the motion.
In March of 2008, the trial judge granted the motion for summary judgment, dismissing all claims against Zurich.
On appeal, Renal Care contends that the trial judge erred because the policy does not unambiguously exclude coverage for the vicarious liability of an employer in *443 connection with an intentional act resulting in bodily injuries to an employee. The Appellant also argues that the trial judge erred in finding that Wallace's actions fell outside the scope of the workers' compensation law barring coverage under those provisions of the policy.
In regard to the exclusion for intentional acts, Renal Care argues that the incident was accidental as to the company's involvement, and was intentional only as to Wallace's behavior. Thus, it argues that the incident should be covered because from the standpoint of the insured the act was not intentional.[2]
Zurich responds that the policy only covers injuries that are accidental and excludes damages caused by intentional acts regardless of who is at fault.
The appellate courts review the grant or denial of a motion for summary judgment de novo, using the same criteria applied by the trial courts. Independent Fire Ins. Co. v. Sunbeam Corp., 99-2181, p. 7 (La.2/29/00), 755 So.2d 226, 230. A summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to a material fact, and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B).
The party bringing the motion bears the burden of proof; however, where the moving party will not bear the burden of proof at trial, the moving party must only point out that there is an absence of factual support for one or more elements essential to the adverse party's claim. La. C.C.P. art. 966(C)(2). The burden does not shift to the party opposing the summary judgment until the moving party first presents a prima facie case that no genuine issues of material fact exist. Input/Output, Inc. v. Wilson Greatbatch, Inc, 07-570, p. 6 (La.App. 5 Cir. 1/22/08), 977 So.2d 109, 112-113; writ denied, 08-0397 (La.4/18/08), 978 So.2d 350. Thereafter, if the adverse party fails to produce factual support sufficient to show that he will be able to meet his evidentiary burden of proof at trial, no issue of material fact exists and the moving party is entitled to summary judgment. Id.
The documents submitted in conjunction with the summary judgment here include the policy, and the deposition testimonies of the Plaintiff, Toni Nizzo, the Defendant, Phyllis Forest Wallace, and a co-worker, Toni Lienemann. Nizzo and Lienemann claim that Wallace was angry when Nizzo told her to shut up because Wallace had been complaining incessantly about the assignments. They testified that Wallace angrily walked toward Nizzo, yelling at her telling her (Wallace) to shut up. Wallace then stepped in close to Nizzo's face, raised her hands, palms out, and struck/pushed Nizzo who fell to the floor.
In opposition, Wallace testified in her deposition that Nizzo told Wallace to shut up when Wallace asked Nizzo if she was planning on dumping her (Nizzo's) patients on her that day. According to Wallace, Nizzo said she was not in the mood for dealing with Wallace that morning. Wallace then started to address Lienemann, but before she completed her sentence, Nizzo leaned into her face screaming for Wallace to shut up, spit flying onto Wallace's glasses. Wallace said she raised her hand to remove her glasses because she could not see, but the movement startled *444 Nizzo who stepped back, sat on the edge of the desk, leaned to the left and fell onto the floor. Wallace claims that she did not touch the Plaintiff.
The question of whether Wallace intentionally struck Nizzo causing her to fall, or intentionally caused her to fall without striking her, is a genuine issue as to a material fact. Resolution of these facts is necessary for the determination of the vicarious liability issue. Thus, there we find that the trial judge erred in granting the motion for summary judgment for this reason.
In addition, we find that Zurich also failed to prove that it is entitled to judgment as a matter of law, the second prong for summary judgment.
The Employers' Liability Insurance policy does not unambiguously exclude coverage to Renal Care. The policy states:
A. How this insurance applies:
This employers' liability insurance applies to bodily injury by accident or bodily injury by disease.......
1. The bodily injury must arise out of and in the course of the injured employee's employment by you.
2. The employment must be necessary or Incidental to your work in a state or territory listed.......
B. We will pay:
We will pay all sums you legally must pay as damages because of bodily injury to your employees, provided the bodily injury is covered by this Employers' Liability Insurance.......
C. Exclusions:
This insurance does not cover ...
5. Bodily injury intentionally caused or aggravated by you.
General Section A on the first page of the policy states the policy is "a contract... between you (the employer named in item 1 of the information Page) and us (the insurer named on the information Page.)" In Section B of the General Section, the policy defines "you." It states, "You are the insured if you are an employer named in item 1 ..." Renal Care is named in item 1.
An insurance policy is a contract between the parties and should be construed employing the general rules of interpretation set forth in the Louisiana Civil Code. Comeaux v. State Farm Fire and Cas. Co, 07-957, p. 9 (La.App. 5 Cir. 5/27/08), 986 So.2d 153, 157. Language in an insurance policy that is clear, expresses the intent of the parties, and does not violate a statute or public policy, must be enforced as written. La.C.C. arts.2045-2057; Comeaux, 07-957 at 9, 986 So.2d at 157-158. If the insurance policy is susceptible to two or more reasonable interpretations, then it is considered ambiguous and must be liberally interpreted in favor of coverage. Hayne v. Woodridge Condominiums, Inc., 06-923, p. 10 (La.App. 5 Cir. 4/11/07), 957 So.2d 804, 809. The insurer bears the burden of proving the applicability of policy exclusions. Comeaux, 07-957 at 9, 986 So.2d at 158.
The language of the policy in this case is not ambiguous. The exclusion for intentional acts applies to "you," defined as the insured, Renal Care. There are no references in the exclusion to a third party. Because the language is not ambiguous, it is not subject to interpretation, and we must enforce it as written.
The Plaintiff asserts a negligence claim against Renal Care for its selection and training of employees, and for the vicarious liability for Wallace's alleged intentional acts due to its status as the employer.[3]*445 Neither of these claims involves the intentional acts of Renal Care.
Furthermore, the question of Renal Care's vicarious liability or the workers' compensation exclusion for intentional tort cannot be established until the factual questions are resolved. Thus, Zurich failed to prove it was entitled to judgment as a matter of law, and the summary judgment was not properly granted for this reason, as well as the existence of material issues of disputed fact.
Accordingly, the judgment is hereby reversed. The case is remanded for further proceedings.
Costs of the appeal are to be paid by the Defendant, Zurich American Insurance Company.
REVERSED AND REMANDED.
NOTES
[1] The Plaintiff received workers' compensation benefits.
[2] Renal Care also argues it's not vicariously liable for Wallace's actions. That question is not before us because, in a prior judgment, the trial judge denied Renal Care's motion for summary judgment on that issue, and the judgment was not appealed.
[3] Although the Plaintiff had previously made a claim against Renal Care for an intentional tort, that claim was dismissed on a summary judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573243/ | 66 S.W.3d 678 (2002)
76 Ark.App. 428
CAPITAL LIFE AND ACCIDENT INSURANCE COMPANY,
v.
Lela K. PHELPS.
No. CA 01-769.
Court of Appeals of Arkansas, Division II.
February 13, 2002.
*679 Mitchell, Williams, Selig, Gates & Woodyard P.L.L.C., by: Byron Freeland and Leigh Ann Shults, Little Rock, for appellant.
Walters, Hamby & Verkamp, by: Bill Walters, Greenwood, for appellee.
TERRY CRABTREE, Judge.
Appellant, Capitol Life and Accident Insurance Company (Capitol), appeals the denial of its claim for rescission of three credit-life policies issued to the late Lincoln Phelps and a subsequent judgment in favor of Phelps's widow, appellee Lela Phelps. This is the third time this case has been before us. On the first occasion, we reversed a circuit court jury verdict in favor of appellee and instructed that the case be transferred to chancery. See Capitol Life & Accident Ins. Co. v. Phelps, No. CA98-1495, 1999 WL 360279 (June 2, 1999). Following a trial in chancery court, which also resulted in a verdict in favor of appellee, another appeal was taken by Capitol. We dismissed that appeal for lack of finality. See Capitol Life & Accident Ins. Co. v. Phelps, 72 Ark.App. 464, 37 S.W.3d 692 (2001). Thereafter, a final order was entered by the chancellor, and this appeal was brought. We are able to reach the merits on this appeal, and we affirm the chancellor's decision.
Between October 24, 1995, and March 8, 1996, Lincoln Phelps submitted applications to appellant for three credit life policies. Each application contained the following language:
I VOLUNTARILY REQUEST THE INSURANCE DESCRIBED IN THIS POLICY. I ... AM ... NOW IN GOOD HEALTH, MENTALLY AND PHYSICALLY, AND HAVE NO CHRONIC DISEASE OR POOR HEALTH CONDITION.
The applications were signed by Phelps and forwarded to appellant, who then issued *680 policies in the amounts of $21,107.07, $6,690.22, and $24,812.78, for a total of $52,610.07.
On September 13, 1996, while all three policies were in effect, Lincoln Phelps died at age fifty-four. His death certificate listed the cause of death as acute myocardial infarction due to cardiac dysrhythmia. Appellee Lela Phelps, as executrix of her husband's estate, submitted claims to appellant on all three policies, but the claims were denied. Following that denial, Mrs. Phelps sued appellant seeking the policy proceeds, plus a twelve-percent penalty, interest, and attorney fees, pursuant to Arkansas Code Annotated section 23-79-208 (Repl.1999). Appellant counterclaimed for rescission on the grounds that Phelps had misrepresented his health as being good when in fact it was not, and further, had appellant known the true state of Phelps's health, it would not have issued the policies.
On January 18, 2000, a trial was held in chancery court. Appellee presented the testimony of herself and others that Lincoln Phelps had always been a vigorous, hard-working man with no visible health problems. The evidence was undisputed that Phelps consistently worked at hard physical labor for up to twelve hours a day, rarely missed work due to illness, had not been hospitalized in the twenty years preceding his death, and gave no outward indication of being in anything other than good health. Appellant, however, introduced Phelps's medical records into evidence, and they revealed that, at various times during the twenty years preceding his death, Phelps had been diagnosed with Graves disease (a thyroid disorder), hypertension, atrial fibrillation, and a mitral valve insufficiency. Appellant's vice-president, Paul Eaton, testified that, had appellant known of the health problems reflected in those records, it would not have issued the policies.
Following the trial, the chancellor ruled that the terms "good health" and "poor health condition" in the policy applications were ambiguous and that the term "chronic disease" while not ambiguous, was unclear. He also stated that "the Court cannot answer the question that [Phelps's alleged misrepresentation] was material to the denial. Mr. Eaton, testifying for the insurance company, states [that] they would not have issued the policy, but his testimony is after the fact." Based upon these findings, the chancellor denied appellant's request to rescind the policies and entered judgment for appellee in the amount of $52,610.01. He also awarded appellee a twelve percent penalty, prejudgment interest, attorney fees, costs, and post-judgment interest, for a total judgment of $121,037.11. The appeal is brought from that order.
Misrepresentations, omissions, concealment of facts, and incorrect statements shall not prevent recovery under an insurance policy unless either: 1) fraudulent; 2) material to either the acceptance of the risk or to the hazard assumed by the insurer; or 3) the insurer in good faith would not have issued the policy, or would not have issued it in the same amount, or at the same premium rate, or would not have provided coverage with respect to the hazard resulting in the loss if the facts had been made known to the insurer as required by the application for the policy. See Ark.Code Ann. § 23-79-107(a) (Repl. 1999). Appellant does not contend that Phelps fraudulently misrepresented the state of his health, but argues that Phelps's incorrect statement of good health was material to its acceptance of the risk and that, had it known the true facts, it would not have issued the policy. This is an affirmative defense that an insurer *681 must plead and prove by a preponderance of the evidence. See American Family Life Assurance Co. v. Reeves, 248 Ark. 1303, 455 S.W.2d 932 (1970).
In deciding appeals from a chancery court, we review the evidence de novo and reverse only if the chancellor's findings are clearly erroneous. Morse v. Morse, 60 Ark.App. 215, 961 S.W.2d 777 (1998). Further, we give great deference to the chancellor's superior position to determine the credibility of witnesses and the weight to be accorded their testimony. Simmons First Bank v. Bob Callahan Servs., Inc., 340 Ark. 692, 13 S.W.3d 570 (2000).
Appellant first challenges the chancellor's ruling that the language in the applications was ambiguous. An ambiguity exists when a provision in a policy or application is susceptible to more than one reasonable interpretation. Phelps v. U.S. Credit Life Ins. Co., 336 Ark. 257, 984 S.W.2d 425 (1999).
The supreme court has defined the term "good health" as used in this context to mean that an applicant is in "apparent good health and free from such diseases as would seriously affect the risk." Union Life Ins. Co. v. Davis, 247 Ark. 1054, 1059, 449 S.W.2d 192, 195 (1970). The court further qualified that definition, stating that the applicant "must be justified in the belief that he is free of symptoms which should cause reasonable apprehension of disease which would materially affect the risk." Id. at 1060, 449 S.W.2d at 195. Based upon the fact that Phelps was virtually asymptomatic and able to lead a normalif not more vigorous than normal life, it is likely that he was justified in believing himself to be in good health. However, we need not address that point. Even if the application language was unambiguous, and even if Phelps incorrectly represented the state of his health, appellant could not void the policy unless it proved, pursuant to Ark.Code Ann. § 23-79-107(a), that the misrepresentation was material to its acceptance of the risk or that it would not have issued the policy had it known the true facts. The chancellor found that appellant's proof on this point was not convincing, and we cannot say that such a finding was clearly erroneous.
The burden was on appellant to sustain its contention that the facts not disclosed were material to the risk assumed by it or that, in good faith, it would not have issued the policy. See Old Republic Ins. Co. v. Alexander, 245 Ark. 1029, 436 S.W.2d 829 (1969). Appellant's vice-president Paul Eaton testified without elaboration that, if appellant had known of Phelps's health problems, it would not have issued the policies. However, Eaton offered no proof of any underwriting practices either in his own company or within the industry with regard to applicants with the type of health conditions reflected in Phelps's records. The only concrete underwriting guidelines introduced into evidence were those that required an applicant to fill out a detailed health certificate based on certain age, policy term, and amount of loan criteria. Those guidelines did not apply to Phelps, who was fifty-three at the time of his application and whose policies were valued at less than $75,000 for only a one-year term.
As the supreme court recognized in Old Republic Ins. Co. v. Alexander, supra:
It is significant, as pointed out by the chancellor, that appellant produced no record of its own underwriting standards, nor did it attempt to show general standards in the underwriting profession or insurance trade by disinterested witnesses. It relied solely on the retrospective and possibly self-serving declarations *682 of conclusions by this witness... his testimony cannot be considered as that of a disinterested witness. In weighing testimony, courts must consider the interest of a witness in the matter in controversy. Facts established by the testimony of an interested witness, or one whose testimony might be biased, cannot be considered as undisputed or uncontradicted. While the testimony of such a witness may not be arbitrarily disregarded, a trier of facts is not required to accept any statement as true merely because so testified. It cannot be said that such testimony is arbitrarily disregarded when it is not consistent with other evidence in the case, or unreasonable in its nature or is contradicted. Nor is it arbitrarily disregarded where facts are shown which might bias the testimony or from which an inference may be drawn unfavorable to the witness' testimony or against the fact testified to by him. (Citations omitted).
Id. at 1039, 436 S.W.2d at 835-36. See also Wittner v. IDS Ins. Co. of N.Y., 96 A.D.2d 1053, 466 N.Y.S.2d 480 (1983); 44 AM.JUR.2D Insurance § 1957 (2d ed.1982) (holding that insurer's testimony on whether policy would have been issued is acceptable evidence, but not conclusive).
The chancellor in the case before us did not accept the testimony of appellant's representative that appellant would not have issued the policy had it known of Phelps's health conditions. Given the conclusory nature of the representative's testimony and the lack of supporting documentation, we cannot say that the chancellor clearly erred.[1]
The final issue concerns the amount of attorney fees awarded to appellee by the chancellor. The chancellor awarded $30,589.86 in fees, which was forty percent of the amount recovered by appellee under the policies, plus penalty and prejudgment interest. In her motion for fees, appellee stated that her agreement with her counsel was that, if the case should be appealed, counsel would be entitled to forty percent of the amount recovered. She also claimed that her counsel had spent over 350 hours on the case, although the itemized statement she attached showed only the activity entries, not the time spent.
Arkansas Code Annotated section 23-79-208(a) (Repl.1999) provides that an insured may recover a reasonable attorney fee from an insurer who wrongfully refuses to pay on a policy. Phelps v. U.S. Credit Life Ins. Co., 340 Ark. 439, 10 S.W.3d 854 (2000). The following factors are relevant in determining reasonable fees: 1) the experience and ability of the attorney; 2) the time and labor required to perform the service properly; 3) the amount in controversy and the result obtained in the case; 4) the novelty and difficulty of the issues involved; 5) the fee customarily charged for similar services in the local area; 6) whether the fee is fixed or contingent; 7) the time limitations imposed upon the client in the circumstances; and 8) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the attorney. Id. However, while the courts should be guided by the foregoing *683 factors, there is no fixed formula in determining the reasonableness of an award of attorney fees. Id. Because of its intimate acquaintance with the record and the quality of service rendered, we recognize the superior perspective of the trial court in assessing the applicable factors. Id. Thus, we will not set aside an award of attorney fees absent an abuse of discretion by the trial court. Id.
In Phelps v. U.S. Credit Life Insurance Company, supra, we approved an attorney fee award based upon a one-third contingency fee arrangement. Considering that this case has been tried twice and appealed three times, we see no abuse of discretion in the award in this case.
Affirmed.
STROUD, C.J., and JENNINGS, J., agree.
NOTES
[1] Appellant makes a brief argument that Phelps's misrepresentation was material because Phelps's death was causally related to the matters misrepresented. See Ark.Code Ann. § 23-79-107(c) (Repl.1999), which provides that "a misrepresentation is material if there is a causal relationship between the misrepresentation and the hazard resulting in a loss under the policy or contract." The chancellor made no ruling on the connection between Phelps's death and the conditions listed in his medical reports but, in any event, the evidence was in dispute on this point. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1543037/ | 39 F.2d 162 (1930)
UNITED STATES
v.
BATES VALVE BAG CORPORATION et al.
No. 705.
District Court, D. Delaware.
March 11, 1930.
*163 Russell Hardy and George P. Alt, Special Assts. to Atty. Gen., and Leonard E. Wales, U. S. Dist. Atty., of Wilmington, Del.
Clarence A. Southerland (of Ward & Gray), of Wilmington, Del., and Arthur H. Dean, of New York City, for defendants.
MORRIS, District Judge.
The petition of the United States, filed in January, 1929, against Bates Valve Bag Corporation, chartered under the laws of Delaware, charges the respondent with violation of section 3 of the Clayton Act (15 USCA § 14). It alleges that the respondent manufactures machines for packing cement and like substances in valve bags through a filling tube comprising a part of the machine. The bags have a narrow, valvular opening at one end for the introduction of the filling tube. Upon the withdrawal of the tube after filling the bag, the weight of the material in the bag causes the valvular opening to close and remain closed. The valve or valve bag was originally covered by a patent, but the patent has long since expired. The machines embody various features covered by patents owned by respondent. By reason thereof, the respondent has a monopoly of the manufacture and sale of valve bag filling machines. The machines are disposed of under a contract which states that respondent reserves the title, and that the person acquiring the possession has only a license to have and use the machine under specified conditions and only so long as those conditions are observed. The condition here complained of is that the user of the machine shall not manufacture valve bags or buy valve bags from any one other than those specified persons licensed by the respondent to manufacture and sell such bags. The effect of this restriction, it is asserted, has been "to substantially lessen competition" by preventing bag makers not named by the respondent from engaging in the valve bag trade. The petitioner prayed, among other things, that the contracts between the respondent and the users of the Bates machines be adjudged and decreed to be null and void, in so far as they restrain the user of the machine in the manufacture, purchase, or use of valve bags, and that the respondent be perpetually enjoined from enforcing the challenged conditions in the contracts heretofore made and from making any similar contracts.
By an amended answer filed April 30, 1929, the respondent alleged that on February 28, 1929, it sold all its business and assets of every kind, including its machines and all interests in the contracts with respect thereto to St. Regis Paper Company, a New York corporation; that thereafter the respondent was dissolved, and that it now has no interest in the subject-matter of the petition.
Thereafter the petitioner by supplemental petition set out the transfer of all the capital stock and the assets of respondent to St. Regis Paper Company, the organization by that company of Bates Valve Bag Corporation under the laws of New Jersey, the transfer by the St. Regis Company to the New Jersey corporation, for all the latter's capital stock, of all the assets that had been acquired by the St. Regis Company from the Delaware corporation, and the continued enforcement by the New Jersey corporation, acting under the direction of the St. Regis Company, of the contracts and clauses complained of in the petition. The supplemental petition prayed that, pursuant to section 15 of the Clayton Act (15 USCA § 25), the St. Regis Company and the New Jersey corporation be made additional parties respondent, and that the same relief be granted against them as was sought against the original respondent, the Delaware corporation.
The subpna prayed for was issued. The new respondents were foreign corporations having no office, agent, or place of business in this district. Consequently, pursuant to the authority of section 15 of the Clayton Act, the subpna was served outside this district. Thereupon the two new respondents appeared specially and moved to quash the service on them on the ground that by reason of the termination of all interest of the Delaware corporation in the subject-matter of the suit, and by reason of the dissolution of that corporation, the cause with respect to it had become moot, and that, as a consequence thereof, this court had lost jurisdiction of the cause, and hence had lost all power to obtain jurisdiction under section 15 *164 of the Clayton Act or otherwise of the new respondents by service made outside this district.
As the motion to quash the service raised the same issues as the separate defense set up in the answer of the Delaware corporation, it was ordered that the separate defense be heard before the trial of the principal case and at the same time as the motion to quash. That hearing has been had. Thereat it was established that the St. Regis Company had acquired all the capital stock and all the assets of the Delaware corporation in February of 1929, had caused the New Jersey corporation to be chartered and had thereupon transferred to the New Jersey corporation, for all its capital stock, the assets that had been acquired from the Delaware corporation; that the Delaware corporation had thereupon been duly dissolved; that the St. Regis Company now owns all the capital stock of the New Jersey corporation; and that the latter company is continuing to enforce the challenged clauses of the contract made by the Delaware corporation. The basic question now before the court, upon which all the other questions turn, is whether, by reason of these facts, the case against the Delaware corporation has become moot.
The effect of the dissolution of a Delaware corporation is set out in section 40 of the Delaware Corporation Law, as amended, 34 Del. Laws, p. 283, c. 112, § 9, which provides: "All corporations, whether they expire by their own limitation, or are otherwise dissolved, shall nevertheless be continued for the term of three years from such expiration or dissolution bodies corporate for the purpose of prosecuting and defending suits by or against them, and of enabling them gradually to settle and close their business, to dispose of and convey their property, and to divide their capital stock, but not for the purpose of continuing the business for which said corporation shall have been established * * *."
By virtue of this section, the Delaware corporation, for the purpose of this case, is as much alive and in being as it was prior to its dissolution, but its continued existence is "not for the purpose of continuing the business" for which that corporation was established. Consequently, it is clear that the Delaware corporation has, by its dissolution and the assignment of all its assets, deprived itself of all power and opportunity to do any act in pursuance of, or for the purpose of, carrying out or executing the challenged contracts heretofore made by it, or to make any new contracts of a similar character, and that the grounds for granting the injunction originally sought against the Delaware corporation have been removed. But that fact or conclusion is not sufficient to warrant the further finding that the suit against it has become moot, that the court has been deprived of jurisdiction or should not retain jurisdiction to the end of the suit. For in a suit in which the pleadings disclose a proper case for injunctive relief when the suit was instituted and a prayer for an injunction and incidental relief, the removal during the pendency of the suit of the grounds for injunctive relief does not take away the jurisdiction or bar the court from granting the incidental relief, if upon final hearing the allegations are sustained by proof. This principle is frequently applied in patent infringement suits in equity in which the right to injunctive relief set up in the bill of complaint, upon which right the equity jurisdiction rests, Root v. Railway Co., 105 U. S. 189, 26 L. Ed. 975, is destroyed during the pendency of the suit by the expiration, by its own limitations, of the patent sued upon. Clark v. Wooster, 119 U. S. 322, 325, 7 S. Ct. 217, 30 L. Ed. 392. The principle is particularly applicable in suits instituted in the public interest in which incidental relief in addition to that which gives the court jurisdiction is sought and the respondent destroys by his own act, during the pendency of the suit, the grounds upon which the right to the jurisdictional relief rests. In United States v. Trans-Missouri Freight Association, 166 U. S. 290, 307-310, 17 S. Ct. 540, 546, 41 L. Ed. 1007, the freight association was alleged to be in violation of the Sherman Act. The relief sought was a decree that the agreement was invalid and an injunction. After the entry of the decree in the court below, the association was dissolved by vote of its members. In holding that the suit had not become moot, and that the appellate jurisdiction of the Supreme Court had not been ousted by the dissolution of the Association, that court said: "Private parties may settle their controversies at any time, and rights which a plaintiff may have had at the time of the commencement of the action may terminate before judgment is obtained or while the case is on appeal, and in any such case the court, being informed of the facts, will proceed no further in the action. Here, however, there has been no extinguishment of the rights (whatever they are) of the public, the enforcement of which the government has endeavored to procure by a judgment of a court under the provisions of the act of congress *165 above cited. The defendants cannot foreclose those rights, nor prevent the assertion thereof by the government as a substantial trustee for the public under the act of Congress, by any such action as has been taken in this case. By designating the agreement in question as illegal, and the alleged combination as an unlawful one, we simply mean to say that such is the character of the agreement as claimed by the government. That question the government has the right to bring before the court and obtain its judgment thereon. Whether the agreement is of that character is the question herein to be decided."
In the case at bar, I think the dissolution of the Delaware corporation and the transfer of all its assets did not make the suit against it moot or deprive the court of jurisdiction to pass upon the legality of the challenged contracts.
At the argument, it was suggested that the service made upon the New York and the New Jersey respondents should be set aside for the further reason that the Delaware corporation and the new respondents were not joint conspirators or joint violators of the Clayton Act and, if violators of the act at all, they are but successive violators and are, consequently, not within the scope of that portion of section 15 of the Act (15 USCA § 25), which provides for bringing in additional parties "whenever it shall appear to the court * * * that the ends of justice require that other parties should be brought before the court. * * *" This power is as broad as its necessity. But it presents nothing new with respect to the added parties in this suit, for it has long been held that one to whom a defendant in a suit transfers the subject-matter of the suit while the suit is pending may be made a party thereto. Sedgwick v. Cleveland, 7 Paige (N. Y.) 287; Ex parte Mobley, 19 S. C. 337. And the ends of justice require that, if the contracts here challenged are in violation of the Clayton Act, the relief afforded the petitioner should not be limited to a decree adjudging the contracts to be illegal, but should, to be fully adequate, include an injunction enjoining either or both of the new respondents from continuing to enforce the old contracts and from entering into or acting under any similar contract in the future.
The motion to quash the return of service made upon the New York and the New Jersey corporations must be denied, and the suit must proceed to final hearing upon its merits. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572886/ | 576 N.W.2d 747 (1998)
In the Matter of the Petition of Dorothy P. GEIS, single, and Dorothy P. Geis and Jerome A. Geis as Personal Representatives of the Estate of LeRoy F. Geis, Deceased, for an Order Determining Boundaries and Specifying an Easement Location.
No. C7-97-1669.
Court of Appeals of Minnesota.
March 31, 1998.
Review Denied May 28, 1998.
*748 Clinton R. McLagan, McLagan & Lerman, P.A., Mendota Heights, for appellants.
Dennis P. Moriarty, G. Lee Vickerman, Jaspers, Moriarty & Walburg, P.A., Shakopee, for respondent.
Considered and decided by AMUNDSON, P.J., and HARTEN and MANSUR,[*] JJ.
OPINION
MARTIN J. MANSUR, Judge.
This action was brought by appellants Dorothy P. Geis and Jerome A. Geis, as a proceeding subsequent to an initial registration of land, pursuant to Minn.Stat. § 508.671. Appellants requested that the trial court: (1) determine the boundary between government lot 3 (owned by appellants) and government lot 4 (owned by respondent); (2) direct the establishment of judicial landmarks on the boundary between government lots 3 and 4; and (3) direct the registrar of titles to remove any reference to a certain document from the memorial to the certificate of title. On appeal from a judgment in favor of respondent Kane, appellants argue the trial court erred in concluding their action was not properly brought as a proceeding subsequent to initial registration of land. We affirm.
FACTS
Appellants own registered land in Scott County, Minnesota, as evidenced by certificate of title number 13006 (registered land). The full legal description of the registered land is as follows:
The South 46 3/8th rods of the North Half of the Northeast Quarter; the Southeast Quarter of the Northeast Quarter Government Lot 3; and that part of Government Lot 2 lying Northerly and Westerly of the following described lines: Commencing at the Northeast corner of said Government Lot 2; thence South 89° 33' 00" West along the North line of said Lot 2 a distance of 191.50 feet to the point of beginning of said line; thence South 46° 32' 54" West a distance of 558.70 feet; thence 43° 19' 00" West a distance of 632.80 feet; thence North 89° 49' 43" West a distance of 478.50 feet; thence South 43° 19' 00" West a distance of 676.50 feet; thence North 89° 43' 33" West a distance of 324 feet more or less to the shoreline of Carls Lake (McMahon Lake) and there terminating.
SUBJECT to the rights of the State of Minnesota, if any, to the bed of McMahon Lake; not intending however, to deprive the applicant of the ownership of the bed of a non-navigable body of water; nor the usual riparian rights that attach to land riparian to a navigable public body of water, incident to the ownership thereof, and the State of Minnesota thereof shall have no right, title or interest in all that portion of said property lying above contour elevation 959.2 Scott County Minnesota Highway Datum based upon Bench Mark water table sill Southwest corner barn, Joe Shea's having Bench Mark 989.49, based upon measurement by William Schmokel, Registered Land Surveyor of March 22, 1974.
Frank Farrell, appellants' predecessor in title, registered appellants' land in 1974. Prior *749 to registration, Farrell had the land surveyed by William J. Schmokel, a registered land surveyor and the Scott County Surveyor. The Schmokel survey concluded that the north-south quarter line of section 36 should be extended in a straight line to McMahon Lake. This resulted in government lot 3 having no shoreline on the lake.
Respondent owns adjoining land, located in Scott County, Minnesota, legally described as East Half of Government Lot 4, Section 36, Township 114, Range 22, Scott County Minnesota. This property is abstract property and has been continuously owned by respondent's family for approximately 100 years.
In 1994, Steven Geis approached James Kane about purchasing Government Lot 4, however, the Kane family refused to sell. Around the same time, Steven Geis commissioned a survey of appellants' land and hired Bruce W. Shepperd, a registered land surveyor, to conduct the survey. Shepperd concluded government lot 3 was incorrectly surveyed by Schmokel in 1974, and that government lot 3's boundary line with lot 4 should deflect from where it intersects the meander line into the center of the lake. Based on this survey, government lot 3 would have access to the lakeshore.
Appellants brought a proceeding subsequent to the initial registration of land pursuant to Minn.Stat. § 508.671, in part to determine the boundary lines of government lots 3 and 4. Appellants requested that the trial court establish the common boundary line between government lots 3 and 4 in a manner that would provide government lot 3 with riparian rights to McMahon Lake. Although the trial court agreed appellants' survey was correct, it concluded appellants' action was inappropriate and denied their request to establish judicial landmarks on the boundary between government lots 3 and 4. Appellants appealed from the trial court's judgment.
ISSUE
Did the trial court err in concluding appellants could not judicially establish the boundary lines between government lots 3 and 4 in a proceeding subsequent to initial registration of land?
ANALYSIS
On appeal from a judgment, this court's scope of review is limited to determining whether the trial court's factual findings are clearly erroneous and whether the trial court erred in its legal conclusions. Citizens State Bank v. Leth, 450 N.W.2d 923, 925 (Minn. App.1990). When the evidence reasonably supports the trial court's findings, we must affirm. Hilton v. Nelsen, 283 N.W.2d 877, 881 (Minn.1979). Statutory interpretation is a question of law, which we review de novo. Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn. 1985).
Registration of titles is authorized and regulated by chapter 508 of the Minnesota statutes. Konantz v. Stein, 283 Minn. 33, 37, 167 N.W.2d 1, 5 (1969). The purpose of the torrens law is to establish an indefeasible title, which is immune from future adverse claims and encumbrances not noted on the certificate. Id., 167 N.W.2d at 5; Moore v. Henricksen, 282 Minn. 509, 519, 165 N.W.2d 209, 217 (1968); In re Petition of McGinnis, 536 N.W.2d 33, 35 (Minn.App.1995), review denied (Minn. Oct. 27, 1995). By affording a method of acquiring a decree of registration and a certificate of title free from all adverse claims and encumbrances not noted on the certificate, the torrens law confers a conclusive title on the holder of a certificate. Moore, 282 Minn. at 519, 165 N.W.2d at 217; see also In re Petition of Alchemedes/Brookwood, Ltd. Partnership, 546 N.W.2d 41, 42 (Minn.App.1996) (concluding persons dealing with registered property need look no further than certificate of title for any transactions that might affect land), review denied (Minn. June 7, 1996).
Every person receiving a certificate of title pursuant to a decree of registration and every subsequent purchaser of registered land who receives a certificate of title in good faith and for a valuable consideration shall hold it free from all encumbrances and adverse claims, excepting only the estates, mortgages, liens, charges, and interests as may be noted in the last certificate of title in the office of the registrar, and *750 also excepting any of the following rights or encumbrances subsisting against it, if any:
(1) liens, claims, or rights arising or existing under the laws or the constitution of the United States, which this state cannot require to appear of record;
(2) the lien of any real property tax or special assessment for which the land has not been sold at the date of the certificate of title;
(3) any lease for a period not exceeding three years when there is actual occupation of the premises thereunder;
(4) all rights in public highways upon the land;
(5) the right of appeal, or right to appear and contest the application, as is allowed by this chapter;
(6) the rights of any person in possession under deed or contract for deed from the owner of the certificate of title; and
(7) any outstanding mechanics lien rights which may exist under sections 514.01 to 514.17.
Minn.Stat. § 508.25 (1996). Despite the conclusiveness of torrens registration, numerous sections in chapter 508 allow individuals to bring proceedings subsequent to the initial registration of land.[1]
Appellants argue the trial court erred by refusing to order judicial landmarks placed on the boundary common to government lots 3 and 4 pursuant to Minn.Stat. § 508.671. We disagree.
Boundary line determinations in proceedings subsequent are authorized and governed by Minn.Stat. § 508.671, which provides in pertinent part:
Subdivision 1. Petition. An owner of registered land may apply by a duly verified petition to the court to have all or some of the boundary lines judicially determined. The petition shall contain the full names and post office addresses of all owners of adjoining lands which are in any manner affected by the boundary determination. * * * The owner shall have the premises surveyed by a registered land surveyor and shall file in the proceedings a plat of the survey showing the correct location of the boundary line or lines to be determined. * * *
Subd. 2. Order. Before the issuance of any final order determining the location of the owner's boundary lines, the court shall fix and establish the boundaries and direct the establishment of judicial landmarks in the manner provided by section 559.25. The final order shall make reference to the boundary lines that have determined and to the location of the judicial landmarks that mark the boundary lines.
Minn.Stat. § 508.671 (1996). While Minn. Stat. § 508.671 provides for the determination of boundary lines after land has been registered, courts may only determine the boundary lines to land actually registered and described in the certificate of title. See Minn.Stat. § 508.06(3) (1996) (providing application for registration of land shall set forth substantially correct description of land); Minn.Stat. § 508.22 (1996) (providing every decree of registration shall bind land described in it, forever quiet title to it, and be forever binding and conclusive upon all persons) (emphasis added); see, e.g., Moore, 282 Minn. at 518-19, 165 N.W.2d at 217 (concluding failure to note prescriptive easement in registration decree is conclusive against easement).
Moreover, a court may not, in a proceeding subsequent to initial registration of land, determine boundary lines, if that determination alters the legal description of the land as stated in the certificate of title, and thereby attacks the torrens certificate. See Minneapolis & St. Louis Ry. Co. v. Ellsworth, 237 Minn. 439, 444-45, 54 N.W.2d 800, 803-04 (1952) (concluding trial court's findings in action to determine boundary lines not erroneous because finding of location of boundary line does not attack torrens certificate and judgment does not attack torrens decree); Park Elm Homeowner's Ass'n v. Mooney, 398 N.W.2d 643, 647 (Minn.App. *751 1987) (concluding appellant's title extended to low water mark, as indicated by certificate of title, and plat of property, and therefore trial court lacked authority to grant respondent ownership rights in part of appellant's property in derogation of torrens act). To allow courts to do so would be contrary to the underlying purposes of the torrens act. See C.S. McCrossan, Inc. v. Builders Fin. Co., 304 Minn. 538, 544, 232 N.W.2d 15, 19 (1975) (concluding purpose behind torrens registration is that certificate of title, including memorials thereon, be made conclusive evidence of all matters contained therein); Estate of Koester v. Hale, 297 Minn. 387, 393, 211 N.W.2d 778, 781-82 (1973) (concluding plain meaning of torrens provisions is that they are intended to prevent unjust enrichment that otherwise would necessarily result if purchaser of registered land obtained more land than was owned, claimed, or possessed by predecessor in title who registered land).
Appellants ask this court to direct the trial court to establish the boundary line between government lots 3 and 4 in a manner that is consistent with the Shepperd survey. We decline to do so. The evidence before the trial court demonstrated the legal description of appellants' property, as established in the torrens proceeding, does not include any land on government lot 4. Although appellants claim ownership of their land is based on the Shepperd survey, this survey encompasses land on government lot 4 and therefore, not included on appellants' certificate of title. While appellants argue a judicial determination of their boundary lines would not result in taking any part of government lot 4, they offered no evidence explaining the differences between the legal description as stated in their certificate of title, and the measurements contained in the Shepperd survey, other than to urge this court they are both the same. Thus, establishing the boundary lines in a manner consistent with the Shepperd survey would necessarily alter the legal description of appellants' land, and therefore constitute an attack on the torrens certificate. Given the purposes of the torrens act and the unique facts of this case, we conclude the trial court did not err by denying appellants' request to judicially determine boundaries. See Fidelity & Deposit Co. v. Riopelle, 298 Minn. 417, 421, 216 N.W.2d 674, 677 (1974) (concluding not all controversies arising out of ownership or claims of different parties to registered land are to be settled in summary proceeding subsequent to original registration); see also Hilton, 283 N.W.2d at 881 (concluding when evidence reasonably supports court's findings reviewing court must affirm).
DECISION
The trial court did not err in concluding appellants' action was not properly brought as a proceeding subsequent to initial registration of land pursuant to Minn.Stat. § 508.671.
Affirmed.
AMUNDSON, Judge (dissenting).
I respectfully dissent. This case was tried as a boundary dispute. The gravamen of the action is the proper manner to determine the boundary line between two adjacent government lots. These lots abut a meandered lake, which had little appreciable reliction or accretion. Appellants' land was registered without a judicial determination of boundaries. Respondents' land was not registered. The trial court determined that the disputed line deflected at the meander line to a point in the middle of the lake as shown on one of the surveys. Neither party disputes this decision on appeal.
The trial court, however, appeared concerned that this decision would deprive respondents of land they had occupied for many years. The trial court concluded that because appellants' land was registered, respondents had no defense to this proceeding subsequent to a boundary determination. The court determined that if appellants' predecessor in title had determined the boundaries in the original registration, respondents would have had those defenses.
The basic premise of the trial court is incorrect. Respondents could have counter-claimed for a reformation of the description on appellants' certificate of title on the quit claim deed they gave Farrell prior to registration. *752 They did not. Respondents obviously thought they could win on the strength of their expert surveyor. The case was tried as a survey dispute and not as a reformation action, which presumably would have been tried differently by appellants.
Minnesota law, in the torrens statute, makes an order for judicial landmarks mandatory. See Minn.Stat. § 508.671, subd. 2 (1996) (providing court shall file and establish boundaries and direct establishment of judicial landmarks). Prior to 1986, boundaries of registered land were determined by Minn. Stat. §§ 559.23, 559.24, and 559.25. It is important to note Minn.Stat. § 559.25 does not require judicial landmarks. The language in this statute is permissive and states in relevant part:
The judgment shall locate and define the boundary lines involved by reference to well-known permanent landmarks, and, if it shall be deemed for the interest of the parties, after the entry of judgment, the court may direct a competent surveyor to establish a permanent stone or iron landmark in accordance with the judgment, from which future surveys of the land embraced in the judgment shall be made.
Minn.Stat. § 559.25 (1996) (emphasis added). However, the language added to section 508.671 in 1986 is mandatory and requires:
Before the issuance of any final order determining the location of the owner's boundary lines, the court shall fix and establish the boundaries and direct the establishment of judicial landmarks in the manner provided by section 559.25.
Minn.Stat. § 508.671, subd. 2 (emphasis added). In this case, the trial court must follow section 508.671, which specifically states the court "shall" order judicial landmarks.
Because Minn.Stat. § 508.671, subd. 2 requires the court to direct the establishment of judicial landmarks, the question arises: Where should those monuments be placed? In this case we ask: If title to land is registered without judicial determination of the boundary, can the land then be ground-located either by an erroneous survey or the unstated intention of the registrant? I think not. The act of registration is not a conveyance and thus even if the description is ambiguous there is no support for the inclusion of evidence of parties' intent. The trial court properly found that the common boundary between Lots 3 and 4 is the line shown on the Sheppard survey. This is not disputed on appeal. Respondents' only claim is to the east line of Government Lot 4. There is only one east line of Government Lot 4. Judicial landmarks should be set on the line shown by the Sheppard survey, the line that defines the westerly line of the land described on appellants' certificate of title.
Were appellants avoiding possible defenses in this proceeding subsequent which would have been available to respondents in the original registration action? The trial court seemed convinced and by a memorandum accompanying the findings, stated:
If a claim was made at [the] * * * time of the original registration it is possible they would have had a defense to the registration based on adverse possession or boundary by practical location. * * *
By seeking to acquire the land by a proceeding [sic] subsequent, the Petitioner has avoided these possible defenses.
(citations omitted.) In fact, of course, respondents had their options. They could have counterclaimed for practical location of the boundaries, reformation of the description on the quit claim deed, or for a reformation of the description on appellants' certificate of title. They did none of these things. Respondents chose not to attack the description on the quit claim deed or on appellants' certificate of title. The statute provides for reformation of a written instrument:
(a) Before a court of equity will interfere to reform a written instrument it must appear, substantially as alleged in the pleadings, that there was in fact a valid agreement sufficiently expressing in terms the real intention of the parties; that there was in fact a written contract which failed to express such true intention; and that this failure was due to mutual mistake, or to mistake of one side and fraud or inequitable conduct of the other. (b) These facts must be established by competent evidence, which is consistent and not contradictory, clear and not equivocal, convincing *753 and not doubtful. Mere preponderance of testimony is not sufficient. (c) Such relief will be extended to those only who have not by their own conduct (as laches, negligence, or otherwise) put themselves in such a position as to render it unjust to change the situation, especially when such change might injuriously affect the rights or status of innocent third parties.
Fritz v. Fritz, 94 Minn. 264, 266, 102 N.W. 705, 706 (1905). In fact, a certificate of title may be altered by order of the court upon any reasonable ground. Minn.Stat. § 508.71, subd. 2 (1996); see also Nolan v. Stuebner, 429 N.W.2d 918, 924 (Minn.App.1988) (affirming trial court alteration of certificate of title which amended easement and reformed certificate of title), review denied (Minn. Dec. 16, 1988).
Appellants did not ask the court to amend the deed or the certificate of title, and the trial court erred when it held that appellants avoided possible defenses by bringing a proceeding subsequent rather than an original registration. Appellants ignored their possible defenses and elected to try the case as a dispute over the proper method of surveying this riparian land. Judgment should be reversed.
NOTES
[*] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
[1] See Minn.Stat. §§ 508.44, 508.45, 508.58, 508.59, 508.62, 508.67, 508.671, 508.70, 508.71 and 508.73. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572900/ | 576 N.W.2d 141 (1998)
456 Mich. 704
Hildegard GORA, The Loving Touch, Inc., Jacqueline Maxwell, Lea M. Perkins, Traci L. Lepro and Dawn L. Spangler, Plaintiffs-Appellees,
v.
CITY OF FERNDALE, a Municipal body corporate of the State of Michigan; and Valerie E. Kitchen in her official capacity as City Clerk for the City of Ferndale, Defendants-Appellants.
Docket No. 106783, Calendar No. 11.
Supreme Court of Michigan.
Argued December 10, 1997.
Decided April 1, 1998.
*143 Stephen M. Taylor, Farmington Hills, for Plaintiffs-Appellees.
Brian M. Smith & Associates, P.C. by Lawrence J. DeBrincat and Justin L. Smith, Troy, for Defendants-Appellants.
*142 Opinion
TAYLOR, Justice.
Plaintiffs, former operators and employees of massage parlor establishments in the city of Ferndale, brought suit challenging the constitutionality of Ferndale Ordinance No. 832, as amended by Ordinance No. 836. The ordinance is a comprehensive scheme of regulations governing the operation of massage parlors within the city of Ferndale. In a published opinion on remand, the Court of Appeals affirmed the circuit court's finding that two sections of the city's ordinance were violative of the state and federal constitutions.[1] The panel determined that § 7-266(a) of the ordinance, which prohibits opposite sex massage in massage parlor establishments except on a written order from a licensed health care practitioner, impermissibly discriminates on the basis of gender in violation of the state and federal Equal Protection Clauses.[2] It further held that § 7-265, which provides for periodic inspections without warrants of massage parlors by the police or other authorized city inspectors, violates constitutional protections against searches and seizures.[3] We granted leave to appeal[4] and now reverse because we find that the ordinance is constitutionally valid in its entirety.
I
In November 1990, the city of Ferndale enacted a comprehensive ordinance regulating massage parlors. Among other things, Ordinance No. 832, as amended by Ordinance No. 836, sets forth procedures and educational requirements for obtaining a city license or permit to own, operate, or work in a massage parlor, and prescribes necessary facilities, hours of operation, and employee conduct and dress. The ordinance also restricts opposite sex massages in § 7-266(a). That section provides:
Treatment of persons of opposite sex restricted. It shall be unlawful for any person holding a permit under this section and working in a massage establishment to treat a person of the opposite sex, except *144 upon the signed order of a licensed physician, osteopath, chiropractor, or registered physical therapist, which order shall be dated and shall specifically state the number of treatments, not to exceed ten (10). The date and hour of each treatment given and the name of the operator shall be entered on such order by the establishment where such treatments are given and shall be subject to inspection by the police pursuant to this article. The requirements of this subsection shall not apply to treatments given in the residence of a patient, the office of a licensed physician, osteopath or registered physical therapist, chiropractor, or in a regularly established and licensed hospital or sanitarium.
Further, the ordinance provides for periodic inspections of massage parlor establishments at § 7-265, which states:
The chief of police or other authorized inspectors from the City of Ferndale shall from time to time make inspection of each massage business establishment for the purposes of determining that the provisions of this article are fully complied with. It shall be unlawful for any licensee to fail to allow such inspection officer access to the premises or hinder such officer in any manner.
Under § 2-270, violation of any provision of the ordinance is a misdemeanor punishable by a fine of up to $500 or ninety days in jail.
Plaintiffs filed suit in Oakland Circuit Court, challenging the constitutionality of the ordinance. Initially, the circuit court found that several sections of the ordinance were violative of the state and federal constitutions. In reviewing this decision, however, the Court of Appeals held that the entire ordinance was preempted by provisions of the Occupational Code regulating myomassologists and did not address plaintiffs' constitutional claims.[5] In lieu of granting leave to appeal, this Court issued an order vacating that decision and remanding the case for reconsideration in light of 1995 P.A. 104, which repealed those portions of the Occupational Code that formed the basis of the panel's finding of preemption.[6] In addition, we directed the Court of Appeals to consider the constitutional issues that were left unaddressed.
On June 21, 1996, the Court of Appeals issued a second opinion on remand, holding that the two provisions at issue are unconstitutional. 217 Mich.App. 295, 551 N.W.2d 454 (1996). The panel concluded that § 7-266(a) violated the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution, as well as the equal protection guarantees provided by Michigan's Constitution. Const. 1963, art. 1, § 2. The opinion observed that classification schemes based on gender require application of the heightened scrutiny test, which requires that the classification serve an important governmental purpose and that it must be substantially related to achieving the government's objective. 217 Mich.App. at 303, 551 N.W.2d 454. In applying this test to the ordinance at issue, it stated:
Section 7-266(a) of defendant's ordinance is directed at an important public purpose, mainly the prevention of prostitution at massage parlors. Defendant's brief does not explain how the means of prohibiting mixed-gender massage is substantially related toward this end. Although prohibiting massage performed upon persons of the opposite gender would certainly prevent any sort of heterosexual contact between female masseuses and male customers, it would also cut the available number of plaintiff's [sic] prospective customers in half, significantly affecting their business. Although defendant's goal is legitimate, the prohibition applied to accomplish that goal is far too broad to be considered substantially related under the heightened-scrutiny test. [Id. at 303-304, 551 N.W.2d 454.]
With regard to the section of the ordinance dealing with inspections, § 7-265, the Court of Appeals affirmed the circuit court's determination that the provision violated the Fourth Amendment's constitutional protections against conducting searches and seizures without warrants. Id. at 304, 551 *145 N.W.2d 454. It reached this conclusion on the basis of the reasoning that the administrative search exception to the warrant requirement is inapplicable because the State of Michigan does not pervasively regulate the massage parlor industry. Id. at 305, 551 N.W.2d 454. However, the panel reversed the circuit court's finding of constitutional violations with regard to other provisions of the ordinance relating to educational requirements, minimum age restrictions, and prohibitions regarding touching or exposure of body parts.[7]
II
Before beginning our analysis, we note that an individual's right to engage in business is subject to the state's authority, pursuant to its historic police powers, to enact laws protecting the public health, safety, welfare, and morals. Grocers Dairy Co. v. Dep't of Agriculture Director, 377 Mich. 71, 75, 138 N.W.2d 767 (1966). "The enactment and enforcement of ordinances related to municipal concerns is a valid exercise of municipal police powers as long as the ordinance does not conflict with the constitution or general laws." Rental Property Owners Ass'n of Kent Co. v. Grand Rapids, 455 Mich. 246, 253, 566 N.W.2d 514 (1997). The rules governing the construction of statutes apply with equal force to the interpretation of municipal ordinances. Macenas v. Michiana, 433 Mich. 380, 396, 446 N.W.2d 102 (1989). Statutes and ordinances must be construed in a constitutional manner if possible. Detroit v. Qualls, 434 Mich. 340, 364, 454 N.W.2d 374 (1990). Because ordinances are presumed constitutional, the party challenging the validity of an ordinance has the burden of proving a violation. Rental Property Owners Ass'n, supra at 253, 566 N.W.2d 514.
III
The city argues that the Court of Appeals erred when it concluded that § 7-266(a), prohibiting opposite sex massages, was unconstitutional as a violation of the Fourteenth Amendment. We agree. The Court of Appeals decision is contrary to numerous United States Supreme Court decisions allowing such ordinances to stand on the basis of its conclusion that no federal question implicating equal protection guarantees was raised by the measures. Further, the ordinance does not run afoul of our state constitution. In Doe v. Dep't of Social Services, 439 Mich. 650, 672, 487 N.W.2d 166 (1992), we stated:
[W]e do not find in the wording used, nor in its arrangement, any evidence of purpose on the part of the drafters to provide broader protection in the Equal Protection Clause of the state constitution than is found in its federal counterpart. Rather, the pattern suggests a deliberate effort to duplicate the protection secured by the federal clause.
The United States Supreme Court has repeatedly ruled that ordinances prohibiting opposite sex massage do not present a substantial federal question.
In the first of these cases, Kisley v. City of Falls Church, 212 Va. 693, 187 S.E.2d 168 (1972), the Virginia Supreme Court held that an ordinance restricting opposite sex massages did not violate constitutional due process or equal protection guarantees. Id. at 696, 187 S.E.2d 168. The court concluded that, because the ordinance applied equally to both men and women, "[t]here is nothing in the ordinance that denies the equal protection guaranteed by the Fourteenth Amendment...." Id. On appeal, the United States Supreme Court dismissed the matter for want of a substantial federal question. Kisley v. City of Falls Church, 409 U.S. 907, 93 S.Ct. 237, 34 L.Ed.2d 169 (1972). The meaning of such a dismissal is that all the issues properly presented to the Supreme Court have been considered on the merits and held to be "without substance"; for this reason, the adjudication is binding precedent under the doctrine of stare decisis with respect to those issues when raised in subsequent matters. In re Apportionment of State Legislature1992, 439 Mich. 715, 729, 486 N.W.2d 639 (1992), citing Hicks v. Miranda, *146 422 U.S. 332, 95 S.Ct. 2281, 45 L.Ed.2d 223 (1975).
Not surprisingly, in subsequent cases before the Supreme Court raising the identical issue, the Court has consistently rejected constitutional challenges. See, e.g., Wright v. Indianapolis, 439 U.S. 804, 99 S.Ct. 60, 58 L.Ed.2d 97 (1978); where, again, the Court dismissed for want of a substantial federal question Indianapolis v. Wright, 267 Ind. 471, 371 N.E.2d 1298 (1978). The Court did the same in Smith v. Keator, 419 U.S. 1043, 95 S.Ct. 613, 42 L.Ed.2d 636 (1974), and in Rubenstein v. Cherry Hill Twp., 417 U.S. 963, 94 S.Ct. 3165, 41 L.Ed.2d 1136 (1974). The federal circuit and district courts have followed this authority, as have the state courts that have considered it.[8] It can be said, then, that this issue has been conclusively decided with regard to the federal constitution, and this Court, in light of this authority and the merits of the arguments presented, also concludes that this ordinance restricting or prohibiting opposite sex massages does not violate federal equal protection guarantees. People v. Walker (On Rehearing), 374 Mich. 331, 336, 132 N.W.2d 87 (1965).[9]
Further, as noted above, the scope of the equal protection guarantee afforded by our state constitution is coextensive with its federal counterpart. Doe, supra at 672, 487 N.W.2d 166. Therefore, the United States Supreme Court dismissals cited above compel our conclusion that the ordinance is not violative of plaintiffs' rights to equal protection of the law under art. 1, § 2 of Michigan's Constitution.
IV
Having decided that plaintiffs' equal protection claims are unavailing, we now move on to consider the plaintiffs' constitutional challenge to the inspection provision of the ordinance as violative of the Fourth Amendment's protection against searches conducted without warrants. The Court of Appeals determined that the administrative search exception to the warrant requirement is inapplicable under these circumstances because the massage parlor industry is not subject to pervasive regulation. We disagree.
While it is well established that the Fourth Amendment's prohibition of unreasonable searches and seizures applies to administrative inspections of private commercial property, an exemption from the search warrant requirement exists for administrative inspections of closely regulated industries.[10]Donovan v. Dewey, 452 U.S. *147 594, 602-603, 101 S.Ct. 2534, 2539-2540, 69 L.Ed.2d 262 (1981); United States v. Biswell, 406 U.S. 311, 92 S.Ct. 1593, 32 L.Ed.2d 87 (1972); Colonnade Catering Corp. v. United States, 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60 (1970). Whether the exemption applies is primarily determined by "`the pervasiveness and regularity of the ... regulation' and the effect of such regulation upon an owner's expectation of privacy." New York v. Burger, 482 U.S. 691, 701, 107 S.Ct. 2636, 2643, 96 L.Ed.2d 601 (1987).[11] When a person chooses to engage in a "pervasively regulated business... he does so with the knowledge that his business ... will be subject to effective inspection." Biswell, supra at 316, 92 S.Ct. at 1596. In part, the justification for this is that, unlike under general inspection schemes, the person in the pervasively regulated business "is not left to wonder about the purposes of the inspector or the limits of his task" as long as the regulations provide notice of and implicitly restrict the scope of the inspection to those areas of the business that must be examined to enforce the regulations. Id.; see also Donovan, supra at 603-604, 101 S.Ct. at 2540-2541.
While regulation of massage parlors has not been as extensive as that of some other enterprises, such as the liquor or firearms industries, it has nonetheless been held to be a pervasively regulated industry. Pollard v. Cockrell, 578 F.2d 1002, 1014 (C.A.5, 1978); Kim v. Dolch, 173 Cal.App.3d 736, 743, 219 Cal.Rptr. 248 (1985); see also anno., Regulation of masseurs, 17 A.L.R.2d 1183. In Indianapolis v. Wright, supra at 478, 371 N.E.2d 1298, the Indiana Supreme Court upheld a local massage parlor inspection ordinance similar to the one at issue in this case against a Fourth Amendment challenge.[12] After discussing federal case law relating to administrative inspections conducted pursuant to a licensing program, the court concluded that this was a pervasively regulated enterprise and that the massage parlor inspection scheme authorized by the ordinance was reasonable and permissible under the administrative search exception to the warrant requirement. Id. When appealed, the United States Supreme Court dismissed the appeal sub nom, Wright v. Indianapolis, supra, for want of a substantial federal question. As noted in the preceding section, the Supreme Court's disposition of a case in this manner is a decision on the merits that is stare decisis with regard to the issues presented, including, of course, the question of pervasive regulation. In re Apportionment of State Legislature1992, supra at 729, 486 N.W.2d 639; Hicks, supra at 344-345, 95 S.Ct. at 2289-2290. Thus, we conclude that the United States Supreme Court has determined that the massage parlor industry is a pervasively regulated business and that inspections of massage parlors conducted *148 without warrants pursuant to a comprehensive licensing and regulation ordinance are permissible under the administrative search exception to the warrant requirement of the Fourth Amendment.[13]
It is important to note that, while the Court of Appeals resolution of this issue turned solely on whether massage parlors are a pervasively regulated industry, the trial court found the inspection provision of the Ferndale ordinance constitutionally objectionable because, unlike the ordinance upheld in Wright, the Ferndale ordinance provides for criminal prosecution for refusing to permit inspections. Furthermore, the trial court held the ordinance to be constitutionally defective because it fails to expressly limit inspections to business hours or other reasonable times and does not expressly require that inspections be conducted in a reasonable manner. We shall address these distinctions in turn.
As a prelude to our discussion of the trial court's first ground for finding the ordinance constitutionally objectionable, namely, that it imposes criminal penalties, we note that the penalties imposed are not equivalent to a criminal prosecution under Michigan law. As we recently stated in Huron Twp. v. City Disposal Systems, Inc., 448 Mich. 362, 365, 531 N.W.2d 153 (1995), "[t]his Court has long recognized that prosecutions for violations of ordinances are in a sense criminal, but that such violations are not criminal cases within the meaning of the statutes and rules for review by this Court."
However, even if the penalties imposed are considered criminal in nature, the United States Supreme Court has repeatedly held that an administrative regulatory scheme is not rendered constitutionally unreasonable because it imposes criminal penalties for refusing to allow an administrative inspection without a warrant or for any other violation of the underlying law. Burger, supra at 712, 107 S.Ct. at 2648; Biswell, supra at 315, 92 S.Ct. at 1596; see also Kim, supra at 747, 219 Cal.Rptr. 248. A business owner or employee's "decision to step aside and permit the inspection rather than face a criminal prosecution is analogous to a householder's acquiescence in a search pursuant to a warrant when the alternative is a possible criminal prosecution for refusing entry...." Biswell, supra at 315, 92 S.Ct. at 1596. In Burger, supra at 712, 107 S.Ct. at 2648, the Supreme Court expressly recognized that social problems may be addressed "both by way of an administrative scheme and through penal sanctions." Plaintiffs have cited no case holding that the imposition of criminal penalties, by itself, is sufficient to invalidate an otherwise constitutional ordinance providing for administrative inspections of commercial property conducted pursuant to a comprehensive licensing program. Thus, the ordinance cannot be adjudged unconstitutional solely on the basis that criminal penalties are provided for its violation.
We now turn to the second constitutional infirmity identified by the trial court, the absence of an express reasonableness requirement. While it is true that ordinance § 7-265 does not state that inspections must be conducted in a reasonable manner or at a reasonable time, the trial court erred in its assumption that the city council intended to authorize unreasonable inspections. It is one of the oldest and most well-established tenets of our jurisprudence that legislative enactments enjoy a presumption of constitutionality. As this Court stated in Brown v. Shelby Twp., 360 Mich. 299, 309, 103 N.W.2d 612 (1960):
"The generally accepted rule is that a presumption prevails in favor of the reasonableness and validity in all particulars of a municipal ordinance unless the contrary is shown by competent evidence, or appears on the face of the enactment." [Quoting Harrigan & Reid Co. v. Burton, 224 Mich. 564, 569, 195 N.W. 60 (1923).]
One of the reasons underlying this presumption is that persons holding legislative office, such as members of the city council, are *149 duty-bound to act in conformity with their oaths to support the Michigan and federal constitutions, just as are members of the judiciary. Marbury v. Madison, 5 U.S. (1 Cranch) 137, 179-180, 2 L.Ed. 60 (1803). As Justice Holmes put it, "it must be remembered that legislatures are ultimate guardians of the liberties and welfare of the people in quite as great a degree as the courts." Missouri, Kansas & Texas R. Co. v. May, 194 U.S. 267, 270, 24 S.Ct. 638, 639, 48 L.Ed. 971 (1904). Therefore, it cannot be assumed that the city council members intended to violate their civic trust; such an assumption impermissibly shifts the burden of proof to the municipality. Rental Property Owners Ass'n, supra at 253, 566 N.W.2d 514. Moreover, the oath to uphold the constitution would be rendered meaningless if legislators were required at every turn to prove that they acted in conformance with it.
In addition to disregarding the presumption of constitutionality, reading § 7-265 to authorize unreasonable inspections is also inconsistent with the understanding that the words of the ordinance should trigger. The ordinance says that inspections may only be conducted "for the purposes of determining that the provisions of this article are fully complied with." This means, as interpreted in Michigan, that they are to be done reasonably. In Tallman v. Dep't of Natural Resources, 421 Mich. 585, 626-627, 365 N.W.2d 724 (1984), we found that the inspection statute at issue, which authorized inspections of fishing vessels "at any time," did not offend either the state or federal constitution because it was sufficiently limited by language stating that the inspections "must be deemed `necessary' to carry out the provisions of the act." These limitations on the acceptable scope of an inspection assure the requirement that the action be reasonable. The same result obtains here, and we find that the inspection ordinance is, in like fashion, implicitly limited by its language restricting the scope of inspections to that necessary to determine compliance with the other provisions of the ordinance.[14]
A further reason this ordinance should be read as only permitting reasonable inspections is that an unreasonable inspection could not, as a matter of law, be one to which the licensee could be held to have consented. It is well established that administrative searches conducted without warrants are permissible in closely regulated industries because a licensee in such an industry is held to have impliedly consented to periodic inspections by applying for and obtaining a license. Almeida-Sanchez v. United States, 413 U.S. 266, 271, 93 S.Ct. 2535, 2538, 37 L.Ed.2d 596 (1973); Biswell, supra at 316, 92 S.Ct. at 1596; Wright, supra at 478, 371 N.E.2d 1298. However, the scope of the consent given extends only to reasonable inspections that are limited to that necessary to ensure compliance with the regulatory scheme. In Tallman, supra at 629, 365 N.W.2d 724, we stated unequivocally that no one "can be required to surrender ... constitutionally protected rights in exchange for the privilege of doing business." Thus, because we must assume that the city council acted reasonably and constitutionally, with awareness of the existing law, it can only be concluded on this basis also that only reasonable inspections are authorized by § 7-265.
Finally, plaintiffs' claim that the ordinance is facially invalid as violative of the Fourth and Fourteenth Amendments of the federal constitution and art. 1, §§ 11 and 17 of the Michigan Constitution is meritless. A legislative enactment can be held to be facially invalid only if there are no factual circumstances under which the provision could be constitutionally implemented. United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 2100, 95 L.Ed.2d 697 (1987).[15] The trial *150 court misunderstood this test by finding that, if circumstances could be conceived under which the ordinance would be unconstitutionally applied, then the ordinance must fall. This turns the test on its head. "The cardinal principle of statutory construction is to save and not to destroy." NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 30, 57 S.Ct. 615, 621, 81 L.Ed. 893 (1937). Because there are circumstances under which the ordinance would be valid, namely, inspections conducted in a reasonable manner consistent with plaintiffs' Fourth Amendment rights, the test is met and the facial challenge to constitutionality fails.[16] Therefore, because § 7-265 may be construed, consistent with constitutional protections, to permit periodic reasonable inspections for the purpose of determining compliance with the ordinance, we reverse the Court of Appeals decision finding the provision violative of the Fourth Amendment of the United States Constitution.
V
In conclusion, we hold that the Ferndale massage parlor ordinance is constitutional in its entirety. As we have explained, the United States Supreme Court has repeatedly held that provisions restricting or prohibiting opposite sex massages do not offend the Equal Protection Clause of the federal constitution. Further, under these circumstances, the Michigan Constitution provides no greater protection than does its federal counterpart. Thus, the Court of Appeals erred in finding that the ordinance violated plaintiffs' equal protection rights.
We find that the administrative search exception to the warrant requirement is applicable in this case because the United States Supreme Court implicitly held that the massage parlor industry is subject to pervasive regulation in its dismissal of the appeal in Wright, supra, for want of a substantial federal question. The slight differences between the language of Ferndale Ordinance § 7-265 and similar inspection provisions upheld by the Supreme Court do not warrant finding a constitutional violation. Because we must construe the ordinance in a constitutional manner if possible, we read the ordinance as permitting periodic inspections that are conducted without warrants in a reasonable fashion solely for the purposes of determining compliance with the requirements of the ordinance. Consequently, the Court of Appeals decision is reversed.
MALLETT, C.J., and BRICKLEY, BOYLE, and WEAVER, JJ., concurred with TAYLOR, J.
MICHAEL F. CAVANAGH, Justice (concurring in part and dissenting in part).
I concur only in the result of the majority with respect to the equal protection issue. Current and future plenary review of this issue is precluded until the United States Supreme Court affords the issue plenary review. However, I agree with Justice Brennan's dissent in Colorado Springs Amusements, Ltd. v. Rizzo, 428 U.S. 913, 96 S.Ct. 3228, 49 L.Ed.2d 1222 (1976), that this Court should be able to review the merits of the equal protection argument. The merit of plaintiffs' argument is at the very least colorable after the United States Supreme Court decision in JEB v. Alabama ex rel TB, 511 U.S. 127, 114 S.Ct. 1419, 128 L.Ed.2d 89 (1994), which recognized an equal protection violation even though members of both sexes were excluded from participating in the jury process on the basis of their gender.
As to the issue of search without a warrant, I concur with the reasoning and result of Justice MARILYN J. KELLY.
MARILYN J. KELLY, Justice (dissenting ).
Today, without acknowledging the test *151 adopted by this Court in Tallman v. DNR,[1] and more importantly, without recognizing the independence of the state and its citizens and their ability to enact a constitution that gives them greater protection than the federal constitution, the Court abdicates its constitutional responsibility to undertake an independent analysis of its own state's constitution. The majority holds for the first time that United States Supreme Court precedent construing the Fourth Amendment is binding on this Court's interpretation of the Michigan Constitution, Const.1963, art. 1, § 11.
Part III of the majority's opinion states that our Equal Protection Clause provides no greater protection than its federal counterpart. Slip op. at 146. Under that reasoning, United States Supreme Court precedent holding that a statute does not violate federal equal protection means that the statute is constitutional under the equal protection provision in our state constitution, as well. Slip op. at 146-147.
In Part IV of the opinion, the majority extends this analysis to Const. 1963, art. 1, § 11, and the Fourth Amendment of the federal constitution:
As noted in the preceding section, the Supreme Court's disposition of [Wright v. Indianapolis[2]] in this manner is a decision on the merits that is stare decisis with regard to the issues presented, including, of course, the question of pervasive regulation. Thus, we conclude that the United States Supreme Court has determined that the massage parlor industry is a pervasively regulated business and that inspections of massage parlors conducted without warrants pursuant to a comprehensive licensing and regulation ordinance are permissible under the administrative search exception to the warrant requirement of the Fourth Amendment. [Slip op. at 148 (citations omitted).]
The United States Supreme Court dismissed Wright v. Indianapolis for lack of a substantial federal question. It is error for this Court to hold that the dismissal in Wright prevents us from undertaking an independent analysis of the issues presented here under our own constitution. A finding that the massage parlor industry is pervasively regulated in Indiana does not dictate that regulation is pervasive in Michigan, or in any other state. It does not follow from the mere finding that an industry is pervasively regulated that warrantless searches of commercial premises used in that industry are constitutional under Michigan law. Finally, and most importantly, the Supreme Court's dismissal of Wright does not mean that § 7-265 of the Ferndale ordinance is permissible under art. 1, § 11 of the state constitution.
The citizens of this state are protected from unreasonable searches and seizures by Const. 1963, art. 1, § 11, which provides:
The person, houses, papers and possessions of every person shall be secure from unreasonable searches and seizures. No warrant to search any place or to seize any person or things shall issue without describing them, nor without probable cause, supported by oath or affirmation.
This Court adopted the "pervasively regulated industry" exception to the warrant requirement of art. 1, § 11 in Tallman. There, we fashioned a seven-part test to determine whether a provision for searches without warrants satisfies the requirements of the Michigan Constitution.[3]
*152 In Tallman, this Court made clear that, when examining a statute alleged to fit under the exception for searches without warrants, it will undertake an independent analysis. At issue there was a fish and game statute that provided for warrantless searches of commercial fishing vessels.[4]
In adopting the exception and applying it under the state constitution, the Tallman Court did not simply follow federal precedent. It undertook its own analysis, engaging in an extensive analysis of federal regulation of fishing and fisheries. The fact that several federal circuits had held that fishing was a pervasively regulated industry did not end the Court's inquiry. 421 Mich. at 608-613,365 N.W.2d 724.
Nor did the Tallman Court end its inquiry after turning to the regulations in several of our sister states and examining decisions holding administrative searches permissible under their constitutions. Id. at 613-616, 365 N.W.2d 724. Neither the federal precedent nor the decisions of our sister states commanded an identical result under our constitution.[5] Instead, the Court went on to examine both the history and scope of commercial fishing regulations within this state. At length, it decided that commercial fishing is a pervasively regulated industry in Michigan. Id. at 619-626, 365 N.W.2d 724.
In addition, merely finding the industry to be pervasively regulated did not end the Court's constitutional inquiry. In Tallman, the Court adopted a seven-factor test, only one of whose factors dealt with pervasive regulation. See note 3. The Court expressly noted that its test was different from the federal test.[6] But only after examining all seven factors did it conclude that the statute was constitutional under art. 1, § 11. Id. at 618, 619-630, 365 N.W.2d 724. In the years since, our state courts have used these seven factors to determine whether statutes and ordinances providing for searches without warrants satisfy the minimum requirements of the Michigan Constitution.[7]
In Dep't of State Police v. Sitz,[8] this Court held that the protection of art. 1, § 11 is not limited to that provided by the federal constitution. The Court recognized that the expansion of art. 1, § 11 should occur only when there are compelling reasons for it. However, we noted that
"compelling reason" should not be understood as establishing a conclusive presumption artificially linking state constitutional interpretation to federal law. As illustrated by the question presented today, a literal application of the term would force us to ignore the jurisprudential history of this Court in favor of the analysis of the United States Supreme Court announced in Sitz. [[9]]Properly understood, the Nash[[10]] [compelling reason] rule compels neither the acceptance of federal interpretation nor its rejection. In each instance, what is required of this Court is a searching examination to discover what law "the people have made." [Id. at 758-759, 506 N.W.2d 209.]
A "searching examination" of art. 1, § 11 is conspicuously absent from the majority opinion. Instead, it merely holds that federal precedent compels its conclusion, an approach Sitz v. Dep't of State Police explicitly *153 rejected. It is not obvious to me that compelling reasons exist to expand the section's coverage in this area. However, I am certain that the Court errs when it fails to undertake an independent analysis of the state's own constitutional provisions.
I would vacate the Court of Appeals opinion on this issue and remand to the trial court for application of the seven-factor test adopted in Tallman.
NOTES
[1] 217 Mich.App. 295, 551 N.W.2d 454 (1996).
[2] U.S. Const., Am. XIV, § 1; Const. 1963, art. 1, § 2.
[3] U.S. Const., Am. IV, made applicable to the states through the Due Process Clause of the Fourteenth Amendment. Mapp v. Ohio, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081 (1961). See also Const. 1963, art. 1, §§ 11, 17.
[4] 456 Mich. 851, 568 N.W.2d 88 (1997).
[5] 210 Mich.App. 622, 533 N.W.2d 840 (1995).
[6] 451 Mich. 875, 549 N.W.2d 567 (1996).
[7] Plaintiffs have not appealed from this portion of the Court of Appeals decision.
[8] Accord Song v. Elyria, Ohio, 985 F.2d 840, 843 (C.A.6, 1993), Oriental Health Spa v. Fort Wayne, 864 F.2d 486, 490 (C.A.7, 1988), Mini Spas v. South Salt Lake City, 810 F.2d 939 (C.A.10, 1987), Pollard v. Cockrell, 578 F.2d 1002, 1010-1011 (C.A.5, 1978), Tomlinson v. Savannah, 543 F.2d 570, 571 (C.A.5, 1976), Colorado Springs Amusements, Ltd. v. Rizzo, 524 F.2d 571, 576 (C.A.3, 1975), cert den 428 U.S. 913, 96 S.Ct. 3228, 49 L.Ed.2d 1222 (1976), Clampitt v. Fort Wayne, 682 F.Supp. 401 (N.D.Ind., 1988), Wigginess, Inc. v. Fruchtman, 482 F.Supp. 681, 687-689 (S.D.N.Y., 1979), aff'd. 628 F.2d 1346 (C.A.2, 1980), cert den 449 U.S. 842, 101 S.Ct. 122, 66 L.Ed.2d 50 (1980), Techtow v. City Council of North Las Vegas, 105 Nev. 330, 333-334, 775 P.2d 227 (1989), and Redwood Gym v. Salt Lake Comm., 624 P.2d 1138, 1146 (Utah, 1981) ("It has been established to a certainty ... that an ordinance such as the one in question here does no violence to federal guarantees of equal protection"). We find the reasoning in the sole case cited by plaintiffs, JSK Enterprises, Inc. v. City of Lacey, 6 Wash.App. 43, 54-55, 492 P.2d 600 (1971), to be unpersuasive because the case was decided before the United States Supreme Court decision in Kisley.
[9] There exists no legal basis for the Court of Appeals finding that the restrictions on opposite sex massage are "far too broad to be considered substantially related" to the government's interest in controlling prostitution. The United States Supreme Court has never "recognized an `overbreadth' doctrine outside the limited context of the First Amendment." United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 2100, 95 L.Ed.2d 697 (1987).
[10] As the dissent notes, this Court adopted the "pervasively regulated industry" exception to the warrant requirement of art. 1, § 11 in Tallman v. Dep't of Natural Resources, 421 Mich. 585, 365 N.W.2d 724 (1984). In Tallman, this Court noted that the seven factors in the test it announced "differ only slightly from the five factors applied in the federal courts." Id. at 618, 365 N.W.2d 724. To be understood is that these two tests are essentially identical, although organized differently, i.e., there are seven factors in the Michigan version and five factors in the federal version. Thus, Michigan has adopted a "pervasively regulated industry" exception to art. 1, § 11's warrant requirement that is essentially the same as the federal exception. Further, this Court has stated that "the Michigan Constitution should not be construed to provide greater remedy for search and seizure violations than the federal constitution unless there is a compelling reason to do so." People v. Champion, 452 Mich. 92, 97-98, n. 3, 549 N.W.2d 849 (1996). Neither the parties nor the dissent offer any compelling reason why the Michigan Constitution should be construed differently than the federal constitution regarding the "pervasively regulated industry" exception to the warrant requirement. Accordingly, the United States Supreme Court authority, discussed below, regarding the precise issue before usa local massage parlor inspection ordinanceconclusively resolves the issue here.
[11] We are unpersuaded by plaintiffs' contention that there can be no finding that the massage parlor trade is a pervasively regulated industry in the absence of a history of regulation by the City of Ferndale. The United States Supreme Court expressly rejected an approach that relied exclusively
on historical factors in Donovan v. Dewey, supra at 606, 101 S.Ct. at 2542, stating that "if the length of regulation were the only criterion, absurd results would occur." Rather, "it is the pervasiveness and regularity of the ... regulation that ultimately determines whether a warrant is necessary to render an inspection program reasonable under the Fourth Amendment." Id.; see also New York v. Burger, supra at 720, 107 S.Ct. at 2652; Tallman v. Dep't of Natural Resources, n. 10, supra at 607, 365 N.W.2d 724. Moreover, the goal of the ordinance is primarily to prevent massage establishments from being used as a front for prostitution, which, as "the oldest profession," historically has been subject to pervasive regulation for perhaps longer than any other industry.
[12] The ordinance in that case provided that massage parlors and similar businesses "shall be open for inspection during all business hours and at other reasonable times by police officers, health and fire inspectors ... upon the showing of proper credentials by such person." Id.
[13] In addition to conclusively resolving the question whether the massage parlor business is a "pervasively regulated industry," the Supreme Court's disposition of Wright also illustrates the error in the Court of Appeals assumption that the industry must be regulated at the state level. Just as in the instant case, in Indianapolis v. Wright, supra at 475, 371 N.E.2d 1298, there was no state statute regulating massage parlors.
[14] The United States Supreme Court has repeatedly upheld inspection provisions conferring substantial discretion on inspectors in situations where, as in the instant case, "unannounced, even frequent, inspections are essential" to effective enforcement of a comprehensive and well-defined regulatory scheme. Biswell, supra at 316, 92 S.Ct. at 1596; see also Donovan, supra at 603, 101 S.Ct. at 2540; Burger, supra at 710-711, 107 S.Ct. at 2648.
[15] Similarly, in People v. McQuillan, 392 Mich. 511, 536-537, 221 N.W.2d 569 (1974), we held that it is the court's duty to construe a statute "as constitutional unless the contrary clearly appears." In that case, a due process challenge was raised to a statute requiring that the defendants found not guilty by reason of insanity "be committed immediately." Id. This Court determined that the statute did not, on its face, violate due process because a hearing requirement could be inferred from the provision. Id.
[16] Moreover, plaintiffs cannot assert that the inspection provision of the ordinance is unconstitutional as applied. There is no evidence whatsoever in the record from which to conclude that the ordinance has been applied in an unconstitutional manner.
[1] 421 Mich. 585, 365 N.W.2d 724 (1984).
[2] 439 U.S. 804, 99 S.Ct. 60, 58 L.Ed.2d 97 (1978).
[3] Id. at 617-618, 365 N.W.2d 724. The Court explained:
We conclude that conflicts arising under art. 1, § 11 of the Michigan Constitution between the enforcement needs of governmental agencies and the privacy interests of regulated commercial actors should be resolved by balancing the following factors:
(1) the existence of express statutory authorization for search or seizure;
(2) the importance of the governmental interest at stake;
(3) the pervasiveness and longevity of industry regulation;
(4) the inclusion of reasonable limitations on searches in statutes and regulations;
(5) the government's need for flexibility in the time, scope, and frequency of inspections in order to achieve reasonable levels of compliance;
(6) the degree of intrusion occasioned by a particular regulatory search; and
(7) the degree to which a business person may be said to have impliedly consented to warrantless searches as a condition of doing business, so that the search does not infringe upon reasonable expectations of privacy.
[4] M.C.L. § 308.1b(2)(e); M.S.A. § 13.1491(2)(e).
[5] "[F]ederal and state cases provide guidance and persuasive authority for our adoption of the `pervasively regulated industry' doctrine as the law of this state." Id. at 616-617, 365 N.W.2d at 738.
[6] 421 Mich. at 618, 365 N.W.2d 724. "These seven factors differ only slightly from the five factors applied in the federal courts." Id.
[7] See, for example, People v. Pashigian, 150 Mich.App. 97, 388 N.W.2d 259 (1986), and People v. Barnes, 146 Mich.App. 37, 379 N.W.2d 464 (1985).
[8] 443 Mich. 744, 506 N.W.2d 209 (1993).
[9] Michigan Dep't of State Police v. Sitz, 496 U.S. 444, 110 S.Ct. 2481, 110 L.Ed.2d 412 (1990).
[10] People v. Nash, 418 Mich. 196, 341 N.W.2d 439 (1983). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572912/ | 576 N.W.2d 753 (1998)
STATE of Minnesota, Appellant,
v.
Freeman Algot WICKLUND, et al., Respondents.
No. C7-97-1381.
Court of Appeals of Minnesota.
April 7, 1998.
*754 Hubert H. Humphrey III, Attorney General, St. Paul; and Sandra Henkels Johnson, Bloomington City Attorney, Bloomington, for appellant.
Larry B. Leventhal, Michael C. Hager, Larry Leventhal & Associates, Minneapolis, for respondents.
John M. Sheran, Jeffrey A. Eyres, Susan M. Humiston, Leonard, Street and Deinard, P.A., Minneapolis, for amicus curiae Mall of America Company.
Randall D.B. Tigue, Minneapolis, for amicus curiae Minnesota Civil Liberties Union.
Carla J. Heyl, St. Paul, for amicus curiae League of Minnesota Cities.
Charles F. Webber, Faegre & Benson LLP, Minneapolis; and Edward J. Sack, New York City, of counsel for amicus curiae International Council of Shopping Centers, Inc.
Carla J. Pedersen, Richard L. Evans, McGrann Shea Franzen Carnival Straughn & Lamb, Minneapolis, for amicus curiae Greater Minneapolis Building Owners & Managers Association and Building Owners and Managers Association International.
Considered and decided by HUSPENI, P.J., and RANDALL and MANSUR,[*] JJ.
OPINION
MARTIN J. MANSUR, Judge.
This appeal is from a pretrial order denying respondents' motion to dismiss but ruling in respondents' favor on the legal issue of whether the Mall of America is a "public forum" for purposes of the free speech provision of the Minnesota Constitution. Respondents are charged with misdemeanor trespassing. Minn.Stat. § 609.605, subd. 1 (1996). We reverse.
FACTS
Respondents Freeman Wicklund, Althea Schaffer, Peter Eckholdt, and Alissa Eggert are charged with entering the Mall of America on May 19, 1996, as part of a group of about 10 people protesting on behalf of animal rights. They allegedly stood in the courtyard in front of Macy's department store, carrying signs and passing out leaflets *755 directed at Macy's sale of fur coats. They allegedly refused the request of Mall of America security personnel to leave the area because they were in violation of the Mall's rules regarding unauthorized distribution of literature and picketing. The group was advised that there were public areas available for protest on public sidewalks outside the Mall, and some agreed to leave voluntarily, but respondents refused and were arrested by Bloomington police. Respondents were charged with misdemeanor trespassing.
Respondents moved to dismiss the charges on grounds that the Bloomington trespassing ordinance was being unconstitutionally applied to them, and that First Amendment activities were protected in the Mall of America. After the state filed a response to the motion, the trial court issued an order soliciting briefing on the issue of whether the state constitutional protection for free speech applied to respondents' activities at the Mall of America. The court also posed additional factual questions. The parties filed additional memoranda, and the trial court granted both the Minnesota Civil Liberties Union (MCLU) and the Mall of America leave to participate as amicus curiae, and they filed amicus memoranda.
At an evidentiary hearing on the motion to dismiss, the parties presented a stipulation of facts and a list of exhibits. Testimony was presented concerning the financing of the Mall of America, the Mall's relationship with the Bloomington Port Authority and the City of Bloomington, including the Bloomington police department, the general phenomenon of enclosed shopping malls, and the details of the May 19, 1996, demonstration at which respondents were arrested.
The trial court issued an order denying the motion to dismiss, but agreeing with respondents' argument that the Mall of America is a "public forum" for purposes of the free speech provision of the Minnesota Constitution. The trial court concluded that the free speech provision of the state constitution should be construed more expansively than its federal counterpart, that given the substantial public subsidy involved in its construction, the Mall of America is not "private" in any meaningful sense, that the Mall was "born of a union with government," and that the Mall could impose only reasonable time, place and manner restrictions on the exercise of free speech. Although the court agreed with respondents' free speech argument, it denied their motion to dismiss, finding that respondents did not show that they had tried to get the Mall's permission for their demonstration or that such a request would have been futile.
ISSUE
Does the free speech provision of the Minnesota Constitution apply to respondents' expressive conduct at the Mall of America?
ANALYSIS
This court generally reviews a pretrial order appealed by the state under the clearly erroneous standard. See, e.g., State v. Jones, 518 N.W.2d 67, 69 (Minn.App.1994) (in pretrial appeal, state must show clearly and unequivocally that district court erred and, unless reversed, error will have critical impact on outcome of trial), review denied (Minn. July 27, 1994). The issue presented here, however, is the proper construction of a state constitutional provision, a question of law that this court may review de novo. See generally State v. Stallman, 519 N.W.2d 903, 906 (Minn.App.1994) (constitutionality of statute is legal issue reviewed de novo by appellate court). Although respondents attempt to frame the issue before this court as a factual issue to which the clearly erroneous standard might apply, the trial court's order presents a legal ruling reviewable under a de novo standard of review.
The United States Supreme Court has held that the free speech guarantee of the federal Bill of Rights does not extend to expressive conduct that occurs within the confines of a privately-owned shopping center. See Lloyd Corp., Ltd. v. Tanner, 407 U.S. 551, 569, 92 S. Ct. 2219, 2228, 33 L. Ed. 2d 131 (1972).[1] Therefore, respondents' activity *756 in leafleting at the Mall of America against Macy's department store is protected only if the free speech guarantee in article I, section 3, of the state constitution extends a broader protection than the First Amendment of the federal Bill of Rights.
The United States Supreme Court's decision in Lloyd Corp. not to extend First Amendment protections to privately-owned shopping centers does not prevent a state from extending the free speech protections of its own constitution more expansively to protect expressive conduct in such locations. PruneYard Shopping Center v. Robins, 447 U.S. 74, 81, 100 S. Ct. 2035, 2040, 64 L. Ed. 2d 741 (1980). A number of state courts have done so. E.g. New Jersey Coalition Against War in the Middle East v. J.M.B. Realty Corp., 138 N.J. 326, 650 A.2d 757 (1994); Robins v. Pruneyard Shopping Center, 23 Cal. 3d 899, 153 Cal. Rptr. 854, 592 P.2d 341 (1979). We conclude, however, that the current state of the law in Minnesota and the weight of authority in other jurisdictions do not support such an extension.
Article I, section 3, of the Minnesota Constitution provides as follows:
The Liberty of the press shall forever remain inviolate, and all persons may freely speak, write and publish their sentiments on all subjects being responsible for the abuse of such rights.
As the trial court noted, this provision is worded differently than the federal Bill of Rights, which provides that "Congress shall make no law * * * abridging the freedom of speech or the press * * * *." U.S. Const. amend. I. It is axiomatic that the Minnesota Constitution may be construed so as to offer greater protection for individual rights than the U.S. Supreme Court has afforded under the federal constitution. E.g. State v. Fuller, 374 N.W.2d 722, 726 (Minn.1985). But it is a significant undertaking for a state court to hold that the state constitution affords broader protections than the federal constitution, and it is not sufficient, to reject a U.S. Supreme Court opinion, that one prefers the opposite result. Women of State of Minn. by Doe v. Gomez, 542 N.W.2d 17, 30 (Minn. 1995).
The free speech provision in article I, section 3, of our state constitution expresses the right of free speech in positive terms, extending a freedom of speech to "all persons," while the First Amendment expresses the same guarantee in negative terms, as a restriction on the power of Congress to make laws. But, our state constitution's first amendment language is not unique. There are 33 states with virtually identical free speech provisions, stated in positive terms contrasting with the negative phrasing of the First Amendment. Cf. Note, Private Abridgement of Speech and the State Constitutions, 90 Yale L.J. 165, 180 n. 79 (1980) (counting 43 states with similarly-worded state constitutional free speech clauses).
Our supreme court has held that the free speech provision of the state constitution does not extend any broader protection to speech than is provided in the federal Bill of Rights. See, e.g., State v. Davidson, 481 N.W.2d 51, 57 (Minn.1992) (citing State v. Century Camera, Inc., 309 N.W.2d 735, 738 n. 6 (Minn.1981)). This court is not only bound by those decisions, we also find them particularly persuasive in this case.
The trial court's order discusses extensively the history of the state constitution and quotes from the debate over the free speech clause. But none of the debate excerpts quoted reveals the framers' reason for departing from the language of the First Amendment of the U.S. Constitution. The focus of the state constitutional debates is on the problem of libel, confirming Justice Holmes's observation that such state constitutional free speech provisions were primarily concerned with preventing prior restraint on publication, while preserving subsequent actions for libel. Patterson v. Colorado, 205 U.S. 454, 462, 27 S. Ct. 556, 558, 51 L. Ed. 879 (1907). Moreover, a logical explanation for our state constitution's free speech clause, given the number of state constitutions with *757 similar provisions, is that the language was borrowed from other state constitutions. See State v. Pett, 253 Minn. 429, 432, 92 N.W.2d 205, 207 (1958) (when state constitution was drafted, provisions of constitutions from states admitted earlier were available and presumably "carefully studied and compared").
Our supreme court has not addressed whether the state constitution protects expressive conduct in privately-owned shopping centers. This court, however, has rejected an argument that it should extend the protections of article I, section 3, to expressive conduct on private property. State v. Scholberg, 412 N.W.2d 339, 344 (Minn.App.1987), review denied (Minn. Nov. 13, 1987). Although Scholberg involved a demonstration on a sidewalk owned by a private hospital rather than expressive conduct in a shopping center, this court posed the issue in broad terms:
This is a case of conflicting rights between demonstrators' free speech rights and a private-property owner's right to exclude.
Id. at 341.
Here, the trial court concluded, based on the evidence received concerning the character of the Mall of America and the level of public funding involved in its construction, that the Mall was "born of a union with government" and is not "private" in any real sense. The court conceded that under Scholberg, article I, section 3, does not apply to "purely" private property. The court concluded, however, that article I, section 3, does apply to private property in which there is some undefined degree of public subsidy or investment.
Our supreme court, while not specifically addressing the principle of "state action" in the context of article I, section 3, has noted that the First Amendment guarantee of freedom of speech does not "provide protection or redress against abridgement by private individuals or corporations." Cherne Indus., Inc. v. Grounds & Assocs., Inc., 278 N.W.2d 81, 94 (Minn.1979). The supreme court has consistently interpreted the state Bill of Rights to require state action. See, e.g., Zeman v. City of Minneapolis, 552 N.W.2d 548, 552 (Minn.1996) (takings clause of state constitution applies only to state action). Public funding by itself does not satisfy the "state action" requirement. See Brennan v. Minneapolis Soc'y of the Blind, Inc., 282 N.W.2d 515, 527-28 (Minn.1979) (more is required for "state action" than public funding).
It is not clear whether the trial court in its order was attempting to distinguish Brennan or to discard the "state action" requirement for purposes of article I, section 3.
Respondents presented evidence that the total public investment in the Mall of America, for both the Bloomington Port Authority and the City of Bloomington, is about $186 million. The parties stipulated that construction and development of the Mall cost its private investors approximately $700 million, and that the Bloomington Port Authority used tax increment financing to finance improvements to the site. Although the trial court's order at one point indicates the Mall of America is unique in the size of the public funding involved, there are many projects that would have the same percentage (estimated by one of the witnesses as 13%) of public financing, and therefore would be potentially subject to being held to be public property under the trial court's reasoning. Under the ruling of the trial court here, there are many properties that have been developed using tax increment financing, or other means of public subsidy, that would apparently not qualify as "purely private." We conclude that the public funding involved in the development of the Mall of America does not satisfy the state action requirement under Brennan.
Neither can we agree with the trial court's apparent discarding of the state action requirement in the area of free speech. The "state action" requirement is a necessary restriction on the powers of the courts under the separation of powers doctrine. As the Connecticut Supreme Court has stated:
It is not the role of this court to strike precise balances among the fluctuating interests of competing private groups which then become rigidified in the granite of constitutional adjudication. That function *758 has traditionally been performed by the legislature, which has far greater competence and flexibility to deal with the myriad complications which may arise from the exercise of constitutional rights by some in diminution of those of others.
Cologne v. Westfarms Assocs., 192 Conn. 48, 469 A.2d 1201, 1210 (1984). In the words of one commentator,
if courts abandon threshold requirements of state action there will be no principled means to prevent the "constitutionalization" of an unacceptably broad range of private law and private relationships.
John Devlin, Constructing an Alternative to `State Action' as a Limit on State Constitutional Rights Guarantees: A Survey, Critique and Proposal, 21 Rutgers L.J. 819, 825 (1990). As the Wisconsin Supreme Court stated:
To turn what was a prohibition of governmental acts into positive rights against other private persons is not logical nor historically established. * * * To say that whenever a balancing must be done between free speech and private interests that free speech must prevail is to give vent to one's own choices and to rewrite history and the constitution in personal terms. That is not the right nor privilege of courts or judges.
Jacobs v. Major, 139 Wis. 2d 492, 407 N.W.2d 832, 840 (1987).
We are aware also of the uncertainties created by the trial court's application of free speech rights to an undetermined class of properties that are privately-owned but publicly-funded, at least in part. If the "state action" requirement is discarded, it is difficult to formulate a principled line between those privately-owned locations in which constitutional free speech guarantees should apply and those where they should not. See Cologne, 469 A.2d at 1209 (noting the lack of any legal basis to distinguish large regional shopping centers from other large gathering places, such as sports stadiums, theaters, factories, supermarkets or large office buildings). Moreover, a discarding of the "state action" requirement in this area has broad implications for other constitutional provisions to which the "state action" requirement has traditionally been applied.[2]
We acknowledge the criticisms of the "state action" doctrine. See, e.g., Kevin Cole, Federal & State "State Action": The Undercritical Embrace of a Hypercriticized Doctrine, 24 Georgia L.Rev. 327, 333 (1990). We would even note that the one area in which some state courts have dispensed with the "state action" requirement is precisely the issue involved in this appeal, rights of free speech on private property, particularly in large, privately-owned shopping centers. See, e.g., New Jersey Coalition, 650 A.2d at 770-71 (state constitutional free speech guarantee applies to private entities). But this is not the majority view. See Southcenter Joint Venture v. National Democratic Policy Comm., 113 Wash.2d 413, 780 P.2d 1282, 1289 (1989) ("overwhelming majority" of courts have declined to apply free speech provisions to private individuals); Cole, Federal & State "State Action," 24 Georgia L.Rev. at 341 (number of states extending state constitutional free speech rights to private property had dropped, as of 1990, from nine to five); amicus brief, International Council of Shopping Centers, Inc., at 4 (counting 13 states as having rejected state constitutional free speech claims on private shopping mall property). It is not even the majority view among states that, like Minnesota, have a free speech provision making no reference to state action. As the Washington Supreme Court has stated:
It is a 2-foot leap across a 10-foot ditch, however, to seize upon the absence of a reference to the State as the actor limited by the state free speech provision and conclude therefrom that the framers of our state constitution intended to create a bold new right that conflicts with the fundamental premise on which the entire constitution is based. To do so would not be to "interpret" our constitution, but to deny its very nature.
*759 Southcenter Joint Venture, 780 P.2d at 1287-88.
The trial court's order is contrary to the many decisions of our supreme court refusing to interpret the state constitutional free speech guarantee in article I, section 3, more expansively than that in the federal constitution. It is also contrary to this court's opinion in Scholberg, holding that article I, section 3, does not apply to private property, and contrary to the greater weight of the authority in other jurisdictions that have addressed the issue of state constitutional guarantees of free speech in privately-owned shopping centers.
We note that the trial court explicitly declined to determine whether the Mall of America had established reasonable time, place and manner restrictions on expressive conduct, although the court did indicate that "banishment to a peripheral area outside the Mall" was not reasonable. Even if the Mall is considered a "public forum," it may enforce time, place and manner regulations that are
content-neutral, are narrowly tailored to serve a significant government interest, and leave open ample alternative channels of communication.
Perry Educ. Ass'n v. Perry Local Educators' Ass'n, 460 U.S. 37, 45, 103 S. Ct. 948, 955, 74 L. Ed. 2d 794 (1983). Although the Mall's policy generally prohibits soliciting and leafletting within the Mall, "[e]ven a complete ban can be narrowly tailored." State v. Castellano, 506 N.W.2d 641, 647 (Minn.App.1993). There was testimony, moreover, that respondents' activities would have been permitted on the public sidewalk on the periphery of the Mall. Although no part of this area is immediately adjacent to the Macy's store, and this alternative provides little opportunity for direct contact with pedestrians, the record does not show that this alternative is so distant or has so many disadvantages that it is not an acceptable alternative channel of communication. Cf. Logan Valley, 391 U.S. at 321-22, 88 S.Ct. at 1610-11 (alternative space outside shopping center that was 350 to 500 feet from targeted store posed safety problems for picketers, and made distributing handbills very difficult was not acceptable alternative to space inside shopping center). Thus, although we do not decide the question of time, place and manner restrictions, we also do not imply that the record shows the Mall's policy to be unconstitutionally restrictive.
DECISION
The free speech protection of article I, section 3, of the Minnesota Constitution does not apply to respondents' expressive conduct at the privately-owned Mall of America.
Reversed.
NOTES
[*] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. Art. VI, § 10.
[1] Respondents base part of their argument on an earlier decision, Amalgamated Food Employees Union Local 590 v. Logan Valley Plaza, 391 U.S. 308, 88 S. Ct. 1601, 20 L. Ed. 2d 603 (1968), that had applied First Amendment protections to a privately-owned shopping center. But Lloyd Corp. quoted with approval from the dissents in Logan Valley, 407 U.S. at 562-67, 92 S.Ct. at 2226-28, and the Court later explicitly stated that Logan Valley has been overruled. Hudgens v. NLRB, 424 U.S. 507, 518, 96 S. Ct. 1029, 1035-36, 47 L. Ed. 2d 196 (1976).
[2] There are early Minnesota cases indicating the state constitution was not understood as creating positive rights enforceable against private parties. See Board of Supervisors v. Heenan, 2 Minn. 330, 332, 2 Gilmer 281, 283 (1858) (constitution only a system of limitations on legislative power). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572959/ | 971 S.W.2d 553 (1997)
The STATE of Texas, Appellant,
v.
David Allan LEE, Appellee.
No. 05-96-01894-CR.
Court of Appeals of Texas, Dallas.
December 18, 1997.
Tom O'Connell, Criminal District Attorney, Carrie Roberge Chavez, McKinney, for State.
J. Craig Jett, Dallas, for Appellee.
Before MALONEY, WHITTINGTON and BRIDGES, JJ.
*554 OPINION
WHITTINGTON, Justice.
The State appeals the trial court's order sustaining appellee's double jeopardy claim and dismissing the indictment against him with prejudice. See Tex.Code Crim. Proc. Ann. art. 44.01(a)(1), (4) (Vernon Supp.1998). In three points of error, the State contends the trial judge erred in (1) sustaining appellee's objection to a portion of the prosecutor's opening statement, (2) granting a mistrial based on the prosecutor's opening statement, and (3) barring a retrial of the charges against appellee based on double jeopardy. For the reasons set forth below, we dismiss the State's first and second points of error for want of jurisdiction. We overrule the State's third point of error and affirm the trial court's order dismissing the indictment in this cause.
BACKGROUND
The grand jury indicted appellee for indecency with a child. Appellee pleaded not guilty, and the case was called for trial in October 1995. Following voir dire, the jury was empaneled and sworn and the prosecutor began her opening statement to the jury. During the opening, the prosecutor told the jury that before any charges were filed in the case, Paul Raleeh, the officer investigating the charges, called appellee and asked if they could talk. According to the prosecutor, appellee told Raleeh (1) he was not interested in talking to Raleeh, and (2) Raleeh should call appellee's attorney.[1] Appellee immediately objected to the prosecutor's statement, arguing it was an improper comment on appellee's invocation of his right to counsel and his right to remain silent.[2] Following a brief discussion between the court and counsel, the trial judge sustained appellee's objection and granted appellee's motion for mistrial.
The State later sought to retry appellee under the same indictment. Appellee filed an application for writ of habeas corpus, arguing the State was barred from retrying him because jeopardy had attached at the previous proceeding. The trial judge held a hearing on appellee's application in December 1995. After hearing from a number of witnesses, the trial judge orally denied habeas relief.
Shortly thereafter, appellee filed a motion to reconsider, urging the trial judge to reconsider his ruling in light of the Texas Court of Criminal Appeals's recent decision in Bauder v. State, 921 S.W.2d 696 (Tex.Crim.App. 1996). The trial judge did so and ultimately granted the relief requested in appellee's application. Having concluded that further prosecution was barred under the double jeopardy clause of the Texas Constitution, the trial judge dismissed the indictment with prejudice and discharged appellee. The court then entered various findings of fact and conclusions of law, and the State perfected this appeal.
JURISDICTION
In its first and second points of error, the State contends the trial court erred in sustaining appellee's objection to the prosecutor's opening statement and subsequently granting a mistrial based on that statement. According to the State, these rulings were improper because (1) the prosecutor's statement was not a "meaningful comment" on either appellee's right to remain silent or his right to counsel; and (2) a limiting instruction would have been sufficient to cure the error, if any, resulting from the comment. We conclude we lack jurisdiction to address these points.
Article 44.01 of the code of criminal procedure authorizes the State to appeal a trial *555 court's order in a criminal case under only limited circumstances. See TEX.CODE CRIM. PROC. ANN. art. 44.01 (Vernon Supp.1998). Under article 44.01, the State may appeal a criminal court order if the order (1) dismisses a charging instrument or any portion thereof, (2) arrests or modifies a judgment, (3) grants a new trial, or (4) sustains a claim of former jeopardy. TEX.CODE CRIM. PROC. ANN. art. 44.01(a) (Vernon Supp.1998). Article 44.01 also authorizes the State, under certain circumstances, to appeal an order granting a motion to suppress. TEX.CODE CRIM. PROC. ANN. art. 44.01(a)(5) (Vernon Supp.1998). Likewise, the State may appeal a sentence on the ground the sentence is illegal. Tex.Code Crim. Proc. Ann. art. 44.01(b) (Vernon Supp. 1998). The complaints in the State's first and second points of error do not fall into any of these categories. Accordingly, we conclude we lack jurisdiction to address these points. We dismiss the State's first and second points of error for want of jurisdiction.
DOUBLE JEOPARDY
In its third point of error, the State contends the trial judge erred in (1) concluding the State was barred from retrying appellee, and (2) dismissing the indictment in this case with prejudice. According to the State, dismissing the indictment was improper because the facts and circumstances presented by this case do not bar a retrial under the court's reasoning in Bauder.[3] We disagree.
The Texas Court of Criminal Appeals has recently announced a new standard for reviewing double jeopardy claims under the Texas Constitution.[4] In Bauder, the court held that, when a trial court properly grants a mistrial based on prosecutorial misconduct, a successive prosecution is barred if the court determines the prosecutor engaging in the objectionable conduct (1) acted with the intent to induce a mistrial; or (2) was aware of, but consciously disregarded, the risk that the conduct would require a mistrial at the defendant's request. See Bauder, 921 S.W.2d at 699.
The Bauder test requires us to follow a two-step analysis. See Janney v. State, 938 S.W.2d 770, 772 (Tex.App.Houston [14th Dist.] 1997, no pet.); Bauder v. State, 936 S.W.2d 19, 20 (Tex.App.San Antonio 1996, pet. granted) (op. on remand). Under that analysis, we first determine whether the mistrial was properly granted.[5] If we conclude it was, we then determine whether the prosecutor either intended to induce the mistrial or "was aware [of] but consciously disregarded the risk that an objectionable event for which he was responsible would require [the] mistrial." Bauder, 936 S.W.2d at 20. Under this test, the prosecutor is only accountable for mistrials that are (1) properly granted, and (2) made necessary by the deliberate or reckless conduct of the prosecutor. Bauder, 936 S.W.2d at 20.
Here, the trial judge granted a mistrial after the prosecutor told the jury that appellee (1) refused to discuss the allegations with Detective Raleeh, and (2) told Raleeh he should contact appellee's attorney. The trial *556 judge concluded this statement was a comment on appellee's right to remain silent and his right to counsel and that (1) declaring a mistrial was manifestly necessary to ensure appellee a fair trial, (2) instructing the jury to disregard would have been insufficient to cure the error, and (3) the statement could be interpreted by the jury as evidence "of [appellee's] knowledge of his own guilt." As this Court noted in Ex parte May, 852 S.W.2d 3, 5 (Tex.App.Dallas 1993, pet. ref'd), we accord great deference to a trial court's findings and conclusions when reviewing a double jeopardy claim. Deference is accorded because the trial court bases its ruling in part on a credibility determination that is inherently unreviewable by this Court. Accordingly, we view the evidence in the light most favorable to the trial court's ruling. Ex parte May, 852 S.W.2d at 5.
Propriety of Granting Mistrial
We begin our analysis by first determining whether the trial judge properly granted a mistrial following the prosecutor's opening remarks. Here, the trial judge concluded the mistrial was "manifestly necessary" because an instruction to disregard could not have cured the error associated with the prosecutor's comment. We conclude the trial judge's conclusion is supported by the record.
Granting a mistrial is proper when (1) error is committed, and (2) the error cannot be cured by an instruction to disregard. See Garcia v. State, 943 S.W.2d 215, 216-17 (Tex. App.Fort Worth 1997, no pet.) (noting it is error not to grant mistrial in case where error is so egregious an instruction to disregard could not cure harm). Here, the prosecutor's statement was clearly improper because it constituted a comment on appellee's invocation of his right to counsel. See Hardie v. State, 807 S.W.2d 319, 322 (Tex.Crim. App.1991) (holding evidence of accused's invocation of right to counsel inadmissible as evidence of guilt); Rezac v. State, 722 S.W.2d 32, 33 (Tex.App.Dallas 1986) (holding that invocation of constitutional right to counsel may not be relied on as evidence of guilt), rev'd on other grounds, 782 S.W.2d 869 (Tex. Crim.App.1990); see also TEX.CODE CRIM. PROC. ANN. art. 38.38 (Vernon Pamph.1998) (noting that prosecutor in criminal case may not comment on fact that defendant has retained attorney). The question then is whether the error could have been cured by an instruction to disregard. We conclude it could not.
The comment in this case was a direct reference to appellee's having retained counsel to represent him. As the trial judge recognized, this is precisely the type of comment that could be taken by the jury as evidence of appellee's guilt. However, in addition to informing the jury that appellee had already retained counsel, the comment also indicated that appellee was unwilling to talk to police about the allegations. We note that the purpose of opening statement is to give the jury a general picture of the facts of the case so the jury will be better able to understand the evidence presented. In this case, the prosecutor distorted this "general picture" by informing the jury, at the outset, that appellee had hired a lawyer even before charges had been filed. This comment was one of the first "facts" the jury was told about the case and, because of that, it could well have shaped the jury's entire view of both the defendant and the case. Under these circumstances, we conclude the trial judge could properly have concluded that the prosecutor's comment was so prejudicial it could not have been cured by an instruction to disregard.
We recognize, as the court of criminal appeals did in Bauder, that a mistrial is an extreme remedy that should only be granted when an objectionable event is so emotionally inflammatory that curative instructions are not likely to prevent the jury from being unfairly prejudiced against the defendant. However, we conclude the "objectionable event" in this case satisfies this standard. After reviewing the record in this case in the light most favorable to the trial court's ruling, we conclude the record supports the trial court's decision to grant a mistrial. See Ex parte May, 852 S.W.2d at 5-6.
Prosecutor's Conduct
We turn next to determine whether the second prong of the Bauder test is met; *557 i.e., whether the prosecutor "was aware [of] but consciously disregarded the risk that an objectionable event for which [she] was responsible would require [the] mistrial." Bauder, 936 S.W.2d at 20. The trial judge, after hearing testimony from the prosecutor and others, concluded that it was. Again, we conclude the trial judge's conclusions are supported by the record.
In his findings of fact, the trial judge found that although the prosecutor did not intend to cause a mistrial, she "should have known" and was "reckless" about whether her statement would in fact require a mistrial at the defendant's request. Testimony from the habeas hearing supports this finding. During the hearing, the defense elicited evidence that the prosecutor (1) had been practicing law for approximately twelve years, and (2) had worked as a prosecutor in the district attorney's office for the past six years. In addition, testimony showed that the prosecutor (1) was an "experienced criminal trial attorney" (having handled approximately eighty-five jury trials), (2) was board certified in criminal law, and (3) averaged about twenty hours a year in continuing legal education. Finally, the prosecutor admitted that she had previously had three or four cases end in mistrials when the mistrials were not the result "of the jury being unable to reach a verdict."[6]
Based on this and other evidence, the trial judge concluded the prosecutor had been "reckless" about whether her statement to the jury would in fact require a mistrial. We find no error in the trial court's decision. See Ex parte May, 852 S.W.2d at 5 (reviewing ruling on double jeopardy claim to determine whether ruling was clearly erroneous). The question of whether a prosecutor acts intentionally or recklessly in prompting a defense request for a mistrial is a matter falling peculiarly within the province of the trial court. Viewing the evidence in the light most favorable to the trial court's ruling, we conclude the trial court could properly have found that this seasoned prosecutor "was aware [of,] but consciously disregarded[,] the risk" that her actions would require a mistrial. Accordingly, we conclude the second prong of the Bauder test is met. The State is barred from retrying appellee for the offense charged. We overrule the State's sole point of error.
We affirm the trial court's order dismissing the indictment in this cause.
NOTES
[1] The prosecutor specifically said:
The evidence will be that early on in the investigation, Detective Raleeh, before any charges were filed, while the case was still being investigated, called [appellee] and said, I havethere are some charges, a complaint has been filed against you, and I'm interested in talking to you about it.
And [appellee] said that he wasn't interested in talking about it and to call his attorney, Craig Jett, and gave him the phone number.
[2] Although appellee did not initially object to the statement as being an impermissible comment on his right to remain silent, counsel later included this as a ground for his objection after the trial judge indicated he believed the comment could be so interpreted.
[3] We have jurisdiction over this point because, under article 44.01(a)(1) and (4), the State may appeal an order sustaining a claim of former jeopardy and dismissing an indictment. See TEX. CODE CRIM. PROC. ANN. art. 44.01(a)(1), (4) (Vernon Supp.1998).
[4] The Bauder court held that the Texas Constitution's double jeopardy protections were "slightly more expansive" than the federal constitution's when prosecutorial misconduct prompts a defendant to seek a mistrial. See Ex parte Anthony, 931 S.W.2d 664, 667 (Tex.App.Dallas 1996, pet. ref'd).
[5] According to the Bauder court, this step is necessary because the prosecutor is only accountable for mistrials that are properly granted. See Bauder, 936 S.W.2d at 20 (citing court of criminal appeals's opinion in Bauder). However, we note, as did our sister court in Janney, that this prong of the test is troubling because it puts this Court in the awkward position of second-guessing the trial judge's decision to grant a mistrial. See Janney, 938 S.W.2d at 772 n. 1. We agree with the Janney court that many times, because of concern for an accused's right to a fair trial, a trial judge will err on the side of caution and grant a mistrial. Many considerations factor into this decision and many of them cannot be adequately reflected in the record. Accordingly, we question the propriety of having an appellate court determine whether the mistrial was "properly granted." Nevertheless, we recognize we are compelled to make this determination under Bauder.
[6] The prosecutor also admitted at the habeas hearing that although her purpose for making the subject statement was to show that Raleeh conducted a thorough investigation, the statement that appellee made to Raleeh invoking his right to counsel did little, if anything, to further this purpose. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572995/ | 576 N.W.2d 129 (1998)
456 Mich. 625
PEOPLE of the State of Michigan, Plaintiff-Appellant,
v.
Joseph Charles LEMMON, Defendant-Appellee.
Docket No. 105850, Calendar No. 2.
Supreme Court of Michigan.
Argued November 4, 1997.
Decided March 24, 1998.
*130 Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, John D. O'Hair, Prosecuting Attorney, and Timothy A. Baughman, Chief, Research, Training and Appeals, Detroit, for People.
State Appellate Defender by P.E. Bennett, Detroit, for Defendant-Appellee.
Opinion
BOYLE, Justice.
We granted leave to appeal to address whether the trial court erred in granting defendant's motion for a new trial on the basis that the great weight of the evidence standard established in People v. Herbert, 444 Mich. 466, 476, 511 N.W.2d 654 (1993), permitted the trial judge to act as a "thirteenth juror." Insofar as it authorizes judges to grant new trial motions on the basis of a disagreement with juror assessment of credibility, Herbert is overruled. A trial judge does not sit as the thirteenth juror in ruling on motions for a new trial and may grant a new trial only if the evidence preponderates heavily against the verdict so that it would be a miscarriage of justice to allow the verdict to stand.
*131 I
FACTS AND PROCEDURE
Defendant Joseph Lemmon was convicted of five counts of criminal sexual conduct following a jury trial held before Judge Carole F. Youngblood. He was found guilty of one count of first-degree criminal sexual conduct[1] and two counts of second-degree criminal's sexual conduct[2] against one daughter and two counts of CSC II against the other daughter of his former girlfriend, Deborah Buell. Ms. Buell met and then lived with Joseph Lemmon for a short time in 1988. During that time, Mr. Lemmon fathered a son, the youngest child of Ms. Buell; however, the relationship ended before James was born. The couple later resumed their relationship in 1992 and Joseph Lemmon moved in with Ms. Buell and her three other children, two daughters, ages eleven and eight, and a son, age six. He lived with them as a member of the family from November, 1992, until August, 1993.
The older daughter testified that, on four different occasions, when her mother was not in the home, the defendant sexually abused her. The separate incidents occurred on different days and involved defendant lifting her bra and playing with her breasts when putting cream on her pimples, putting his finger into her vagina, attempting penile penetration of her vagina, and sucking her breast. She testified that defendant was responsible for discipline during the time he lived in the house and that while he never physically disciplined her, he did ground her for bad report cards. She further testified that she did not tell anyone what had happened because defendant told her that it was just between the two of them and "not to tell no one" and that if she did, she "would get hurt."
The younger daughter testified that she had been the victim of the defendant's sexual abuse on two occasions. Both incidents, which were similar in nature, occurred when her mother was not present in the home and took place in the bedroom Mr. Lemmon shared with her mother. She stated that, on different days, defendant called her into the bedroom telling her he wanted to show her something. When she went into the room, defendant pulled down his pants, exposed himself, and told her to touch his penis. When she refused, he grabbed her hand, placed it on his penis, and forced her to rub it. She further testified that defendant disciplined her during the time he lived with her mother and would sometimes whip her or confine her to her room. She also testified that defendant told her not to tell anyone what had transpired and that if she did, he "would do something" and she would "be in big trouble."
Both girls testified that they did not tell their mother what had happened until after Mr. Lemmon and their mother had separated and both parties had moved out of the house they shared. Their mother confirmed this portion of the girls' testimony, stating that the girls had not indicated that any type of sexual abuse had occurred during the time she was living with Mr. Lemmon. Ms. Buell testified that it was her decision to break off the relationship with Mr. Lemmon, but that it was not until after the relationship had ended, and she and her children had moved into her parent's home that she was informed of the abuse.
Defense counsel for Mr. Lemmon cross-examined the girls in an attempt to impeach their testimony. He obtained admissions from the older daughter that there were times that she had not told the truth and later admitted to the lie by telling the truth. Specifically, defense counsel elicited from her falsehoods that included instances such as lying about stealing a candy bar, smoking in the woods, not giving notes from her teacher to her parents, taking food off her brothers' plates, going places with friends, riding her bike in the street, and saying she had finished homework when she had not, or cleaned her room when she had not. On cross-examination of the younger daughter, defense counsel obtained admissions that she had not told the truth only when she said she had cleaned her room, but had not, and told her mother she was going one place, but *132 went another. She denied other allegations that she had lied about homework or lied to get her sister in trouble.
Defendant presented several witnesses and testified in his own defense. He stated that his relationship with Ms. Buell had its ups and downs, that she was very jealous, and wanted everything her own way. In contrast to the testimony of Ms. Buell, the defendant claimed that he initiated the breakup. He further indicated that when he moved out of the house he was still on speaking terms with Ms. Buell. Additionally, he denied ever sexually abusing either girl and stated that Ms. Buell was present the one time he had put cream on the older daughter's spots. He agreed that he was involved in disciplining the girls but that he had never hit either of them. He could give no reason for either of the girls to be angry with him, hold anything against him, or make up allegations against him.
At the close of the people's proofs, the prosecutor agreed to dismiss a third count of CSC II concerning the older daughter because she could only recall two specific instances of sexual contact, although there might have been three. There was no motion for a directed verdict regarding the other counts. After Mr. Lemmon presented his defense, the case was submitted to the jury who found the defendant guilty on all five remaining counts.
At sentencing, the defendant submitted a motion for a directed verdict or new trial, which was denied. The trial judge imposed a two- to fifteen-year term for one conviction of CSC I[3] and two- to ten-year terms for each conviction of CSC II,[4] to run concurrently. In July, 1995, defendant obtained new counsel and filed another motion for a directed verdict or a new trial. The motion was granted by Judge Youngblood on the basis of People v. Herbert, supra. The court noted that Herbert allowed a new trial when the verdict is against the great weight of the evidence or to prevent an injustice and stated that the new trial motion was granted after reviewing the whole body of proofs, particularly the contradictory testimony and demeanor of the girls.
The prosecutor filed a delayed application for leave to appeal the decision to grant a new trial.[5] The Court of Appeals stayed the new trial and remanded the case to Judge Youngblood "for a full statement of the court's reasons for granting the motion for new trial, including a specific explanation of why the court found the witnesses' testimony not credible and the verdict against the great weight of the evidence." Unpublished order of the Court of Appeals, entered November 20, 1995 (Docket No. 189329).
In the written opinion reviewed here, the trial court observed that both prosecution witnesses "lacked credibility." She cited their "poor memory of any details" as to time or events, the "illogic" of their description of the circumstances surrounding the sexual assaults, their "poor reputation for truthfulness," and the fact that the information regarding the assaults had not been disclosed until months after their occurrence and "after the defendant had rejected the family relationship." The judge also found the demeanor of the witnesses questionable in that the older daughter "giggled at times, but not at embarrassing moments when one might expect a child to giggle," that "[b]oth children appeared to look at the prosecutor and others in the courtroom for approval rather than candidly testifying as to their memory," and used sexually explicit words and phrases "without any hesitation or embarrassment." The judge indicated that "[t]he only evidence of the defendant's guilt was the testimony of [the girls]. There were no medical records, counseling records, or corroborating testimony."[6]*133 Finally, the judge reaffirmed her opinion that the verdict had resulted in a "miscarriage of justice" stating that the "credibility of the orally-testifying witnesses and their demeanor leaves this court with a firm belief that the defendant should be tried by a different jury."
The Court of Appeals denied the prosecutor's application for leave to appeal. However, Judge Corrigan observed that she had consistently questioned the principle of People v. Herbert that a trial court may sit as a thirteenth juror. Judge Corrigan stated that, in her view, the credibility of the two witnesses had not been significantly impugned but could not say that the trial judge had abused her discretion in granting a new trial. Judge Markman agreed that, given the authority vested in the trial courts under People v. Herbert, there was no "abuse of discretion" on the part of the trial judge and joined Judge Corrigan in questioning the merits of Herbert. Unpublished order of the Court of Appeals, entered March 12, 1996 (Docket No. 189329). The prosecutor appealed, and we granted leave to appeal.
II
The issue presented is rooted in the difference between the standard for granting a new trial and that required to grant a directed verdict of acquittal. Due process commands a directed verdict of acquittal[7] when "sufficient evidence to justify a rational trier of fact in finding guilt beyond a reasonable doubt," People v. Hampton, 407 Mich. 354, 366, 285 N.W.2d 284 (1979), citing Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979), is lacking. If the evidence presented by the prosecution in the light most favorable to the prosecution, up to the time the motion is made, is insufficient to justify a reasonable trier of fact to find guilt beyond a reasonable doubt, a directed verdict or judgment of acquittal must be entered.[8]Hampton, supra at 368, 285 N.W.2d 284.
Under statute,[9] as well as the court rule,[10] the operative principles regarding new *134 trial motions are that the court "may," in the "interest of justice" or to prevent a "miscarriage of justice," grant the defendant's motion for a new trial.[11] In Herbert, we noted that, in addition to preventing injustice, a new trial may be granted if the verdict is against the great weight of the evidence. While the great weight of the evidence standard for granting a new trial is traceable to longstanding case law, People v. Henseler, 48 Mich. 49, 51, 11 N.W. 804 (1882),[12]Herbert is the first opinion decided by this Court requiring consideration of the standard for granting new trial motions in light of the constitutional mandate announced in Jackson and recognized in Hampton.
In Herbert, supra at 476, 511 N.W.2d 654, we quoted with approval Judge Frank's concurring opinion in Dyer v. MacDougall, 201 F.2d 265, 271-272 (C.A.2,1952), that "[o]n a motion for new trial, the judge acts `as the thirteenth juror,' i.e., he evaluates the credibility of the orally-testifying witnesses and therefore their demeanor. But on a motion for a directed verdict he does not." Today we clarify that a judge may not repudiate a jury verdict on the ground that "he disbelieves the testimony of witnesses for the prevailing party." People v. Johnson, 397 Mich. 686, 687, 246 N.W.2d 836 (1976).[[13]]
III
The issue whether a state trial court judge in a jury trial "may assess evidence as a `13th juror' is a question of state law." Hudson v. Louisiana, 450 U.S. 40, 45, n. 5, 101 S. Ct. 970, 973, n. 5, 67 L. Ed. 2d 30 (1981).[14] The historic division of functions between the court and the jury needs no citation of authority. It is the province of the jury to determine questions of fact and assess the credibility of witnesses. "As the trier of fact, the jury is the final judge of credibility." Johnson, supra at 687, 246 *135 N.W.2d 836.[15] The approach that would allow a trial judge to sit as a thirteenth juror[16] and overrule the credibility determinations of the jury suggests that a judge may freely repudiate the jury's findings. Although Johnson, supra at 687, 246 N.W.2d 836, indicates that a trial judge may grant a new trial because he disbelieves witness testimony, explicit reference to the judge as thirteenth juror does not appear in Michigan jurisprudence before Herbert, a per curiam opinion issued without benefit of oral argument. Having had the advantage of oral argument, full appellate briefing, and review of additional state and federal cases, a better view emerges.
Appellate reluctance to interfere with the grant of a new trial is soundly rooted in the proposition that "[t]he judge was `there'[w]e were not." Alder v. Flint City Coach Lines Inc., 364 Mich. 29, 39, 110 N.W.2d 606 (1961). It is also based on the pragmatic expectation of appellate courts that the trial courts will sparingly exercise such authority and that expansion of appellate oversight would simply invite an increase in claims for review. Spalding v. Spalding, 355 Mich. 382, 384, 94 N.W.2d 810 (1959). That disputed issues of fact are for the jury is a fundamental tenet of our jurisprudence, Rizzo v. Kretschmer, 389 Mich. 363, 371-372, 207 N.W.2d 316 (1973), and it is the trial judge who presumably will bear the practical consequence of a conclusion that a case needs to be retried.
The conundrum is that, in motions for a new trial based on the claim that the verdict is against the great weight of the evidence, the issue of credibility of the witnesses is implicit in determining great weight or overwhelming weight of that evidence. Sloan v. Kramer-Orloff Co., 371 Mich. 403, 412, 124 N.W.2d 255 (1963). The problem has been addressed by abstract formulations that caution against overturning verdicts and, less frequently, by an attempt to give concrete guidance to a judge asked to review "the whole body of proofs," which necessarily includes an evaluation of the credibility of the witnesses. Herbert, supra at 475, 511 N.W.2d 654. New trial motions based solely on the weight of the evidence regarding witness credibility are not favored.[17]
This formulation of the standard is, in turn, founded on the principle that the preservation of the jury by constitutional amendment was designed as a limitation on judicial power. As Justice Taylor recently observed, the "special role accorded jurors under our constitutional system of justice" has been acknowledged for centuries. People v. Bart (On Remand), 220 Mich.App. 1, 12, 558 N.W.2d 449 (1996):
"Now let any man of sense consider, whether this method be not more proper for bolting out the truth, for finding out the guilty, and preserving the innocent, than if the whole decision were left to the examination of a judge, or two or three, whose interests, passion, haste, or multiplicity of business may easily betray them *136 into error." [Quoting Care, English Liberties, pp. 205-209, written in 1680 (and cited in 2 Few, In Defense of Trial by Jury, p. 278, published in 1993 by the American Jury Trial Foundation).]
Justice Taylor further observed that "the hurdle a judge must clear to overrule a jury is unquestionably among the highest in our law. It is to be approached by the court with great trepidation and reserve, with all presumptions running against its invocation." Id. at 13, 558 N.W.2d 449.
The thirteenth juror standard posits that the authority of the trial judge is equal to, or greater than, that of the other jurors when the court does not agree with the outcome.[18] It follows that the oft repeated statement, the "power to grant a new trial on this ground should be invoked only in exceptional cases in which the evidence preponderates heavily against the verdict," Dorman v. State, 622 P.2d 448, 454 (Alaska, 1981), citing 3 Wright & Miller, Federal Practice & Procedure, § 553, pp. 245-248, cannot be understood to endorse the concept of the judge as thirteenth juror. The trial judge who posits the authority to determine whether the evidence is so evenly balanced that reasonable jurors might come to different conclusions, as Justice Cavanagh suggests, may further assume that jurors have unreasonably come to the conclusion they reached. That is why the thirteenth juror approach has a potential to undermine the jury function and why we now reject it.
Were the concept to be applied as expressed, the constitutional method for sifting out the truth, for our finding the guilty and preserving the innocent, would be "left to the examination of a judge, or two or three." To adhere to this principle and articulate a concept for resolving the conundrum of the trial court, appellate courts have narrowed the inquiry to focus on the defendant's innocence, that is, whether it would be a manifest injustice to allow the verdict to stand.[19]United States v. Polin, 824 F. Supp. 542, 551 (E.D.Pa., 1993). Numerous federal circuits[20] and other jurisdictions have adopted similar standards: "The discretionary power to grant a new trial should be exercised only in the exceptional case in which the evidence weighs heavily against the conviction," State v. Martin, 20 Ohio App. 3d 172, 175, 485 N.E.2d 717 (1983), or "preponderates sufficiently heavily against the verdict that a serious miscarriage of justice may have occurred...." *137 State v. Kringstad, 353 N.W.2d 302, 306 (N.D., 1984).
In accord with these cases, the Vermont Supreme Court stated that a motion for a new trial in the interest of justice is a remedy to be used sparingly and "only in exceptional cases" and "should be granted `only upon a conclusion by the trial court that, weighing all the evidence including the credibility of the witnesses, the verdict is clearly against the weight of the evidence.'" State v. Ladabouche, 146 Vt. 279, 283, 502 A.2d 852 (1985). The court asserted that this language permits the inference that the trial judge does not sit "merely as a thirteenth juror, but applies a stricter standard," and further noted that more recent federal cases have adopted this standard and do not mention the thirteenth juror concept. Id.[21]
These observations are in full accord with the language of our statute and court rule. Thus, "a new trial based upon the weight of the evidence should be granted only where the evidence preponderates heavily against the verdict and a serious miscarriage of justice would otherwise result." Ladabouche, supra at 285, 502 A.2d 852.
IV
We align ourselves with those appellate courts holding that, absent exceptional circumstances, issues of witness credibility are for the jury, and the trial court may not substitute its view of the credibility "for the constitutionally guaranteed jury determination thereof." Sloan, supra at 411, 124 N.W.2d 255.[22] We reiterate the observation in Anderson v. Conterio, 303 Mich. 75, 79, 5 N.W.2d 572 (1942), that, when testimony is in direct conflict and testimony supporting the verdict has been impeached, if "it cannot be said as a matter of law that the testimony thus impeached was deprived of all probative value or that the jury could not believe it," the credibility of witnesses is for the jury.
Adding flesh to what is a more refined articulation of the formula that "`[i]n general, conflicting testimony or a question as to the credibility of a witness are not sufficient grounds for granting a new trial,'" United States v. Garcia, 978 F.2d 746, 748 (C.A.1, 1992), quoting with approval United States v. Kuzniar, 881 F.2d 466, 470 (C.A.7, 1989),[23] federal circuit courts have carved out a very narrow exception to the rule that the trial court may not take the testimony away from the jury. Id. at 470-471. Defining the exception, the federal courts have developed several tests that would allow application of the exception; for example, if the "testimony contradicts indisputable physical facts or laws," id., "[w]here testimony is patently incredible or defies physical realities," United States v. Sanchez, 969 F.2d 1409, 1414 (C.A.2, 1992), "[w]here a witness's testimony is material and is so inherently implausible that it could not be believed by a reasonable juror," Garcia, supra at 748, or where the witnesses testimony has been seriously "impeached" and the case marked by "uncertainties and discrepancies." United *138 States v. Martinez, 763 F.2d 1297, 1313 (C.A.11, 1985).
This does not mean that "[a] judge's disagreement with the jury's verdict," United States v. Arrington, 757 F.2d 1484, 1486 (C.A.4, 1985), or a "trial judge's rejection of all or part of the testimony of a witness or witnesses," entitles a defendant to a new trial. Sanchez, supra at 1414. Rather, a trial judge must determine if one of the tests applies so that it would seriously undermine the credibility of a witness' testimony and, if so, is there "a real concern that an innocent person may have been convicted" or that "it would be a manifest injustice" to allow the guilty verdict to stand. Id. If the "evidence is nearly balanced, or is such that different minds would naturally and fairly come to different conclusions," the judge may not disturb the jury findings although his judgment might incline him the other way. Kringstad, supra at 307.[24] Any "real concern" that an innocent person has been convicted would arise "only if the credible trial evidence weighs more heavily in [the defendant's] favor than against it." Polin, supra at 551.
Formulaic pronouncements are less than successful in giving practical guidance to trial courts regarding when the "mystic borderline" is crossed between credibility issues that must remain with the jury and a court's authority to overturn that finding. We can state confidently that the judge is not to act as a thirteenth juror when passing on such motions. Justice Cavanagh can state with equal assurance that the trial judge is uniquely situated "to observe the presentation of evidence in court." Neither statement defines the range of authority that remains.[25] A survey of the legal landscape, including federal authority and legal commentary, identifies the practical guidance that a trial judge seeks. Justice O'Hara in Sloan, instructs the trial court to answer the threshold question regarding what issue is actually posed by the motion, that is, to engage in "an evaluation of the testimony bearing on the controverted fact," id. at 409, 124 N.W.2d 255, to determine whether the question is one of "`great' or `overwhelming' weight" of the evidence or, rather, "a question of the credibility of witnesses testifying to diametrically opposed assertions of fact." Id. at 412, 124 N.W.2d 255.[26] Justice O'Hara suggests that, unlike Justice Cavanagh's reference to the unique position of the trial court judge, unless it can be said that directly contradictory testimony was so far impeached that it "was deprived of all probative value or that the jury could not believe it," id. at 410, 124 N.W.2d 255, or contradicted indisputable physical facts or defied physical realities, the trial court must defer to the jury's determination. "So concluding we must, despite any misgivings or inclinations to disagree, leave the test of credibility where our system reposed itin the trier of the facts." Id. at 412, 124 N.W.2d 255. To state as does the concurrence that a trial judge sits as a thirteenth juror, that is, to "invoke this perspective sparingly," is to articulate an unreviewable standard that invites judges so inclined to substitute their views for that of the jury.
V
In the instant case, the testimony of the victims was in direct conflict with that of the defendant. The defendant was effectively able to cross-examine the girls and attempt to discredit their testimony. The defendant also testified and presented his version of events to the jury. The credibility of a witness is determined by more than words and includes tonal quality, volume, speech patterns, and demeanor, all giving clues to the factfinder regarding whether a witness is telling the truth. State v. Turner, *139 186 Wis. 2d 277, 521 N.W.2d 148 (Ct.App., 1994). The jury was able to see, hear, and observe both the victims and the defendant and determine the credibility of their testimony. The jury found the defendant guilty of all the charges after viewing all the evidence and all the witnesses. The question being one of credibility posed by diametrically opposed versions of the events in question, the trial court was obligated, "despite any misgivings or inclinations to disagree," to leave the test of credibility where statute, case law, common law, and the constitution repose it "in the trier of fact." On the record presented, the jury's evaluation was not inferior to that of the trial court.
CONCLUSION
The reasons cited by the trial judge in the opinion before us are an inadequate basis for disturbing the jury's evaluations of credibility under the limitations of Herbert adopted today. Conflicting testimony, even when impeached to some extent, is an insufficient ground for granting a new trial. The reasons cited do not evidence that the testimony contradicts indisputable physical facts or law. Any suggestion that the testimony is patently incredible or is so inherently implausible that it could not be believed by a reasonable juror is undermined by the court's earlier conclusion that the evidence justified the conviction.
The reasons asserted by the trial judge for granting a new trial were grounded in the erroneous view that she could employ her status as a thirteenth juror to set aside the jury verdict. The trial court's duty to protect the process encompasses a duty to the defendant, to the public, and to the constitutionally guaranteed role of the jury as determiner of disputed facts. We hold that fidelity to these principles dictates that, in this category of cases, the judge does not sit as a thirteenth juror. The thirteenth juror principle is an erroneous legal standard. It does not establish that an innocent person had been found guilty, or that the evidence preponderates heavily against the verdict so that it would be a serious miscarriage of justice to permit the verdict to stand.
However, because we find that the court did not err in ordering a new trial under the erroneous thirteenth juror standard previously permitted under Herbert, we affirm the decision of the Court of Appeals[27] and hold that the newly adopted limitations on Herbert apply prospectively to cases not yet final as of the date of this decision.
MALLETT, C.J., and BRICKLEY, WEAVER, and TAYLOR, JJ., concurred with BOYLE, J.
MICHAEL F. CAVANAGH, Justice (concurring ).
I agree with the majority when it holds that a trial judge may not grant a new trial solely on the basis of an evaluation "of the credibility of witnesses testifying to diametrically opposed assertions of fact." Slip op. at 138.[1] I write separately, however, because I do not find this holding inconsistent with our opinion in Herbert, and therefore I see no need to overrule any portion of that decision. People v. Herbert, 444 Mich. 466, 511 N.W.2d 654 (1993).
In Herbert, we held that it was error for the trial judge to conclude that he was not allowed to consider the credibility of witnesses when deciding a motion for a new trial.[2] In distinguishing the standard for *140 determining whether to grant a new trial and the standard for directing a verdict of acquittal, we explained that under the great weight of the evidence standard, "a judge necessarily reviews the whole body of proofs," which may include the credibility of witnesses. Id. at 475, 511 N.W.2d 654.[3] In elaborating on this distinction, we quoted the language that is at the heart of today's opinion:
On a motion for new trial, the judge acts "as the thirteenth juror," i.e., he evaluates the credibility of the orally-testifying witnesses and therefore their demeanor. But on a motion for a directed verdict he does not. [Dyer v. MacDougall, 201 F.2d 265, 272 (C.A.2, 1952) (Frank, J., concurring).]
Part of the difficulty with this case is that the "thirteenth juror" concept has not been well defined by either case law or commentators. The opinion states that under the thirteenth juror concept the authority of the trial judge is equal to, or greater than, that of the other jurors when "the court does not agree with the outcome," slip op. at 136, and that it allows the trial judge to "freely repudiate the jury's findings." Id. at 135. The opinion characterizes the Herbert decision as allowing a judge to effectively set aside a jury verdict any time the judge would hold otherwise. I disagree with this characterization of the thirteenth juror concept.[4]
Referring to the trial judge as the "thirteenth juror" is an analogy to the trial judge's unique position to view the evidence and the witnesses in court. Unlike an appellate judge, the trial judge sits alongside the jury and is able to form opinions with respect to the strengths and weaknesses of the respective party's cases.[5] However, this does not mean that the trial judge acts like a juror or orders a new trial every time the judge disagrees with the jury's conclusions. As explained in Williams v. City of Valdosta, 689 F.2d 964, 973, n. 7 (C.A.11,1982):
There are statements in the cases that, in ruling on the motion, the trial judge acts as a 13th juror. Properly understood and applied, no fault can be found with them for the judge does act to evaluate and weigh the evidence. But while he has a responsibility for the result no less than the jury, he should not set the verdict aside as against the weight of the evidence merely because, if he had acted as trier of the fact, he would have reached a different result; and in that sense he does not act as a 13th juror in approving or disapproving the verdict. And since the credibility of witnesses is peculiarly for the jury, it is an invasion of the jury's province to grant a new trial merely because the evidence was sharply in conflict. [Quoting Moore's Federal Practice, ¶ 59.08[5], at XX-XXX-XX (emphasis in original).]
Herbert specifically states that review of a jury's verdict under the great weight of the evidence standard is to be undertaken "mindful of the special role accorded jurors under our constitutional system of justice." 444 Mich. at 477, 511 N.W.2d 654. I see today's opinion not as overturning this portion of Herbert; rather, today's opinion gives substance to the meaning of the "special role accorded jurors under our constitutional system of justice." Indeed, other jurisdictions using the thirteenth juror analogy have limited a trial court's discretion to grant a new trial in a manner similar to the limitations adopted today. As stated by the Supreme Court of Rhode Island:
*141 [T]he trial justice must act as a thirteenth juror, exercising his or her independent judgment on the credibility of witnesses and on the weight of the evidence. If, after this analysis, the trial justice disagrees with the verdict of the jury, he or she must then determine whether the evidence is so evenly balanced that reasonable minds might fairly come to differing conclusions. If he or she finds the evidence so evenly balanced, then he or she should defer to the findings of the jury. [State v. Warren, 624 A.2d 841, 843 (R.I., 1993) (citations omitted).][[6]]
It is for these reasons that I disagree with the majority's conclusion that "[t]he thirteenth juror standard posits that the authority of the trial judge is equal to, or greater than, that of the other jurors when the court does not agree with the outcome." Slip op. at 136. The term "thirteenth juror" does not mean that the trial judge substitutes personal judgment for that of the jury; rather, it refers to the trial judge's unique position, enabling the judge to observe the presentation of evidence in court. Thus, it is entirely consistent to say that a trial judge sits as a thirteenth juror when evaluating the weight of the evidence presented at trial, but that the judge should invoke this perspective sparingly when granting a new trial on the basis of the great weight of the evidence. In short, I believe the holding of the majority is further elaboration of our statement in Herbert, and, therefore, it is unnecessary to overrule any portion of that opinion.
MARILYN J. KELLY, JJ., concurred with MICHAEL F. CAVANAGH, J.
NOTES
[1] M.C.L. § 750.520b; M.S.A. § 28.788(2)
[2] M.C.L. § 750.520c; M.S.A. § 28.788(3).
[3] M.C.L. § 750.520b(2); M.S.A. § 27.788(2).
[4] M.C.L. § 750.520c(2); M.S.A. § 27.788(3)(2).
[5] In the interim, the prosecutor had filed a motion to disqualify Judge Youngblood, citing the judge's views on witness credibility. This motion was denied by Judge Youngblood and later by Chief Wayne Circuit Judge James Rashid.
[6] M.C.L. § 750.520h; M.S.A. § 28.788(8) explicitly states:
The testimony of a victim need not be corroborated in prosecutions under sections 520b to 520g.
[7] MCR 6.419 provides:
(A) Before Submission to Jury. After the prosecutor has rested the prosecution's case in chief and before the defendant presents proofs, the court on its own initiative may, or on the defendant's motion must, direct a verdict of acquittal on any charged offense as to which the evidence is insufficient to support conviction....
(B) After Jury Verdict. After a jury verdict, the defendant may file an original or renewed motion for directed verdict of acquittal in the same manner as provided by MCR 6.431(A) for filing a motion for a new trial.
M.C.L. § 730.518; M.S.A. § 27.3937(18) states:
In any city affected by the provisions of this act the judge presiding in any jury trial shall have the same power to direct a verdict for either party as is or may be possessed by judges of the circuit courts of the state.
Compare similar standards under F.R. Crim. P. 29:
(a) Motion before Submission to Jury. Motions for directed verdict are abolished and motions for judgment of acquittal shall be used in their place. The court on motion of a defendant or of its own motion shall order the entry of judgment of acquittal of one or more offenses charged in the indictment or information after the evidence on either side is closed if the evidence is insufficient to sustain a conviction of such offense or offenses.
* * * * * *
(c) ... If the jury returns a verdict of guilty or is discharged without having returned a verdict, a motion for judgment of acquittal may be made or renewed ... If a verdict of guilty is returned the court may on such motion set aside the verdict and enter judgment of acquittal.
[8] In contrast, granting a new trial does not implicate issues of constitutional magnitude and is permissive in nature. Hampton, supra at 373, 285 N.W.2d 284; Herbert, supra at 475, 511 N.W.2d 654.
[9] M.C.L. § 770.1; M.S.A. § 28.1098 provides:
The judge of a court in which the trial of an offense is held may grant a new trial to the defendant, for any cause for which by law a new trial may be granted, or when it appears to the court that justice has not been done, and on the terms or conditions as the court directs.
[10] MCR 6.431 (B) provides:
Reasons for Granting. On the defendant's motion, the court may order a new trial on any ground that would support appellate reversal of the conviction or because it believes that the verdict has resulted in a miscarriage of justice. The court must state its reasons for granting or denying a new trial orally on the record or in a written ruling made a part of the record.
Compare a similar standard under F.R. Crim. P. 33:
The court on motion of a defendant may grant a new trial to that defendant if required in the interest of justice. If trial was by the court without a jury the court on motion of a defendant for a new trial may vacate the judgment if entered, take additional testimony and direct the entry of a new judgment.
[11] See, generally, 3 Wright & Miller, Federal Practice & Procedure, §§ 551, 553, and Seward, The sufficiency-weight distinctionA matter of life or death, 38 U. Miami L. R. 147 (1983).
[12] See Tibbs v. Florida, 457 U.S. 31, 38, n. 11, 102 S. Ct. 2211, 2216, n. 11, 72 L. Ed. 2d 652 (1982). The United States Supreme Court acknowledged that the Florida Supreme Court ruled that appellate courts in that state could no longer reverse convictions on the ground of the great weight of the evidence. However, the Court noted that "[c]ourts in other jurisdictions sometimes rely upon the weight of the evidence to overturn convictions" and that some federal courts have interpreted F.R. Crim. P. 33 to permit a trial judge, "`if required in the interest of justice,'" to "set aside a conviction that is against the weight of the evidence." Id. at 38-39, n. 12, 102 S.Ct. at 2216, n. 12. The Court further noted that "A reversal based on the weight of the evidence ... can occur only after the State both has presented sufficient evidence to support conviction and has persuaded the jury to convict." [Id. at 42-43, 102 S.Ct. at 2218.]
[13] See Herbert, supra at 479, 511 N.W.2d 654 (Boyle J. dissenting):
In People v. Johnson, 397 Mich. 686, 687, 246 N.W.2d 836 (1976), this Court observed that "[a]s the trier of fact, the jury is the final judge of credibility." Unfortunately, however, the opinion in Johnson (hereafter Johnson II) and an earlier order from this Court (People v. Johnson, 391 Mich. 834[, 218 N.W.2d 378 (1974)]) contain language that intimates judicial oversight of the credibility decisions of trial court juries. The Court of Appeals opinion in the case resulting in the first order of this Court in Johnson, People v. Johnson, 52 Mich.App. 385, 217 N.W.2d 417 (1974), was based on a finding of injustice. The order of reversal relied on the dissenting opinion in Sloan v. Kramer-Orloff Co., 371 Mich. 403, 410-412, 124 N.W.2d 255 (1963). The issue in Johnson II was the standard for dismissal of charges. Therefore, the discussion in the opinion in Johnson regarding credibility oversight was dicta. [Brickley, J., concurred with Boyle, J.]
[14] Tibbs, n. 12 supra at 42, 102 S.Ct. at 2218. A reversal on the weight of the evidence does not mean that acquittal was the only proper verdict but, rather, that "the appellate court sits as a `thirteenth juror' and disagrees with the jury's resolution of the conflicting testimony."
We note that the United States Court of Appeals for the Sixth Circuit has consistently refused to adopt this position.
The court of appeals ... does not sit as a "thirteenth juror" to judge the credibility of witnesses. Neither do we reweigh the evidence. Rather, we are limited to examining the evidence produced at trial to determine whether the district court's determination that the evidence [does or] does not "preponderate heavily against the verdict" is a clear and manifest abuse of discretion. [United States v. Ashworth, 836 F.2d 260, 266 (C.A.6, 1988).]
[15] Sheahan v. Barry, 27 Mich. 217, 226 (1873) states:
The division of functions between court and jury is one which is essential to the safe administration of justice, and a new trial will always be granted when the judge interferes with the lawful province of the jury. He has no right to take away from them the decision of any question of fact, and he cannot deprive them of the right to settle for themselves what witnesses or what testimony they will credit or discredit. This would be clearly error.
[16] For jurisdictions recognizing the thirteenth juror concept, see Veitch v. Superior Court of Santa Clara Co., 89 Cal. App. 3d 722, 730-731, 152 Cal. Rptr. 822 (1979), People v. Ramos, 33 A.D.2d 344, 347, 308 N.Y.S.2d 195 (1970), and State v. Hudson, 373 So. 2d 1294, 1298 (La., 1979) (Tate, J., concurring); contra see People v. Noga, 196 Colo. 478, 480, 586 P.2d 1002 (1978) (holding that a judge may never upset a jury verdict for the sole reason that if he were finder of fact he would have ruled otherwise), and State v. Bowle, 318 So. 2d 407, 408 (Fla.App., 1975) (holding that a trial judge is not permitted to sit as a seventh juror pitting his judgment against that of the jury). For courts subsequent to Jackson rejecting the concept, see State v. Kringstad, 353 N.W.2d 302, 307 (N.D., 1984) (holding that a trial court's discretion to grant a new trial is more restricted than the discretion implied by the thirteenth juror concept), and United States v. Rothrock, 806 F.2d 318, 322 (C.A.1, 1986) (a trial judge is not a thirteenth juror who may set aside a verdict because he would have reached a different result).
[17] United States v. Thomas, 894 F. Supp. 58, 63 (N.D.N.Y., 1995) (such motions are not favored and should be granted only with great caution in exceptional circumstances).
[18] "Such a rule would seriously intrude upon the jury's function." State v. Ladabouche, 146 Vt. 279, 502 A.2d 852 (1985).
[19] See M.C.L. § 769.26; M.S.A. § 28.1096:
No judgment or verdict shall be set aside or reversed or a new trial be granted by any court of this state in any criminal case, on the ground of misdirection of the jury, or the improper admission or rejection of evidence, or for error as to any matter of pleading or procedure, unless in the opinion of the court, after an examination of the entire cause, it shall affirmatively appear that the error complained of has resulted in a miscarriage of justice.
[20] United States v. Dockray, 943 F.2d 152, 157 (C.A.1, 1991) (a new trial may be granted on the basis of the great weight of the evidence if the verdict is a miscarriage of justice, the evidence preponderates heavily against the verdict, or a jury result is seriously erroneous); United States v. Sanchez, 969 F.2d 1409, 1414 (C.A.2 1992) (the discretion to grant new trial in the interest of justice should be exercised sparingly, with great caution under extraordinary circumstances); United States v. Arrington, 757 F.2d 1484, 1486 (C.A.4, 1985) (discretion should be exercised sparingly and new trial granted only when evidence weighs heavily against the verdict); United States v. Robertson, 110 F.3d 1113, 1120, n. 11 (C.A.5, 1997) (the power to grant a new trial should be exercised with caution, invoked only in exceptional cases in which the evidence preponderates heavily against the verdict); United States v. Ashworth, n. 14 supra (exercise of discretion to grant new trial should be used only in extraordinary circumstances when evidence preponderates heavily against the verdict); United States v. Lincoln, 630 F.2d 1313, 1319 (C.A.8, 1980)(a new trial should be granted only where the evidence preponderates sufficiently heavily against the verdict that a serious miscarriage of justice occurred); United States v. Rush, 749 F.2d 1369, 1371 (C.A.9, 1984) (motions for a new trial should be granted only in exceptional circumstances when evidence preponderates heavily against the verdict); United States v. Evans, 42 F.3d 586, 593-594 (C.A.10, 1994) (the power to grant a new trial on the weight of the evidence should be invoked only in exceptional cases in which evidence preponderates heavily against the verdict); United States v. Martinez, 763 F.2d 1297, 1313 (C.A.11, 1985) (motions for new trials on the basis of the weight of the evidence are not favored and should be granted sparingly and only in exceptional cases).
[21] Citing with approval, United States v. Arrington, United States v. Rush, and United States v. Lincoln, n. 20 supra, and United States v. Indelicato, 611 F.2d 376, 387 (C.A.1, 1979).
[22] Criminal cases are usually fought on the battlefield of witness credibility, United States v. Friedland, 660 F.2d 919, 931, n. 13 (C.A.3, 1981), and this is particularly true in situations involving the credibility of a victim of a CSC crime where the only witnesses present are the victim and the perpetrator, with the credibility of a professed accomplice to an unwitnessed crime, or the credibility of a coconspirator to a conspiracy, which, by its very nature, is a clandestine offense often know only to its members. It is a well established rule that a jury may convict on the uncorroborated evidence of a CSC victim, People v. Smith, 149 Mich.App. 189, 195, 385 N.W.2d 654 (1986), citing M.C.L. § 750.520h; M.S.A. § 28.788(8); a professed accomplice, People v. Barron, 381 Mich. 421, 163 N.W.2d 219 (1968) (a jury may convict on uncorroborated evidence of a professed accomplice); or in federal court on the uncorroborated testimony of a coconspirator, U.S. v. Martinez, 844 F. Supp. 975 (S.D.N.Y., 1994). Jury decisions in these cases are essentially based on the jury's assessment of the witnesses' credibility. In general, the trial courts "`must defer to the jury's resolution of the weight of the evidence and the credibility of the witnesses,'" and only where exceptional circumstances can be demonstrated may the trial judge "intrude upon the jury function of credibility assessment." United States v. Sanchez, n. 20 supra at 1414.
[23] See also Marshall v. United States, 141 U.S. App. D.C. 1, 2, n. 1, 436 F.2d 155 (1970).
[24] The judicial mind does not always ascribe the same degree of credibility to a witness or witnesses as does the composite mind of the lay jury. Justice Campbell wrote:
Courts cannot assume that the witnesses whom they would most credit are to be followed by the jury. And however much they may be discontented with the result, they cannot usurp the functions of the jury. [Marcott v. Marquette H & O R Co., 47 Mich. 1, 7, 10 N.W. 53 (1881).]
[25] The prosecutor suggests that, following Hampton, there may be little meaningful distinction in criminal cases between the new trial standard and the standard for a directed verdict. We do not reach or adopt that position.
[26] Bart, supra at 12, 558 N.W.2d 449, appears to follow this method of analysis in assessing the adequacy of the reasons for granting the motion for a new trial.
[27] The standard of appellate review regarding a trial judge's decision to grant or deny a motion for a new trial is "entrusted to the discretion of the trial court and that decision will not be disturbed on appeal without a showing of an abuse of discretion...." People v. Hampton, supra at 373, 285 N.W.2d 284. Absent an abuse of discretion, the decision of the trial court must be affirmed. The Court of Appeals found and we agree that there was no abuse of discretion under the previously established thirteenth juror standard.
[1] As the majority explains, there are some circumstances where a witness' testimony may be so impeached or illogical that a trial judge may legitimately grant a new trial on the basis of the credibility of such a witness. Slip op. at 137. Moreover, a trial court may also rely on other substantial "noncredibility" evidence when deciding whether a new trial is warranted under the great weight of the evidence.
[2] Under today's decision, this would still be the case. The majority does not eliminate the consideration of witness credibility by the trial judge. Rather, it clarifies the standard a trial judge must use when deciding whether to grant a new trial on the basis of the credibility of a witness alone.
[3] In contrast, a motion for a directed verdict requires the trial judge to consider the evidence in a light most favorable to the prosecution. In that instance, a judge must not evaluate the credibility of witnesses. Id. at 475, n. 14, 511 N.W.2d 654.
[4] The majority cites three cases as examples of jurisdictions "recognizing the thirteenth juror concept." Slip op. at 135, n. 16. However, the term "thirteenth juror" does not appear anywhere in these three decisions. See Veitch v. Superior Court of Santa Clara Co., 89 Cal. App. 3d 722, 730-731, 152 Cal. Rptr. 822 (1979), People v. Ramos, 33 A.D.2d 344, 347, 308 N.Y.S.2d 195 (1970), and State v. Hudson, 373 So. 2d 1294, 1298 (La., 1979) (Tate, J., concurring). Thus, none of these cases appropriately describes the thirteenth juror analogy or the standard we adopted in Herbert.
[5] "The judge sees the witnesses, hears the testimony, and has a special perspective of the relationship between the evidence and the verdict which cannot be recreated by a reviewing court from the printed record." Reeves v. Markle, 119 Ariz. 159, 163, 579 P.2d 1382 (1978).
[6] See also Seward, The sufficiency-weight distinctionA matter of life or death, 38 U. Miami L.R. 147, 154-155 (1983):
There is, however, a caveat to the application of the "thirteenth juror" analogy since the standard for upsetting a jury verdict is very strict. It has been argued that allowing the judge to reverse a conviction based upon the weight of evidence permits the judge to usurp a function traditionally within the province of the jury. By invading the province of the jury, the judge then becomes the real trier of fact. Recognizing this danger, courts must use caution when reweighing evidence. Accordingly, courts reversing a jury verdict based upon the weight of evidence couch their decisions in terms of "exceptional cases," "preventing injustice," or the "evidence preponderating heavily against the verdict." [Citations omitted.] | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573152/ | 576 N.W.2d 618 (1998)
In re the MARRIAGE OF Karen Kathleen BELL and Gary Donald Bell.
Upon the Petition of
Karen Kathleen Bell, Appellee,
And Concerning
Gary Donald Bell, Appellant.
No. 96-2142.
Court of Appeals of Iowa.
January 28, 1998.
*621 Andrew P. Nelson of Meyer, Lorentzen & Nelson, Decorah, for appellant.
Marion L. Beatty of Miller, Pearson, Gloe, Burns, Beatty & Cowie, P.C., Decorah for appellee.
Heard by CADY, C.J., and SACKETT, and STREIT, JJ.
CADY, Chief Judge.
Gary Bell appeals from the economic provisions of the district court's dissolution decree. He claims the trial court erred in requiring him to pay alimony following his retirement and after the remarriage or cohabitation of his former wife, Karen. He also challenges the amount of alimony and the property distribution. We affirm as modified.
Gary and Karen Bell divorced after thirty-six years of marriage. At the time of dissolution Karen was fifty-five years old and Gary was fifty-six years of age.
Karen was employed in a variety of capacities during the marriage, including work as an LPN. She was also the primary caretaker of the parties' two children and she performed most of the household duties. Additionally, she assisted Gary with his business. She accompanied him on business trips, helped entertain business associates, and assisted in secretarial duties.
In 1995, Karen suffered a severe stroke. This has diminished her language, math, and communication skills. She also has limited use of her arms and suffers from angina, hypertension, diabetes, hypothyroidism, congestive heart failure, and asthma. Her health condition precludes her from future employment.
Gary was the primary source of income during the marriage. He worked in the egg processing business for most of his career. From 1990 to 1995, Gary earned between $64,145 and $84,754 per year. In 1996, his income exceeded $100,000. He changed employers shortly before trial. He currently earns a base salary of $60,000 per year. He can also earn bonuses based on the profitability of the company.
As a part of a severance agreement, Gary received payments in the amount of $46,859. He will owe taxes totaling approximately $18,000 from these payments.
The trial court awarded Karen a net property award of $103,040, including a lake home and a rental property. Gary received a net award of $135,484, including the parties' homestead. To equalize the distribution, the trial court awarded Karen a cash settlement of $15,000.
The district court ordered Gary to pay alimony in the amount of $1500 per month until either party dies. The decree further provided the alimony payment would be reduced by fifty percent in the event Karen remarries or cohabits with another person or when Gary begins to receive social security retirement benefits. In addition, Gary must provide health insurance for Karen which currently costs $293.40 per month. The alimony obligation was reduced by the actual cost of the insurance premium.
On appeal Gary claims the district court erred in requiring him to pay alimony beyond Karen's remarriage, cohabitation, or his retirement. He also asserts the trial court required him to pay excessive alimony and distributed the property inequitably.
I. Standard of Review
We review this equitable matter de novo. Iowa R.App. P. 4. This requires us to examine the entire record and adjudicate anew *622 rights on the issues properly presented. In re Marriage of Ruter, 564 N.W.2d 849, 851 (Iowa App.1997). At the same time, we recognize the value in listening to and observing the parties and witnesses. Iowa R.App. P. 14(f)(7). Consequently, we give weight to the findings of the trial court, although they are not binding. Id.
II. Alimony
Alimony is an allowance to the former spouse in lieu of a legal obligation to support that person. See In re Marriage of Gonzalez, 561 N.W.2d 94, 99 (Iowa App. 1997). When determining the appropriateness of alimony, we consider: (1) the earning capacity of each party; and (2) present standards of living and ability to pay balanced against the relative needs of the other. In re Marriage of Kurtt, 561 N.W.2d 385, 387 (Iowa App.1997); In re Marriage of Miller, 524 N.W.2d 442, 445 (Iowa App.1994).
Alimony is not an absolute right. Instead, an award depends upon the circumstances of each particular case. Gonzalez, 561 N.W.2d at 99. Many factors are considered in determining the appropriate amount of alimony to be awarded to a spouse. In re Marriage of Siglin, 555 N.W.2d 846, 850 (Iowa App.1996); Iowa Code § 598.21(3) (1995). Alimony may be used to remedy the inequities in a marriage and to compensate a spouse who leaves the marriage at a financial disadvantage. In re Marriage of Geil, 509 N.W.2d 738, 742 (Iowa 1993). Following a marriage of long duration, we have affirmed awards of both alimony and substantially equal property distribution, especially where the disparity in earning capacity has been great. Gonzalez, 561 N.W.2d at 99; Geil, 509 N.W.2d at 742. We also consider the division of property in determining alimony. Siglin, 555 N.W.2d at 850.
The general rule in Iowa is that while the subsequent remarriage of a spouse does not result in automatic termination of an alimony obligation, it shifts the burden to the recipient to show extraordinary circumstances exist which require the continuation of the alimony payments. See In re Marriage of Shima, 360 N.W.2d 827, 828 (Iowa 1985); In re Marriage of Von Glan, 525 N.W.2d 427, 429 (Iowa App.1994). The rationale behind this rule is it would be contrary to public policy to allow a party to receive support from both a prior and a current spouse. In re Marriage of Cooper, 451 N.W.2d 507, 509 (Iowa App.1989). Dissolution courts may, however, provide alimony is not modifiable, does not terminate on remarriage, or is payable in a lesser sum upon remarriage. See In re Marriage of Phares, 500 N.W.2d 76, 79 (Iowa App.1993); In re Marriage of Aronow, 480 N.W.2d 87, 89 (Iowa App.1991) (decree provided alimony would continue upon remarriage).
We have reviewed circumstances where our courts have permitted alimony to continue after remarriage of the recipient spouse. Whether continued alimony after remarriage is an appropriate term in an original decree for dissolution of marriage normally depends upon the purpose behind the award of alimony. Continued alimony after remarriage most often occurs with rehabilitative and reimbursement alimony.
Reimbursement alimony is predicated upon economic sacrifices made by one spouse that directly enhance the future earning capacity of the other spouse. In some instances, it would be unfair to terminate this type of award simply because the recipient spouse remarries. See In re Marriage of Lalone, 469 N.W.2d 695, 697 (Iowa 1991) (although reimbursement alimony did not apply in this case, the court recognized it is not subject to modification until full payment has been made except on recipient's death); In re Marriage of Francis, 442 N.W.2d 59, 64 (Iowa 1989) (reimbursement alimony not subject to modification or termination until full compensation except upon recipient's death).
Rehabilitative alimony serves to support an economically dependent spouse through a limited period of education and training. In re Marriage of O'Rourke, 547 N.W.2d 864, 866 (Iowa App.1996). The purpose behind this type of alimony also may justify continuing alimony beyond remarriage. See In re Marriage of Seidenfeld, 241 N.W.2d 881, 884 (Iowa 1976) (alimony payments to wife for the purpose of further education should continue even if wife remarries); *623 In re Marriage of Boehlje, 443 N.W.2d 81, 84 (Iowa App.1989) (alimony award containing education expenses ordered not to cease in the event of recipient spouse's remarriage); In re Marriage of Orgren, 375 N.W.2d 710, 712 (Iowa App.1985) (continuation of alimony especially appropriate where its purpose is rehabilitative).
In addition to reimbursement and rehabilitative alimony, retirement benefits which function as a distribution of property but are classified as alimony may also continue upon the remarriage of the recipient. See In re Marriage of Wilson, 449 N.W.2d 890, 893 (Iowa App.1989) (retirement benefits distributed in the form of alimony do not terminate on remarriage of recipient). With the exception of reimbursement alimony, rehabilitative alimony, and in some instances retirement benefits distributed as alimony, there is no support for permanent alimony beyond remarriage absent proof of extraordinary circumstances arising from the remarriage. See Cooper, 451 N.W.2d at 509 (citing Kantaris v. Kantaris, 169 N.W.2d 824, 831 (Iowa 1969) (court rejected provision in decree mandating continued alimony beyond remarriage)); Shima, 360 N.W.2d at 829 (discussing the concept of extraordinary circumstances to justify continued alimony after remarriage).
Gary maintains his alimony obligation should terminate upon Karen's remarriage or cohabitation, or upon his retirement and receipt of social security retirement benefits. We acknowledge special circumstances could arise in the future which would warrant permanent alimony after remarriage of the recipient spouse. In this case, however, we are unable to reasonably contemplate at this time that these circumstances would occur. The general rule that alimony should not continue after remarriage should therefore be followed in this case. See Shima, 360 N.W.2d at 828.
Accordingly, we modify the district court decree to remove the requirement that Gary pay alimony following remarriage or cohabitation with another person. If Karen remarries or cohabits with another person in a marriage equivalent relationship the alimony obligation shall terminate and the burden will shift to Karen in a modification proceeding to demonstrate extraordinary circumstances warranting continued alimony. See id.; 29 Am.Jur.2d Evidence § 161 (1994) (where information necessary to prove an issue is peculiarly or exclusively in the possession of one party, convenience and fairness may justify placing the burdens of pleading and proving those facts upon that party).
Gary also objects to the continuation of his alimony obligation upon his retirement and receipt of social security benefits. In determining the necessity and length of alimony, we consider the earning capacity of each party, as well as the present living standards and ability to pay balanced against the relative needs of the other spouse. See Kurtt, 561 N.W.2d at 387. Gary currently has a good income and the ability to establish a retirement fund. Karen, conversely, is unable to work and will need Gary's continued support even after he retires. If his circumstances following retirement render him unable to continue support at that level, he may petition the court for a modification of the decree. See In re Marriage of Hayne, 334 N.W.2d 347, 353 (Iowa App.1983). We therefore agree with the district court that Karen's alimony should continue following Gary's retirement and receipt of social security benefits, but at a reduced amount of fifty-percent.
Gary further contends his support obligation to provide medical insurance for Karen should terminate when she qualifies for social security and Medicare benefits. The decree states Gary must provide health insurance with coverage equivalent to that provided during the marriage. We agree that due to Karen's health condition she should continue to receive coverage equal to that provided in the marriage. We specifically modify the district court decree to provide that after Karen qualifies for Medicare, Gary shall provide supplement medical insurance so that Karen will maintain the same insurance benefits she received during the marriage.
Gary next claims the amount of alimony was excessive and inequitable. Karen *624 qualifies for $395 in monthly social security disability benefits. She also has rental income of $300. Karen estimated her monthly expenses to be approximately $1320. Gary nets $3486.82 per month based on a $60,000 per year salary, without bonuses. He estimated his monthly expenses to be approximately $2625. The district court ordered him to pay alimony in the amount of $1500 per month.
There is a distinction between social security disability payments and social security retirement benefits. See State ex rel Pfister v. Larson, 569 N.W.2d 512, 516 (Iowa App.1997) (discussed in the context of child support). Disability payments are considered a substitute for income, while social security retirement benefits are a supplement to income. Id.; Potts v. Potts, 240 N.W.2d 680, 681 (Iowa 1976).
Because Karen's social security disability income is a substitute for income, her estimated monthly expenses of $1320 will be reduced by her disability income of $395. Her minimum monthly financial need will thus be $925. Although Karen has rental property income, we note the condition of the property will require repairs which will decrease her income from the property. Moreover, neither party will be able to live at the lifestyle they enjoyed while living together on Gary's income. Based on the long duration of the marriage, Karen's medical condition, Karen's needs, and Gary's ability to pay, we find $1100 to be a reasonable amount of alimony.
III. Property Distribution
The partners to a marriage are entitled to a just and equitable share of property accumulated through their joint efforts. See In re Marriage of Gonzalez, 561 N.W.2d 94, 98 (Iowa App.1997); see also In re Marriage of Russell, 473 N.W.2d 244, 246 (Iowa App.1991). The Iowa courts do not require an equal division or a percentage division in determining a just and equitable share of property. Gonzalez, 561 N.W.2d at 98. Instead, each particular circumstance determines what is fair and equitable. Id. Further, the property distribution should be made pursuant to the criteria codified in Iowa Code section 598.21(1) (1995). Id.
Conduct of a spouse which results in loss or disposal of property otherwise subject to division at the time of divorce may be considered in making an equitable distribution of property. See In re Marriage of Cerven, 335 N.W.2d 143, 146 (Iowa 1983) (money transferred to son was a sham designed to shield husband from support obligations); In re Marriage of Burgess, 568 N.W.2d 827, 828 (Iowa App.1997) (waste of marital assets by spouse prior to dissolution of marriage can be considered in making property distribution); In re Marriage of Williams, 421 N.W.2d 160, 164-65 (Iowa App.1988) (husband's transfers of assets in violation of court order considered in making equitable distribution). Additionally, we recognize the dissipation or waste of marital assets by a spouse prior to dissolution may generally be considered in making a property distribution. Burgess, 568 N.W.2d at 828; see Lee R. Russ, Annotation, Spouse's Dissipation of Marital Assets Prior to Divorce as Factor in Divorce Court's Determination of Property Division, 41 A.L.R. 4th 416 (1985).
Gary maintains the trial court did not arrive at an equitable distribution of property. Specifically, he claims the court erred in requiring him to pay Karen a cash settlement of $15,000. He asserts the $46,895 he received as part of a severance package did not include taxes due of approximately $18,758 and the taxes should be considered marital debt.
Gary received a net property settlement of $135,484. We recognize he will have to pay approximately $18,758 in taxes and assign that debt to him. This reduces his net property award to $116,726. After paying Karen the $15,000 cash settlement, his net award is reduced to $101,726. Karen received a net award of $103,040. With the $15,000 cash settlement, her award totals $118,040. The record indicates Gary spent significant portions of marital assets on gambling prior to the dissolution. For example, on one occasion he spent over $2000 at casinos. The night before trial he spent an additional $600 at a casino. We find the amounts of money Gary spent on gambling after the initiation of the dissolution proceedings to be wasteful of *625 marital assets and we consider this in our distribution. Consequently, we find the trial court's award resulted in an equitable distribution and decline to relieve Gary of the trial court's order to pay Karen $15,000. Further, any additional taxes owed by Gary from gambling winnings he failed to report will be assigned to him.
IV. Attorney Fees
An award of appellate attorney fees is not a matter of right, but rests in our discretion. Kurtt, 561 N.W.2d at 389. In determining whether to award appellate attorney fees, we consider the needs of the party making the request, the ability of the other party to pay, and whether the party making the request was obligated to defend the decision of the trial court on appeal. Id.
Considering Karen's need and both parties' ability to pay, we find Gary should contribute $1000 for her appellate attorney fees.
V. Conclusion
We modify the district court decree by eliminating the requirement for Gary to continue to pay alimony in the event of Karen's remarriage or cohabitation. Alimony shall terminate in the event Karen remarries or cohabitates with another person in a marriage equivalent relationship. Once Gary retires from his employment and receives social security benefits, his alimony obligation shall be reduced to fifty percent of the current amount. Once Karen becomes eligible for Medicare, Gary shall maintain supplemental medical insurance for the benefit of Karen so that she will maintain the same insurance benefits she received during the marriage. The decree is further modified to reduce the monthly alimony obligation to $1100. We decline to disturb the trial court's award of a $15,000 cash settlement to Karen, and otherwise affirm the district court. We award Karen $1000 in appellate attorney fees.
AFFIRMED AS MODIFIED.
STREIT, J., concurs.
SACKETT, J., concurs in part and dissents in part.
SACKETT, Judge (concurring in part; dissenting in part).
I would not remove the requirement that Gary continue to pay half of the ordered alimony on Karen's cohabitation or remarriage. This was a long-term marriage in which Karen assumed a lesser role for family support and a greater role for family care. Her disability precludes her from gainful employment. Her financial future should not be totally dependent on the ability of another man to support her.
I agree with the majority's decision affirming the district court's fifty percent reduction of alimony on Gary's retirement and receipt of social security retirement. I do not, however, adopt their reasoning that his ability to establish a retirement fund in the future is a factor to consider on the issue.
I would award no appellate attorney fees.
In all other respects, I concur with the majority. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573155/ | 2 So. 3d 1187 (2009)
STATE of Louisiana
v.
Michael W. SMITH.
No. 2007-1443.
Court of Appeal of Louisiana, Third Circuit.
January 21, 2009.
*1189 J. Phil Haney, District Attorney, Walter J. Senette, Jr., Assistant District Attorney, Sixteenth Judicial District, Franklin, LA, for State of Louisiana.
Richard A. Spears, Attorney at Law, New Iberia, LA, for Defendant-Appellant, Michael W. Smith.
Court composed of MARC T. AMY, BILLY HOWARD EZELL, and J. DAVID PAINTER, Judges.
PAINTER, Judge.
Defendant, Michael W. Smith, appeals his convictions and sentences on the charges of attempted aggravated escape and aggravated obstruction of a highway. For the following reasons, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On June 3, 2005, the State charged Defendant, Michael W. Smith, with one count of aggravated escape, in violation of La.R.S. 14:110(C)(1), and one count of aggravated obstruction of a highway, in violation of La.R.S. 14:96. Defendant's trial began September 7, 2005, and continued through September 9, 2005. At the conclusion of trial, the jury found Defendant guilty of attempted aggravated escape and guilty as charged of aggravated obstruction of a highway.
The district court ordered Defendant to serve ten years at hard labor for the aggravated obstruction conviction and to serve five years at hard labor for the attempted aggravated escape conviction. Defendant was given credit for all time served, and the sentences were ordered to run consecutively with each other.
The State filed a multiple offender bill against Defendant.[1] The district court conducted Defendant's habitual offender hearing on June 29, 2007. At the hearing, Defendant pled guilty to second offender status. The district court vacated Defendant's aggravated obstruction penalty, replaced it with an eighteen-year hard labor sentence, and, again, gave Defendant credit for all time served.
Defendant now appeals, arguing that there was insufficient evidence presented at trial to support his convictions and that *1190 the trial court erred in not allowing a particular jury instruction.
At trial, the State called Iberia Parish Sheriff Detective Shane Landry as its first witness. Detective Landry was in his current position on the date of the incident, October 29, 2004. On that day, the Lafayette Parish Sheriff's Office sent Detective Landry an arrest warrant for Defendant, with whom Detective Landry was familiar. Detective Landry then began to search for Defendant. After watching Defendant's hotel room for about twenty minutes, Detective Landry saw Defendant approach and enter the room.
Detective Landry called patrol officers to assist him, and when Detective Landry exited the building, one of the patrolmen, Sergeant Trent Walker, was talking to Defendant. Defendant sat in a blue 2007 Chevrolet extended cab truck, which Detective Landry had previously been informed that Defendant was using. Detective Landry informed Sergeant Walker of Defendant's identity and the arrest warrant.
Detective Landry watched as Sergeant Walker walked to the driver's door of the blue pickup. Detective Landry then heard tires squealing and saw the vehicle leave. Detective Landry reported that Sergeant Walker had been in the truck's driver-side doorway when it began moving; Sergeant Walker followed the moving vehicle while still inside the doorway. Detective Landry immediately returned to his unit, which he had parked "way in the front."[2] Detective Landry attested that, by the time he reached his vehicle, there was no way he could catch up to Defendant because Defendant was long gone. Defendant was not apprehended that night, but officers finally arrested Defendant in St. Landry Parish on November 6, 2004.
Iberia Parish Sheriff Sergeant Trent Walker was the second witness to testify for the State. Sergeant Walker was working patrol on October 29, 2004, and he assisted Detective Landry in executing an arrest warrant. Sergeant Walker had been given the description and plate number of the blue truck Defendant was using. Detective Landry twice called him to the hotel where Defendant was staying. On the second call, Sergeant Walker noticed a blue truck in the parking lot and went to investigate. As he neared the blue truck, he noticed Defendant walking quickly toward him. Defendant acted nervous.
Sergeant Walker called Defendant over and asked Defendant for his name. Defendant gave a false name and continued looking nervous. When Sergeant Walker asked for identification, Defendant walked to the truck, opened the door, and stood at the door entrance. Sergeant Walker went to the rear of the automobile to verify the license plate number he had been given earlier; the numbers did not match. When Sergeant Walker looked up from comparing the numbers, Defendant was seated in the truck.
As Sergeant Walker approached Defendant, Detective Landry ran into view and identified Defendant as the person for whom they were looking. At that point, Defendant attempted to close the truck's door, but Sergeant Walker caught the door with his left hand. Sergeant Walker reached around Defendant and grasped Defendant's neck with his right hand while holding Defendant's left arm with his left hand. Sergeant Walker told Defendant, "stop, stop[!] Get out of the vehicle. Get *1191 out of the vehicle." Defendant responded by turning on the ignition, putting the automobile in gear, and accelerating in such a manner as to squeal the tires.
At the time Defendant accelerated, Sergeant Walker was still standing in the parking lot with his shoulder and arm inside the truck trying to remove Defendant. Because his arm was trapped between Defendant's back and the truck's seat, Sergeant Walker had to run with the vehicle in order to avoid being dragged or run over. Sergeant Walker was able to pull free without falling. Defendant did not stop and accelerated to ten or fifteen miles per hour before Sergeant Walker was able to extricate himself.
Sergeant Walker watched as Defendant closed his door and left the hotel parking lot. Defendant was traveling twenty-five or thirty miles per hour by the time he exited the parking lot. After losing sight of Defendant, Sergeant Walker ran back to his patrol unit and pursued Defendant. Sergeant James Segura and Deputy Jacob Huckaby were present to help execute the arrest warrant. In pursuing Defendant, Sergeant Walker traveled at speeds up to 115 or 120 miles per hour. According to Sergeant Walker, Sergeant Segura drove at speeds up to 120 or 125 miles per hour.
During the pursuit, Sergeant Walker came within four or five car lengths of Defendant on Highway 90 in Iberia Parish. At that time, Defendant was driving ninety to one hundred miles per hour in medium density traffic. During the chase, all units in pursuit had both their sirens and their lights activated. Sergeant Walker worried that one of the speeding vehicles would hit an uninvolved vehicle. Defendant did not heed the sirens.
Sergeant Walker followed Defendant into St. Martin Parish where Defendant left the roadway. Defendant continued to travel between ninety and one hundred miles per hour in medium traffic. Sergeant Walker continued to worry about the possibility of the automobiles involved in the pursuit colliding with an uninvolved vehicle. The pursuit continued into Lafayette Parish. Dispatchers advised surrounding agencies of the pursuit, and law enforcement from those agencies provided assistance in the chase.
Sergeant Walker testified that there were traffic lights on the route Defendant traveled. Defendant did not heed the red traffic lights; he drove through the first red light at about eighty miles per hour. At that light, traffic had stopped in both lanes waiting for the red light to change; Defendant drove on the shoulder of the road to get around the cars and to go through the light. The second red light was located at the intersection of Highway 92 and Smede Highway near or in Broussard. Defendant turned left onto Highway 92 through the red light. Highway 92 is a two-lane road.
Sergeant Walker stated that, at about the time Defendant turned onto Highway 92, a Broussard unit cut ahead of all three of the Iberia Parish Sheriff units. After pursuing Defendant a distance down Highway 92, the Broussard unit began to slow before finally turning off its lights and pulling over. The pursuit ended because Defendant was no longer in sight. Sergeant Walker continued on to Youngsville for the purpose of meeting with the Lafayette Parish Sheriff's Office. Defendant was not found or arrested until November 6, 2004. Sergeant Walker said that Defendant did not cooperate with Sergeant Walker at any time during the incident. The pursuit in Iberia Parish lasted five to ten minutes.
Iberia Parish Sheriff Lieutenant James Segura testified as the third witness for the prosecution; he has been promoted *1192 from sergeant to lieutenant since the October 29, 2004, incident. Lieutenant Segura assisted Detective Landry with the arrest warrant on the evening of October 29, 2004. When Lieutenant Segura arrived at the hotel, he parked his car by backing into a parking space. Sergeant Walker and Deputy Huckaby arrived with Lieutenant Segura; Detective Landry was already onsite. Sergeant Walker parked several spaces over from Lieutenant Segura. When he arrived, Lieutenant Segura noticed a vehicle in the parking lot that matched the description of the blue truck for which they were looking.
Lieutenant Segura averred that, from his vantage point, he was able to observe Sergeant Walker's interaction with Defendant. Lieutenant Segura was about thirty feet away from both Sergeant Walker and Defendant in the well-lit parking lot. As Sergeant Walker approached Defendant's automobile, Sergeant Walker turned and noticed a man walking in his direction. After Sergeant Walker conversed with Defendant, Sergeant Walker went to the back of the pickup truck while Defendant went to the driver's side and opened the door. At the rear of the vehicle, Sergeant Walker looked at the license plate.
Lieutenant Segura then saw Detective Landry exit the hotel and yell, "that's him, that's him." After Detective Landry identified Defendant as the person for whom they were looking, Sergeant Walker left the rear of the vehicle and approached the driver's side door of the truck. Lieutenant Segura heard Sergeant Walker direct Defendant to step out of the vehicle.
Lieutenant Segura saw Defendant attempt to close the truck door, which attempt Sergeant Walker stopped. Lieutenant Segura next saw Sergeant Walker reach into the cab of the truck and grab Defendant. Lieutenant Segura heard Sergeant Walker shouting at Defendant to stop and get out of the vehicle. When Defendant refused to get out of the truck, Sergeant Walker reached further into the automobile in an apparent attempt to pull Defendant from the vehicle. Sergeant Walker repeatedly instructed Defendant to stop and to get out of the vehicle.
Lieutenant Segura heard the vehicle's engine start and the tires squeal. The truck accelerated with Sergeant Walker still halfway in the automobile trying to remove Defendant. Lieutenant Segura worried that Defendant would run over Sergeant Walker. Sergeant Walker went with the truck until he was able to disengage from Defendant and move away from the automobile. From Lieutenant Segura's vantage point, Sergeant Walker had physical control or contact on Defendant as Sergeant Walker commanded Defendant to exit the vehicle.
Lieutenant Segura had been running toward the truck to assist Sergeant Walker, so he had to turn around and run back to his unit so he could pursue Defendant. Lieutenant Segura was able to figure out which direction Defendant had taken. When Lieutenant Segura reached Highway 90, he saw taillights moving west at a high rate of speed. Lieutenant Segura, driving approximately 120 miles per hour, radioed Defendant's location so others could assist in the chase. Lieutenant Segura caught up with Defendant at an overpass in Iberia Parish. Defendant was driving extremely fast; dodging cars in both lanes in an attempt to evade the officers.
Lieutenant Segura employed his sirens, lights, and spotlight in an attempt to warn traffic about what was happening. Once Lieutenant Segura caught up with Defendant, he slowed to one hundred miles per hour. Lieutenant Segura followed Defendant to Highway 92 in St. Martin Parish. Because of Defendant's speed, Lieutenant *1193 Segura was concerned that there would be a fatal accident.
Lieutenant Segura stated that, beginning in St. Martin Parish, Defendant ignored traffic signals; once, he ran a red light by passing the stopped traffic on the shoulder. Defendant gained a larger lead on Lieutenant Segura by so doing because, although Defendant did not slow, Lieutenant Segura had to make sure the intersection was clear before he proceeded. Defendant also ran a red light when he turned left at the intersection of Highway 90 and Highway 92.
Lieutenant Segura said that, when Defendant turned left at the intersection, a Broussard Police Department unit joined the pursuit by pulling ahead of Lieutenant Segura. The officers were unable to apprehend Defendant that evening.
The fourth witness to testify for the prosecution was construction worker Jace Marceaux. Mr. Marceaux and his family traveled to New Iberia from the Broussard area on October 29, 2004, around 8:00 p.m. Mr. Marceaux drove his family to eat dinner at Duffy's Restaurant in New Iberia. After about an hour, the Marceaux family returned to the vehicle, and Mr. Marceaux turned onto Highway 14 traveling toward Highway 90.
Mr. Marceaux testified that he had turned onto the entry ramp of Highway 90 when he noticed someone "coming up behind me fast." Mr. Marceaux edged his vehicle to the left because he did not know where the truck was going. Mr. Marceaux stated that the truck flew by, spraying rocks on his automobile. Although he attempted to get the license plate, the passing vehicle moved too quickly out of view. Another car was ahead of the Marceauxs on the entry ramp; it was in the truck's way, so it drove around that car at a high rate of speed.
When he saw the truck's lights closing in on him from behind, Mr. Marceaux thought that the truck was going to strike the rear of his vehicle. Mr. Marceaux pulled halfway onto the shoulder in order to avoid being hit. Mr. Marceaux saw the truck pull to the right, so Mr. Marceaux kept his automobile to the left. Mr. Marceaux estimated the truck was traveling at least sixty miles per hour when it passed him. The truck was a dark blue full-sized king cab pickup truck. As the truck disappeared from view, Mr. Marceaux saw police lights behind him. Two or three police cars passed the Marceaux vehicle. When Mr. Marceaux reached Highway 90, he saw the truck weaving in and out of the traffic in an apparent effort to evade the police officers.
Mr. Marceaux's wife called 911 and reported the incident. The operator asked them to meet with an officer, so they met with an officer at a service station located at the corner of Captain Cade and Highway 90. The police officer made a report after speaking with the Marceauxs.
Nicole Marceaux, Jace Marceaux's wife, testified as the fifth witness for the prosecution. Ms. Marceaux and her family went to New Iberia on Friday, October 29, 2004; she and her family habitually went to New Iberia every Friday or Saturday night to eat at Duffy's. The Marceauxs arrived at Duffy's around 7:00 p.m. that evening. After leaving the restaurant, the Marceauxs took Center Street to Highway 90 because they wanted to go home. Midway along the entry ramp to Highway 90, her husband told the family to "hold on" and drove onto the left shoulder. A vehicle came up quickly behind them, pulled onto the right shoulder, and then rapidly passed the Marceauxs. As he passed, the vehicle sprayed rocks that hit the Marceauxs' vehicle. The vehicle was *1194 traveling too fast for the Marceauxs to obtain a license plate number.
Mrs. Marceaux related that, after passing their vehicle and pulling back into the driving lane, the driver had to return to the shoulder because there was another car in front of the Marceauxs' automobile. The vehicle that passed the Marceauxs' vehicle was a full-sized pickup truck. When the Marceauxs' vehicle merged onto Highway 90, Mrs. Marceaux phoned 911 to report the careless driving. The operator advised Mrs. Marceaux that law enforcement was aware of the situation and told her that officers were in pursuit. The 911 operator asked the Marceauxs to meet with an officer and give statements. The Marceauxs met with an officer at a convenience store on the corner of Captain Cade and Highway 90. Several police units passed the Marceauxs while they were en route.
Broussard Police Department Patrol Supervisor Roger Durgin testified as the State's final witness. On October 29, 2004, Officer Durgin was working when he received a request for assistance by the Iberia Parish Sheriff's Office via the Lafayette Parish Communication Center. The Iberia Parish Sheriff's Office requested assistance with a high speed pursuit traveling toward Broussard on Highway 90. As asked, Officer Durgin drove into the expected path of the pursuit and waited on a median crossover inside the city limits of Broussard in St. Martin Parish.
As the chase neared, Officer Durgin noticed that the dark blue suspect vehicle, which approached at eighty to eighty-five miles per hour, ignored a red light and passed the stopped cars by driving on the shoulder. The driver operated the vehicle in a "very reckless manner;" he drove through the next red light at approximately eighty-five to ninety miles per hour without braking before he turned left on Highway 92 and continued toward Youngsville. Officer Durgin activated his lights and siren and joined the pursuit, but the vehicle did not stop or slow. Officer Durgin stopped chasing the suspect after three or four miles in accordance with an order issued by Officer Durgin's chief. The vehicle was not apprehended.
DISCUSSION
Errors Patent
In accordance with La.Code Crim.P. art. 920, all appeals are reviewed for errors patent on the face of the record. After reviewing the record, we find that there are no errors patent.
Sufficiency of Evidence (aggravated obstruction of a highway of commerce)
Defendant argues that the State failed to sufficiently prove he committed aggravated obstruction of a highway because the offense requires an obstruction. Defendant asserts that the State's theory of prosecution was faulty because it put forth that Defendant violated La.R.S. 14:96 by driving recklessly and by speeding. In support of his argument, Defendant contends that all of the published jurisprudence concerning La.R.S. 14:96 involves an actual obstruction. Defendant urges that the trial court erred when it refused Defendant's attempts to include a definition of obstruction in the jury instructions. The State responds that, under La.R.S. 14:96, the term obstruction includes acts as long as those acts foreseeably endanger human life. The State concedes that there is no published jurisprudence where an act resulted in a conviction for obstruction of a highway, but it maintains that the plain language of the statute includes actions as well as obstruction.
The standard of appellate review for a sufficiency of the evidence claim is whether, after viewing the evidence in *1195 the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime proven beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 560 (1979); State v. Mussall, 523 So. 2d 1305 (La.1988). A determination of the weight of evidence is a question of fact, resting solely with the trier of fact who may accept or reject, in whole or in part, the testimony of any witnesses. State v. Silman, 95-0154 (La.11/27/95), 663 So. 2d 27, 35. A reviewing court may impinge on the factfinding function of the jury only to the extent necessary to assure the Jackson standard of review. State v. Bordenave, 95-2328 (La.4/26/96), 678 So. 2d 19, 20. It is not the function of an appellate court to assess credibility or re-weigh the evidence. Id.
State v. Macon, 06-481, pp. 7-8 (La.6/1/07), 957 So. 2d 1280, 1285-86.
"Aggravated obstruction of a highway of commerce is the intentional or criminally negligent placing of anything, or performance of any act, on any railway, railroad, navigable waterway, road, highway, thoroughfare, or runway of an airport, wherein it is foreseeable that human life might be endangered." La.R.S. 14:96 (emphasis added).
We are cognizant of this court's decision in State v. Cox, 07-744 (La.App. 3 Cir. 1/30/08), 974 So. 2d 891, with the State's writ application having been granted by the Louisiana Supreme Court at 08-492 (La.10/3/08), 992 So. 2d 996. As in the instant case, Cox involved a high speed police pursuit. During the chase, Cox left his lane of travel while negotiating a curve and struck an oncoming vehicle. The driver of the other vehicle died as a result of the injuries received in the crash. This court refused to affirm the conviction for aggravated obstruction of a highway based on a finding that Cox did not place anything in the highway. However, in the instant case, we find that the language of La.R.S. 14:96 as quoted above, specifically the inclusion of "performance of any act, supports a finding in this case that the State proved that Defendant committed the elements of the offense.
Like Defendant in the current case, the defendant in State v. Keltner, 542 So. 2d 42 (La.App. 2 Cir.), writ denied, 548 So. 2d 1228 (La.1989) was also convicted of aggravated obstruction of a highway of commerce for performing an act on a highway that foreseeably endangered human life; however, sufficiency of the evidence was not an issue before the Keltner court. Keltner drove an eighteen-wheeler carrying a full load when two of his rear tires blew. Id. Thinking he could make it to the next truck stop, the defendant proceeded by driving slowly, around five miles per hour, on the shoulder of Interstate 20 and by sometimes veering back into the driving lane when the shoulder became too rough. Id. The defendant had turned on his emergency blinkers, but several drivers attested they narrowly avoided collisions with the truck. Id. Ultimately, a bus collided with the defendant's tractor trailer; two people were killed and several were injured. Id.
In the instant case, the evidence presented at trial shows that Defendant drove his truck at excessive speeds on roadways in Iberia Parish. Officer testimony shows that Defendant drove at excessive speeds because he traveled at speeds greater than one hundred miles per hour, which is more than twenty miles per hour over the highest posted speed limit in the State of Louisiana. While in that parish, he forced at least one vehicle, the Marceauxs' automobile, partially off the road and onto the shoulder, which foreseeably could have caused an accident had Mr. Marceaux *1196 veered too far or lost control of his vehicle. After forcing the Marceaux family off the road, Defendant wove in and out of traffic on Highway 90 at excessive speeds, which behavior also could have foreseeably caused life-threatening accidents. In St. Martin Parish, Defendant's actions became even more dangerous as he ran two red lights, which created an additional risk of collision with traffic legally crossing the intersections.
Thus, this court finds that, when viewed in a light most favorable to the prosecution, a reasonable factfinder could have found that the State proved Defendant violated the elements of the offense set forth in La.R.S. 14:96.
Jury Instructions
At trial, the defense requested the inclusion of the following jury instruction:
That in order to convict Mr. Smith of Aggravated Obstruction of a Highway of Commerce, you must find beyond a reasonable doubt that he intentionally or criminally negligently placed anything on a road or a highway which caused an obstruction, or he performed an act which caused an obstruction on a road or a highway and it was foreseeable that human life might be endangered.
The trial court denied Defendant's request because "[n]owhere in that statute does it say that act or placement of an object must obstruct, impede or in any way affect the traffic other than endangering, that it might endanger human life." Defendant objected to the exclusion of this requested jury instruction.
We find that the trial court properly excluded the requested jury charge because the requested instruction defined the law to require the placement of an obstructive barrier in the roadway, which was a misstatement of the law. Under La.Code Crim.P. art. 802, the trial court is bound to issue jury instructions concerning the law applicable to the case. The trial court correctly pointed out that the language of statute under which Defendant was charged, La.R.S. 14:96, did not require placement of any sort of obstacle on the highway. "When the wording of a Section is clear and free of ambiguity, the letter of it shall not be disregarded under the pretext of pursuing its spirit." La.R.S. 1:4. Moreover, "[t]he articles of this Code ... shall be given a genuine construction, according to the fair import of their words, taken in their usual sense, in connection with the context, and with reference to the purpose of the provision." La.R.S. 14:3. Hence, this court finds that the trial court did not err in adhering to the plain language of La.R.S. 14:96 or in refusing to exclude instructions that were not law applicable to the case. Accordingly, this argument by Defendant is without merit.
Defendant claims that the trial court erred in refusing to give a jury charge allowing the offense simple obstruction of a highway of commerce as a responsive verdict to the aggravated obstruction of a highway offense. Other than quoting the statute for simple obstruction of a highway of commerce, Defendant cites no legal premise in support of this claim. The prosecution responds that the trial court correctly refused to include simple obstruction as a jury charge.
At trial, Defendant objected to the trial court's exclusion of a jury instruction giving simple obstruction of a highway as a responsive verdict to aggravated obstruction of a highway. The trial court held that simple obstruction of a highway was not a lesser included offense of aggravated obstruction because simple obstruction, as defined in La.R.S. 14:97, contained an extra element not present in the aggravated offense; to wit, "[t]he requirement that the *1197 action or object placed on the highway will render movement more difficult."
As previously stated, La.Code Crim.P. art. 802 requires the trial court to charge the jury as to the law applicable to the case. Additionally, "[a]fter charging the jury, the judge shall give the jury a written list of the verdicts responsive to each offense charged, with each separately stated." La.Code Crim.P. art. 809.
The Louisiana Code of Criminal Procedure does not specifically set forth the responsive verdicts to aggravated obstruction of a highway of commerce. La.Code Crim.P. art. 814. "In all cases not provided for in Article 814, the following verdicts are responsive: (1) Guilty; (2) Guilty of a lesser and included grade of the offense even though the offense charged is a felony, and the lesser offense a misdemeanor; or (3) Not Guilty." La.Code Crim.P. art. 815. "A lesser offense is included in the charge of the greater offense if all of the elements of the lesser crime are included in the definition of the greater offense." State v. McCoy, 337 So. 2d 192, 196 (La.1976). "Stated in another way for practical application, this merely means that, if any reasonable state of facts can be imagined wherein the greater offense is committed without perpetration of the lesser offense, a verdict for the lesser cannot be responsive." State v. Poe, 214 La. 606, 38 So. 2d 359, 363 (1948) (on rehearing).
As previously stated, "[a]ggravated obstruction of a highway of commerce is the intentional or criminally negligent placing of anything, or performance of any act, on any railway, railroad, navigable waterway, road, highway, thoroughfare, or runway of an airport, wherein it is foreseeable that human life might be endangered." La.R.S. 14:96. "Simple obstruction of a highway of commerce is the intentional or criminally negligent placing of anything or performance of any act on any railway, railroad, navigable waterway, road, highway, thoroughfare, or runway of an airport, which will render movement thereon more difficult." La.R.S. 14:97.
Because simple obstruction of a highway of commerce includes a mandatory element of rendering movement more difficult on the highway of commerce and because aggravated obstruction of a highway of commerce does not require an impediment to traffic, La.R.S. 14:97 is not responsive to La.R.S. 14:96. Therefore, the trial court did not err in refusing to give simple obstruction of a highway of commerce as a responsive verdict to aggravated obstruction of a highway of commerce. Accordingly, this assignment of error is without merit.
Sufficiency of Evidence (attempted aggravated escape)
Defendant also complains that the evidence presented at trial was insufficient to prove he was guilty of attempted aggravated escape because he "was never in the custody of officers." Defendant maintains that none of the evidence presented at trial proves that Defendant was in custody at the time he fled in his vehicle. The State responds that it proved Defendant was in custody by showing that a police officer had physical hold of Defendant by two different points of contact and by proving that the officer was in the process of physically removing Defendant from the vehicle when Defendant accelerated his automobile.
Aggravated escape is the intentional departure of a person from the legal custody of any officer of the Department of Public Safety and Corrections or any law enforcement officer or from any place where such person is legally confined when his departure is under circumstances *1198 wherein human life is endangered.
La.R.S. 14:110(C)(1). The version of aggravated escape under which Defendant was prosecuted requires the intentional departure of a detained person from the legal custody of any law enforcement officer prior to confinement when the circumstances of the departure endanger human life. See State v. Bullock, 576 So. 2d 453, 455-56 (La.1991).
Usually, a person needs only to intend a crime and perform an act toward accomplishing that crime to be guilty of attempting that crime:
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.
La.R.S. 14:27(A). The State must have shown that Defendant was in legal custody in order to prove Defendant was actually capable of attempting an aggravated escape.
Defendant asserts only that the State failed to prove he was in custody at the time of his departure; he does not challenge the sufficiency of the evidence presented to prove the remaining elements of the offense. The evidence presented at trial shows that a law enforcement officer, Sergeant Walker, pursuant to a valid arrest warrant, took hold of Defendant by clasping Defendant's wrist and by reaching around Defendant's back and grabbing Defendant's neck. The officer demanded Defendant stop and exit the truck while also attempting to wrest Defendant from the vehicle. Defendant broke the officer's hold by rapidly accelerating his vehicle with the officer still partially in the truck, which action caused the officer to release Defendant out of fear for his life and safety. There is no evidence in the record showing that the officer ever told Defendant that he was under arrest.
The Bullock court found that defendant guilty of simple escape under the following circumstances:
On February 1, 1987, police responded to a call of burglary in progress at an Exxon station located at 3725 South Carrollton Avenue in New Orleans. They looked inside the building, where they saw defendant attempting to hide. When the police ordered defendant to halt, he ran away, crashing through a plate glass window. Defendant was apprehended after a brief chase. Cut and bleeding, he was arrested, handcuffed and taken by police from the scene directly to Charity Hospital for treatment of his lacerations. Once at the hospital, defendant was placed on a stretcher in the emergency accident room. The doctor advised the police to take defendant's handcuffs from behind him and place them in front so he could be treated. After the police did so, defendant jumped off the stretcher and fled out the back door of the emergency room to the hallway leading out of the hospital. Defendant was apprehended when he collided with a hospital security guard, and was arrested for simple escape.
Bullock, 576 So.2d at 454.
In State v. Pierre, 261 La. 42, 259 So. 2d 6 (1972), the supreme court discussed the flight doctrine; in so doing, it seemed to distinguish evading imminent arrest from escaping from legal custody. The language used by the supreme court in discussing whether a line-up identification of a defendant should have been suppressed seems to support this premise: "Having found that the defendant was legally *1199 arrested, we proceed to a determination of the constitutionality vel non of the instant line-up. When the line-up occurred, defendant was in legal custody and under no arrest." State v. Johnson, 255 La. 314, 230 So. 2d 825, 831 (1970).
This court follows the idea that custody follows arrest in the simple escape case of State v. Brooks, 99-395, pp. 2-5 (La.App. 3 Cir. 12/22/99), 755 So. 2d 311, 312-14, writ denied, 00-1764 (La.6/1/01), 793 So. 2d 178:
Defendant does not contest that he fled the police station during booking. He argues, instead, that he did not "escape" because he was never in the "lawful custody" of the Opelousas City Police Department. Specifically, Defendant contends that his arrest on the remaining after being forbidden charge was illegal because he was arrested on a public sidewalk.
"Simple escape" is defined in La.R.S. 14:110(A)(1) (emphasis added) as:
The intentional departure, under circumstances wherein human life is not endangered, of a person imprisoned, committed, or detained from a place where such person is legally confined, from a designated area of a place where such person is legally confined, or from the lawful custody of any law enforcement officer or officer of the Department of Public Safety and Corrections.
The Reporter's Comment (citations omitted) discusses the "lawful custody" requirement as follows:
As long as the arrest and commitment are "legal" any attempt to escape is a crime, despite the guilt or innocence of the culprit. But if the warrant of arrest or commitment is void, the prisoner is not liable for escaping. However an informality or irregularity in the process of commitment is not justification to escape.
....
On May 12, 1996, Officer David Zerangue was on security patrol outside the Manhattan Lounge in Opelousas. In the early morning hours, Officer Zerangue observed the owner of the nightclub refuse to admit Defendant because Defendant was wearing a bandana on his head. Officer Zerangue then told Defendant to leave, but Defendant kept pacing on the sidewalk near the lounge. At trial, Officer Zerangue described Defendant's actions as follows:
He made a couple of attempts to go back into the club. I warned him to leave. He went on the north side of the building, which is the South Street side. The owner came back in after the first argument between the two. I advised the owner to go back into the club, I advised Mr. Brooks to leave. The owner came back outside and when Mr. Brooks spotted him, he started walking toward ... left the corner of Academy and South and walked back towards the front door, and him [sic] and the owner got into an argument again.
Officer Zerangue warned Defendant that he would be arrested if he did not leave. When Defendant replied, "You can take me to jail," Officer Zerangue arrested him for remaining after being forbidden. Officer Zerangue admitted that Defendant was on the sidewalk at the time of his arrest. However, he testified that he arrested Defendant because it was apparent Defendant would continue to attempt to enter the club and to cause trouble for the owner. Officer Zerangue explained that Defendant was arrested "right at the front door. Still on the sidewalk, but in front of the front door."
La.R.S. [sic] 14:63.3 A (emphasis added) provides:
*1200 No person shall without authority go into or upon or remain in or upon or attempt to go into or upon or remain in or upon any structure, watercraft, or any other movable, or immovable property, which belongs to another, including public buildings and structures, ferries, and bridges, or any part, portion, or area thereof, after having been forbidden to do so, either orally or in writing, including by means of any sign hereinafter described, by any owner, lessee, or custodian of the property or by any other authorized person.
Defendant contests the validity of his arrest because there is no testimony that places him on club property after he was initially told to leave. However, the statute clearly criminalizes an "attempt to go into or upon" any property belonging to another after being forbidden. We find that one may[ ] attempt to enter private property from a public sidewalk and, further, that is what Defendant did in this case.
The only discussion of La.R.S. 14:63.3 in the context of a public sidewalk is found in a civil action, Melancon v. Trahan, 94-26, p. 8 (La.App. 3 Cir. 10/5/94); 645 So. 2d 722, 726, writ denied, 95-87 (La.3/10/95); 650 So. 2d 1183, in which we stated that "the statute does not prohibit standing on a public sidewalk." In the present case, however, Defendant was not arrested because he remained on the sidewalk but, rather, because of his attempts to enter the nightclubincluding arguing with the ownerafter being refused admission by the owner and told to leave by the security officer.
This assignment of error lacks merit.
The supreme court has held that, for Miranda warning purposes, custody is determined "by two distinct inquiries: an objective assessment of ... whether there is a formal arrest or restraint on freedom of the degree associated with formal arrest; and, second, an evaluation of how a reasonable person in th[at] position ... would gauge the breadth of his freedom of action." State v. Kennedy, 05-1981, p. 50 (La.5/22/07), 957 So. 2d 757, 794.[3] In the second inquiry, the restraint on freedom of movement should be of the degree associated with a formal arrest. State v. Saltzman, 03-1423, p. 1 (La.4/8/04), 871 So. 2d 1087, 1088.
We find that an ordinary prudent person would have equated the degree to which the officer actually held Defendant with the restraint exercised in a formal arrest and, therefore, find that Defendant was in legal custody at the time of his flight.
Discovery Agreements
In the "Specifications of Error" section of Defendant's appellate brief, he asserts that the trial court erred in enforcing discovery agreements between the prosecution and the defense. However, Defendant does not brief this issue. Therefore, pursuant to Uniform RulesCourts of Appeal, Rule 2-12.4, we consider this assignment of error to have been abandoned and do not consider it.
DECREE
For all of the foregoing reasons, Defendant's convictions and sentences are affirmed.
AFFIRMED.
EZELL, Judge, dissents and assigns written reasons.
*1201 EZELL, Judge, dissents:
I agree with the State v. Cox, 07-774 (La.App. 3 Cir. 1/30/08), 974 So. 2d 891, writ granted, 08-492 (La.10/3/08), 992 So. 2d 996, decision, and therefore would not affirm the aggravated obstruction of a highway of commerce conviction.
NOTES
[1] The State actually filed the multiple bill against Defendant prior to imposing the original sentence.
[2] Detective Landry did not specify whether he had parked in front of the hotel or in the front portion of the parking lot.
[3] Certiorari has been granted in this case by the Supreme Court. Kennedy v. Louisiana, ___ U.S. ___, 128 S. Ct. 829, 169 L. Ed. 2d 625 (2008). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573233/ | 576 N.W.2d 634 (1998)
STATE of Iowa, Appellee,
v.
Eric Allen SMITH, Appellant.
No. 96-2253.
Court of Appeals of Iowa.
January 28, 1998.
*635 Linda Del Gallo, State Appellate Defender, and John M. Priester and Patricia Reynolds, Assistant State Appellate Defenders, for appellant.
Thomas J. Miller, Attorney General, Robert P. Ewald, Assistant Attorney General, and Richard Crowl, County Attorney, for appellee.
Considered by HUITINK, P.J., and VOGEL and MAHAN, JJ.
HUITINK, Presiding Judge.
Defendant Eric Allen Smith appeals from his convictions and sentences for attempted murder, willful injury, and possession of a firearm as a felon in violation of Iowa Code sections 707.11 (1995), 708.4 (1995), and 724.26 (1995), respectively, following a jury trial. We reverse and remand for a new trial.
I. Background Facts and Proceedings.
Smith was charged by trial information filed on August 29, 1996, with attempted *636 murder and willful injury based on allegations he shot Chris Carpenter on August 16, 1996. An additional trial information was filed on September 25, 1996, charging Smith as a felon in possession of a firearm. The State's motion to consolidate all the charges against Smith for trial was granted over Smith's objection.
At trial Carpenter testified Smith was the person who shot him from the passenger side of a car that overtook Carpenter's vehicle while both were traveling on a Council Bluffs street. Kenny Anderson testified he was the driver of the car from which the shot was fired and Smith was a passenger in the car. Anderson also testified he saw Smith shoot Carpenter. Over Smith's objection, a police officer was allowed to testify about his investigatory interviews with Carpenter and Anderson. The officer testified:
Q: What details did he [Anderson] give you about the incident?
WITNESS: When we talked to Chris Carpenteror when I talked to him, he had described how a vehicle had come up behind his vehicle had came up behind his vehicle, hadhad pulled around to the left side of his vehicle and how the passenger in that vehicle stuck a gun out the window and shot him in the face and that'sKenny Anderson also said the same things.
Smith denied shooting Carpenter. Although Smith did not testify, he called witnesses who testified he was seen elsewhere at the time of the shooting.
Smith was convicted as charged. On appeal he argues the district court erred in consolidating the felon in possession of a firearm charge with the other offenses. He also argues the testimony of the police officer concerning investigatory interviews was hearsay and should have been excluded.
II. Standard of Review.
We review for errors at law. Iowa R.App. P. 4. The district court's decision to consolidate all the charges against Smith is reviewed for an abuse of discretion. Iowa R.Crim. P. 6(1); State v. Thornton, 506 N.W.2d 777, 779 (Iowa 1993). The trial court's ruling on the admission or exclusion of evidence will not be disturbed absent an abuse of discretion. State v. Hubka, 480 N.W.2d 867, 868 (Iowa 1992).
III. Consolidation Order.
Iowa Rule of Criminal Procedure 6(1) provides:
Two or more public offenses which arose from the same transaction or occurrence or from two or more transactions or occurrences constituting parts of a common scheme or plan may be alleged and prosecuted as separate counts in a single ... information ..., unless for good cause shown, the trial court in its discretion determines otherwise....
This rule in its amended form serves the goals of judicial economy and allows the State more leeway in charging multiple offenses. State v. Lam, 391 N.W.2d 245, 249 (Iowa 1986).
Multiple offenses arise out of the same transaction or occurrence "where the facts of each charge can be explained adequately only by drawing upon the facts of the other charge." State v. Bair, 362 N.W.2d 509, 512 (Iowa 1985). If either crime can be proven without reference to the other, this test is not met and severance is required. Id.
A "common scheme or plan by its very definition presupposes that it involves a series of separate transactions or acts." State v. Lam, 391 N.W.2d at 249. The test applied in making this determination is "the requirement that all offenses charged must be products of a single or continuing motive." Id. at 250 (citing State v. Garrette, 699 S.W.2d 468, 493 (Mo.Ct.App.1985)).
Even if one or both of the foregoing tests are satisfied, Rule 6(1) provides for discretionary severance upon a showing of good cause. In this circumstance, "a trial on multiple charges must strike the proper balance between the antipodal themes of ensuring [a] defendant a fair trial and preserving judicial efficiency." State v. Geier, 484 N.W.2d 167, 173 (Iowa 1992). The defendant has the burden to show "his interest in receiving a fair trial uninfluenced by the prejudicial effects which could result from a joint *637 trial outweighed the State's interest in judicial economy." State v. Lam, 391 N.W.2d at 251 (citing State v. Trudo, 253 N.W.2d 101, 104 (Iowa 1977) cert. denied 434 U.S. 903, 98 S.Ct. 299, 54 L.Ed.2d 189 (1977)). This burden can be met by showing the jury is unable to compartmentalize the evidence offered to prove each consolidated charge. State v. Geier, 484 N.W.2d at 173.
A Rule 6(1) determination is distinguished from an evidentiary ruling by its concern for which offenses may be properly joined for prosecution in a single trial and not crimes which are admissible as evidence to prove the offense charged. State v. Lam, 391 N.W.2d. at 250. Although the rules of evidence limiting admission of prior crimes are not implicated by this determination, considerations of unfair prejudice are common to both contexts. See Id.; State v. Plaster, 424 N.W.2d 226, 231-32 (Iowa 1988). Our severance rules are also distinguished from the rules of evidence by the consideration of judicial economy as opposed to evidentiary concerns for the probative value of a defendant's criminal history. Id.
In this appeal, Smith does not dispute the district court's determination that the consolidated charges arose out of the same transaction or occurrence. Our consideration is therefore limited to the propriety of the district court's finding of good cause supporting its consolidation order.
As already noted, the good cause determination required by Rule 6(1) requires a balance of the defendant's right to a fair trial and the State's interests in judicial economy. State v. Geier, 484 N.W.2d at 173. Consolidation of multiple charges advances the interests of judicial economy by avoiding duplicative proceedings when the proof underlying several offenses is the same. State v. Dicks, 473 N.W.2d 210, 214 (Iowa App.1991). The prejudice discretionary severance seeks to prevent includes that which inherently attends evidence of a defendant's other crimes. Id.; see also Old Chief v. United States, 519 U.S. 172, ___, 117 S.Ct. 644, 650, 136 L.Ed.2d 574, 589 (1997). Unfair prejudice means "an undue tendency to suggest decisions on an improper basis, commonly though not necessarily, an emotional one." State v. Plaster, 424 N.W.2d at 231 (citing Fed. R.Evid. 403). It has also been observed:
The appellate court may conclude that "unfair prejudice" occurred because an insufficient effort was made below to avoid the dangers of prejudice, or because the theory on which the evidence was offered was designed to elicit a response from the jurors not justified by the evidence.
State v. Plaster, 424 N.W.2d at 232 (citations omitted).
After reviewing the record, we fail to see how the State's interest in judicial economy was advanced by the district court's consolidation order. Smith's election not to testify precluded the use of his prior felony convictions for impeachment purposes. He also stipulated to the prior felonies thereby eliminating the need for the State to prove this essential element of the offense of a felon in possession of a firearm. Moreover, as Smith correctly notes, the remaining elements of this offense lent themselves to discreet and efficient resolution by the use of special interrogatories or a supplemental trial information. Under these circumstances any nominal benefits of consolidation were clearly and substantially outweighed by the prejudice attending disclosure of Smith's prior felony convictions to the jury. Because the district court's efforts to avoid prejudice in this case were insufficient, we find the decision to consolidate the felon in possession of a firearm charge was an abuse of the district court's discretion under Rule 6(1).
Our resolution of this issue in Smith's favor obviates the need to consider the remaining issue raised in this appeal.
The judgment of the district court is reversed and this case is remanded for a new trial.
REVERSED AND REMANDED FOR NEW TRIAL. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573159/ | 217 Wis. 2d 392 (1998)
576 N.W.2d 912
STATE of Wisconsin, Plaintiff-Respondent,
v.
Randy J. LECHNER, Defendant-Appellant.[]
No. 96-2830-CR.
Supreme Court of Wisconsin.
Oral argument February 20, 1998.
Decided April 30, 1998.
*396 For the defendant-appellant there were briefs by Craig W. Albee and Shellow, Shellow & Glynn, S.C., Milwaukee and oral argument by Craig W. Albee.
For the plaintiff-respondent the cause was argued by Sharon Ruhly, assistant attorney general, with whom on the brief was James E. Doyle, attorney general.
¶ 1. DONALD W. STEINMETZ, J.
This case presents three issues for review:[1]
(1) Whether the State violated the defendant's constitutional rights to be free from double jeopardy when the defendant pled no contest to and was sentenced for both second-degree reckless homicide and homicide by intoxicated use of a vehicle where the defendant's criminal conduct resulted in the death of one person;
(2) Whether the State violated the defendant's constitutional rights to be free from double jeopardy when the defendant pled no contest to and was sentenced for two counts of second-degree reckless *397 endangerment arising out of one episode of reckless driving; and
(3) Whether the circuit court erroneously exercised its discretion when it sentenced the defendant to the maximum prison term allowed by law or when it decided not to modify the sentence it imposed on the defendant when the record shows, inter alia, that the circuit court referred to a presentence report containing inaccurate information as to the number of the defendant's criminal convictions and that the circuit court admonished the legislature's failure to be tough on drunk drivers.
¶ 2. This case is before the court on a request for certification filed by the court of appeals pursuant to Wis. Stat. § (Rule) 809.61 (1995-96). The Circuit Court for Racine County, Judge Dennis J. Barry, denied defendant Randy Lechner's motion for post-conviction relief, concluding that (1) Lechner's constitutional right to be free from double jeopardy was not violated when he pled no contest to both second-degree reckless homicide and intoxicated vehicular homicide for the slaying of one person; (2) Lechner's constitutional right to be free from double jeopardy was not violated when he pled no contest to two counts of reckless endangerment arising out of one episode of reckless driving; and (3) the circuit court was not required to modify the prison term to which it sentenced Lechner. Lechner appealed both the judgment of conviction and sentence and the circuit court's denial of his post-conviction motions. The court of appeals certified to this court three issues for review. We answer each of the three issues in the negative and affirm the order of the circuit court.
¶ 3. The relevant facts of this case are not disputed. On December 4, 1994, a witness observed a *398 vehicle driven by the defendant, Randy Lechner, weaving in and out of traffic as it passed each in a succession of vehicles traveling southbound on State Highway 31. In his rearview mirror, the witness watched Lechner drive his vehicle across the double yellow center line of the highway to pass the vehicle traveling immediately behind the witness. The witness testified that Lechner then passed the vehicle in which he was traveling and the vehicle immediately in front of the witness. When Lechner reentered the southbound lane of traffic, the driver of the vehicle Lechner had just passed was forced to brake to avoid a collision. The witness estimated that Lechner was driving at a speed between 60 and 65 miles per hour even though the posted speed limit in that designated no passing zone was 45 miles per hour. The witness then watched as Lechner again drove his vehicle across the center line, passed another vehicle, and abruptly cut back into the southbound lane of traffic. Once again, the driver of the vehicle Lechner had just passed was forced to brake to avoid a collision.
¶ 4. When Lechner again drove his vehicle across the center line to pass another vehicle, he collided head-on with a northbound vehicle driven by Jan Pinney. The collision caused great bodily harm to Jan and to her daughter, Heather Pinney, and it killed sevenyear-old Robert Pinney. Lechner was later arrested and taken into custody. A post-arrest blood test showed that Lechner had a blood alcohol concentration of 0.142%, a level above the legal limit for operating a motor vehicle. See Wis. Stat. § 340.01(46m) (1993-94).[2]
*399 ¶ 5. In its criminal complaint and amended complaint, the State charged Lechner with ten counts of violating state law: (1) one count of second-degree reckless homicide; (2) one count of intoxicated vehicular homicide; (3) two counts of causing great bodily harm by operating a motor vehicle while under the influence of alcohol;[3] (4) three counts of operating a vehicle with a prohibited blood alcohol concentration; and (5) three counts of recklessly endangering the safety of another.
¶ 6. Relevant to the three issues now before this court, Lechner by pretrial motion challenged on constitutional grounds the charges for reckless homicide and intoxicated vehicular homicide, arguing that he could not be convicted twice for killing the same person. The circuit court denied Lechner's motion. Lechner also challenged on constitutional grounds the three counts of reckless endangerment, arguing that he could not be charged more than once for the same criminal act of reckless driving. The circuit court denied this motion. After a plea agreement was reached by the State and Lechner, Lechner ultimately pled no contest to the following offenses: (1) second-degree reckless homicide, in violation of Wis. Stat. § 940.06; (2) homicide by intoxicated use of a vehicle, in violation of Wis. Stat. § 940.09(1)(a); (3) causing great bodily harm by intoxicated use of a vehicle, in violation of Wis. Stat. § 940.25(1)(a); (4) causing injury by intoxicated use of a vehicle, in violation of Wis. Stat. § 346.63(2)(a); and (5) *400 two counts of second-degree recklessly endangering the safety of another, in violation of Wis. Stat. § 941.30(2).[4]
¶ 7. At the sentencing hearing, the circuit court sentenced Lechner to the maximum sentence on each count, with the sentences to run consecutive to each other, for a total prison sentence of 30 years. The court rejected both the State's recommended sentence of 20 years and defense counsel's four-year recommendation. After the sentence was imposed, Lechner filed a postconviction motion challenging his convictions and his sentence. Lechner again argued that his separate convictions for reckless homicide and homicide by intoxicated use of a vehicle and his two convictions for reckless endangerment violated his constitutional protection against double jeopardy and violated his fundamental right to due process. Lechner also challenged the sentences imposed by the court, arguing that the circuit court had erroneously exercised its discretion by relying on inaccurate information in the presentence report, by ignoring mitigating factors, and by employing a preconceived sentencing policy.
¶ 8. After a hearing, the circuit court denied Lechner's post-conviction motions. Lechner appealed to the court of appeals for review of the circuit court's denials. The court of appeals requested certification of this case pursuant to Wis. Stat. § (Rule) 809.61. We accepted the certification and answer the three issues certified by the court of appeals.
¶ 9. The first two issues certified by the court of appeals require us to discern whether the State violated the defendant's constitutional rights to be free *401 from double jeopardy. Whether an individual has been twice placed in jeopardy for the same offense in violation of the Fifth Amendment to the United States Constitution and art. I, § 8 of the Wisconsin Constitution is a question of law. See State v. Sauceda, 168 Wis. 2d 486, 492, 485 N.W.2d 1 (1992)(citing State v. Kramsvogel, 124 Wis. 2d 101, 107, 369 N.W.2d 145 (1985)). Reviewing the first two certified issues, we therefore owe no deference to the circuit court's decisions. See id.; State v. Harris, 161 Wis. 2d 758, 760, 469 N.W.2d 207 (Ct. App. 1991).
¶ 10. Both the United States and Wisconsin Constitutions protect a criminal defendant against being twice placed in jeopardy for the same offense.[5] The double jeopardy clause embodies three protections: "protection against a second prosecution for the same offense after acquittal; protection against a second prosecution for the same offense after conviction; and protection against multiple punishments for the same offense." Sauceda, 168 Wis. 2d at 492 (citing North Carolina v. Pearce, 395 U.S. 711, 717 (1969)). In two *402 separate multiplicity challenges, the defendant here raises the third protection against double jeopardy.[6]
¶ 11. The protection against multiple punishments for the same offense is generally invoked in both a "lesser-included offense" case where the defendant argues that he or she has been punished for committing a greater offense and a lesser-included offense, see, e.g., United States v. Jeffers, 432 U.S. 137 (1977); Sauceda, 168 Wis. 2d at 492-93, and a "continuous offense" case where the defendant argues that he or she has been punished for two or more counts of the same offense arising out of one criminal act. See, e.g., In re Snow, 120 U.S. 274 (1887); Rabe, 96 Wis. 2d at 64-65. The defendant here raises both challenges. Although the focus of our analysis of each of the defendant's challenges varies, we apply the same test to both.
[1-3]
¶ 12. A defendant may be charged and convicted of multiple counts or crimes arising out of one criminal act only if the legislature intends it. See State v. Kuntz, 160 Wis. 2d 722, 754, 467 N.W.2d 531 (1991); Geitner v. State, 59 Wis. 2d 128, 130-31, 207 N.W.2d 837, 839 (1973); see also Missouri v. Hunter, 459 U.S. 359, 366-69 (1983). We must, therefore, discern whether the legislature intended to allow multiple punishments for the offenses at issue in this case. Wisconsin courts *403 employ a two-part test to determine whether the legislature intended that multiple punishments be imposed on one defendant for the same offense arising from a single course of conduct. See Sauceda, 168 Wis. 2d at 493. In determining the legislature's intent, the courts of this state consider: (1) whether each offense is identical in law and in fact;[7] and (2) whether the legislature intended to allow multiple convictions for the offenses charged. Sauceda, 168 Wis. 2d at 493, 495. With this two-part test, we analyze in turn both the defendant's "lesser-included offense" challenge and his "continuous offense" challenge.
¶ 13. On appeal, the defendant first argues that the State violated his constitutional right to be protected from double jeopardy when the judgment of conviction was entered and he was sentenced for both second-degree reckless homicide in violation of Wis. Stat. § 940.06 and homicide by intoxicated use of a vehicle in violation of Wis. Stat. § 940.09(1)(a) where one criminal act by the defendant resulted in the death *404 of one person.[8] The defendant contends that the reckless homicide offense is a lesser-included offense of the intoxicated use offense, and therefore conviction and punishment under both provisions are multiplicitous. We disagree.
¶ 14. In analyzing the "lesser-included offense" challenge, we must first determine whether the offenses of second-degree reckless homicide and homicide by intoxicated use of a vehicle are the same offense or are different in either fact or law. Since the factual situations underlying both offenses in this case are identical, our focus is on whether the offenses are also identical in law. The determinative inquiry, therefore, is whether the criminal statutes define one offense as a lesser-included offense of the other. See Sauceda, 183 Wis. 2d at 493-94 n.8; see, e.g., Kuntz, 160 Wis. 2d at 753-57; State v. Wolske, 143 Wis. 2d 175,180-85, 420 N.W.2d 60 (Ct. App. 1988).
*405 [4]
¶ 15. Under Wisconsin law, the determination whether offenses are different in law or whether one offense is a lesser-included offense of another is controlled by the "elements only" test set out in Blockburger v. United States, 284 U.S. 299, 304 (1932), which has been codified in Wis. Stat. § 939.66(1).[9]See Sauceda, 168 Wis. 2d at 493. In Blockburger, the United States Supreme Court held that where the same act constitutes a violation of two distinct statutory provisions, the test under the double jeopardy clause is whether each provision requires proof of a fact which the other does not. See Blockburger, 284 U.S. at 304. Under this test, two offenses are different in law if each statutory crime requires for conviction proof of an element which the other does not require. See Sauceda, 168 Wis. 2d at 494-95. Only then can it be said that the legislature has promulgated separate, distinct offenses providing for multiple convictions and punishments. See State v. Bohacheff, 114 Wis. 2d 402, 411-12, 338 N.W.2d 466 (1983).
[5]
¶ 16. Applying the "elements-only" test of Blockburger and Wis. Stat. § 939.66(1) to the offenses involved in this case, we conclude that second-degree reckless homicide is not a lesser-included offense of homicide by intoxicated use of a vehicle. A comparison of the elements of the statutes involved reveals that a conviction for second-degree reckless homicide *406 requires proof of elements not required to prove homicide by intoxicated use of a vehicle and that a conviction for homicide by intoxicated use of a vehicle requires proof of elements not required to prove second-degree reckless homicide.
¶ 17. The offense of second-degree reckless homicide contrary to Wis. Stat. § 940.06 comprises two elements: (1) that the defendant caused the death of the victim; and (2) that the defendant caused the death by criminally reckless conduct.[10]See Wis. JI-Criminal 1060 at 1 (1989). In contrast, the offense of homicide by intoxicated operation of a motor vehicle contrary to Wis. Stat. § 940.09(1)(a) comprises three elements: (1) that the defendant operated a motor vehicle; (2) that the defendant's operation of that vehicle caused the death of the victim; and (3) that the defendant was under the influence of an intoxicant at the time he or she operated the vehicle. See Wis. JI-Criminal 1185 at 1 (1993).
¶ 18. A conviction for homicide by intoxicated use of a vehicle, therefore, does not require proof that the defendant acted with criminal recklessness or that such conduct caused the victim's death. Similarly, a conviction for second-degree reckless homicide does not require proof that the defendant was operating a motor vehicle or that the defendant was under the influence of alcohol. Under the elements-only test applied in this state, second-degree reckless homicide in violation of Wis. Stat. § 940.06 is not a lesser-included offense of homicide by intoxicated use of a vehicle in violation of § 940.09(1)(a).
*407 ¶ 19. Since second-degree reckless homicide is not a lesser-included offense of homicide by intoxicated use of a vehicle, we presume that the legislature intended to permit cumulative punishments for both offenses. See Sauceda, 168 Wis. 2d at 495 (citing Kuntz, 160 Wis. 2d at 756; Rabe, 96 Wis. 2d at 63). This presumption is rebutted only if other factors clearly indicate a contrary legislative intent. See Kuntz, 160 Wis. 2d at 755 (citing Hunter, 459 U.S. at 367). Factors that may indicate a contrary legislative intent regarding multiple punishment include the language of the statutes, the legislative history, the nature of the proscribed conduct, and the appropriateness of multiple punishment. See Kuntz, 160 Wis. 2d at 756; Manson v. State, 101 Wis. 2d 413, 422, 304 N.W.2d 729, 734 (1981). In this case, none of these factors indicates a legislative intent contrary to allowing convictions for both second-degree reckless homicide and homicide by intoxicated use of a vehicle where the criminal act of the defendant resulted in a single death.
¶ 20. First, the language of the statutes does not indicate a contrary legislative intent. Both Wis. Stat. §§ 940.06 and 940.09(1)(a) expressly provide that a person is guilty of a Class C felony if that person commits certain pro scribed conduct causing the death of another person. Neither section states or implies that a conviction under its provisions precludes a conviction for homicide under a separate statutory section, even if a person's criminal act causes the death of only one person. In enacting the specific language of Wis. Stat. §§ 940.06 and 940.09(1)(a), the legislature did not indicate that a person could not be convicted of violating both statutes for causing the death of one person.
¶ 21. Second, the legislature, by enacting Wis. Stat. § 939.66(2), has specifically addressed the issue of *408 multiple homicide convictions for a criminal act causing a single death. Where a single act of a defendant forms the basis for a crime punishable under more than one statutory provision, Wis. Stat. § 939.66(2) provides that a defendant may not be convicted for two criminal homicides if one is "a less serious type of criminal homicide."[11] The defendant in this case argues that this section "unequivocally" evinces the legislature's intent to allow only one homicide conviction for causing the death of one person. A closer reading of the plain language in Wis. Stat. § 939.66(2), however, establishes just the opposite.
¶ 22. The plain language of Wis. Stat. § 939.66(2) does not prohibit multiple homicide convictions for killing one person. It bars multiple convictions only when one of the homicide convictions is for a "less serious type" of homicide. Noticeably absent from the prohibitions of Wis. Stat. § 939.66(2) is a bar against multiple homicide convictions when the homicides are "equally serious." Since the legislature enacted Wis. Stat. § 939.66(2) as a prohibition against multiple homicide convictions and limited its application to situations where one homicide conviction is for a less serious type of homicide, we can infer a legislative intent not to prohibit multiple convictions when the defendant is convicted for equally serious types of homicide.
¶ 23. The inference that the legislature did not intend to prohibit multiple convictions for "equally serious" homicides is supported by the fact that the *409 statutory provision immediately following Wis. Stat. § 939.66(2) prohibits multiple convictions when one crime is a "less serious or equally serious type of battery." Wis. Stat. § 939.66(2m) (emphasis added). When originally enacted in 1986, Wis. Stat. § 939.66(2m) prohibited multiple convictions for two battery offenses only when one conviction was for a less serious type of battery. See 1985 Wis. Act 144, § 1. In 1993, at the same time the legislature created a number of separate but equally serious battery offenses, it amended Wis. Stat. § 939.66(2m) to prohibit multiple convictions for less serious or equally serious types of battery. See 1993 Wis. Act 441, §§ 2 and 4. With this amendment, the legislature apparently intended to bar multiple convictions for a single act of battery, regardless of the seriousness of the offenses.
¶ 24. In contrast, when it amended Wis. Stat. § 940.09(1)(a) in 1991 to raise homicide by intoxicated use of a vehicle to a Class C felony, the legislature did not amend Wis. Stat. § 939.66(2) to bar multiple convictions for that offense and other equally serious types of homicide. See 1991 Wis. Act 277, § 53-57. Although different homicide offenses of the same criminal class have existed since Wis. Stat. § 939.66(2) was enacted, the legislature has never amended that section to bar multiple convictions for equally serious types of homicide.
¶ 25. Considering the specific acts of the legislature and comparing the current language in Wis. Stat. §§ 939.66(2) and (2m), we can reasonably presume that the legislature was aware of the distinction between "less serious" and "equally serious" types of crimes. We can similarly presume from the presence of the "equally serious" language in Wis. Stat. § 939.66(2m) and its absence in the immediately preceding *410 § 939.66(2) that the legislature intended to prohibit multiple convictions for equally serious types of battery, but it did not intend to prohibit multiple convictions for equally serious types of homicide. See In re R.W.S., 162 Wis. 2d 862, 879, 471 N.W.2d 16 (1991). The legislative history and precise language of Wis. Stat. § 939.66(2) and (2m) evince a legislative intent to allow multiple convictions for equally serious homicides when a single act of the defendant results in the death of one person.
¶ 26. The defendant responds by arguing that his convictions are barred under Wis. Stat. § 939.66(2) because second-degree reckless homicide is a "less serious type of homicide" than homicide by intoxicated use of a vehicle. The defendant notes that a conviction for the intoxicated use offense carries the additional punishments of a mandatory revocation of the defendant's driver's license and a $250 driver assessment surcharge. The defendant contends that since a conviction for second-degree reckless homicide does not include these additional sanctions, that offense must be a less serious type of homicide than the intoxicated use offense. We find the defendant's argument unpersuasive.
¶ 27. Whether the legislature intended two classifications of homicide to be less or equally serious types of homicide is determined by reference to the penalty structure the legislature established in Wis. Stat. §§ 939.50 through 939.52. "While the word `serious' is not expressly defined in [Wis. Stat. § ] 939.66, seriousness of an offense has been determined by this court on the maximum penalty which may be imposed." State v. Davis, 144 Wis. 2d 852, 857, 425 N.W.2d 411 *411 (1988).[12] Particular to this case, the legislature has classified both second-degree reckless homicide and homicide by intoxicated use of a vehicle as Class C felonies. See Wis. Stat. §§ 940.06 and 940.09(1). Both offenses, therefore, carry the same maximum penalty of ten years in prison. See Wis. Stat. § 939.50(3)(c). Accordingly, applying the test this court established in Davis, we conclude that second-degree reckless homicide is not a less serious type of criminal homicide than homicide by intoxicated use of a vehicle under Wis. Stat. § 939.66(2).
¶ 28. We find irrelevant to this analysis the fact that a conviction for second-degree reckless homicide does not also carry a revocation of driving privileges or a $250 surcharge for driver assessment program. Neither the revocation nor the surcharge affects the maximum possible penalty allowed by the penalty *412 structure the legislature established in Wis. Stat. §§ 939.50 through 939.52. The absence of a license revocation and a surcharge does not make second-degree reckless homicide a "less serious type of criminal homicide" than homicide by intoxicated use of a vehicle under Wis. Stat. § 939.66(2).
¶ 29. Furthermore, it appears that the legislature enacted Wis. Stat. §§ 940.06 and 940.09(1)(a) to proscribe different criminal acts and to protect distinct public interests. The conduct proscribed by the intoxication statute is operating a vehicle while intoxicated and thereby causing death or great bodily injury. See Wolske, 143 Wis. 2d at 184 (citing State v. Caibaiosai, 122 Wis. 2d 587, 591, 363 N.W.2d 574 (1985)); cf. Bohacheff, 114 Wis. 2d at 414-415 (discussing Wis. Stat. § 940.25 (1981-82)). The purpose of the intoxication statutes is to "provide maximum safety for all users of the highways of this state" from the harm threatened by "[o]peration of motor vehicles by persons who are under the influence of an intoxicant." Wolske, 143 Wis. 2d at 184 (quoting Caibaiosai, 122 Wis. 2d at 591).
¶ 30. In contrast, the reckless homicide statutes proscribe a person from knowingly creating an "unreasonable and substantial risk of death or great bodily harm to another person." Wis. JI-Criminal 1060 at 1. Wis. Stat. § 940.06 does not target alcohol use, nor is its scope limited to a defendant's operation of a motor vehicle. The apparent purpose of the reckless homicide statutes is to provide maximum safety on and off the highway to members of the general public.
¶ 31. "Where the statutes intend to protect multiple and varied interests of the victim and the public, multiple punishments are appropriate." Bohacheff, 114 Wis. 2d at 416. The different conduct proscribed by and *413 the different purposes of the reckless homicide and homicide by intoxicated use of a vehicle statutes further convince us that the legislature intended multiple convictions and punishments for those offenses.
[6]
¶ 32. For the foregoing reasons, we conclude that the legislature intended that multiple convictions and punishments attend the separate homicide offenses to which the defendant here pled no contest. We therefore answer in the negative the first issue certified by the court of appeals. The defendant's convictions and punishments for second-degree reckless homicide and homicide by intoxicated use of a vehicle are not multiplicitous, and, therefore, do not violate his right to be free from double jeopardy.
¶ 33. The defendant next argues that the State violated his constitutional right to be free from double jeopardy when he pled no contest to and was sentenced for two separate counts of second-degree recklessly endangering the safety of another, in violation of Wis. Stat. § 941.30, arising from one episode of reckless driving along a one-half mile stretch of highway. The defendant contends that to divide this offense into more than one count is multiplicitous, and that to convict and punish him under both reckless endangerment counts therefore violate his constitutional right to be free from double jeopardy. Again we disagree.
[7, 8]
¶ 34. The double jeopardy clause bars the State from dividing a single offense into multiple charges. See State v. Blenski, 73 Wis. 2d 685, 245 N.W.2d 906 (1976). In determining whether the State has impermissibly divided a single course of conduct into separate violations of the same statute, courts of this state consider (1) whether each offense is identical in *414 law and in fact; and (2) whether the legislature's intent is to allow multiple convictions. See Rabe, 96 Wis. 2d at 65, 67.
¶ 35. In analyzing the defendant's "continuous offense" challenge, we must first discern whether the separate counts of second-degree reckless endangerment to which the defendant pled no contest are different in either fact or law. See Rabe, 96 Wis. 2d at 65; State v. Van Meter, 72 Wis. 2d 754, 758, 242 N.W.2d 206 (1976). Since the defendant pled no contest to two separate counts of violating the same statutory provision, the offenses are identical in law. See Sauceda, 168 Wis. 2d at 493-94 n.8; Van Meter, 72 Wis. 2d at 758. Our focus, therefore, is not on statutory definitions but on the facts giving rise to each offense; the determinative inquiry is whether a conviction for each offense requires proof of an additional fact that conviction for the other offenses does not. See Sauceda, 168 Wis. 2d at 493-94 n.8; Van Meter, 72 Wis. 2d 758; see, e.g., Rabe, 96 Wis. 2d at 65-68; Harrell, 88 Wis. 2d at 556-60. Accordingly, in "continuous-offense" cases such as this one, "the question turns on whether the defendant's repeated commission of the same offense at different places or times constitutes an ongoing crime or several separate offenses." Rabe, 96 Wis. 2d at 65.
¶ 36. In Rabe, this court upheld the defendant's conviction for separate counts of homicide for each death caused by the defendant's negligent operation of a vehicle where all deaths resulted from one accident. See id. at 76. The court there recognized that even though the offenses may be identical and contained within the same statutory section, the factual circumstances may be separated in time or sufficiently different in nature to justify multiple punishments. See id. at 65-66.
*415 ¶ 37. As in Rabe, the issue in this case is whether a defendant's acts constituted an ongoing crime or separate offenses. The defendant in this case argues that his reckless driving constituted just one offense because it occurred over a 30-second period of time and covered only a one-half mile stretch of road. This argument is unpersuasive. We do not dispense justice solely by the hands of a clock or the lengths of a ruler. See, e.g., Harrell, 88 Wis. 2d at 566 (holding that two acts of sexual intercourse between defendant and victim, separated by 20 minutes of conversation, constituted two separate and distinct acts of rape); Melby v. State, 70 Wis. 2d 368, 234 N.W.2d 634 (1975)(holding possession at same time and place of two types of illicit drug constituted two separate punishable counts of possessing a dangerous drug); Madison v. Nickel, 66 Wis. 2d 71, 223 N.W.2d 865 (1974)(holding four obscene magazines sold to the same person at the same time and place constituted four separate violations of an obscenity ordinance). Despite the length of time and the distance traveled, the defendant's conduct in this case supports two counts of reckless conduct.
¶ 38. The record in this case establishes that the defendant committed at least two distinct acts of reckless conduct, putting at risk the life of a different person with each act. According to the record, a witness observed the vehicle driven by the defendant swerving in and out of traffic at a rate of speed well above the posted speed limit. On at least two separate occasions, the defendant drove his vehicle across the double yellow centerline of the highway, accelerated, and passed a different vehicle. On at least two separate occasions, the defendant abruptly reentered the southbound traffic lane, forcing the driver of the vehicle he had just passed to take evasive action to avoid a collision. Each *416 time he drove his vehicle across the centerline of the highway, passed a different vehicle, and abruptly reentered the traffic lane, the defendant created a separate, unreasonable and substantial risk of harm to a different human beingthe driver of the vehicle he had just passed and cut off on the highway.
¶ 39. It is significant that the defendant here did more than pass at one time a continuous line of cars, putting each successive driver at risk as he passed him or her. Each of the defendant's decisions to pass each successive vehicle was not the result of an original impulse to pass the first vehicle, but rather was a fresh impulse. Each of the defendant's acts of reckless conduct had come to an end before a separate act began. Each time he pulled his vehicle out and passed a different vehicle, the defendant commenced a separate, conscious decision to act. Each time the defendant exited and reentered the traffic lane, he completed a separate, distinct act of criminally reckless conduct.
[9]
¶ 40. Based on the facts set out in record, we conclude that there was a sufficient break in the defendant's conduct to constitute at least two separate and distinct criminal acts of second-degree reckless endangerment under Wis. Stat. § 941.30(2). See Rabe, 96 Wis. 2d at 66; Harrell, 88 Wis. 2d at 565.
¶ 41. Having determined that the defendant's repeated commission of the same offense at different places and times constituted separate punishable offenses, we next look to the intent of the legislature. It is multiplicitous to charge separate counts of the same offense, and to impose separate punishments upon conviction, if other factors clearly indicate that the legislature intended a single unit of prosecution for the *417 offenses for which the defendant was convicted. See Rabe, 96 Wis. 2d at 69; Blenski, 73 Wis. 2d at 693-94.
¶ 42. We conclude that there are no factors which clearly indicate that the legislature intended that all acts of second-degree reckless endangerment be prosecuted in a single count. First, this court has held that, as a general rule, where different victims are involved, the legislature intends to allow a corresponding number of punishable crimes. See Rabe, 96 Wis. 2d at 67-68; see also Austin v. State, 86 Wis. 2d 213, 223, 271 N.W.2d 668 (1978). In this case, each of the defendant's distinct criminally reckless acts endangered the safety of at least one other human being (the driver of each vehicle he passed and then cut off). We, therefore, presume that the legislature intended to allow a separate punishable offense for each of the defendant's criminally reckless acts.
¶ 43. Second, the language and purpose of Wis. Stat. § 941.30(2) indicate that the legislature's intent was to allow multiple convictions and punishments for each act of reckless endangerment. When reviewing the language of a criminal statute "[t]he test is whether the individual acts are prohibited, or the course of action which they constitute. If the former, then each act is punishable separately. . . .If the latter, there can be but one penalty." Blockburger, 284 U.S. at 302 (quoting Wharton's Criminal Law (11th ed.) § 34 n.3); see also Rabe, 96 Wis. 2d at 70-74. Section 941.30(2) does not proscribe reckless conduct generally, but rather penalizes individual acts of criminal recklessness. For each conviction for violating Wis. Stat. § 941.30(2), a defendant must first be found to have endangered the safety of another person. See Wis. JI-Criminal 1347 at 1 (1989). Proof of the defendant's reckless conduct alone is insufficient for a conviction. See id. Section *418 941.30(2), therefore, punishes the individual acts of a defendant and not the course of action which those acts constitute. Each of the defendant's acts of seconddegree reckless endangerment is separately punishable.
¶ 44. For the foregoing reasons, we conclude that the legislature intended that multiple punishments attend the separate counts to which the defendant here pled no contest. We therefore answer the second issue certified by the court of appeals in the negative. The defendant's convictions and punishments for two counts of second-degree recklessly endangering safety were not multiplicitous and, therefore, do not violate his rights to be free from double jeopardy.
¶ 45. The third issue certified by the court of appeals is whether the circuit court erroneously exercised its discretion either when it initially sentenced the defendant or when it refused to modify that sentence. On appeal, the defendant challenges on a number of grounds the sentence imposed by the circuit court and the court's decision not to modify its sentence. We address each in turn.
¶ 46. At the outset of our analysis, we note that our review of the circuit court's decision on sentencing differs from the standard of review we employed when considering the first two issues here addressed. When a criminal defendant challenges the sentence imposed by the circuit court, the defendant has the burden to show some unreasonable or unjustifiable basis in the record for the sentence at issue. See State v. Thompson, 172 Wis. 2d 257, 263, 493 N.W.2d 729 (Ct. App. 1992). When reviewing a sentence imposed by the circuit court, we start with the presumption that the circuit court acted reasonably. See Elias v. State, 93 Wis. 2d 278, 284, 286 N.W.2d 559 (1980). We will not interfere *419 with the circuit court's sentencing decision unless the circuit court erroneously exercised its discretion. See McCleary v. State, 49 Wis. 2d 263, 278, 182 N.W.2d 512 (1971).[13] On appeal, we will "search the record to determine whether in the exercise of proper discretion the sentence imposed can be sustained." Id. at 282.
¶ 47. The defendant first argues that the circuit court's consideration of inaccurate information concerning the number of his criminal convictions violated his constitutional right to due process and requires resentencing. It is well-settled that a criminal defendant has a due process right to be sentenced only upon materially accurate information. See United States v. Tucker, 404 U.S. 443 (1972); Bruneau v. State, 77 Wis. 2d 166, 174-75, 252 N.W.2d 347 (1977). A defendant who requests resentencing due to the circuit court's use of inaccurate information at the sentencing hearing "must show both that the information was inaccurate and that the court actually relied on the inaccurate information in the sentencing." State v. Johnson, 158 Wis. 2d 458, 468, 463 N.W.2d 352 (Ct. App. 1990).
¶ 48. Both parties and the circuit court recognize that the presentence report inaccurately listed the number of the defendant's prior criminal convictions. Rather than having four prior criminal convictions as *420 listed in the presentence report, the defendant had three prior arrests and only one prior criminal conviction.[14] The question that remains is whether the circuit court relied on the inaccurate number of convictions when sentencing the defendant. We conclude that it did not.
¶ 49. The defendant has failed to show that the circuit court relied on the inaccurate number of the defendant's prior convictions contained in the *421 presentence report. On the contrary, the record shows that the circuit court in this case considered, and based its sentence on, those primary factors a circuit court should consider when deciding which sentence to impose. These factors include "the gravity of the offense, the character of the offender, and the need for protection of the public." Elias, 93 Wis. 2d at 284; see State v. Wickstrom, 118 Wis. 2d 339, 354-55, 348 N.W.2d 183 (Ct. App. 1984).
¶ 50. At the sentencing hearing, the circuit court progressed through a detailed and comprehensive checklist considering the defendant's conscious decision to drink and drive, his "extremely reckless manner" of driving, and the "magnitude of the tragedy." The court also considered that the defendant had dropped out of high school, had a criminal record, and had a long history of drug and alcohol problems. In addition, the court considered the defendant's need for correctional treatment and rehabilitation, the need to protect the public from future criminal conduct by this defendant; and the need to impose a sentence that would prevent others from drinking and driving.
¶ 51. Before sentencing the defendant, the circuit court specifically referred to the inaccurate information contained in the presentence report when considering the character of the defendant. The circuit court's reference to the defendant's prior convictions, however, appears to have been no more than the court identifying individual episodes amounting to "warning signals" of which the defendant should have been aware. The court included as warning signals not only the defendant's prior convictions, but also his long history of drug and alcohol use, his participation in a treatment program for aggressive behavior, and his *422 failure to complete a treatment program for alcohol abuse.
¶ 52. The circuit court made clear at the hearing on the motion for post-conviction relief that its focus during sentencing was not on the number of the defendant's prior convictions, but on the fact that the events giving rise to those alleged convictions evidenced the defendant's long history of drug and alcohol abusea history not disputed by the defendant. The circuit court, referring to the inaccurate information in the presentence report, explained:
[I]n 1980 the defendant was convicted of two criminal counts of chemical usage, abuse, sale, but it's quite evident that the defendant was involved with mind altering chemicals. Again, you can substitute the number two for number ten or number one or even a deferred prosecution and no convictions. The point was, he had a problem. He had a brush with difficulty related to alcohol or mind altering drugs. . . .[T]he point was throughout his life, there were warning signs, and in so ignoring them, that was the factor. . .that I considered. . . .The inaccuracies [in the presentence report] in my opinion are not of such a nature that it's of any relevance to what this court considered.
When sentencing the defendant, the circuit court did not consider the gravity of his past offenses; nor did it express a need or desire to punish him as a repeat offender or as a career criminal. Rather, the court considered the defendant's past record of criminal offenses and his history of undesirable behavior patterns. Both are relevant factors in assessing the defendant's character. See State v. Tew, 54 Wis. 2d 361, 367-68, 195 N.W.2d 615 (1972). In this case, the number of the defendant's criminal offenses was a proper and relevant *423 factor for the circuit court to consider regardless of whether the offenses resulted in dismissal, acquittal, or conviction. See Elias, 93 Wis. 2d at 284; State v. Bobbitt, 178 Wis. 2d 11, 18, 503 N.W.2d 11 (Ct. App. 1993).
[10]
¶ 53. Considering the circumstances surrounding the defendant's sentencing and the circuit court's in-depth consideration of the gravity of the offenses in this case, the character of the defender, and the need for protection of the public, we conclude that the circuit court did not rely on inaccurate information in the presentence report and, therefore, did not violate the defendant's due process right to be sentenced only on materially accurate information. The circuit court did not erroneously exercise its discretion by denying the defendant's request for resentencing.
¶ 54. The defendant next argues that his sentence must be modified because the inaccurate information contained in the presentence report was used to calculate the sentencing guidelines under Wis. Stat. § 973.012.[15] The defendant argues that recalculated sentence guidelines present a "new factor" the circuit court should consider in modifying the defendant's sentence. A "new factor" is "a fact or set of facts highly relevant to the imposition of sentence, but not known to the circuit judge at the time of original sentencing, *424 even though it was then in existence, it was unknowingly overlooked by all of the parties." State v. Franklin, 148 Wis. 2d 1, 8, 434 N.W.2d 609 (1989). Although the decision whether a new factor exists is a question of law, which we review de novo, see Franklin, 148 Wis. 2d at 9, we will overturn a circuit court's decision whether the new factor justifies sentence modification only when the court erroneously exercised its discretion. See State v. Hegwood, 113 Wis. 2d 544, 546, 335 N.W.2d 399 (1983); State v. Smet, 186 Wis. 2d 24, 34, 519 N.W.2d 697 (Ct. App. 1994).
[11]
¶ 55. Whether or not the recalculated sentence guidelines constitute a new factor, the circuit court's decision in this case not to modify the defendant's sentence based on the revised sentencing guidelines was not an erroneous exercise of discretion. A recalculation of the sentencing guidelines based on the accurate number of the defendant's prior convictions would have changed only the suggested sentence for the two second-degree recklessly endangering safety convictions from a term of imprisonment to a sentence of probation.[16] The circuit court, however, stated that based on what it found to be aggravating circumstances in this *425 case it did not rely on the guidelines when it initially sentenced the defendant. A sentencing court is not required to impose a sentence that falls within the sentence suggested by the sentencing guidelines. See Wis. Stat. § 973.012.
[T]he sentencing guidelines. . .[are]just that: guidelines, not edicts. Unless and until the legislature does away with indeterminate sentencing or adopts a system of minimum mandatory sentences for certain crimes, the responsibility of the trial court will continue to be to sentence within the range of the penalties established by the legislature.
In the Matter of Judicial Administration Felony Sentencing Guidelines, 120 Wis. 2d 198, 207, 353 N.W.2d 793 (1984) (Bablitch, J. concurring). The decision to impose a sentence outside those guidelines under the circumstances of this case, therefore, was within the sound discretion of the sentencing court. The fact that the sentencing court did not follow the sentencing guidelines did not give the defendant a right to appeal his sentence. See State v. Elam, 195 Wis. 2d 683, 685, 538 N.W.2d 249 (1995)(per curiam); Wis. Stat. § 973.012.[17]
*426 ¶ 56. Although the inaccuracy in the presentence report resulted in a miscalculation of the sentencing guidelines, the circuit court indicated that it did not rely on the initial sentencing guidelines and that it would not have followed the recalculated sentencing guidelines. The court was under no obligation to do so. Based on the circumstances of this case, the circuit court's decision not to modify the defendant's sentence in light of the recalculated sentence was not an erroneous exercise of discretion.
¶ 57. The defendant also argues that the sentence to a prison term of 30 years was unduly harsh and excessive because the court applied a preconceived sentencing policy and because the sentence was disproportionately harsh in relation to sentences imposed in similar cases in Racine County. We recognize that it is an erroneous exercise of discretion for a sentencing court to have a preconceived sentencing policy "closed to individual mitigating factors." State v. Ogden, 199 Wis. 2d 566, 571, 544 N.W.2d 574 (1996). A prohibited sentencing policy exists, however, only where the court's predispositions are "specific or rigid so as to ignore the particular circumstances of the individual offender upon whom he or she is passing judgment." Id. The current record does not establish that the circuit court applied such a specific or rigid sentencing policy.
¶ 58. The defendant's argument that the circuit court applied a preconceived sentencing policy is based solely on a short colloquy delivered by the circuit court during sentencing. At the sentencing hearing, the circuit court expressed its disappointment with the legislature's mere rhetoric of getting tough on drunk driving. This colloquy, however, did not render the circuit court's sentence a result of some preconceived sentencing policy. On the contrary, the record shows *427 that the circuit court considered and weighed all relevant factors when sentencing the defendant. In particular, the circuit court considered a list of mitigating factors including the fact that the defendant expressed sincere remorse for the crimes he committed, that he had a successful career; and that he had a family to support.
¶ 59. In light of the gravity of the crime involved here and the defendant's refusal to heed a number of warning signals, the circuit court decided not to give much weight to these mitigating factors. Based on the "entire picture and all the opportunities that presented themselves [to the defendant]," the circuit court decided that the maximum sentences were appropriate and that those sentences should run consecutively. The record does not support the defendant's argument that the circuit court applied a preconceived sentencing policy.
¶ 60. The defendant's argument that the sentence was unduly harsh and excessive in relation to other sentences imposed in OWI cases in Racine county is without merit. There is no requirement that defendants convicted of committing similar crimes must receive equal or similar sentences. On the contrary, individualized sentencing is a cornerstone to Wisconsin's system of indeterminate sentencing. "[N]o two convicted felons stand before the sentencing court on identical footing. The sentencing court must assess the crime, the criminal, and the community, and no two cases will present identical factors." Felony Sentencing Guidelines, 120 Wis. 2d at 201. Imposing such a requirement would ignore the particular mitigating and aggravating factors in each case. The defendant here has failed to establish any connection between himself and his crimes and those defendants and *428 crimes to which he has compared his sentence. Absent such connection, "disparate sentences are totally irrelevant" to the sentence imposed in this case. McCleary, 49 Wis. 2d at 272.
¶ 61. Based on the foregoing, we conclude that the State did not violate the defendant's constitutional rights to be free from being twice placed in jeopardy for the same crime when the defendant pled no contest to and was sentenced for both second-degree reckless homicide and homicide by intoxicated use of a vehicle. We further conclude that the State did not violate the defendant's right to be free from double jeopardy when he pled no contest to and was sentenced for two separate counts of second-degree reckless endangerment. Finally, we also conclude that the circuit court did not erroneously exercise its discretion when it sentenced the defendant to the maximum 30-year prison sentence or when it decided not to modify this sentence. We therefore answer in the negative each of three issues certified by the court of appeals and affirm the order of the circuit court.
By the Court.The order of the Racine County Circuit Court is affirmed.
NOTES
[] Motion for reconsideration denied June 16, 1998.
[1] In our consideration and analysis of the present case, we have renumbered and slightly reworded the three issues certified by the court of appeals to better reflect the issues as raised by the parties in their briefs and as presented during oral arguments before this court. We do not believe that this renumbering and rewording alters in any material way the issues as certified by the court of appeals.
[2] Unless otherwise stated, all future references to Wis. Stats. are to the 1993-94 version of the statutes.
Wis. Stat. § 340.01(46m) "Prohibited alcohol concentration" means one of the following: (a) If the person has one or no prior convictions, suspensions, or revocations...an alcohol concentration of 0.1 or more.
[3] The State later reduced one count of causing great bodily harm by operating a motor vehicle while under the influence of alcohol to one count of causing bodily harm by operating a motor vehicle while under the influence of alcohol.
[4] Pursuant to the plea agreement, the State dismissed the three counts of operating a vehicle while under the influence of alcohol, in violation of Wis. Stat. § 346.63 and one of the three counts of second-degree reckless endangerment.
[5] The double jeopardy clause of the United States Constitution provides: "[N]or shall any person be subject for the same offense to be twice put in jeopardy of life and limb." U.S. Const. amend. V. Article I, § 8 of the Wisconsin Constitution states: "[N]o person for the same offense may be put twice in jeopardy of punishment." Because the jeopardy provisions of the United States and Wisconsin Constitutions are "identical in scope and purpose," this court has accepted decisions of the United States Supreme Court, where applicable, as controlling the double jeopardy provisions of both constitutions. Day v. State, 76 Wis. 2d 588, 591, 251 N.W.2d 811 (1977); see also State v. Calhoun, 67 Wis. 2d 204, 220, 226 N.W.2d 504 (1975).
[6] The term "multiplicity," as used in double jeopardy challenges, is defined as encompassing both the charging of a single statutory offense in more than one count, see Harrell v. State, 88 Wis. 2d 546, 555, 277 N.W.2d 462 (Ct. App. 1979)(citing United States v. Free, 574 F.2d 1221 (5th Cir. 1978)), and the question of merger: "whether a single criminal episode which contains the elements of more than one distinct offense merges into a single offense." Id. (citing United States v. Umentum, 401 F. Supp. 746, 750 (E.D. Wis. 1975)).
[7] As we explained in State v. Sauceda, 168 Wis. 2d 486, 485 N.W.2d 1 (1992), the focus of the first part of this test varies with respect to particular challenges raised. In a "lesserincluded offense" challenge, the factual situations underlying the offenses are the same, so our focus is on whether the offenses are also identical in law. See id. at 493-94 n.8; see, e.g., State v. Kuntz, 160 Wis. 2d 722, 753-57, 467 N.W.2d 531 (1991); State v. Wolske, 143 Wis. 2d 175, 180-185, 420 N.W.2d 60 (Ct. App. 1988). In a "continuous offense" challenge, the course of conduct is alleged to have constituted multiple violations of the same statutory provision, so our focus is not on statutory definitions but on the facts of a given defendant's criminal activity. See Sauceda, 168 Wis. 2d at 493-94 n.8; see, e.g., State v. Rabe, 96 Wis. 2d 48, 65-68, 291 N.W.2d 809 (1980); State v. Van Meter, 72 Wis. 2d 754, 758, 242 N.W.2d 206 (1976).
[8] On appeal, the defendant also argues that to convict him of and sentence him for both second-degree reckless homicide and homicide by intoxicated use of a vehicle violated his constitutional right to due process and "fundamental fairness." By pleading no contest to the charged offenses, the defendant waived these constitutional challenges. It is well-established that a plea of no contest, knowingly and understandingly made, constitutes a waiver of non jurisdictional defects and defenses, including claimed violations of constitutional rights. See State v. Riekkoff, 112 Wis. 2d 119, 122-23, 332 N.W.2d 744 (1983) (citing Hawkins v. State, 26 Wis. 2d 443, 448, 132 N.W.2d 545, 547-48 (1965)). We therefore do not address the due process and fundamental fairness arguments here raised by the defendant. The defendant's plea of no contest, however, did not waive his double jeopardy challenges. See State v. Hartnek, 146 Wis. 2d 188, 192 n.2, 430 N.W.2d 361 (1988); State v. Morris, 108 Wis. 2d 282, 284 n.2, 322 N.W.2d 264 (1982).
[9] Wis. Stat. § 939.66 Conviction of included crime permitted. Upon prosecution for a crime, the actor may be convicted of either the crime charged or an included crime, but not both. An included crime may be any of the following:
(1) A crime which does not require proof of any fact in addition to those which must be proved for the crime charged.
[10] "Criminal recklessness" is defined in Wis. Stat. § 939.24 (1): "[T]he actor creates an unreasonable and substantial risk of death or great bodily harm to another human being and the actor is aware of that risk."
[11] Wis. Stat. § 939.66 Conviction of included crime permitted. Upon prosecution for a crime, the actor may be convicted of either the crime charged or an included crime, but not both. An included crime may be any of the following:.. .
(2) A crime which is a less serious type of criminal homicide than the one charged.
[12] In State v. Davis, 144 Wis. 2d 852, 425 N.W.2d 411 (1988), this court, considering the maximum possible prison sentence available for each offense, concluded that felony murder was a "less serious type of criminal homicide" than deprived mind murder under Wis. Stat. § 939.66(2). Id. at 861. The court recognized that Wis. Stat. § 940.02 classified both offenses as Class B felonies carrying a 20-year maximum prison sentence. The court, however, found more significant that a conviction for deprived mind murder, unlike a conviction for felony murder, did not bar a separate conviction for an underlying felony offense, and therefore could result in a maximum sentence of 40 years. See id. at 859-61. In this case, since neither seconddegree reckless homicide nor homicide by intoxicated use of a vehicle is based on the commission of an underlying felony offense, we need not consider whether the possible penalty for an underlying offense increases the total maximum prison term to which the defendant could be sentenced. Rather, we find dispositive in this case the maximum prison sentence provided for each offense under Wis. Stat. § 939.50(3)(c).
[13] The issue on review before the court is not whether we, as individual judges, each would have imposed a different sentence in the present case or would have modified that sentence on the defendant's motion for post-conviction relief. The issue is whether the sentencing court erroneously exercised its discretion in its decisions. Appellate judges should not substitute their preference for a particular sentence merely because they would have imposed a different sentence had they been in the circuit judge's position. See Cunningham v. State, 76 Wis. 2d 277, 251 N.W.2d 65 (1977).
[14] Upon closer review, the inaccuracies in the presentence report do not appear as significant as the defendant would have this court believe. Although the record is somewhat unclear concerning Randy Lechner's criminal history, it appears that Lechner was arrested three times, once in each 1980, 1988, and 1990, but was ultimately convicted of only one criminal charge. In 1980, Lechner was arrested in Illinois and charged with two counts of possession with intent to deliver a controlled substance (cocaine) and two counts of possession with intent to deliver marijuana. Pursuant to a negotiated plea agreement, the Illinois prosecutor consolidated two of the counts against Lechner and dismissed the other two. Lechner then pled guilty to the consolidated count of possession with intent to deliver both a controlled substance and marijuana. Since the two counts were consolidated, the 1980 arrest resulted in only one criminal conviction. For this conviction, the court sentenced Lechner to three years of probation. In 1988, Lechner was arrested in Illinois and charged with battery. According to Lechner, he paid a fine for this offense. The record shows only that the battery charge was dismissed. Finally, in 1990, Lechner was arrested in Wisconsin for battery. Apparently pursuant to another negotiated plea, Lechner was charged only with a violation of a misdemeanor disorderly conduct ordinance. Lechner pled no contest to this ordinance violation, paid a fine, and was ordered by the court to attend an "Alternatives to Aggression" program. According to the presentence report, Lechner admitted that alcohol or drug use played a part in both battery arrests. Lechner later disputed this statement.
[15] Wis. Stat. § 973.012 provides:
A sentencing court, when imposing a sentence, shall take the guidelines established under [Wis. Stat. §] 1973.011 into consideration. If the court does not impose a sentence in accordance with the recommendations in the guidelines, the court shall state on the record its reasons for deviating from the guidelines. There shall be no right of appeal on the basis of the circuit court's decision to render a sentence that does not fall within the sentencing guidelines.
[16] Recalculating the sentencing guidelines would not have altered the suggested maximum sentence for each homicide conviction. Calculated using the accurate number of the defendant's prior convictions, the sentencing guidelines for each of the homicide convictions would have called for sentences of 96-120 months. Calculated using the inaccurate information contained in the presentence report, the sentencing guidelines called for a sentence of 108-120 months. The maximum sentence suggested for each homicide conviction, calculated under either sentencing guidelines, was 120 months, the maximum sentence allowed under the law. See Wis. Stat. § 939.503(3)(c).
[17] Under Wis. Stat. § 973.012, the circuit court was required to state on the record its reasons for deviating from the sentence recommended in the sentencing guidelines. When initially sentencing the defendant, the court in this case was unaware, due to the inaccurate presentence report, that it was imposing a sentence outside the sentencing guidelines, and therefore did not state any reasons for doing so. At both the sentencing hearing and the hearing on the post-conviction motions, however, the court set forth a detailed explanation of the reasons for the sentence it imposed. Under these circumstances, we find that the circuit court satisfied the requirements of Wis. Stat. § 973.012. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2584899/ | 187 P.3d 753 (2008)
STATE
v.
SELFRIDGE.
No. 81559-3.
Supreme Court of Washington, Department II.
July 9, 2008.
Disposition of petition for review. Denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573567/ | 743 N.W.2d 782 (2008)
16 Neb. Ct. App. 328
Mary Elizabeth WAGNER, Appellee
v.
James Brian WAGNER, Appellant.
No. A-06-427.
Court of Appeals of Nebraska.
January 22, 2008.
Riko E. Bishop, of Perry, Guthery, Haase & Gessford, P.C., L.L.O., Lincoln, for appellant.
Kevin A. Brostrom and Stacie A. Coding, of Lauritsen, Brownell, Brostrom, Stehlik, Myers & Daugherty, P.C., L.L.O., Grand Island, for appellee.
IRWIN, SIEVERS, and MOORE, Judges.
*783 IRWIN, Judge.
I. INTRODUCTION
James Brian Wagner appeals a decree entered by the district court for Hall County dissolving his marriage to. Mary Elizabeth Wagner. On appeal, James challenges various aspects of the court's property distribution, the court's alimony award, and the court's award of attorney fees, to Mary. We conclude that a typewritten letter from the court to the parties which resolved all of the issues presented in the case and was filed with the court's clerk constituted the final, appealable order, and thus James' appeal from the subsequently filed "Decree of Dissolution" was not timely. We dismiss the appeal.
II. BACKGROUND
On January 2, 2004, Mary filed a petition seeking dissolution of the parties' marriage. A trial was conducted on August 22 and December 7, 2005.
On January 11, 2006, the district court filed with the clerk of the court a copy of a letter dated January 10 and sent to counsel for both parties. In that letter, the court indicated that "[b]y this letter I am rendering decision on the trial of this matter." The court directed Mary's counsel to "draft the Decree incorporating the findings and orders [in the letter] and submit it to [James' counsel] for his approval as to form and then to the Court." In the letter, the court resolved all issues, did not reserve judgment on anything, and did not direct the parties to advise the court of any issues not resolved or file any further requests for relief.
On February 7, 2006, the court filed a "Decree of Dissolution" which included all of the findings made in the court's January 11 letter to counsel. On February 17, James filed a motion seeking a new trial or an alteration or amendment to the judgment ... On March 14, the court filed a journal entry overruling the motion. James filed his notice of appeal on April 12.
III. ASSIGNMENTS OF ERROR
James has assigned four errors on appeal. Because of our conclusion that the appeal was not timely filed, we need not more specifically discuss James' assignments of error.
IV. ANALYSIS
Our review of the record in this case revealed that the district court filed a typewritten, signed letter to the parties in which the court resolved the issues presented. The subsequently filed "Decree of Dissolution" did not alter the findings of the court from those set forth in the letter. Pursuant to established precedent, we conclude that James failed to timely file his appeal.
Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it. City of Ashland v. Ashland Salvage, 271 Neb. 362, 711 N.W.2d 861 (2006); Hosack v. Hosack, 267 Neb. 934, 678 N.W.2d 746 (2004); Peterson v. Peterson, 14 Neb.App. 778, 714 N.W.2d 793 (2006). Neb.Rev. Stat. § 25-1912(1) (Cum.Supp.2006) provides that "proceedings to obtain a reversal, vacation, or modification of judgments and decrees rendered or final orders made by the district court . . . shall be by filing... within thirty days after the entry of such judgment, decree, or final order, a notice of intention to prosecute such appeal." Neb.Rev.Stat. § 25-1301 (Cum. Supp.2006) provides in pertinent part:
(1) A judgment is the final determination of the rights of the parties in an action.
*784 (2) Rendition of a judgment is the act of the court, or a judge thereof, in making and signing a written notation of the relief granted or denied in an action.
(3) The entry of, a judgment, decree, or final order occurs when the clerk of the court places the file stamp and date upon the judgment, decree, or final order. For purposes of determining the time for appeal, the date stamped on the judgment, decree, or final order shall be the date of entry.
1. DEVELOPMENT OF LAW
The jurisdictional issue in the present case arises because the record includes two signed and file-stamped documents which contain the district court's findings and resolution on the issues presented at trial. In prior cases, the appellate courts of this state have established that in such a situation, if the first document is a final determination of the parties' rights and does not leave matters unresolved, it can be considered a final, appealable order for purposes of establishing the appropriate deadline for filing a notice of appeal. See, City of Ashland v. Ashland Salvage, supra; Hosack v. Hosack, supra; Peterson v. Peterson, supra.
(a) Hosack v. Hosack
In Hosack v. Hosack, supra, Judy Louise Hosack filed a petition seeking dissolution of her marriage to Max Galen Hosack. On October 15, 2002, the district court filed a journal entry resolving a number of the issues presented in the dissolution proceeding. The journal entry also specifically indicated that counsel was to advise the court, by written motion, if the court had failed to rule on any material issue and that if no motion was filed within 10 days, all matters not specifically ruled upon were deemed denied. The journal entry directed Judy's counsel to prepare the decree and present it to Max's counsel for review. A decree was signed by the district court on November 14 and filed by the clerk of the district court.
On December 4, 2002, Max filed a notice of appeal to this court. This court dismissed the appeal, ruling that the October 15 journal entry was a proper entry of judgment and that Max's notice of appeal was not timely. Max then sought and was granted further review by the Nebraska Supreme Court.
On further review, the Supreme Court held that the October 15, 2002, journal entry was not a proper entry of judgment. The court held that the journal entry "left certain matters unresolved" and noted that the journal entry "directed [counsel] to advise the district court by written motion if the court had failed to rule on any material issue presented." Hosack v. Hosack, 267 Neb. 934, 939, 678 N.W.2d 746, 752 (2004).
The Supreme Court also specifically disapproved of the practice of a trial court's filing a journal entry describing an order to be entered at a subsequent date. The court recognized that "`the confusion presented ... can be avoided if trial courts will, as they should, limit themselves to entering but one final determination of the rights of the parties in a case.'" Id. at 940, 678 N.W.2d at 752, quoting Federal Land Bank v. McElhose, 222 Neb. 448, 384 N.W.2d 295 (1986). The court directed trial courts to "notify the parties of [the] findings and intentions as to the matter before the court by an appropriate method of communication without filing a journal entry" and noted that "[t]he trial court may thereby direct the prevailing party to prepare an order subject to approval as to form by the opposing party." 267 Neb. at 940, 678 N.W.2d at 752-53. The court specifically directed that "[o]nly the signed final order should be filed with the clerk of the court." Id. at 940, 678 N.W.2d at 753.
*785 (b) City of Ashland v. Ashland Salvage
In City of Ashland v. Ashland Salvage, 271 Neb. 362, 711 N.W.2d 861 (2006), Ashland Salvage, Inc., and Arlo Remmen (collectively Ashland Salvage) filed, suit against the City of Ashland to challenge a special assessment imposed by the city for cleanup costs associated with the removal of materials Ashland Salvage, had been storing on portions of public rights-of-way. The city filed a declaratory judgment action, and prior to trial, the district court consolidated the two actions.
On November 22, 2004, following a trial, the district court ruled in favor of the city on the declaratory judgment claim in a file-stamped journal entry. The journal entry also directed counsel for the city to prepare an injunction. On November 30, Ashland Salvage filed a notice of appeal from the November 22 journal entry. On December 6, the court filed an order of permanent injunction.
The Nebraska Supreme Court held that the November 22, 2004, journal entry was a final, appealable order and that Ashland Salvage's appeal from it, rather than the later December 6 order, was timely. The court held that the journal entry resolved all issues raised in the declaratory judgment action and disposed of the whole merits of the case, notwithstanding that it directed counsel for the city to prepare another order. The court held that the journal entry satisfied the requirements of § 25-1301 to constitute a judgment from which an appeal could be taken. In contrast to the journal entry in Hosack v. Hosack, supra, that left certain matters unresolved, the November 22 file-stamped journal entry disposed of all claims.
The Supreme Court also once again took the opportunity to disapprove of the practice of a trial court's filing of a journal entry describing an order to be entered on a subsequent date. The court again gave direction to the trial courts of the proper procedure and again indicated that "[o]nly the signed [judgment, decree, or] final order should be filed with the clerk of the court.'" 271 Neb. at 368, 711 N.W.2d at 868, quoting Hosack v. Hosack, supra.
(c) Peterson v. Peterson
In Peterson v. Peterson, 14 Neb.App. 778, 714 N.W.2d 793 (2006), Mary J. Peterson filed a petition seeking dissolution of her marriage to Paul R. Peterson. On May 3, 2004, a document titled "`Opinion and Findings'" was file stamped and filed by the clerk of the district court. Id at 779, 714 N.W.2d at 795. The May 3 document was also signed by the trial judge, and it set forth the court's resolution of the issues presented. The document did not include any language suggesting that either party could file any motion to advise the court of material issues left unresolved. The document did include a provision stating that Mary's counsel was prepare a Decree in conformance with the Court's findings and submit the same to opposing Counsel for approval, then to the Court for signature.'" Id. at 781, 714 N.W.2d at 796. On May 4, the court entered an order nunc pro tune in which the court revised the May 3 document with respect to two provisions.
On May 28, 2004, a "`Decree of Dissolution of Marriage'" was filed. Id. This document was also signed by the trial judge and file stamped, and it set forth essentially the same findings set forth in the previous two documents. On June 4, Mary filed a motion for new trial, which motion was denied on July 8. On August 3, Mary filed a notice of appeal, and Paul subsequently filed a cross-appeal.
This court reviewed the Nebraska Supreme Court's holdings in City of Ashland v. Ashland Salvage, 271 Neb. 362, 711 N.W.2d 861 (2006), and Hosack v. Hosack, *786 267 Neb. 934, 678 N.W.2d 746 (2004), to determine whether the May 3 and 4, 2004, documents should be considered a final, appealable order. We held that the May 3 and 4 documents set forth the district court's determination of the issues presented for resolution and left no matters unresolved. We held that, pursuant to City of Ashland v. Ashland Salvage, supra, the language directing one party's counsel to prepare another document did not contradict the May 3 and 4 documents' function as a final determination of the rights of the parties. Finally, we held that the May 28 decree did not alter the determination of the issues as set out in the May 3 and 4 documents. We concluded that Mary's notice of appeal was clearly filed out of time. We also held that Mary's motion for new trial was not timely filed with respect to the May 3 and 4 final order. On July 19, 2006, the Supreme Court overruled a petition for further review in Peterson.
In the course of this court's discussion in Peterson, we noted that the Nebraska Supreme Court has specifically disapproved of the practice of a trial court's filing a journal entry describing an order to be filed at a subsequent date. We quoted the Supreme Court's directions to trial courts from City of Ashland v. Ashland Salvage, supra, and Hosack v. Hosack, supra, as set forth above.
2. APPLICATION AND RESOLUTION
The present case is, for all practical purposes, nearly identical to City of Ashland v. Ashland Salvage, supra, and Peterson v. Peterson, supra. In this case, the district court filed a written, signed document which set forth the court's determination, of all issues presented for resolution. In that document, the court specifically indicated that it was "rendering decision on the trial of this matter." In this case, that document was a letter to counsel for both parties, while in City of Ashland, that document was a signed journal entry and in Peterson, that document was in the form of an "Opinion and Findings"; but in each case, the court filed a written, signed document determining all issues presented. In each case, that written, signed document directed counsel for one of the parties to prepare another document and present it to opposing counsel for approval as to form, but as the Nebraska Supreme Court directed in City of Ashland, that direction does not deprive the document of its function as a final, appealable order.
The letter to counsel in this case satisfied the requirements of § 25-1301(2) to constitute a rendition of judgment, because it was a written, signed notation of the relief granted or denied. The letter to counsel further satisfied the requirements of § 25-1301(3) to constitute the entry of a judgment, because the clerk placed the file stamp and date upon the letter.
Although the Nebraska Supreme Court has specifically cautioned in both City of Ashland v. Ashland Salvage, supra, and Hosack v. Hosack, supra, that only the final order should be filed by the trial court, the district court in the present case filed both the letter to counsel and the subsequently drafted decree of dissolution. As a result, the January 11, 2006, letter to counsel constituted a final, appealable order. James' notice of appeal was not filed until April 12, and was clearly filed out of time. Additionally, as in Peterson v. Peterson, 14 Neb.App. 778, 714 N.W.2d 793 (2006), the motion for new trial did not serve to toll the time for filing an appeal, because it was not filed within 10 days of the final, appealable order.
*787 V. CONCLUSION
Having found that James' appeal was filed outside the 30-day time limit for filing an appeal, we are without jurisdiction to hear the appeal. The appeal is dismissed for lack of jurisdiction.
APPEAL DISMISSED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/8304525/ | OPINION ON PETITION TO REHEAR.
The appellant has filed a petition to rehear and assigns as error the action of the court in declining to consider certain exhibits to the testimony of E. T. Scott for the reason that they were not preserved as evidence by a formal bill of exceptions nor by the method provided by the statute codified in Shannon’s Code, Section 4836A1 and 2. The absence of this evidence makes a break in the appellant’s title and it fails to connect and show a perfect title. The petitioner prefaces its remarks with a complaint that the court, of its own motion, struck this evidence. The matter was called to the .attention of the court when the appellant objected to the evidence insisted upon by the appellee. It was insisted that her evidence was not preserved in the manner provided by statute. The court was of the opinion that this contention was well founded. This evidence pertained to the possession of the land in question. For this reason the court hesitated to reject the appellee’s testimony and decide the case upon the appellant’s testimony when it was found to be in the same state. Such a procedure may have' brought about an injustice and the appellant thereby profited by its failure to preserve the evidence heard in the case below. For this reason, the court did, of its own motion, examine the testimony of the appellant to see if it was before the court. Appellant’s position is stated as follows:
“Appellants respectfully insists that this was error, and further insists that under the present statutes of Tennessee it is not necessary to preserve such evidence thus excluded either by formal bill of exceptions or by having the same otherwise identified than was done in the final decree of this case.”
The final decree reads:
*504“In preparing the transcript for the appeal herein granted, the clerk will copy therein all evidence and all exhibits to which exceptions were made and sustained on the trial, in order that the same may be preserved as a part of the record, and the appellate court thus be allowed to consider the admissibility of this excluded evidence. ’ ’
If the appellant’s position is right and this formal method prevails and was not changed by the Acts of 1905, then it is difficult to see the usefulness of the Acts of 1905.
However, we have reconsidered our former holding, re-read the authorities, and concur in our original opinion. "We think the authorities support the following propositions of law:
Evidence excluded by a court of original jurisdiction can be preserved only in one of three ways: 1. By a bill of exceptions. 2. By spreading the excluded paper, or setting out the excluded testimony, together with the exceptions and rulings of the trial court upon the minutes of the court. (Reference to a document, in an entry signed by the trial court, is not sufficient.) 3. By complying with Chapter 49, Acts of 1905, Shannon’s Code, Section 4836A1 and 2. Wynne v. Edwards, 7 Humphrey, 419; Jones v. Stockton, 74 Tenn. (6 Lee), 134; Nance v. Chesney, 101 Tenn., 469, 147 S. W., 690; Railway & Light Co. v. Martin, 117 Tenn., 704, 99 S. W., 367.
The case of Casualty Company v. Parson, 132 Tenn., 217, 177 S. W., 937, does not overrule or modify the aforementioned authorities. In the Casualty Company case, the question was one of identification and not one of authentication. The decree recited a certain deposition had been read. This deposition, together with its exhibits, were incorporated -in the bill of exceptions and, of course, the bill of exception authenticated the exhibits. The evidence was preserved by a bill of exceptions but the parties were attempting to strike it out of the bill because the clerk identified it as a part of the deposition without” the signature of the trial judge thereon. The court held that the officer who took the deposition identified it by his certificate and signature on the designated exhibit. The parties were trying to strike out evidence that was preserved by the bill of exceptions. This case presents a different question entirely.
The motion to rehear is denied.
Snodgrass and Thompson, JJ., concur. | 01-03-2023 | 10-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/2584937/ | 187 P.3d 232 (2008)
STATE
v.
POWELL.
No. 20080051.
Supreme Court of Utah.
April 17, 2008.
Petition for certiorari denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917903/ | 101 B.R. 30 (1988)
In re David Lee SAIN, Debtor.
BANK OF FINDLAY, Plaintiff,
v.
David Lee SAIN, Defendant.
Bankruptcy No. 87-70114, Adv. No. 87-7097.
United States Bankruptcy Court, C.D. Illinois.
May 11, 1988.
*31 Rex Brown, Decatur, Ill., Attorney for defendant/debtor/David Lee Sain.
Donald E. Brilley, Decatur, Ill., for plaintiff/Bank of Findlay.
OPINION
LARRY L. LESSEN, Chief Judge.
This matter is before the Court on the complaint of the Bank of Findlay to determine dischargeability of a debt pursuant to Sec. 523(a)(6) of the Bankruptcy Code. 11 U.S.C. Sec. 523(a)(6). A trial was held, revealing the following facts:
The Debtor, David Lee Sain, had an ongoing business relationship with the Bank for seven years, obtaining financing from them in connection with a car dealership the Debtor at one time owned. Typically, the Debtor's loans were secured by the vehicles he bought and sold in his business. Sometimes the Debtor applied the proceeds from sales to the Bank's notes, other times he did not. Both the Bank and the Debtor treated the security arrangement informally although the Bank held the titles to some of the vehicles, it obtained a formal lien on only one occasion. The Debtor testified that he understood what it meant to grant a security interest, and that he knew such interests extended to proceeds of collateral.
On March 6, 1986, the Debtor executed a promissory note in favor of the Bank in the principal sum of $20,676.43. At that time, the Debtor's car dealership had failed and the Debtor was struggling to maintain a body shop business. The Bank, aware of the Debtor's financial difficulties, intended the six month note as an attempt at a work-out arrangement with the Debtor. All previous collateral having disappeared, the Bank accepted as collateral for the note a 1980 Chevy pickup truck the Debtor had bought for $2750 from a junkyard in 1982 and rebuilt. No certificate of title was available at the time except a salvage certificate. Greg Bohlen, the Senior Vice-President at the Bank testified that he directed the Debtor to sell the truck as soon as possible and apply the proceeds to the note. The Debtor maintained that Bohlen never indicated that he was to apply all of the proceeds to the note.
The Debtor did sell the truck, on April 24, 1986, for $5000. However, the only portion of the proceeds he applied to the note was one $284 payment.[1] The rest of the proceeds were used by the Debtor to reimburse his grandmother, to pay his attorney, to pay the Secretary of State and for business and living expenses.
The Debtor defaulted on the note by failing to repay it in full by September 3, 1986. He filed a Chapter 7 bankruptcy petition on January 26, 1987, at which time he owed $22,157.01 on the note, with interest accruing since then at a rate of $6.19 per day.
The Bank maintains that the Debtor's conduct in selling the truck, pledged as security for the Bank's note, and using the proceeds for his own devices constitutes conversion, rendering nondischargeable the debt owed the Bank, to the extent of the value of the collateral.
In order to prevail in its claim, the Bank must prove by clear and convincing evidence that the Debtor wilfully and maliciously injured or converted to his own use *32 the Bank's property. 11 U.S.C. Sec. 523(a)(6). The term "willful" means "deliberate or intentional" and "malicious" means a wrongful act done consciously and knowingly without just cause or excuse. In re Condict, 71 B.R. 485, 487 (N.D.Ill. 1987). It is not necessary that the Debtor act with ill will or malevolent purpose toward the injured party. In re Hallahan, 78 B.R. 547, 550 (Bankr.C.D.Ill.1987). Thus, "a wrongful act done intentionally, which necessarily produces harm and is without just cause or excuse, may constitute a willful and malicious injury." 3 Collier on Bankruptcy, Sec. 523.16 at 523-128 (15th Ed.1983).
In the case at bar, the Debtor consciously and knowingly sold the truck he had pledged as collateral to the Bank. He distributed the proceeds according to his own discretion, allocating the Bank, to whom he owed in excess of $20,000, a meager $284 payment from the $5000 he received from the sale. The Debtor asks the Court to believe that the Bank had authorized him to sell the truck and to use his own judgment as to how to distribute the proceeds. The Court finds far more plausible the testimony of Greg Bohlen, Senior Vice-President at the Bank, indicating that the Debtor was indeed authorized to sell the collateral, but was directed to apply the proceeds to reduce the Bank's note. While the Bank was perhaps ill-advised in allowing the Debtor the latitude to sell the truck himself, rather than collecting it from him for sale, under Sec. 523(a)(6) the Court is concerned only with the conduct and intent of the Debtor. The Debtor's misconduct lies in his misappropriation of the proceeds. The Debtor has failed to establish just cause or excuse for his knowingly wrongful intentional conversion of the Bank's collateral. Hence, the debt owed the Bank is nondischargeable, to the extent of the value of the collateral less the amount applied to the Bank's note. The Court finds that the value of the collateral is $5000, the sum the Debtor received for its sale. The amount applied to the Bank's note is $284. Thus, the debt owed the Bank is nondischargeable in the amount of $4716.
The Bank seeks judgment for its attorneys' fees in this proceeding, relying on a doctrine referred to as the "American Rule." That doctrine limits allowance of attorneys' fees in cases involving federal law to those in which there exists a statutory basis, a basis created by instrument which is the basis for relief in the case, or aggravated conduct situations justifying imposition of fees for equitable reasons. In re Woods, 25 B.R. 16, 17 (Bankr.D.Or. 1982). The Bank contends that because the form note the Debtor signed contains a provision wherein the Borrower agrees to pay attorneys' fees as part of costs of collection, the Bank is entitled to attorneys' fees. The Court finds that the award of attorneys' fees in a bankruptcy proceeding to determine dischargeability of a debt is beyond the scope of the provision contained in the note. The Court further finds that the award of attorneys' fees to a prevailing creditor in such a proceeding is within the Court's discretion, and is the exception rather than the rule. In this case, the Court holds that the Bank is not entitled to attorneys' fees.
This Opinion is to serve as Findings of Fact and Conclusions of Law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure.
See written Order.
ORDER
For the reasons set forth in an Opinion entered on the 11th day of May, 1988;
IT IS THEREFORE ORDERED that the amount due and owing the Bank of Findlay *33 in the amount of $4716 be and is hereby nondischargeable in bankruptcy.
NOTES
[1] The Debtor testified that he made two payments from the proceeds, but, as the Bank pointed out, one of these payments was made April 10, 1986, before the truck was sold. (See Plaintiff's Ex. 3 Note Envelope reflecting payments). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917970/ | 376 Mich. 64 (1965)
135 N.W.2d 426
SCALLEN
v.
STATE HEALTH COMMISSIONER.
Calendar No. 53, Docket No. 50,444.
Supreme Court of Michigan.
Decided June 7, 1965.
*68 James E. Haggerty and Edward P. Echlin (Edmund E. Shepherd, of counsel), for plaintiff.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, Donald T. Kane and Victor H. Meier, Assistant Attorneys General, for defendant.
SOURIS, J. (dissenting).
This appeal is taken by leave granted from an order of the trial court directing the defendant State health commissioner to change the birth records of the health department to show February 13, 1890 as the date of birth of plaintiff, a judge of the recorder's court of the city of Detroit. A statutory hearing in circuit court was held upon a petition filed December 21, 1960, pursuant to CLS 1961, § 326.17 (Stat Ann 1956 Rev § 14.237), after the health commissioner had refused plaintiff's request to make such change in his record of birth.
Plaintiff claims that until 1956 he believed he had been born on February 13, 1889, and had so listed his date of birth whenever it was required as, for example, in executing his membership form for the judges' retirement system on January 26, 1952. In July of 1956 plaintiff was asked to furnish proof of his age to the retirement system and, in the course of trying to do so, he alleges he discovered discrepancies in public birth records relating to him. He now avers that he was born on February 13, 1890.
In plaintiff's attempt to establish February 13, 1890 as the date of his birth he alleges that the official State and county records of his birth are in error. There is no doubt that some of those records *69 are wrong, since the date shown for his birth in the records of Wayne county varies from February 13, 1888 to February 18, 1889.[1] One thing, however, is certain about the records: none of them provides even the slightest basis for assuming that plaintiff was born in 1890.
To establish his birth occurred on February 13, 1890, plaintiff relies solely upon two affidavits. One affidavit was given by Mary C. Cooney, sister of plaintiff, who was born November 24, 1885. She avers that as of the day of the burial of plaintiff's brother Cornelius, April 14, 1889, when she was three years, four months and 21 days old, "she is positive of her own knowledge" that plaintiff was not yet alive. She further avers that "frequently during her lifetime her mother, in family discussions said, `She was carrying John shortly after the burial of Cornelius.'" Upon this basis Mrs. Cooney "believes * * * [plaintiff] was born on February 13, 1890."
A second affidavit was filed by Margaret S. Hoelscher, a cousin of plaintiff, who was born February 19, 1884. She, too, alleges as her recollection that at the time of Cornelius' death plaintiff was not alive, but, like Mrs. Cooney, she has no recollection of the actual date or year of plaintiff's birth. She makes reference to family tradition, but without identifying its source, from which, if true, it might be inferred that plaintiff was born in 1890.
Defendant objected to the admission into evidence of both of these affidavits on the ground that they contained hearsay evidence. The representations in *70 the affidavits as to plaintiff's family history, based upon declarations made by others than the affiants and offered to prove the truth of the matters stated, were hearsay. There is, however, a well-established exception to the hearsay rule in the case of statements regarding family history. If the declarant who made the statement sought to be introduced as hearsay were related by blood to the person about whom the statement was made, or if the declarant were the spouse of someone so related, the statement may be admitted if the declarant be dead. Lamoreaux v. Attorney General (1891), 89 Mich 146, 160.
Testing the affidavits by this standard the hearsay contained in Mrs. Cooney's affidavit was admissible. It consisted of statements alleged to have been made by plaintiff's mother, who is now deceased, prior to the dispute they were introduced to resolve and without any apparent motive to deceive. Such cannot, however, be said of the affidavit of Mrs. Hoelscher. She gives no source for her hearsay evidence relative to plaintiff's birth date. For all that appears in her affidavit the unidentified declarant might still be alive. When hearsay evidence as to family history is admitted, the declarant must be identified in order that the trier of fact have some basis for determining the credence to be given such evidence. Since Mrs. Hoelscher's affidavit did not specify the declarant, its hearsay was inadmissible. See Rule 63(24) of the Uniform Rules of Evidence.[2]
All of the official State and county records, the veracity of which plaintiff disputes, agree in at least this respect: that plaintiff was not born in 1890 but, rather, was born sometime before. In addition, the record of the United States census department, a copy of which plaintiff himself submitted to the State health department, shows that in the Federal *71 census of 1900 plaintiff's birth date was recorded as February, 1889.
For over 65 years plaintiff believed he was born in February, 1889, and it does not appear in the record that any of his numerous family ever tried to disabuse him of this belief. Moreover, plaintiff testified that in his efforts to document his birth date he checked the records of the high school and college he attended and that "they had a record of an age, but not of a date of birth." These early records, which at least gave plaintiff's age, were not introduced into evidence by him. It could be inferred from this omission on his part that the age as shown in the school records would not have supported his contention that he was born in 1890. See cases collected and cited at pp 285, 286 of Prudential Insurance Company of America v. Cusick (1963), 369 Mich 269. Plaintiff also testified that he had consulted the national archives for a record of his birth, but was unsuccessful since "prior to 1890 all records had been destroyed by fire." Had plaintiff been born in 1890 as he claims, such fires would not have destroyed records of his birth.
This appeal from the above cited special statutory proceeding, not in the course of the common law, must be viewed as an appeal in the nature of certiorari. See Jackson v. People (1860), 9 Mich 111, 117, 118 (77 Am Rep 491). Certiorari is one of the writs superseded by orders of superintending control, GCR 1963, 711.3, but the scope of our review by order of superintending control in circumstances such that certiorari previously would have issued is identical with the scope of our review by that common-law writ. Thus, our review in this case is confined to questions of law.
"The office of a certiorari is not however to review questions of fact, but questions of law. And in *72 examining into the evidence the appellate court does so not to determine whether the probabilities preponderate one way or the other but simply to determine whether the evidence is such that it will justify the finding as a legitimate inference from the facts proved, whether that inference would or would not have been drawn by the appellate tribunal." Jackson v. People, supra, p 120.
If the trial court's finding that plaintiff was born on February 13, 1890 is to be affirmed, evidentiary support therefor must be found in the admissible portions of the two affidavits, for all of the other pertinent admissible evidence disputes that finding tending, instead, to support a finding that plaintiff was born prior to 1890. Had either affidavit contained a positive assertion of affiant's own knowledge that plaintiff was born on February 13, 1890 or on personal knowledge, notwithstanding affiants' tender years at the time of occurrence of the event, that plaintiff was not born prior thereto, our appellate task would be ended because such evidence clearly would have supported the trial court's finding.
However, nowhere in Mrs. Hoelscher's affidavit is there any admissible evidence bearing on the issue except that plaintiff was not alive at the time of his brother's burial and nowhere in Mrs. Cooney's affidavit, relating to events 68 years earlier, does she, 72 years old when sworn, claim of her own knowledge that plaintiff was born in 1890. Indeed, although Mrs. Cooney asserts a distinct recollection of the death of Cornelius when she was three years, four months and 21 days old, she makes no claim of personal memory of plaintiff's birth which she alleges, but only on information and belief, occurred on February 13, 1890 when she would have been four years, two months and 20 days old. She does assert of her own knowledge that plaintiff was not *73 born at the time of Cornelius' burial, as does Mrs. Hoelscher, and that her mother frequently stated in family discussions during her lifetime that she was carrying plaintiff after the burial of Cornelius. We are not advised whether plaintiff's mother was carrying him before and at the time of burial. Nor are we advised why, if it was common currency in family exchanges that plaintiff's mother was carrying him after Cornelius' death, the plaintiff nonetheless persisted in his belief without question, even upon the most solemn occasions, for example, his marriage in 1915, that he had been born on February 13, 1889, before his brother's burial.
While Mrs. Cooney's affidavit, directly and by permissible inference, would have supported a finding that plaintiff was not born on February 13, 1889, as would, also, Mrs. Hoelscher's affidavit, there is no direct or inferential showing therein or otherwise that he was born, instead, on February 13, 1890. In order to conclude, as did the trial judge, that plaintiff was born on February 13, 1890, one must make the following inferences and assumptions: that plaintiff's mother was not carrying plaintiff before and at the time of, as well as after, his brother's burial; that he was not born between April 14, 1889, the date of his brother's burial, and the year's end; that, while the official birth records erred in stating plaintiff's year of birth, they accurately stated the day as February 13th; and that official birth records made in 1889, which listed plaintiff by name, parentage, and place of birth, as well as by birth date prior to 1890, somehow erroneously anticipated by one year the fact of plaintiff's birth. The trial judge's conclusion that plaintiff was born on February 13, 1890, based only in part upon inferences permissible from admissible evidentiary fact, in part upon inferences drawn from inferences, for example, that plaintiff was not born sometime *74 in 1889, and in part upon bare assumptions, for example, that plaintiff was born on a February 13th,[3] does not meet the legal standard for affirmance enjoined upon us by Jackson v. People, supra. We cannot conclude that (p 120) "the evidence is such that it will justify the finding as a legitimate inference from the facts proved."
The trial court's order filed May 7, 1962, determining plaintiff's date of birth as February 13, 1890, and granting plaintiff other relief in conformance therewith should be vacated. Costs may be taxed.
T.M. KAVANAGH, C.J., concurred in result.
O'HARA, J. (for affirmance).
I do not read the record in this case as does my distinguished Associate. I am in agreement with his statement of the issue and the legal principles involved. It seems to me, however, Mr. Justice SOURIS in his opinion does exactly what he holds is legally impermissible. I refer to the fact-finding process, or at least the inference-from-facts process which he applies to the record which was adduced. He writes:
"There is no doubt that some of those records are wrong, since the date shown for his birth in the records of Wayne county varies from February 13, 1888 to February 18, 1889. One thing, however, is certain about the records: none of them provides even the slightest basis for assuming that petitioner was born in 1890." (Emphasis supplied.)
This finding of fact, conclusion of fact or inference from facts, to me, ignores the basic holding of the *75 circuit judge, sitting in a nonjury proceeding. The trial judge found:
"Such records, especially those which purport to certify that plaintiff was born in 1889, rather than in 1890, are wholly unreliable, and the court gives them no credence." (Emphasis supplied.)
I am unable to perceive how appellate review by certiorari permits this Court to accept one finding of fact that "some of those records are wrong" and reject summarily the logical extension of such a finding made by the trial judge that all of them were contrary to fact and untrustworthy.
It should not be overlooked that the legislature must have recognized that uncertainty and error attended certain public records when it invited, by statute,[*] judicial review thereof and empowered the circuit courts to order their correction.
At the peril of doing precisely what I contend our Court is not empowered to undertake here, I must, to answer my Brother's rationale, make reference to those evidentiary excerpts which led Judge Culehan to reject the "records" so-called in toto. Edward Drennan, a total stranger to these proceedings, living in Chicago and a former employee of the county clerk's office in Wayne county, testified as follows:
"Q. During that time, you were so employed by the county clerk, did you have anything to do with records of vital statistics?
"A. Yes, sir.
"Q. Birth records, particularly?
"A. Yes, I did.
"Q. Did you have anything to do with searching records in the office of the county clerk for birth certificates?
"A. Yes.
*76 "Q. Were you familiar from your employment in the county clerk's office with the manner in which birth certificates were filed in the office of the county clerk prior to 1906?
"A. Yes, I was.
"Q. And what was that method?
"A. Well, there were several methods. One was a census that was taken every year by well, he was a political appointee of a ward or a district and he would solicit birth records.
"Q. Yes.
"A. Also, doctors and hospitals used to turn in their records to the county clerk.
"Q. And how were they kept? In what manner were they kept prior to the year 1906 in the office of the county clerk of Wayne county, Michigan?
"A. Well, they were kept very loosely. There was no they had no system prior to 1906.
"Q. Was there any book
"A. (Interrupting) Yes, there was.
"Q. (Continuing) wherein they were kept?
"A. But when they were entered in the book, it had nothing to do with when they came into the county clerk. In other words, these records were allowed to accumulate.
"Q. Yes.
"A. And then possibly no one knows when they were put in the book because I asked several people when were they put in the book and there was no system. For example, today, when a paper comes into the county clerk, it is stamped and filed such and such a date. Now, when it gets into the calendar, I mean, is another date. It might be two or three days. It is generally the following day, but there is no way of knowing when they got into these books.
"Q. In other words, there was no identification stamp as to date?
"A. No, there was not.
*77 "Q. On either the report of the census filed by different individuals or the time that the doctors would file a certificate of birth?
"A. Some of the doctors, there were; there were. But, most of them there weren't.
"Q. I see. And in relation to the time they were filed until they were entered into the book, there was no way of ascertaining that fact?
"A. There was no way to determine when the records came in and when they were put in the book, no." (All emphasis supplied.)
This testimony alone, if accorded the credence the trial judge was permitted to accord it, was ample to allow him to reject the records of Wayne county in relation to this date of birth. However, there are so many patent errors in the records themselves that without that testimony Judge Culehan's conclusion was amply justified. Exhibit A, supposedly recorded May 8, 1889, shows a John P. Scallon to have been born February 13, 1888. Exhibit B, purported to have been recorded May 10, 1890, shows a John Scallon to have been born February 18, 1889. Exhibit C, an enumerator's return (paid for on the basis of 10-cents per item to a patronage appointee) and said to have been recorded May 11, 1890, attests plaintiff's birth of February 18, 1889. An earlier enumerator's return shows plaintiff to have been born February 13, 1888. Exhibit E, yet another recorded May 11, 1890, sets the birth date at February 12, 1889. Apparently each enumerator considered the 10-cent stipend for a birth or death recording of considerably more importance than the accuracy of the date of the event it purported to attest. Climaxing the weird melange of recording errors is plaintiff's brother's birth certificate. Cornelius Scallen is shown to have been born less than 2 months after plaintiff, a phenomenon not generally regarded as physically possible. The "birth" certificate *78 was later shown to be a death certificate. But says Justice SOURIS, as I understand him, none of these errors establishes even the possibility of plaintiff being born in 1890. This misconstrues the purpose of the testimony and disregards the plain intention of the statute. The foregoing testimony went not to the date of plaintiff's birth, but as I view the record, it went to the point of the total unreliability of the public records. When this was established, and surely it was, the fact finder was entitled to accept the affidavit evidence. Nor do I find it a necessary conclusion that the foregoing hodgepodge of inaccuracy "anticipated by one year the fact of plaintiff's birth." To so conclude one must disregard completely the testimony of Mr. Drennan that the dates on which records were supposed to have been entered did accord with the actual date.
I do not conclude as does Justice SOURIS that the finding that plaintiff was born on "a" February 13th "was a bare assumption." No one seriously challenged the day of birth. The trial judge did not even address himself to it. Thus when it appeared, under the positive unequivocal affidavit evidence that plaintiff was not yet born in 1889, the court came to the eminently logical conclusion that he was born on an unchallenged day of the following year. It is not unknown that the term for which infants are carried varies a month or so either way.
If one feels obligated to take a legalistic approach to this controversy, it could well be argued that the records themselves, without plaintiff's affidavits, establish prima facie that plaintiff's legal birth date is February 13, 1890. Exhibit "E", a form of affidavit furnished by the State and filed April 25, 1958, made 5 changes in the official record of plaintiff's birth. It changed the day-date from February 18th to February 13th. It changed the incorrect *79 family name spelling from "Scallon" to "Scallen." It added plaintiff's mother's maiden name. It spelled out the name Peter and gave the birth-year date as 1890. Someone never identified, at some time never established, drew a pen line through the year "1890" and substituted in pen "1889." The undetermined scrivener also scratched out "Peter" as typed and wrote the initial "P." Nevertheless, the affidavit was accepted for filing for what it was a correction of the date of plaintiff's birth certificate. Are we on appellate review by certiorari (common-law or 1963 model, if there be a difference) required to find that the pen alterations were made before the affidavit was accepted? Was he not completely free to accept the just as logical postulate that someone without authority or basis, in fact or in law, penaltered the affidavit after it was accepted and filed? If this be so, plaintiff's birth date was corrected by affidavit on April 25, 1958. Under the attorney general's theory of the case, such accomplished correction would establish prima facie the birth-year date as 1890. If the affidavits, as he contends, are insufficient to justify a change from 1888 or 1889, to 1890, I assume they would likewise be insufficient to change the date from 1890 to 1889. One does not suppose their effectiveness is dependent on whether the change is to advance or set back the birth date.
In the two and a half years during which I have been privileged to serve on this Court, if there is one tenet, one legal axiom I have learned, it is that almost sacrosanct and reverential status is accorded the findings of fact made by a jury or a trial judge in a nonjury case. Tested by this settled principle unless we make a separate rule for this case, it seems to me we are impotent to disturb Judge Culehan's findings.
*80 As lately as February of this year, Mr. Justice BLACK alluded to the principle here involved:
"This is one of the many cases, appealed to this Court as a matter of right under former practice, where controlling issues of fact only have been tried on mutual waiver of a jury; whereupon the losing party has come here with allegation that the trial judge's findings of fact are contrary to the clear preponderance of the evidence.[**]" (The asterisk refers to the footnote which I also quote.) Kevreson v. Michigan Consolidated Gas Company, 374 Mich 465-467.
I am not unmindful that Kevreson is a jury-waived automobile negligence case and that the case at bar is a special statutory proceedings affording no jury trial. This difference does not alter the rule. It would indeed stretch the appellate reviewing process to say here that "the trial judge's findings of fact are contrary to the great weight of the evidence."
I neither cite nor discuss other precedent cases, nor other authority, for I believe none is involved. The narrow limits of review by certiorari are pointed out by Mr. Justice SOURIS. I accept them. The court had jurisdiction. The statute specifically supplied it. The proceedings were regular. The total evidentiary record presented a factual dispute. The trier of the facts made findings of fact and permissible inferences therefrom. I find no error. The order *81 of the trial judge directing correction of the records is affirmed. Costs to the appellee.
DETHMERS and KELLY, JJ., concurred with O'HARA, J.
BLACK, J. (for affirmance).
It is true that this Court remains addicted to those weasel words, "review in the nature of certiorari." Nonetheless, our order granting leave to review Judge Culehan's statutory determination was, in unqualified legal effect, an issued writ of certiorari.[*] I therefore approach the task of present review within the "any evidence" confines of that constitutionally authorized writ.
Mr. Justice FELLOWS, describing the scope of review upon certiorari, laid out those confines in Meyers v. Michigan C.R. Co., 199 Mich 134, 137, 138:
"It may not be necessary to repeat what we have so frequently said that this Court does not review the findings of fact of the board, except to determine whether there is any evidence to support the award. The evidence may not be direct; it may be circumstantial. The board not only passes on the credibility of witnesses, but draws its inferences from the circumstances and the facts which it finds established. We may reverse awards for a failure of evidence to support them, but we are not the triers of the facts. With this view in mind, we approach the consideration of this case."
I could agree both with the reasoning and result Justice SOURIS has proposed had this been a common-law action with review sought on ground that nonjury findings are contrary to clear preponderance, or that such findings are "clearly erroneous" *82 (see Kevreson v. Michigan Consolidated Gas Company, 374 Mich 465, 467). For instance, if the question had come here as in the factually like case of Fontana v. Ford Motor Company, 278 Mich 199, the Court well might conclude as it did in Fontana. But this is no common-law Fontana Case. This is certiorari to review a special determination of fact the circuit court was expressly authorized to make and enter with respect to correction of records of birth and death. See CLS 1961, § 326.17 (Stat Ann 1956 Rev § 14.237). So, if there is any proof as contemplated by section 326.17, or any permissible inference from such proof, tending to support what Judge Culehan found factually, affirmance is due automatically. Here there is such proof and inference, as Justice SOURIS' thoroughgoing analysis of the record plainly discloses.
Compare Justice SOURIS' foregoing analysis with this connected passage (Fontana at 202-204):
"Defendant contends that, as against the record evidence, the testimony of plaintiff and his brother has no probative force as a matter of law and the record must be taken as conclusive proof of plaintiff's age, citing Webb v. Haycock, 19 Beav 342 (52 Eng Rep 382); Denoyer v. Ryan, 24 F 77; Campbell v. State, 21 Okla Cr 243 (206 P 622); Meehan v. Supreme Council Catholic Benevolent Legion, 95 App Div 142 (88 NYS 821); Hunt v. Supreme Council, Order of Chosen Friends, 64 Mich 671 (8 Am St Rep 855), none of which, however, sustains the contention.
"In this State one is competent to testify to his own age, Cheever v. Congdon, 34 Mich 296, his testimony, though rebuttable, is `best evidence,' i.e., not secondary, Morrison v. Emsley, 53 Mich 564, and it raises a question of fact, if denied by testimony or circumstances, Durfee, for the use of Lantz, v. Abbott, 61 Mich 471; People v. Bernor, 115 Mich 692; Schweitzer v. Bird, 204 Mich 333. The testimony *83 of plaintiff's brother is competent at least to his proximate age. Hancock v. Supreme Council Catholic Benevolent Legion, 69 NJ Law 308 (55 A 246).
"Defendant cites no statute or authority which gives to any of the records produced greater probative force than that of `competent' testimony. Plaintiff's voting registration and marriage affidavit are by way of impeachment of his claim as to his age. All the other testimony is strictly hearsay because no witness with personal knowledge of the facts was produced. Consequently, none of the proof is of such a superior legal character as to determine the fact and the issue necessarily is for the jury.
"However, the finding of a jury in favor of plaintiff's claim of age would be against the great weight of the evidence. Plaintiff's mother lives with him and he did not produce her as a witness nor take her deposition. An inference arises that her testimony would have been unfavorable to him. This failure and inference, together with plaintiff's conduct (during all the time and on all occasions when he had no interest in misrepresenting it) in representing his age as the records proclaim it, and the fact that the record evidence is wholly unimpeached for errors, are of overwhelming force as against the bare statements of plaintiff and his brother. This requires reversal of the judgment and new trial."
I agree with Justice O'HARA that the statutory determination made in circuit should be affirmed.
SMITH and ADAMS, JJ., did not sit.
NOTES
[1] In addition to this intrinsic evidence of error, plaintiff relied upon the testimony of a former employee of the Wayne county clerk's office who was employed therein from 1952 to 1956. This record does not disclose on what basis he was allowed to make his pronouncements about the manner in which entries were made in the clerk's office 63 years before he commenced his employment thorein, as quoted in Mr. Justice O'HARA's opinion.
[2] 9A Uniform Laws Annotated, 1964 Cum Ann pocket part, p 245.
[3] The birth records in evidence variously show plaintiff's day of birth as February 12, 13, and 18. Nothing appears in this record, other than plaintiff's apparently continuous use of February 13 as his day of birth, to support a judicial finding that he was born on February 13, rather than February 12 or 18.
[*] CLS 1961, § 326.17 (Stat Ann 1956 Rev § 14.237). REPORTER.
[**] "Former Court Rule No 64 (1945) provided that `Appellant may assign as error that the judgment is against the preponderance of the evidence.' This has been changed to `Appellant may assign as error that the finding on the issue tried without a jury is clearly erroneous.' GCR 1963, 810. The change of wording does not affect our status as a reviewing Court. We adhere to what was said on that score in Schneider v. Pomerville, 348 Mich 49, Northwest Auto Company v. Mulligan Lincoln-Mercury, Inc., 348 Mich 279, and Barnes v. Beck, 348 Mich 286."
[*] The present Constitution dubs it a prerogative and remedial writ. Const 1963, art 6, § 4. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917984/ | 135 N.W.2d 700 (1965)
Petition of Eugene M. NELSON and Jean Louise Nelson, for adoption of Arthur William Bye and John Leslie Bye, Respondents,
v.
Arthur William BYE, the natural father of Arthur William Bye and John Leslie Bye, Appellant.
No. 39519.
Supreme Court of Minnesota.
May 14, 1965.
*701 William E. Kalar, Minneapolis, for appellant.
Robert R. Pflueger, Ortonville, for respondents.
MURPHY, Justice.
This is an appeal from a judgment and decree for adoption of appellant's minor children by his divorced wife and her present husband. Minn.St. 259.24, subd. 1(b), provides that no child shall be adopted without the consent of his parents, except where a parent has abandoned the child or has lost custody through a divorce decree. This case raises the issue as to whether the consent of the father is necessary under circumstances where by an amended decree custody was given to the mother subject to the right of the father to reasonable visitation and "to take the children with him" for a 3-week period in each year. It is contended that the father's right thus expressed is not a right of custody which requires his consent to the adoption.
From the record it appears that appellant, Arthur William Bye, and his wife, Jean Louise, were divorced in November 1960. By the decree of divorce custody of their two children, Arthur William, Jr., age 6, and John Leslie, age 4, was awarded to the mother, subject to the father's right to visit the children twice weekly and to have temporary custody of them for 3 weeks during the summer vacation. The decree also required the father to pay the sum of $50 per month in support of each of the children. The mother married the petitioner Eugene M. Nelson on January 23, 1961, about 2 months after the divorce decree was entered. After the second marriage, the children were taken by the mother to the farm home of her second husband near Ortonville, Minnesota, a distance of 168 miles from where they had previously resided in Hennepin County. Subsequently, appellant by motion sought an order of the District Court of Hennepin County adjudging the mother in contempt, presumably because she unlawfully removed the children from Hennepin County. The motion further asked that in view of the changed residence of the children definite visitation rights be provided, that the support payments be modified, and for other relief not pertinent here. On this motion the trial court determined that the wife had "remarried within the period of the statutory prohibition against remarriage"; that she had removed the children from Minneapolis *702 "without informing the Department of Court Services of her exact location so that arrangements could be made for appropriate visitation" in accordance with the judgment and decree; that the father would be subjected to an additional expense in visiting his children by reason of the wife's conduct but that the wife's default "does not constitute a wilful contempt." The court went on to make an order amending the divorce decree by reducing support payments to $40 a month for each child until he reached the age of 21 years and providing:
"That the defendant have the right of reasonable visitation with the minor children of the parties upon arrangements made by and through the Department of Court Services, which arrangements shall include notice to the plaintiff of any failure to comply with the arrangements made by and through said Department of Court Services at least 24 hours prior to the time of the scheduled visitation. That defendant shall have the right of visitation for a period of three weeks during the summer school term vacation, which shall be the first full three weeks in August of each year, with the right to take the children with him, unless otherwise arranged through the Department of Court Services." (Italics supplied.)
It would appear that the trial court felt that in view of the changed residence of the children, the "twice weekly" visitation privilege was no longer practical, but that the temporary custody provision of the original decree giving appellant charge of the children for 3 weeks of the summer school vacation should not be changed. The wording used in the amended decree which omits the term "temporary custody" gives rise to the issue with which we are presented. It is contended by respondents that the omission of the term "custody" has altered the relationship so as to dispense with the necessity for the father's consent to adoption. Section 259.24, subd. 1(b), provides:
"No child shall be adopted without the consent of his parents * * * except in the following instances:
* * * * * *
"(b) Consent shall not be required of a parent who has abandoned the child, or of a parent who has lost custody of the child through a divorce decree, and upon whom notice has been served as required by section 259.26."
This issue must be resolved by what we said in In re Petition of Parks, 267 Minn. 468, 127 N.W.2d 548. That case related to custody of a child granted pursuant to a stipulation in a divorce proceeding. The father was given custody of the child subject to the right of the mother to have custody at certain intervals. Both parents remarried and subsequently the child's stepmother, with the father's consent, initiated adoption proceedings. It was there contended that the mother's consent to the adoption was not necessary. In that case we discussed at length the construction to be given generally to § 259.24. We pointed out (267 Minn. 474, 127 N.W.2d 553) that in the judgment of the legislature "the best interest of a child will most likely be served if parental consent is required in all cases except abandonment and loss of custody through divorce." We went on to say:
"* * * The correlative rights and duties inherent in the parent-child relationship are natural rights of such fundamental importance that it is generally held that parents should not be deprived of them `except for grave and weighty reasons.' In an adoption proceeding, where an absolute severance of this relationship is sought, the consent provisions are designed to protect the natural rights of a parent to the custody, society, comfort, and services of the child. These rights were protected by the common law. Since the statute is in derogation of the common *703 law, it is quite uniformly held that provisions abrogating the necessity of parental consent be construed strictly in favor of the parent and the preservation of the relationship."
We concluded that the legislature intended that consent of a divorced parent may be dispensed with only in those cases "where the divorce decree, judged as of the time of issuance, expressly or by necessary implication extinguished the right to custody." 267 Minn. 476, 127 N.W.2d 554.
In the Parks case we followed the approach of those courts which recognize the right of the natural parent and the fundamental importance of his relationship with his child in controversies involving termination of the parent-child relationship. 2 Am.Jur.(2d) Adoption, § 7; In re Slaughter (Mo.App.) 290 S.W.2d 408; Nevelos v. Railston, 65 N.Mex. 250, 335 P. 2d 573; Rubendall v. Bisterfelt, 227 Iowa 1388, 291 N.W. 401; In re Adoption of Perkins, 242 Iowa 1374, 49 N.W.2d 248.
It cannot safely be said that a parent is unfit and should be permanently denied all parental rights merely because the decree awards custody to the other parent. It should be kept in mind that the decree awarding custody is effective only as between the parents and is always subject to subsequent modification or revision to promote the best interests of the child. Minn.St. 518.18. In the absence of evidence of unfitness which would warrant severance of the parent-child relationship in the interest of the child's welfare, the right of the natural parent who initially loses custody of a child as a result of a divorce decree should not be extinguished so as to prevent such parent from seeking custody in the event of death, subsequent divorce, or other changes in circumstances of the prevailing party. 2 Am.Jur.(2d) Adoption, § 28; 49 Minn.L.Rev. 131.
Here, there is nothing in the record which indicates that the father is an unfit person or that he has abandoned or failed to support and care for the children. In granting the adoption it appears that the trial court was influenced by certain factors which interfered with the children's best interests. The court felt that the children should be free from the embarrassment of bearing the name of the natural father while they lived in the home of the stepfather and mother and that the latter should be spared feelings of resentment manifested by the children which carried over from visits with the natural father.
We find no difficulty in determining on the record before us that appellant here is not a person within the purview of § 259.24, subd. 1(b), who has abandoned his children or has lost custody of them through the amended divorce decree. It seems to us that under the provisions of the amended decree of divorce the right given to the natural father to reasonable visitation and "to take the children with him" for a period of 3 weeks in August of each year, unless the Department of Court Services arranges otherwise, is a sufficient right to custody to give him the status of one whose consent to adoption is required.
Reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917995/ | 101 B.R. 775 (1989)
In re DAMASON CONSTRUCTION CORP., Debtor.
Charles W. GRANT, Trustee, Plaintiff,
v.
William J. DAVIS, Wendy M. Davis, and Kyle M. Davis, Defendants.
Bankruptcy No. 88-417-BKC-3P7, Adv. No. 88-160.
United States Bankruptcy Court, M.D. Florida, Jacksonville Division.
June 26, 1989.
Ronald Bergwerk, Jacksonville, Fla., for plaintiff.
*776 J. Herbert Williams, II, Jacksonville, Fla., for defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
GEORGE L. PROCTOR, Bankruptcy Judge.
This adversary proceeding is before the Court upon the trustee's complaint to avoid the transfer of money and property to insiders pursuant to 11 U.S.C. § 548(a)(2). A trial of this cause was held May 2, 1989, and upon the evidence presented, the Court enters the following Findings of Fact and Conclusions of Law:
FINDINGS OF FACT
On February 29, 1988, Damason Construction Corporation ("Debtor") filed a petition for relief under Chapter 7 of the Bankruptcy Code. 11 U.S.C. § 701 et seq. Prior to that date, the debtor had engaged in the business of building and selling homes. The defendants were officers, directors and principals of the corporation.
The evidence shows that the debtor had been experiencing financial difficulties since March of 1987. In December 1987, the debtor closed its doors for the Christmas holidays and never reopened for business.
During the few months prior to the petition date, each of the defendants received and cashed a number of checks from the debtor. These payments were as follows:
WILLIAM J. DAVIS
10/07/87 $1,500.00
10/16/87 1,500.00
10/29/87 1,500.00
11/13/89 1,500.00
12/18/89 1,500.00
_________
TOTAL = $7,500.00
WENDY M. DAVIS
09/18/87 $ 700.00
11/30/87 500.00
12/11/87 1,000.00
_________
TOTAL = $2,200.00
KYLE M. DAVIS
10/06/87 $ 800.00
10/10/87 800.00
10/29/87 800.00
11/13/87 800.00
11/27/87 500.00
12/03/87 413.00
12/12/87 500.00
12/12/87 800.00
_________
TOTAL = $5,413.00
These payments were not designated on the corporate books as salary and no taxes were deducted or paid for these items. Although some of the checks contained references to "expenses," the defendants were unable to document any specific corporate expenses which had not already been reimbursed.
When asked about the services they performed for the debtor, the defendants could not describe any specific services rendered to the corporation nor could they ascribe a measure of value to the services allegedly performed. In addition, the testimony is clear that the amounts taken were used solely for the defendants' personal needs as opposed to a corporate purpose.
In addition to the above transfers, the debtor also deeded a parcel of real property in Citrus County to Kyle Davis on December 9, 1987, legally described as:
Lot 34, Block 372 Inverness Highlands West, per Plat Book 5, pp. 19-33, public records of Citrus County, Florida.
No consideration was received for the transfer despite the fact that debtor had originally paid $3,500.00 for the lot. At the time of the transfer, the property was unencumbered and worth $3,500.00.
The defendants testified that the purpose of the transfer of real property was to facilitate the construction of a model home for the corporation. However, the evidence indicates that the property was transferred two weeks prior to the closing of the business and that the debtor failed to received any value for the transfer.
The debtor's schedules reflect that the corporation was highly insolvent on the petition date, February 29, 1988. More specifically, the debtor had unsecured debts of $329,995.00 and assets of $130,654.00. Moreover, many of the scheduled assets proved to be of nominal value. The Statement of Affairs shows that there were no transfers during the prior year. This was corroborated by Wendy Davis, who testified that there were no significant changes in the corporation's financial position *777 within the three months preceding bankruptcy.
CONCLUSIONS OF LAW
The complaint in this adversary proceeding is predicated upon 11 U.S.C. § 548(a)(2). That section provides in relevant part:
(a) The trustee may avoid any transfer of an interest of the debtor in property, or any obligation incurred by the debtor, that was made or incurred on or within one year before the date of the filing of the petition, if the debtor voluntarily or involuntarily
(2)(A) received less than a reasonably equivalent value in exchange for such transfer or obligation; and
(B)(i) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation.
To set aside a transfer under this section, a plaintiff must prove (i) that there was a transfer of an interest of the debtor in property (ii) that the transfer occurred within one year preceding the filing of the bankruptcy petition, (iii) that the debtor received less than a reasonably equivalent value in exchange for this transfer, and (iv) that the debtor was either insolvent on the date of the transfer, became insolvent as a result of the transfer, or was left with an unreasonably small capital after the fact. In re Ear, Nose and Throat Surgeons of Worcester, 49 B.R. 316 (Bankr.D.Mass. 1985); Matter of Curina International, Inc., 23 B.R. 969, 973 (Bankr.S.D.N.Y. 1982). Proof of actual fraudulent intent is unnecessary. See, In re Reininger-Bone (Cates-Harman v. Reininger-Bone), 79 B.R. 53 (Bankr.M.D.Fla.1987); In re Energy Savings Center, Inc., 54 B.R. 100 (Bankr.E.D.Penn.1985).
Ordinarily, the burden of proof rests on the trustee to prove each element of a fraudulent transfer. In re Thames (Campbell v. Thames), 21 B.R. 704 (Bankr. S.C.1981). Where, however, the defendant has raised an affirmative defense to such action or where the plaintiff has established a prima facie case, it is incumbent upon the defendant to prove the validity of such defense.
In this case, the defendants have raised two affirmative defenses. First, the defendants suggest that the debtor received reasonably equivalent value in exchange for the transfers in the way of services and payment of corporate expenses, and secondly, that the debtor was solvent when the transfers were made. There is no dispute as to the transfer and receipt of debtor's property within one year prior to the petition date.
The Bankruptcy Code does not define "reasonably equivalent value" and consequently, the term has proven problematic for the bankruptcy courts. 4 Collier on Bankruptcy ¶ 548.09 (15th Ed.1986). In the context of payments to insiders, the courts have tended to phrase the inquiry in terms of whether fair consideration or a fair equivalent has been given for a particular transfer. Thus, the determination must be made on a case by case basis. See, Matter of Nacol (Kleinfeld v. Nacol), 36 B.R. 566 (Bankr.M.D.Fla.1983) (Paskay, C.J.).
Here, the defendants suggest that they provided personal services to the debtor and/or paid expenses on behalf of the corporation equal to the amount of the transfers. When asked about these services, however, the defendants could not provide specific details about the services provide nor could they produce records of any "expenses" paid on the debtor's behalf.
The defendants argue that it was their ordinary business practice to draw "salary" from the debtor corporation as money became available and that the Court should take this in to consideration when making its ruling.[1] The Court does not agree. Section 548(a)(2) speaks in terms of whether the debtor received a reasonable equivalent value in exchange for property transferred. While payments to insiders in the ordinary course of business may have some relevance to a § 547 preference action, it has no bearing on a § 548(a)(2) *778 fraudulent transfer action. Instead, the focus is limited solely to the value of the property or services given to the debtor in exchange for the transfer.
In any event, the transfers do not appear to be part of any well-established, ordinary and re-occurring business practice. If the payments were truly in the nature of salary, there would have been a corresponding entry in the corporation's books and deductions for income taxes as was the case for other salaried employees. Instead, the transfers in question appear to be an attempt by the defendants to deplete the cash reserves of the debtor prior to the bankruptcy. This is not a practice that can be condoned by the Court.
As for the transfer of the real property, the Court finds that the debtor failed to receive a reasonable equivalent value in exchange for the transfer. The defendants' explanation that the transfer was made to facilitate the construction of a model home is not credible due to the fact that the debtor ceased doing business two weeks later.
The Court will now turn its attention to the solvency issue. Where a debtor is shown to be insolvent at a date subsequent to a particular transfer and the debtor's condition did not change during the interim period, it is logical and permissible to presume that the debtor was insolvent at the time of the transfer. In re Arrowhead Gardens, Inc. (Foley v. Briden), 32 B.R. 296 (Bankr.D.Mass.1983), aff'd 776 F.2d 379 (1st Cir.1983).
In this case, there is little doubt that the debtor was insolvent on the petition date. The bankruptcy schedules reveal that the debtor had unsecured debts of $329,995.00 and assets of only $130,654.00. The Statement of Affairs indicates that there were no transfers during the prior year and there was testimony to the effect that no significant changes in the debtor's financial condition occurred within the preceding three months. Although more concrete evidence of insolvency would be helpful, it is logical to infer that the debtor was insolvent when the transfers to the defendants were made.
Having considered the totality of the evidence the Court finds (i) there was a transfer of an interest of the debtor in property (ii) within one year of the filing of the bankruptcy petition (iii) in which the debtor received less than a reasonably equivalent value in exchange for the transfers (iv) which was made while the debtor was insolvent. Accordingly, the transfers to the defendants are avoidable under § 548(a)(2) of the Bankruptcy Code, and each defendant remains individually liable for the amount of money and property received by him or her personally.
A separate Final Judgment will be entered in accordance with these findings.
FINAL JUDGMENT
Upon Findings of Fact and Conclusions of Law separately entered, it is ORDERED as follows:
1. Final Judgment is entered in favor of plaintiff, Charles W. Grant, Trustee, and against defendant William J. Davis in the amount of $7,500.00, for which sum let execution issue.
2. Final Judgment is entered in favor of plaintiff, Charles W. Grant, Trustee, and against defendant Wendy M. Davis in the amount of $2,200.00, for which sum let execution issue.
3. Final Judgment is entered in favor of plaintiff, Charles W. Grant, Trustee, and against defendant Kyle M. Davis in the amount of $8,913.00, for which sum let execution issue.
NOTES
[1] See, e.g., In re Top Sport Distributors, Inc., 41 B.R. 235 (Bankr.S.D.Fla.1984). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573020/ | 2 So.3d 321 (2008)
Donald E. BROWN, Personal Representative, etc., Appellant,
v.
Thomas W. MILLER, III, etc., et al., Appellees.
Nos. 5D07-1288, 5D07-1356.
District Court of Appeal of Florida, Fifth District.
October 17, 2008.
Rehearing Denied February 9, 2009.
*322 Stephen Mendelsohn of Greenberg Traurig, P.A., Boca Raton and Elliot B. Kula and Daniel M. Samson, of Greenberg & Traurig, P.A., Miami, and James E. Cheek, III, of Winderweele, Haines, Ward & Woodman, P.A., Winter Park, for Appellant.
David B. King and Thomas A. Zehnder of King, Blackwell, Downs & Zehnder, P.A., Orlando, for Appellees.
EVANDER, J.
This is an appeal from a partial summary judgment order invalidating a transfer of over seven million dollars from the Elinor Estes Miller Trust to the Thomas W. Miller, Jr., Trust ("Bill Miller Trust") and directing that such monies be held in constructive trust for the benefit of the Elinor Estes Miller Trust and its remainderman, Thomas W. Miller, III, ("Tom"). We have jurisdiction pursuant to Florida Rule of Appellate Procedure 9.130(a)(3)(C)(ii).
Thomas W. Miller, Jr. ("Bill") was the trustee and lifetime beneficiary of a trust established by his wife, Elinor Miller. Upon Elinor's death in 1999, her trust assets were distributed to designated charities and family members with the balance being divided into three separate sub-trusts, designated as Trust A-1, Trust A-2 and Trust B, with each serving a distinct purpose. This appeal relates solely to the Trust A-2 assets. The trust language critical to the resolution of this appeal provides:
V.
Administration of Trust "A"
2. With respect to Trust "A-1" and Trust "A-2", the Trustee shall pay quarterly *323 or oftener, the entire net income derived from the trust estates to my husband, THOMAS W. MILLER, JR., so long as he shall live. In addition thereto, the Trustee shall pay to my husband, THOMAS W. MILLER, JR., such amounts from the principal of Trust "A-2" first and then from "A-1" after the exhaustion of "A-2", as it deems necessary or advisable to provide liberally for his maintenance, health, and support in his accustomed manner of living, taking into account all of his other income and means of support known to the Trustee. The Trustee shall also pay to my husband such additional amounts of principal from Trust "A-2" as he may from time to time request....
3. Upon the death of my husband, THOMAS W. MILLER, JR., the Trustee shall pay over and distribute the then remaining balance of Trust "A-2", if any, to such person or persons, and in such manner, as he shall appoint by his last Will and Testament, which makes reference to said power of appointment, including in him the power to appoint to his estate. Any portion of Trust "A-2" not effectively appointed by my husband, THOMAS W. MILLER, JR., shall continue to be held in trust for the lifetime of my son, THOMAS W. MILLER, III,....
(Emphasis added.)
On February 11, 2000, Bill executed a third codicil to his last will and testament. In this codicil, Bill purported to exercise his power of appointment by directing that, upon his death, the Trust A-2 balance be distributed to The Elinor and T.W. Miller, Jr. Foundation ("the Foundation").
Between the date of his wife's death and January 25, 2002, Bill, as trustee, transferred approximately $420,000 from Trust A-2 to himself and others. On January 25, 2002, Bill, as trustee, then transferred the remaining balance of the Trust A-2 assets (approximately seven million dollars) to the Bill Miller Trust.
Bill died in April 2004. His son, Tom, then brought the underlying action against his estate, the personal representatives of his estate, the trustees of the Bill Miller Trust, and the Foundation (collectively referred to as "Appellants") seeking, inter alia, to set aside the seven million dollar transfer to the Bill Miller Trust and to invalidate Bill's purported exercise of his power of appointment. Pursuant to the terms of his mother's trust, the seven million dollars would be held in trust for Tom's benefit if he prevailed on both these issues.[1]
In granting Tom's motion for partial summary judgment, the trial court found that the transfer at issue was improper for three reasons: (1) it was contrary to the trust language limiting transfers to Elinor's husband; (2) it was contrary to the trust language limiting transfers from "time to time;" and (3) it violated Bill's duty to act in good faith to protect the interests of the Trust A-2 contingent remaindermen. We respectfully disagree with the trial court's conclusions.
A court may grant summary judgment only if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla.2000). Here, we agree with both parties that the interpretation of the Elinor Miller Trust documents is a question of law which is entitled *324 to de novo review. See Fleck-Rubin v. Fleck, 933 So.2d 38, 39 (Fla. 2d DCA 2006); Gallagher v. Dupont, 918 So.2d 342, 346 (Fla. 5th DCA 2005).
Tom argues that Elinor only authorized transfers from Trust A-2 to "my husband." Based on this argument, Tom contends that the transfer to the Bill Miller Trust was invalid because Elinor was "not married" to the Bill Miller Trust. Appellants respond that the Bill Miller Trust was a revocable trust and, accordingly, a conveyance to the Bill Miller Trust was equivalent to a transfer to Bill Miller. We agree with Appellants. It is undisputed that Bill maintained 100% control over the Bill Miller Trust assets. Furthermore, he had the right to end the trust at any time and thereby regain absolute ownership over the trust property. Florida Nat'l Bank of Palm Beach Co. v. Genova, 460 So.2d 895, 897 (Fla.1984). Thus, Bill had complete and unfettered access to the seven million dollars conveyed into his trust. In construing the provisions of a trust document, the cardinal rule is to give effect to the grantor's intent, if possible. Knauer v. Barnett, 360 So.2d 399, 405 (Fla.1978). We believe that in authorizing transfers of Trust A-2 assets to her husband, Elinor clearly intended to permit transfers to an entity, such as a revocable trust, over which her husband retained complete control and the right to absolute ownership.
Tom next argues that the trust language "[t]he Trustee shall also pay to my husband such additional amounts of principal from Trust "A-2" as he may from time to time request" prohibited Bill from depleting the trust in "one fell swoop." This argument is flawed for at least two reasons. First, the parties agree that Bill made transfers from Trust A-2, totaling $420,000, prior to the disputed seven million dollar transfer. Thus, Bill did, in fact, withdraw monies from Trust A-2 "from time to time." Second, we conclude that the "from time to time" language was not intended by Elinor to serve as a limitation on Bill's right to withdraw amounts of principal from Trust A-2. The trust document manifests a clear intent to permit Elinor's husband to withdraw any and all monies from Trust A-2. To accept Tom's argument would mean that it would have been improper for Bill to request payment of all of the Trust A-2 assets at one time, but proper if he had requested payment of all but $10. We are unwilling to assume that Elinor intended such an illogical result. Other jurisdictions have addressed this issue and have reached the same conclusion. See, e.g., Hoffman v. McGinnes, 277 F.2d 598, 600-03 (3d Cir.1960) (trust provision stating "upon [the beneficiary's] request" trustees "shall pay to her from time to time any part of the principal of my estate she may desire" granted beneficiary unrestricted power exercisable at any time during her life to use all or any part of principal of trust); State Tax Comm'n v. New England Merchants Nat'l Bank of Boston, 355 Mass. 417, 245 N.E.2d 448, 449-50 (1969) (trust provision stating trustee "shall ... from time to time ... pay over such part or all of the principal... to [each beneficiary] as he or she may in writing request" permitted beneficiary to withdraw principal at any time and such withdrawal not dependent upon trustee exercising its discretion); In re Keen's Estate, 80 Pa. D. & C. 377 (Pa. Orphans' Ct.1951) (words "from time to time" did not diminish or qualify right to demand entire principal in lump sum).
Pursuant to terms of the trust agreement, Bill had the absolute right to withdraw all of the Trust A-2 assets. He cannot be found to have acted in bad faith by exercising that right. Conn. Bank & *325 Trust Co. v. Lyman, 148 Conn. 273, 170 A.2d 130 (1961).
Because we find that it was error for the trial court to set aside the seven million dollar transfer, we find it unnecessary to determine whether Bill properly exercised his power of appointment The trial court's order granting Tom's motion for partial summary judgment is hereby reversed.
REVERSED and REMANDED.
MONACO and COHEN, JJ., concur.
NOTES
[1] The power of appointment issue is only relevant to the resolution of this appeal if the seven million dollar transfer is found to be invalid. If the transfer is found to be proper, Trust A-2 would appear to be devoid of any assets. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573022/ | 2 So.3d 842 (2008)
James Randall MOON
v.
Mark R. PILLION.
1070124.
Supreme Court of Alabama.
July 11, 2008.
*844 Gregory C. Buffalow of Miller Hamilton Snider & Odom, LLC, Mobile for appellant.
Jessica M. McDill of Chason & Chason, P.C., Bay Minette, for appellee.
SEE, Justice.
James Randall Moon appeals from a partial summary judgment in favor of Mark R. Pillion on Moon's claims alleging abuse of process and malicious prosecution against Pillion stemming from a boundary dispute between the parties. We affirm.
Facts and Procedural History
Moon and Pillion are owners of adjoining properties that share a common wire fence for about 616 feet. Pillion purchased his property in 1992; Moon purchased his property in 1995. At the time the parties became neighbors, the fence was in place. Around 2000, the parties replaced the wire on the fence using the existing fence posts. In June 2005, Pillion commissioned a survey of his property. The surveyor placed boundary stakes at various points along the property line that indicated that the fence deviated from the property line by as much as 18 inches onto Pillion's property for a distance of about 425 feet. Pillion alleges that after he discovered that some of the survey stakes had been removed and tossed onto his side of the fence, he replaced the stakes and placed a 4-foot high metal "T-post" on Moon's side of the fence to mark the property line. On June 4, 2005, Moon telephoned the Baldwin County Sheriff's Department to report that Pillion had placed a fence post on Moon's property as a "booby trap" for Moon's children and animals. Officer Scott Boyd responded. After discussing the matter with both parties, Officer Boyd encouraged Pillion to paint the post a bright color to prevent injury to anyone. That same day, Pillion painted the post, and Moon removed the post and placed it under his barn. Pillion then contacted Officer Boyd regarding the missing post. Officer Boyd suggested that Pillion could swear out a criminal warrant against Moon for third-degree theft for taking the post. Pillion swore out a warrant against Moon for theft of "one property boundary marker post." After a trial, Moon was acquitted of the criminal charge, and he returned the post to Pillion.
In October 2005, Moon sued Pillion in the circuit court, alleging malicious prosecution, abuse of process, and trespass and seeking a judgment declaring the existing fence to be the true boundary line between the properties. In October 2006 Pillion moved for a partial summary judgment on the tort claims. The trial court granted the motion as to the malicious-prosecution and abuse-of-process claims. Thereafter, Moon voluntarily dismissed his trespass claim and withdrew his jury demand on the boundary-line dispute. The trial court, after a bench trial at which it considered ore tenus evidence, ruled that Pillion's *845 deed, which the surveyor had used to place the boundary stakes, and not the fence, reflected the true boundary between the properties. Moon now appeals the partial summary judgment as to the malicious-prosecution and abuse-of-process claims.
Issues
Moon presents two issues on appeal. First, Moon argues that the trial court erred in entering a summary judgment on his malicious-prosecution claim because, he says, there is a genuine issue of material fact as to whether Pillion acted in good faith in swearing out the criminal warrant against Moon for theft of the post. Moon also argues that the trial court erred in entering a summary judgment on his abuse-of-process claim because, he says, there is a genuine issue of material fact as to whether Pillion used the issuance of the criminal warrant against Moon for a wrongful purpose.
Standard of Review
"`On appeal, this Court reviews a summary judgment de novo.' DiBiasi v. Joe Wheeler Elec. Membership Corp., 988 So.2d 454, 459 (Ala.2008) (citing Ex parte Essary, 992 So.2d 5, 8 (Ala.2007)). In order to uphold a summary judgment, we must determine that `there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' Rule 56(c)(3), Ala. R. Civ. P. `When the movant makes a prima facie showing that those two conditions have been satisfied, the burden then shifts to the nonmovant to present substantial evidence creating a genuine issue of material fact.' Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So.2d 949, 952 (Ala.2004). Substantial evidence is `evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989); see also § 12-21-12(d), Ala. Code 1975. In reviewing a summary judgment, we must view the evidence in the light most favorable to the nonmovant. Johnny Ray Sports, Inc. v. Wachovia Bank, 982 So.2d 1067, 1071 (Ala. 2007). `Finally, this Court does not afford any presumption of correctness to the trial court's ruling on questions of law or its conclusion as to the appropriate legal standard to be applied.' DiBiasi, 988 So.2d at 459."
Catrett v. Baldwin County Elec. Membership Corp., 996 So.2d 196, 199 (Ala.2008).
Analysis
I.
Moon argues that the trial court erred in entering a summary judgment on his malicious-prosecution claim because, he says, a genuine issue of material fact remains as to whether Pillion acted in good faith.
"`The elements of malicious prosecution are: (1) a judicial proceeding initiated by the defendant, (2) the lack of probable cause, (3) malice, (4) termination in favor of the plaintiff, and (5) damage.'" Lee v. Minute Stop, Inc., 874 So.2d 505, 512 (Ala.2003) (quoting Cutts v. American United Life Ins. Co., 505 So.2d 1211, 1214 (Ala.1987)). However, we begin by noting that "`"`[m]alicious prosecution is an action disfavored in the law.'"'" Lee, 874 So.2d at 511 (quoting Mitchell v. Folmar & Assocs., LLP, 854 So.2d 1115, 1117 (Ala. 2003), quoting other cases). "`The reason for such disfavor is clear: "[P]ublic policy requires that all persons shall resort freely to the courts for redress of wrongs and to enforce their rights, and that this may be done without the peril of a suit for damages in the event of an unfavorable judgment by jury or judge."'" Mitchell, 854 *846 So.2d at 1117 (quoting Eidson v. Olin Corp., 527 So.2d 1283, 1284 (Ala.1988), quoting in turn Boothby Realty Co. v. Haygood, 269 Ala. 549, 554, 114 So.2d 555, 559 (1959)).
Moon appears to allege that the summary judgment entered on his malicious-prosecution claim was improper because, he says, there is a genuine issue of material fact as to the second element of malicious prosecution whether Pillion had probable cause for the issuance of a criminal warrant. "Probable cause is defined as `"[a] reasonable ground for suspicion, supported by circumstances sufficiently strong in themselves to warrant a cautious man in the belief that the person accused is guilty of the offense charged."'" Eidson, 527 So.2d at 1285 (quoting Parisian Co. v. Williams, 203 Ala. 378, 383, 83 So. 122, 127 (1919)). This Court has stated:
"The test that this Court must apply when reviewing the lack-of-probable-cause element in a malicious prosecution case in which summary judgment has been granted to a defendant is as follows: Can one or more undisputed facts be found in the record below establishing that the defendant acted in good faith on the appearance of things as they existed when suit was filed, based upon direct evidence, or upon circumstantial evidence and inferences that can reasonably be drawn therefrom? If so, then summary judgment in favor of the defendant on plaintiff's malicious prosecution count would be appropriate."
Eidson, 527 So.2d at 1285-86. In other words, "[i]f there are any undisputed facts of record establishing that [the defendant] had probable cause to bring the former action ... against [the plaintiff], then [the plaintiff] cannot recover for malicious prosecution and summary judgment is appropriate." Eidson, 527 So.2d at 1285. Moon admitted in his deposition that on June 4, 2005, after Officer Boyd had spoken with him and Pillion and Pillion had painted the post, he "went out there and [he] went to the house and got a pair of gloves and [he] pulled [the post] up .... [He] throwed it under the barn with a stack mower [he] had." In light of the undisputed fact that Moon had telephoned the sheriff to complain about the post and that the post was removed that same day after Pillion had painted it and placed it back on Moon's side of the fence, it is clear that Pillion had a reasonable ground for suspicion that Moon was guilty of theft of the post. Because Pillion had probable cause for swearing out the criminal warrant against Moon, Moon failed to prove lack of a probable cause for the underlying prosecution, and the summary judgment on the claim of malicious prosecution was appropriate. We, therefore, affirm the judgment of the trial court on that claim.
II.
Moon argues that the trial court erred in entering a summary judgment on his abuse-of-process claim because, Moon asserts, a genuine issue of material fact remains as to whether Pillion "`willfully made use of [the criminal action] for a purpose not justified by law.'" Moon's brief at 20 (quoting Drill Parts & Serv. Co. v. Joy Mfg. Co., 619 So.2d 1280, 1286 (Ala. 1993) (citations omitted)). "This Court has held that in order to prove the tort of abuse of process, a plaintiff must prove: `"(1) the existence of an ulterior purpose; 2) a wrongful use of process, and 3) malice."'" Preskitt v. Lyons, 865 So.2d 424, 430 (Ala.2003) (quoting Willis v. Parker, 814 So.2d 857, 865 (Ala.2001), quoting in turn C.C. & J., Inc. v. Hagood, 711 So.2d 947, 950 (Ala.1998)). Moon argues two facts in support of his allegation that Pillion committed a "wrongful use of process" by "attempting to use the criminal action to resolve a civil boundary dispute." *847 Moon's brief at 20. First, Moon alleges that when the parties were entering the courthouse on the day of the trial of the theft charge against him, he overheard Pillion tell a security guard that "he was here on a boundary line dispute." Second, Moon argues that Pillion "misrepresented to the criminal court that [Moon] had interfered with a `boundary' marker as opposed to a T-pole." Moon's brief at 20. We note that the T-pole apparently was used by Pillion to mark the boundary between the two properties.
This Court has stated that "abuse of process will not lie [where] no result was obtained that is unlawful or improperly attainable under the law." Dempsey v. Denman, 442 So.2d 63, 65 (Ala.1983). In this case, first, even though Moon alleges that Pillion accused him of stealing a "T-pole" in an attempt to resolve a boundary dispute, the record reflects that Moon was found not guilty of the charge of theft and that the criminal prosecution had no apparent effect on the settlement of the boundary dispute. Second, even viewing the factual allegations in the light most favorable to Moon, he "has not proved that [Pillion] pursued the [criminal] action `to obtain a result which the [criminal] process was not intended by law to effect.'" Willis v. Parker, 814 So.2d 857, 866 (Ala.2001) (quoting Dempsey, 442 So.2d at 65). We conclude, therefore, that the trial court did not err in entering a summary judgment in favor of Pillion on Moon's abuse-of-process claim.
Conclusion
Viewing the facts in the light most favorable to Moon, as we are required to do, we conclude that he has not demonstrated that there is a genuine issue of material fact as to either his claim of malicious prosecution or his claim of abuse of process. We therefore affirm the trial court's partial summary judgment in favor of Pillion.
AFFIRMED.
COBB, C.J., and LYONS, WOODALL, STUART, SMITH, BOLIN, PARKER, and MURDOCK, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573028/ | 2 So.3d 277 (2009)
PERRY
v.
STATE.
No. 5D07-4421.
District Court of Appeal of Florida, Fifth District.
January 20, 2009.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573067/ | 971 S.W.2d 557 (1998)
Suzette WILSON and Harry Wilson, Individually and as Next Friend of Joshua and Nicholas Wilson, Appellants,
v.
Mark L. KUTLER, M.D., Appellee.
No. 05-97-01342-CV.
Court of Appeals of Texas, Dallas.
January 6, 1998.
*558 Donna R. Morris, Patrick Allen Wright, Morris & Morris, Flower Mound, for Appellants.
Charles G. Bell, Gwinn & Roby, Dallas, for Appellee.
Before THOMAS and WHITTINGTON and BRIDGES, JJ.
OPINION
WHITTINGTON, Justice.
Appellee Mark L. Kutler, M.D. has filed a motion in this Court to dismiss this appeal for lack of jurisdiction. Appellee contends that appellants did not timely perfect their appeal, and thus failed to invoke this Court's jurisdiction. We agree and, accordingly, dismiss the appeal.
Factual Background
The controversy regarding the timeliness of the perfection of appellants' appeal arises out of the fact that two ostensibly final summary judgments were signed by the trial court. Appellee filed a motion for summary judgment on March 12, 1997. The presiding judge referred the motion to a master for a hearing. Although no written recommendation appears in the record, the parties agree, and the trial court's docket sheet reflects, that the master recommended granting the motion.
On April 23, 1997, appellants requested a hearing before the presiding judge on appellee's motion for summary judgment and the master's recommendation. A hearing date was set for June 6, 1997. On April 24, 1997, prior to conducting appellants' requested hearing, the trial court signed an order granting appellee's motion for summary judgment. Approximately two months later, on June 20, 1997, the trial court signed a second order. The order states that, after considering the summary judgment evidence and the argument of counsel, the court was of the opinion that the previously granted summary judgment should be affirmed. Appellants perfected their appeal on July 18, 1997.
Discussion
In his motion to dismiss for lack of jurisdiction, appellee contends the trial court's order signed on April 24, 1997, was a final, appealable judgment. Appellee further contends that the trial court's second judgment, signed two months later, was outside the trial court's plenary power and, therefore, void. See TEX.R. CIV. P. 329b. If the first judgment was final, appellants were required to perfect their appeal by May 26, 1997. See TEX.R.App. P. 41. Because appellants did not perfect their appeal until July 18, 1997, approximately three months after the first judgment was signed, appellee argues they failed to invoke this Court's jurisdiction.
Under chapter 54 of the Texas Government Code, certain district courts in Dallas County may refer matters before them to *559 qualified masters for consideration. Tex. Gov't Code Ann. §§ 54.501-506 (Vernon 1988). A referring court may adopt, modify, correct, reject, reverse, or recommit for further information the master's report. Id. § 54.513(a). However, "[a]fter receiving notice of the master's findings, any party is entitled to a hearing before the judge of the referring court." Id. § 54.514(a) (emphasis added). Appellants in this case invoked their right to a hearing before the presiding judge by filing a request for a hearing on appellee's motion for summary judgment and the master's recommendation.
A party's entitlement to a hearing before the judge of the referring court under section 54.514(a) is similar to the former provisions of the Texas Government Code regarding appeals of master's reports in family court. See Act of June 18, 1987, 70th Leg., R.S., ch. 674, § 3.02, 1987 Tex. Gen. Laws 2507, 2519-20, repealed by Act of April 20, 1995, 74th Leg., R.S., ch. 20, § 2(3), 1995 Tex. Gen. Laws 113, 282 (current version at TEX. FAM. CODE ANN. § 201.015 (Vernon 1996)). Under former section 54.012, any party was entitled to a hearing before the judge of the referring court if, within three days after the master submitted his report, an appeal of the report was filed with the referring court. Id. In construing this provision, the Texas Supreme Court concluded it was error for a referring court to enter a final judgment without conducting a properly requested hearing. State ex rel. Latty v. Owens, 907 S.W.2d 484, 485 (Tex.1995). Although the judgment entered prior to conducting the requested hearing was erroneous, the supreme court further concluded the judgment was final and appealable. Id. The mere failure to follow proper procedure did not render the judgment void. Id.
Similarly, in this case we conclude that the trial court's order signed on April 24, 1997 was a final and appealable judgment. It purports to dispose of all issues and parties. See id. Although the trial court should have conducted the hearing requested by appellants prior to entering the order, such failure does not render the judgment void. See id. It appears that the trial court attempted to correct its error in failing to conduct the requested hearing by entering the second judgment. Because the April 24 judgment is final, however, the trial court's order of June 20, 1997 is a nullity. See TEX.R. CIV. P. 329b.
Appellants urge us to treat their request for a hearing as a motion for new trial and thereby extend the appellate timetable. See Tex.R.App. P. 41. Appellants argue that their motion requesting a hearing was effective as a motion for new trial even though it was both "misnamed" and "premature." It is true that the court must look to the content of a filing rather than its title to determine its nature. TEX.R. CIV. P. 71. In this case, however, the title of appellants' motion accurately reflects its substance and the relief sought. Nothing in the body of appellants' request for a hearing suggests that it was intended to function as a motion for new trial. The motion requests relief under chapter 54 in the form of a hearing prior to entry of the final judgment. Appellants sought review of appellee's motion for summary judgment and the master's recommendation, not of a judgment. Accordingly, appellants' motion is in neither form nor substance a motion for new trial.
Because no motion for new trial was filed, appellants' appeal bond was due within thirty days after the final judgment was signed. TEX.R.App. P. 41. Because the final judgment in this case was signed on April 24, 1997, appellants' bond was due to be filed no later than May 26, 1997. Appellants' failure to file their appeal bond by that date creates a jurisdictional defect in the appeal. See Fite v. Johnson, 654 S.W.2d 51, 52 (Tex. App.Dallas 1983, no writ). We grant appellee's motion to dismiss and dismiss this appeal for want of jurisdiction. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572972/ | 2 So. 3d 274 (2009)
ROBERTSON
v.
STATE.
No. 4D07-4754.
District Court of Appeal of Florida, Fourth District.
February 4, 2009.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1572985/ | 2 So. 3d 655 (2008)
Charlie SAWYER a/k/a Charlie Sawyer, Jr., Appellant,
v.
STATE of Mississippi, Appellee.
No. 2007-KA-00136-COA.
Court of Appeals of Mississippi.
July 1, 2008.
Rehearing Denied October 28, 2008.
Certiorari Denied February 26, 2009.
*656 William R. Labarre, Virginia Lynn Watkins, Attorneys for Appellant.
Office of the Attorney General by Billy L. Gore, Attorney for Appellee.
Before KING, C.J., GRIFFIS and CARLTON, JJ.
GRIFFIS, J., for the Court.
¶ 1. Charlie Sawyer was convicted in the Circuit Court of Hinds County of armed robbery, in violation of Mississippi Code Annotated section 97-3-79 (Rev.2006), and of possession of a firearm as a convicted felon, in violation of Mississippi Code Annotated section 97-37-5 (Rev.2006). Sawyer was subject to enhanced penalties as a habitual offender under Mississippi Code Annotated section 99-19-83 (Rev.2007). On appeal, Sawyer argues that his case should be reversed and remanded for a new trial because the trial court abused its discretion: (1) when it denied his motion to sever the counts against him, (2) when it did not require the State to agree to his stipulation, and (3) when it denied his Batson challenge by accepting the prosecutor's reasons for why she exercised her peremptory challenges as being race-neutral.
FACTS
¶ 2. On June 3, 2005, Alfred Jacobs attempted to purchase food at Ellis Seafood in Jackson, Mississippi. While placing his order at the drive-thru menu board, Jacobs was robbed at gunpoint by two men.
¶ 3. On June 11, 2005, the employees of Ellis Seafood observed an armed man in the bushes outside of their restaurant and called the police. The police officers arrived and surrounded the armed man and arrested him. The officers determined that the armed individual was Sawyer. Sawyer had previously been convicted of two armed robberies.
¶ 4. Detective Brad Davis, who was assigned to the June 3, 2005, robbery, called Jacobs and asked him to review a photographic lineup. After examining the photographic lineup, Jacobs immediately identified Sawyer as one of the individuals who had robbed him on June 3, 2005.
¶ 5. Sawyer was charged with armed robbery and possession of a firearm as a convicted felon. Sawyer filed a motion to sever the trial on the count of armed robbery and the count of possession of a firearm as a convicted felon. Sawyer argued that the probative value of his prior convictions for armed robbery was "substantially outweighed by the danger of unfair prejudice." M.R.E. 403. At the hearing on the motion, counsel for Sawyer argued that if the trial court determined that severance was not appropriate, then Sawyer would stipulate to two prior felony convictions. The State rejected the stipulation. *657 The trial court denied the motion to sever and did not allow Sawyer to stipulate to his prior convictions. It is from this issue that the Court has determined that the case must be reversed and remanded for a new trial.
ANALYSIS
I. Should the trial court have severed the two counts?
¶ 6. Sawyer argues that the trial court should have severed the two counts against him because the jury would automatically infer that he was guilty of Count I, armed robbery, when the jury heard the evidence of his previous convictions for armed robbery, which were necessary to establish the elements of Count II, possession of a firearm as a convicted felon.
¶ 7. The standard of review for consideration of the trial court's decision on a motion for severance is abuse of discretion. Rushing v. State, 911 So. 2d 526, 532(¶ 12) (Miss.2005). The trial judge is required to conduct a Corley hearing on the motion. Id. at 533(¶ 14).
¶ 8. In Corley v. State, 584 So. 2d 769, 772 (Miss.1991), the Mississippi Supreme Court established the procedure a trial court should follow when a party moves to sever the counts in an indictment. Pursuant to the holding in Corley, the State has the burden, during a Corley hearing, of making out a prima facie case that the offenses charged are within Mississippi Code Annotated section 99-7-2 (Rev.2007). See id. "If the State meets its initial burden, the defendant may thereafter rebut the State's case by showing the `offenses were separate and distinct acts or transactions.'" Rushing, 911 So.2d at 533(¶ 14) (quoting Corley, 584 So.2d at 772). Under Corley, the trial court must weigh the following: "whether the time period between the occurrences is insignificant, whether the evidence proving each count would be admissible to prove each of the other counts, and whether the crimes are interwoven." Corley, 584 So.2d at 772. After reviewing the record, we find that the trial court in the instant case did indeed conduct a Corley hearing. Therefore, we will review this case under a Corley analysis.
¶ 9. For Counts I and II to be tried together, the trial judge must first determine that the time period between the two crimes is insignificant. Id. In Sawyer's indictment, he was charged with having committed both crimes on June 3, 2005.[1] Because one crime is armed robbery and the other is possession of a firearm as a convicted felon, there is little doubt that both crimes occurred simultaneously, and the first factor has been met under Corley.
¶ 10. Next, the trial court must determine if the evidence to prove the armed robbery count would be used to prove the felon in possession of a firearm count. Obviously, the evidence from Count I would be admissible in Count II because both crimes require that the State prove that Sawyer had possession of a firearm, and both crimes happened at exactly the same time. Indeed, the evidence necessary to prove Count I is admissible to prove Count II. Furthermore, Corley states, "[w]hether the evidence would be admissible under [Mississippi Rule of Evidence 404(b)] has no bearing on whether the trial court should allow a multi-count indictment." *658 Id. at 772 n. 1. Thus, we find that the evidence in one count may be used to prove the other count and that we need not address any Rule 404(b) implications here.
¶ 11. Finally, the trial court must determine whether or not the crimes are interwoven. The crimes here are clearly interwoven because they occurred at the exact same time and both depend on the fact that Sawyer possessed a firearm. See, e.g., Harris v. State, 908 So. 2d 868, 875(¶ 25) (Miss.Ct.App.2005). Therefore, we cannot find that the trial judge abused his discretion in denying Sawyer's motion for severance under Corley.
¶ 12. However, as mentioned above, Corley does not address the implications of Mississippi Rule of Evidence 404(b). Since the following section analyzes the reasons for reversal and remand for a new trial, the trial court may reconsider whether severance is appropriate at the retrial of this case.
II. Should the trial court have made the State agree to Sawyer's stipulation?
¶ 13. During the Corley hearing, Sawyer's counsel made the alternative argument that Sawyer would stipulate that he was a convicted felon. This stipulation would establish Sawyer's status as a prior convicted felon, the first element of the crime of possession of a firearm as a convicted felon.[2] Sawyer argued that, without this stipulation, the State would offer his two prior convictions for armed robbery as evidence, and the jury would then infer that he was guilty of armed robbery on June 3, 2005, because of his previous armed robbery convictions.
¶ 14. We review the trial court's "rulings on the admission or exclusion of evidence for abuse of discretion. An error in the admission or exclusion of evidence is not grounds for reversal unless the error affected a substantial right of a party." Williams v. State, 960 So. 2d 506, 510(¶ 11) (Miss.Ct.App.2006) (citation omitted).
¶ 15. Character evidence is not admissible to prove that one acted in conformity therewith on a particular occasion. M.R.E 404(a). Under Rule 404(b) of the Mississippi Rules of Evidence, "[e]vidence of other crimes, wrongs or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith." Evidence of other crimes or bad acts may be admissible to prove identity, knowledge, intent, motive, opportunity, or preparation. M.R.E. 404(b).
¶ 16. Upon finding that the evidence is admissible under Mississippi Rule of Evidence 404(b) or otherwise, a court must still consider whether the evidence passes the Rule 403 filter. Rule 403 provides that otherwise admissible evidence may be excluded where the risk of undue prejudice substantially outweighs the probative value of the evidence.
¶ 17. Sawyer argues that Rule 404(b) prohibits the introduction of his prior convictions. The State argues that the evidence of the prior convictions is not offered to prove Sawyer's character or that he acted in conformity therewith. Instead, the State argues that evidence of the prior convictions is necessary to establish the first element of the crime of possession of a firearm as a convicted felon, in violation of Mississippi Code Annotated section 97-37-5.
*659 ¶ 18. At trial, Sawyer relied on the United States Supreme Court decision in Old Chief v. United States, 519 U.S. 172, 117 S. Ct. 644, 136 L. Ed. 2d 574 (1997). In Old Chief, the defendant was charged with "assault with a dangerous weapon[,] using a firearm in relation to a crime of violence[, and] violation of 18 U.S.C. § 922(g)(1)." Id. at 174, 117 S. Ct. 644. Section 922(g)(1) is similar to our felon in possession of a firearm statute.
¶ 19. Old Chief had previously been convicted of "assault causing serious bodily injury." Id. at 175, 117 S. Ct. 644. Prior to trial, Old Chief moved the trial court to exclude any mention of his previous conviction for assault, and he "offered to `solve the problems here by stipulating, agreeing and requesting the Court to instruct the jury that he has been convicted of a crime punishable by imprisonment exceeding one (1) year.'" Id. "The Assistant United States Attorney refused to join in a stipulation, insisting on his right to prove his case his own way, and the District Court agreed. . . . At trial, over renewed objection, the Government introduced the order of judgment and commitment for Old Chief's prior conviction." Id. at 177, 117 S. Ct. 644.
¶ 20. After a thorough analysis of the common law and Federal Rules of Evidence 403 and 404(b), the Supreme Court held:
Given these peculiarities of the element of felony-convict status and of admissions and the like when used to prove it, there is no cognizable difference between the evidentiary significance of an admission and of the legitimately probative component of the official record the prosecution would prefer to place in evidence. For purposes of the Rule 403 weighing of the probative against the prejudicial, the functions of the competing evidence are distinguishable only by the risk inherent in the one and wholly absent from the other. In this case, as in any other in which the prior conviction is for an offense likely to support conviction on some improper ground, the only reasonable conclusion was that the risk of unfair prejudice did substantially outweigh the discounted probative value of the record of conviction, and it was an abuse of discretion to admit the record when an admission was available.
Id. at 191, 117 S. Ct. 644.
¶ 21. The State responded that "I don't know what case [the defense attorney] has, but we all knowand I don't even know what district she is citing out of. Looks like Florida, I guess. . . . But we all know that if their [sic] citing to a Florida law, I mean you don't know what's applicable or not, but this is Mississippi state law. . . ." The trial court accepted the State's argument that it must be bound by Mississippi law and not Florida law.
¶ 22. The State's argument was that it did not have to agree to the stipulation and the court cannot force the State to accept the stipulation. At trial, the prosecutor cited Evans v. State, 802 So. 2d 137 (Miss. Ct.App.2001) as the controlling authority. Indeed, in Evans, citing Mississippi Code Annotated section 97-37-5, this Court held that the State is not limited by "the methods by which it may prove the prior conviction(s)." Evans, 802 So.2d at 140(¶ 7).
¶ 23. The prosecutor also cited Carter v. State, 953 So. 2d 224 (Miss.2007) as controlling authority. Ricky Carter was charged with and convicted of attempted burglary of a dwelling and was sentenced as a habitual offender to serve twenty-five years in custody. Carter, 953 So.2d at 225(¶ 1). At trial, the court admitted, over objection, evidence that Carter had six prior burglary or grand larceny convictions. Id. at 227 (¶¶ 6-7). The State argued that the prior convictions were offered under *660 Rule 404(b) to prove the element of intent. Carter, 953 So.2d at 231(¶ 17). The supreme court held that the trial court did not abuse its discretion in admitting Carter's prior felony convictions into evidence. Id. The supreme court determined that the factual circumstances required that the prior convictions be admitted to show that Carter had the intent to take, steal, and carry away; and the convictions were not used as character evidence. Id. at 229(¶ 11).
¶ 24. Carter's defense to the attempted burglary charge was that he was looking for a job and was lost. Id. at 226(¶ 2). Carter argued that the admission of prior convictions was unduly prejudicial, even though the jury would have to determine Carter's "intent, namely, whether it was burglarious or whether he was merely a trespasser gone horribly awry." Id. at 229(¶ 12). The supreme court determined that the jury must determine Carter's intent, and his prior convictions were permitted for the limited purpose to establish intent under Rule 404(b). Id. at 231(¶ 17). Thus, the supreme court found that the trial court did not abuse its discretion in admitting Carter's prior felony convictions into evidence. Id.
¶ 25. The appellate brief filed on behalf of the State of Mississippi by the Attorney General does not cite either Evans or Carter as authority for this Court to follow in deciding this appeal. Astonishingly, the State does not even cite Old Chief or attempt to respond to Sawyer's argument on Mississippi Rule of Evidence 403 or 404. Instead, the State offers the following:
We are aware of [the] appellant's concern that a jury might be inclined to reason that Sawyer must be guilty "here and now" of the armed robbery [as] charged in Count I because he had been twice previously convicted "then and there" of the armed robberies [as] charged in Count II.
It seems as though the State, without specifically stating it, concedes that the trial court may have been in error. The State's only argument is to provide us with a concise recitation of the law on limiting instructions. We do not believe a limiting instruction would cure the error committed here.
¶ 26. Old Chief interprets the Federal Rules of Evidence. The Mississippi Supreme Court, however, has stated:
Though a few differences exist, the Mississippi Rules of Evidence are generally the same as the Federal Rules of Evidence. In construing the Mississippi Rules of Evidence, this Court has generally cited federal case law which interpreted the federal rule corresponding with the Mississippi [R]ule of Evidence at issue in the case.
Hall v. State, 691 So. 2d 415, 420 n. 3 (Miss.1997).
¶ 27. Unlike Carter, the State here does not offer Sawyer's two prior convictions for armed robbery as an exception under Rule 404(b), i.e., "motive opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident." M.R.E. 404(b). Instead, the State sought to establish one of the elements of the crime of possession of a firearm as a convicted felon pursuant to Mississippi Code Annotated section 97-37-5.
¶ 28. The facts presented here are identical to the facts in Old Chief. We therefore conclude that the United States Supreme Court's opinion in Old Chief governs the outcome. Indeed, it would be difficult, if not impossible, for the jury to put aside evidence in Count II that Sawyer had twice before committed armed robbery when it considered Count I, regarding Sawyer's guilt of armed robbery on June 3, 2005. As in Old Chief, we find *661 that the probative value of Sawyer's prior armed robbery convictions is substantially outweighed by the danger of unfair prejudice because the jury would use Sawyer's prior convictions as evidence in considering Count I. M.R.E. 403. Thus, we find that the trial court abused its discretion when it allowed evidence of Sawyer's two prior convictions of armed robbery to be admitted into evidence when a valid stipulation was available. Accordingly, we reverse and remand this case for a new trial.
III. Did the State commit a Batson violation?
¶ 29. Given our holding to reverse and remand for a new trial on other grounds, Sawyer's claim that there was a Batson violation is now moot.
CONCLUSION
¶ 30. Even though we find that the trial court properly applied the test in Corley, we remind the trial court that it "may, on motion of the state or defendant, grant a severance of offenses whenever . . . it is deemed appropriate to promote a fair determination of the defendant's guilt or innocence of each offense. . . ." URCCC 9.03 (emphasis added). After reviewing Old Chief, we find that the trial court abused its discretion because it should have either severed the two counts and tried them separately, or the court should have made the State accept Sawyer's stipulation if the State still desired to try the two counts together.
¶ 31. THE JUDGMENT OF THE CIRCUIT COURT OF HINDS COUNTY IS REVERSED AND REMANDED FOR A NEW TRIAL CONSISTENT WITH THIS OPINION. ALL COSTS OF THIS APPEAL ARE ASSESSED TO HINDS COUNTY.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, CHANDLER, BARNES, ISHEE AND CARLTON, JJ., CONCUR. ROBERTS, J., CONCURS IN RESULT ONLY.
NOTES
[1] From the record, it appears that the district attorney did not charge Sawyer as a felon in possession of a firearm on the day he was arrested. The indictment could have charged Sawyer for possession of a firearm as a convicted felon on June 11, 2005, the day that he was arrested. Nevertheless, Sawyer's charge was based on the State proving that he was in possession of a firearm on June 3rd, when he allegedly robbed Jacobs.
[2] Under Mississippi Code Annotated section 97-37-5(1) (Supp.2007), "[i]t shall be unlawful for any person who has been convicted of a felony under the laws of this state . . . to possess any firearm. . . ." The statute also provides the following penalty upon conviction of a maximum fine of $5,000 or a sentencing range of one to ten years, or both a fine and imprisonment. Miss.Code Ann. § 97-37-5(2) (Supp.2007). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2584903/ | 187 P.3d 268 (2008)
163 Wash.2d 1039
GLASSER
v.
CITY OF SEATTLE.
No. 80578-4.
Supreme Court of Washington, Department I.
June 3, 2008.
Disposition of petition for review. Denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1577247/ | 35 So. 3d 1103 (2010)
STATE of Louisiana
v.
Jauve COLLINS.
No. 2009 KA 1617.
Court of Appeal of Louisiana, First Circuit.
February 12, 2010.
*1105 Richard J. Ward, Jr.,[1] District Attorney, Elizabeth A. Engolio, Assistant District Attorney, Plaquemine, LA, Attorneys for State of Louisiana.
Frederick Kroenke, Louisiana Appellate Project, Baton Rouge, LA, Attorney for Defendant-Appellant, Jauve Collins.
Before PARRO, KUHN, and McDONALD, JJ.
PARRO, J.
The defendant, Juave Collins, was charged by grand jury indictment with second degree murder, in violation of LSA-R.S. 14:30.1. The defendant pled not guilty, but was found guilty as charged after a jury trial. The defendant was sentenced to life imprisonment at hard labor without the benefit of probation, parole, or suspension of sentence. The defendant now appeals, assigning error as to the constitutionality of the sentence imposed and the effectiveness of counsel. For the *1106 following reasons, we affirm the conviction and sentence.
STATEMENT OF FACTS
On or about February 26, 2007, after 8:30 p.m., the Baton Rouge City Police Department responded to the shooting of an elderly victim, Henry Bellaire, at 221 River Crest Avenue in Baton Rouge. The victim's daughter, Gaylyn Bellaire, was present at the time of the shooting. Gaylyn testified that she routinely called home, as instructed by the victim, when she was within close proximity so he could meet her outside. Just before the shooting took place, Gaylyn called home and informed her parents that she was near the residence.
As she approached the residence, Gaylyn observed three black males walking towards her home. Gaylyn pulled into the driveway and began carrying groceries into the residence. The victim opened the garage door and came out to assist her. When Gaylyn went back outside to retrieve more groceries, one of the males approached her father and stated, "Give me all your money." The victim stated that he did not have any money, and the individual shot him. Gaylyn called for emergency assistance.
Gaylyn identified the defendant as the shooter, who was sixteen years old at the time of the shooting. The victim suffered a gunshot wound to the chest and died as a result. The other two black males at the scene of the shooting with the defendant, Tedrick Davis and Jonathan Dunn, also testified that the defendant was the person who shot the victim after attempting to rob him.
ASSIGNMENTS OF ERROR NUMBERS ONE AND TWO
In assignment of error number one, the defendant contends that the trial court erred in imposing an unconstitutionally excessive punishment. The defendant contends that this case confirms the inherent difficulties in sentencing a juvenile to life imprisonment without parole. The defendant notes that the trial judge concluded that he was incapable of ever being rehabilitated even though he had never been convicted before committing this crime at the age of sixteen. The defendant cites Roper v. Simmons, 543 U.S. 551, 125 S. Ct. 1183, 161 L. Ed. 2d 1 (2005), noting that the United States Supreme Court held that juvenile offenders have diminished culpability and concluded that a sentencing judge could not reliably predict a juvenile's potential for rehabilitation and deterrence. The defendant notes that the defendant in Roper was sentenced to death as opposed to life imprisonment, but argues that the analysis in that case is still applicable to the instant case. In the second assignment of error, the defendant argues that in the event this court finds that the excessive sentence argument raised in assignment of error number one cannot be reviewed due to the lack of a motion to reconsider sentence, the failure of his trial counsel to file the motion constitutes ineffective assistance of counsel.
One purpose of the motion to reconsider sentence is to allow the defendant to raise any errors that may have occurred in sentencing while the trial judge still has the jurisdiction to change or correct the sentence. The defendant may point out such errors or deficiencies, or may present argument or evidence not considered in the original sentencing, thereby preventing the necessity of a remand for resentencing. State v. Mims, 619 So. 2d 1059 (La.1993) (per curiam). Under the clear language of LSA-C.Cr.P. art. 881.1(E), failure to make or file a motion to reconsider sentence precludes a defendant from raising an objection *1107 to the sentence on appeal, including a claim of excessiveness. As noted by the defendant, a motion to reconsider sentence was not filed in this case. Accordingly, the defendant is procedurally barred from having his challenge to the sentence, raised in assignment of error number one, reviewed by this court on appeal. State v. Felder, 00-2887 (La.App. 1st Cir.9/28/01), 809 So. 2d 360, 369, writ denied, 01-3027 (La.10/25/02), 827 So. 2d 1173.
As noted, in assignment of error number two, the defendant argues that his trial counsel was ineffective in failing to file a motion to reconsider sentence. In the interest of judicial economy, we choose to consider the defendant's excessiveness argument in order to address the claim of ineffective assistance of counsel. See State v. Wilkinson, 99-0803 (La.App. 1st Cir.2/18/00), 754 So. 2d 301, 303, writ denied, 00-2336 (La.4/20/01), 790 So. 2d 631.
As a general rule, a claim of ineffective assistance of counsel is more properly raised in an application for post-conviction relief in the trial court rather than on appeal. This is because post-conviction relief provides the opportunity for a full evidentiary hearing under LSA-C.Cr.P. art. 930.[2] However, when the record is sufficient, this court may resolve this issue on direct appeal in the interest of judicial economy. State v. Lockhart, 629 So. 2d 1195, 1207 (La.App. 1st Cir. 1993), writ denied, 94-0050 (La.4/7/94), 635 So. 2d 1132.
The claim of ineffective assistance of counsel is to be assessed by the two-part test of Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984). The defendant must show that counsel's performance was deficient and that the deficiency prejudiced him. Counsel's performance is deficient when it can be shown that he made errors so serious that he was not functioning as the "counsel" guaranteed to the defendant by the Sixth Amendment. Counsel's deficient performance will have prejudiced the defendant if he shows that the errors were so serious as to deprive him of a fair trial. The defendant must make both showings to prove that counsel was so ineffective as to require reversal. Strickland, 466 U.S. at 687, 104 S.Ct. at 2064. To carry his burden, the defendant "must show that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome." Strickland, 466 U.S. at 694, 104 S.Ct. at 2068.
The failure to file a motion to reconsider sentence in itself does not constitute ineffective assistance of counsel. Felder, 809 So.2d at 370. However, if the defendant can show a reasonable probability that, but for counsel's error, his sentence would have been different, a basis for an ineffective assistance claim may be found. Thus, the defendant must show that but for his counsel's failure to file a motion to reconsider sentence, the sentence would have been changed, either in the trial court or on appeal. Felder, 809 So.2d at 370.
The Eighth Amendment to the United States Constitution and Article I, Section 20, of the Louisiana Constitution prohibit the imposition of excessive punishment. Although a sentence falls within statutory limits, it may be excessive. State v. Sepulvado, 367 So. 2d 762, 767 *1108 (La.1979). A sentence is considered constitutionally excessive if it is grossly disproportionate to the seriousness of the offense or is nothing more than a purposeless and needless infliction of pain and suffering. A sentence is considered grossly disproportionate if, when the crime and punishment are considered in light of the harm done to society, it shocks one's sense of justice. State v. Andrews, 94-0842 (La.App. 1st Cir.5/5/95), 655 So. 2d 448, 454. The trial court has great discretion in imposing a sentence within the statutory limits, and such a sentence will not be set aside as excessive in the absence of a manifest abuse of discretion. See State v. Holts, 525 So. 2d 1241, 1245 (La.App. 1st Cir. 1988). Louisiana Code of Criminal Procedure article 894.1 sets forth the factors for the trial court to consider when imposing sentence. While the entire checklist of LSA-C.Cr.P. art. 894.1 need not be recited, the record must reflect the trial court adequately considered the criteria. State v. Brown, 02-2231 (La.App. 1st Cir.5/9/03), 849 So. 2d 566, 569.
In State v. Dorthey, 623 So. 2d 1276, 1280-81 (La.1993), the Louisiana Supreme Court recognized that if a trial judge determines that the punishment mandated by the Habitual Offender Law makes no measurable contribution to acceptable goals of punishment or that the sentence amounts to nothing more than the purposeful imposition of pain and suffering and is grossly out of proportion to the severity of the crime, he is duty bound to reduce the sentence to one that would not be constitutionally excessive. However, the holding in Dorthey was made only after, and in light of, express recognition by the court that the determination and definition of acts that are punishable as crimes is purely a legislative function. It is the legislature's prerogative to determine the length of the sentence imposed for crimes classified as felonies. Moreover, courts are charged with applying these punishments unless they are found to be unconstitutional. Dorthey, 623 So.2d at 1278.
In State v. Johnson, 97-1906 (La.3/4/98), 709 So. 2d 672, 676, the Louisiana Supreme Court reexamined the issue of when Dorthey permits a downward departure from a mandatory minimum sentence, albeit in the context of the Habitual Offender Law. The court held that to rebut the presumption that the mandatory minimum sentence was constitutional, the defendant had to "clearly and convincingly" show that:
[he] is exceptional, which in this context means that because of unusual circumstances this defendant is a victim of the legislature's failure to assign sentences that are meaningfully tailored to the culpability of the offender, the gravity of the offense, and the circumstances of the case.
Johnson, 709 So.2d at 676. A trial judge may not rely solely upon the nonviolent nature of a crime before the court or of past crimes as evidence that justifies rebutting the presumption of constitutionality. Johnson, 709 So.2d at 676. While both Dorthey and Johnson involve the mandatory minimum sentences imposed under the Habitual Offender Law, the Louisiana Supreme Court has held that the sentencing review principles espoused in Dorthey are not restricted in application to the penalties provided by LSA-R.S. 15:529.1. See State v. Fobbs, 99-1024 (La.9/24/99), 744 So. 2d 1274 (per curiam); State v. Henderson, 99-1945 (La.App. 1st Cir.6/23/00), 762 So. 2d 747, 760 n. 5, writ denied. 00-2223 (La.6/15/01), 793 So. 2d 1235; State v. Davis, 94-2332 (La.App. 1st Cir.12/15/95), 666 So. 2d 400, 407-08, writ *1109 denied. 96-0127 (La.4/19/96), 671 So. 2d 925.
At the outset, we reject any argument that the United States Supreme Court's analysis in Roper applies with equal force to the instant case, as the court in that case was specifically analyzing whether the death penalty is a disproportionate punishment for juveniles. The court specifically held that once the diminished culpability of juveniles is recognized, it is evident that the penological justifications for the death penalty apply to them with lesser force than to adults. Moreover, in Roper the Supreme Court affirmed the Missouri Supreme Court's setting aside the defendant's death sentence and resentencing him to "life imprisonment without eligibility for probation, parole, or release except by act of the Governor." Roper, 543 U.S. at 560, 125 S.Ct. at 1189.
In imposing sentence in this case, the trial court listened to an impact statement by the victim's wife, Elizabeth Bellaire. Elizabeth stated, in part, that the victim was a church-going person and family man and that his death caused trauma to their close-knit family. The trial court noted that the defendant showed a deliberate cruelty to the victim and found any lesser sentence than the mandatory sentence would deprecate the seriousness of the offense. The trial court also took into consideration that the defendant is a youthful offender, sixteen at the time of the offense, but also noted that the defendant is a violent person.
Although the defendant was only sixteen at the time of the offense, he has failed to show how his youth justified a deviation from the mandatory sentence. See State v. Crotwell, 00-2551 (La.App. 1st Cir.11/9/01), 818 So. 2d 34, 46; Henderson, 762 So.2d at 760-61. The defendant did not present any particular facts regarding his family history or special circumstances that would support a deviation from the mandatory sentence provided in LSA-R.S. 14:30.1(B). Based on the record before us, we find that the defendant has failed to show that he is exceptional or that the mandatory life sentence is not meaningfully tailored to his culpability, the gravity of the offense, and the circumstances of the case. Thus, we do not find that a downward departure from the mandatory life sentence was required in this case. The sentence imposed is not excessive and assignment of error number one lacks merit. Even if we were to conclude that the defendant's trial counsel performed deficiently in not filing a motion to reconsider sentence, the defendant fails to show that he was prejudiced in this regard. Thus, the ineffective assistance of counsel argument raised in assignment of error number two is without merit. Accordingly, we affirm the conviction and sentence.
CONVICTION AND SENTENCE AFFIRMED.
NOTES
[1] After the District Attorney of the Nineteenth Judicial District recused himself and his office in this matter, the Attorney General of the State of Louisiana appointed Richard J. Ward, Jr., District Attorney of the Eighteenth Judicial District, to act in the place of the recused District Attorney.
[2] The defendant would have to satisfy the requirements of LSA-C.Cr.P. art. 924 et seq., to receive such a hearing. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917896/ | 272 So.2d 167 (1973)
VALLEYBROOK DEVELOPERS, INC., a Florida Corporation, et al., Petitioners,
v.
GULF POWER COMPANY, a Corporation, Respondent.
No. R-440.
District Court of Appeal of Florida, First District.
January 25, 1973.
*168 James E. Moore, Jr., and D. Michael Chesser, of Moore & Dewrell, Niceville, for petitioners.
W. Spencer Mitchem, of Beggs, Lane, Daniel, Gaines & Davis, Pensacola, for respondent.
RAWLS, Judge.
Petitioners, Valleybrook Developers, Inc., and others, by petition for a writ of common law certiorari seek to set aside an order of taking rendered by the Circuit Court of Santa Rosa County.
Respondent, Gulf Power Company, contends that a petition for certiorari will not lie to review an interlocutory order. Such contention is without merit. Section 74.061, Florida Statutes, F.S.A., provides in part: "(1) Immediately upon the making of the deposit, the title or interest specified in the petition shall vest in the petitioner, and the said lands shall be deemed to be condemned and taken for the use of the petitioner, ..." (Emphasis supplied.) Thus, the instant order of taking, pursuant to the grace of the sovereign, has in a "quick proceeding" wrested the interest in lands sought by petitioner from the landowner. After the condemnor's bulldozers have desecrated the landscape long prior to final judgment, can it be logically argued that a conveyance of the landowner's interest without his consent is such an injury that may be remedied by an appeal from final judgment? We hold not. Common law certiorari is the proper procedure to review an order of taking in an eminent domain proceeding. Clark v. Gulf Power Company;[1] Couse v. Canal Authority;[2] and Georgia Southern & Florida Railway Company v. Duval Connecting Railroad Company.[3]
The following point posed by petitioners merits our consideration, viz.: Was there substantial evidence to support the finding of the Circuit Court of Santa Rosa County, Florida, that the respondent had *169 made a good faith estimate of the value of each parcel in the proceeding?
Section 74.031, Florida Statutes, F.S.A., entitled "Declaration of taking, contents" provides in part: "... The petitioner shall make a good faith estimate of value, based upon a valid appraisal of each parcel in the proceeding, ..." The sole witness who testified on behalf of the condemnor as to "good faith estimate" was a Mr. Kempson, Manager of the Land Department of Gulf Power Company. This witness on direct examination stated that a Mr. Adkinson, a MAI, made an appraisal of the Valleybrook parcels and, over objection, Mr. Kempson testified as to amounts. On cross examination, he testified that he could not remember the dates of Adkinson's appraisals; he had received the appraisals by telephone and was billed on December 20, 1971; the appraisals were made some time prior to that date; and to his knowledge the appraisals had not been brought up to date. The trial court denied petitioners' motion to strike the foregoing testimony and entered the controverted order of taking.
Strict compliance of the law is required when public utilities utilize the sovereign's grant of the right of eminent domain.[4] The taking of private property is not a ministerial act. A purpose of stating a "good faith estimate" in the declaration of taking is to fix a basis for withdrawal by the owner from the deposit, so that the owner will have the use of the money as the petitioner has the use of the land.[5] The landowner is entitled to a good faith estimate of value, based upon a valid appraisal of each parcel. The instant order of taking was entered by the trial judge solely upon the testimony of a witness that a qualified appraiser told him in a telephone conversation more than six months prior to the hearing on the order of taking[6] that such-and-such amounts were reasonable. Private land, even in this era of governmental edicts, cannot be seized upon such hearsay testimony.
The order of taking as to petitioners' lands is reversed and the cause remanded.
SPECTOR, C.J., and JOHNSON, J., concur.
NOTES
[1] Clark v. Gulf Power Company, 198 So.2d 368 (1 Fla.App. 1967).
[2] Couse v. Canal Authority, 209 So.2d 865 (Fla. 1968).
[3] Georgia Southern & Florida Railway Company v. Duval Connecting Railroad Company, 187 So.2d 405 (1 Fla.App. 1966).
[4] Marvin v. Housing Authority of Jacksonville, 133 Fla. 590, 183 So. 145 (1938).
[5] 5 Nichols' Eminent Domain § 18.7, p. 18-283.
[6] It is well settled that the "good faith estimate of value, based upon a valid appraisal of each parcel" refers to the date of taking, not six months or more prior thereto. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917902/ | 376 Mich. 90 (1965)
135 N.W.2d 357
PEOPLE
v.
FERGUSON.
Calendar No. 51, Docket No. 50,146.
Supreme Court of Michigan.
Decided June 7, 1965.
Frank J. Kelley, Attorney General, James R. Ramsey, Acting Solicitor General, Robert F. Leonard, Prosecuting Attorney, and Richard J. Ruhala, Assistant Prosecuting Attorney, for the people.
Charles Campbell, for defendant.
Amicus Curiae:
Rolland R. O'Hare, Erwin Ellmann, and James P. Kurtz, for American Civil Liberties Union of Michigan.
*92 SMITH, J.
Defendant, on January 26, 1956, was jury-convicted of robbery armed.[1] By leave granted, defendant is here on appeal from an order denying his motion for leave to file a delayed motion for new trial and other relief.
Defendant argues 2 points: first, that the fruit of an illegal search and seizure (automatic pistol) was erroneously admitted into evidence although no motion to suppress was made before trial; and, second, that the testimony of an accomplice who confessed during a period of alleged illegal detention should have been excluded a defendant's trial. The brief amicus, in general support of defendant's first contention, phrases the question in this manner: "Was it proper for the trial court, not he ground that a motion to suppress had not been filed prior to the trial, to allow the introduction of a gun into evidence over defense counsel's objection that it had been illegally seized, where defendant had been unrepresented by counsel at the examination in which the gun was not offered in evidence?" By way of reply, the prosecuting attorney rejects the arguments of defendant and of the amicus curiae, adding that the search and seizure was not illegal.
The first question is whether the court in defendant's 1956 trial should have granted defendant's motion to suppress, under the circumstances. Two men, one armed with a pistol, robbed a saloon employee of money sometime after midnight on the morning of September 26, 1955, in the city of Flint. Two suspects, one of whom was defendant, were arrested in the apartment of a third person about 8 a.m. that same morning.
An officer testified that he was admitted to the apartment by the third party who was a tenant from whom permission to search was obtained, there *93 being no warrant. A .38 caliber Colt automatic pistol was found in the apartment during the search. Witnesses testified that defendant wielded the pistol during the robbery. The pistol was not introduced at the preliminary examination in municipal court, although defendant was identified as the gun-wielding robber. Defendant was not represented by counsel at the examination. After the binding over to circuit court, the prosecuting attorney filed an information describing the weapon as "a .38 caliber Cold automatic pistol, serial No. 36144." Defense counsel was appointed in circuit court on December 15, 1955, and the case was tried January 26, 1956. At trial, defense counsel made the following motion when the prosecutor offered the pistol into evidence:
"I object to this being offered into evidence. There has been no showing of a search warrant, or it was admittedly taken from the home of the defendant without a search warrant. I object."
The trial judge treated it as a motion to suppress on account of an alleged illegal search and seizure. He denied the motion, ruling that defendant's failure to move in advance of trial served as a waiver. As to the illegal search and seizure question, we limit review to the question of whether, under the circumstances, the trial court should have entertained defendant's motion to suppress first made during trial of the case.
It is said in People v. Heibel, 305 Mich 710, 712, 713:
"The rule is well established that the illegality of seizure of evidence, where such illegality is known before trial, must first be raised by a motion to suppress the evidence, timely made. The legality or illegality of the search and seizure is a collateral matter and the court will not turn aside from the *94 trial of the case to consider such a collateral matter."
It has been held, however, in People v. Bass, 235 Mich 588, 593, that under a court rule the trial court had discretion to permit a defendant to move to suppress during trial, but in that case the trial court's refusal was held not an abuse of discretion where defendant knew of the search the day after officers searched his home and seized certain evidence. This Court said: "Knowing that the officers had made the search and had the evidence secured thereby in their possession, it was the duty of defendant to so inform his attorney."
Although the discretionary feature of the rule came into being on application of a court rule, it is consonant with the general application of the law and is expressly adopted as such. In restatement, the rule is as quoted above from People v. Heibel, supra, to which may be added: "except under special circumstances the trial court may, within its sound discretion, entertain at trial a motion to suppress." We dare not attempt to define "special circumstances" for by inclusion in the definition we may be construed as excluding other valid circumstances. However, we cite this situation as an example: where facts constituting the illegality are not known before trial, it is consonant with the general rule for the trial judge to exercise his discretion and turn aside from the trial of the case and consider such a motion. This does not mean that defendant must have had an awareness of the law, but that he had knowledge of factual circumstances constituting the illegal seizure. See Isaacs v. United States (CA 10, 1960), 283 F2d 587, for application of similar principle under Rule 41(e) of the Federal rules of criminal procedure.[2] In such a situation, if the factual *95 circumstances are known to defendant in advance of trial, he is responsible for communicating them to his lawyer immediately and his lawyer, in turn, is responsible for making a proper motion in advance of trial. People v. Bass, supra. If, however, factual circumstances are not known sufficiently in advance of trial to permit such a motion then the trial court may exercise its discretion and consider the motion at trial.
In the instant case, we do not find that the trial court abused its discretion by refusing defense counsel's motion to suppress under the circumstances before him at the trial. There was no claim either then or now that defendant did not know of the factual circumstances surrounding the alleged illegal seizure. In truth, all facts seem to point to the conclusion that defendant was indeed aware. The warrant accused defendant of being armed with "a gun" at the time of robbery. At the preliminary examination, he was identified as the gun wielder; in circuit court, the information not only made the same accusation but specifically identified the weapon by manufacture, model, and serial number. At the very least, we may say that defendant must have been keenly aware by the time of his arraignment in circuit court that he was accused of being armed with a weapon which had been completely and minutely identified. Having been so accused and the alleged weapon so identified and directly tied to defendant, the suggestion is very strong that he knew how the police secured the weapon.[3] All of this *96 would go to the question only of whether factual circumstances surrounding the alleged illegal seizure were known to defendant prior to trial. As to this point, of course, we return to the crucial factor that neither defendant nor his counsel asserted at trial that defendant had no knowledge of the factual circumstances. The burden of asserting and proving was upon the motioner. People v. Robinson, 344 Mich 353, 364. Defendant motioner did not sustain his burden. In addition, it is plain that between the appointment date of defense counsel (December 15, 1955) and the trial date (January 26, 1956), time was ample in which to bring a pretrial motion to suppress. We conclude, therefore, that the trial judge did not abuse his discretion under circumstances therein presented.
Defendant's second argument is that the confession of his accomplice, Dolphus Miller, was obtained as a direct result of illegal detention and that such confession should not have been admitted into evidence at defendant's trial. Defendant says the rule in People v. Hamilton, 359 Mich 410, should be extended to include confessional testimony of an accomplice. The record shows that Miller was represented by counsel at both the preliminary examination and trial of defendant where Miller appeared as a witness for the people. In both proceedings, Miller testified as to his guilt and also that of defendant. At the preliminary examination, Miller was offered to defendant for cross-examination but the offer was declined. At trial, defendant's counsel cross-examined Miller.
In the Hamilton Case, where a defendant was not arraigned without necessary delay, according to a relevant statute,[4] his detention was unlawful, and *97 where such illegal detention was continued for the purpose of extracting a confession, and where during such detention defendant was denied even limited conference with his counsel, a confession obtained during such detention was thereby rendered involuntary, hence, inadmissible at defendant's trial. It is unnecessary to discuss extending the rule in Hamilton to confessional testimony of an accomplice, because nothing appears of record to show that Miller was illegally detained or, if so, that it was for the purpose of extracting a confession. We need go no further, inferring nothing as to the merits of the question.
Affirmed.
DETHMERS, KELLY, BLACK, SOURIS, O'HARA, and ADAMS, JJ., concurred with SMITH, J.
T.M. KAVANAGH, C.J., concurred in result.
NOTES
[1] See CL 1948, § 750.529 (Stat Ann 1954 Rev § 28.797).
[2] That Rule 41(e) is a restatement of existing Federal law and practice, with certain minor exceptions, see Notes of Advisory Committee on Rules, Rule 41(e), Federal rules of criminal procedure, 18 USCA, and cases cited thereunder.
[3] Corroboration of a kind is found in the affidavit of one Russell Haines, tenant in the searched apartment in 1955. His affidavit, made November 28, 1961, was filed in support of defendant's present motion. Deponent says the police "began searching the apartment" while Ferguson (defendant) "was getting dressed."
[4] Const 1908, art 2, § 16, now in Const 1963, art 1, § 17. CL 1948, § 764.13 (Stat Ann 1954 Rev § 28.872), repealed in 1961, and reenacted by PA 1964, No 58 (CL 1948, § 764.13 [Stat Ann 1965 Cum Supp § 28.871(1)]), and CL 1948, § 764.26 (Stat Ann 1954 Rev § 28.885). REPORTER. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917913/ | 135 N.W.2d 730 (1965)
Andrew QUIST, as Executor of the Estate of Elma J. Volby, Deceased, Plaintiff and Appellant,
v.
Ruby V. BETO, Defendant and Respondent.
No. 10170.
Supreme Court of South Dakota.
June 11, 1965.
*731 Mumford, Protsch & Sage, Howard, for plaintiff and appellant.
Lammers & Lammers, L. F. Ericsson, Madison, for defendant and respondent.
NICHOL, Circuit Judge.
Plaintiff-appellant, as executor of the estate of Elma J. Volby, deceased, brings this action to set aside a certain declaration of trust in which the defendant-respondent, Ruby V. Beto, was made beneficiary to receive 1,155 shares of Investors Mutual, Inc. Mrs. Beto, the respondent, is a double niece of the decedent and also of her husband, Herman Volby, who had predeceased Elma J. Volby.
Prior to the death of Herman Volby, the Volbys had sold their farm to Ruby V. Beto by contract for deed and for the sum of $48,000, of which $12,000 was paid down. After the sale of the farm, the Volbys moved to Madison, and in 1958 Elma J. Volby, now deceased, suffered a stroke. Her health continued poor, and she suffered another stroke in August 1961.
Mr. Volby died in October 1960, and Mrs. Volby died on February 9, 1962.
After her husband's death in October of 1960, Mrs. Volby actually executed three documents having a bearing on this case. The first document, Exhibit 1, was a revocable declaration of trust, signed by the decedent, Elma Volby, naming Mrs. Beto, her niece, as beneficiary, and was accepted by Mrs. Volby as a payment on the contract for deed for the farm they had purchased from the Volbys, and the Betos were given credit therefor. The second document, Exhibit 2, was executed by Mrs. Volby revoking the first document, after a conference with Mr. Quist, an attorney at law and executor of her estate. Mr. Quist, though present at the trial of this case, did not testify.
The real issue involved in the case is the third document, Exhibit 3, which was executed by Mrs. Volby on November 29, 1961, after consulting with her then attorney, Mr. L. F. Ericsson, and after conferring with a representative of Investors Diversified Services.
It should be noted that this third exhibit changed the beneficiary of the fund back from the estate to Ruby Beto as in the first document, but that it was not for the full amount of the stock, namely, 1,400 shares in the first document, but for only 1,155 shares because of an increase in value of the stock, so that it is obvious that either Mrs. Volby exercised judgment on her own part and/or that she received independent advice from an independent attorney.
Appellant in his assignments of error presents three main questions:
1. Did the Circuit Court err in holding that the respondent, Ruby Beto, sustained the burden of going forward with the evidence to show that she took no unfair advantage of her dominant position to procure the execution of Exhibit 3?
2. Did the Circuit Court err in holding that Elma Volby received independent advice in the execution of Exhibit 3?
3. Did the Court err in holding that Ruby Beto did not exercise undue influence over Elma Volby, and that she took no unfair advantage of her dominant position in securing the execution of Exhibit 3?
*732 On the question of undue influence, the burden is usually on the contestant to establish undue influence by a preponderance of evidence. In re Metz' Estate, 78 S.D. 212, 100 N.W.2d 393. The trial court, however, by reason of the confidential relationship existing between the deceased and the respondent shifted the burden to the respondent, Ruby Beto, of going forward with the evidence and showing that she took no unfair advantage of her dominant position. The trial court then found that the respondent, Ruby Beto, had sustained the burden of showing that she took no unfair advantage.
The evidence clearly showed a close and friendly relationship between the deceased and the defendant. She was a niece of both Mr. and Mrs. Volby, and was the closest of all the relatives to the Volbys, even more so than the adopted son Paul who had left home and had remained away for many years. After Mr. Volby's death in October 1960, Mrs. Volby looked more and more to Mrs. Beto for assistance in both personal and business matters.
The trial court found that although Mrs. Volby was physically weak and at times confused, she was mentally competent. Appellant's counsel even concedes the question of competency, but relied primarily on their claim that Ruby Beto exercised undue influence over Elma Volby and took an unfair advantage of her dominant position in securing the execution of the document now in litigation, Exhibit 3.
This court has held that while the existence of a confidential relation between a decedent and a beneficiary may demand close judicial scrutiny, it does not require a finding of undue influence or raise a presumption thereof, or even cast upon the beneficiary the burden of disproving undue influence. In re Rowlands' Estate, 70 S.D. 419, 18 N.W.2d 290.
The trial court, as stated before, did require the respondent Beto to go forward with the evidence to show that she took no unfair advantage of the decedent. This is no doubt in accordance with the decision of this court in the case of Davies v. Toms, 75 S.D. 273, 63 N.W.2d 406. In the case of McKenzie v. Birkholtz, 74 S.D. 173, 50 N.W.2d 95, we held that the fact that a beneficiary has an opportunity to exercise undue influence upon a grantor to execute a deed will not alone warrant setting the deed aside.
We feel, as succinctly stated by the Supreme Court of Wyoming in the case of In re Wilson's Estate, 399 P.2d 1008, that it is not sufficient to show that a party benefited by a will had the motive and the opportunity to exert undue influence; but there must be evidence that he did exert it and did so control the actions of the testator that the instrument is not really the will of the testator.
The trial court had the opportunity to study the nature and type of the relationship existing between the decedent and the beneficiary, Mrs. Beto, and the witnesses for the executor, and the various relatives, some of whom claimed undue influence. The trial court through these witnesses no doubt considered the opportunities existing for the exerting of the type of influence or deception claimed to have been employed by Mrs. Beto, the circumstances surrounding the drafting and execution of the various instruments, the existence of a fraudulent motive, if any, and after hearing all of these witnesses and observing their demeanor, resolved all of the issues in favor of the beneficiary, Ruby V. Beto, respondent.
This court feels that it is clearly committed to the proposition not only that it must accept as true all evidence favorable to the trial court's findings of fact, except such evidence as is so unreasonable as to challenge the credulity of the court, Hilde *733 v. Flood, S.D., 130 N.W.2d 100, but also that the finding of the trial court on these issues will not be disturbed on appeal where it is supported by substantial evidence and there is not a clear preponderance of evidence against it. Durr v. Hardesty, 76 S.D. 232, 76 N.W.2d 393.
In short, the court believes that the trial court was correct when it found that "the preponderance of the evidence shows that Exhibit 3 (the document in issue) was the product of the assistance and help rendered by Mrs. Beto to Mrs. Volby over a period of years and the friendship and affection which developed between them, and that it was not the product of any undue influence exercised by Mrs. Beto which controlled the will of Mrs. Volby."
Further, this court agrees with the trial court that the document in question, Exhibit 3, was signed by Mrs. Volby "after receiving independent advice from her own attorney", and that "Mrs. Volby (the deceased) exercised her own will in making the defendant beneficiary" thereunder. Of all of "the nephews and nieces who took the remainder of the estate, it was only Mrs. Beto who had rendered unusual services to her aunt during the long period she needed help. Defendant was the natural object of her aunt's bounty more than any other relative", and the result of the execution of the document in question, Exhibit 3, was "not unnatural under the circumstances shown nor unfair to the other relatives."
Affirmed.
ROBERTS, P. J., and RENTTO, BIEGELMEIER and HOMEYER, JJ., concur.
NICHOL, Circuit Judge, sitting for HANSON, J., disqualified. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917917/ | 135 N.W.2d 651 (1965)
Lawrence W. REICH, Appellant,
v.
Frances L. MILLER, Appellee.
No. 51720.
Supreme Court of Iowa.
June 8, 1965.
Paul W. Deck and Robert J. Larson, Sioux City, for appellant.
*652 John W. Gleysteen and William E. Kunze, Sioux City, for appellee.
PETERSON, Justice.
This case involves an intersection accident wherein the plaintiff brought an action to recover damages sustained when the plaintiff, while operating his car, was involved in an accident with an automobile operated by defendant. The accident occurred at the intersection of Jennings Street, running north and south, and 12th Street, running east and west, in Sioux City, Iowa. Plaintiff alleged certain acts of negligence on the part of defendant, which defendant denied and defendant also denied that plaintiff was free from contributory negligence.
Plaintiff was driving his car in a northerly direction on Jennings Street and defendant was driving his automobile in a westerly direction on 12th Street. The case proceeded to trial before a jury and at the close of plaintiff's evidence the defendant's motion for a directed verdict was sustained by the trial court and the jury was instructed to enter a verdict in favor of defendant on the basis that plaintiff was guilty of contributory negligence as a matter of law in failing to yield the right of way in traversing an intersection. Plaintiff appealed.
Plaintiff testified as he was entering the intersection of Jennings Street and 12th Street from the south he looked to the right and saw defendant's car driving west on 12th Street about 150 feet away. He then looked to the front as it was a route for school children. When he looked again defendant's car was about to hit his car.
Plaintiff's estimate of defendant's speed was 35 to 40 miles per hour. He said his own speed was 15 to 20 miles per hour. Plaintiff was wrong as to speed or distance. Plaintiff had about 35 feet to go to cross the intersection. If defendant drove 150 feet while plaintiff drove 35 to 40 feet, he was going about 75 miles per hour. If defendant was only travelling 35 to 40 miles per hour, plaintiff had ample time to cross the intersection and leave 12th Street behind. Something was wrong, but the only testimony we have in the record is plaintiff's. Appellant states in the record there were other witnesses to the accident, but their testimony is not shown. This was a mistake. We might have received helpful information from such evidence.
The question is, whether plaintiff was guilty of contributory negligence as a matter of law, or should the question be submitted to the jury? In considering a directed verdict plaintiff is entitled to have evidence considered in light most favorable to him. In the absence of more evidence as to what happened from other witnesses, or the defendant, the situation is very doubtful as to plaintiff being guilty of contributory negligence as a matter of law. The criterion is whether two or more reasonable minds would differ as to whether plaintiff was guilty of contributory negligence. On the present state of the record there is a question of serious doubt. Under such conditions the court should have heard all the evidence and submitted the question to the jury.
Normally, the question of contributory negligence is submitted to the jury to be decided as a question of fact by the jury. Brown v. Guiter, Iowa, 128 N.W.2d 896; Perry v. Eblen, 250 Iowa 1338, 98 N.W.2d 832; Peterschmidt v. Menke, 249 Iowa 859, 89 N.W.2d 152; Miller v. Griffith, 246 Iowa 476, 66 N.W.2d 505; Pestotnik v. Balliet, 233 Iowa 1047, 10 N.W.2d 99; Davidson v. Vast, 233 Iowa 534, 10 N.W.2d 12; Beardsley v. Hobbs, 239 Iowa 1332, 34 N.W.2d 916.
It is difficult to find two state of facts in collision cases at intersections that are identical. This is true with reference to the case at bar. However, we find some decisions by this court pertaining to cases which are somewhat the same.
*653 We must consider and keep in mind the statutory provision pertaining to the matter of right of way which is Section 321.319, 1962 Code of Iowa, I.C.A., as follows: "Where two vehicles are approaching on any public street or highway so that their paths will intersect and there is danger of collision, the vehicle approaching the other from the right shall have the right of way."
We have held, however, that the right of way statute as to passage of cars at intersections is not an absolute right, but is a relative right. Jacobson v. Aldrich, 246 Iowa 1160, 68 N.W.2d 733. Our statement is as follows: "Certainly the defendant had the directional right of way. This is not an absolute right, but relative. It is qualified by section 321.288, Code of Iowa 1950 I.C.A., which so far as material says: `The person operating a motor vehicle * * shall have the same under control and shall reduce the speed to a reasonable and proper rate: * * * 3. When approaching and traversing a crossing or intersection of public highways * * *.'"
"There is additionally the duty of all parties to exercise reasonable care to keep a proper lookout at all times, particularly when approaching and traversing an intersection. As in all cases, this duty is in proportion to the danger reasonably to be anticipated."
Ordinarily, where the party has been held contributorily negligent as a matter of law in failing to yield the right of way to a car approaching from the right the question of improper lookout is involved. In such cases either the plaintiff did not look to ascertain if there would be danger of a collision or looked and failed to see what was in plain sight. Such cases were Beezley v. Kleinholtz, 251 Iowa 133, 100 N.W.2d 105; Peterschmidt v. Menke, 249 Iowa 859, 89 N.W.2d 152; Olson v. Truax, 250 Iowa 1040, 97 N.W.2d 900.
This is not the situation however in the case at bar. Plaintiff testified, as above outlined in detail, that as he approached the intersection he took a quick glance to the left and saw there were no vehicles approaching; then he looked to his right and discovered defendant's approaching automobile. Defendant's car however was about one-half block, or 150 feet to his right which gave him more than sufficient time and space to go through the intersection and proceed north on Jennings Street.
Defendant testified he assumed that he had time to get through the intersection. This is a state of mind with reference to which defendant had a right to testify. Brown v. Guiter, Iowa, 128 N.W.2d 896; Shuck v. Keefe, 205 Iowa 365, 218 N.W. 31. In the Shuck case the court held that a jury case was presented as to plaintiff's contributory negligence where plaintiff testified he saw the defendant approaching from the right, 100 feet away and he assumed he had time to cross. The court said that it could not be said as a matter of law that his assumption was unreasonable.
In the Jacobson case, supra, the court said: "He who looks to his right and sees no vehicle approaching within a distance which could be covered at a lawful and prudent speed so as to cause a collision at the intersection is not guilty of contributory negligence as a matter of law if he assumes there is no danger of such an accident. This rule applies also if he sees a car approaching on his right, but at such a distance that lawful speed would not bring it to the intersection in time to cause a collision."
The question of whether or not the matter of contributory negligence was a question for the jury is discussed at considerable length by Judge Bliss in Lawson v. Fordyce, 234 Iowa 632, 12 N.W.2d 301. The case was a little different from the ordinary automobile case because it involved one of the parties leading a cow and whether or not plaintiff was guilty of contributory negligence when he was leading such cow on the right hand side of the highway. Judge Bliss said in the opinion: "Negligence to be contributory must have a proximate *654 causal relation to the injury. Whether it has or has not is ordinarily a question for the jury. Carlson v. Meusberger, supra, 200 Iowa 65, 71, 73, 204 N.W. 432; Lane v. Varlamos, 213 Iowa 795, 799, 239 N.W. 689 (together with four other citations)."
The case of Falt v. Krug, 239 Iowa 766, 32 N.W.2d 781, was an intersection collision case. The trial court directed a verdict for defendant. Judge Mantz in writing the opinion for this court quoted from the case of Fitter v. Iowa Telephone Company, 143 Iowa 689, 121 N.W. 48, as follows: "Proximate cause and contributory negligence are questions for the jury save in very exceptional cases where the facts are so clear and undisputed, and the relation of cause and effect so apparent to every candid mind, that but one conclusion may be fairly drawn therefrom."
The case of Short v. Powell, 228 Iowa 333, 291 N.W. 406, was an intersection collision case with some similarities to the case at bar. We said in the case: "Whether the court was in error in deciding the case as a matter of law, or whether it should have submitted the case to the jury for determination, is before us on this appeal. We have so frequently held as to require no citation in its support, that where reasonable minds may reach different conclusions from the facts presented, the case is one for the jury."
The case of Beardsley v. Hobbs, 239 Iowa 1332, 34 N.W.2d 916, 918, was an intersection collision case occurring near Salix, Iowa. We again said: "If fair minded and reasonable men would differ on the factual question whether one was guilty of contributory negligence that question is for the trier of the facts."
Hutchins v. La Barre, 242 Iowa 515, 47 N.W.2d 269, was an intersection collision case in the residential section of Algona. It had many facts somewhat similar to the facts in the case at bar. After outlining the facts we stated: "We think, under the circumstances of this case, that it was a question of fact for the jury to say whether Mitchell's failure to look to the north proximately contributed to the accident and not a matter to be summarily disposed of as a question of law. The judgment of the court below is reversed."
The case of Miller v. Griffith, 246 Iowa 476, 66 N.W.2d 505, was an intersection collision case in Cass County. The case was submitted to the jury, but appellant insisted the question of contributory negligence should be decided against defendant as a matter of law. We stated: "Contributory negligence and proximate cause are strictly issues of fact and ordinarily are for the jury except where, under the entire record, plaintiff's contributory negligence is so palpable that reasonable minds may fairly reach no other conclusion, and the question becomes one of law for the court. Kinney v. Larsen, 239 Iowa 494, 31 N.W.2d 635; Howie v. Ryder & McGloughlin, 244 Iowa 861, 58 N.W.2d 389. While we have not set forth the record at length, an examination thereof shows a situation upon which reasonable minds might well differ. It was properly submitted to the jury. The assignment is without merit."
Under the facts of the instant case it could not be said that reasonable minds would agree on the matter of plaintiff having been guilty of contributory negligence. The trial court was in error in directing a verdict in favor of defendant on such basis. The case is reversed.
Reversed.
All Judges concur except STUART and THOMPSON, JJ., dissent.
STUART, Justice (dissenting):
I respectfully dissent. I do not believe reasonable men could arrive at any conclusion except that plaintiff's conduct was negligent and contributed to the accident. At the risk of unduly extending this dissent, I intend to quote the very brief record *655 to avoid any tendency to understate plaintiff's case. Plaintiff was the only witness who testified on this issue.
Defendant had the directional right of way under Section 321.319, Code of Iowa quoted in the majority opinion. Plaintiff did not stop or yield the right of way. The question is whether the failure to comply with the statute constituted contributory negligence as a matter of law. He testified that as he approached the intersection from the south he was going between 12 and 20 miles per hour. When he first looked to his right, the front of his car was 5' to 10' back of the south curbline and he could see a good block to the east. He testified:
"I saw a car coming from my right traveling on 12th street. * * * about ½ block away. * * * I observed it long enough to estimate its speed. I would say he was going between thirty-five and forty. I proceeded into the intersection, I looked ahead and I looked off and I looked back, I took a glance to my right again and there he was all at once and I stepped on the gas to get out. As I was entering the intersection I was going about 20 and I looked and thought I had plenty of time and I was going to proceed on through. * * * When the other car entered the intersection the front end of my car was even with the north side of the curbline of 12th street. As soon as the other car entered the intersection I kinda got alook and seen, and then I swung my wheels turned my car to the left. The other car never changed its course from the time I first saw it until it struck my car, that I know of. It was speeding."
Both doors of plaintiff's car received the main force of the impact. 12th Street is 36 feet wide. The speed limit is 25 miles per hour.
On cross-examination he testified, from bumper to bumper, his car was 21' long. The front was 10 to 12 feet south of curbline when he saw the car coming.
"At that time I saw this other car half way down the block. I believe it would be 150 feet. That's my best estimate. I didn't pay too much attention to the car coming from the east, I saw him and that's all. I couldn't and didn't estimate its speed, not at that time. The next time I saw the car was just an instant before the collision. I had been looking straight ahead and glanced to the left but I was looking straight ahead up to that time. In the instance that I saw the car just before the collision I couldn't estimate his speed. * * * The front end of my car proceeded 10 feet to the intersection plus 36 feet across 12th street or 46 feet altogether before I was hit. During the same period of time the automobile of the defendant traveled 150 feet."
He admitted he knew the car was to his right and didn't continue to watch it saying: "I figured I had plenty of time to get through the intersection."
"There wasn't anything there to prevent me from looking to my right and watching that auto coming up the street towards the intersection. I didn't see him again until just before the collision. He came on so fast that I thought I was out of there."
"From the time I first saw it until the point of impact the time elapsed was probably two seconds."
Since plaintiff's testimony is different on direct and cross-examination on his opportunity to estimate speed of defendant's car, we will test each version to see if he can escape contributory negligence as a matter of law under either one.
On direct, his theory must have been that he saw defendant, knew he was speeding ½ block away but estimated the speed at 35-40 miles per hour when in fact he was going fast enough to cover 150 feet in the time it took plaintiff to go 46 feet or about 65 miles per hour.
While estimates of speed, time and distance are not very reliable, they must be used to make plaintiff's case and therefore *656 should be used to test it. Conceding it is for the jury to test the credibility of an experienced driver who was not able to tell 35 miles per hour from 65 miles per hour at ½ block, we will use his figures as facts.
For plaintiff to clear the intersection from the time he first saw defendant's car, the front end would have to travel 66'-10 feet to curb, 36 feet across street, 20 feet to clear rear end. At 20 miles per hour, his fastest speed, it would take 2.2 seconds. If we assume defendant was coming at the lowest estimated speed of 35 miles per hour, he would reach the intersection in about 2.9 seconds. In other words plaintiff would at best have 7/10ths of a second to get out of defendant's way.
Let us assume plaintiff's evidence on cross examination is more favorable to him and assume further that a jury could find a reasonable prudent man would just glance at a car, not determine its rate of speed, and decide he has time to cross the intersection assuming that defendant is driving within the speed limit. We must then also assume defendant was driving 25 miles per hour. Even using these figures, plaintiff would have slightly less than two seconds to clear the intersection.
These computations are not given as establishing indisputable facts, but to show that plaintiff was dealing in split seconds. In argument he says:
"It should be remembered, in this case, that from the time the Plaintiff first saw the Defendant until the collision occurred the time lapse was only two seconds. (R. p. 14, lines 6-9) This amount of time certainly does not allow plaintiff to enter into nice calculations in estimating speeds, and distances to be covered at those speeds, in determining whether or not he can safely pass through the intersection. His experience and judgment must govern in this regard and must make his assumption as whether to proceed, instantly. As stated above he may make an assumption and testify to his state of mind in making that assumption. If his assumption is erroneous, or his judgment faulty, or his split second timing inaccurate, a collision will occur."
This is the very argument I would use in affirming. I do not believe a reasonably prudent man knowing this would attempt to cross an intersection in front of an oncoming car with the right of way when his safety depends upon a split second, or at most on two seconds, especially when his judgment is based on estimates of speed and distance arrived at in a glance.
I do not believe we should approve of defendant making such "nice calculations". His mere conclusion that he thought he had time to cross when he obviously didn't, in my opinion, is not sufficient to make his conduct under the circumstances that of a reasonably prudent man.
I would affirm.
THOMPSON, J., joins in this dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917925/ | 376 Mich. 1 (1965)
135 N.W.2d 414
STEVENS
v.
EDWARD C. LEVY COMPANY.
Calendar Nos. 17, 18; Docket Nos. 50,532, 50,533.
Supreme Court of Michigan.
Decided June 7, 1965.
Albert Lopatin (Norman L. Zemke, of counsel), for plaintiffs.
DETHMERS, J.
In these cases, consolidated for trial and appeal, plaintiff Corda Stevens sues for damages for personal injuries and her husband, plaintiff Clifford Stevens, for medical expenses incurred in her behalf and loss of consortium.
A jury returned a $6,000 verdict for the wife and a $3,000 verdict for the husband. On presentation of defendant's motions for new trial, the court filed an opinion ordering new trial unless plaintiff wife should remit $3,000 and plaintiff husband $1,000, reducing her judgment to $3,000 and his to $2,000. Plaintiffs declined to file remittiturs and appeal from such order.
Defendant's employee drove a truck against a cinder block restaurant building in which plaintiff wife was working. The building was shifted on its foundation 3 or 4 inches, blocks were cracked down one side and practically everything in the building *3 was moved by the force or shock of the collision. Plaintiff wife testified that her right leg hit against a mechanical dishwasher. In his opening statement at trial defense counsel conceded that defendant's driver had been negligent and stated that defendant was contesting only the question of damages.
Plaintiff wife testified that prior to the accident she had had no difficulty with her neck or right leg, but thereafter continued to suffer considerable pain in both; that the leg started bothering so badly that she couldn't stand on it; that after some absence from her job she attempted to work but was so bothered by her leg that her employer sent her to a doctor who informed her that she had a blood clot and told her to go home and stay off her leg. She was treated in a hospital outpatient department. A blood clot later developed in her chest. A ligation was performed on her leg. For 6 months after that she could not work, and frequently she was treated in the emergency department of a hospital. She was still suffering leg pains at time of trial almost 3-1/2 years after the accident. She had started a restaurant business, but lost 3 months' work from her business because of her leg and hired a substitute for $30 per week. A physician who had examined her more than 2-1/2 years after the accident testified that she was injured in the neck and back and leg from the accident; that she suffered from tenderness in the trapezius muscles in the back of the neck, decrease in her ability to flex her neck, tenderness in the right calf and minimal varicose veins. He expressed the opinion that all this was caused by the accident. The doctor also testified that she had a congenital arthritic condition of the vertebrae and that this rendered her more susceptible to trauma. Also, he testified that he considered her injuries as permanent. He was of the opinion that the accident caused a thrombosis in a vein, that a *4 portion of the clot later broke off and traveled to her lungs, causing a pulmonary embolism. Another doctor's testimony confirmed the above. He expressed the opinion, in testimony, that the accident had caused a traumatic phlebitis in the leg which later developed into a pulmonary embolism, that in such cases a blood clot circulating in the blood stream could get into the heart and produce coronary thrombosis and death. The evidence showed out-of-pocket expenses for doctor and hospital bills of $1,172.20 and loss of wages and money paid to employ a substitute for plaintiff wife in her restaurant totalling $1,740, or a combined total of $2,912.20.
In his opinion the trial judge stated that plaintiff wife's "injuries were slight, and that the jury became inflamed apparently as the result of the insurance issue introduced by the plaintiff herself." With respect to the latter, the court stated that it consisted of the fact that when asked on the witness stand about going to a certain doctor, she "volunteered in answer, a question: `Is that the insurance doctor?'" The record discloses that the court did not hear her correctly. Her question actually was, "Is that the internist doctor?" The record also discloses that that doctor was an internist. The record thus strips the trial judge's opinion of any basis for the idea that the jury had been inflamed or influenced by mention of insurance.
There remaining no showing of any improper conduct or language by plaintiff or her counsel, as thought by the trial judge, which would have inflamed the jury or appealed improperly to its sympathy or caused a verdict resulting from passion, prejudice, partiality, or corruption, the verdict should be upheld unless it is so excessive as to shock the judicial conscience.
In point is the following quotation from 6 Callaghan's Michigan Pleading & Practice (2d ed), *5 § 41.13, (p 397), cited with approval in Weeks v. Hyatt, 346 Mich 479, 490:
"As long as the amount awarded is within the range of the evidence, and within the limits of what reasonable minds might deem just compensation for such imponderable items as personal injuries sustained and pain and suffering, the verdict rendered should not be set aside."
We approve, also, from 9 Michigan Law & Practice, Damages, § 61, pp 62, 63:
"There is no fixed criterion for determining when an award of damages is excessive, but if an award is within the scope of the testimony, fairly represents the judgment of the jury, and does not appear to have been the result of prejudice, passion, partiality, sympathy, or corruption, it will generally be sustained, whether attacked as excessive or inadequate. However, if an award is so excessive as to shock the judicial conscience, it will be reduced.
"The permanency of an injury has a bearing on whether an award is excessive."
In Cleven v. Griffin, 298 Mich 139, this Court said:
"There is no absolute standard by which we can measure the amount of damages in personal injury cases. The amount allowed for pain and suffering must rest in the sound judgment of the triers of the facts. Watrous v. Conor, 266 Mich 397; Weil v. Longyear, 263 Mich 22. Courts are reluctant to disturb verdicts of juries for personal injuries on the ground that the amount is excessive. Cawood v. Earl Paige & Co., 239 Mich 485. We do not usually substitute our judgment for that of the jury unless the verdict shocks the conscience or has been secured by improper means, prejudice or sympathy. Watrous v. Conor, supra; Michaels v. Smith. 240 Mich 671. The verdict was within the range of the testimony and not excessive."
*6 In Majewski v. Nowicki, 364 Mich 698, we said:
"There is nothing to indicate that the verdict was reached as a result of passion, prejudice, mistake of law or of fact, or that it amounts to an injustice to defendants or is contrary to the evidence. We can only conclude that the entering of an order requiring remittitur constituted an abuse of discretion."
In the instant case testimony as to pain, suffering, permanence of injury, disability, medical and hospital expenses, and loss of wages, if accepted as true, as it evidently was by the jury, makes the verdicts well within the range of the proofs. They are not shown to be the result of prejudice, passion, partiality, sympathy, corruption or inflammatory remarks. They are not so excessive as to shock the judicial conscience. The trial court was guilty of an abuse of discretion in requiring the remittiturs.
Reversed and remanded for entry of judgments on the verdicts. Costs to plaintiffs.
T.M. KAVANAGH, C.J., and KELLY, BLACK, SOURIS, SMITH, O'HARA, and ADAMS, JJ., concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917932/ | 272 So.2d 502 (1972)
WEDNESDAY NIGHT, INC., a Florida Corporation, D/B/a Bachelors III, Appellant,
v.
The CITY OF FORT LAUDERDALE and Broward County, Florida, Appellees.
No. 42305.
Supreme Court of Florida.
December 20, 1972.
Rehearing Denied February 23, 1973.
*503 Heiman & Crary, Miami, for appellant.
Dean Andrews and Ronald B. Sladon, Fort Lauderdale, for appellee City of Fort Lauderdale; John U. Lloyd, County Atty., and Alexander Cocalis, Asst. County Atty., for appellee Broward County.
ERVIN, Judge:
Appellant Wednesday Night, Inc., a Florida corporation doing business as Bachelors III, operates a nightclub which sells alcoholic beverages within the City of Fort Lauderdale. Appellant commenced this action against Appellee City of Fort Lauderdale (and the City moved for joinder of Broward County) seeking to enjoin enforcement of City Ordinance C-70-34 which fixes the hours for sale of alcoholic beverages on premises within the corporate limits of the City. The ordinance was adopted pursuant to the authority granted by F.S. Section 562.14(3), F.S.A. The Appellant's complaint specifically asserted the unconstitutionality of the statute and the ordinance.
The trial court entered a final judgment finding:
"Section 562.14, Florida Statutes [F.S.A.] and so much of Ordinance C-70-34 of the City of Fort Lauderdale as limits the hours of sale of alcoholic beverages, be and they are hereby declared to be valid, constitutional, and enforceable against the Plaintiff."
Appellant appealed that judgment here, and raises the following questions for decision:
1. Whether Section 562.14, F.S. [F.S.A.], contravenes the Federal and Florida constitutional guarantees of due process and equal protection of the laws.
*504 2. Whether ordinance No. C-70-34 of the City of Fort Lauderdale contravenes the due process and equal protection guarantees of the Florida and Federal constitutions.
3. Whether the statute constitutes an unlawful delegation of the powers of the Legislature.
4. Whether the statute is a special law enacted in violation of the strict limitations imposed on such statutes by the 1885 and 1968 constitutions.
5. Whether the statute violates the constitutional mandate to establish a uniform system of county and municipal government.
F.S. Section 562.14, F.S.A., reads as follows:
"562.14 Regulating the time for sale of alcoholic and intoxicating beverages; municipal and county regulations, etc.
(1) No alcoholic beverages may be sold, consumed or served or permitted to be served or consumed, in any place holding a license under the division of beverage, between the hours of midnight and seven o'clock a.m. of the following day.
"(2) No intoxicating beverages may be sold, consumed or served or permitted to be served, or consumed, in any place holding a license under the division of beverage, between twelve o'clock midnight Saturday and seven o'clock a.m. Monday.
"(3) Incorporated municipalities may by ordinance independently regulate the hours of sale of alcoholic beverages within the corporate limits thereof, notwithstanding the provisions of this section. It shall be the duty of the sheriff, deputy sheriff and police officers of such municipality, and not the duty of the division of beverage, to enforce the hours of sale as regulated by any incorporated municipality. (Emphasis supplied.)
"(4) The board of county commissioners of any county of the state may, by resolution, independently regulate the hours of sale of alcoholic beverages within the territory of such county not included within any municipality notwithstanding the provisions of this section. It shall be the duty of the sheriff, deputy sheriff and police officers of such county, and not the duty of the division of beverage to enforce the hours of sale as regulated by such resolution.
"(5) Any person, firm or in case of a corporation, the officers, agents or employees thereof, violating any of the provisions of this section shall be guilty of a misdemeanor of the second degree, punishable as provided in § 775.082 or § 775.083.
"(6) Provided, however, that nothing contained in this section shall apply to beverages served upon any dining, club, parlor, buffet or observation car operated on any railroad, but such beverages may be sold only to passengers upon said cars and must be served for consumption thereon."
We have jurisdiction of the appeal because the trial court passed upon the validity of F.S. Section 562.14, F.S.A. We find that the five questions should be answered in the negative and affirm.
Even though other municipalities in close proximity to the City of Fort Lauderdale have established hours governing the sale of intoxicating beverages on premises that are different from those fixed by the City of Fort Lauderdale, this in nowise affects the validity of Section 562.14 or the City of Fort Lauderdale's ordinance. Pursuant to the delegated authority of the statute, the City may within its territorial jurisdiction prescribe by ordinance different hours of liquor sales from those fixed by other cities. As to local matters and subjects, local regulations and classifications applying within the territorial jurisdiction of the governmental unit may be enacted or adopted in the absence of controlling provisions of law to the contrary. F.S. Section 562.14(3), F.S.A. expressly *505 authorizes and delegates the power of municipal regulation of hours of liquor sales. Section 5, Article VIII, State Constitution, F.S.A., provides the sale of intoxicating liquors shall be regulated by law. Section 2(b), Article VIII, State Constitution, provides municipalities shall have governmental powers to enable them to conduct municipal government, "and may exercise any power for municipal purposes except as otherwise provided by law." Reference is made to § 152 and § 153 of 6 Fla.Jur., Constitutional Law, relating to delegation of regulatory power by the Legislature to municipalities. In this regard see particularly State v. A.C.L.R. Co., 56 Fla. 617, 47 So. 969, and Jacksonville v. Bowden, 67 Fla. 181, 64 So. 769.
Insofar as concerns equal protection, it is well settled that the Constitution of the United States does not prohibit legislation which is limited to the territory within which it is to operate. The constitutional guaranty of equal protection of laws does not require territorial uniformity. See Ocampo v. United States, 234 U.S. 91, 34 S.Ct. 712, 58 L.Ed. 1231, and McGowan v. Maryland, 366 U.S. 420, 81 S.Ct. 1101, 6 L.Ed.2d 393.
F.S. Section 562.14(3), F.S.A. is a general law relating to all municipalities. It has no features contravening the several prohibitions against certain special laws or general laws of local application appearing in Section 11 of Article III, State Constitution.
There is no mandate in the State Constitution to establish a uniform system of municipal government. Section 2, Article VIII, State Constitution. Section 562.14(3) is therefore not in contravention of any uniform system of municipal government.
Affirmed.
ROBERTS, C.J., and CARLTON, BOYD, McCAIN and DEKLE, JJ., and DREW, J. (Retired), concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917953/ | 272 So.2d 458 (1973)
Shirley DAVIS, Individually and as natural tutrix of her minor daughter, Cathy Ann Davis, Plaintiff-Appellant,
v.
ALLSTATE INSURANCE COMPANY et al., Defendants-Appellees.
No. 11987.
Court of Appeal of Louisiana, Second Circuit.
January 9, 1973.
Rehearing Denied February 6, 1973.
Jerry A. Kirby, Monroe, for plaintiff-appellant.
*459 Snellings, Breard, Sartor, Shafto & Inabnett by Kent Breard, Monroe, for Allstate Ins. Co., defendant-appellee.
Before AYRES, PRICE and HALL. JJ.
En Banc. Rehearing Denied February 6, 1973.
AYRES, Judge.
This action arose out of a motor vehicle collision which occurred on the Sterlington Road near Monroe on March 25, 1971. Involved in the collision was an automobile owned and driven by Cletus M. Willbanks with whom plaintiff's minor daughter, Cathy Ann Davis, was riding as a guest passenger. Plaintiff appears as natural tutrix of her daughter and seeks to recover damages for and on behalf of her daughter for injuries, pain, and suffering sustained and endured by the daughter as a result of the accident. Plaintiff also appears in her individual capacity and seeks to be reimbursed medical expenses incurred in the treatment of the injuries sustained by the daughter. Made defendants are Willbanks, against whom plaintiff seeks to recover in tort, and Allstate Insurance Company, against whom she seeks to recover in contract under the uninsured motorist's provisions of her own automobile policy issued by that defendant.
To plaintiff's action the defendant insurer, Allstate, successfully urged in the trial court a motion for a summary judgment based upon the contention that there was no genuine issue as to a material fact and that, accordingly, defendant was entitled to a judgment, as a matter of law, dismissing plaintiff's demands. From a judgment accordingly dismissing plaintiff's action so far as concerns Allstate, plaintiff appealed.
The motion for a summary judgment was based upon the proposition that plaintiff's notice and demand made upon the insurer were untimely and not in keeping with the provisions of the insurance contract which required:
"As soon as practicable, the insured or other person making claim shall give to the company written proof of claim, under oath if required, including full particulars of the nature and extent of the injuries, treatment, and other details entering into the determination of the amount payable hereunder."
In connection with the aforesaid policy statement, it is urged that in order to institute and maintain an action under the insurance contract, compliance with all its terms, such as the giving of notice, is a prerequisite.
In an affidavit of Herb Griener, defendant's local claims manager, it is shown that this action was filed in the Fourth Judicial District Court for Ouachita Parish on March 14, 1972, and a copy of the petition was served upon the Secretary of State, defendant's agent for service, on March 17, 1972, a copy of which was forthwith forwarded to and received in defendant's Shreveport office on March 20, 1972. Moreover, no other notice of plaintiff's claim was received by it prior to the later date. It is further recited in the aforesaid affidavit that the failure to give prompt and reasonable notice to the insurer prevented the insurer not only from making a prompt investigation of the alleged accident but also from protecting its interests against a negligent tort-feasor. These violations of the terms of the insurance contract, it is contended, resulted in prejudice to defendant.
In opposition to defendant's motion for a summary judgment, plaintiff, Shirley Davis, filed an affidavit containing a recital of facts to this effect:
That shortly after the collision occurred, plaintiff was notified by Cletus M. Willbanks, who was then dating her daughter, Cathy Ann Davis, that he had full insurance coverage on his car, both as to collision and liability. Through experience and knowledge acquired by virtue of her prior employment by an insurance company, plaintiff felt that notice would not be necessary under the uninsured motorist's provisions of her policy until such time as she was able to establish there was no liability *460 type insurance company insuring Willbanks' car.
Plaintiff, through her attorney, proceeded to contact Willbanks' insurer and was subsequently informed that Willbanks had only collision-type coverage on his vehicle. After receipt of this information and on a basis of Willbanks' contention that he had liability insurance on his car, petitioner and her attorney continued to investigate the possibility that Willbanks had such insurance with another insurance company. After it was determined Willbanks did not have liability insurance, this suit was filed without prior formal notice to defendant due to the fact that the expiration of the prescriptive period for actions in tort was close at hand. Upon filing the suit, plaintiff, through her attorney, agreed to allow Allstate 30 days, at least, in which to investigate this matter. This delay was requested by defendant's representative and granted by plaintiff's counsel.
Shortly thereafter, Bill Roach, agent of the defendant insurer, was contacted by plaintiff's counsel, who made available to Roach all available information with reference to the accident, the injuries sustained, and the doctor's reports. Roach had the fullest cooperation from plaintiff and her counsel.
Although plaintiff gave no immediate notice to Allstate following the accident, such failure was due to the fact that she had no knowledge that Willbanks had no liability-type coverage. Therefore, notice given in the way of a suit filed and served upon defendants was notice "as soon as practical," for, until it was determined that Willbanks had no liability insurance coverage on his car, plaintiff did not know there was coverage under the uninsured motorist's provisions of her policy.
With reference to the purposes to be served by notices in cases such as this, Judge Tate of the Third Circuit Court of Appeal, and now Associate Justice of the Supreme Court, stated, in Miller v. Marcantel, 221 So.2d 557, 559 (La.App., 3d Cir. 1969):
"The function of the notice requirements is simply to prevent the insurer from being prejudiced, not to provide a technical escape-hatch by which to deny coverage in the absence of prejudice nor to evade the fundamental protective purpose of the insurance contract to assure the insured and the general public that liability claims will be paid up to the policy limits for which premiums were collected. Therefore, unless the insurer is actually prejudiced by the insured's failure to give notice immediately, the insurer cannot defeat its liability under the policy because of the non-prejudicial failure of its insured to give immediate notice of an accident or claim as stipulated by a policy provision." (Emphasis supplied.)
Thus, by reference to the affidavit filed for and on behalf of the defendant, defendant has not shown in either its motion, or in the affidavit filed in support of the motion, or elsewhere, how or in What manner or respect, it has been prejudiced by plaintiff's failure to promptly notify the defendant of the accident. Nowhere is it contended that plaintiff's alleged failure to comply with the terms of the contract was predicated upon fraud or induced by any desire or purpose to mislead defendant or to conceal from it any fact. Plaintiff's affidavit not only clearly negated any fraud, deception, or the withholding of information from defendant but also evidenced a willingness to fully cooperate with defendant in its investigation of the case. Defendant, moreover, availed itself of plaintiff's offer to postpone any further action in court pending the making of its investigation.
Under the showing made in these affidavits, plaintiff was hard pressed to establish there was no liability insurance covering the Willbanks car, a prerequisite to the establishment of defendant's liability to plaintiff under the uninsured motorist's *461 provisions of her policy. That Willbanks, the driver and owner of the vehicle involved, was a resident of the State of Arkansas served to increase plaintiff's difficulty in establishing that the Willbanks car was not covered by liability insurance. It was, however, finally determined, about four days prior to the expiration of a year following the collision, that Willbanks did not have such insurance on the car. As soon as this fact was made known to plaintiff and her attorney, time scarcely remained for plaintiff to make an appropriate demand. Plaintiff, thereupon, instituted this action so as to preserve her rights and those of the defendant insurer against the tort-feasor.
The sole issue before this court is whether plaintiff's failure to give notice of the accident to Allstate until just before prescription would have accrued against the tort-feasor was a violation of the terms of her insurance barring her right to recover against her insurer.
In Jackson v. State Farm Mut. Automobile Ins. Co., 211 La. 19, 29 So.2d 177, 179 (1946) wherein the court was concerned with the single proposition as to whether the insurance company was relieved from liability because of a delay of 82 days in its receipt of notice of the occurrence of an accident, the court appropriately observed:
"Each case involving delayed notices must stand upon its own facts and circumstances. The Court may consider in balancing the equities, not only the time intervening between the accident and the date of notice to the insured, and whether or not the claim is a direct one by the injured persons, under Act 55 of 1930 [LSA-R.S. 22:655] but also when the parties first discovered that substantial injury had been done or that a claim would be made; the time when the injured party discovered that insurance existed and knew the identity of the insurer; what prejudice to the insurance company's defense has been caused by the delay; the good faith of the insured and injured party; and the existence of any special circumstances, especially those indicating fraud or collusion.
"Having found in the case before us that the insured Toler had reasonable grounds to believe that no claim would be made until the June demand was made upon him; that there was no substantial prejudice to defendants; and that no element of fraud, collusion, or bad faith existed, we conclude that plaintiffs' right of action under the policy issued by the defendant has not been lost." (Emphasis supplied.)
In Jones v. Shehee-Ford Wagon & Harness Co., 183 La. 293, 163 So. 129, 131 (1935), the Supreme Court observed that the principal issue in the case was whether Shehee-Ford, the insured, breached the contract of insurance by failing to immediately report the accident. The court found, as a fact, that "As soon as the insured, in this case, was informed that the accident had caused a loss covered by the policy, the insured gave notice to the insurer." (Emphasis supplied.) The court, therefore, concluded that when the insured gave notice to the insurance company as soon as he had reason to believe that the accident which caused the loss was covered by the policy, there was a substantial compliance with the clause requiring immediate notice. In that regard, the Supreme Court stated:
"Under policy contracts similar to the one before us, the law does not require the insured to give notice to the insurance company of an accident unless the insured has reason to believe that the accident has caused or will cause loss covered by the policy." (Emphasis supplied.) 163 So. 131.
As already noted, plaintiff had no reason to believe that the accident was covered by the uninsured motorist's provisions of her own policy until it was determined there was no liability insurance covering the offending vehicle.
*462 Moreover, under a similar clause with reference to notice, this court held, in Howard v. Early Chevrolet-Pontiac-Cadillac, Inc., 150 So.2d 309, 312 (La.App., 2d Cir. 1963), that an insurer could not avoid liability for injuries sustained by an invitee of an insured on the insured's premises because of failure of the insured to give notice of the accident as soon as practicable as required by the policy where the failure was due to the insured's impression there was no liability under the policy. In that case, the insured was under the impression that the policy did not cover the accident until within four days of the running of prescription, when she learned of the policy's coverage.
Nor do we find that the defendant insurer has been prejudiced by plaintiff's action. Quite to the contrary, the filing of this suit shortly before the end of the one-year prescriptive period inured to the benefit of the insurer and preserved its rights of subrogation against the tort-feasor.
The facts of the instant case are vastly different from those of LeBlanc v. Davis, 254 La. 439, 223 So.2d 862, 863 (1969), on which defendant bases its defense. The record in that case discloses not only a failure to cooperate with the defendant but an absolute refusal to do so. In summarizing the facts of that case, former Chief Justice Fournet pointed out:
"While the record does not clearly indicate exactly when the insured gave the company proof of claim, the record does show that after suit was filed on January 27, 1965 Travelers, apparently not having sufficient information to properly evaluate the claim of the insured, propounded interrogatories to the plaintiff requesting the names of all doctors who had treated or examined her along with the physical findings of each, what, if any, written reports had been rendered and if they would be made available voluntarily. Counsel for plaintiff vigorously resisted all efforts of the defendant to secure any information in regard to the physicians' findings, objecting to the interrogatories, which was sustained by the trial judge along with the notation that counsel refused to give the written reports, referring the defendant to discovery depositions. Upon advice of her counsel Mrs. LeBlanc again was not allowed to give the information requested in a deposition taken of her testimony by defense counsel. Whereupon, Travelers sought to have her suit dismissed for violating the policy contract, filing an exception of no cause or right of action and alternatively, a motion for summary judgment, the same being denied by the trial judge. (Emphasis supplied.)
The court, in that case, held: The requirement of uninsured-motorist provisions of an automobile liability policy that the insured give full medical information concerning injuries suffered was a condition precedent to the right to recover, and the insured, who refused to disclose full medical information concerning injuries she sustained when her vehicle was struck from the rear by an uninsured motorist, was not entitled to recover from the insurer.
Thus, as pointed out in Miller v. Marcantel, supra, 221 So.2d 559, an insurer cannot defeat its liability under a policy because of the nonprejudicial failure of its insured to give immediate notice of an accident or claim as stipulated by a policy provision.
Our conclusion is that the motion for a summary judgment is without merit and must be overruled.
Hence, for the reasons assigned, the judgment appealed is annulled, avoided, reversed, and set aside; and
It is now ordered that the motion for a summary judgment be, and the same is hereby, overruled, and this cause is now remanded to the Honorable Fourth Judicial District Court in and for Ouachita Parish, Louisiana, for further proceedings consistent *463 with the views herein expressed and in accordance with law.
Defendant Allstate Insurance Company is assessed with the cost of this appeal; the assessment of all other costs is to await final judgment.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1917961/ | 135 N.W.2d 63 (1965)
Winnifred HILLERNS, Respondent,
v.
MINNESOTAN HOTEL AND FIREMAN'S FUND INSURANCE COMPANY, Relators, and
Minnesotan Hotel and Minnesota Motel, Inc., dba Northgate Motel, Great American Indemnity Company, and Maryland Casualty Company, Respondents.
No. 39422.
Supreme Court of Minnesota.
April 30, 1965.
*64 Tyrrell, Jardine, Logan & O'Brien and Raymond W. Fitch, St. Paul, for relators.
Sigal, Savelkoul, Cohen & Sween, Minneapolis, for employe respondent.
Mordaunt, Walstad, Cousineau & McGuire, Minneapolis, for respondent Great Am. Indem. Co. and Minnesotan Hotel.
Robert J. Munson, Minneapolis, for respondent Maryland Cas. Co. and Minnesotan Hotel, and Minnesota Motel Inc. dba Northgate.
NELSON, Justice.
On August 12, 1949, respondent employee, Winnifred Hillerns, was employed by the Minnesotan Hotel, whose workmen's compensation insurer was then Great American Indemnity Company. On that date employee sustained an injury to her back arising out of and in the course of her employment. On December 1, 1950, she agreed to a stipulation for an award based on the assumption she had suffered a 10-percent permanent partial disability.
She returned to work for the hotel in October 1953. On or about November 20, 1953, she called this employer, stating "she did not incur any injury on the job" but suspected that she had "a recurrence of an old injury to her back" and that this was "caused by overwork on her present job." The hotel gave written notice to the Industrial Commission of this occurrence on January 20, 1954. On November 20, 1953, the hotel's compensation insurer was Fireman's Fund Insurance Company. After investigating the matter Fireman's Fund gave notice of denial of liability.
Employee did nothing further until August 3, 1962, when she filed a petition to vacate the award entered by the commission on December 1, 1950. That petition asserted that her back condition had become progressively worse since December 1, 1950, and that she now had a minimum of 25-percent permanent partial disability. The Industrial Commission granted employee's petition for vacation of the award on November 19, 1962. Thereafter she filed an amended claim petition alleging that she is permanently totally disabled because of the injury she suffered in August 1949 and because of an injury she suffered May 30, 1954, while employed by respondent Minnesota Motel, Inc., d. b. a. Northgate Motel.
Great American and the hotel then petitioned to join Fireman's Fund as a party on the grounds that if employee had any disability some of that disability arose out of an incident on or about November 20, 1953, when Fireman's Fund was the hotel's compensation insurer. By its order dated February 6, 1964, the commission granted the petition for joinder. On the relation of *65 Fireman's Fund and the hotel, we issued certiorari to review this order.
Fireman's Fund asserts that if employee was hurt in November 1953, the time for instituting a proceeding under the workmen's compensation law has expired and that therefore in no event can Fireman's Fund be held liable. Hence, it asserts that it was improperly joined as a party, pointing out that Minn.St. 176.151 requires an employee to bring a proceeding to obtain compensation within 2 years of the time the employer files notice of injury with the Industrial Commission and within 6 years from the date of the accident.
Great American contends that the Industrial Commission, by its order, has not determined whether the statute of limitations has run but only that, due to oral unrecorded contentions, there appears to be a basis for joining Fireman's Fund as an additional party. Its primary contention is that an order granting joinder is not a final order and therefore is not appealable.
It is our opinion that an order granting joinder is nonappealable and not reviewable by certiorari. At the outset, it is important to note that this court cannot, under the circumstances, make findings of fact. The function of this court is to review the findings of fact enunciated by the Industrial Commission in order to determine whether the evidence sustains those findings. But it is equally clear that until such findings are made there is nothing here for this court to review. See, Yureko v. Prospect Foundry Co., 262 Minn. 480, 115 N.W.2d 477, and Anderson v. Pyramid Granite Co., 218 Minn. 194, 15 N.W.2d 523. The commission has made no findings in the proceeding before us.
The statutory authority for the review of proceedings of the Industrial Commission is to be found in Minn.St. 176.471, subd. 1, which permits review by this court on certiorari on the grounds that the order does not conform with the statute; the commission committed any other error of law; or that its findings of fact and order were unwarranted by the evidence. None of these grounds is applicable to an order granting joinder of a party.
Subdivision 9 of § 176.471 does appear applicable. It states:
"When the return of the proceedings before the commission has been filed with the clerk of the supreme court, the supreme court shall hear and dispose of the matter in accordance with the laws and court rules governing appeals in civil actions."
Examining the rules governing appeals in civil cases, we find that since Chapman v. Dorsey, 230 Minn. 279, 41 N.W.2d 438, it has been the rule in this state that an order either granting or denying the joinder of additional parties to an action is nonappealable. See, Fischer v. Perisian, 251 Minn. 166, 86 N.W.2d 737.
In the Chapman case the defendant, by means of both appeal and writ of certiorari, sought review of an order of the trial court denying the joinder of additional parties defendant. As to the appeal we held that the order was not appealable because it did not constitute a final determination of the rights of the parties upon the merits and was not decisive of any substantive or ultimate rights of the litigants.
As to the writ of certiorari we said (230 Minn. 288, 41 N.W.2d 443):
"* * * A writ of certiorari does not lie to review an order denying a motion for the joinder of additional parties, in that such order is intermediate in its nature, is decisive of no issue upon the merits or of any part thereof, and is subject to review upon an appeal from a final judgment on the merits."
Section 176.471 does not specifically permit review of an order joining a party, nor do any of its provisions appear to contemplate review of such an order. Thus, § 176.471, subd. 9, requires us to dispose *66 of this proceeding "in accordance with the laws and court rules governing appeals in civil actions." Applying the rule of the Chapman case to the Industrial Commission's order granting the petition for joinder of Fireman's Fund, we must conclude that certiorari does not lie to review this order, since it is intermediate in nature, is decisive of no issue upon the merits or of any part thereof, and is subject to review by certiorari after a final determination by the commission on the merits.
Writ quashed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1543706/ | 523 Pa. 363 (1989)
567 A.2d 638
Joseph CAMAIONE, Sr., Appellee,
v.
BOROUGH OF LATROBE, Appellant.
Supreme Court of Pennsylvania.
Argued September 28, 1989.
Decided December 21, 1989.
Reargument Denied February 20, 1990.
*364 James E. Kelley, Jr., McDonald, Moore, Mason & Snyder, Latrobe, for appellant.
Vincent J. Quatrini, Jr., Greensburg, for appellee.
Anthony C. Busillo, II, Harrisburg, for amicus curiae, PA Lodge of the FOP.
Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA and PAPADAKOS, JJ.
OPINION OF THE COURT
PAPADAKOS, Justice.
This is the appeal of the Borough of Latrobe (Borough) from the opinion and order of the Commonwealth Court reversing an order of the Court of Common Pleas of Westmoreland County and remanding to that court with instructions that benefits under the Heart and Lung Act[1] be restored to Joseph Camaione, Sr., (Appellee) until such time as an evidentiary hearing is conducted to establish whether Appellee's temporary disability has ceased. 113 Pa. Cmwlth. 113, 536 A.2d 500.
*365 The facts underlying this matter were stipulated to by the parties and are relatively simple. Appellee, a police officer of the Borough, suffered a work-related injury on February 5, 1975. Appellee could not return to work and began receiving Heart and Lung Act benefits because he was deemed temporarily incapacitated from performing his duties.[2] Appellee was also awarded worker's compensation benefits which were paid over to the Borough as a form of subrogation in accordance with the provisions of the Heart and Lung Act.
This arrangement continued until July 27, 1981, when the Borough enacted a Resolution, effective as of September 1, 1981, requiring the retirement of the two oldest police officers on the Borough Police Force, one of whom was Appellee. This action was taken pursuant to 53 P.S. Section 46190 which permits Boroughs to retire employees eligible for pensions starting with the oldest employee and following in order of age if economic reasons exist to reduce the size of the police force.
Appellee was notified that the Borough was contemplating this action and that the Resolution was, in fact, enacted. Beginning on September 1, 1981, Appellee's regular salary check issued pursuant to the Heart and Lung Act was terminated and he began receiving the worker's compensation check directly as well as a pension check which together totalled more than the salary he had been receiving pursuant to the Heart and Lung Act.
In January, 1983, however, a referee for the Worker's Compensation Board reviewed Appellee's disability claim and, following a hearing, determined that Appellee's condition was no longer total and that an adjustment to his *366 weekly benefits would have to be made. Because the partial disability would exist for over 500 weeks, the referee determined that a lump sum payment of $25,000.00 was in order and, accordingly, awarded this amount to Appellee which he accepted on February 22, 1983.
As a result of this action, Appellee's worker's compensation check was terminated and he continued to receive his pension check only. He now was receiving each month less than his salary had been. This situation continued for fifteen months when, on May 22, 1984, Appellee filed a complaint in Mandamus seeking to have the Borough restore his full salary under the provisions of the Heart and Lung Act. Appellee reasoned that he was entitled to his full salary as long as his disability was of a temporary nature and that he was never afforded a hearing to establish that a change in his condition had occurred. The trial court denied relief, but the Commonwealth Court reversed holding that Appellee was entitled to notice that his involuntary retirement would affect his rights under the Heart and Lung Act.
In so holding, the Commonwealth Court relied on our decision in Callahan v. Pennsylvania State Police, 494 Pa. 461, 431 A.2d 946 (1981), for the proposition that a police officer's status under the Heart and Lung Act could not be changed from temporary disability to permanent disability without a due process hearing. We accepted the Borough's petition for allowance of appeal to examine whether Callahan was properly applied in the situation where a Borough exercises its legislative prerogative under the Borough Code to control the size of its police force because of economic reasons.
When we have had occasion to review the provisions of the Heart and Lung Act, we have emphasized that this remedial legislation provides compensation for police who suffer temporary incapacity or disability in the performance of their work. The guarantee of uninterrupted income during periods of temporary disability has been cited as an attraction for service in the police force and one that *367 assures a reasonably speedy return to full active duty. Kurtz v. Erie, 389 Pa. 557, 133 A.2d 172 (1957). Compensation for total disability is not permitted under the statute and has not been allowed by this Court. Kurtz; Creighan v. City of Pittsburgh, 389 Pa. 569, 132 A.2d 867 (1957).
In addition, once it is determined that a policeman qualifies for benefits under the Heart and Lung Act, his disability status cannot be changed from temporary to permanent unless a due process hearing is afforded. Cunningham v. Pennsylvania State Police, 510 Pa. 74, 507 A.2d 40 (1986); Callahan v. Pennsylvania State Police, 494 Pa. 461, 431 A.2d 946 (1981).
We have also indicated, however, that the benefits of full compensation granted by the Act can be terminated through voluntary retirement and the Commonwealth Court and the Superior Court have both applied the statute in this manner. See, Creighan v. City of Pittsburgh, 389 Pa. 569, 132 A.2d 867 (1957); See also, Hasinecz v. Pennsylvania State Police, 100 Pa. Commonwealth Ct. 622, 515 A.2d 351 (1986) (Court indicated that benefits of act do not extend to former members of police force); and White v. West Norriton Township, 158 Pa. Superior Ct. 375, 45 A.2d 401 (1946) (Court held that dismissed police officer could not invoke benefits of the act.)
The other statute that comes into play in this case is the Borough Code which authorizes a borough to reduce its police force for reasons of economy.[3] This section vests authority in the Borough, as the body responsible for fiscal matters to control the size of its police and fire departments *368 by implementing cuts when reasons of economy come into play.
We have held that an officer who is retired under this section is not entitled to a hearing before the Civil Service Commission since there are no charges motivating the retirement. Kusza v. Maximonis, 363 Pa. 479, 70 A.2d 329 (1950). We have also affirmed the authority of a municipality to enact mandatory retirement legislation as a necessary detail of municipal administration and no appeal lies from such action. In re Wallington's Appeal, 390 Pa. 416, 135 A.2d 744 (1957). These cases stand for the proposition that municipalities must have the power to control the orderly and proper functioning of their retirement funds and to react in a responsible manner to economic developments because they and they alone are required to raise tax revenues to fund the programs which are determined to be necessary.
The question here presented is whether Appellee's involuntary retirement can be accomplished under this section without a hearing, and if so, whether this retirement can have an effect on his benefits under the Heart and Lung Act. As we have already recited, the Heart and Lung Act provides for continuing compensation during temporary disability for current members of the police force and the Borough Code provides for a non-reviewable involuntary retirement for economic reasons.
The Borough argues that since Appellee does not question that an economic hardship existed when he was retired and that he had the requisite seniority to be retired, he could be retired under Section 46190 without notice and with no right of appeal. The Borough also argues that the Heart and Lung Act benefits do not confer a property right which supercedes the Borough's right to regulate its police complement because of economic hardship. We agree.
The benefits conferred by the Heart and Lung Act do not guarantee lifetime employment. We have carefully reviewed the Heart and Lung Act and conclude that its *369 provisions do no more than assure uninterrupted compensation of salary for current members of a police force while a temporary incapacity exists to insure that injured police officers are treated equally with actively employed officers.
There is no indication that this Act confers any rights upon injured officers as to the terms of their employment or that the Act in any way removes the right to hire, fire, furlough or retire which is vested in the Borough under Section 46190. All that the Heart and Lung Act provides is that while an officer is a member of the police force his temporary incapacity status cannot be changed without a due process hearing. This is what Callahan stands for and we will not read it or the Act any broader, for to do so would grant greater rights to injured officers than to actively employed officers.
Since the Borough has the sole right under Section 46190 to regulate the size and membership of its police force because of economic constraints, it had the right to invoke this section and retire Appellee. That being the case, his retirement removed him from the group of employees covered by the Act. Since Appellee did not have a right to continued membership in the police force different than any other police officer employed by the Borough, there was no property right affected by his retirement. Accordingly, there was no adjudication which deprived him of a right for which a hearing was required. In re Wallington, 390 Pa. 416, 135 A.2d 744 (1957); Kusza v. Maximonis, 363 Pa. 479, 70 A.2d 329 (1950).
The Order of the Commonwealth Court is reversed and the Order of the Court of Common Pleas is reinstated.
LARSEN, J., files a concurring opinion.
LARSEN, Justice, concurring.
I join the majority opinion, especially in light of the fact that appellant, the Borough of Latrobe, and appellee, Joseph Camaione, Sr., entered into a stipulation that appellee was retired "[f]or reasons of economy, and the necessity to *370 reduce projected expenditures in order to balance the budget for the fiscal year ending December 31, 1981, . . ."
NOTES
[1] Act of June 28, 1935, P.L. 477, Section 1, 53 P.S., Section 637, as amended May 31, 1974, P.L. 309, No. 99, Section 1, 53 P.S. Section 637 (Supp.1981-82)
[2] The section pertinent to this case is found at 53 P.S. Section 637 and provides as follows:
Any policeman . . . of any Borough . . . who is injured in the performance of his duties . . . and by reason thereof is temporarily incapacitated from performing his duties, shall be paid by the . . . municipality, by which he is employed, his full rate of salary, as fixed by Ordinance or Resolution, until the disability arising therefrom has ceased.
[3] 53 P.S. Section 46190 provides in pertinent part:
If for reasons of economy or other reasons it shall be deemed necessary by any borough to reduce the number of paid employees of the police or fire force, then such borough shall apply the following procedure: (i) if there are any employes eligible for retirement under the terms of any retirement or pension law . . . then such reduction in numbers shall be made by retirement of such employes, starting with the oldest employe and following in order of age respectively. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/730748/ | 101 F.3d 714
41 Cont.Cas.Fed. (CCH) P 77,008
NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.Dinah Wolverton PERKINS, Appellant,v.Marvin RUNYON, Postmaster General, United States PostalService, Appellee.
No. 96-1387.
United States Court of Appeals, Federal Circuit.
Nov. 7, 1996.
Before LOURIE, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and RADER, Circuit Judge.
DECISION
PER CURIAM.
1
Dinah Wolverton Perkins appeals from the April 24, 1995 decision of the Postal Service Board of Contract Appeals, Docket No. 3691, denying her appeal from the United States Postal Service's ("the agency's") decision to terminate her mail delivery contract for default. Because the board did not err in determining that Perkins was in default, we affirm.
DISCUSSION
2
The agency awarded Perkins a contract to provide delivery services along a route originating at the agency's office in Marana, Arizona, beginning July 1, 1994. The contract required that she report to the office in sufficient time to sort and load the mail to be delivered and to depart by 9:30 a.m. The contract further required that she deliver the mail and return to the agency's office by 12:45 p.m. Perkins repeatedly failed to meet these requirements. The agency received customer complaints concerning delivery of mail along Perkins' route, including late deliveries, misdeliveries, and failure to pick up outgoing mail.
3
On August 5, 1994, after the first month of the contract, the postmaster met with Perkins to discuss her progress. He informed her of her shortcomings in performance and his concerns about the late deliveries and misdeliveries, and he told her that her performance must improve within thirty days. A week later, the postmaster received a petition signed by seven residents along Perkins' route. They identified what they perceived to be deficiencies in service and they requested that she be removed from the route. On September 1, 1994, the postmaster issued a "Final Request for Service Improvement," informing Perkins that her performance had not improved and giving her two days to restore and maintain satisfactory performance. Perkins' performance continued to fail to meet the contractual requirements, and the agency terminated her contract for default.
4
Perkins appealed the termination to the board. The board upheld the termination, finding that she failed to meet the requirements of her contract, even after being given more than two months to improve. The board also noted that an emergency contractor hired to take over Perkins' route met the contract schedule on a fairly regular basis after approximately five weeks. Accordingly, the board concluded that her failure to meet the requirements of the contract constituted a sufficient basis for the agency to terminate the contract. Perkins now appeals to this court. We have jurisdiction under 28 U.S.C. § 1295(a)(10) (1994).
5
Under our applicable standard of review,
6
the decision of the agency board on any question of law shall not be final or conclusive, but the decision on any question of fact shall be final and conclusive and shall not be set aside unless the decision is fraudulent, or arbitrary, or capricious, or so grossly erroneous as to necessarily imply bad faith, or if such decision is not supported by substantial evidence.
7
41 U.S.C. § 609(b) (1994).
8
Perkins argues that the board ignored or gave no weight to her testimony. She alleges that the board did not consider the agency's failure to train her and that she was subject to harassment. She also alleges that the board's decision was a result of bias. The agency responds that her failure to meet the requirements of the contract was supported by substantial evidence, and that the board did not err in sustaining its termination.
9
We agree with the agency that the board's decision is supported by substantial evidence. Her argument concerning the weight of her testimony implies that we should reweigh the evidence, which would be improper for us to do. Considering the whole record, including her testimony, she has failed to show that the board's decision was not supported by substantial evidence. The record reflects that Perkins repeatedly failed to meet the requirements of the contract, even after being given an opportunity to improve her performance and being warned that continued performance deficiencies may result in termination for default.
10
Nor is there any evidence of record that the agency failed to meet its training obligation. In particular, the board found that the agency provided her with approximately twenty hours of training, even though the contract required that it provide only six hours of training. The board also found her claims concerning harassment and bias to be unsupported by substantial evidence. She has not shown any of these findings to be fraudulent, arbitrary, capricious, or grossly erroneous. | 01-03-2023 | 04-17-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1573613/ | 396 S.W.2d 906 (1965)
Carmen HOLDER, a widow, Appellant,
v.
Howard L. SCOTT, Appellee.
No. 7670.
Court of Civil Appeals of Texas, Texarkana.
October 19, 1965.
On Motion for Rehearing November 23, 1965.
Rehearing Denied November 23, 1965.
*907 Wm. V. Brown, Jr., Brown & Brown, Texarkana, for appellant.
C. M. Kennedy, Texarkana, for appellee.
DAVIS, Justice.
Plaintiff-appellee, Howard L. Scott, filed suit in the Fifth Judicial District Court of Bowie County, Texas, against defendant-appellant, Carmen Holder, a widow, in the nature of a partition suit involving about five acres of land. The parties will be referred to as in the trial court.
Plaintiff and defendant were formerly husband and wife. They married in Texarkana, Arkansas, on March 9, 1930, and lived together until October 22, 1932. On April 28, 1931, they acquired the 5 acre tract of land. They lived in Texarkana, Bowie County, Texas. Plaintiff left defendant and went to Garland County, Arkansas, for the express purpose of getting a divorce, where he filed a suit on or about January 24, 1933. A judgment of divorce was granted to plaintiff, on Citation by Publication, on Feb. 28, 1933.
The defendant filed a suit for divorce and a division of the community property against plaintiff in the 102nd Judicial District Court of Bowie County, Texas, on Feb. 28, 1933. Mr. Scott was served with Citation by Publication. Judgment of divorce was granted to Mrs. Scott on March 23, 1933, and the community property was therein partitioned. According to the judgment as entered in the 102nd Judicial District Court of Bowie County, plaintiff was awarded the five acre tract of land that is involved in this suit as her separate property, free from any rights or claims. The judgment also awarded to Mr. Scott a $2,000.00 diamond ring, a $1400.00 automobile, and a radio of the value of $100.00.
It appears that the plaintiff, in the year 1934, filed a suit in the Fifth Judicial District Court of Bowie County, Texas, to set aside the judgment of divorce and partition of the community property that was entered by the 102nd Judicial District Court of Bowie County, Texas. The attorney who represented the plaintiff in that proceedings made the statement in a letter dated July 23, 1934, that the judgment "* * * can be set aside by a proceedings brought in the same court in which it was rendered." Yet, he filed the suit in the Fifth Judicial District Court of Bowie County, Texas, and cited Mrs. Carmen Scott Holder by Citation by Publication.
It seems that Mr. Scott was not a resident of Bowie County, Texas, at any time after his separation from the defendant, but the record shows that he paid taxes on the property that is involved in this suit. The defendant also paid the taxes.
The plaintiff alleged that he and the defendant were the joint owners of the five acre tract of land that was described in his petition, and that each party was entitled to one-half of the same. Plaintiff alleged the value of the property to be $6,000.00. Defendant denied the allegation and alleged that she was the sole owner of said land.
Plaintiff demanded an abstract of title from the defendant which was furnished, showing that she claimed title to the property *908 under the judgment of the 102nd Judicial District Court of Bowie County, Texas. The defendant demanded an abstract of title and the plaintiff furnished one, showing that he claimed title to the property under the divorce decree of the Chancery Court of Garland County, Arkansas; and, under a divorce decree in the 102nd Judicial District Court of Bowie County, Texas, and a judgment of the Fifth Judicial District Court of Bowie County, Texas, setting aside the divorce decree of the 102nd Judicial District Court of Bowie County, Texas. After all the evidence was in, defendant filed a motion for judgment in her favor. The court overruled defendant's motion and she excepted. The court entered a judgment for the plaintiff. Defendant excepted and gave notice of appeal. She brings forward four points of error.
By her points, defendant says the trial court erred in not granting her motion for judgment; there is no evidence upon which the trial court could find for the plaintiff; in holding the Arkansas Judgment a valid judgment; and in holding that the 102nd Judicial District Court of Bowie County, Texas, was without jurisdiction and could not grant defendant a divorce and partition the community property; and, in holding that the judgment of the Fifth Judicial District Court of Bowie County, Texas, had jurisdiction to set aside and nullify the judgment rendered by the 102nd Judicial District Court of Bowie County, Texas.
In a partition suit, a plaintiff must plead and prove title to the tract of land involved. There is no stipulation or proof of a common source of title, but it was stipulated that the land described in plaintiff's original petition is the land that is involved in the controversy. The plaintiff, anticipating that the defendant would offer in evidence the judgment of the 102nd Judicial District Court of Bowie County, Texas, offered in evidence a divorce judgment that was rendered by the Chancery Court of Garland County, Arkansas. This judgment was offered for the purpose of attempting to show that the plaintiff still owned an undivided interest in and to the title to the land that he was seeking to partition. There was no objections to the judgment, but the defendant took the position that the judgment was void because it was acquired through fraud. Defendant then offered in evidence a judgment of divorce and partition of the community property of the 102nd Judicial District Court of Bowie County, Texas. The plaintiff offered in evidence a judgment of the Fifth Judicial District Court of Bowie County, Texas, which judgment purportedly set aside the judgment of the 102nd Judicial District Court of Bowie County, Texas.
The plaintiff testified in the case that his wife asked him for a divorce. He then testified that they had an agreement that he would go to Arkansas and establish residence for a divorce and they would "split the sale of that property if and when it sold". The plaintiff also testified as follows:
"Q. You didn't let Mrs. Holder know where you were at that time did you?
"A. No.
* * * * * *
"Q. I believe you said on cross examination to Mr. Brown that the reason you went to Hot Springs to file this divorce suit was at the request of your wife.
"A. We had discussed it together and had agreed on it.
* * * * * *
"Q. Did you have any agreement about the property you owned?
"A. Yes.
"Q. An oral agreement?
"A. On community property.
"Q. What agreement did you have with heroral agreement?
"A. That I would go up and establish for divorce. After she asked me *909 for divorce, I said I would go up and establish for divorce, and we would split the sale of that property if and when it sold. * * *"
Yet, in the face of this testimony, defendant filed a suit for divorce and a division of the community property in the 102nd Judicial District Court of Bowie County, Texas. Bearing in mind that the judgment of divorce and partition of the community property was granted in the 102nd Judicial District Court of Bowie County, Texas, on March 23, 1933, the defendant testified that he knew about the suit within two years. He testified as follows:
"Q. You knew Mrs. Scott brought this suit in the 102nd District Court, did you not?
"A. I knew it previous to 1934."
* * * * * *
"Q. You learned about this in less than two years after the divorce was granted, did you not? The divorce was granted on the 27th day of March, 1933, and you learned of it prior to July, 1934, did you not?
"A. That's right."
The plaintiff offered in evidence a letter written to him by an attorney. The letter, dated July 23, 1934, in which the lawyer advised the plaintiff that he would have to take proceedings in the same court in which the judgment was rendered. This seems to be the law. The 102nd Judicial District Court of Bowie County, Texas, had jurisdiction of the parties and the property. If the plaintiff had wanted to take any action to set the judgment aside, he could have filed motion for new trial in the same court in which the judgment was rendered within two years. Citation being by Publication. Such was the law as provided by Art. 2236, Vernon's Ann.Civ. St., now Rule 329, Vernon's Texas Rules of Civil Procedure; 34 T.J.2d 25, Sec. 191. The judgment in Cause No. 2003 styled "H. L. Scott v. Mrs. Carmen Holder, et al" in the Fifth Judicial District Court of Bowie County, Texas, is a nullity and was void from the date of entry. A suit, in such a case, to set aside a judgment must be filed in the same court in which the judgment was rendered. If the judgment of the 102nd Judicial District Court of Bowie County, Texas, was voidable, the judgment has become final and could only be set aside by bill of review in the same court in which the judgment was rendered. 33 T.J.2d 694, Sec. 164; 33 T.J.2d 686, Sec. 157; 33 T.J.2d 687, Sec. 158.
The plaintiff takes the position that we must give full faith and credit to the judgment of the Chancery Court of Garland County, Arkansas. He cites in support thereof Williams et al. v. State of North Carolina, 317 U.S. 287, 63 S.Ct. 207, 87 L. Ed. 279, 143 A.L.R. 1273. In that case, the conviction of O. B. Williams and Lillie Shaver Hendrix for bigamous cohabitation was reversed and remanded. Apparently the case was tried again and resulted in another appeal to the U.S. Supreme Court. In that case, a conviction for bigamous co-habitation was affirmed. Williams et al. v. State of North Carolina, 325 U. S. 226, 65 S.Ct. 1092, 89 L.Ed. 1577, 157 A.L.R. 1366. In the last case the Court said:
"Under our system of law, judicial power to grant a divorcejurisdiction, strictly speakingis founded on domicil."
In Dyer v. Johnson, CCA (1929), 19 S.W. 2d 421, wr. dism., the court said:
"We think that the Texas authorities hold that a judgment entered by a sister state, sued on in this state may be set aside for fraud in the obtaining of the judgment."
The judgment of the Chancery Court of Garland County, Arkansas, was acquired through a fraud that was perpetrated upon the court.
*910 The plaintiff did not plead the judgment of the Chancery Court of Garland County, Arkansas; neither did he plead res adjudicata or estoppel. Neither did he plead the laws of the State of Arkansas or offer them in evidence. In the absence of such pleading and proof of the laws of a sister state, the laws of that state are presumed to be the same as the laws of Texas. Blethen v. Bonner, Tex.Civ.App., 52 S.W. 571, aff'd. 93 Tex. 141, 53 S.W. 1016; Clardy v. Wilson, 24 Tex.Civ.App. 196, 58 S.W. 52; James v. James, 81 Tex. 373, 16 S.W. 1087; Tempel v. Dodge, 89 Tex. 69, 32 S.W. 514, 33 S.W. 222; Armendiaz v. De La Serna, 40 Tex. 291; Bradshaw v. Mayfield, 18 Tex. 21. If such is the case, the plaintiff was not a resident of the State of Arkansas for one full year prior to filing the suit and of the County of Garland for six months prior thereto. Such is the requirement as provided by Art. 4631 V.T.C.S.
If such is not the law, and we are required to examine the laws of the State of Arkansas, it is necessary also to examine the Statement of Facts. According to the laws of Arkansas in 1933, a person must have established a bona fide residence for a period of at least 30 days prior to filing the suit. According to such law, the person must remain there at least 90 days before the decree of divorce can be granted. This is necessary to give the Arkansas court jurisdiction over the plaintiff. The plaintiff testified that he went to Arkansas for the express purpose of getting a divorce. That he had not been in Arkansas for two weeks prior to the time he filed his suit. The suit was filed on January 24, 1933. The divorce was granted on February 28, 1933. This is less than two months. He further testified that he left Arkansas immediately after the divorce was granted. If such was the case, the judgment of divorce as granted in the State of Arkansas is a nullity and is void. Deal v. Deal (1948), 212 Ark. 958, 208 S.W.2d 782; Gilmore v. Gilmore (1942), 204 Ark. 643, 164 S.W.2d 446; Cassen v. Cassen (1947), 211 Ark. 582, 201 S.W. 2d 585. The points are sustained.
The judgment of the trial court is reversed and judgment is here rendered that the appellee take nothing.
ON MOTION FOR REHEARING
The appellee has filed a motion for rehearing. He takes the position that it was stipulated in the trial court that the divorce decree that was entered in Arkansas was a valid decree of divorce between the parties. Appellee attached a certificate by the trial judge to his brief in support of the motion for re-hearing. We will note that the statement of facts as filed in the case contains a certificate of the court reporter, an approval of both the attorneys, and a certificate by the district judge. This court is without jurisdiction to go behind the statement of facts. Gist v. Holt (1943 CCA), 173 S.W.2d 216, W.R., W.M.; Johnson v. Brown (1948 CCA), 218 S.W.2d 317, E.R., N.R.E.; Hawkins v. Western National Bank of Hereford (1912 CCA), 145 S.W. 722, Er. Dism'd; Lawyers Surety Corporation v. San Angelo Tank Car Line, Ltd. (1963 CCA), 365 S.W.2d 212, N.W.H.; 3 T.J.2d 647, Sec. 393.
Appellant took the position in the trial court that the judgment of divorce which was entered by the Arkansas court was void. After the judgment was offered in evidence, appellant, in effect, made a collateral attack upon the same and proved that the judgment was acquired through an act of fraud on the Arkansas Court. Appellant is not bound by the void judgment of the State of Arkansas. 34 T.J.2d 393, Sec. 373.
Much has been written on void judgment. A void judgment is just no judgment at all. It is a nullity and has no force or effect whatever. It is not necessary to take any steps to have a void judgment reversed, vacated or set aside. It may be impeached in any action direct or collateral. 2 Speer's Marital Rights in Texas, Fourth Edition, 580, Sec. 755; 34 T.J.2d 94, Sec. 227; 34 T.J.2d 177, Sec. 262; 49 *911 C.J.S. Judgments § 434, p. 859; 30A Am. J. 197, Sec. 45. A void judgment cannot be cured by subsequent proceeding. 30A Am. J. 199, Sec. 46.
A careful consideration has been given the Motion for Re-hearing, and the same is respectfully overruled. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573073/ | 2 So.3d 939 (2006)
MARSHALL VAN REED
v.
STATE.
No. CR-05-1842.
Court of Criminal Appeals of Alabama.
October 13, 2006.
Decision of the Alabama Court of Criminal Appeal without opinion. Reh. denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573085/ | 2 So.3d 582 (2009)
STATE of Louisiana, Appellee
v.
Samuel Lynn SPEED, Appellant.
No. 43,786-KA.
Court of Appeal of Louisiana, Second Circuit.
January 14, 2009.
*584 Annette Roach, Louisiana Appellate Project, for Appellant.
Paul J. Carmouche, District Attorney, Catherine M. Estopinal, Geya D. Williams Prudhomme, Assistant District Attorneys, for Appellee.
Before STEWART, CARAWAY and MOORE, JJ.
CARAWAY, J.
Samuel Lynn Speed was convicted by a jury of aggravated second degree battery, in violation of La. R.S. 14:34.7, and adjudicated a second felony habitual offender. He received a sentence of 16 years at hard labor without benefit of probation, parole or suspension. Speed appeals his conviction and sentence. We affirm the conviction and, as amended, affirm the sentence.
Facts
On March 9, 2006, at approximately 1:00 a.m., Sheteda Johnson was asleep in the home she occupied with her three children and Samuel Speed, her boyfriend. Johnson was sleeping alone in her bedroom when she was awakened by the feel of something hot on her skin. She jumped out of bed and ran into the hallway screaming, attempting to remove her shirt to get the hot substance, which was later identified as grease, away from her skin. Johnson ran in one direction down the hallway, but turned and ran toward her children's bedroom, which was next door to her bedroom. The children were attempting to exit the room as Johnson tried to enter it. They saw the injuries to their *585 mother and took her across the street to Johnson's mother's house, where an ambulance was called. Speed was standing in the hallway where the bedrooms were located during some portion of these events. He made no move to help the victim or to contact emergency services for her.
The victim was taken to the hospital where she was diagnosed with second and third degree burns on her face, back, shoulders and right hand. For six to seven months following the incident, the victim made regular visits to a doctor to check her injuries. She lived with her mother for two to three months following the incident because she needed help bathing and changing her bandages. During her trial testimony, Johnson was asked to remove her shirt so that she could show the jury the extent of her injuries. Despite defense counsel's objection, the victim was permitted to do so.
Johnson testified that she loved Speed and believed that he did not intend to hurt her. She stated that the state pursued the charges against her will. Johnson testified that Speed claimed he had tripped over something on the bedroom floor, accidentally spilling the grease on her. Johnson also testified that she believed Speed when he told her that he was taking the hot grease to throw it in the commode in the bathroom. The grease had been sitting on their stove in the kitchen. She acknowledged, however, that there was no bathroom in her bedroom and it would have been unnecessary for the defendant to enter that room to throw hot grease into the commode. She also admitted that the grease had been solidified when she had earlier asked Speed to dispose of it. Johnson testified that anyone coming from the kitchen would pass the bathroom before getting to the bedroom where she slept. Johnson also admitted that she and Speed had a "discussion" several weeks before the incident in which Speed accused her of having an affair.
On cross-examination, Johnson testified that the incident could have been an accident, although she wondered why he had come into her room with hot grease. She admitted giving a statement in an affidavit concerning her belief that the incident was an accident. She also stated in the affidavit that she had forgiven Speed and wanted him to go on with his life.
Officer Chad Dailey of the Shreveport Police Department investigated the incident and spoke briefly to Johnson as she was being treated in the ambulance. He believed her to be in shock when he spoke to her, but she told him that "while she was sleeping her live-in boyfriend had thrown hot grease on her while she was sleeping in the bed." Dailey also spoke to the victim's neighbor, Jesse Ray Murray. Dailey testified regarding what Murray told him as follows:
he stated that over the past several days he had had a couple of conversations with the defendant in which the defendant had told Mr. Murray that he felt like the victim was having an affair on him. And Mr. Murray said that the defendant had said that a few days prior he had a pot of boiling water on the stove and was waiting for her to come home and he was going to throw the water on her. Mr. Murray told me he was able to talk him out of that incident.
Dailey was later called on the morning of the crime, and told that Speed was at the patrol desk to turn himself in.
Jean Johnson, Johnson's mother, testified that her doorbell rang at approximately one in the morning and when she answered it her daughter was "standing there with her arms away from her like this and she was covered in oil." Jean Johnson further testified that her daughter *586 said, "Why did he do this to me?" She knew her daughter was referring to Speed.
Finally, Jesse Ray Murray, the neighbor of Johnson and Speed, was called to testify. Murray did not witness the incident, but walked outside after he heard the arrival of the ambulance. Murray had spoken to the defendant a couple of days before the incident. Murray described the conversation as follows:
Q: What did Samuel Speed tell you about Sheteda?
A: Well, came over and said something was going on, you know, with her.
Q: Okay. If you could be specific to the ladies and gentlemen of the jury as to what he said.
A: He was saying that something is going on, I think he had just got out the hospital or something. Anyway he said that what he was going to do was get him some hot water and throw on her.
Q: Okay. Did he say why he was going to do that?
A: Well, what he said was cause I think it's some kind of fidelity (sic) between her and some other guy cheating or something there going on
* * *
Well, he said he had some hot water on the stove at that present time that he was going to throw on her whenever she came back to the house.
* * *
Okay. What I told him was, I said, man, look, if it's that bad what you need to do is get your stuff and leave.
Murray indicated that a similar discussion between Speed and himself also occurred the next day.
When asked on cross-examination why Murray did not tell Johnson or her mother about the threats made by Speed, Murray responded:
Well, because I felt that it was enough it wasn't enough to we hadn't nothing really happened. People will talk when they angry, upset, so I took it for granted that that's more or less, course see, I wasn't going to get really going to get involved in it cause, see, they could have just went on back home tonight and made it up and got up and forgot all about it. [sic]
Murray was also asked repeatedly about an incident involving Speed's dog. Murray testified that Speed and Johnson were out of town between 3 and 6 months before the present incident and their dog got out of their backyard and attempted to attack him. Murray shot once at the ground near the dog, but it kept advancing on him, so he shot and killed the dog. He then notified Speed and Johnson.
A six-person jury unanimously found Speed guilty as charged of aggravated second degree battery on March 22, 2007. Motions for new trial and post-verdict judgment of acquittal were subsequently filed and denied by the court. The state filed a habitual offender bill of information and the district court adjudicated Speed a second felony offender.
At the end of the habitual offender proceeding and prior to sentencing, Johnson, Merita Starks, Speed's daughter, and Speed testified. After hearing testimony from these witnesses regarding the accidental nature of the incident and the hardship that Speed's incarceration would cause, the trial court subsequently sentenced the defendant to 16 years at hard labor without benefit of probation, parole or suspension of sentence. Speed appeals his conviction and sentence.
*587 Discussion
Speed argues that the evidence was insufficient to support his conviction because the state failed to prove he had the requisite intent to commit a battery upon the victim. Speed contends that there were no eyewitnesses to the incident and that Johnson believed the incident was accidental. Speed urges that Murray's testimony was unreliable because Murray could not remember certain events and there was tension in the relationship between Speed and Murray after Murray shot his dog.
The standard of appellate review for a sufficiency of the evidence claim is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime proven beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); State v. Tate, 01-1658 (La.5/20/03), 851 So.2d 921, cert. denied, 541 U.S. 905, 124 S.Ct. 1604, 158 L.Ed.2d 248 (2004); State v. Cummings, 95-1377 (La.2/28/96), 668 So.2d 1132; State v. Murray, 36,137 (La.App. 2d Cir.8/29/02), 827 So.2d 488, writ denied, 02-2634 (La.9/05/03), 852 So.2d 1020. This standard, now legislatively embodied in La. C. Cr. P. art. 821, does not provide the appellate court with a vehicle to substitute its own appreciation of the evidence for that of the fact finder. State v. Pigford, 05-0477 (La.2/22/06), 922 So.2d 517; State v. Robertson, 96-1048 (La.10/4/96), 680 So.2d 1165. The appellate court does not assess the credibility of witnesses or reweigh evidence. State v. Smith, 94-3116 (La.10/16/95), 661 So.2d 442. A reviewing court accords great deference to a jury's decision to accept or reject the testimony of a witness in whole or in part. State v. Hill, 42,025 (La.App. 2d Cir.5/9/07), 956 So.2d 758, writ denied, 07-1209 (La.12/14/07), 970 So.2d 529; State v. Gilliam, 36,118 (La.App. 2d Cir.8/30/02), 827 So.2d 508, writ denied, 02-3090 (La.11/14/03), 858 So.2d 422.
The Jackson standard is applicable in cases involving both direct and circumstantial evidence. An appellate court reviewing the sufficiency of evidence in such cases must resolve any conflict in the direct evidence by viewing that evidence in the light most favorable to the prosecution. When the direct evidence is thus viewed, the facts established by the direct evidence and inferred from the circumstances established by that evidence must be sufficient for a rational trier of fact to conclude beyond a reasonable doubt that defendant was guilty of every essential element of the crime. State v. Sutton, 436 So.2d 471 (La.1983); State v. Parker, 42,311 (La. App. 2d Cir.8/15/07), 963 So.2d 497; State v. Owens, 30,903 (La.App. 2d Cir.9/25/98), 719 So.2d 610, writ denied, 98-2723 (La.2/5/99), 737 So.2d 747. Circumstantial evidence consists of proof of collateral facts and circumstances from which the existence of the main fact may be inferred according to reason and common experience. State v. Robbins, 43,129 (La.App. 2d Cir.3/19/08), 979 So.2d 630. A conviction based upon circumstantial evidence must exclude every reasonable hypothesis of innocence. La. R.S. 15:438.
Where there is conflicting testimony about factual matters, the resolution of which depends upon a determination of the credibility of the witnesses, the matter is one of the weight of the evidence, not its sufficiency. State v. Allen, 36,180 (La. App. 2d Cir.9/18/02), 828 So.2d 622, writs denied, 02-2595 (La.3/28/03), 840 So.2d 566, 02-2997 (La.6/27/03), 847 So.2d 1255, cert. denied, 540 U.S. 1185, 124 S.Ct. 1404, 158 L.Ed.2d 90 (2004).
*588 The trier of fact is charged to make a credibility determination and may, within the bounds of rationality, accept or reject the testimony of any witness; the reviewing court may impinge on that discretion only to the extent necessary to guarantee the fundamental due process of law. State v. Casey, 99-0023 (La.1/26/00), 775 So.2d 1022, cert. denied, 531 U.S. 840, 121 S.Ct. 104, 148 L.Ed.2d 62 (2000).
La. R.S. 14:34.7 defines aggravated second degree battery as a battery committed with a dangerous weapon when the offender intentionally inflicts serious bodily injury. The statute defines serious bodily injury as bodily injury which involves unconsciousness, extreme physical pain or protracted and obvious disfigurement, or protracted loss or impairment of the function of a bodily member, organ, or mental faculty, or a substantial risk of death.
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. La. R.S. 14:10(1). Second degree battery is a specific intent crime. State v. Fuller, 414 So.2d 306 (La.1982); State v. Hunter, 36,692 (La.App. 2d Cir.12/20/02), 834 So.2d 6. The evidence must show that the defendant intended to inflict serious injury. Id. Likewise, aggravated second degree battery is also a specific intent crime. State v. Lee, 07-1404 (La.App. 3d Cir.5/7/08), 2008 WL 1961152; State v. P.M., 00-1613 (La.App. 3d Cir.5/2/01), 786 So.2d 857. Although intent is a question of fact, it need not be proven as a fact; instead, it may be inferred from the circumstances of the transaction. State v. Fuller, 414 So.2d at 310.
In this case, there is no dispute that it was Speed who poured hot grease on Johnson while she slept in their home. The sole issue is whether the state presented proof beyond a reasonable doubt that Speed had the requisite specific intent to inflict seriously bodily injury. Only the defendant, who exercised his right not to testify, observed how Johnson was burned by the grease. Therefore, the state's case rests upon circumstantial evidence. At trial, Johnson could only state that it was a possibility that the incident was an accident, adding "anything is possible." After the incident, Johnson immediately made statements to her mother questioning why Speed would do this to her, and thus suggesting his intentional criminal motive. She admitted that Speed was disturbed over the possibility of her having an affair and had accused her of doing so weeks prior to the incident. These facts corroborate Murray's testimony that Speed accused Johnson of having an affair in the two days prior to the incident and had planned to throw hot water on her before Murray talked him out of it. If believed, Murray's testimony establishes that Speed exhibited a pattern of behavior in seeking to hurt Johnson in retaliation for the alleged affair.
The circumstantial evidence also refutes Speed's claim of intending to dispose of the hot grease in the bathroom. His asserted actions of heating cold crease at 1:00 a.m. and carrying the hot grease down a hallway into a room where there was no bathroom, are beyond belief. This accidental scenario is also belied by Speed's failure to assist Johnson at the time of the incident and his departure from the scene.
From this evidence, the jury could have reasonably inferred that Speed intentionally poured hot grease on Johnson in retaliation for the alleged affair with the specific intent to inflict serious bodily injury. When viewed in the light most favorable to the prosecution, a rational trier of fact could have rejected Speed's claims of an accident as unreasonable and found the *589 essential elements of the crime proven beyond a reasonable doubt. This assignment of error is without merit.
Speed next argues that his conviction should be reversed and remanded for new trial because it is unclear whether 6 or 12 jurors were actually empaneled. Speed contends that the March 20, 2007, trial court minutes state that previously accepted jurors, "made a jury of twelve (12) good and true persons...."
Although Speed correctly points out the above-noted minute entry, the record also reflects that the minute entry on the date of the verdict states that the jury was polled and all six jurors indicated their vote. Further the record minutes have been modified. The original March 20, 2007 minutes contain a handwritten "X" through the entry with a handwritten note stating, "see page 5A for corrected minutes." Page 5A of the record contains a single entry dated March 20, 2007 which corrects the erroneous reference to twelve jurors.
Finally, the trial transcript reflects that six jurors were polled. Where there is a discrepancy between the minutes and the transcript, the transcript prevails. State v. Lynch, 441 So.2d 732 (La.1983). With the corrected minutes contained in the record, and the transcript reflecting that a six-person juror convicted Speed, we find no merit to this argument.
Speed next argues that the jury charges contained in the record erroneously state that "general intent" is required to be found in order to convict the defendant of aggravated second degree battery, aggravated battery, second degree battery and simple battery.
The record before us shows that during the jury charge conference, the state objected to the proposed jury charges on the grounds that "none of the charges are specific intent crimes." The court noted, "That's correct," and the written charge ultimately gave the following instruction:
I instruct you that general criminal intent is an essential element of Aggravated Second Degree Battery, Aggravated Battery, Second Degree Battery and Simple Battery.
Defense counsel lodged no objection to the instruction and the final charge read to the jury is not part of the transcript of the appellate record.
Proof of specific intent is required where the statutory definition of a crime includes the intent to produce or accomplish some prescribed consequence. State v. Fuller, supra; State v. Elliot, 00-2637 (La.App. 1st Cir.6/22/01), 809 So.2d 203.[1] Serious bodily injury is the intended harm for the crime of second degree battery. State v. Fuller, supra. Therefore, the defendant's crime of conviction was a specific intent crime.
La.C.Cr.P. art. 801 sets out the procedure for challenging jury instructions in subpart C, as follows:
A party may not assign as error the giving or failure to give a jury charge or any portion thereof unless an objection thereto is made before the jury retires or within such time as the court may reasonably cure the alleged error. The nature of the objection and grounds therefor shall be stated at the time of the objection. The court shall give the party an opportunity to make the objection out of the presence of the jury.
*590 Generally, a party may not assign as error a complaint to a jury charge in the absence of a contemporaneous objection. State v. Belgard, 410 So.2d 720 (La.1982); State v. Wilson, 28,403 (La. App. 2d Cir.8/21/96), 679 So.2d 963. See also State v. Hongo, 96-2060 (La. 12/2/97), 706 So.2d 419, fn. 3 at p. 422. An invalid instruction on the elements of an offense is not a structural error and is therefore subject to harmless error review and only warrants reversal when the defendant is actually prejudiced by the error. State v. Hongo, supra; State v. Woods, 00-2147 (La.App. 1st Cir.5/11/01), 787 So.2d 1083, writ denied, 01-2389 (La.6/14/02), 817 So.2d 1153. 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. State v. Hongo, supra. The determination is based upon whether the guilty verdict actually rendered in this trial was surely unattributable to the error. State v. Hongo, supra. See State v. Hollins, 99-278 (La.App. 5th Cir.8/31/99), 742 So.2d 671, writ denied, 99-2853 (La.1/5/01), 778 So.2d 587; State v. Page, 96-227 (La.App. 5th Cir.8/28/96), 680 So.2d 104, writ denied, 96-2543 (La.9/19/97), 701 So.2d 153, where the trial courts incorrectly instructed juries that an essential element of the charged crime was general intent for specific intent crimes. The appellate courts upheld the verdicts after observing that the courts had properly instructed the juries on the elements of the crime and determining that the evidence supported the convictions.
In this case, because no contemporaneous objection was made by Speed to the jury charge, he is statutorily precluded from raising this issue on appeal. Moreover, considering the unique facts presented by this case, any error in the jury instruction is harmless and surely unattributable to the verdict. The jury in this case was correctly instructed on the definition of the crime of aggravated second degree battery. The crime is defined as a battery committed with a dangerous weapon when the offender intentionally inflicts serious bodily injury. Even with the incorrect instruction regarding general intent, the jury was correctly instructed by the definition of the crime that in order to convict Speed the evidence must show that he intentionally inflicted serious bodily injury, the prescribed conduct. Thus, the very definition of the crime necessitated a finding of specific intent and the jury could not have convicted Speed on an improper element.
As noted above, the facts clearly indicate, to the exclusion of any reasonable hypothesis of innocence, that Speed intended to inflict serious bodily injury upon Johnson through the act of throwing hot grease upon her person. Speed had discussed his desire to physically injure Johnson in like manner in the two days prior to the event, acted consistently with his comments on the night in question, and fled the scene without assisting Johnson. Thus, the evidence is otherwise sufficient to support the jury's verdict and this argument is without merit.
Speed next argues that the display of Johnson's scarring in front of the jury prejudiced the jury and precluded an impartial review of the evidence.
Relevant evidence is evidence having any tendency to make the existence of any fact that is of consequence as to the determination of the action more probable or less probable than it would be without the evidence. La. C.E. art. 401. All relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, and the Constitution of *591 Louisiana, the Louisiana Code of Evidence or other legislation. All evidence that is not relevant is inadmissible. La. C.E. art. 402. Relevant evidence may be excluded if the probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by consideration of undue delay, or waste of time. La. C.E. art. 403.
As discussed at length above, an essential element of the crime of aggravated second degree battery is proof of serious bodily injury. Bodily injury includes bodily injury which involves extreme physical pain, or protracted and obvious disfigurement or a substantial risk of death. Here, through Johnson, the state sought to show the extent of pain, body scarring and disfigurement that resulted from the hot grease burns. Obviously such evidence is relevant to the state's proof of the essential element of serious bodily injury and completed the story of the crime. For this reason, any prejudice to Speed was outweighed by the probative value of the evidence.
Concerning his adjudication as an habitual offender, Speed also contends that the minutes of court used to prove his predicate conviction in the habitual offender proceeding were insufficient to show that the plea was free and voluntary. The state introduced at the habitual offender hearing the court minutes relating to the prior offense. Those minutes reflect that on February 9, 2004, Speed entered a plea of guilty to the charge of possession of a Schedule II drug and the "court informed the defendant of his constitutional rights as per Boykin v. Alabama...." Speed's counsel objected to this evidence on the grounds that the evidence did not appear to be certified copies, namely because the documents did not have a seal on them. The court overruled the objection. Eventually, the state supplied originals of the documents and introduced them into evidence. Defense counsel offered no further objection to the evidence either in a written motion or by oral objection.
La. R.S. 15:529.1 D(1)(b) provides in relevant part:
A person claiming that a conviction or adjudication of delinquency alleged in the information was obtained in violation of the Constitutions of Louisiana or of the United States shall set forth his claim, and the factual basis therefor, with particularity in his response to the information. The person shall have the burden of proof, by a preponderance of the evidence, on any issue of fact raised by the response. Any challenge to a previous conviction or adjudication of delinquency which is not made before sentence is imposed may not thereafter be raised to attack the sentence.
This provision requires affirmative evidence of a defect in the prior guilty plea. Otherwise, the presumption of regularity which attaches to the minutes of a prior guilty plea means that the trial court can assume a defendant received advice with respect to each of his Boykin[2] rights until he proves otherwise. State v. Clesi, 07-0564 (La.11/2/07), 967 So.2d 488. Where the record does not contain a written objection to the multiple offender bill of information, any issue relating to the constitutionality of the plea is not preserved for appellate review unless an oral objection is made at the hearing. State v. Braziel, 42,668 (La.App. 2d Cir.10/24/07), 968 So.2d 853; State v. Johnson, 42,323 *592 (La.App. 2d Cir.8/15/07), 962 So.2d 1126; State v. Henry, 36,217 (La.App. 2d Cir.8/14/02), 823 So.2d 1064.
Because Speed did not raise his challenge to the previous guilty plea in either a written response to the bill or prior to the imposition of sentence, he is precluded from raising this issue on appeal. Moreover, in proof of the previous conviction, the state introduced the bill of information containing the defendant's fingerprints and the court minutes. Because Speed entered no evidence to contest the validity of the plea, the minutes stating that Speed was informed of his Boykin rights are presumed to be regular. The trial court properly assumed that Speed received the correct Boykin advice because he had not proven otherwise. State v. Clesi, supra. Thus, this argument is without merit.
In his final assignments of error, Speed argues that the trial court failed to comply with the provisions of La.C.Cr.P. art. 894.1. Speed also contends that the imposed sentence is excessive and serves no legitimate purpose.
After sentencing, Speed filed a motion to reconsider sentence on the grounds of constitutional excessiveness only. The failure to include a specific ground upon which a motion to reconsider may be based shall preclude the defendant from raising an objection to the sentence or from urging any ground not raised in the motion on appeal or review. La. C.Cr.P. art. 881.1; State v. Mims, 619 So.2d 1059 (La.1993); State v. Masters, 37,967 (La.App. 2d Cir.12/17/03), 862 So.2d 1121; State v. Duncan, 30,453 (La.App. 2d Cir.2/25/98), 707 So.2d 164. Thus, Speed is precluded from arguing La.C.Cr.P. art. 894.1 noncompliance and is relegated to review of the bare claim of constitutional excessiveness.
Regarding the excessiveness of the sentence, Speed argues that no evidence from his previous behavior suggests he would be likely to commit a similar offense. He also re-urges that the court should have given weight to the wishes of the victim in fashioning the imposed sentence and that because of his incarceration, she continues to be victimized as she has been financially ruined. Speed argues that a lesser period of incarceration, one near or at the minimum required by law, would meet the needs of society and the goals of punishment. Finally, Speed contends that the trial court erroneously restricted his eligibility for parole under La. R.S. 15:529.1.
A sentence violates La. Const. art. 1, § 20 if it is grossly out of proportion to the seriousness of the offense or nothing more than a purposeless and needless infliction of pain and suffering. State v. Smith, 01-2574 (La.1/14/03), 839 So.2d 1; State v. Dorthey, 623 So.2d 1276 (La.1993); State v. Bonanno, 384 So.2d 355 (La.1980). A sentence is considered grossly disproportionate if, when the crime and punishment are viewed in light of the harm done to society, it shocks the sense of justice. State v. Weaver, 01-0467 (La.1/15/02), 805 So.2d 166; State v. Lobato, 603 So.2d 739 (La.1992); State v. Robinson, 40,983 (La. App. 2d Cir.1/24/07), 948 So.2d 379; State v. Bradford, 29,519 (La.App. 2d Cir.4/2/97), 691 So.2d 864.
For Speed's conviction and adjudication as a second felony habitual offender, he faced a maximum possible sentencing exposure of 30 years. In addition to the possession of cocaine offense for which he was habitually billed, Speed also had an unauthorized entry of an inhabited dwelling conviction in 1989. Despite the victim's requests that Speed not serve jail time for the offense, the fact remains that Speed's actions in pouring hot grease on another were an inhumane act of cruelty. Further, the evidence shows that his behavior *593 was premeditated. Considering the egregious nature of the act and Speed's criminal record, we find no constitutional error in the sentence which is appropriately tailored to this defendant.
Speed correctly points out, however, that the trial court erroneously imposed the sentence without benefit of parole. La. R.S. 15:529.1 G provides that a sentence imposed under the habitual offender statute is to be served without benefit of probation or suspension of sentence only. State v. Tate, 99-1483 (La. 11/24/99), 747 So.2d 519. The underlying offense of conviction places no restriction on Speed's parole eligibility so the court erroneously imposed the sentence without parole. Because the deletion of this portion of the sentence does not involve the exercise of judicial discretion, we amend the sentence to delete that portion denying Speed the benefit of parole. State v. Tate, supra. In all other respects, the sentence is affirmed.
Conclusion
For the foregoing reasons, Speed's conviction is affirmed. The imposed sentence is amended to delete that portion of the sentence which denies parole eligibility, and, as amended is affirmed.
CONVICTION AFFIRMED; SENTENCE AMENDED, AND AFFIRMED AS AMENDED.
NOTES
[1] To the contrary, in general intent crimes, criminal intent necessary to sustain a conviction is shown by the very doing of the acts which have been declared criminal. State v. Howard, 94-0023 (La.6/3/94), 638 So.2d 216; State v. Holmes, 388 So.2d 722 (La. 1980).
[2] This notation is a reference to the case of Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573098/ | (2008)
Jonathan HAAS, M.D., Plaintiff,
v.
WYOMING VALLEY HEALTH CARE SYSTEM, Defendant.
No. 3:03-CV-1966.
United States District Court, M.D. Pennsylvania.
March 31, 2008.
MEMORANDUM
A. RICHARD CAPUTO, District Judge.
Before me are Plaintiff Dr. Jonathan Haas' request for equitable relief pursuant to the Americans with Disabilities Act ("ADA") and motion for attorney's fees. (Doc. 137, 125.) Also before me is Defendant Wyoming Valley Health Care System's ("WVHCS") post-trial motions for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(b), or in the alternative, for a new trial pursuant to Federal Rule of Civil Procedure 59. (Doc. 124.)
Judgment as a matter of law will be entered in favor of the Defendant on the Rehabilitation Act claim because Plaintiff Dr. Haas posed a "direct threat" to the health and safety of the patients in WVHCS. Because Defendant WVHCS is entitled to judgment as a matter of law under Rule 50(b) of the Federal Rules of Civil Procedure, I do not reach the Defendant's motion for a new trial. As the same analysis applies for a "direct threat" pursuant to the Rehabilitation Act and the ADA, Plaintiffs request for equitable relief will be denied. As Plaintiff is not a prevailing party, Plaintiffs motion for attorney's fees will also be denied.
BACKGROUND
Dr. Haas brought suit against WVHCS under the ADA and the Rehabilitation Act of 1973, 29 U.S.C. §§ 791 and 794, seeking equitable relief including reinstatement and damages, respectively. A trial was held before a jury on the Rehabilitation Act claim beginning April 2, 2007, and after five days of trial, the jury returned a verdict in favor of Dr. Haas in the amount of $250,000.00. (Doc. 120.)
The issues for legal relief pursuant to the Rehabilitation Act turn on essentially the same questions which must be decided for equitable relief pursuant to the ADA. These questions are whether Dr. Haas could perform as an orthopedic staff surgeon at the hospital with or without a reasonable accommodation, and, if so, did he pose a direct threat to the patients he might encounter in the operating room at the hospital.
Dr. Haas has a disability, bipolar disorder, and his disability had a substantial effect on the major life activity of thinking. He could not perform as an orthopedic staff surgeon at the hospital without a reasonable accommodation, but he could do so with a reasonable accommodation. The accommodation made by the WVHCS as a condition to reinstatement was reasonable. Lastly, in any, any event, the WVHCS met its burden of proof in demonstrating that Dr. Haas posed a direct threat to patients he might encounter in the operating room at the hospital without adherence to the conditions of accommodation proffered by WVHCS.
The salient facts are as follows. Dr. Haas was a well-educated and trained physician and orthopedic surgeon. Early in his career, while a resident in 1994, he suffered from an episode then diagnosed as a bipolar disorder. He received treatment and continued his career without recurrence until 1999 when he suffered another episode. After a similar diagnosis, he underwent psychiatric treatment and took medication. He recovered, or went into recession. In 2000, he wished to return to northeastern Pennsylvania and entered the employ of Dr. Michael Raklewicz, an orthopedic surgeon in Wilkes-Barre, Pennsylvania. He sought orthopedic privileges at Wilkes-Barre General Hospital, and in this process his mental illness and the episodes occasioned thereby became known to the hospital. Dr. Thomas L. Campbell required a psychiatric clearance of Dr. Haas, and Dr. Haas, in January 2001, secured such a clearance from Dr. Matthew Berger, a psychiatrist selected by Dr. Haas. Thereafter, Dr. Haas was given credentials as an orthopedic surgeon at the hospital.[1]
On May 23, 2001, while performing a total knee replacement in the operating room at the hospital, Dr. Haas suffered an episode engendered by his mental illness (bipolar disorder). Part way into the surgery, he demonstrated confusion in his thought process to the extent that the assistant and the prosthesis manufacturer's representative gave him instructions on the performance of the procedure. In the course of the episode, he was distracted from the procedure and engaged in conversation with a student unrelated to the surgery. The evidence was abundant that he was confused in his thought processes such that he could not perform the operation without specific instructions and guidance from others.
After the completion of the knee replacement, Dr. Haas continued to exhibit behavior that was consistent with a confusing thought process. He asked the same question five times of two other physicians who were puzzled by his behavior. This was observed by Dr. Raklewicz, who also found Dr. Haas uncommunicative.
After this operating room incident, Dr. Haas relinquished his privileges, and he was granted a one year leave of absence, effective May 24, 2001. Dr. Haas, in an effort to gain reinstatement, asked Dr. Berger to write a letter concerning his condition, which Dr. Berger did in August 2001. The letter opined that Dr. Haas was presently not exhibiting any active mental disease. (Pl's Ex. 61.) In November 2001, Dr. Berger wrote advising the hospital that he was unable to clear Dr. Haas for practice. (D.'s Ex. 27.) The letter stated in part that "[a]s to whether Dr. Haas had a psychiatric problem, I am unable to make that determination and say whether a psychiatric problem existed. Therefore, I am unable to psychiatrically clear him." (D.'s Ex. 27.) The letter also states, however, "[that] on interview with me, the patient showed no evidence [of] any Axis I psychiatric disorder. As to Axis II issues, i.e. his personality, the patient does tend to be rather introspective and socially naive in his interactions. However, I do not believe that this reaches the threshold which could be considered a disorder and/or a disease." (D.'s Ex. 27.) Five days later, the Credentials Committee advised Dr. Haas he would need unequivocal psychiatric clearance before he could be considered for reinstatement. (Pl.'s Ex. 39.)
Thereafter, Dr. Haas engaged Dr. Kelly J. Felins in an effort to gain psychiatric clearance. By letter of June 26, 2002, Dr. Felins wrote to Dr. Thomas Campbell. (Pl.'s Ex. 44.) No reinstatement was granted as a result of the June 26, 2002 Felins letter. The letter opined "Regard Dr. Haas's clinical abilities: I have no way of judging his surgical skills but find that he is quite capable of problem-solving. My reservation would be that under stress, he may have difficulty relating to patients or staff. I recommend that this possibility be directly evaluated, if possible, before making any decisions to resolve this matter." (Pl.'s Ex. 44.) Dr. Felins wrote a second letter on November 4, 2002, in which she "strongly recommended" that Dr. Haas end his voluntary leave and return to work without restrictions. (Pl.'s Ex. 50.) This letter stated, in its entirety:
This letter is a follow-up regarding Jonathan Haas, M.D. Since my last letter he has followed up fully with my recommendations to enter into treatment with Dominic Mazza, M.D. and continues in weekly psychotherapy.
His personality disorder is stable and in no way should interfere with his return to work. I therefore recommend strongly that he end his voluntary medical leave and return to work without restrictions as soon as possible.
(Pl.'s Ex. 50.) In the meantime, Dr. Haas had been treated by Dr. Mazza, a psychiatrist, for his bipolar disorder. On November 27, 2002, Dr. Mazza wrote a letter indicating that Dr. Haas was making satisfactory progress, and that he supported Dr. Felins' recommendation. (Pl.'s Ex. 53.) Dr. Mazza's letter, in its entirety, stated "Dr. Jonathan Haas is a patient of mine in individual psychotherapy and is making satisfactory progress. I am aware of Dr. Felins' evaluation and recommendations and support those." (Pl.'s Ex 53.) On December 4, 2002, the Credentials Committee recommended that Dr. Haas' privileges be reinstated with the conditions that he be supervised/assisted in the operating room for a period of six months by a Board Certified Orthopedic Surgeon who was on the staff of the hospital; that Dr. Haas was responsible for securing such an orthopedic surgeon; that Dr. Haas continue with his psychiatric treatment; and, that his treating psychiatrist provide periodic reports of his progress to the hospital. (Pl.'s Ex. 54.) Dr. Haas was notified of these conditions for reinstatement by letter of December 18, 2002 from Dr. Host, the Chief Executive Officer of WVHCS. (Pl.'s Ex. 55.)
Dr. Haas was unable to secure an orthopedic surgeon to supervise him in the operating room. Dr. DePasquale, the Chief of Surgery at the hospital, and a general surgeon, volunteered to accompany him, but the hospital required an orthopedic surgeon, viewing a general surgeon as not being qualified to do orthopedic surgery of the type performed by Dr. Haas.
Dr. Haas informed the hospital he was unable to obtain a qualifying orthopedic surgeon, and requested that this condition be eliminated. The hospital did not respond to Dr. Haas in this regard.
LEGAL STANDARD
I. Judgment as a Matter of Law-Standard
Under Rule 50(b), a party may renew its request for a motion for judgment as a matter of law by filing a motion no more than ten (10) days after judgment is entered. See FED. R. CIV. P. 50(b). In the present case, Defendants' Rule 50(b) motion was timely filed in accordance with the Court's May 1, 2007 Order setting post-trial briefing deadlines. (Docs. 131, 148.) Judgment notwithstanding the verdict should be granted sparingly. See Walter v. Holiday Inns, Inc., 985 F.2d 1232, 1238 (3d Cir.1993). In deciding whether to grant a Rule 50(b) motion:
the trial court must view the evidence in the light most favorable to the non-moving party, and determine whether the record contains "the minimum quantum of evidence from which a jury might reasonably afford relief." The court may not weigh evidence, determine the credibility of witnesses or substitute its version of the facts for that of the jury. The court may, however, enter judgment notwithstanding the verdict if upon review of the record, it can be said as a matter of law that the verdict is not supported by legally sufficient evidence.
Parkway Garage, Inc. v. City of Philadelphia, 5 F.3d 685, 691-92 (3d Cir.1993), abrogation on other grounds recognized by United Artists Theatre Circuit, Inc. v. Twp. of Warrington, PA, 316 F.3d 392 (3d Cir.2003) (citations omitted). The question is not whether there is literally no evidence supporting the non-moving party, but whether there is evidence upon which the jury could properly find for the nonmoving party. See Walter, 985 F.2d at 1238 (citing Patzig v. O'Neil, 577 F.2d 841, 846 (3d Cir.1978)).
DISCUSSION
I. Standing
The Defendant WVHCS first argues that it is entitled to judgment as a matter of law because Dr. Haas is a non-employee seeking medical staff privileges at the hospital. For that reason, Defendant argues that Dr. Haas is not a member of the protected class of individuals under the Rehabilitation Act or the ADA. The Defendant WVHCS cites Wojewski v. Rapid City Reg'l Hosp., 450 F.3d 338 (8th Cir. 2006), an Eighth Circuit Court of Appeals case in support of its theory. In Wojewski the plaintiff physician sued the defendant hospital alleging that the termination of his privileges at the hospital violated Title I of Americans with Disabilities Act ("ADA") and the Rehabilitation Act.
The Eight Circuit Court of Appeal's analysis focused first on the plaintiff physician's standing under Title I of the ADA. First, the court noted that Title I of the ADA deals solely with employment discrimination actions. The plaintiff physician was a member of the medical staff, which permitted him to admit patients, use the hospital's facilities, and perform surgeries. Id. at 340. However, the plaintiff physician also leased separate office space and maintained his own staff. Id. The defendant hospital did not bill patients for the plaintiffs services, and the hospital did not pay the plaintiff. Id. The plaintiff physician was later diagnosed with bipolar disorder, and took a leave of absence. Id. Later that year, the defendant hospital reinstated the plaintiff physician subject to certain conditions. Id. After reinstatement, the plaintiff physician experienced an acute episode during surgery, and the defendant hospital terminated the plaintiff physician's medical staff privileges. Id. at 341.
In Wojewski, the Eighth Circuit Court of Appeals affirmed the district court's grant of summary judgment, finding that the plaintiff physician did not have standing under Title I of the ADA because he was not an employee of the hospital, but an independent contractor. Id. at 342. Such a finding was based upon the facts that the plaintiff physician maintained its own office and was not paid by the hospital. Id. Furthermore, the court held that given the similarity between the ADA and the Rehabilitation Act, the court would decline to extend coverage of the Rehabilitation Act to independent contractors in this scenario. Id. at 345.
In comparison, Plaintiff cites Menkowitz v. Pottstoum Mem'l Med. Ctr., 154 F.3d 113 (3d Cir. 1998). In this Third Circuit Court of Appeals case, the court considered whether Title III of the ADA granted a cause of action to a plaintiff physician with staff privileges. The court noted that "it is evident that Congress sought to regulate disability discrimination in the area of employment exclusively through Title I, notwithstanding the broad language of Title III." Id. at 118-19. The court found that the plaintiff properly stated a cause of action as an individual within the meaning of Title III. Id. at 121.
In this case, Plaintiff Dr. Haas brought his cause of action pursuant to Title III of the ADA, and not Title I. As Title III is the applicable provision in this case, Menkowitz is the controlling law. Although Wojewski is persuasive authority on the standing of such a plaintiff to bring a Title I claim, it is inapplicable to the Plaintiffs standing under Title I. Menkowitz specifically distinguished between Title I and Title III of the ADA in its decision, holding that "a medical doctor with staff privilegesone who is not an employee for purposes of Title Imay assert a cause of action under Title III of the ADA as an `individual' who is denied the`full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation.'" Id. at 122. Therefore, Plaintiff does have standing to bring a claim pursuant to Title III of the ADA. The Third Circuit Court of Appeals also discussed standing pursuant to Section 504 of the Rehabilitation Act. The court held that "nothing in the Rehabilitation Act would prevent a physician with staff privileges from asserting a cause of action based on disability discrimination." Id. at 123 (citing Landefeld v. Marion Gen. Hosp., 994 F.2d 1178 (6th Cir.1993)).
For these reasons, Plaintiff Dr. Haas has standing to sue the Defendant WVHCS under both Title III of the ADA and Section 504 of the Rehabilitation Act.
II. Elements of a ClaimThe Rehabilitation Act and the ADA
Section 504 of the Rehabilitation Act provides that "No otherwise qualified individual with a disability in the United States, as defined in Section 705(20) of this title, shall, solely by reason of her or his disability, be excluded from the participation in, or be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance."
To establish a claim, plaintiff must show that: (1) he is an individual with a disability; (2) he is otherwise qualified for participation in the program or activity, or for the position sought; (3) he was excluded from the position sought, denied the benefits of, or subject to discrimination under the program or activity "solely by reason of his [or her] handicap;" and (4) the relevant program or activity receives federal financial assistance. Menkowitz, 154 F.3d at 123 (citing Strathie v. Dep't of Transp., 716 F.2d 227, 230 (3d Cir.1983); Wagner v. Fair Acres Geriatric Ctr., 49 F.3d 1002, 1009 (3d Cir.1995)).
Plaintiff also must show that a reasonable accommodation is possible. Donahue v. Consol. Rail Corp., 224 F.3d 226, 229 (3d Cir.2000). For a disparate treatment claim, a plaintiff must also show by a preponderance of the evidence that others not in his protected class were treated differently. Logan v. Potter, 2007 WL 1652268 (D.N.J. June 6, 2007) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)).
In defense, the Defendant bears the burden of proving that the accommodations requested by the plaintiff are unreasonable, or would cause an undue burden on the employer. Donahue, 224 F.3d at 229. The burden also shifts to the defendant to show a legitimate, non-discriminatory reason for the adverse employment act. St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 508-10, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993). However, the ultimate burden remains with the plaintiff. Once the employer satisfies the burden of production by introducing evidence of a legitimate non-discriminatory reason for the action, plaintiff must prove by a preponderance of the evidence that the proffered reasons were pretextual. Id.
In this case, the final factor, whether the Defendant received federal funds or assistance, is undisputed. The remaining issues concern the other three factors: whether the Plaintiff was disabled, whether the Plaintiff was otherwise qualified, and whether the Plaintiff was excluded solely by reason of his disability.
In contrast, the ADA provides that "No individual shall be discriminated against on the basis of disability, in the full and equal employment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation." 42 U.S.C. § 12182(a).
To establish liability under this section, a Plaintiff must prove that he: (1) has a disability; (2) was discriminated against on the basis of that disability; (3) was thereby denied goods or services; (4) by a place of public accommodation by the owner or operator of that facility. Little v. Lycoming County, 912 F.Supp. 809, 818 (M.D.Pa.1996) (McClure, J.).
A. Disability
Defendant's first argument is that Plaintiff Haas failed to prove that he had a disability pursuant to the Rehabilitation Act or the ADA, and failed to prove that he was substantially limited in his ability to think. However, in the Court's Memorandum and Order of December 6, 2006 denying the Defendant's motion for summary judgment, the Court found that the Plaintiff had a disability as defined in the text of the Americans with Disabilities Act ("ADA"). The Court held that "Dr. Haas' mental condition could fairly be considered a substantial limitation on his ability to work in his profession as a surgeon, because no remedial measures (i.e., medication) could be taken to correct this disability." Haas v. Wyoming Valley Health Care System, 465 F.Supp.2d 429, 434 (M.D.Pa.2006). Furthermore, the Court noted that in its memorandum in support of the motion for summary judgment, Defendant conceded that Plaintiff satisfied this prong of the analysis. However, even presuming that Plaintiff satisfied his burden of proving disability, he has failed to show that he is "otherwise qualified" or that the treatment occurred "solely by reason of his disability. The definition of "individual with a disability" under the Rehabilitation Act is the same as that under the ADA, and therefore the finding of disability within the ADA requires a finding of disability pursuant to the Rehabilitation Act. See 29 U.S.C. § 705(20)(B).
B. "Direct Threat"
Defendant further argues that the Plaintiff was not "otherwise qualified" pursuant to the Rehabilitation Act because Plaintiffs condition presented a "direct threat" to the patients of the WVHCS, and the modifications required to eliminate this threat would fundamentally alter the nature of the WVHCS's goods and services. Similarly, Defendant WVHCS argues that the modification of the assistance of a general surgeon requested by Plaintiff is not required because Dr. Haas poses a "direct threat to the health and safety of others." 42 U.S.C. § 12182(b)(3). The concept of "direct threat" under the Rehabilitation Act is the same as under the ADA.[2] Therefore Defendant's direct threat defense under the ADA applies equally here to Plaintiffs claim under the Rehabilitation Act.
1. Standard
The Third Circuit Court of Appeals has held that, with respect to the Rehabilitation Act, "[a] handicapped individual who cannot meet all of the program's requirements is not otherwise qualified if there is a factual basis in the record reasonably demonstrating that accommodating that individual would require either a modification of the essential nature of the program, or impose an undue burden on the recipient of federal funds." Strathie, 716 F.2d at 231.
The United States District Court for Eastern District of Pennsylvania considered the importance of health and safety of others with respect to the Rehabilitation Act in Taylor v. Garrett, 820 F.Supp. 933 (E.D.Pa.1993). "As the implementing regulations promulgated by the EEOC make clear, whether a handicapped person can be classified as a`qualified handicapped person' for whom reasonable accommodation must be made requires consideration of the demands of a particular jobi.e., the handicapped employee's ability to`perform the essential functions of the position in question without endangering the health and safety of the individual or others....'" Id. at 935 (citing 29 C.F.R. § 1613.702(f) (1992)) (emphasis omitted).
The Supreme Court case of Sch. Bd. of Nassau County v. Arline, 480 U.S. 273, 276, 107 S.Ct. 1123, 94 L.Ed.2d 307 (1987) first dealt with the issue of a "direct threat" with respect to the Rehabilitation Act. In Arline, a teacher with tuberculosis challenged her dismissal by the school board on the basis of her disease. The Court held that although the Plaintiff was handicapped within the meaning of the statute, there was a question as to whether she was "otherwise qualified" to perform the duties of the job.
In Arline, the Supreme Court held that "[a] person who poses a significant risk of communicating an infectious disease to others in the workplace will not be otherwise qualified for his or her job if reasonable accommodation will not eliminate that risk." Id. at 287 n. 16, 107 S.Ct. 1123. Furthermore, the Arline Court stated that the test effectuated Section 504's "goal of protecting handicapped individuals from deprivations based on prejudice, stereotypes, or unfounded fear, while giving appropriate weight to such legitimate concerns... as avoiding exposing others to significant health and safety risks." Id. at 287, 107 S.Ct. 1123. In determining whether a person would be otherwise qualified under these factors, the court should consider: (1) the nature of the risk; (2) the duration of the risk; (3) the severity of the risk; and (4) the probabilities the disease will be transmitted and will cause varying degrees of harm. Id. at 288, 107 S.Ct. 1123.
The Third Circuit Court of Appeals case of New Directions Treatment Servs. v. City of Reading, 490 F.3d 293 (3d Cir. 2007) further discussed the significant risk, or "direct threat" test developed in Arline. The court noted that, although the Arline decision was limited to cases of infectious diseases, other courts have expanded the test to "where a disability created a significant risk to the health or safety of others." Id. at 305 (citing Robertson v. Neuromedical Ctr, 161 F.3d 292, 295-96 (5th Cir. 1998) (attention deficit hyperactive disorder); EEOC v. Amego, Inc., 110 F.3d 135, 143-5 (1st Cir.1997) (depression); Turco v. Hoechst Celanese Corp., 101 F.3d 1090, 1094 (5th Cir.1996) (diabetes); Palmer v. Cir. Ct. of Cook County, 117 F.3d 351, 353 (7th Cir.1997) (violent employees); Donahue v. Consol. Rail Corp., 224 F.3d 226, 231 (3d Cir.2000) (epileptics operating potentially dangerous machinery)). Furthermore, Congress has amended the ADA and the Rehabilitation Act to include provisions containing an exception if the disability "poses a direct threat to the health or safety of others." 42 U.S.C. § 12182(b)(3); 29 U.S.C. § 705(20)(D).
In Ross v. Beaumont Hosp., 687 F.Supp. 1115 (E.D.Mich.1988), the court considered a Rehabilitation Act claim brought by a physician suffering from narcolepsy. In finding that the defendant hospital had a prudential concern, the court noted that:
"Where the lives of critically ill patients are at stake, public policy may dictate exclusion if there is any doubt concerning an individual's ability to serve such patients. To use the allocation of the burden of proof as a means of addressing this concern, however, would be a mistake. There are more suitable methods of analysis to protect valid exclusions. As previously discussed, program operators may establish eligibility criteria that reflect legitimate needs to ensure the public safety. A nursing or medical school is entitled to ensure that persons who serve as hospital staff present no significant safety risk to patients. A medical school might legitimately contend that no individual who may foreseeably cause injury to patients should be permitted on its staff. If it can then demonstrate, for example, that an individual with a history of mental disability may foreseeably cause significant injury, it will have carried the requisite burden of persuasion."
Id. (quoting Judith Welch Wegner, The Antidiscrimination Model Reconsidered: Ensuring Equal Opportunity Without Respect to Handicap Under Section 504 of the Rehabilitation Act of 1973, 69 CORNELL L.REV. 401, 490 (1984)).
Similarly, Title III of the ADA requires a place of public accommodation to make reasonable modifications to its policies, practices, and procedures where necessary to ensure full and equal access to its services by disabled individuals. 42 U.S.C. 12182(b) (2)(A)(ii). However, the "reasonable modifications" requirement is subject to several limitations. Most applicable here, modifications are not required if doing so would pose a "direct threat to the health and safety of others." 42 U.S.C. § 12182(b) (3). Beale v. Aardvark Day Care Ctr., No. 00-CV-113, 2000 WL 33119418, at *5 (E.D.Pa. Dec. 29, 2000).
2. Application of Standard
To determine if Plaintiff Haas posed a "direct threat" to the patients, the four factors enunciated by the Supreme Court in Arline must be considered. In this case, the nature of the risk involves the life and health of the patients that Plaintiff Haas is treating or operating on. The duration of the risk lasts throughout the time of the procedure and treatment. The severity of the risk is very high, as if Plaintiff Haas had an episode during surgery, the patient could be severely injured or die.
The fourth factor considers the probability of the risk occurring. On May 23, 2001, an episode occurred in the operating room during a surgical procedure. Dr. Haas had a psychotic episode in the operating room, became confused, and required significant assistance to complete a total knee replacement. (Prebish Trial Tr. Vol. 3, 106:10-111:6, 112:10-12, 112:18-21, 114:18-21, Apr. 4, 2007, Doc. 140; Harris Trial Tr. vol. 3, 225:20-226:24, Apr. 4, 2007, Doc. 140; MeCarty Trial Tr. vol. 3, 255:12-259:17, Apr. 4, 2007, Doc. 140; Davenport Trial Tr. vol. 3, 201:19-204:23, Apr. 4, 2007, Doc. 140; Amory Trial Tr. vol. 4, 185-191:23, Apr. 5, 2007, Doc. 141.) The testimony included statements that "He had a hard time ... remembering things, turning his back, I remember, on the sterile field and just dazing." (Prebish Trial Tr. vol. 3, 106:14-18, Apr. 4, 2007, Doc. 140.) Nurse Michelle Davenport testified that Dr. Haas had "an erratic thought process, not being able to concentrate." (Davenport Trial Tr. vol. 3, 210:5-6, Apr. 4, 2007, Doc. 140.) The representative from the prosthetics company, Jay Amory, testified that he had lost "his ability to concentrate" and "did not understand what I was trying to explain." (Amory Trial Tr. vol. 4, 189:13-17; 186:14-15, Apr. 5, 2007, Doc. 141.)
After the surgery, Dr. Raklewicz approached Dr. Haas, and noted that he went on to ask the same question several times in conversation with other doctors. (Raklewicz Trial Tr. vol. 3, 147:21-148:618, Apr. 4, 2007, Doc. 140.) Dr. Raklewicz also testified that "He just seemed dazed... I'm still convinced that I really don't think he knew who I was at that time, which really concerned me." (Raklewicz Trial Tr. vol. 3, 148:14, 16-18, Apr. 4, 2007, Doc. 140.)
Dr. Haas further testified that he felt abnormal at the time of surgery, but proceeded despite this feeling. (Haas Trial Tr. vol. 2, 205:15-206:25, Apr. 3, 2007, Doc. 139.) Specifically, he stated that he felt as if he were "[i]n an elated state, somewhat agitated. The thought process, somewhat sped up." (Haas Trial Tr. vol. 2, 205:25-206:1, Apr. 3, 2007, Doc. 139.)
However, Plaintiff notes that with regard to the May 23rd incident, Dr. Haas performed the operation from start to finish. (Prebish Trial Tr. vol. 3, 113:1-3, Apr. 4, 2007, Doc. 140.) Dr. Haas received assistance during the surgery from a Physician's Assistant. (Prebish Trial Tr. vol. 3, 16:18-17:11, Apr. 4, 2007, Doc. 140.) During the operation, the Physician's Assistant inserted the pin into the femoral block and closed the skin, which are duties normally completed by a Physician's Assistant, according to Dr. Haas. (Haas Trial Tr. vol. 2, 16:18-17:11, Apr. 3, 2007, Doc. 139.) Furthermore, Plaintiff notes that this operation was successful. (Davenport Trial Tr. vol. 3, 204:24-205:1, Apr. 4, 2007, Doc. 140; Raklewicz Trial Tr. vol. 3, 161:3-7, Apr. 4, 2007, Doc. 140.) Plaintiff points to testimony that the patient was not at risk during the surgery, and had the patient been at risk, a telephone was available in the operating room. (Prebish Trial Tr. vol. 3, 132:16-133:5; 133:10-12, Apr. 4, 2007, Doc. 140.) Plaintiff argues that several witnesses also testified that the patient was not at risk during the operation, and that Dr. Haas was not a direct threat to the patient. (Davenport Trial Tr. vol. 3, 204:4-6, Apr. 4, 2007, Doc. 140; Harris Trial Tr. vol. 3, 244:19-21, Apr. 4, 2007, Doc. 140; MeCarty Trial Tr. vol. 3, 263:9-17, Apr. 4, 2007, Doc. 140.)
However, Plaintiff does not mention other relevant testimony by the nurses. First, Nurse Davenport stated that she had never seen a surgical assistant place a prosthesis in a patient before this time. (Davenport Trial Tr. vol. 3, 204:13-15, Apr. 4, 2007, Doc. 140.) Nurse Davenport also testified that the patient was safe "because of the staff that he had around him, the procedure was able to continue on because of their help." (Davenport Trial Tr. vol. 3, 204:8-11, Apr. 4, 2007, Doc. 140.) Despite Plaintiffs argument that Ms. Harris testified that Plaintiff Haas was not a direct threat to the patient (Harris Trial Tr. vol. 3, 244:19-21, Apr. 4, 2007, Doc. 140), review of her testimony reveals that Ms. Harris stated that the patient was at risk, although it was not life-threatening. (Harris Trial. Tr. vol. 3, 242:25-7, Apr. 4, 2007, Doc. 140.) Furthermore, to complete the surgery, Dr. Haas needed prompting from the prosthesis manufacturer's representative, Mr. Armory, and the Physician's Assistant, Eric Stover. (Davenport Trial Tr. vol. 3, 212:1-13, Apr. 4, 2007, Doc. 140.) Nurse Davenport testified that Dr. Haas required step-by-step instruction in completing the surgery. (Davenport Trial Tr. vol. 3, 212:1-13, Apr. 4, 2007, Doc. 140.)
The fact that this particular incident did not result in harm to the patient does not establish that Dr. Haas did not pose a direct threat to his patients. Rather, the question is whether an occurrence of such an episode could result in harm to a patient. There are numerous facts in evidence that show that such an episode could potentially occur again.
The Defendant WVHCS presented testimony demonstrating that it considered the nature, duration, and severity of the risk to patients when making their decision imposing conditions on Dr. Haas' return. (DePasquale Trial Tr. vol. 2, 171:3-7, Apr. 3, 2007, Doc. 139; Smith Trial Tr. vol. 4, 137:4-7, Apr. 5, 2007, Doc. 140; Campbell Trial Tr. vol. 4, 78:8-19, Apr. 5, 2007, Doc. 141.) Plaintiff Haas attempted to demonstrate his ability to return to the Hospital through two (2) letters from psychiatrists. The Hospital considered the probability of the episode recurring based upon these two (2) letters: Dr. Felins' November 2002 letter and Dr. Mazza's November 2002 letter. (PL's Exs. 50, 53.) Dr. Campbell testified that Dr. Felins told him that she was not Dr. Haas' treating physician and he was not her patient. (Campbell Trial Tr. vol. 4, 74:6-9, Apr. 5, 2007, Doc. 141.) Dr. Smith also testified as to the WVHCS's view of the letters received from Dr. Mazza and Dr. Felins. Dr. Smith testified that Dr. Felins' letter was not sufficiently convincing that Dr. Haas would be able to return safely. (Smith
Trial Tr. vol. 4, 127:7-10, Apr. 5, 2007, Doc. 141.) Dr. Smith further testified that Dr. Mazza's note was brief, and thus also unconvincing. (Smith Trial Tr. vol. 4, 127:10-11, Apr. 5, 2007, Doc. 141.) Furthermore, Dr. Smith testified that neither letter stated "that Dr. Haas could come back in any particular timeframe with complete assurance of safety, or reasonably complete assurance of safety." (Smith Trial Tr. vol. 4, 127:12-15, Apr. 5, 2007, Doc. 141.)
The Hospital also considered Dr. Berger's report. (Campbell Trial Tr. vol. 4, 69: 7-23, Apr. 5, 2007, Doc. 141.) Dr. Campbell testified that "in [Dr. Berger's] letter he put a disclaimer that if an incident happened on 5/23 then he would withhold his recommendation in so many words." (Campbell Trial Tr. vol. 4, 69:14-17, Apr. 5, 2007, Doc. 141.)
Therefore, the Defendant WVHCS had a legitimate concern regarding patient safety. Numerous witnesses testified regarding the issue of patient safety, including Dr. DePasquale, Dr. Smith, and Dr. Campbell. (DePasquale Trial Tr. vol. 2, 161:20-23, 171:3-7, Apr. 3, 2007, Doc. 139; Smith Trial Tr. vol. 4, 137:4-7, Apr. 5, 2007, Doc. 141; Campbell Trial Tr. vol. 4, 78:8-19, Apr. 5, 2007, Doc. 141.) Dr. Haas has argued that patient safety would have been realized by the oversight of Dr. De-Pasquale during surgery, and therefore the conditions were a pretext for the discrimination. However, the Defendant WVHCS has raised two (2) points as to why Dr. DePasquale's assistance would not be the type of accommodation to eliminate the direct threat. First, Dr. DePasquale testified that "I volunteered to act as an assistant to Dr. Haas with all of his cases... I never said I would supervise. I said that I would assist." (DePasquale Trial Tr. vol. 2, 155:8-9; 172:19-24, Apr. 3, 2007, Doc. 139.) Furthermore, Dr. DePasquale testified that he was not board-certified in orthopedic surgery, nor did he have privileges in orthopedic surgery. (DePasquale Trial Tr. vol. 2, 171:14-23, Apr. 3, 2007, Doc. 139.)
The Defendant WVHCS has also presented an abundance of evidence regarding the requirement of having an orthopedic surgeon supervising Dr. Haas for reasons of patient safety. For example, Dr. Smith testified that a general surgeon, psychiatrist, internist or pediatrician is not qualified to do the type of procedures that an orthopedic surgeon performs. (Smith Trial Tr. vol. 4, 138:21-139:15, Apr. 5, 2007, Doc. 141.) Furthermore, Dr. Campbell testified that the training and education of an orthopedic surgeon differs from that of a general surgeon. (Campbell`Trial Tr. vol. 4, 77:13-78:7, Apr. 5, 2007, Doc, 141.) Furthermore, Dr. Campbell stated that he would not advise any of his own patients to undergo an orthopedic surgery with a general surgeon. (Campbell Trial Tr. vol. 4, 77:13-78:7, Apr. 5, 2007, Doc. 141.) The Executive Committee also determined that it was important to have an orthopedic surgeon present at surgery, rather than wait for one should a problem arise, especially because the patient would be under anesthesia. (Smith Trial Tr. vol. 4, 138:21-139:15, Apr. 5, 2007, Doc. 141.)
For these reasons, Dr. Haas is not "otherwise qualified" within the meaning of the Rehabilitation Act, as he posed a direct threat to the health and safety of the patients in the WVHCS. Similarly, he posed a "direct threat" within the meaning of the ADA. Discrimination on the basis of a disability is permitted when the disability poses a "direct threat" to the health and safety of others that cannot be eliminated by a modification of policies, practices, or procedures, or the provision of additional aids or services. See Doe v. County of Centre, 242 F.3d 437, 447 (3d Cir.2001). Therefore, WVHCS's disparate treatment of Dr. Haas, such as the requirement that he be supervised by another orthopedic surgeon, is permissible. Dr. Haas argues that the failure of the Hospital to allow Dr. DePasquale to assist in Plaintiffs procedures, or the failure to allow Dr. Haas to operate on his own, constitutes failure to provide a reasonable modification. However, as discussed supra, such a modification would not be reasonable in the light of patient safety.
No reasonable juror could find that Dr. Haas did not pose a direct threat to the health and safety of his patients. Furthermore, no reasonable jury could find that the substitution of a supervising general surgeon would be a reasonable accommodation for orthopedic surgeries, which require special education and training.
I do not take lightly the determination that I have made that no reasonable juror could find that Dr. Haas did not pose a direct threat to patient safety, and was therefore not otherwise qualified to perform as an orthopedic surgeon at the relevant time period, and likewise that no reasonable juror could find that a supervising general surgeon was a reasonable accommodation. I say so because it is an overturning of a jury verdict in favor of Dr. Haas on these issues, and my reverence for the jury's wisdom as the foundation of our trial system is deeply rooted in conviction. But there are those rare occasions where legal principleshere patient safety and reasonable accommodationare clear as matters lacking in the ingredient of differences among reasonable people and are so clear that the Court must intervene and say so. This is such a case.
Therefore, the Defendant WVHCS is entitled to judgment as a matter of law on the Rehabilitation Act claim, and Defendant's motion will be granted. Plaintiff will also be denied his request for equitable relief pursuant to the ADA.
III. Motion for New Trial and Motion for Attorney's Fees
Because the standard for granting a new trial is "lower" than that for entering judgment as a matter of law, if a party satisfies the standard for judgment as a matter of law, it is unnecessary to order a new trial. Markovich v. Bell Helicopter Textron, Inc., 805 F.Supp. 1231 (E.D.Pa. 1992). Therefore, as Defendant has satisfied the requirements for judgment as a matter of law, the Court need not address whether Defendant is entitled to a new trial.
Plaintiff also requested attorney's fees, costs and other expenses pursuant to 42 U.S.C. § 1988, 42 U.S.C. § 2000e-5(k) and Federal Rule of Civil Procedure 54(d)(2). However, these provisions hold that the "prevailing party" is entitled to attorney's fees. Plaintiff is not a prevailing party, as judgment as a matter of law will be entered on the damages claims pursuant to the Rehabilitation Act, and Plaintiff will be denied equitable relief pursuant to the ADA. Therefore, Plaintiffs claim for attorney's fees and costs will be denied.
CONCLUSION
For the foregoing reasons, Defendant's motion for judgment as a matter of law on the Rehabilitation Act will be granted, as Plaintiff posed a "direct threat" to the health and safety of the patients of WVHCS. For the same reasons, Plaintiff will be denied equitable relief under the ADA. As the Court has granted judgment as a matter of law for the Defendant, it need not reach the Defendant's motion for a new trial. Finally, Plaintiffs motion for attorney's fees will be denied, as Plaintiff is not a prevailing party as required by statute.
An appropriate Order follows.
ORDER
NOW, this 31st day of March, 2008, IT IS HEREBY ORDERED that:
(1) Defendant's Motion for a Judgment as a Matter of Law (Doc. 124) is GRANTED.
(2) Plaintiffs Request for Equitable Relief pursuant to the ADA (Doc. 137) is DENIED.
(3) Plaintiffs Motion for Attorney's Fees (Doc. 125) is DENIED.
(4) Judgment shall be ENTERED for Defendant.
NOTES
[1] Dr. Haas had temporary privileges as of August 2000.
[2] See 28 C.F.R. Pt. 36, App. B (explaining that the direct threat exception, which was later codified in Title III of the ADA, was adopted from the Supreme Court's holding in Sch. Bd. Nassau County v. Arline, 480 U.S. 273, 287, 107 S.Ct. 1123, 94 L.Ed.2d 307 (1987)). In Arline, the Supreme Court reconciled the contrary objectives of prohibiting discrimination against individuals with disabilities with protecting others from significant health and safety risks posed by those individuals by finding that the Rehabilitation Act did not to require the hiring of a person who posed "a significant risk of communicating an infectious disease to others." Id. at 287 n. 16, 107 S.Ct. 1123. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573266/ | 2 So.3d 277 (2009)
ODEUS
v.
STATE.
No. 5D08-3119.
District Court of Appeal of Florida, Fifth District.
January 27, 2009.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573105/ | 2 So. 3d 378 (2008)
Aldei Mariza LANDE, Appellant,
v.
Richard A. LANDE, Appellee.
No. 4D08-158.
District Court of Appeal of Florida, Fourth District.
December 24, 2008.
*379 Max R. Whitney of Max R. Whitney, P.A., Deerfield Beach, for appellant.
Richard A. Lande, Boca Raton, pro se.
DAMOORGIAN, J.
Aldei Mariza Lande, the former wife, appeals the trial court's final judgment dissolving her marriage to Richard A. Lande, the former husband. She also appeals several accompanying orders. We reverse the portions of the final judgment regarding child custody and child support, and affirm in all other respects.
The parties were married in 1997 in New York. They have one minor child, a son. In October of 2000, the parties and their son moved to Clearwater, Florida. In 2002, they relocated to Pinellas County, Florida, where they purchased their marital home. Then, in December of 2002, the former wife and the son moved to Brazil, where they continued to reside as of the final judgment.
In 2005, the former husband filed a petition for dissolution of marriage in Palm Beach County, Florida, which was served on the former wife in Brazil. When the *380 former wife failed to file a timely responsive pleading, the trial court entered a default judgment. The former wife moved to vacate the default, but the trial court never ruled on that motion. After the default was entered, the former wife filed an answer and counter-petition for dissolution of the marriage. She subsequently filed a motion to dismiss the dissolution action for lack of jurisdiction.
On December 14, 2007, the trial court entered the following orders:
1. Order Denying the Former Wife's Motion to Dismiss
2. Order Granting the Former Husband Permission to Negotiate with Mortgage Lenders Without the Former Wife's Consent
3. Order Requiring the Former Wife to Obtain a Passport for Minor Child
4. Order Denying the Former Wife's Motion to Vacate Attorney's Fees in the Amount of $1,275.00
The court also entered a final judgment of dissolution of marriage. In addition to dissolving the parties' marriage, the final judgment determined that the former husband shall be the primary custodial parent, that the former wife shall pay $227.00 per month in child support, that the former husband shall take the marital home in Pinellas County while the former wife takes the parties' home in Brazil, that neither party shall be responsible for spousal support, and that the former wife and her trial counsel shall be jointly and severally liable for $1,275.00 in attorney's fees for failing to appear at a deposition.
The former wife appeals from the final judgment and the four accompanying orders. She argues that the Palm Beach County court lacked jurisdiction over the dissolution action because the parties last resided together in Pinellas County and their marital residence is located in Pinellas County. She also argues that the court lacked jurisdiction to make a child custody determination because Florida was not the child's home state, as defined in section 61.514, Florida Statutes (2007). Finally, she argues that venue was improper in Palm Beach County.
Whether a court has jurisdiction is a question of law which is reviewed de novo. Lowe v. Lowe, 948 So. 2d 836, 839 (Fla. 4th DCA 2007); Sanchez v. Fernandez, 915 So. 2d 192, 192 (Fla. 4th DCA 2005).
The trial court properly determined that it had jurisdiction to dissolve the parties' marriage, equitably distribute the parties' marital property, and enter a child support award. "Under the divisible divorce concept, if the trial court has subject matter jurisdiction over a marriage, pursuant to sections 61.021 and 61.052, Florida Statutes, then it can dissolve the marital relationship. But to adjudicate property disputes, support, and equitable distribution, the court must have personal jurisdiction over both parties." Marshall v. Marshall, 988 So. 2d 644, 648 (Fla. 4th DCA 2008) (citation omitted). Here, the trial court had subject matter jurisdiction over the parties' marriage because the former husband has been a continuous resident of Florida since October of 2000. See § 61.021, Fla. Stat. (2007) ("to obtain a dissolution of marriage, one of the parties to the marriage must reside 6 months in the state before the filing of the petition"). In addition, the trial court had personal jurisdiction over both parties because both appeared in the dissolution action without challenging personal jurisdiction. See Fla. R. Civ. P. 1.140(b) (stating that the defense of lack of personal jurisdiction must be raised in or prior to the responsive pleading).
*381 The trial court also had jurisdiction to enter the order allowing the former husband to unilaterally negotiate the mortgage on the parties' marital residence even though that property is located outside of Palm Beach County. When the focal point of an action is in personam, a court has the power to determine the parties' equitable rights even when the relief sought might incidentally affect real property over which the court does not have in rem jurisdiction. Ruth v. Dep't of Legal Affairs, 684 So. 2d 181, 185-86 (Fla.1996). Here, the trial court's order does not act directly on the property, nor does it directly order the transfer of title. It allows the former husband to take action on the mortgage, which is in the former wife's name, in order to effectuate the equitable division of marital property. The trial court's personal jurisdiction over both parties was sufficient for this order.
Because the former wife failed to challenge venue in her answer to the petition for dissolution of marriage, she cannot challenge it on appeal. A party waives a venue challenge unless she raises it in the responsive pleading or in a motion made before the responsive pleading. Fla. R. Civ. P. 1.140(b), (h)(1). Accordingly, the former wife is precluded from appealing venue as improper.
The trial court did not have jurisdiction to award the former husband primary residential custody of the parties' minor child. Except in limited circumstances which do not apply in this case, a Florida court has jurisdiction to make an initial child custody determination only if Florida is the child's home state on the date of the commencement of the custody proceeding or was the child's home state within six months before commencement of the proceeding and a parent or person acting as a parent continues to live in the state. See § 61.514, Fla. Stat. (2007). "Home state" is defined as "the state in which a child lived with a parent or a person acting as a parent for at least 6 consecutive months immediately before the commencement of a child custody proceeding." § 61.503(7), Fla. Stat. (2007). A foreign country is treated as a state of the United States for jurisdiction purposes. § 61.506(1), Fla. Stat. (2007). At the time the former husband filed the petition for dissolution of marriage, the child had been living with the former wife in Brazil for approximately three years. Thus, the child's home state and the proper jurisdiction for the initial custody determination was Brazil, not Florida.
We reverse the portion of the final judgment that awards the former husband primary residential custody of the parties' minor child. We also reverse the determination of child support inasmuch as the calculation depended on declaring the former husband the primary custodial parent. We affirm the final judgment and the above-mentioned accompanying orders in all other respects.
Affirmed in Part, Reversed in Part.
WARNER and FARMER, JJ., concur. | 01-03-2023 | 10-30-2013 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.