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https://www.courtlistener.com/api/rest/v3/opinions/1578056/ | 274 S.W.3d 840 (2008)
In re SHIPPERS STEVEDORING COMPANY, Relator.
No. 14-08-00438-CV.
Court of Appeals of Texas, Houston (14th Dist.).
November 20, 2008.
*841 F. William Mahley, Debra W. Biehle, P.M. Schenkkan and Mary A. Keeney, for Relators.
Alan Brandt Daughtry, C. Elaine Howard, Linda C. Goehrs, Kurt B. Arnold, Michael P. Doyle, Lynda Burchett, Patricia Mary Davis, Randy L. Fairless, Richard M. McRory, Houston, Douglas T. Gilman, Brenton J. Allison, Pearland, for real parties in interest.
Panel consists of Chief Justice HEDGES and Justices GUZMAN and BOYCE.
OPINION
EVA M. GUZMAN, Justice.
On May 29, 2008, relator, Shippers Stevedoring Company ("Shippers"), filed a petition for writ of mandamus in this court. See TEX. GOV'T CODE ANN. § 22.221 (Vernon 2004); see also TEX.R.APP. P. 52. In the petition, relator asks this court to compel the Honorable Rory R. Olsen, presiding judge of Probate Court Number Three, Harris County, Texas, to vacate his May 12, 2008 order denying relator's plea to the jurisdiction and to grant the same. Because Shippers has not established its entitlement to the extraordinary relief of a writ of mandamus, we deny its petition for writ of mandamus.
*842 I. FACTUAL AND PROCEDURAL BACKGROUND
Chavon Lewis was crushed by a forklift while working as a checker for Shippers Stevedoring at a Port of Houston dock on the Houston Ship Channel. Her heirs and estate, the real parties in interest in this proceeding, brought wrongful death and survival claims which ultimately were consolidated in Harris County Probate Court No. 3.[1] In February 2006, Shippers filed a motion for final summary judgment, asserting that it is "immune from any tort action brought by Plaintiffs as a matter of law" because the Longshore and Harbor Workers' Compensation Act ("LHWCA") provided the real parties in interest's exclusive remedy arising from Lewis's death. The trial court denied the motion.
Seventeen months later, Shippers moved unsuccessfully for partial summary judgment on the grounds that it is a subscriber to the Texas Workers' Compensation Act and therefore exempt from liability on claims of negligence and negligence per se arising from Lewis's death. Shippers petitioned this court for a writ of mandamus compelling the trial court to reverse its denial of the motion, and this court denied the requested relief. In re Shippers Stevedoring Co., No. 14-08-00031-CV, 2008 WL 256940 (Tex.App.-Houston [14th Dist.] Jan. 31, 2008, orig. proceeding) (per curiam) (mem.op.).
On February 12, 2008, Shippers filed a plea to the jurisdiction in which it argued that the probate court lacks subject-matter jurisdiction over the claims asserted against Shippers because (a) the LHWCA provides the exclusive remedies arising from Lewis's death, and (b) the Department of Labor has exclusive original jurisdiction to adjudicate claims arising under the LHWCA. According to Shippers, the probate court would usurp the Department of Labor's authority if allowed to proceed to trial on the asserted claims. The trial court initially granted the requested relief, but after a successful motion for reconsideration, the trial court denied the plea to the jurisdiction. Shippers now petitions the court for a writ of mandamus compelling the trial court to reverse its ruling, grant Shippers's plea, and dismiss the claims against it.
II. ISSUES PRESENTED
In two issues, Shippers contends that the trial court abused its discretion by denying Shippers's plea to the jurisdiction, and more specifically, by basing that denial "on a supposed Texas `twilight zone'" of overlapping jurisdiction between the LHWCA and the Texas Workers' Compensation Act.
III. STANDARD OF REVIEW
To demonstrate entitlement to mandamus relief, a relator must show that the trial court committed a clear abuse of discretion and there is no adequate remedy by appeal. In re Ford Motor Co., 165 S.W.3d 315, 317 (Tex.2005) (orig. proceeding); In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex.2004) (orig.proceeding). A trial court abuses its discretion when it fails to correctly apply the law. Ford Motor, 165 S.W.3d at 317; Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (orig.proceeding). Even if the area of law is unsettled, the trial court abuses its discretion in reaching an erroneous legal conclusion. Huie v. DeShazo, 922 S.W.2d 920, 927-28 (Tex.1996).
*843 IV. ANALYSIS
To clarify the arguments presented, we begin with a brief overview of the history and application of the LHWCA.
A. Concurrent Jurisdiction of Federal and State Compensation Schemes
The LHWCA is a federal, no-fault workers' compensation scheme enacted in 1927 to provide compensation for work-related injuries or death of nonseaman maritime workers. Longmire v. Sea Drilling Corp., 610 F.2d 1342, 1349 (5th Cir.1980). Before 1972, compensation under the LHWCA was limited to employee injuries sustained on navigable waters and dry docks. Dir., Office of Workers' Comp. Programs, U.S. Dep't of Labor v. Perini N. River Assocs., 459 U.S. 297, 299, 103 S. Ct. 634, 74 L. Ed. 2d 465 (1983). Such injuries were covered under the LHWCA regardless of whether they also were covered by a state workers' compensation scheme. Calbeck v. Travelers Ins. Co., 370 U.S. 114, 124, 82 S. Ct. 1196, 8 L. Ed. 2d 368 (1962). Coverage under the LHWCA generally stopped at the water's edge, and the states were left to legislate their own workers' compensation schemes on the landward side of that line. Longmire, 610 F.2d at 1349.
In 1972, Congress amended the Act to extend LHWCA coverage to certain adjoining areas of land. Id. Although it became possible for land-based injuries to nonseaman maritime workers to be subject to both the state and federal workers' compensation scheme, each act purported to be exclusive. See 33 U.S.C.A. § 905 (West 2001); TEX. LAB.CODE ANN. § 408.001 (Vernon 2006). This raised the question of whether state or federal law applied to such claims. A state law that conflicts with federal law is preempted and without effect. U.S. CONST. art. VI, cl. 2; Maryland v. Louisiana, 451 U.S. 725, 746, 101 S. Ct. 2114, 68 L. Ed. 2d 576 (1981); Mills v. Warner Lambert Co., 157 S.W.3d 424, 426 (Tex.2005) (per curiam). The question of the extent to which such laws conflicted was not resolved by referring solely to the text of either legislation.
The Texas Workers' Compensation Act provides that "[r]ecovery of workers' compensation benefits is the exclusive remedy of an employee covered by workers' compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee." TEX. LAB.CODE ANN. § 408.001 (emphasis added). Likewise, the LHWCA provides in relevant part:
The liability of an employer prescribed in section 904 of this title shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death....
33 U.S.C.A. § 905 (emphasis added). At a glance, then, it might appear that the LHWCA preempts all state law claims against a covered workers' employer, including claims asserted under state workers' compensation legislation. This, however, is not the case.
The exception to this rule is articulated in Sun Ship, Inc. v. Pennsylvania, 447 U.S. 715, 100 S. Ct. 2432, 65 L. Ed. 2d 458 (1980). In Sun Ship, the United States Supreme Court described the "jurisdictional dilemma" that would result if there were no overlap between the state and federal compensation schemes, and recalled the risk of prejudice to injured workers that would result from "compelling laborers to seek relief under two mutually exclusive remedial systems...." Id. at 720, 100 S. Ct. 2432. As the Court explained, such *844 an approach would be "defeat[ing] the purpose of the federal act, which seeks to give `to these hardworking men, engaged in a somewhat hazardous employment, the justice involved in the modern principle of compensation,' and the state acts ... which ai[m] at `sure and certain relief for workmen.'" Id. (quoting Davis v. Dep't of Labor & Indus. of Wash., 317 U.S. 249, 254, 63 S. Ct. 225, 87 L. Ed. 246 (1946)). Thus, the Court concluded that state workers' compensation laws share concurrent jurisdiction with the LHWCA,[2] and "if state remedial schemes are more generous than federal law, concurrent jurisdiction could result in more favorable awards for workers' injuries than under an exclusively federal compensation system."[3] Moreover, concurrent jurisdiction presented no danger of double recovery "since employers' awards under one compensation scheme would be credited against any recovery under the second scheme." Id. at 725 n. 8, 100 S. Ct. 2432 (citing Calbeck, 370 U.S. at 131, 82 S. Ct. 1196).
The Sun Ship exception to federal preemption is narrow and does not extend beyond those claims encompassed by the state workers' compensation act. The United States Supreme Court has further clarified the construction of section 905 of the LHWCA and explained that, aside from the Sun Ship exception of "some state workers' compensation claims," the LHWCA "expressly preempts all other claims" against an employer or vessel owner by reason of a nonseaman maritime employee's land-based injury or death. Norfolk Shipbuilding & Drydock Corp. v. Garris, 532 U.S. 811, 818-19, 121 S. Ct. 1927, 150 L. Ed. 2d 34 (2001) (emphasis added) (distinguishing heir's claims under the Virginia wrongful-death statute against a negligent third-party that neither employed the decedent nor owned the vessel on which the accident occurred).
In effect, then, the LHWCA preempts all negligence claims[4] asserted under state wrongful-death statutes[5] against the workers' employer and provides the exclusive remedy for such claims to the workers' estate and heirs, except for claims compensable under the state worker's compensation act.[6] In Texas, the claimant's choice of remedies is made simpler still, because "a person covered by a method of compensation established under federal law" is not subject to the state Workers' Compensation Act at all. TEX. LAB.CODE ANN. § 406.091(a)(2) (Vernon 2006).
Against this backdrop we consider the issues and arguments presented.
B. Claims of the Real Parties in Interest
Although a plea to the jurisdiction should be decided without delving into the merits of the case, the claims form the context against which the plea is raised. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.2000). Here, the real parties in interest contend they "are entitled to elect between the compensation system in place in the federal systemthe LHWCAand the compensation system in *845 place in Texasthe workers' compensation system."[7] They contend they have chosen to pursue remedies under the state workers' compensation scheme, and because persons who are covered by the LHWCA are exempt from the Texas Workers' Compensation Act (and similarly excluded from Shippers' state workers' compensation insurance coverage), they characterize Shippers as a "nonsubscriber" to workers' compensation coverageat least, with regard to Lewis. They further reason that, because non-subscribing employers waive the defenses available against negligence claims under the Texas Workers' Compensation Act and instead may be sued directly under the Wrongful Death Act, they likewise must be permitted to sue Shippers directly under the Wrongful Death Act. In sum, Lewis's estate and survivors contend that Shippers has lost the defenses provided by both the federal and state compensation acts because Shippers lacks state workers' compensation insurance covering Lewis, even though Lewis is exempt from the Texas Workers' Compensation Act as a matter of law.[8]
C. Shippers's Plea to the Jurisdiction
In its plea to the jurisdiction, Shippers argued that the trial court lacked subject-matter jurisdiction over the claims asserted against it because the U.S. Department of Labor has exclusive jurisdiction to determine all questions involving liability for Lewis's death. As explained in Sun Ship, a state has concurrent jurisdiction to provide a workers' compensation scheme applicable to the land-based injuries of nonseaman maritime workers. Our state legislature, however, has exempted such workers from the Texas Workers' Compensation Act; thus, Texas workers' compensation law currently provides no alternative remedy to the compensation scheme set forth in the LHWCA.[9] Here, the parties agree that Lewis was killed in the course of her employment as a checker and therefore was covered by the LHWCA.[10] Shippers next points out that because Lewis was covered by the LHWCA, she was not subject to the Texas Workers' Compensation Act, and thus, the exclusive remedies against Shippers for negligence claims arising from Lewis's death are those provided in the LHWCA. See 33 U.S.C.A. § 905; TEX. LAB.CODE ANN. § 406.091. From these premises, Shippers reasons that the U.S. Department of Labor has exclusive original jurisdiction to make an initial determination of the merits of the real parties in interest's claims. Thus, Shippers concludes, the probate court lacks subject-matter jurisdiction over the claims asserted against Shippers.
D. Application of the Plea to the Jurisdiction to the State Law Claims
In effect, Shippers treats the real parties in interest's claims under the state wrongful-death and survival statutes as if the parties actually sought compensation under the LHWCA. The real parties in interest, however, do not assert claims for compensation under the LHWCA. As *846 plaintiffs, each real party in interest "is master to decide what law he will rely upon,"[11] and here, each plaintiff has brought against Shippers only state-law claims pursuant to the wrongful-death and survival statutes. By arguing that such claims are preempted, Shippers has raised an affirmative defense. Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987) ("Federal pre-emption is ordinarily a federal defense to the plaintiffs' suit."); Harrill v. A.J.'s Wrecker Serv., Inc., 27 S.W.3d 191, 194 (Tex.App.-Dallas 2000, pet. dism'd w.o.j) ("Preemption is an affirmative defense."). But regardless of the merit of that defense to the specific claims pleaded in this case a question that we do not reachits assertion does not deprive the state trial court of subject-matter jurisdiction. See Mills v. Warner Lambert Co., 157 S.W.3d 424, 426 (Tex.2005) (per curiam) (stating that federal preemption is generally an affirmative defense to suit but does not ordinarily deprive a state court of jurisdiction). Moreover, we will not recharacterize the state-law claims asserted by the real parties in interest as federal claims. See Aaron v. Nat'l Union Fire Ins. Co. of Pittsburg, Pa., 876 F.2d 1157, 1164-65 (5th Cir.1989) (concluding that LHWCA did not so preempt field of state law that state action for wrongful death of the longshoreman had to be recharacterized as stating federal cause of action, as would authorize removal), cert. denied, 493 U.S. 1074, 110 S. Ct. 1121, 107 L. Ed. 2d 1028 (1990); Tex. Employers' Ins. Ass'n v. Jackson, 862 F.2d 491 (5th Cir.1988) (holding that rights created by the LHWCA are not uniquely federal rights enforceable in federal court of equity so as to permit injunction against state court action based on state law claims which are preempted by the Act), cert. denied, 490 U.S. 1035, 109 S. Ct. 1932, 104 L. Ed. 2d 404 (1989). The trial court therefore did not abuse its discretion in denying Shippers's plea to the jurisdiction concerning these claims. See Mills, 157 S.W.3d at 425 ("State-court jurisdiction is affected only when Congress requires that claims be addressed exclusively in a federal forum."); Romney v. Lin, 105 F.3d 806, 813 (2d Cir.1997) ("There are thus some cases in which a state law cause of action is preempted, but only a state court has jurisdiction to so rule.").
V. CONCLUSION
Because relator Shippers has failed to show that the probate court lacks subject-matter jurisdiction over the claims asserted, it has failed to establish its entitlement to the extraordinary relief of a writ of mandamus. We therefore deny relator's petition for writ of mandamus.
NOTES
[1] The consolidated cases originally bore cause numbers 364,336-401; 361,074-402; 361,075-402; and 361,076-402.
[2] Id. at 723-24, 100 S. Ct. 2432.
[3] Id. at 724, 100 S. Ct. 2432.
[4] Cf. 33 U.S.C.A. § 902(2) (defining "injury" to include occupational diseases or infections, an "accidental injury or death arising out of and in the course of employment," and "an injury caused by the willful act of a third person directed against an employee because of his employment.") (emphasis added).
[5] See Norfolk Shipbuilding, 532 U.S. at 818, 121 S. Ct. 1927.
[6] No intentional torts are at issue in this case, and we express no opinion regarding the preemption of such claims.
[7] Real Parties' Response to Shippers'[s] Petition for Writ of Mandamus on Federal Preemption and Exclusive Jurisdiction ("Response"), at 10.
[8] See TEX. LAB.CODE ANN. § 406.091.
[9] Id.
[10] The parties do not dispute that, as a "checker," Chavon Lewis was covered under the LHWCA. See Ne. Marine Terminal Co., Inc. v. Caputo, 432 U.S. 249, 271, 97 S. Ct. 2348, 53 L. Ed. 2d 320 (1977) (holding that employee whose "job was to check and mark items of cargo as they were unloaded from a container" is covered by the LHWCA under the 1972 amendments) (citing S.Rep. 13; H.R.R. Rep.No. 92-1441, at 11, U.S.Code Cong. & Admin.News 1972, pp. 4698, 4708).
[11] The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S. Ct. 410, 57 L. Ed. 716 (1913). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578249/ | 35 So. 3d 31 (2010)
GALL
v.
PETRO STOPPING CENTERS, L.P.
No. SC10-62.
Supreme Court of Florida.
April 15, 2010.
Decision Without Published Opinion Review denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578327/ | 261 U.S. 330 (1923)
PULLMAN COMPANY
v.
RICHARDSON, AS TREASURER OF THE STATE OF CALIFORNIA.
HINES, AS DIRECTOR GENERAL OF RAILROADS, ET AL.
v.
RICHARDSON, AS TREASURER OF THE STATE OF CALIFORNIA.
Nos. 143-148, and 149.
Supreme Court of United States.
Argued December 4, 5, 1922.
Decided March 12, 1923.
ERROR TO THE SUPREME COURT OF THE STATE OF CALIFORNIA.
*331 Mr. Cordenio A. Severance, with whom Mr. Gustavus A. Fernald and Mr. Burke Corbet were on the brief, for plaintiffs in error.
Mr. U.S. Webb, Attorney General of the State of California, and Mr. Raymond Benjamin, for defendant in error, submitted.
*333 MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
These were actions by the Pullman Company against the Treasurer of California to recover moneys paid under *334 protest as state taxes. Each action related to a designated part of the tax for a distinct year and was brought on the theory that the part designated was invalid because imposed under constitutional and statutory provisions repugnant to the Constitution of the United States. The Treasurer prevailed in the court of first instance and in the Supreme Court of the State. 185 Cal. 484. The Pullman Company then brought the cases here on writs of error.
In 1910 California adopted an amendment to her constitution, § 14 of Article XIII, one purpose of which was to effect a separation of state from local taxation by subjecting public service corporations to a designated tax for state purposes and relieving them from taxation for county and municipal purposes. Referring to this feature of the amendment, the Supreme Court of the State said in San Francisco v. Pacific Telephone & Telegraph Co., 166 Cal. 244, 248: "Under the old system, the property and franchises of the corporations above referred to were taxed for both state and local purposes. The amendment creates a new mode of taxing such property and franchises, and appropriates the revenue so raised to state purposes solely. The new method, by which taxes are collected exclusively for the state, is substituted for the former system, under which the same subjects were taxed for both state and local purposes."
The pertinent parts of the amendment are as follows (Laws 1910-11, p. xliv):
"Sec. 14 (a). . . . all sleeping car, dining car, drawing-room car, and palace car companies, . . . operating upon the railroads in this State; . . . shall annually pay to the State a tax upon their franchises, . . . rolling stock, . . . and other property, or any part thereof used exclusively in the operation of their business in this State, computed as follows: Said tax shall be equal to the percentages hereinafter fixed upon *335 the gross receipts from operation of such companies and each thereof within this State. When such companies are operating partly within and partly without this State, the gross receipts within this State shall be deemed to be all receipts on business beginning and ending within this State, and a proportion, based upon the proportion of the mileage within this State to the entire mileage over which such business is done, of receipts on all business passing through, into, or out of this State.
"The percentages above mentioned shall be as follows: . . . on all sleeping car, dining car, drawing-room car, palace car companies, . . . three per cent; . . . Such taxes shall be in lieu of all other taxes and licenses, State, county and municipal, upon the property above enumerated of such companies except as otherwise in this section provided; . . .
"(e) . . . In the event that the above named revenues are at any time deemed insufficient to meet the annual expenditures of the State, including the above named expenditures for educational purposes, there may be levied, in the manner to be provided by law, a tax, for State purposes, on all the property in the State, including the classes of property enumerated in this section, sufficient to meet the deficiency. . . .
"(f) All the provisions of this section shall be self-executing, and the Legislature shall pass all laws necessary to carry this section into effect, and shall provide for a valuation and assessment of the property enumerated in this section, . . . The rates of taxation fixed in this section shall remain in force until changed by the Legislature, two thirds of all the members elected to each of the two houses voting in favor thereof."
Several acts to carry the amendment into effect were adopted from time to time, but it suffices here to say of them, first, that the computing percentage applicable to sleeping car, dining car, drawing-room car, and palace car *336 companies was increased to four per cent. in 1913 (c. 6, Laws 1913) and reduced to three and ninety-five hundredths per cent. in 1915 (c. 2, Laws 1915); secondly, that provision was made for enforcing the tax by either the usual tax sale or a suit in the name of the State (c. 335, §§ 20, 21, 24, Laws 1910-11; c. 6, § 5, Laws 1913), and, thirdly, that there was further provision that if the tax was not paid within a designated period the delinquent company, if a domestic corporation, "will forfeit its charter" and, if a foreign corporation, "will forfeit its right to do business in this State," and that the transaction of any business in the State on behalf of a company incurring any such forfeiture, except to settle its affairs, should be punished by substantial fines. Laws 1911, c. 335, § 24; Laws 1913, c. 6, § 5, and c. 320, § 9.
The taxes in question were levied under the new system in 1911 and six subsequent years. All were alike, save in particulars not material here; so it will be enough to state the facts relating to the tax levied in 1911.
The Pullman Company is an Illinois corporation engaged in operating sleeping and parlor cars on the railroads of the country. Some of its cars are operated between points in California, some between points within and points without that State and some through the State between points outside. In 1910 the company's gross receipts from all its operations within the State were $1,905,302.97. Of this sum $938,786.80 came from operations which began and ended in the State and $966,516.17 came from that part of the interstate operations which was within the State. The latter amount was arrived at by taking every service performed partly within and partly without the State and determining on a mileage basis what portion of the sum received therefor was attributable to the part of the service within the State. To illustrate: If a passenger was carried in a sleeping car from Oakland to Chicago for $14.00, and one-seventh of *337 the mileage was in California, $2.00 was deemed the gross receipt for so much of the service as was rendered in that State.
The gross receipts were calculated and reported by the company and the state officers accepted the calculation. The amount of the tax was computed by applying to the gross receipts the percentage rule prescribed by the amendment to the state constitution. In this way a tax of $57,159.08 was levied in 1911. Had the gross receipts from intrastate business alone been considered the tax would have been $28,163.61, that is, $28,995.47 less than the actual levy.
The company objected to the consideration of the gross receipts from the interstate business, although they came only from service within the State, and objected to a corresponding part of the tax the $28,995.47. That part was paid under protest and the first of these actions was brought to recover it, an admissible course under the state law. Laws 1910-1911, c. 335, § 23; Laws 1913, c. 320, § 7. The other part was paid voluntarily and is not in controversy.
The company insists that the tax in question and the provisions therefor in the state constitution and statutes are invalid under the commerce clause of the Constitution of the United States, because (a) the tax is laid on gross receipts from interstate commerce, and (b) its payment is made a condition to continuing an interstate business within the State, and are invalid under the due process of law clause of the Fourteenth Amendment, because the tax is intended to reach income from property situated and business done without the State.
The state court holds that the tax is not a tax on gross receipts as such, but is in both name and essence a tax on property within the State, and that it is computed with reference to the gross receipts only as a means of adjusting *338 it to the real value of the property in the relation in which the same is used.
The principles to be applied in cases of this class repeatedly have been considered by this court and are now settled.
A State can neither tax the act of engaging in interstate commerce nor lay a tax on gross receipts therefrom. In either case the tax would be a restraint or burden on such commerce and its imposition an invasion of the power of regulation confided to Congress by the commerce clause of the Constitution. Fargo v. Michigan, 121 U.S. 230; Philadelphia & Southern S.S. Co. v. Pennsylvania, 122 U.S. 326; Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, 210 U.S. 217; Meyer v. Wells, Fargo & Co., 223 U.S. 298.
The rule is otherwise with property used in interstate commerce. A State within whose limits such property is permanently located or commonly used may tax it. Cudahy Packing Co. v. Minnesota, 246 U.S. 450, 453; Wells, Fargo & Co. v. Nevada, 248 U.S. 165, 167; Union Tank Line Co. v. Wright, 249 U.S. 275, 282. And, if the property be part of a system and have an augmented value by reason of a connected operation of the whole, it may be taxed according to its value as part of the system, although the other parts be outside the State; in other words, the tax may be made to cover the enhanced value which comes to the property in the State through its organic relation to the system. Fargo v. Hart, 193 U.S. 490, 499; Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, supra, p. 225; United States Express Co. v. Minnesota, 223 U.S. 335, 337; Union Tank Line Co. v. Wright, supra.
In taxing property so situated and used a State may select and employ any appropriate means of reaching its actual or full value as part of a going concern, such as treating the gross receipts from its use in both intrastate *339 and interstate commerce as an index or measure of its value, and if the means do not involve any discrimination against interstate commerce and the tax amounts to no more than what would be legitimate as an ordinary tax upon the property, valued with reference to its use, the tax is not open to attack as restraining or burdening such commerce. Cudahy Packing Co. v. Minnesota, supra; St. Louis Southwestern Ry. Co. v. Arkansas, 235 U.S. 350, 367; United States Express Co. v. Minnesota, supra; Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, supra, p. 227; Union Tank Line Co. v. Wright, supra.
An examination of the tax in question in the light of these principles shows that the chief objection urged against it is not tenable. The provisions under which the tax is imposed call it a property tax, specify the property subjected to it and declare that it is in lieu of all other taxes on such property. The Supreme Court of the State holds it is a tax on the property specified. In no material respect does it differ from the tax which was recognized by this Court as a property tax in United States Express Co. v. Minnesota and Cudahy Packing Co. v. Minnesota, above cited. True, it is computed with special regard to the gross receipts, but this, as is fairly shown, is done merely as a means of getting at the full value of the property, considering its nature and use. The tax is not claimed to be in excess of what would be legitimate as an ordinary tax on the property valued as part of a going concern, nor to be relatively higher than the taxes on other kinds of property. There is no ground for thinking that it operates as a discrimination against interstate commerce.
The statutory provision that a foreign corporation which fails to pay the tax shall be excluded from doing business in the State requires but brief notice. It is not sought to be enforced here. The Pullman Company has not failed to pay the tax. The provision has not been *340 construed by the state court. If it be construed as covering interstate commerce it is void, for the right to engage in such commerce is not within the State's control. See Western Union Telegraph Co. v. Massachusetts, 125 U.S. 530, 554; Leloup v. Port of Mobile, 127 U.S. 640, 645; Postal Telegraph Cable Co. v. Adams, 155 U.S. 688, 695-696. The state court may construe it as confined to intrastate business. St. Louis Southwestern Ry. Co. v. Arkansas, 235 U.S. 350, 368-369. In neither event would it affect the validity of the tax before us.
We find nothing in the provisions under which the tax was levied, in the decision of the state court, or in the record, which gives any support to the contention that the tax is intended to reach income from property situated or business done without the State.
Judgment affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858865/ | Maxwell v. Texas Department of Transportation
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-93-562-CV
RHONDA MAXWELL,
APPELLANT
vs.
TEXAS DEPARTMENT OF TRANSPORTATION,
APPELLEE
FROM THE DISTRICT COURT OF BURNET COUNTY, 33RD JUDICIAL DISTRICT
NO. 13,960, HONORABLE CLAYTON E. EVANS, JUDGE PRESIDING
We are asked in this appeal to determine the limits of governmental immunity under
the Texas Tort Claims Act. Tex. Civ. Prac. & Rem. Code Ann. §§ 101.001-.109 (West 1986 &
Supp. 1994). Rhonda Maxwell appeals from a take-nothing summary judgment rendered in favor
of the Texas Department of Transportation ("the Department"). We will affirm the judgment of
the trial court.
BACKGROUND
Maxwell was severely injured early one morning when her car veered off U.S.
Highway 281 and came to rest in a culvert adjacent to the road. Maxwell asserts that she swerved
off the road to avoid hitting a deer. The Department built and continues to maintain both the
culvert and highway. Maxwell sued the Department, alleging that the culvert constituted a special
defect or, in the alternative, an ordinary premises defect, and that her injuries were proximately
caused by the Department's failure to warn of the culvert or make the culvert reasonably safe.
At the time of the accident the only warning device notifying motorists of the culvert's existence
was a post with three amber reflectors.
The Department moved for summary judgment on the basis of governmental
immunity under sections 101.056(2) and 101.061 of the Texas Tort Claims Act. The Department
also argued that Maxwell could not prove all of the elements of a premises cause of action.
Because the summary judgment order did not state the basis of the trial court's judgment, Maxwell
brings four points of error attacking all three grounds stated in the Department's motion for
summary judgment. See Tindle v. Jackson Nat'l Life Ins. Co., 837 S.W.2d 795, 797 n.1 (Tex.
App.--Dallas 1992, no writ) (when the trial court does not state the basis for granting summary
judgment appellant has burden to address each of the summary judgment grounds presented by
the movant in order to show the trial court's error). We will affirm the trial court's judgment
if any of the theories advanced by the Department demonstrates a right to judgment as a matter
of law. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989). In reviewing the summary
judgment, we will indulge every reasonable inference and resolve any doubts in favor of the non-movant. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 549 (Tex. 1985).
TEXAS TORT CLAIMS ACT
A state agency, such as the Department, may not be sued for damages unless the
Texas Tort Claims Act waives the state's governmental immunity for the alleged wrongful act.
Lowe v. Texas Tech Univ., 540 S.W.2d 297, 298 (Tex. 1976). Under the Act, a governmental
unit may be held liable for personal injury or death caused by a defective condition or use of
tangible personal or real property if, under the circumstances, a private person would be liable
to the claimant according to Texas law. Texas Tort Claims Act § 101.021(2). The statute
provides legislative consent to sue a governmental unit for a claim allowed under the Act. Id. at
§ 101.025(b).
However, the Tort Claims Act does not provide a waiver of immunity when a claim
is based on an agency's performance or nonperformance of an act committed to agency discretion.
Id. at § 101.056(2). Nor does it apply to agency acts or omissions committed before January 1,
1970. Id. at § 101.061. The Department asserted both of these exceptions to liability in its
motion for summary judgment.
The Tort Claims Act also provides that an agency shall not be liable for its failure
"initially to place a traffic or road sign, signal, or warning device if the failure is a result of a
discretionary action of the governmental unit." Id. at § 101.060(a)(1). However, when the
danger constitutes a special defect, the state has an obligation to place a warning device, and will
not be immune from liability if it fails to do so. Id. at § 101.060(c). Maxwell attempts to
circumvent the Department's immunity from claims based on discretionary acts by arguing that
the culvert constituted a special defect. Id. at §§ 101.022(b), .060(c). In the alternative, she
argues that the culvert was a premises defect. Whether a condition constitutes a special defect or
a premises defect is an issue of law for the court to decide. State Dep't of Highways & Pub.
Transp. v. Payne, 838 S.W.2d 235, 238 (Tex. 1992).
DISCRETIONARY ACTS
The Department moved for summary judgment contending that Maxwell's
complaints regarding the placement of the culvert and its safety features are essentially complaints
about the design of the culvert, an issue committed to agency discretion. A governmental entity's
discretion in the design of roads and bridges, which includes the installation of safety features
such as guardrails and barricades, is protected from liability by section 101.056(2) of the Tort
Claims Act. Wenzel v. City of New Braunfels, 852 S.W.2d 97, 98 (Tex. App.--Austin 1993, no
writ) (failing to erect barricade, warning sign, or similar warning device); City of El Paso v.
Ayoub, 787 S.W.2d 553 (Tex. App.--El Paso 1990, writ denied) (design, placement, and upgrading
of guardrails and barricades on bridge over culvert); Burnett v. Texas Highway Dep't, 694 S.W.2d
210, 212 (Tex. App.-- Eastland 1985, writ ref'd n.r.e.) (replacement of highway metal beam guard
fence with rigid barrier); Stanford v. State Dep't of Highways & Pub. Transp., 635 S.W.2d 581,
582 (Tex. App.--Dallas 1982, writ ref'd n.r.e.) (decision not to add guardrails on overpass).
In her first point of error Maxwell insists that the trial court erred in granting
summary judgment based on immunity for discretionary acts because the Department's decisions
regarding the placement of the culvert and its safety features involve professional or occupational
discretion not protected by section 101.056(2). See Eakle v. Texas Dep't of Human Servs., 815
S.W.2d 869, 874 (Tex. App.--Austin 1991, no writ) (discussing professional and occupational
discretion). She asserts that while the decision to build the highway is a policy decision protected
from liability, the placement of the culvert and its safety features are unprotected architectural and
engineering decisions. We disagree.
Actions involving occupational or professional discretion are devoid of policy
implications. Examples include decisions made in driving a mail truck, 3 K. Davis,
Administrative Law Treatise § 25.08 at 403-4 (Supp. 1982); or the decision by a drama instructor
to use a glass rather than a plastic prop in a university production. Christilles v. Southwest Texas
State Univ., 639 S.W.2d 38, 42 (Tex. App.--Austin 1982, writ ref'd n.r.e.). Decisions
regarding the design of a highway and the installation of safety features, however, do not fall into
this category. It is not proper for a court to second-guess the agency's decision that some other
type of marker or safety device would have been more appropriate than the amber reflector at
issue, or that the culvert was placed too close to the highway. To do so would displace the
authority of the agency responsible for making such decisions. See Ayoub, 787 S.W.2d at 554;
Burnett, 694 S.W.2d at 212; Stanford, 635 S.W.2d at 582.
Contrary to Maxwell's argument, a "professional," such as an engineer, may use
his or her skills in designing adequate safety features for a highway without subjecting the process
to judicial review as an occupational or professional class of agency action. Thus, even though
the Department may have used engineering expertise and discretion in the planning and design of
the culvert, the action remains in the informed discretion of the agency and exempt from liability
under section 101.056(2).
Maxwell next argues that the Department is not entitled to immunity from liability
pursuant to section 101.056(2), because the culvert constitutes a special defect. See Texas Tort
Claims Act § 101.060(c) (state liable for injuries arising from failure to warn of special defects).
As such, appellant argues that the agency has a mandatory, rather than discretionary, duty to warn
motorists of the dangerous condition, and section 101.056(2) does not apply. However, the
mandatory duty to warn of special defects provides an exception only to those exemptions from
liability described in section 101.060 of the Tort Claims Act. Id.
Section 101.060 exempts the government from liability for injuries caused by: 1)
the Department's failure to initially place a traffic signal or warning device if the decision is
within the agency's discretion; 2) the absence, condition or malfunction of a traffic signal or
warning device if the Department has not had sufficient notice to remedy the defect; and 3) the
removal or destruction of a traffic signal or warning device by a third person if the Department
has not had sufficient notice to replace the sign or device. Id. at § 101.060(a). Section 101.060
further states that if the injury is caused by a special defect, the mandatory duty to warn of the
special defect abrogates governmental immunity. Id. at § 101.060(c). We note that the
Department did not assert section 101.060 as a ground for summary judgment.
In her pleadings, Maxwell stated that the Department failed to warn her of the
culvert's existence. Summary judgment evidence presented by both the Department and Maxwell
shows, however, that motorists were warned of the culvert by a "type 2" marker consisting of a
post with three amber reflectors. Maxwell's response to the Department's motion for summary
judgment suggests that the Department breached its duty to Maxwell by placing the culvert too
near the road, failing to provide guardrails or barricades, and using the wrong type of warning
device. These claims do not complain of the absence of a warning device, but, rather, the
adequacy of the marker already in place.
Cases that have found special defects under section 101.060(c) involve the state's
failure to provide any warning device at all. Harris County v. Eaton, 573 S.W.2d 177, 179 (Tex.
1978) (county failed to place signs warning of abnormally large hole in pavement); State v.
McBride, 601 S.W.2d 552, 558 (Tex. Civ. App.--Waco 1980, writ ref'd n.r.e.) (signs advising
motorists to reduce speed did not warn of hazard of slick mud on road as result of construction);
Miranda v. State 591 S.W.2d 568, 570 (Tex. Civ. App.--El Paso 1979, no writ) (agency did not
place signs warning of flood waters on low water crossing). In this case, however, the evidence
shows that a warning sign was present.
Even if Maxwell's claim involved a complete failure to warn of the culvert, thereby
triggering the mandatory duty to warn, we do not believe that the culvert constitutes a special
defect. Special defects have been held to be those obstructions that present unexpected and
unusual dangers to ordinary users of the highway that are beyond the normal course of events.
Payne, 838 S.W.2d at 238; Wenzel, 852 S.W.2d at 100. In Payne, a culvert was held not to be
a special defect because normal users of the highway were unlikely to encounter it. Id.
We believe that the culvert at issue here is not a special defect because it, too,
would not be encountered by ordinary users of the highway. Like the plaintiff in Payne, Maxwell
travelled off the road before coming into contact with the culvert. Special defects are obstructions
that affect normal highway traffic. Eaton, 573 S.W.2d at 179; McBride, 601 S.W.2d at 558;
Miranda, 591 S.W.2d at 570. The culvert also does not present an unusual danger beyond the
normal course of events. The Department's summary judgment evidence shows that the culvert
had been in place since the late 1950's and that there had been no reported accidents involving the
site before Maxwell's.
Because the Department has established its immunity based on section 101.056(2),
we overrule the first point of error.
NO MATERIAL FACT ISSUES
In her second point of error, Maxwell argues that she has raised various fact issues
that should defeat the summary judgment in favor of the Department. However, all of the alleged
facts relate to the adequacy of the Department's warning and the steps taken by the agency to
make the culvert safe. When an appellee, such as the Department, has conclusively established
that it cannot be held liable because of governmental immunity, any facts relating to its liability
are immaterial. Eakle, 815 S.W.2d at 877. A motion for summary judgment cannot be defeated
by the existence of an immaterial fact issue. Id. Accordingly, Maxwell's second point of error
is overruled.
ACTS OR OMISSIONS BEFORE JANUARY 1, 1970
Maxwell's third and fourth points of error concern the Department's assertion of
section 101.061 as an alternative basis for governmental immunity. The Department argues that
it was entitled to summary judgment because the Tort Claims Act "does not apply to an act or
omission that occurred before January 1, 1970." Texas Tort Claims Act § 101.061. If the
Department proves that the culvert was completed before 1970 and has remained in the same
condition since that time, then, as a matter of law, the Department is entitled to immunity under
section 101.061. Tarrant County Water Control & Improvement Dist. No. 1 v. Crossland, 781
S.W.2d 427, 432 (Tex. App.--Fort Worth 1989, writ denied), overruled on other grounds,
Mitchell v. City of Dallas, 870 S.W.2d 21, 23 (Tex. 1994). The Department's summary judgment
evidence shows that the highway and culvert were constructed in the late 1950's and that there
have been no changes in the traffic control devices, signs, markers, and safety features of the
culvert since January 1969. Maxwell's summary judgment evidence does not contradict this. (1)
Maxwell argues that the Department's failure to upgrade or improve the safety
features of the culvert during renovation of the highway in 1979 constitutes an act or omission that
occurred after January 1, 1970. We disagree. The act or omission is the actual building of the
structure. University of Texas-Pan Am. v. Valdez, 869 S.W.2d 446, 449 (Tex. App.--Corpus
Christi 1993, writ denied). When the claims concern a structure built before January 1, 1970, the
state is exempt from liability. Chapman v. City of Houston, 839 S.W.2d 95, 99 (Tex.
App.--Houston [14th Dist.] 1992, writ denied). Failure to provide additional safety features and
devices after 1970 does not constitute an act or omission within the meaning of section 101.061.
See Crossland, 781 S.W.2d at 432.
In response, Maxwell argues that interpreting section 101.061 to bar claims based
on pre-1970 highway designs encourages the state to ignore highway defects because they existed
before 1970. She asserts that the state has been given free rein to ignore unsafe highways and
dangerous conditions simply because of the defect's age. This argument, however, disregards the
intent of section 101.061 which is to "provide for the abolishment of governmental immunity
without causing havoc." Chapman, 839 S.W.2d at 99. The legislature did not want to place the
state in the position of trying to analyze every structure under its control and then rebuild,
redesign, and make safe all of those structures in order to protect the state from liability. Id.
Maxwell would have the state confront the same problem that the legislature clearly intended for
it to avoid. We overrule Maxwell's third and fourth points of error.
CONCLUSION
Because we hold that the Department has satisfied its burden of proof to support
governmental immunity under section 101.056(2) and section 101.061 of the Texas Tort Claims
Act, we affirm the judgment of the trial court.
Bea Ann Smith, Justice
Before Justices Powers, Jones and B. A. Smith
Affirmed
Filed: June 22, 1994
Publish
1. 1 Maxwell points out that the original design for the highway in 1959 contemplated the
erection of several timber posts along the culvert to serve as a guard fence. She argues that
the Department failed to conclusively prove that the fence was removed before 1970, and,
thus, a fact issue remains defeating summary judgment. The Department's summary judgment
evidence shows, however, that the wooden posts were replaced before January 1969, and since
that time there have been no changes made to the site by the Department. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1578153/ | 274 S.W.3d 478 (2008)
In re the ADOPTION OF F.C., M.C., and D.C., Minor children.
No. 28826.
Missouri Court of Appeals, Southern District, Division Two.
October 6, 2008.
Rehearing Denied October 28, 2008.
*480 Eric A. Farris, Branson, MO, for appellant.
Joseph L. Hensley, Joplin, MO, for respondent.
DON E. BURRELL, Presiding Judge.
P.S. and J.S. ("Grandparents") are the maternal grandparents of the minor children, F.C., M.C., and D.C. ("the Children"). Grandparents appeal the trial court's judgment denying their petition for adoption and granting, instead, the competing petition for the Children's adoption filed by A.O. ("Foster Father") and B.O. ("Foster Mother") (collectively, "Foster Parents").[1] Grandparents contend: 1) the evidence does not support the trial court's conclusion that adoption of the Children by Foster Parents was in the Children's best interests; and 2) the testimony of the Children's Guardian ad Litem ("GAL") should have been stricken because the GAL failed to meet the Missouri Supreme Court Standards for Guardians ad Litem. Finding no error, we affirm.
I. Factual and Procedural Background
Viewed in the light most favorable to the judgment, In re K.R.J.B., 228 S.W.3d 611, 613 (Mo.App. S.D.2007); Lee v. Hiler, 141 S.W.3d 517, 520 (Mo.App. S.D.2004), the relevant facts are as follows.[2] The Children were born to P.C. *481 and W.C., Grandparents' daughter and former son-in-law. On December 7, 2002, upon a showing of probable cause to believe they had been abused or neglected, the Children (who were two, four, and six years old at the time) were taken from their parents and placed into protective custody. The Children were initially split apart and placed in separate foster homes. One week later, the Children were moved from their separate locations and placed together in Foster Parents' home when Foster Parents volunteered to take them. Foster Parents were familiar with the Children and their parents because the family had participated in the "Head Start" program where Foster Mother was a Family Resource Specialist.
At the time the Children were removed from their parents' custody, Grandparents lived two hours away in Branson, Missouri but also owned a home in Granby, Missouri that was located approximately thirty minutes from Foster Parents' home. Grandparents' Branson home would have needed to be remodeled to create additional bedrooms before the Children would have been able to stay there. At the time of the Children's removal, Grandparents did not remodel their Branson home or move to their Granby home (which was apparently configured in an acceptable manner) in any attempt to have the Children placed with them. Grandparents did not initially participate in Family Support Team meetings held by the Children's Division. When Grandparents began to attend these meetings, their purpose and goal was to support their daughter's efforts to regain custody of the Children.
Sometime in 2003, Grandparents began to act independently of their daughter and were successful in obtaining a court-ordered schedule of visitation with the Children. The length and conditions of this visitation varied over time but began with daytime visits and progressed to overnight and weekend visits.
Attempts to reunify the Children with a natural parent were not successful, and the trial court ultimately terminated the natural parents' parental rights via a judgment entered January 12, 2006. The Children's biological mother appealed the termination of her parental rights. After this Court affirmed the judgment,[3] Foster Parents and Grandparents filed separate petitions for adoption within two weeks of each other and the cases were consolidated. By the time of the trial on the consolidated petitions for adoption, the Children had lived with Foster Parents for approximately four years and nine months.
The trial court heard evidence on the adoption petitions over several days in August and September of 2007. The Children's therapist, the Children's Division, and the GAL all recommended that the Children be adopted by Foster Parents. A psychologist hired by the Children's Division conducted an evaluation to determine the level of bonding between the Children and each of the competing parties *482 but did not make a recommendation as to whose adoption petition should be granted. He did, however, conclude that the Children were bonded with both Foster Parents and Grandparents.
A. Foster Parents' Circumstances
Foster Father and Foster Mother were respectively forty-five and forty-four years of age at the time of trial. Foster Father has a college education and has been employed as an editor for a newspaper for over twenty years. Foster Mother works approximately twenty-five hours per week as a Family Resource Specialist with "Head Start," a program designed to enhance early childhood development. Foster Parents' income is approximately $84,400 to $90,600 per year. Insurance for the children would be provided through Foster Father's employer.
Foster Parents live in a three bedroom, two-and-a-half bath, single-family home. The home is located on 1.6 acres in Webb City, Missouri. Foster Parents have a biological son who is a twenty-two-year-old college student. He no longer resides primarily in the family home but stays there periodically on weekends and during school breaks. Foster Parents have been married for twenty-three years.
B. Grandparents' Circumstances
Grandparents were both sixty-six years old at the time of trial. Grandmother has a master's degree and teaches reading recovery and early literacy to the lowest performing child in each first grade class. Grandfather has a college education and worked twenty-seven years for an oil field service company before retiring. Grandparents are also members of a musical band that performs approximately nine months a year for two hours per week at a Branson resort property. Grandparents' income is approximately $95,000 to $98,000 per year. Insurance for the children would be provided through Grandmother's employment. Grandparents' remodeled Branson home is approximately 2,500 square feet and now has three bedrooms.
II. Standard of Review
"[T]he paramount goal in an adoption proceeding is the best interests of the child." In re C.D.G., 108 S.W.3d 669, 674 (Mo.App. W.D.2002). "We will affirm the judgment below, unless the judgment has no substantial evidence to support it, the judgment is against the weight of the evidence, or the trial court erroneously declared or applied the law." Id. A judgment is presumed correct and we accept as true the evidence and inferences favorable to the judgment and disregard all contrary evidence and inferences. In re M.F., 1 S.W.3d 524, 532 (Mo.App. W.D.1999); Lee, 141 S.W.3d at 520. "Greater deference is granted to a trial court's determination in custody and adoption proceedings than in other cases." In re K.K.J., 984 S.W.2d 548, 552 (Mo.App. S.D.1999). Credibility of the witnesses and the weight given to their testimony is for the trial court's determination as we defer to the trial judge's superior opportunity to assess such credibility. Lee, 141 S.W.3d at 520; Keller v. Friendly Ford, Inc., 782 S.W.2d 170, 173 (Mo.App. S.D.1990); Harris v. Lynch, 940 S.W.2d 42, 45 (Mo.App. E.D.1997).
III. Analysis
Although neither party requested findings of fact and conclusions of law, the trial court's judgment contained the following relevant findings:
The Children's Division and the Guardian ad Litem recommended permanency for the children through adoption by the [Foster Parents], citing their length of time in the [Foster Parents'] home and the bond they have built with the children. This Court simply cannot ignore *483 the years of foster care that the [Foster Parents] have endured to get to this point and the strength of the bond between the children and their foster Mom and Dad. Though any result entered by the Court will naturally be upsetting to one of the couples in this case, as both love the children dearly, the Court must concern itself with what is best for the children. Therefore, based on the findings above, the Court denies the [Grandparents'] Petition and finds in favor of [Foster Parents].
Because no request for specific findings of fact was made, "[a]ll fact issues upon which no specific findings [were] made shall be considered as having been found in accordance with the result reached." Rule 73.01(c); Zaharopoulos v. Sprenger, 605 S.W.2d 143, 145 (Mo.App. E.D.1980) ("the judgment will be affirmed if it is correct on any reasonable theory supported by the evidence.").
Point One: Best Interests Determination
In Grandparents' first point on appeal, they argue the trial court erred in finding that the best interests of the Children would be served by granting the Foster Parents' petition for adoption because the Grandparents presented substantial and sufficient evidence at trial that they were the party best suited to serve as the Children's adoptive parents. Grandparents cite several factors in support of this position and also note several "concerns" about the Foster Parents they allege the trial court did not properly weigh. Further, Grandparents argue that the trial court "based its decision solely on the length of time that the children have spent in the custody of the [Foster Parents]."[4]
"There are innumerable factors that may be considered in determining whether an adoptive placement is in the children's best interests." In re C.D.G., 108 S.W.3d at 677. "With the possible exception of a strong negative factor, no one factor is determinative of the issue." Id. "As such, the best-interests analysis is very fact-intensive and may turn on very subtle factors." Id.
Grandparents argue that their level of income, biological relationship, good and stable home, degree of bonding with the Children, age and health, degree of training, education, combined intelligence quotient (IQ), and level of commitment all favor a finding that the best interests of the Children would best be served by allowing Grandparents to be their adoptive parents. In making this argument, Grandparents fail to recognize that many of these same factors would also support the trial court's decision to allow Foster Parents to adopt the Children. Further, whether the "concerns" about the Foster Parents that the trial court allegedly failed to properly weigh would constitute a "strong negative factor" depends on *484 whether the trial court believed they actually existed. The testimony on these matters was in controversy and thus involved credibility determinations that were the trial court's to make. We assume the trial court made those credibility determinations in a fashion consistent with its judgment. Warren v. Tom, 946 S.W.2d 754, 759 (Mo.App. S.D.1997).
While Grandparents' income was somewhat higher than that of Foster Parents', both parties' income either met or exceeded their monthly expenses. Grandparents rightly note their biological relationship to the Children as a factor the trial court should consider. While there is no overriding preference for adoptive placement with biological relatives, such relationships are nevertheless significant considerations in determining what is in the children's best interests. See In re C.D.G., 108 S.W.3d at 677; Matter of M.D.H., 595 S.W.2d 448, 451 (Mo.App. S.D.1980). What Grandparents fail to consider, however, is that the trial court may also have considered their biological relationship in determining whether Grandparents might allow the Children to have contact with their biological mother (Grandparents' daughter) in a manner that would not be in the Children's best interests. See In re T.J.D., 186 S.W.3d 488, 496 (Mo.App. S.D.2006) (finding that "the `future contact with biological parents' factor weigh[ed] heavily against Grandfather and favorably to the Foster Parents."). Because no findings of fact were made on this issue, we must construe it as having been found in accordance with the trial court's decision. Rule 73.01(c).
Grandparents point to their ability to provide a good and stable home, but this was also true of Foster Parents. Both parties had home studies that were approved by the Children's Division.[5] Grandparents rightly point out that the Children have a strong and positive bond with them. However, the psychologist who testified to the existence of that bond went on to testify that the Children were also bonded to Foster Parents. Moreover, he testified that the nature of the Children's bonding was to Foster Parents as "parents" and to Grandparents as "grandparents." The Children's therapist also testified that the Children were bonded not only with Foster Parents, but also with Foster Parents' son.
Grandparents refer to their age and excellent health, degree of training in child-care issues, and advanced education as factors that would weigh in their favor. Again, Grandparents fail to appreciate that Foster Parents are over twenty years younger, are also in excellent health, have received equivalent if not more training in child-care issues, and are also well educated. Grandparents argue that they have higher IQ scores than Foster Parents and contend that Foster Parents are less committed to these Children because they have incurred fewer out-of-pocket expenses in their attempt to adopt the Children. A review of the record shows that both of these parties love and are committed to these children, and Grandparents have failed to argue how their higher IQ scores would be of particular benefit to the Children.
Grandparents argue the trial court erred because it based its decision solely on the length of time the children had spent in the custody of Foster Parents. As earlier noted, the amount of time the Children had spent living with Foster Parents was *485 obviously significant to the trial court based on its express statement to that effect, but Grandparents have failed to cite to any evidence that would support their conclusion that it is the only evidence the trial court considered.
Viewing the evidence in the light most favorable to the judgment, as we must, we cannot find that the trial court's decision was against the weight of the evidence. Instead, there is substantial evidence to support it and no mistake of law appears. Point one is denied.
Point Two: The Guardian ad Litem
In Grandparents' second point on appeal, they argue the trial court abused its discretion when it overruled Grandparents' motion to strike the testimony of and discharge the GAL. Grandparents allege the GAL's actions were in violation of Section 453.025.4[6] and the Missouri Supreme Court's Standards for Guardians ad Litem because: 1) the fact that she held the same opinion as to who should adopt the Children both before and after the competing petitions for their adoption were filed demonstrated that she was not objective and neutral as required; 2) the GAL never met with the Children; and 3) the GAL failed to complete the required six hours of annual specialized Guardian ad Litem training and file with the court the required affidavit so attesting.
At trial, Grandparents made a motion to strike the testimony of the GAL after she had testified. Grandparents argued at that time that she did not meet the standard of objectivity required by the Guardian ad Litem rules because she had "held the same opinion as to a preference in this adoption since the June of 2004 staffing meeting" and "could not identify the last time she visited with [the Children]." On appeal, Grandparents now attempt to raise two additional grounds: 1) that the GAL's "actions and omissions" were in violation of the requirements of Section 453.025.4; and 2) that she did not meet the Missouri Supreme Court's Standards for Guardians ad Litem. These new objections cannot be raised for the first time on appeal.[7] Rule 84.13; Section 512.160, RSMo (2000); Mo. Pub. Serv. Co. v. Juergens, 760 S.W.2d 105, 106 (Mo. 1988); Rolla 31 Sch. Dist. v. State, 837 S.W.2d 1, 7 (Mo.1992) ("It is incumbent upon one seeking relief to ensure that the trial court rules upon all requests before it in order to preserve an erroneous ruling for appeal. Allegations of error that have not been presented to or expressly decided by the trial court shall not be considered on appeal."). Because these additional claims of error were not properly preserved for our review, they will not be addressed.
As to Grandparents' objections that were raised at trial, we first note that *486 Grandparents fail to cite any authority for their contention that the GAL was required by law to be "objective and neutral." To the contrary, the applicable statute requires a Guardian ad Litem to "[b]e the legal advocate for the best interest of the party he is appointed to represent. . . ." Section 453.025.4(1) (emphasis added). Advocacy is not neutrality. In fact, as Grandparents' brief correctly points out, a Guardian ad Litem's duty is to "`jealously guard[] the rights of infants.'" (quoting Spotts v. Spotts, 331 Mo. 917, 55 S.W.2d 977, 981 (1932)).
In regard to being objective, we assume Grandparents suggest it in the sense of "expressing or dealing with facts or conditions as perceived without distortion by personal feelings, prejudices, or interpretations." MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 855 (11th ed.2005). The comment to Standard 2.0 of the Missouri Supreme Court's Standards with Comments for Guardians ad Litem in Missouri Juvenile and Family Court Matters ("the Standards") cited by Grandparents says a Guardian ad Litem "must maintain an objectivity that preserves a clear focus on the child's best interests."[8] STANDARDS WITH COMMENTS FOR GUARDIANS AD LITEM IN MO. JUVENILE & FAMILY COURT MATTERS 4, Standard 2.0 at 4 (1996), http://www. courts.mo.gov/file/Guardian%20ad%20litem% 20Standards.pdf. Although the ability to view facts and situations "objectively" (as defined above) is an important skill for a Guardian ad Litem (as for any advocate) to develop, perhaps a more fitting definition of "objective" in this context is the Merriam-Webster's alternative definition: "something toward which effort is directed; a strategic position to be attained or a purpose to be achieved. . . ." MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 855 (11th ed.2005). In any event, Grandparents fail to cite any authority supporting the proposition that a consistent position or recommendation over time amounts to a de facto lack of objectivity under either definition. The failure to cite relevant authority or explain the lack thereof constitutes an abandonment of the point under Rule 84.04(d). In re Clinton, 231 S.W.3d 317, 323 (Mo.App. S.D.2007). Grandparents also fail to show, in the context of this case, why the GAL's consistent recommendation that the Children be adopted by Foster Parents is not supported by the evidence as seen in the light most favorable to the judgment.
In regard to Grandparents' allegation that the GAL did not personally interview the Children, the GAL testified that she had met with the Children on a few occasions and that "I'm also able, as guardian ad litem, to rely on reports and other sources of information. And all indication is that the majority of the time the children have indicated that they want to remain with [Foster Parents]." As earlier indicated, Section 453.025.4(3) gives a Guardian ad Litem discretion in deciding whether or not to directly interview the child whose best interests he or she is appointed to assert and protect. More importantly, Grandparents have failed to point out why any failure by the GAL to personally interview the Children in this case would constitute an abuse of that discretion or how any such failure resulted in prejudice. "A judgment for error is not to be reversed unless the complainant suffered injury or prejudice." Miles v. Dennis, 853 S.W.2d 406, 409 (Mo.App. W.D. *487 1993). In fact, the trial court could have stricken the GAL's testimony as requested by Grandparents and its decision to grant Foster Parents' petition for adoption would still have been supported by substantial evidence. Point two is also denied and the judgment of the trial court is affirmed.
PARRISH and RAHMEYER, JJ., Concur.
NOTES
[1] The trial court entered an order consolidating these originally separate adoption cases into one single case at the request of the parties. See In re K.W., 32 S.W.3d 674, 675-76 (Mo.App. W.D.2000) (actual consolidation of cases required or unsuccessful competing petitioner has no standing to appeal).
[2] Unfortunately, Grandparents' Statement of Facts was not helpful in making this determination. Our briefing rules require that an appellant's "statement of facts shall be a fair and concise statement of the facts relevant to the questions presented for determination without argument. Such statement of facts may be followed by a resume of the testimony of each witness relevant to the points presented." Rule 84.04(c) (emphasis added). Grandparents' Statement of Facts is argumentative and fails to mention many of the relevant facts, particularly those that are favorable to the trial court's judgment. While the failure to comply with Rule 84.04(c) is grounds to dismiss the appeal, In re Gerhard, 34 S.W.3d 305, 307 (Mo.App. S.D.2001), we choose to exercise our discretion to determine the case on its merits in spite of the breach.
Unless otherwise indicated, all references to rules are to Missouri Court Rules (2008).
[3] In re F.C., 211 S.W.3d 680 (Mo.App. S.D. 2007). The biological father did not appeal.
[4] This contention is raised for the first time in the argument section of Grandparents' brief and is not contained in their Point Relied On. Rule 84.04(e) states in relevant part that "[t]he argument shall be limited to those errors included in the `Points Relied On.'" Grandparents' Point Relied On also spans nearly two and a half pages with approximately two pages of references to the record. "Any reference to the record shall be limited to the ultimate facts necessary to inform the appellate court and the other parties of the issues. Detailed evidentiary facts shall not be included." Rule 84.04(d)(4). Both of Grandparents' Points Relied On also list more than four cases upon which the point relies. Rule 84.04(d)(5) states the list of cases is "not to exceed four." Because the best interests of minor children are involved, and we believe we have a sufficient understanding of Grandparents' contentions, we point out these briefing deficiencies but will proceed with a review of the case on its merits.
[5] Grandparents' Branson home was approved after it was remodeled to create additional bedrooms.
[6] Unless otherwise indicated, all statutory references are to RSMo Cum.Supp (2006).
[7] The issue of whether or not the GAL had met the Missouri Supreme Court Standards for Guardians ad Litem was mentioned in a post-trial letter Grandparents' counsel addressed to the Circuit Clerk (which indicated that a copy was being sent to the trial judge) that requested a review of the GAL's annual affidavits of compliance with those standards. Grandparents did not request that the evidence be re-opened or file any other post-trial motions. Grandparents do not attempt to show how such a procedure might be sufficient to preserve this claim of error for appellate review. Section 453.025.4(3) states that a Guardian ad Litem shall "[a]scertain the child's wishes, feelings and attitudes regarding the adoption by interviewing persons with knowledge of the child, and if appropriate, to meet with the child." (emphasis added). This particular portion of the statute is fairly implicated by Grandparents' objection that the GAL did not meet with the Children and will be addressed to that extent.
[8] Although Grandparents' Brief asserts that the Standards are mandatory, under Section 484.302 each circuit court has until July 1, 2011 to fully implement them. H.B. 1570, 94th. Gen. Assemb., 2d Reg. Sess. (Mo.2008). No evidence was presented that the circuit containing Jasper County has adopted the Standards. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578220/ | 35 So. 3d 39 (2010)
STILES
v.
STATE.
No. 5D09-3440.
District Court of Appeal of Florida, Fifth District.
May 4, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578235/ | 35 So. 3d 1141 (2010)
Brad L. ROBIN, Dale Harry Borden, Harry Dale Borden, Pero Cibilic, Clear Water Oysters, Inc., Joseph B. Collins, Anthony E. Esteves, Jr., Anthony E. Esteves, III, Carol A. Gonzales, Joseph R. Gonzales, Joseph A. Gonzales, Selina M. Gonzales, Wayne A. Gray, et al.
v.
STATE of Louisiana Through the DEPARTMENT OF NATURAL RESOURCES, Charles C. Foti, Jr., Attorney General, Governor Kathleen Babineaux Blanco.
No. 2009-CA-1383.
Court of Appeal of Louisiana, Fourth Circuit.
March 24, 2010.
F. Gerald Maples, Carlos A. Zelaya II, Machelle R. Lee Hall F. Gerald Maples, P.A., New Orleans, LA, Wayne B. Mumphrey, J. Wayne Mumphrey, Mumphrey Law Firm L.L.C., Slidell, LA, Clayton M. Connors, Mumphrey Law Firm, L.L.C., New Orleans, LA, for Plaintiffs/Appellants.
Andrew C. Wilson, Daniel J. Caruso, Susan F. Clade, Simon Peragine Smith & Redfearn, L.L.P., New Orleans, LA, for Defendants/Appellees.
(Court composed of Judge PATRICIA RIVET MURRAY, Judge TERRI F. LOVE, Judge EDWIN A. LOMBARD).
EDWIN A. LOMBARD, Judge.
Plaintiffs, Brad. L. Robin et al, bring forth a devolutive appeal asking this Court to review the trial court's decision to grant the Exception of Improper Venue filed by defendants, the State of Louisiana, through its Department of Natural Resources, Office of the Attorney General, and Office of the Governor. For the reasons provided below, plaintiffs' appeal is dismissed.
Plaintiffs aver that the trial court erred in determining that the proper venue for this matter is the Nineteenth Judicial District for the Parish of East Baton Rouge. The Notice of Signing of Judgment granting defendants' Exception of Improper Venue was issued on June 16, 2009. The trial court ordered plaintiffs to file an application for supervisory writ by July 10, 2009. Plaintiffs timely filed an application with this Court on July 10, 2009.
On July 28, 2009, this Court declined to consider plaintiffs' application, as it "fail[ed] to comply with Rule 4-5(h) of the Uniform Rules, Courts of Appeal. Rule 2-12.13, Uniform Rules, Courts of Appeal." Plaintiffs thereafter filed a Petition for Appeal with the trial court on August 14, 2009. The deadline for filing a suspensive appeal had passed, and plaintiffs therefore expressed a "desire to appeal devolutively."
A granting of an exception of improper venue is a non-appealable, interlocutory ruling. Schexnayder v. Gash, 07-771, p. 3-4 (La.App. 5 Cir. 2/19/08), 980 So. 2d 65, 66-67. La.Code Civ. Proc. art. 2083 states that an interlocutory judgment is appealable only when expressly provided by law. This precludes an appeal from a ruling on an exception of improper venue because there is no statute expressly permitting an appeal from such a ruling. Schexnayder, 980 So.2d at 67.
What plaintiffs present before this Court is a non-appealable interlocutory judgment. It has not been rendered a final judgment or partial final judgment. La.Code Civ. Proc. arts. 1911, 1915(B). *1142 The correct course of action for appellate review was to file an application for supervisory writ. This Court ruled that plaintiffs' application was deficient. This Court declines to convert plaintiffs' appeal of an interlocutory judgment into another application for supervisory writ. Therefore, plaintiffs' appeal is dismissed.
APPEAL DISMISSED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578065/ | 274 S.W.3d 496 (2008)
ESTATE OF Larry R. McKOWN, Deceased; Sharon Cumpton, Public Administrator Personal Representative;
Elaine F. McKown, Appellant,
v.
Lutricia Rapue, Respondent.
No. WD 69360.
Missouri Court of Appeals, Western District.
November 25, 2008.
Rehearing Denied January 27, 2009.
*497 Dana K. Kaiser, Kansas City, for appellant.
Jeremiah Kidwell, Kansas City, for respondent.
Before THOMAS H. NEWTON, C.J., JOSEPH M. ELLIS, and JAMES EDWARD WELSH, JJ.
JAMES EDWARD WELSH, Judge.
Elaine F. McKown appeals the circuit court's judgment denying her election of surviving spouse, application of surviving spouse for exempt property, and application of surviving spouse for homestead allowance against the estate of Larry R. McKown. Elaine McKown asserts that the circuit court erred in finding that a Kansas decree of separate maintenance barred her from claiming statutory allowances or from otherwise inheriting property in Larry McKown's estate. We reverse the circuit court's judgment.
The evidence established that Elaine McKown and Larry McKown were married on June 9, 1968. On November 1, 1995, the District Court of Johnson County, Kansas, entered a decree of separate maintenance in regard to Elaine and Larry McKown's marriage. The district court found that Elaine and Larry McKown were incompatible with one another and that they "should be granted an Absolute Decree of Separate Maintenance one from the other on the grounds of incompatibility." The decree stated, "[T]he parties state to the Court that an oral settlement agreement has been reached as to the disposition of all rights, duties and obligations of the parties[.]" In regard to the property, the decree ordered:
10. The marital real estate of the parties located at 7500 Norwood Drive, Prairie Village, Kansas, 66208, shall be set aside as the sole and separate property of [Elaine McKown], free and clear of any interest of [Larry McKown] and [Larry McKown] shall execute a Quit-Claim Deed releasing any interest that he has in such real estate to [Elaine McKown]. [Elaine McKown] shall be responsible for maintaining the mortgage obligation on such real estate and shall pay all costs associated with the property henceforth.
11. The lake lot property located at Pomme de Terre and legally described as Lot 17, Stamp Development, a Subdivision *498 of Hickory County, Missouri, is set aside to [Larry McKown] as his sole and separate property and [Elaine McKown] shall execute a Quit-Claim Deed or any other document necessary to relinquish any right, title, claim or interest she may have in said property.
12. The pension and profit sharing at General Motors and any other retirement benefits which may have accrued as a result of [Larry McKown's] employment with General Motors shall be set aside to him as his sole and separate property free and clear of any right, title, interest or claim on the part of [Elaine McKown] therefore.
13. Each party shall be given their own personal property and clothing. All other personal property has been divided and each party hereto shall keep and maintain as his or her sole and separate property all that property which is in his or her possession at the time of the granting of this Decree of Separate Maintenance and neither shall make any further claim upon the other for any personal property.
After the court issued the decree of separate maintenance, Elaine McKown and Larry McKown lived separate and apart. They never dissolved their marriage.
On August 7, 2002, Larry McKown executed his Last Will and Testament, in which he acknowledged that Elaine McKown was his spouse but noted that they had "a separate maintenance agreement of record in Johnson County, Kansas." Under the terms of his will, Larry McKown left his estate to his mother, Gwendolyn McKown, so long as she survived him. If Gwendolyn McKown did not survive Larry McKown, which she did not do, the will directed that Larry McKown's estate would go to his sister, Lutricia Rapue.
On May 7, 2007, Larry McKown died. On June 20, 2007, Larry McKown's last will and testament was admitted to probate. The Inventory and Appraisement filed with the court indicated that Larry McKown's estate consisted of real property located in Bates County, Missouri, having a value of $30,000 and subject to a deed of trust in the amount of $17,950; a 1994 Ford Taurus having a value of $1,000; household goods and furnishings having a value of $500; and General Motors life insurance proceeds in the amount of $96,905.95.
On October 11, 2007, Elaine McKown filed with the circuit court an election of surviving spouse, an application of surviving spouse for exempt property, and an application of surviving spouse for homestead allowance. On January 28, 2008, the circuit court held a hearing on the claims of the creditors of the estate and on Elaine McKown's election to take against the will and her applications for exempt property and homestead allowance. On February 8, 2008, the circuit court entered its judgment denying Elaine McKown's election of surviving spouse, application of surviving spouse for exempt property, and application of surviving spouse for homestead allowance. After considering the Kansas decree of separate maintenance, the circuit court found that "all rights of the parties exchanged in the separate maintenance order included allowances, exempt property, homestead allowance, and right to take against the will," and that "all claims of the surviving spouse were previously settled by the settlement agreement . . . as set forth in the Decree of Separate Maintenance from the State of Kansas." Elaine McKown appeals.
In her sole point on appeal, Elaine McKown contends that that the circuit court erred in finding that the Kansas decree of separate maintenance barred her *499 from claiming statutory allowances or from otherwise inheriting property in Larry McKown's estate. We agree.
We must give the Kansas decree of separate maintenance the same force and effect it would have in Kansas. In re Marriage of Sumners, 645 S.W.2d 205, 210 (Mo.App.1983). In Kansas, while a divorce completely dissolves the marital relationship of the parties, a decree of separate maintenance "permits the continuation of the relation in a legal sense." Linson v. Johnson, 1 Kan. App. 2d 155, 563 P.2d 485, 488 (1977) (Linson I), aff'd by Linson v. Johnson, 223 Kan. 442, 575 P.2d 504 (1978) (Linson II).[1] Accordingly, a surviving spouse subject to a decree of separate maintenance is a "surviving spouse" under Kansas law of intestacy and may inherit from the deceased spouse's estate, notwithstanding the decree of separate maintenance. Linson I, 563 P.2d at 491. The surviving spouse's right to inherit from a deceased spouse's estate, however, may be limited by the division of property in the decree of separate maintenance. Id. If the decree of separate maintenance indicates "any clear intent of the trial court at that time to terminate rights of inheritance by either of [the] parties in the estate of the other," the surviving spouse is barred from asserting a right to inherit from a deceased spouse's estate. Id.; Linson II, 575 P.2d at 505. Indeed, in affirming Linson I, the Kansas Supreme Court instructed:
[W]here separate maintenance [is] decreed,. . . to cut off the right of inheritance of the survivor of the first of the parties to die[, the trial court must] provide in the decree that title to the real property awarded each of the parties be vested free and clear of any right, title, interest, lien, claim or estate of the other party.
When a decree of separate maintenance is entered, and the property is divided . . ., the decree must be specific and clearly indicate an intent on the part of the trial court, when the decree is entered, to terminate the rights of inheritance by either of the parties to the marriage in the estate of the other.
Linson II, 575 P.2d at 505-06 (emphasis added).
In Linson I, in the decree of separate maintenance, the trial court awarded "all right, title and interest" in two parcels of real property to the parties as tenants in common. Linson I, 563 P.2d at 487. The court determined the decree of separate maintenance did not indicate a clear intent to terminate the parties' inheritance rights in the estate of the other. Id. at 491. The court concluded that the surviving spouse was entitled pursuant to Kansas law "to make an election to take what she is entitled to by the laws of intestate succession and her right to inherit from the estate of her deceased husband was not barred by the decree of separate maintenance[.]" Id.
In this case, the Kansas decree of separate maintenance said that the parties had reached "an oral settlement agreement. . . as to the disposition of all rights, duties and obligations of the parties," that Larry McKown's retirement benefits shall be his "sole and separate property free and clear of any right, title, interest or claim" on the part of Elaine McKown, and that neither party "shall make any further claim upon the other for any personal property." The language of the decree of separate maintenance, however, did not "specific[ally] and clearly indicate an intent *500 on the part of the trial court . . . to terminate the rights of inheritance by either of the parties to the marriage in the estate of the other" as instructed by the Kansas Supreme Court in Linson II. Linson II, 575 P.2d at 506. Although the decree awarded Larry McKown his retirement benefits as his sole and separate property "free and clear of any right, title, interest or claim," the Kansas trial court did not specifically and clearly indicate an intent to terminate Elaine McKown's rights of inheritance in Larry McKown's estate. Id. Nor did the other language employed by the Kansas trial court in the decree cut off Elaine McKown's rights of inheritance in Larry McKown's estate. Elaine McKown's right to inherit from Larry McKown's estate, therefore, was not barred by the decree of separate maintenance.
Moreover, in Linson I, the court noted that, in the case before it, all parties agreed "as to the right of a surviving spouse to inherit his or her interest in property acquired after a decree of separate maintenance." Linson I, 563 P.2d at 491. In support of this proposition, the court cited In re Estate of Fults, 193 Kan. 491, 394 P.2d 32 (1964). In that case, the court held that a decree of separate maintenance did not prohibit a surviving spouse from asserting her rights under the statutes of descent and distribution as to property acquired by her husband between the date of the decree of separate maintenance and the date of his death. Id. at 37. In so holding, the Fults court cited Hardesty v. Hardesty, 115 Kan. 192, 222 P. 102 (1924) and noted that "a court cannot reach out and appropriate future property" in a decree of separate maintenance. Fults, 394 P.2d at 36.
The circuit court in this case determined, however, that "all claims of [Elaine McKown] were previously settled by the settlement agreement of [Larry McKown and Elaine McKown] as set forth in the Decree of Separate Maintenance from the State of Kansas." Such a declaration by the circuit court pertained to not only the property in the decree of separate maintenance but also to any property acquired by Larry McKown between the date of the decree of separate maintenance and the date of his death. Because, however, the Kansas trial court did not specifically and clearly indicate its intent to terminate Elaine McKown's rights of inheritance in Larry McKown's estate, the decree of separate maintenance does not prohibit Elaine McKown's from asserting her rights to property acquired by Larry McKown between the date of the decree of separate maintenance and the date of his death. Id. at 37.
We note that the Respondent in this case filed a motion to strike Elaine McKown's reply brief asserting that we should strike the reply brief because Elaine McKown raised two issues for the first time in her reply brief. In particular, Elaine McKown asserted in her reply brief that: (1) she is not barred from claiming statutory allowances or from inheriting property which was not subject to the decree of separate maintenance and which was acquired after the decree was entered; and (2) the life insurance proceeds are not pension, profit sharing, or other retirement benefits, and, therefore, the decree of separate maintenance did not dispose of or limit her rights in the proceeds of the life insurance policy. We deny Respondent's motion to strike the brief.
The circuit court determined that "all claims" of Elaine McKown were settled by the decree of separate maintenance. In her point relied on, Elaine McKown asserted that the circuit court erred in finding that the Kansas decree of separate maintenance terminated her right to take *501 against the will and terminated her claims for exempt property and homestead allowance because the decree did not specifically and clearly indicate an intent to terminate her rights of inheritance in Larry McKown's estate. In the argument portion of her brief, Elaine McKown did not restrict her claims to relate only to the property subject to the Kansas decree, as Respondent suggests. She merely argued that nothing in the decree of separate maintenance specifically and clearly indicated an intent on the part of the Kansas trial court to terminate her rights of inheritance in Larry McKown's estate. In any event, Respondent's complaints concerning the manner in which Elaine McKown raised arguments concerning the life insurance proceeds or property acquired after the decree of separate maintenance are ultimately immaterial, since we hold that under Kansas law the 1995 decree did not limit Elaine McKown's inheritance rights as to any of her deceased husband's property.
The circuit court erred in concluding that the decree of separate maintenance terminated Elaine McKown's right to take against the will and terminated her claims for exempt property and homestead allowance. We, therefore, reverse the circuit court's judgment and remand with instructions to allow Elaine McKown to pursue her claims as a surviving spouse of Larry McKown in regard to any property in Larry McKown's estate.
All concur.
NOTES
[1] In Linson II, the Kansas Supreme Court affirmed, adopted, and approved the opinion written by the Court of Appeals in Linson I, but the Supreme Court wrote to "elaborate on the construction of K.S.A. 60-1610(c) to avoid confusion." Linson II, 575 P.2d at 505. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578094/ | 35 So. 3d 40 (2010)
James Vincent HORNE, a/k/a James V. Horne, a/k/a Jimmy Horne, Appellant,
v.
STATE of Florida, Appellee.
No. 2D09-2882.
District Court of Appeal of Florida, Second District.
February 19, 2010.
Rehearing Denied April 21, 2010.
James Vincent Horne, pro se.
Bill McCollum, Attorney General, Tallahassee, and Helene S. Parnes, Assistant Attorney General, Tampa, for Appellee.
WALLACE, Judge.
James Vincent Horne appeals from the new sentences imposed on him in Hillsborough County Circuit Court Case numbers 03-3751, 03-4387, 03-18904, 04-12645, 05-13573, and 05-18021, following remand. In Mr. Horne's prior appeal from the circuit court's order denying his motion to correct illegal sentence, we vacated Mr. Horne's sentences and directed the circuit court to resentence him on all counts in all six cases. Horne v. State, 6 So. 3d 99, 102 (Fla. 2d DCA 2009). In this appeal, Mr. Horne arguesamong other thingsthat the circuit court again imposed illegal sentences contrary to this court's mandate. We find Mr. Horne's arguments to be without merit. In some instances, Mr. Horne's arguments are also unpreserved. We write to address his claim that on count one of case number 04-12645 the circuit court should not have imposed any sentence greater than 87.525 months.
In case number 04-12645, Mr. Horne was charged as follows: count one, delivery of a controlled substance (methamphetamine) in violation of section 893.13(1)(a), Florida Statutes (2003), and count two, possession of a controlled substance (methamphetamine) in violation of section 893.13(6)(a). Methamphetamine is *41 a controlled substance named or described in section 893.03(2)(c)(4), and delivery of methamphetamine is a second-degree felony under section 893.13(1)(a)(1).
Mr. Horne's scoresheet established his minimum permissible sentence under the Criminal Punishment Code[1] as 87.525 months' incarceration. Horne, 6 So.3d at 100. The circuit court originally sentenced Mr. Horne in case number 04-12645 to seventy-seven months' incarceration, followed by twelve months' community control, followed by four years' drug offender probation on count one and to seventy-seven months' incarceration on count two. Thus the total sentence on count one was 137 months, or 11.417 years. The sentences on counts one and two were designated to run concurrently.
In his motion to correct illegal sentence, Mr. Horne claimedamong other things that the imposition of drug offender probation on his conviction for delivery of a controlled substance in case number 04-12645 created an illegal sentence because this offense was not enumerated in the drug offender probation statute. Id. at 101. We agreed that the imposition of drug offender probation on the conviction for delivery of a controlled substance created an illegal sentence. Id. at 102. Thus we held that the postconviction court erred in denying Mr. Horne's claim on this ground. Id.
On remand, the circuit court imposed seventy-seven months' incarceration, followed by twelve months' community control, followed by four years' standard probation on count one, and it reimposed seventy-seven months' incarceration on count two. In accordance with our mandate, the circuit court substituted standard probation for drug offender probation. Once again, the sentences on counts one and two were designated to run concurrently.
Mr. Horne argues that the circuit court should not have imposed any sentence on count one greater than 87.525 months, the lowest permissible sentence under the Code, because the lowest permissible sentence under the Code exceeded the statutory maximum sentence of five years. In support of his argument, Mr. Horne relies on some statements in this court's prior opinion:
Further, we note that the sentence imposed for delivery of a controlled substance in case number 04-12645seventy-seven months' incarceration followed by twelve months' community control followed by four years' drug offender probationis also illegal for the same reasons addressed in claim one. It exceeds both the statutory maximum and the minimum permissible sentence set forth by the Code.
Id. at 102.
We disagree with Mr. Horne's argument that the new sentence on count one of case number 04-12645 exceeds both the statutory maximum sentence and the minimum permissible sentence under the Code. As previously noted, Mr. Horne's minimum permissible sentence under the Code was 87.525 months' imprisonment. Although our prior opinion might be read to suggest otherwise, the statutory maximum sentence for delivery of methamphetamine is fifteen years' imprisonment.[2] §§ 775.082(3)(c), 893.03(2)(c)(4), 893.13(1)(a)(1), Fla. Stat. (2003). Mr. Horne's sentence of seventy-seven months' imprisonment, followed by twelve months' *42 community control, followed by four years' standard probation amounts to a total sentence of 137 months or 11.417 years. Thus his new sentence on count one of case number 04-12645 does not exceed the statutory maximum of fifteen years' imprisonment.
The implication in our prior opinion that a sentence of 137 months would exceed the statutory maximum for the crime for which Mr. Horne was convicted in count one of case number 04-12645 was obviously in error. This statement was dicta and does not fall within the law of the case doctrine. See Fla. Dep't of Transp. v. Juliano, 801 So. 2d 101, 105-07 (Fla.2001); U.S. Concrete Pipe Co. v. Bould, 437 So. 2d 1061, 1063 (Fla.1983); Myers v. Atl. Coast Line R.R., 112 So. 2d 263, 267 n. 6 (Fla. 1959).
For the foregoing reasons, we affirm the new sentences imposed on Mr. Horne in all respects.
Affirmed.
WHATLEY and LaROSE, JJ., Concur.
NOTES
[1] The Criminal Punishment Code applies "to all felony offenses, except capital felonies, committed on or after October 1, 1998." § 921.002, Fla. Stat. (2003).
[2] The crime defined in section 893.13(1)(a) may constitute a second-degree felony, a third-degree felony, or a first-degree misdemeanor depending on the nature of the controlled substance involved. Our prior opinion did not state the nature of the controlled substance that Mr. Horne was charged with delivering. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1825166/ | 275 So. 2d 868 (1973)
Edward A. GIVENS, IV
v.
Genevieve GIVENS, widow of E. C. Givens.
No. 53393.
Supreme Court of Louisiana.
April 19, 1973.
Writ refused. On the facts found by the Court of Appeal, the result is correct. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578277/ | 351 N.W.2d 39 (1984)
STATE of Minnesota, Respondent,
v.
Timothy Joseph GOBELY, Appellant.
No. C6-83-1569.
Court of Appeals of Minnesota.
July 3, 1984.
Review Granted September 12, 1984.
Hubert H. Humphrey, III, Atty. Gen., Tom Foley, Ramsey County Atty., Steven C. DeCoster, Asst. County Atty., St. Paul, for respondent.
Ragnhild Anne Westby, St. Paul, for appellant.
Heard, considered and decided by POPOVICH, C.J., and FORSBERG and RANDALL, JJ.
OPINION
FORSBERG, Judge.
This is an appeal by the defendant, Timothy Joseph Gobely, from a conviction by a jury of receiving stolen property. The trial court found that a search of the defendant did not violate his fourth amendment rights. We disagree, and reverse.
*40 FACTS
On April 22, 1983 a warrant was issued authorizing the search of an apartment in Roseville, Minnesota, for certain items of stolen property. The three residents of the apartment were present when the officers arrived. Among the items seized during the search were two bags of new jewelry, which one occupant of the apartment admitted was stolen.
During the course of the search, the officers were interrupted by the defendant who had arrived at the apartment building and who was attempting to gain entrance by throwing objects at the apartment and gesturing toward the locked door of the building. One of the officers walked down the stairs, opened the door to the building, and admitted the defendant, who asked if she was answering the door for one of the occupants of the apartment. When the officer responded affirmatively, the defendant proceeded up the stairs and into the apartment being searched, chattering about how he had to drive over each time he wanted to talk, since the owners of the apartment did not have a telephone. Upon his entrance into the apartment, the officers performing the search moved towards the doorway, and one officer asked him to identify himself. The defendant stated that he would not answer, and moved 90 degrees to the right. At this, one officer directed the defendant to put his hands on the wall, in order to frisk him for weapons.
During the frisk, the officer felt a hard object on the person of the defendant, which turned out to be a jewelry box. The officer opened the box and found two more rings and a pendant, with tags attached which were similar to the tags on the stolen jewelry found in the apartment. There-upon the defendant was formally placed under arrest for possession of stolen property. At the Rasmussen hearing the trial court determined that the above search did not violate the defendant's constitutional rights, and allowed evidence of the search to be admitted at trial.
ISSUE
Whether the trial court properly ruled that the search did not violate defendant's fourth amendment rights.
ANALYSIS
We find that the frisk of the defendant and resultant discovery of the stolen jewelry was not justified by the circumstances and behavior of the defendant. Terry v. State of Ohio, 392 U.S. 1, 30, 88 S. Ct. 1868, 1884, 20 L. Ed. 2d 889 (1968) allows an officer to conduct a limited search for weapons when the officer "observes unusual conduct which leads him reasonably to conclude in light of his experience that criminal activity may be afoot and that the persons with whom he is dealing may be armed and presently dangerous." The standard is "whether a reasonably prudent man in the circumstances would be warranted in the belief that his safety or that of others was in danger." Id., at 27, 88 S.Ct. at 1883.
In State v. Bitterman, 304 Minn. 481, 232 N.W.2d 91 (1975), the defendant had also arrived at an apartment which was being searched pursuant to a valid warrant. The court noted: "[W]e would ordinarily agree that the mere knocking on a door of premises which are being lawfully searched does not make one subject to a search," Id., 304 Minn. at 484, 232 N.W.2d at 94; however, the court went on to indicate that additional factors warranted the frisk namely, the officers' knowledge that drug users who often carried weapons were involved with the premises being searched, and the officers' recognition of the defendant as a drug user.
It is the State's position that, similarly, in the present situation there were additional factors warranting the frisk. The State particularly argues that: (1) the officers had recently discovered in the apartment evidence of a robbery during which weapons had been taken; (2) the defendant's obvious display of familiar behavior towards the occupants of the apartment raised the possibility of the defendant's possession of those or other weapons; (3) *41 these facts, when coupled with the defendant's refusal to disclose his identity and 90 degree movement, justified the officers' frisk of the defendant for weapons.
These additional circumstances, however, do not appear to have warranted a belief by the officers that their safety was endangered. In United States v. Clay, 640 F.2d 157, 158 (8th Cir.1981) the court discussed the following similar fact situation:
Shortly after the search began [and after marijuana, firearms and ammunition had been discovered in the house], appellant, who was neither a suspect in the investigation nor an anticipated subject of the search, approached the house, knocked on the storm door and was confronted by Sergeant Tom Moss, an undercover police agent who was dressed in blue jeans and a T-shirt. Sgt. Moss opened the door, displayed his badge and identification, and ordered appellant into the house. Appellant immediately stepped backwards but did not attempt to run away. Sgt. Moss pulled out his revolver and again ordered appellant into the house. Appellant entered the house whereupon Sgt. Moss requested his investigator to conduct a pat down search. A small quantity of marijuana and a gun were discovered.
In addressing arguments by the state similar to those presented in this instance, the Clay court first noted that a person's mere arrival at the scene of a search does not provide grounds for a frisk. The court especially noted that nothing in particular established a nexus between the defendant and the contraband, and that "[b]ecause there was an opportunity for inquiry when [the defendant] appeared at the door, inquiry should have been made." Id., at 161. In a note the court stated further: "In the interest of his own protection [the officer] could have denied appellant the right to enter the premises while the search was being conducted . . . Whenever possible, an effort should be made to avoid potentially dangerous confrontations between police and private citizens." Id., at 162. Similarly, in the present instance the officers could have either refused to go down the stairs to open the door or questioned the defendant at that time.
In Clay, the defendant hesitated and stepped back when confronted by the police; in this instance the defendant turned 90 degrees to the right. Neither action was so inherently suspicious as to justify a search.
Finally, the Clay court noted:
To justify a search of this type, the officer must have knowledge that the visitor previously had been engaged in serious criminal conduct . . . or that suspicion exists sufficient to draw a reasoned conclusion that the visitor is involved in the criminal activity that constituted the basis of the issuance of the search warrant . . . or that other exigent circumstances exist that justify a determination that the person with whom the officer is dealing may be armed or presently dangerous . . .
Id., at 161-162. The Clay court concluded that the police officer "had nothing more than `mere suspicion' of possible criminal activity or danger based upon [the defendant's] approach to the house." Id., at 162. Similarly, we conclude that in the present situation the police officers had no reasonable basis upon which to conclude that their safety was endangered.
DECISION
The evidence obtained from the unlawful frisk of the defendant should have been suppressed at trial. We reverse. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578280/ | 439 F. Supp. 650 (1977)
HALCYON SECURITIES, INC., Plaintiff,
v.
CHASE MANHATTAN BANK, N. A., Edgar W. Heisler and Stein Associates, Defendants.
No. 77 Civ. 1144.
United States District Court, S. D. New York.
October 28, 1977.
*651 Brecher, Moskowitz & Altman, New York City, for plaintiff.
Milbank, Tweed, Hadley & McCloy, New York City, for defendants The Chase Manhattan Bank, N. A. and Edgar W. Heisler.
LASKER, District Judge.
Halcyon Securities, Inc., claims that Chase Manhattan Bank and Edgar W. Heisler have committed various violations of the 1934 Securities Exchange Act. Chase moves to dismiss the complaint under Rule 12(b)(6) of the F.R.Civ.P. for failure to state a claim upon which relief can be granted. The motion is granted.
In August of 1975, Stein Associates ("Associates") opened a brokerage account with Halcyon Securities, a registered broker dealer, through which it traded securities. Commencing in October, 1975, Halcyon made three requests to Stein Associates for margin payments to conform with Regulation T of the Federal Reserve Board. Associates made the three payments of $9,500., $68,900., and $14,125.28, respectively, by drawing on its account with Chase although, according to the complaint, at the time each of these checks was honored, Stein Associates had insufficient funds in its account to cover the payments. In December, 1975, Halcyon requested a further margin payment of $77,333. Associates *652 drew and delivered two checks, for $55,966. and $21,367., on its account at Chase but placed a stop payment order on the checks, preventing their negotiation by Halcyon's clearing agent. Plaintiff claims that it suffered such severe losses as a result of this transaction that it was forced to cease operations. Halcyon accuses Chase and Edgar W. Heisler, the branch manager who handled these transactions, of having induced it to continue dealing with Associates by honoring the overdrafts and thus creating a false aura of solvency. Specifically, plaintiff claims that defendants have violated Regulations U and X of the Exchange Act, have conspired with and aided and abetted Associates in a fraudulent scheme in violation of Rule 10b-5, and are guilty of negligence. Since the allegations of Halcyon's complaint are inadequate to permit recovery on any of these grounds, the motion to dismiss is granted.[1]
I.
Regulation U
Plaintiff claims that defendants have violated Regulation U, promulgated by the Board of Governors of the Federal Reserve Board pursuant to § 7(d) of the Exchange Act, which regulates loans by banks for the purchase of margin stock. Regulation U directs that: "no bank shall extend any credit secured directly or indirectly by any stock for the purpose of purchasing or carrying any margin stock in an amount exceeding the maximum loan value of the collateral . . ." 12 C.F.R. § 221.1(a) (1977). Chase and Heisler argue that this regulation is inapplicable to the transactions specified in the complaint since payment of an overdraft is not an extension of credit and, even if it were, the payments were not secured by stock. We find it unnecessary to reach the question whether the payments constituted extensions of credit since plaintiff has failed to allege that the payments were directly or indirectly secured by stock as defined by the Regulation.
"Indirectly secured" is defined by Regulation U to apply to "any arrangement with the customer under which the customer's right or ability to sell, pledge, or otherwise dispose of stock owned by the customer is in any way restricted . . ." 12 C.F.R. § 221.3(a) (1977). Halcyon has not alleged that the payments made by Chase were directly secured by stock, nor that any "arrangement" existed which limited Associates' ability to dispose of the stock.[2] This claim is dismissed.
II.
Regulation X
Halcyon also alleges a concurrent violation of Regulation X of the Exchange Act, which extends to borrowers the obligation of complying with the margin requirements. Regulation X is intended:
"to prevent the infusion of unregulated credit obtained both outside and within the United States into U.S. securities markets in circumvention of the provisions of the Board's margin regulations or by borrowers falsely certifying the purpose of a loan or otherwise wilfully and intentionally evading the provisions of those regulations." 12 C.F.R. § 224.1 (1977). *653 While Halcyon has not alleged in what particular respect defendants are guilty of violating Regulation X, it apparently relies on a theory of aider and abettor liability. (See Plaintiff's Memorandum at 7) The claim is insufficient on two grounds. First, Halcyon has not alleged that any of the margin requirements has been circumvented or evaded, a prerequisite to violation of Regulation X. Second, defendant's conduct does not fall within the definition provided by the Regulation, which states that "the term `aids or abets' shall include, but not be limited to, counsels, commands, induces, or procures." 12 C.F.R. § 224.6(b) (1977) It is recognized that the regulation is not intended to be all-inclusive. Nevertheless, the phrase "not limited to" certainly cannot be construed to go beyond the generally accepted meaning of aiding and abetting as knowing involvement. See Hirsch v. duPont, 553 F.2d 750 at 759 (2d Cir., 1977). The actual language of the regulation strongly suggests that this interpretation is correct here since all the examples supplied refer to active encouragement. Halcyon has not alleged any such active involvement by the bank.[3] This claim is also dismissed.
III.
Rule 10b-5
Halcyon claims that Chase and Heisler have violated Rule 10b-5 by aiding and abetting and by conspiring with Associates to defraud plaintiff. However, the complaint does not allege the necessary elements of either of these claims.
A. Aiding and Abetting
To establish aider and abettor liability under Rule 10b-5, Halcyon must prove that the defendants were guilty of "knowing assistance of or participation in a fraudulent scheme." Hirsch v. duPont, supra, at 759. Faturik v. Woodmere Securities, Inc., 431 F. Supp. 894, 896 (S.D.N.Y. 1977). Halcyon does not allege that the defendants knew that a fraudulent scheme existed, but merely that defendants "knew or should have known" that the checks which it honored were issued in connection with the purchase of securities (Complaint at ¶ 14) and, similarly, that defendants "knew or should have known" that Associates had insufficient funds to cover the payments. (Complaint at ¶¶ 13, 31) Even if Halcyon could prove these facts, such evidence would not establish the degree of knowledge held necessary for aider and abettor liability in Hirsch v. duPont, supra, at 759, in which the Second Circuit stated that "knowledge of the fraud, and not merely the undisclosed material facts, is indispensable." Abrahamson v. Fleschner, (1976-77 Transfer Binder) Fed.Sec.L.Rep. (CCH) ¶ 95,889 at 91,282 n. 16; (2d Cir. Feb. 25, 1977) Faturik v. Woodmere Securities, Inc., supra, at 896.[4] While Chase, through its branch manager, Heisler, may have become acquainted with disconnected facts concerning Associates' financial status, the complaint does not allege that it had knowledge that a fraud was being perpetrated,[5] or that Chase occupied a fiduciary relationship *654 toward Halcyon, which would have created a duty to determine the exact-nature of Associates' activities. See Woodward v. Metro Bank of Dallas, 522 F.2d 84 (5th Cir. 1975). The claim of aider and abettor liability is therefore dismissed.
B. Conspiracy
The allegation of conspiracy must be dismissed for the same reasons which require rejection of the claim of aider and abettor liability. To recover on a claim of conspiracy to violate Rule 10b-5, Halcyon must allege that Chase and Heisler acted with scienter. Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S. Ct. 1375, 47 L. Ed. 2d 668 (1976); see also Dopp v. Franklin, 374 F. Supp. 904, 910-11 (S.D.N.Y.1974). Where, as indicated above, plaintiff has failed to allege that defendants knew of the fraud, it has not stated a claim on which relief can be granted.
IV.
Negligence
Halcyon accuses Chase and Heisler of negligence in honoring Associates' overdrafts and in failing to inform Halcyon of Associates' fraudulent activities. (Complaint at ¶¶ 48 and 49) While the only basis of federal jurisdiction asserted by plaintiff is the Exchange Act, it has not alleged that any specific section has been violated in regard to its negligence claim. We agree with the defendants that the provisions of Rule 12(e) of the F.R.Civ.P. entitle them to a more particular statement as to the section of the statute allegedly violated. Accordingly, the complaint will be dismissed unless within ten days of the filing of this order Halcyon submits an amended complaint specifying what section of the Exchange Act has been violated by defendants' alleged negligence. Since the other federal claims are dismissed, no jurisdiction will exist unless Halcyon can allege in good faith a violation of a provision of this statute.
For the reasons stated above, the motion to dismiss is granted.
It is so ordered.
NOTES
[1] In response to defendants' motion to dismiss, Halcyon has submitted a memorandum of law, together with an affidavit of Halcyon's president, Paul J. Keeler, and testimony of Edgar W. Heisler taken from an arbitration proceeding between Halcyon and Associates. Had we relied upon this material we would have been required by Rule 12(b)(6) to treat this motion as a motion for summary judgment. We have not relied upon this material. However, we note that had we done so we would have been compelled to grant summary judgment to defendants since the supplemental documents provide no support for plaintiff's legal claims.
[2] Plaintiff's memorandum asserts that Halcyon "intends to prove that without doubt, Chase and Heisler were depending upon the securities for their collateral in extending purpose credit to Stein Associates." (Memorandum at 6) Even if Halcyon could prove such a dependence on Chase's part, this would not be evidence of an actionable agreement, since it would not amount to a binding restriction on Associates' right to dispose of its stock.
[3] The testimony of Edgar Heisler reveals only that the bank honored one of the overdrafts because a mechanical error prevented it from returning the check. (Testimony at 312-13)
[4] In Abrahamson, supra, at 91,282 n. 16, the Second Circuit defined the standards for aider and abettor liability in this way: "we believe that before Goodkin can be held liable as an aider and abettor, there must be a showing that Goodkin: (a) knew of the investment adviser-client relationship; (b) had knowledge of the fraud; and (c) acted in concert with the investment adviser. Cf. Ernst & Ernst v. Hockfelder [sic], 425 U.S. 185 [96 S. Ct. 1375, 47 L. Ed. 2d 668] (1976)." In Faturik, supra, at 896, the District Court stated that "the one clear requirement for establishing aider-abettor liability under § 10(b) is actual knowledge of the fraud."
[5] The testimony of Edgar Heisler which Halcyon has submitted does not strengthen this argument. This testimony establishes only that Heisler paid one of Associates' checks, despite insufficient funds, due to a mechanical error; and that, had he thought of it, Heisler might have realized that the check was being used to pay for securities and that Associates had deliberately overdrawn its account. (Testimony at 312-13, 324, 342-43) Based on this testimony, Halcyon argues that defendants had knowledge of an "improper scheme." (Plaintiff's Memorandum at 9) Taken together, these facts fall far short of establishing that Associates was defrauding Halcyon. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578278/ | 281 S.W.3d 255 (2008)
Leslie A. YOUNG, Appellant,
v.
STATE of Arkansas, Appellee.
No. CR 07-1136.
Supreme Court of Arkansas.
March 20, 2008.
*256 R.T. Starken, Cherokee Village, for appellant.
Dustin McDaniel, Att'y Gen., by: Kent G. Holt, Ass't Att'y Gen., for appellee.
JIM HANNAH, Chief Justice.
Leslie A. Young, a/k/a Leslie A. Williams, appeals an order of the Sharp County Circuit Court denying her motion to suppress. In Young v. State, 370 Ark. 147, 257 S.W.3d 870 (2007), Young's convictions for capital murder, aggravated robbery, and attempted arson were affirmed; however, the case was returned to the circuit court under a limited remand for the circuit court to hold a new hearing on the suppression of Young's in-custody statement. Young now appeals the circuit court's decision denying her motion to suppress on remand.
In reviewing the denial of a motion to suppress a custodial statement, this court looks to see if the confession was the product of free and deliberate choice rather than intimidation, coercion, or deception. Reese v. State, 371 Ark. 1, 262 S.W.3d 604 (2007). When we review a trial court's ruling on the voluntariness of a confession, we make an independent determination based on the totality of the circumstances. Id. We will reverse the circuit court only if its decision was clearly against the preponderance of the evidence. Flowers v. State, 362 Ark. 193, 208 S.W.3d 113 (2005). Our jurisdiction is pursuant to Ark. Sup.Ct. R. 1-2(a)(2). We affirm the circuit court's decision denying the motion to suppress.
At issue is an interrogation of Young by Sharp County Sheriff Dale Weaver. It took place in the Sharp County jail. Both parties agree that Young was advised of her Miranda rights by Arkansas State Trooper Jeremy Page prior to the interrogation by Weaver.[1]
Trooper Page took custody of Young earlier that day on January 3, 2006, at about 1:15 p.m. at the county line between Sharp County and Independence County. He had the video recorder in his patrol car running at the time. The video portion of the tape shows only the scenery and passing vehicles; however, the audio portion recorded Page advising Young of her rights. Pursuant to testimony at the suppression hearing, and as confirmed by review of the audio recording on the video tape, Young was advised of her rights, acknowledged that she understood her rights, and, aside from a single complaint about handcuffs, made no further comment then or at any time while being transported by Page.
Elaine Moody testified that she was the "jail matron" at the Sharp County jail who received Young upon her arrival when Page turned Young over to the Sharp County Sheriff's Department. According to Moody, Young spoke to her in order to respond to questions regarding processing into custody; however, there was no discussion related to the crime for which Young was arrested.
After processing Young, Moody called Sheriff Weaver to inform him that it appeared that there might be blood on *257 Young's face and arms. Weaver came to the jail to determine if he should try to take samples from Young's person. Sharp County Sheriff's Deputy Wendy Flynn accompanied him. Weaver concluded there was no blood on Young's face and arms that he could sample. He testified at the suppression hearing about his discussion with Young:
Well, there were some scratches on her arms and so I wanted to ask her about those scratches and prior to that I wanted to know if she had been Mirandized. So I asked her that. I said, Leslie have you been Mirandized? And she said does that mean I've been read my rights. And I said yes that's what it means. And she said yes. And I said well, with that in mind would you want to speak to me about this? And she said yes. And so I asked her about the scratches on her arms.
Weaver then asked Young about where she was on the night of the murder. She answered those questions, and Weaver then told her that she had been seen in the area after the murder and that items from the victim's house had been pawned by her husband. Young then denied any involvement in the murder or other crimes against the victim. According to Weaver, it was then that Young said, "I think I need to talk to a lawyer." Weaver stopped the interrogation at this point. Deputy Flynn also testified and recounted essentially the same facts about the interrogation.
Young argues that her statement was not voluntary. To be admissible, a "statement must be voluntary `in the sense that it was the product of a free and deliberate choice rather than intimidation, coercion, or deception.'" Wofford v. State, 330 Ark. 8, 31, 952 S.W.2d 646, 657-58 (1997) (quoting Mauppin v. State, 309 Ark. at 246-47, 831 S.W.2d at 109 (1992) (quoting Moran v. Burbine, 475 U.S. 412, 421, 106 S. Ct. 1135, 89 L. Ed. 2d 410 (1986))). Further, the statement was given while Young was in custody. An in-custody statement is presumptively involuntary, and the burden is on the State to prove by a preponderance of the evidence that a custodial statement was given voluntarily and was knowingly and intelligently made. Reese, supra.
Young was advised of her Miranda rights, acknowledged that she understood them, and, prior to submitting to interrogation, did not invoke her Miranda rights in any manner.[2] Rather, she chose to submit to questioning by law enforcement. In Scott v. State, 298 Ark. 214, 217, 766 S.W.2d 428, 430 (1989), this court noted that "[t]he United States Supreme Court discussed waiver of the right to counsel in Patterson v. Illinois, 487 U.S. 285, 108 S. Ct. 2389, 101 L. Ed. 2d 261 (1988)[,]" and that "Patterson reemphasized the holding in Miranda that a proper warning, prior to waiver of rights, is necessary before the police may question an accused." A criminal defendant may waive the Miranda rights when he or she is advised of the Miranda rights, fails to invoke those rights in any manner, and then proceeds to give inculpatory statements. *258 In Ward v. State, 308 Ark. 415, 827 S.W.2d 110 (1992), the defendant was arrested on suspicion of murder and advised of his Miranda rights. While being transported to the police station, Ward stated that he had not hurt anybody and repeated an account of his encounter with the victim that he had given prior to his arrest. At the police station, Ward was again advised of his Miranda rights. Ward acknowledged that he understood his rights and agreed to talk to the officers on the condition that his statement not be taped. Ward also refused to sign the waiver-of-rights form, and yet made a statement that was then introduced at trial. The statements made after Ward was advised of his Miranda rights were admissible because he had been advised of his rights, acknowledged that he understood them, and chose to speak with law enforcement. Similarly in United States v. Ogden, 572 F.2d 501 (5th Cir.1978), the court found that where Ogden was arrested, advised of his Miranda rights, indicated that he understood them, and nevertheless chose to speak with law enforcement and give inculpatory statements, those statements were admissible. In Fleming v. State, 284 Ark. 307, 681 S.W.2d 390 (1984), the criminal defendant was advised of his rights, made no comment invoking them, and thereafter answered questions. The statements were found to be voluntary and admissible.
Here, Young was advised of her rights, acknowledged that she understood her rights, and then chose to submit to interrogation. Weaver specifically asked her if she had been advised of her rights, and when she answered that she had, Weaver asked if keeping that in mind she wished to speak with him.[3] She responded that she did. It is clear to this court that Young waived her Miranda rights by implication. We hold that the circuit court's ruling is not against the preponderance of the evidence and affirm the circuit court's decision that the statement was voluntary and admissible.
Affirmed.
NOTES
[1] The record reveals that the interrogation by Sheriff Weaver occurred within no more than two hours of being advised of her rights.
[2] If having been advised of the Miranda rights, a criminal defendant "indicates in any manner, at any time prior to or during questioning, that he wishes to remain silent, [or if he] states that he wants an attorney, the interrogation must cease." Miranda v. Arizona, 384 U.S. 436, 473-474, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (emphasis in original). This holding in Miranda, supra, is reflected in Ark. R. Crim P. 4.5, which provides: "No law enforcement officer shall question an arrested person if the person has indicated in any manner that he does not wish to be questioned, or that he wishes to consult counsel before submitting to any questioning."
[3] Deputy Flynn testified that she did not recall Weaver asking Young, whether having her rights in mind she wished to speak with him. The circuit court accepted Weaver's version, and to the extent this calls for a decision on credibility of the witnesses, that was an issue left to the sound discretion of the circuit court. See Reese v. State, 371 Ark. 1, 262 S.W.3d 604 (2007). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578287/ | 439 F. Supp. 219 (1977)
Dempsey J. MARKEY et al.
v.
TENNECO OIL COMPANY.
Civ. A. No. 75-1583.
United States District Court, E. D. Louisiana.
October 21, 1977.
*220 *221 Joseph W. Thomas, Okla Jones, II, New Orleans, La., for plaintiffs.
David E. Walker, Alvin J. Bordelon, Jr., Kenneth P. Carter, Monroe & Lemann, New Orleans, La., for defendant.
OPINION
SEAR, District Judge:
This is an individual and class action brought under the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. (better known and hereinafter referred to as Title VII) and 42 U.S.C. § 1981 for damages and injunctive relief. Plaintiffs allege that the Tenneco Oil Company refinery located in Chalmette, Louisiana discriminates *222 against blacks in its employment practices, more particularly in the areas of hiring, promotion, pay, and discharge.
On April 12, 1976, Edward J. Boyle, Sr., United States District Judge who was temporarily handling the case during the vacancy in this section of Court certified the case as a class action, the class being composed of:
"I. All black applicants for employment at the Tenneco Oil Company Refinery in Chalmette, Louisiana, from July 2, 1965 to the date of the final order of this Court;
II. All blacks who were, are and will be employees of Tenneco Refinery in Chalmette, Louisiana, from July 2, 1965 to the date of the final order of this Court."[1]
The trial of the case was conducted over a four day period beginning on March 7, 1977. At the conclusion of all the evidence, the matter was submitted, and both sides were given 30 days to submit suggested findings of fact and conclusions of law and other legal memoranda. This period was subsequently extended for an additional two weeks upon a joint motion of counsel.
I. FACTUAL BACKGROUND
In 1955 Tenneco Oil Company purchased an oil refinery located in the city of Chalmette in St. Bernard Parish, Louisiana. The refinery operates on a continuous basis, processing an average of 90,000 barrels of crude oil a day, and manufacturing a variety of petroleum products.
The refinery is organized into four separate departments. The Operations Department, the largest and most essential department, is charged with the operation of eight interrelated complexes, each composed of one or more process and refining units. The Maintenance Department provides labor, mechanical services and warehousing for the refinery at large and the Operations Department in particular. The Administrative Department provides personnel, accounting, fiscal, and clerical services. Lastly, the Technical Department furnishes engineering and other technical support to the Operations Department.
All nonsupervisory personnel in the Maintenance and Operations Departments, with the exception of nine Operations employees who work on the Tenneco wharf,[2] are represented by the Oil, Chemical and Atomic Workers International Union. Also included are ten nonsupervisory employees in the Laboratory, a division of the Technical Department. Since 1964 a series of collective bargaining agreements between the O.C.A.W. and Tenneco have governed all terms and conditions of employment of union members.[3]
*223 II. INDIVIDUAL CLAIM
The named plaintiff in this case, Dempsey J. Markey, alleges that he was discharged from his employment at the refinery because of his race. Markey was hired by Tenneco into an entry-level position as a laborer in the Maintenance Department on May 23, 1974. Pursuant to the collective bargaining agreement between the O.C.A.W and Tenneco, all new employees must successfully complete a 120 day probationary period before acquiring plant seniority with its concomitant rights and benefits. During this period the employee is "on trial". Towards the end of the period, the employee is rated by his supervisor, and may be discharged if his performance has been unsatisfactory. Markey admitted that he was aware that his status with Tenneco was probationary and that his job performance was being closely scrutinized for the purpose of the ultimate evaluation.
By Markey's own account he had worked in the Maintenance Department for two weeks to a month when he was temporarily transferred to the Laboratory to work vacation relief as a "lab sampler". On or about July 10, 1974 Markey drove a Cushman motor cart to collect samples from the tanks. He parked the cart next to the railroad tracks and climbed up to the tanks. Before he returned, a train came down the tracks, catching and dragging the Cushman cart. The cart was badly damaged. Markey contended that he had often parked the cart there without incident, and that he had observed other employees park the cart in the same spot. Nonetheless, he made no protest when a supervisory panel determined he had been negligent and suspended him from work for three days.
A second incident occurred on August 20, 1974 when Markey was asked to work overtime in order to help clean up a crude oil spill. Markey reported to the site of the spill at the end of his regular shift, but instead of beginning work, told the supervisor he was sick and went home. Markey saw no doctor, however, and reported for work on time the next day.
On August 21, 1974, supervisor Hudson filled out a rating sheet on Markey, evaluating his performance on thirteen different job functions on a scale from one to five. Markey scored no higher than a three on any of the job functions. Additionally, the supervisor placed Markey in the lower third of company employees overall, and did not recommend that Markey's employment with Tenneco be continued.
On September 8, 1974 Markey was summoned to the office of W. G. Pollard, where, in a meeting with Pollard and Paul Floth, the administrative manager of the Tenneco plant, Markey was told he was fired. Floth testified at trial that the decision to fire Markey was based on the rating sheet submitted by supervisor Hudson, and the two incidents which had occurred during Markey's probationary period.
On September 11, 1974 Markey filed a charge with the Equal Employment Opportunity Commission. The charge stated that Markey "believed" he had been discharged from Tenneco because of his race. Plaintiff made no other charge of discrimination, and indeed at trial testified that he had not been discriminated against in any other way in connection with his employment at Tenneco. The EEOC found in a Determination dated February 25, 1975, that "the evidence does not support the charge" and that there was "not reasonable cause to believe that Title VII of the Civil Rights Act ... has been violated in the manner alleged."
The Fifth Circuit has recently elaborated upon the respective burdens to be borne by both plaintiff and defendant when trying an individual claim under Title VII in Turner v. Texas Instruments, Inc.[4] There, the Court stated:
"[T]he plaintiff must present a prima facie case of racial discrimination; the employer then has the burden of proving, by a preponderance of the evidence, that legitimate, nondiscriminatory reasons existed to support his action; and the plaintiff *224 then has the burden of proving by a preponderance that the employer's articulated reason was a pretext for discrimination."[5]
It is questionable in this case whether Markey has even gone so far as to present a prima facie case of discrimination. A plaintiff's mere suspicion that he has been discriminated against, is not sufficient evidence to support an individual charge under Title VII.[6] Markey did not demonstrate that the position he vacated was filled by a white person. In fact, Paul Floth testified that Markey had been replaced by a black. Markey simply argued that he disagreed with the supervisor's ratings, and that he felt he had not been at fault in the two incidents which occurred during his tenure with Tenneco.
In regard to the first incident, Markey testified that in parking the Cushman cart close to the railroad tracks, he was doing as he had seen his fellow employees ("lab samplers") do many times. However, Markey did not demonstrate that this practice, later labelled by a supervisory panel as negligent, was officially condoned by Tenneco, or even that supervisory personnel were aware of the practice. Markey could not point to a single instance in which any other employee, black or white, had caused similar damage to company property. Moreover, at the time of the incident, although Markey was disciplined with a three day suspension, Markey made no protest that his treatment was unfair. Under these circumstances, and particularly because plaintiff could not isolate any instance in which a white employee was treated differently for a similar offense, I find that Tenneco had good cause to consider this incident against the plaintiff in determining not to retain him at the end of the probationary period. That such an incident would reflect poorly upon an employee's capabilities is a facially neutral result, and plaintiff has not shown by any evidence that the incident furnished a mere pretext for the exercise of race discrimination against him.[7]
As to the second incident when Markey refused to work overtime claiming that he was ill, I find that this also was properly considered against the plaintiff in evaluating his job performance. Markey had been told at the outset of his employment that he would be required on occasion to work overtime. On August 20, 1974 he was asked to do so. The task was to be an unpleasant, dirty onethe cleaning of an oil spill. Markey claimed that he was ill and could not do the work. It was the opinion of his supervisor that Markey was not ill, but rather that he merely wished to avoid the disagreeable assignment. This opinion was supported by certain objective facts: Markey worked his entire normal shift on the day he was asked to work overtime and reported on time for work the following day also working that entire day; Markey did not see a doctor for his illness. Under these circumstances I find that the assumption of the supervisor was a reasonable one, and was not influenced in any way by the race of the plaintiff.
The final element in the decision to discharge Markey was the poor rating he received from supervisor Hudson. Markey was rated on a scale of one to five on each of thirteen job functions, and scored four "ones" (unsatisfactory), six "twos" (passable), and three "threes" (usual). At trial Markey took issue with each of his ratings, arguing that he should have rated higher in *225 each category. Markey contends that the rating system is entirely subjective and that in his case it was used to discharge him because of his race.
While one of the categories on the rating form was rather amorphous[8], on the whole the functions listed were susceptible to fairly objective ascertainment by one who had observed the employee's job performance.[9] Given that the rating form is an objective one and is facially neutral, the issue remaining is whether it was discriminatorily applied in plaintiff's case, i. e., was plaintiff rated lower than he objectively should have been because of his race. While I have no way of knowing the accuracy of most of the evaluations, other than Markey's self-serving statement that he felt he should have rated higher in each one, in several categories I am able to assess the ratings based on testimony at trial. For example, Markey testified that during his brief tenure with the company he was late for work three or four times, and that he missed entirely approximately two days of work. Given this record, I find that a rating of "three" (usual) in the category of "punctuality and attendance record" was reasonable, indeed it may have been generous. Likewise, considering the two incidents in which Markey was involved, ratings of "one" (unsatisfactory) in the categories of "willingness to work on unpleasant jobs" and "observation of Company rules including Safety rules" were also reasonable. I find that plaintiff has not demonstrated that he was unfairly rated because of his race.
In sum, I find that the factors considered in the decision to terminate Markey's employment at Tenneco were legitimate, neutral criteria, and that plaintiff has failed to prove by a preponderance of the evidence, or even to make out a prima facie case, that he was discharged because of his race.
III. MAINTAINABILITY AND SCOPE OF CLASS ACTION
A. Effect of dismissal of named plaintiff on class claims.
Until very recently, the jurisprudence was well established that a plaintiff who fails on his individual claim may still pursue the class claims as class representative.[10] However, more recently in Satterwhite v. City of Greenville, Texas,[11] the Fifth Circuit decided that assuming that a class has been properly certified in the first place, if the claim of the named plaintiff is dismissed the class claims can be further pursued only if two requirements are met.
First, after dismissal of the individual claim, the class members must "retain sufficient interest in the outcome of [the] litigation to serve as Article III plaintiffs".[12] In other words, absent the claim of the named plaintiff, does the suit present a justiciable dispute or "case or controversy" for decision? This question can be answered by a demonstration that the class, or at least certain of its members, continue to have a personal stake in the outcome of the litigation. Satterwhite suggests that one method of proving this is to show that on the record there are identifiable individuals who nurse a grievance against the defendant or who have in fact sought relief against the defendant's practices in the past. The Supreme Court's decision in *226 Franks v. Bowman Transportation Co.,[13] one of the cases relied upon in Satterwhite,[14] indicated that the court must consider whether an adversary relationship between the class and the defendant survives once the named plaintiff is dismissed. Is there any question "concerning the continuing desire of any class members for the ... relief presently in issue?"[15]
Turning to the facts of this case, I find that a "case or controversy" does survive the dismissal of plaintiff Markey's claim. The exhibits in this case are filled with names of specific class members who, should the plaintiffs prevail on the statistical evidence, would be entitled to relief. Moreover, one unnamed class member, Lynwood Epps, was called to the stand at trial, and testified to events which he believed constituted discrimination. There has been no indication that unnamed class members would be content to have their claims simply passed over without decision.
The second issue to face upon dismissal of the named plaintiff's claim is whether that named plaintiff can justify his continuing representation of the class. Is he an adequate class representative? Of course, this question has already been answered by implication at the outset of this litigation when Judge Boyle certified the case as a class action.[16] Rule 23(a)(4) sets forth the existence of an adequate class representative as a prerequisite to class certification. However, Satterwhite seems to contemplate a second examination of this issue after the named plaintiff's claim is dismissed.
Adequacy of representation encompasses both the competence of plaintiff's counsel, and the character and interest of the plaintiff himself.[17] In retrospect, the performance of plaintiff's counsel is easily evaluated. Both of Markey's attorneys are thoroughly experienced in Title VII litigation. Both prosecuted their clients' case diligently and thoroughly. As to Markey himself, his moral character has not been questioned. Although his particular claim has been dismissed, it does not appear that his interests are antagonistic to class interests.[18] I conclude that plaintiff Markey remains an adequate class representative although I have denied him the relief he personally sought.
B. Narrowing the class
The scope of the class originally certified in this case in the spring of 1976 was quite broad.[19] At the trial at the close of *227 plaintiffs' case, defendant moved for an order redefining the class[20] in the following manner:
"I. All black applicants for employment in jobs which are part of the bargaining unit represented by the O.C.A.W. Union at the Tenneco Oil Company Refinery in Chalmette, Louisiana, from March 15, 1974, to the date of the final order of this Court;
II. All blacks who were, are or will be employees in jobs which are part of the bargaining unit represented by the O.C. A.W. Union at the Tenneco Oil Company Refinery in Chalmette, Louisiana, from March 15, 1974, to the date of the final order of this Court."[21]
I took the motion under submission, and I believe that this opinion is the appropriate vehicle for my ruling on it.
The motion presents a dual argument for limitation of the class. First, defendant contends the plaintiffs may not raise any issue based upon events occurring earlier than 180 days prior to Markey's EEOC charge, and that the class should therefore be limited to persons employed and events occurring after March 15, 1974. Second, defendant contends that Markey lacks the "nexus" required to represent any employees who are not members of the bargaining unit, and that the class should be limited to persons represented by the O.C.A.W. Union.
1. Statute of limitations
Under Title VII, a person seeking relief from employment discrimination must file a charge with the EEOC within 180 days of the occurrence of the allegedly discriminatory act.[22] Failure to file within the prescribed time bars not only any EEOC action, but also bars the ultimate filing of suit in federal court.[23]Oatis v. Crown Zellerbach Corp.[24] established, however, the proposition that if the named plaintiff has properly proceeded with his charge before the EEOC he may nevertheless represent unnamed class members who have not filed charges with the EEOC prior to the institution of suit. The reasoning is that the filing requirement is primarily procedural rather than substantive, and
"... no practical purpose could be served by requiring scores of substantially identical grievances to be processed through the EEOC when a single charge would be sufficient to effectuate both the letter and the spirit of Title VII."[25]
This analysis raises the question of what if any of the other limitations contained in Title VII apply to unnamed class plaintiffs. Specifically in this case, given that unnamed class members need not have actually filed EEOC charges, does the time limitation of 180 days which is imposed on the *228 named plaintiff also apply to the class claims? It would seem unfair if the individual plaintiff who had gone to the trouble and effort of retaining a lawyer and actively prosecuting his case was more restricted in his claim than the unnamed class members who take little or no part in the litigation and rely upon the labors of the named plaintiff.
The Fifth Circuit has not confronted this issue. However, the Third Circuit in Wetzel v. Liberty Mutual Ins. Co.[26] held that a named plaintiff could not represent persons who could not have filed a charge with the EEOC at the time he filed his charge. This meant that anyone who left the employ of the defendant more than 180 days[27] before the named plaintiff filed his charge was time barred from asserting a claim as a member of the class. It did not mean that any discriminatory act that occurred prior to that time was not actionable, because certain policies are considered to be continuing violations of Title VII and would allow the filing of a charge at any time by a present employee. Therefore, for example, an employee who was denied a promotion prior to the named plaintiff's 180 day period, but who was still employed by the defendant during the 180 period would have an actionable claim since failure to promote is a continuing violation of Title VII[28] and the injury is ongoing until it is remedied or the employment relationship is severed. On the other hand, since failure to hire is not a continuing violation[29] a person who had applied for employment and been rejected prior to the named plaintiff's 180 day period would not be eligible for class membership.[30]
Although the Fifth Circuit has not considered Wetzel's holding, the case has been followed by a number of district courts[31] and has been recently reaffirmed as the position of the Third Circuit.[32] There has been no substantial disagreement with Wetzel in the jurisprudence, and the Supreme Court has denied certiorari in the Wetzel case itself. Therefore, I believe that Wetzel should be adopted in this Circuit, and since Wetzel imposes a time limitation on all class members I find defendant's motion to be meritorious on the statute of limitations issue.
2. "Nexus" of named plaintiff with class members
In order to properly represent a class, the named plaintiff must establish his "nexus with the class and its interests and claims which is embraced in the various requirements of 23(a) and (b)."[33] This requirement is commonly paraphrased by saying simply that membership in the class is a prerequisite to pursuance of a class action.[34] Defendant contends in its motion to clarify the class that plaintiff Markey, a probationary *229 employee and member of the O.C.A.W. union, cannot properly represent non-union employees at Tenneco.
The primary authority for this position is the 1975 Fifth Circuit case of Wells v. Ramsay, Scarlett & Co., Inc.[35]Wells was the inverse of the present case. In Wells a black non-union supervisor sought to represent black union employees of the defendant company. The court stated:
"We conclude after studying the record that there was no nexus between plaintiff, a foreman, and the longshoremen named in the class. Plaintiff does not seek to represent a class consisting of black foremen. He was a salaried employee, employed on a monthly basis, who supervised longshoremen. The longshoremen in the asserted class were members of Local 1830, one of the defendant unions. They were assigned on a daily basis through the unions, under collective bargaining agreements, to stevedoring companies for the available longshoremen jobs on the docks in the Baton Rouge area. Plaintiff was not in the longshoremen group for job assignment purposes; indeed, while at one time a member of Local Union 1830, he had severed his affiliation with the union long before his complaint was filed. Moreover, he testified that he was physically unable to perform the services of a longshoreman.
We conclude that the nexus between plaintiff and the class was insufficient and thus the district court did not err in declining to allow the cause to proceed as a class action. . . . One may not represent a class of which he is not a part."[36]
Wells appears to be somewhat of a maverick case in this Circuit. Except for one district court case[37] this aspect of Wells has not been further explained in any manner by any court in this circuit. It remains, nevertheless, the controlling jurisprudence on the subject.[38]
In this case plaintiff Markey was hired as an hourly-paid bargaining unit employee. Markey was given a copy of the collective bargaining agreement and understood that this document governed the terms of his employment. Markey admitted that he never sought or aspired to any job beyond the bargaining unit. Under these circumstances, I find no nexus between Markey and the non-union employees he seeks to represent.
In sum, I find that defendant's motion to clarify class has merit, both as to the request for a time limitation, and as to the request to limit the class to union employees. The motion is therefore GRANTED.
IV. STANDARD AND METHODS OF PROOF OF CLASS CLAIM
In order to prove that defendant engaged in a "pattern and practice"[39] of employment *230 discrimination against its black employees plaintiffs offered both individual testimony of two former black employees (one of whom was the named plaintiff Dempsey J. Markey), and the statistical analysis of their expert Dr. Arnold Levine. Before addressing the various areas in which plaintiffs claim discrimination, it may be helpful to set forth in summary the principles which govern the shifting burden of proof and the use of statistical evidence in Title VII cases.
Because the objective of Title VII is to achieve equality of employment opportunity for all citizens, the Act requires "the removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification."[40] The Act prohibits not only overt discrimination, but also practices which, although facially neutral, operate to segregate and classify along racial lines.[41]
As in any other case, a Title VII plaintiff bears the initial burden of proof. He must offer evidence sufficient to create an inference of the existence of discrimination. The burden then shifts to the employer to defeat the inference which the plaintiff has raised by exposing plaintiff's proof as either inaccurate or insignificant.[42] Whether the plaintiff chooses to approach his case by demonstrating disparate treatment or disparate impact[43] he will most likely employ a statistical analysis as a method of proof. The Fifth Circuit has often accorded statistical evidence critical weight in Title VII cases,[44] and the Supreme *231 Court has recently held that "gross statistical disparities" alone may constitute a prima facie case of discrimination in certain circumstances.[45]
With these general principles in mind, I turn now to the specific allegations of discrimination.
V. HIRING
The defendant Tenneco accepts applications on a continuing basis from persons who hear about the refinery by word of mouth. When a vacancy occurs, that position is first posted for bid by current employees in accordance with the terms of the collective bargaining agreement.[46] If the position is not filled in this manner, Tenneco then reviews the most current applications in its file and selects a certain number of applicants to call in for a screening interview. If an applicant survives the screening, he is then scheduled for a pre-employment test. Both Charles H. Kilgore the refinery general manager, and Paul Floth the administrative manager testified that the test results did not influence hiring decisions, but rather that the test was given for the sole purpose of compiling data for a longitudinal validation study[47] of the test. Generally, Tenneco receives a sufficient number of walk-in applications to fill vacancies. On the occasions when it does not, it advertises the vacancies in the "Help Wanted" section of several newspapers such as the New Orleans Times Picayune. Tenneco recruits from St. Bernard, Orleans, Plaquemines, Jefferson, and St. Tammany Parishes.
There are two "entry level" positions at the Tenneco refinery: laborer in the Maintenance Department, and operator trainee in the Operations Department. Since these are the lowest paying jobs at the plant and require no particular skills, these positions are usually filled from the applications file. The more advanced positions in the bargaining unit requiring special skills, if not filled by a qualified bidder from within, are more difficult to fill, and Tenneco more often takes an active role in recruitment of individuals for these positions than it does for the entry level jobs.
In recent years Tenneco has followed an explicit policy of hiring an equal number of blacks and whites.
Plaintiffs' statistical evidence was structured around five hypotheses. Using statistical data, plaintiffs' expert Dr. Arnold Levine performed various tests and either rejected or accepted each hypothesis.[48] Hypotheses 1 and 2 relate to hiring practices.
Hypothesis 1 reads, "The proportion of Black personnel [at Tenneco] is greater than or equal to the proportion of Blacks in the 1970 Orleans SMSA and the 1975 populations. The hypothesis is tested for each of the following EEOC categories: Managers, professionals and technicians; office and clerical; craftsmen; operatives; laborers." By comparing the percentage of blacks in each employment category in the general population as reflected in the 1970 New Orleans Standard Metropolitan Statistical Areas (SMSA) report[49] with the percentage *232 of blacks in each employment category at Tenneco Dr. Levine rejected hypothesis 1 for several categories in several different years. In light of the narrowed class,[50] the only relevant rejection of the hypothesis is that for the category of craftsmen in the years 1974 and 1975.
On the subject of such statistical analyses, the Supreme Court has recently stated:
"[A]bsent explanation, it is ordinarily to be expected that nondiscriminatory hiring practices will in time result in a work force more or less representative of the racial and ethnic composition of the population in the community from which employees are hired. Evidence of longlasting and gross disparity between the composition of a work force and that of the general population thus may be significant even though § 703(j) makes clear that Title VII imposes no requirement that a work force mirror the general population."[51]
Therefore ordinarily, assuming for the moment the validity of the SMSA figures as a comparative data base[52], the disparity between the percentage of black craftsmen in the general population and the percentage of black craftsmen at Tenneco for the years 1974 and 1975 establishes a prima facie showing of race discrimination in hiring in that job category for those years. However, given Tenneco's policy of filling job vacancies by promoting from within ranks whenever possible[53] and resorting to hiring from the outside only in the absence of qualified current employees, the test of hypothesis 1 and its results lose meaning in relation to hiring discrimination.[54]
Hypothesis 2 presented the framework for a more exacting analysis. It reads: "The proportion of Black Laborers hired by year [at Tenneco] (from 1970-1975) is greater than or equal to their proportionate representation in the SMSA workforce." Dr. Levine performed two tests to ascertain the validity of this hypothesis. The first, the "sign" test[55] revealed that for each year from 1970 to 1975[56] the percentage of black laborers hired by Tenneco fell below the percentage of black laborers in the SMSA workforce.[57] According to Dr. Levine, *233 the probability of this occurring by chance was approximately 2/100, well below the 5 per cent significance level[58] he employed as a standard against which to measure his results. The second test, the "test of proportions"[59] revealed that the percentage of total black laborers hired by Tenneco over the years 1970 through 1975 (.483[60]) varied significantly from the percentage of black laborers in the SMSA (.597). In each case hypothesis 2 which assumed nondiscriminatory hiring of black laborers was rejected and a prima facie case of discrimination was made out.
Defendant's primary attack upon Dr. Levine's analysis is that the SMSA does not reflect the relevant labor force from which Tenneco draws its employees. The SMSA includes the parishes of Orleans, Jefferson, St. Bernard, and St. Tammany. Dr. Levine did not ascertain the actual residences of Tenneco employees, and consequently made no attempt to weight his analysis in accordance with the distribution of Tenneco employees among the surrounding parishes.
The importance of accurately selecting the relevant labor market is illustrated by the recent Supreme Court case of Hazelwood School District v. United States.[61] In that case the plaintiff submitted statistical proof to show that the percentage of black teachers hired by the Hazelwood School District varied significantly from the percentage of black teachers available in the relevant labor market. The plaintiff used a labor market consisting of St. Louis County (the county in which the school district was located) and the city of St. Louis, a city enclosed by but not included in St. Louis County. The defendant argued that the inclusion of the city of St. Louis in the relevant labor market distorted the analysis because of the special attempts by the city to maintain a 50 per cent black teaching staff. Overturning the Court of Appeals' unquestioning acceptance of plaintiff's statistics, the Supreme Court commented, "What the hiring figures prove obviously depends upon the figures to which they are compared."[62] The Court then remanded the case to the district court for a detailed consideration of whether the city of St. Louis should have been excluded from the relevant labor force. In a footnote the Court remarked:
"These observations are not intended to suggest that precise calculations of statistical significance are necessary in employing statistical proof, but merely to highlight *234 the importance of the choice of the relevant labor market area."[63]
The Tenneco refinery is located in St. Bernard parish and is not accessible via public transportation. Quite naturally, the majority of Tenneco employees reside also in St. Bernard parish (63.5 per cent[64]). The remaining employees reside mainly in Orleans (28 per cent), Plaquemines (5 per cent), and Jefferson (2.5 per cent).[65] As shown in published census data, the racial proportions of the civilian labor force in these parishes is:
White Black
St. Bernard 96% 4%
Orleans 61% 39%
Jefferson 89% 11%
Plaquemines 84% 16%[66]
The fact that a substantial majority of Tenneco's employees comes from a parish with only a 4 per cent black work force emphasizes the basic flaw in Dr. Levine's analysis. And plaintiffs have not contended that Tenneco practiced discrimination by drawing the majority of its work force from the parish in which the refinery is located, nor could they logically do so. By weighting the black labor force in each parish to reflect its actual contribution to Tenneco's work force a relevant labor market of 14.53 per cent blacks results.[67] Compared with this figure, Tenneco's hiring practices are clearly nondiscriminatory.
Refining this data further in terms of laborers only, Tenneco should have a relevant labor market in the laborer category of 32.61 per cent blacks.[68] Since plaintiffs' *235 own evidence shows that 48.3 per cent[69] of the laborers hired over the years 1970 to 1975 are black, it is obvious that Tenneco has hired black laborers in proportions beyond their representation in the workforce, again negating any prima facie case of discrimination. In light of this conclusion it is not necessary to address Tenneco's contentions that Tenneco operatives should have been included in the analysis of laborers at Tenneco; inclusion of operatives would only have strengthened Tenneco's position further.
Before leaving the subject of hiring, two more topics should be briefly addressed: method of recruitment and pre-employment testing.
As discussed earlier, Tenneco rarely advertises job openings. Ordinarily news of employment vacancies is spread simply by word of mouth. Plaintiffs attack the word of mouth system as discriminatory.
"Under word-of-mouth hiring practices, friends of current employees admittedly [receive] the first word about job openings. [If] most current employees are white, word-of-mouth hiring alone would tend to isolate blacks from the `web of information' which flows around opportunities at the company. See Blumrosen, The Duty of Fair Recruitment Under the Civil Rights Act of 1964, 22 Rutgers L.Rev. 465, 477 (1968). No business necessity compels the company to continue to rely so heavily on this hiring technique."[70]
However, plaintiffs fail to recognize that word of mouth recruitment is not per se discriminatory; the method itself is neutral only when the company's work force does not reflect the racial balance in the general working population does word of mouth recruitment serve to perpetuate discrimination.[71] Here, plaintiffs have not carried their initial burden of proving a substantial disparity between Tenneco's work force and the relevant labor market. Therefore, assuming Tenneco's work force is racially balanced, word of mouth recruitment can only serve to reinforce that balance.
Plaintiffs further contend that the use of a pre-employment test at Tenneco violates Title VII because the test used has not been validated in accordance with EEOC guidelines and because it has an adverse impact on the hiring of blacks.
The Supreme Court held in Griggs v. Duke Power Co. that Title VII forbids the use of employment tests that effect discrimination unless the employer can show that the test has a manifest relationship to the job in question.[72] The EEOC has promulgated guidelines[73] by which employers may validate employment tests. The Fifth Circuit has found that:
"[T]hese guidelines undeniably provide a valid framework for determining whether a validation study manifests that a particular test predicts reasonable job suitability. Their guidance value is such that we hold they should be followed absent a showing that some cogent reason exists for noncompliance."[74]
The Fifth Circuit has further cited longitudinal validation as preferable over concurrent validation.[75] However, as the Supreme Court has recently remarked, the *236 burden of showing that an employment test is job related "arises . . . only after the complaining party . . . has shown that the tests in question select applicants for hire . . . in a racial pattern significantly different from that of the pool of applicants."[76]
In this case plaintiffs failed to demonstrate statistically or otherwise that test results were in any manner correlated with hiring selections.[77] In fact, the testimony of Tenneco officials was that the test results were disregarded entirely, and that the test was administered to applicants solely for the very purpose of conducting a longitudinal validation study of the test, i.e., records of the applicants' test results were kept for comparison with future job performance in order to determine the accuracy with which the test could predict job performance.
In sum, plaintiffs have not proved that hiring discrimination exists at Tenneco in any form.
VI. PROMOTIONS
Promotions within the bargaining unit are governed by the terms of the collective bargaining agreement[78] which provides for a bidding and seniority system. Pursuant to this procedure vacant positions are posted for bid. If there are no bidders within the department in which the vacancy occurs, the bid is posted plant wide. If no current employee bids on the position the job is filled by hiring a new employee. With the exception of craftsmen positions, promotions are awarded on a strict seniority basis. In the case of craftsmen, a further demonstration of journeyman skills is required. Under the Tenneco system it is possible for an employee to "bid down" if he so wishes, and he may have to if he desires to switch from one department to another.
In order to prove that Tenneco discriminates in its promotion practices, Dr. Levine first referred to the data compiled for the test of proportions on hypothesis 1[79] to show that for the relevant years 1974 and 1975[80] the proportion of black craftsmen at Tenneco varied significantly from the proportion of black craftsmen in the SMSA.
Contrasting the proportion of blacks in a specific job classification with the proportion of blacks in the general population is a proper method of establishing a prima facie case of promotion discrimination.[81] However, the SMSA again does not reflect the relevant labor force for Tenneco. Census data indicate that in the craftsman category, the relevant labor force is 11 per cent black.[82] Representation of blacks in *237 craftsman positions at Tenneco also figures at 11 per cent.[83] Clearly, there is no disparity, and hence no proof of discrimination.
However, Dr. Levine did not stop at the population comparison, but went on to try a second approach to proving promotion discrimination. The analysis began with the following hypothesis (hypothesis 4 in Dr. Levine's report): "Blacks hired as laborers [at Tenneco] are promoted in the `same manner' as Whites hired as laborers [at Tenneco]." For each year from 1970 through 1976 and using only employees who had not been terminated as of 1976 Dr. Levine compared the job status of blacks to whites. By analyzing for each black the number of whites hired at the same time ahead, equal, or behind that black in job position, Dr. Levine was able to compute the average proportion of whites ahead of blacks for each year.[84] Dr. Levine urged that in the absence of discrimination this proportion would amount to 33.3 per cent whites would be evenly distributed above, equal to, and behind blacks. He then compared the average proportion of whites *238 ahead for each year[85] to the 33.3 per cent figure. Dr. Levine concluded that the variation between the two figures steadily increased the longer an employee remained at Tenneco, and reached a level of statistical significance at five years and after.[86]
Plaintiffs' statistical evidence was rebutted by defendant through both expert testimony and specific evidence relating to promotions. Dr. Richard Olson, defendant's expert statistician, testified convincingly that the radical fluctuations in the data[87] rendered Dr. Levine's approach inappropriate. Applying the "sign test"[88] to the first and second years of employment[89] Dr. Olson concluded that in those cases there was no evidence of discrimination. In other words, for the various test groups Dr. Levine's "proportion of whites ahead" figure fluctuated above and below the expected average of 33 per cent approximately an equal number of times.[90] I find that Dr. Olson discredited Dr. Levine's analysis on this point.
Defendant further produced evidence concerning every opening in certain job categories from January 1970 to January 1977. In the categories of operator trainee and stillman[91] the seniority system was equally applied, that is to say the senior bidder whether black or white was awarded the job, in every instance except one.[92] In the case of every opening there were blacks within the Maintenance Department[93] with *239 higher seniority than the successful bidder who chose not to bid for reasons which are not explained.[94]
The Supreme Court addressed the issue of seniority relief for nonapplicants in International Brotherhood of Teamsters v. United States.[95] The Court initially determined that nonapplicants are not "inexorably barred" from an award of seniority relief commenting:
"The effects of and the injuries suffered from discriminatory employment practices are not always confined to those who were expressly denied a requested employment opportunity. A consistently enforced discriminatory policy can surely deter job applications from those who were aware of it and are unwilling to subject themselves to the humiliation of explicit and certain rejection."[96]
The Court agreed in that case that the plaintiff had proved that the defendant employer had engaged in "post-Act"[97] discriminatory policies entitling discriminatees to relief. However, the Court held that this proof created a rebuttable presumption in favor of individual relief only for those persons who had applied for positions and been turned down.[98] Nonapplicants bore a further burden:
"To conclude that a person's failure to submit an application for a job does not inevitably and forever foreclose his entitlement to seniority relief under Title VII is a far cry, however, from holding that nonapplicants are always entitled to such relief. A nonapplicant must show that he was a potential victim of unlawful discrimination. Because he is necessarily claiming that he was deterred from applying for the job by the employer's discriminatory practices, his is the not always easy burden of proving that he would have applied for the job had it not been for those practices. [Citation omitted.] When this burden is met, the nonapplicant is in a position analogous to that of an applicant and is entitled to the presumption [of discrimination accorded to an applicant].
. . . . .
"While the scope and duration of the company's discriminatory policy can leave little doubt that the futility of seeking [certain positions] was communicated to the company's minority employees, that in itself is insufficient. The known prospect of discriminatory rejection shows only that employees who wanted [those certain positions] may have been deterred from applying for them. It does not show which of the nonapplicants actually wanted such jobs, or which possessed the requisite qualifications."[99]
*240 And further in a footnote:
"Inasmuch as the purpose of the nonapplicant's burden of proof will be to establish that his status is similar to that of the applicant, he must bear the burden of coming forward with the basic information about his qualifications that he would have presented in an application. . . . [T]he burden then will be on the employer to show that the nonapplicant was nevertheless not a victim of discrimination."[100]
The case was remanded with instructions that the plaintiff must carry its burden of proof as to each individual nonapplicant.[101]
In this case seniority is the only factor in promotions into the categories of operator trainee and stillman. In every case[102] seniority rank has been strictly followed. Therefore there has been no discouraging pattern of discrimination which might deter blacks from bidding on vacancies. Moreover, there is no past discrimination in hiring or otherwise which might be perpetuated by this neutral seniority system.[103] I conclude that promotions into these job categories have been free of discrimination.
Defendants also produced evidence concerning every job opening in the following crafts positions from January 1970 to January 1977:[104] instrument electrician, carpenter, painter/insulator, first class pipefitter, machinist and welder. Openings for these positions are awarded to the senior qualified bidder. Since in this case another determining factor is added to seniority, a different approach is necessary. However, it should be noted initially that without regard to qualifications, the record shows that in every case where an opening has been filled by a current employee[105] the *241 award might as well have been made on the basis of seniority alone except in two instances. Therefore, it appears that skill requirements have not operated to exclude blacks in statistically significant proportions.
In enacting Title VII Congress
"did not desire to melt job qualifications having no racially discriminatory ingredient or controlling pre-Act antecedent. In light of Title VII's legislative history, ascribing such an altruistic yet impractical purpose to that legislative body would surely be erroneous`reverse discrimination' of the most blatant sort."[106]
Job requirements which serve to perpetuate discrimination, however, even though they may be facially neutral must qualify as "business necessities".
"The business necessity test essentially involves balancing the need for the challenged practice or policy against its discriminatory impact. The business purpose must be `sufficiently compelling to override any racial impact.'; it must `effectively and efficiently' carry out a business purpose; and there must be no acceptable alternative practice."[107]
However, the burden of proving business necessity "arises, of course, only after the complaining . . . class has made out a prima facie case of discrimination, i. e. has shown that the [requirements] in question select applicants for hire or promotion in a racial pattern significantly different from that of the pool of applicants."[108] Here plaintiffs have not demonstrated that the skill requirements of the crafts positions at Tenneco operate to disproportionately exclude black bidders. In only two instances have skill requirements meant that a white bidder with less seniority than a black bidder has been awarded a vacant position. In eleven instances, skill requirements have excluded all bidders, both black and white.
Since skill requirements do not disproportionately exclude blacks from crafts positions, Tenneco is not required to come forth with proof of the "business necessity" or "job relatedness" of these requirements. However, even had a prima facie case been established, I believe that business necessity exists in this case. The Fifth Circuit has recently held that
". . . a facially neutral job criterion can be so manifestly job-related so as not to be `the kind of "artificial, arbitrary, and unnecessary barriers"' Title VII prohibits. In such a case, the employer need not make an evidentiary showing of business necessity, even though the criterion may have a discriminatory impact."[109]
Several years ago Judge Wisdom remarked in dicta that skill in typing was manifestly a business necessity for a secretarial position.[110] It seems to me that it is also manifestly necessary that a welder know how to weld, an electrician know how to repair electrical equipment, and so forth.
In short, plaintiffs have not shown that promotion discrimination exists at Tenneco.
*242 VII. PAY
Rates of pay at Tenneco for union employees are governed by the collective bargaining agreement. For each position, a specific hourly rate is set forth which applies to every employee in that position. Since I have already determined that there is no promotion discrimination at Tenneco and that there are no segregated departments there, it is difficult to imagine how plaintiffs could prove discrimination in rates of pay to blacks and whites. In fact, they have not.
Hypothesis 5 of Dr. Levine's report reads as follows: "There is no pay differential between Blacks and Whites [at Tenneco]." Dr. Levine averaged salaries of black and white employees at Tenneco and concluded that there was a pay disparity of $215.00 per year between blacks and whites, or 1.6 per cent of total average earnings. However, Dr. Levine admitted that his data was flawed, and therefore refused to test the statistical significance of the disparity arguing that to do so would be to "dignify" incompetent data. Therefore, Dr. Levine neither accepted nor rejected hypothesis 5. Nevertheless, plaintiffs continue to argue that Tenneco does discriminate against blacks in pay.
There is no basis for this contention. Dr. Levine's figures are indeed inaccurate. Since he did not have precise numbers of what each employee earned, Dr. Levine extracted what data he could from tables which showed by year which employees occupied which jobs. He assumed that each man in question earned only his straight-time rate at his job (ignoring overtime), and since he did not know when within the year a man acceded to a higher-rated position, he assumed an identical promotion date for all men in the analysis. Similarly when a man resigned or was discharged he did not know how much of the year had been worked, and so made an arbitrary assumption on that point too. Despite the flaws in the data, defendant's expert statistician Dr. Olson ran a statistical test on the disparity to determine whether it was statistically significant. He found that it was not.
Therefore, by no stretch of the imagination have plaintiffs shown discrimination in pay on the basis of race at Tenneco.
VIII. DISCHARGE
Employees within the bargaining unit at Tenneco are initially hired for a 120 day probationary period during which they have no effective plant seniority.[111] During that period each employee is rated by his supervisor. If he receives a satisfactory rating he is hired permanently; if not, he is discharged. The vast majority[112] of employees who have been discharged in recent years have been discharged during the probationary period.
Plaintiffs contend that the rating form[113] for probationary employees is too subjective and leaves room for race discrimination. They claim that Tenneco has indeed practiced race discrimination over recent years and offer statistical evidence to support this contention. Defendant argues that Dr. Levine's data is inaccurate and that his statistical approach is incorrect.
Hypothesis 3 of Dr. Levine's report reads: "The proportion of Blacks terminated [at Tenneco] is less than or equal to the proportionate termination of Whites." Using the sign test[114] and the test of difference in proportions[115] Dr. Levine rejected the hypothesis concluding that Tenneco discriminates against blacks in "terminations". Dr. Levine's data consisted of figures on all laborers in the Maintenance Department terminated for any reason from 1970 through 1975. This included those who voluntarily resigned, retired, died, or quit for medical reasons.
*243 I agree with defendant that Dr. Levine's data is flawed and that Tenneco can only be held responsible for the employees that it discharged, not for those who left Tenneco of their own accord. Of all employees fired during the period 1970 through 1975, fifteen were discharged for failure to satisfactorily complete their probationary period.[116] Seven of these were black, or 47 per cent.[117] The proportion of blacks hired into entry level jobs during this same period is 40 per cent.[118] Considering the small size of the group that was fired, these percentages compare favorably and do not evidence discrimination.
While I have previously questioned to some extent the objectivity of the rating form for probationary employees,[119] since plaintiffs have not demonstrated any discriminatory impact of the form it is not necessary for defendant to justify the form as a business necessity.[120]
Of the permanent nonprobationary employees discharged during the 1970 through 1975 period, three were white and one was black.[121] Again, the small sample size undermines the effectiveness of a statistical analysis. However, the proportion of blacks fired (25 per cent) does in fact compare favorably with the proportion of permanent black employees at Tenneco.
Finally, even if Dr. Levine's data had been accurate, defendant's statistical expert Dr. Olson testified that by performing a statistical test based on frequency of termination rather than proportions hypothesis 4 which assumed nondiscrimination would be accepted rather than rejected. Since I find that Dr. Levine's data was seriously flawed, it is unnecessary to resolve the question of which statistical test was proper.
I conclude that Tenneco does not discriminate in the discharge of probationary or permanent employees.
Since plaintiffs have not proved discrimination at Tenneco either against the named plaintiff Dempsey J. Markey or against blacks as a class, judgment shall be entered in favor of defendant Tenneco Oil Company dismissing plaintiffs' suit at plaintiffs' cost.
NOTES
[1] Court's Order, Record Doc. No. 15. In light of evidence adduced at trial and additional legal arguments brought to the attention of the Court, I must modify the initial certification pursuant to Rule 23(c)(1), Fed.R.Civ.P. See discussion limiting class, infra at pp. 226-227 et seq.
[2] The wharfmen are not represented by a union. In view of the difference in job requirements and union representation, there is no flow of personnel between the wharf and other positions in the refinery, as there is among the other departments and divisions of the refinery.
[3] Labor organizations, as well as employers, have a duty to prevent the perpetuation of discriminatory employment practices. Myers v. Gilman Paper Corp., 5 Cir. 1977, 544 F.2d 837, 850, appeal pending. Quite often, therefore, Title VII suits are brought against the employer and the union in tandem. See, e. g., Carey v. Greyhound Bus Co., 5 Cir. 1974, 500 F.2d 1372. In this case, the union has not beer, joined as a defendant.
In regard to the place of collective bargaining agreements in a scheme of employment practices attacked as discriminatory, the Fifth Circuit has recently cautioned that "when a union has chosen from among arguably acceptable alternatives, a minority of employees should not be given free reign to upset the union's bargain simply because the faction or a court might have subjectively deemed other alternatives better." Myers, supra at 858. Nonetheless, the law is clearly established that the employer may not use a collective bargaining agreement in any way as a shield when discriminatory practices are shown to exist. Carey v. Greyhound Bus Co., Inc., 5 Cir. 1974, 500 F.2d 1372, 1377; Peters v. Missouri-Pacific Railroad Co., 5 Cir. 1973, 483 F.2d 490, 497, cert. denied, 414 U.S. 1002, 94 S. Ct. 356, 38 L. Ed. 2d 238; United States v. Jacksonville Terminal Co., 5 Cir. 1971, 451 F.2d 418, 454, cert. denied 1972, 406 U.S. 906, 92 S. Ct. 1607, 31 L. Ed. 2d 815.
[4] 5 Cir. 1977, 555 F.2d 1251.
[5] Id. at 1256.
[6] Long v. Sapp, 5 Cir. 1974, 502 F.2d 34, 37.
[7] Statistics may be used to show pretext in some individual Title VII cases. Turner v. Texas Instruments, Inc., 5 Cir. 1977, 555 F.2d 1251. However, in this case, the only offer of statistical proof was a general one on the number of blacks and whites discharged at Tenneco over the years in question. It is clear from the Turner case, that what is required is a statistical analysis tailored to the individual facts at issue. In this case, that would mean a showing that under similar circumstances whites received lesser punishments than blacks, or that whites were not disciplined at all whereas blacks were. In order to be meaningful, the statistical sample would have to be of a fair size. As mentioned earlier, plaintiff could not point to a single similar incident involving any employee, white or black.
[8] Category 13: character and moral standards. In this category Markey rated a "three".
[9] The other categories were: thoroughness in completing job assignments, understanding of job assignments, ability to work without constant supervision, willingness to accept responsibility for own mistakes, willingness to work on unpleasant jobs, ability to learn the job, ability to accept orders, ability to get along with fellow employees, observation of Company rules including Safety rules, willingness to look for additional work when assignments are completed, ability to work efficiently and quickly, and punctuality and attendance record.
[10] Huff v. N. D. Cass Co., 5 Cir. 1973, 485 F.2d 710; Long v. Sapp, 5 Cir. 1974, 502 F.2d 34; Smalls, Class Actions under Title VII: Some Current Procedural Problems, 25 Am.U.L.Rev. 821, 840-41 (1976).
[11] 5 Cir. 1977, 557 F.2d 414.
[12] Id. at 423.
[13] 424 U.S. 747, 96 S. Ct. 1251, 47 L. Ed. 2d 444.
[14] The other Supreme Court case cited in Satterwhite was East Texas Motor Freight System, Inc. v. Rodriguez, 1977, 431 U.S. 395, 97 S. Ct. 1891, 52 L. Ed. 2d 453 in which the Court approved the District Court's decision dismissing the plaintiffs' class allegations upon a finding that the named plaintiffs were not proper class representatives. In a footnote the Court speculated that:
". . . a different case would be presented if the District Court had certified a class and only later had it appeared that the named plaintiffs were not class members or were otherwise inappropriate class representatives. In such a case, the class claims would have already been tried, and, provided the initial certification was proper and decertification not appropriate, the claims of the class members would not need to be mooted or destroyed because subsequent events or the proof at trial had undermined the named plaintiffs' individual claims."
Id. at 1898.
[15] 96 S.Ct. at 1260.
[16] See discussion at note 1, supra and accompanying text.
[17] Wright & Miller, Federal Practice and Procedure § 1766.
[18] In Eisen v. Carlisle & Jacquelin, 2 Cir. 1968, 391 F.2d 555, the court commented that the proper measure of the named plaintiff's interest was whether it was antagonistic to class interests, rather than whether it was coextensive with them.
[19] The definition of the class adopted by Judge Boyle is set forth supra at text accompanying note 1. At the time plaintiffs first moved to certify the class, defendant opposed primarily on the ground that the class claims were not reasonably related to Markey's EEOC charge. Defendant argued that if a class were certified it should be limited to "discharged Black probationary employees within the bargaining unit." Record Doc. No. 13. Judge Boyle granted plaintiffs' motion without assigning written reasons.
The leading case on the relation of the EEOC charge to the judicial complaint is Sanchez v. Standard Brands, Inc., 5 Cir. 1970, 431 F.2d 455. Quoting from a Northern District of Georgia case, King v. Georgia Power Co., 1968, 295 F. Supp. 943, the Fifth Circuit held that the judicial complaint "may encompass any kind of discrimination like or related to allegations contained in the charges and growing out of such allegations during the pendency of the case before the Commission." The Fifth Circuit then continued to state an even broader test: "the scope of the judicial complaint is limited to the scope of the EEOC investigation which can reasonably be expected to grow out of the charge of discrimination." Sanchez, 431 F.2d at 467. The Court then affirmed the purpose of the EEOC to encourage voluntary compliance by employers, and stated that an overly restrictive relation requirement would thwart that purpose since employers would have no incentive to conciliate on issues which would never go to court. Given this liberal standard, I believe Judge Boyle was correct in rejecting defendant's argument that the class claims were not "like or related to" Markey's EEOC charge. However, the question of the named plaintiff's "nexus" with the proposed class is, I believe, an entirely separate issue, see discussion, infra at pp. 228-229, which was not fully argued at the time of the original motion to certify class.
[20] Under Rule 23(c)(1), Fed.R.Civ.P., class certification is not immutable, but may be altered or amended at any time before the decision on the merits.
[21] Record Doc. No. 73.
[22] 42 U.S.C. § 2000e-5(e).
[23] Macklin v. Spector Freight Systems, Inc., 1973, 156 U.S.App.D.C. 69, 478 F.2d 979.
[24] 5 Cir. 1968, 398 F.2d 496.
[25] Miller v. International Paper Co., 5 Cir. 1969, 408 F.2d 283.
[26] 3 Cir. 1975, 508 F.2d 239, cert. denied 1975, 421 U.S. 1011, 95 S. Ct. 2415, 44 L. Ed. 2d 679.
[27] Actually, in Wetzel the time limitation was 210 days because a charging party had previously instituted proceedings with a state agency which dealt with discriminatory employment practices. 42 U.S.C. § 2000e-5(d) (1970).
[28] Clark v. Olinkraft, Inc., 5 Cir. 1977, 556 F.2d 1219.
[29] East v. Romine, Inc., 5 Cir. 1975, 518 F.2d 332.
[30] Although a person whose application for employment was rejected during or after the named plaintiff's 180 day period would be.
[31] Grogg v. General Motors Corp., S.D.N.Y. 1976, 72 F.R.D. 523, 534; Lamphere v. Brown University, D.R.I. 1976, 71 F.R.D. 641, 648-49; Presseisen v. Swarthmore College, E.D.Pa. 1976, 71 F.R.D. 34, 47-48; Ungar v. Dunkin' Donuts of America, E.D.Pa. 1975, 68 F.R.D. 65, 140, reversed on other grounds 3 Cir. 1975, 531 F.2d 1211, cert. denied 1977, 429 U.S. 823, 97 S. Ct. 74, 50 L. Ed. 2d 84; Jones v. United Gas Improvement Corp., E.D.Pa. 1975, 68 F.R.D. 1, 15.
[32] Ostapowicz v. Johnson Bronze Co., 3 Cir. 1976, 541 F.2d 394, 397, cert. denied 1977, 429 U.S. 1041, 97 S. Ct. 741, 50 L. Ed. 2d 753.
[33] Huff v. N.D. Cass Co., 5 Cir. 1973, 485 F.2d 710, 714.
[34] Long v. Sapp, 5 Cir. 1974, 502 F.2d 34, 42.
[35] 506 F.2d 436.
[36] Id. at 437-38.
[37] McClinton v. Turbine Support, Division of Chromalloy American Corp., W.D.Tex. 1975, 68 F.R.D. 236, relying on Wells held that the plaintiff, a black foreman, could not represent black union members.
[38] A recent Supreme Court case although not precisely on point indicates a retreat from prior jurisprudence which had loosely construed class action requirements in civil rights cases, and so offers some support for the restrictive view taken in Wells. In East Texas Motor Freight System, Inc. v. Rodriguez, 1977, 431 U.S. 395, 97 S. Ct. 1891, 52 L. Ed. 2d 453, three individual plaintiffs sought to represent a class composed in part of all applicants for the position of "line driver" with the defendant. The Court found, inter alia, that since the individual plaintiffs were clearly unqualified to become "line drivers", they were not members of a class of potential "line drivers", and thus the class claims on that score were dismissed.
[39] This language which has become a catch phrase in Title VII litigation is contained in 42 U.S.C. § 2000e-6(a) and was intended not as a term of art, but only in its usual meaning. See International Brotherhood of Teamsters v. United States, 1977, 431 U.S. 324, 97 S. Ct. 1843, 1855 n. 16, 52 L. Ed. 2d 396 for a discussion of the legislative history behind the phrase.
[40] Griggs v. Duke Power Co., 1971, 401 U.S. 424, 91 S. Ct. 849, 853, 28 L. Ed. 2d 158.
[41] Id.
[42] International Brotherhood of Teamsters v. United States, 1977, 431 U.S. 324, 97 S. Ct. 1843, 1866-67, 52 L. Ed. 2d 396, discussing McDonnell Douglas Corp. v. Green, 1973, 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668 and Franks v. Bowman Transportation Co., 1976, 424 U.S. 747, 96 S. Ct. 1251, 47 L. Ed. 2d 444.
[43] The Supreme Court has recently defined these terms in International Brotherhood of Teamsters v. United States, 1977, 431 U.S. 324, 97 S. Ct. 1843, 1854 at n. 15, 52 L. Ed. 2d 396:
"`Disparate treatment' . . . is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. Proof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment. [Citation omitted.] Undoubtedly disparate treatment was the most obvious evil Congress had in mind when it enacted Title VII. . . .
Claims of disparate treatment may be distinguished from claims that stress `disparate impact.' The latter involve employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. . . . Proof of discriminatory motive, we have held, is not required under a disparate impact theory."
The Fifth Circuit has recently carved an exception to the general "disparate impact" rule as stated in International Brotherhood of Teamsters. In Smith v. Olin Chemical Corp., 5 Cir. 1977, 555 F.2d 1283 the Court stated:
". . . a facially neutral job criterion can be so manifestly job-related so as not to be `the kind of "artificial, arbitrary, and unnecessary barriers"' Title VII prohibits. In such a case, the employer need not make an evidentiary showing of business necessity, even though the criterion may have a discriminatory impact."
[44] James v. Stockham Valves & Fittings Co., 5 Cir. 1977, 559 F.2d 310; Sagers v. Yellow Freight System, Inc., 5 Cir. 1976, 529 F.2d 721; United States v. T.I.M.E.-D.C., 5 Cir. 1975, 517 F.2d 299, vacated and remanded on other grounds, 1977, 431 U.S. 324, 97 S. Ct. 1843, 52 L. Ed. 2d 396; Rodriguez v. East Texas Motor Freight, 5 Cir. 1974, 505 F.2d 40, vacated and remanded on other grounds, 1977, 431 U.S. 324, 97 S. Ct. 1891, 52 L. Ed. 2d 453; Johnson v. Goodyear Tire & Rubber Co., 5 Cir. 1974, 491 F.2d 1364; Ochoa v. Monsanto Co., 5 Cir. 1973, 473 F.2d 318; Rowe v. General Motors Corp., 5 Cir. 1972, 457 F.2d 348; United States v. Hayes International Corp., 5 Cir. 1972, 456 F.2d 112; United States v. Jacksonville Terminal Co., 5 Cir. 1971, 451 F.2d 418, cert. denied, 1972, 406 U.S. 906, 92 S. Ct. 1607, 31 L. Ed. 2d 815.
[45] Hazelwood School District v. United States, 1977, ___ U.S. ___, 97 S. Ct. 2736, 2741, 53 L. Ed. 2d 768.
[46] Defendant's Exhibit 4, Art. 7, Sect. 7.
[47] Dr. James W. Herrine, an industrial psychologist testified as to the difference between a longitudinal validation study and a concurrent validation study. Under the longitudinal method, the test is administered only to job applicants. By tracking the individual's subsequent job performance and correlating this with the test results, it is possible to ascertain to what degree of accuracy the test predicts job performance. Under the concurrent method the test is administered to current employees, and the results are correlated with their job performance to determine the test's accuracy. The obvious advantage of the concurrent method is that such a study can be quickly performed, whereas a longitudinal study necessarily takes place over an extended period of time.
[48] All of plaintiffs' statistical evidence is contained in Dr. Levine's report. Plaintiffs' Exhibit 4.
[49] The 1970 SMSA report contains precise census data. "Updates" conducted in 1975 and 1976 do not reflect precise figures, but are merely estimates. In order to use the 1970 data in years other than 1970, Dr. Levine had to demonstrate that there had been no significant variation in population distribution since 1970that the 1970 proportions had remained fairly constant. The comparison is set forth in Table 1 of Dr. Levine's report, and does indeed show that only minor variations have occurred since 1970, thus justifying the use of the 1970 data for the years following 1970.
[50] The class is limited to persons employed after March 15, 1974. See discussion pp. 227-228, supra.
[51] International Brotherhood of Teamsters v. United States, 1977, 431 U.S. 324, 97 S. Ct. 1843, 1856-57 at n. 20, 52 L. Ed. 2d 396.
[52] Defendant's contention that the SMSA does not accurately represent the relevant work force in this case is addressed, infra, at pp. 233-235.
[53] The positions at Tenneco equated with the category of "craftsman" as used in the SMSA are not entry level jobs.
[54] Plaintiffs did not present or analyze this data by breaking down the numbers hired and the numbers promoted to craftsmen positions. Promotion discrimination was presented separately and is discussed, infra, at p. 236 et seq.
[55] The sign test is explained in W. Dixon & F. Massey, Introduction to Statistical Analysis 335 (3d ed. 1969). Assuming no discrimination, it would be expected that the percentage of blacks at Tenneco would fluctuate around the percentage of blacks in the workforce, so that approximately half of the time it would fall above that number and the other half it would fall below.
[56] Although the class claims as I have redefined them cannot include acts of discrimination in hiring which occurred prior to March 15, 1974, statistics on the prior years are relevant to show a pattern which would not be visible if only the years 1974 and 1975 were used. See United States v. Jacksonville Terminal Co., 5 Cir. 1971, 451 F.2d 418, 441, cert. denied 1972, 406 U.S. 906, 92 S. Ct. 1607, 31 L. Ed. 2d 815, on the importance of a historical approach to statistical analysis in Title VII cases.
[57] Defendant argued that the proper comparison was not between blacks at Tenneco and blacks in the general population, but rather between blacks actually hired by Tenneco and black applicants to Tenneco. This contention is clearly erroneous. "The statistics which the Courts have always considered is [sic] the racial composition of the employer's work force as compared to the percentage of the minority population in the employer's service area." Jones v. Tri-County Electric Cooperative, Inc., 5 Cir. 1975, 512 F.2d 1, 2.
[58] A significance level is a percentage below which test results become significant, i.e., it becomes highly likely that the results are not due to mere chance, but rather reflect the presence of some selective factor, in this case race discrimination. Dr. Levine used a 5 per cent significance level throughout his report which he testified he chose because of the size of his sample. Defendant strenuously contended that a 1 per cent significance level should have been used, and through the testimony of its expert Dr. Richard Olson demonstrated that with a 1 per cent significance level many of plaintiffs' conclusions of discrimination were reversed. However, in light of the sample size and the use of a 5 per cent level in other Title VII cases, I believe the 5 per cent level is the more accurate one in this case. W. Dixon & F. Massey, Introduction to Statistical Analysis 100 (3d ed. 1969). Note, Beyond the Prima Facie Case in Employment Discrimination Law: Statistical Proof and Rebuttal, 89 Harv.L.Rev. 387, 400-01 at n. 58 (1975) and cases cited therein.
[59] The test of proportions is illustrated in W. Dixon & F. Massey, Introduction to Statistical Analysis 101 (3d ed. 1969).
[60] The figure used in Dr. Levine's report at page 3 is .477. However, upon cross-examination Dr. Levine admitted a minor error in his data and revised this figure to the figure referred to in the text. This revision did not change the significance of the results.
[61] 1977, ___ U.S. ___, 97 S. Ct. 2736, 53 L. Ed. 2d 768.
[62] Id. at 2743.
[63] Id. at 2743-44, n. 17 (emphasis added).
[64] Defendant's Exhibit 13.
[65] Id.
[66] This table is compiled from data found in U.S. Bureau of the Census, "Census of Population: 1970 General Social and Economic Characteristics Final Report PC(1)-C20 Louisiana," Government Printing Office (1972), pp. 325-30; 355-60.
[67] The following table shows how this result was reached:
Residence of Employees Black Population Contribution to
When Hired, Defendant in Parish Civilian Tenneco Relevant
Parish Exhibit 13 Labor Force Labor Market
St. Bernard 63.5% × 4% = 2.54%
Orleans 28% × 39% = 10.92%
Plaquemines 5% × 16% = .80%
Jefferson 2.5% × 11% = .27%
_____
Total Theoretical Black
Population in Relevant
Labor Market 14.53%
[68] Data found in U.S. Bureau of the Census, The following table applies the same analysis used in footnote 67, supra for laborers only:
Residence of Employees Black Population Contribution to
When Hired, Defendant in Total Parish Tenneco Relevant
Parish Exhibit 13 Laborers Labor Market
St. Bernard 63.5% × 15% = 9.53%
Orleans 28% × 71% = 19.88%
Plaquemines 5% × 44% = 2.20%
Jefferson 2.5% × 40% = 1.00%
______
Total Theoretical Black
Population in Relevant
Labor Market 32.61%
[69] See note 60, supra, and accompanying text.
[70] United States v. Georgia Power Co., 5 Cir. 1973, 474 F.2d 906, 925.
[71] Id.; Sagers v. Yellow Freight System, Inc., 5 Cir. 1976, 529 F.2d 721, 729; Long v. Sapp, 5 Cir. 1974, 502 F.2d 34, 41; Franks v. Bowman Transportation Co., 5 Cir. 1974, 495 F.2d 398, reversed on other grounds 1976, 424 U.S. 747, 96 S. Ct. 1251, 47 L. Ed. 2d 444.
[72] 1971, 401 U.S. 424, 91 S. Ct. 849, 854, 28 L. Ed. 2d 158.
[73] 29 C.F.R. Part 1607.
[74] United States v. Georgia Power Co., 5 Cir. 1973, 474 F.2d 906, 913.
[75] Id. at 912. See note 47, supra, for a discussion of these two methods.
[76] Albemarle Paper Co. v. Moody, 1975, 422 U.S. 405, 95 S. Ct. 2362, 2375, 45 L. Ed. 2d 280.
[77] See Defendant's Exhibit 18.
[78] Defendant's Exhibit 4, Art. 8, Sect. 7.
[79] This analysis was rejected as it related to hiring precisely because Tenneco attempts if at all possible to promote from within into vacancies in upper level jobs. See note 54, supra, and accompanying text.
[80] Since failure to promote is a continuing violation, promotions in years prior to 1974 would have been admissible had plaintiffs structured this analysis in such a manner as to indicate which employees from those prior years were still employed in 1974. However, they did not. Clark v. Olinkraft, Inc., 5 Cir. 1977, 556 F.2d 1219. The analysis of hypothesis 4, also on the subject of promotion discrimination, used only currently employed employees. In that instance, proof of discriminatory failures to promote prior to 1974 is indeed relevant and admissible.
[81] Robinson v. Union Carbide Corp., 5 Cir. 1976, 538 F.2d 652, 660-61, modified on other grounds 1977, 544 F.2d 1258.
[82] Data found in U.S. Bureau of the Census, "Census of Population: 1970General Social and Economic CharacteristicsFinal Report PC(1)-C20 Louisiana," Government Printing Office (1972), pp. 331-36, 361-67 indicates that among craftsmen blacks comprise the following percentages in each of the following parishes: St. Bernard2 per cent; Orleans32 per cent; Plaquemines13 per cent; Jefferson7 per cent.
The following table applies the same analysis used in note 67, supra, for craftsmen only:
Residence of Employees Black Population Contribution to
When Hired, Defendant in Total Parish Tenneco Relevant
Parish Exhibit 13 Craftsmen Labor Market
St. Bernard 63.5% × 2% = 1.27%
Orleans 28% × 32% = 8.96%
Plaquemines 5% × 13% = .65%
Jefferson 2.5% × 7% = .17%
_____
Total Theoretical Black
Population in Relevant
Labor Market 11.05%
In James v. Stockham Valves & Fittings Co., 5 Cir. 1977, 559 F.2d 310, the Fifth Circuit held that the relevant work force for comparison to crafts positions was not the local labor market, but rather was the employer's own force of maintenance and production workers, in that case 66 per cent black. I believe that the James case is distinguishable, however, since there the employer maintained substantial training and apprenticeship programs for craft positions. It was therefore to be expected that given equal access to those programs the crafts positions would be filled in the same race proportions as the entry level jobs. No such widescale programs were maintained by Tenneco in this case. The only similar program was one instituted approximately one year before the trial for the position of instrument electrician. Openings in that program were posted for bid and were awarded on a strict seniority basis. The program was instituted when Tenneco failed to fill an instrument electrician vacancy after posting the position for bid and advertising in local papers. There is no such program for any of the other crafts positions at Tenneco. Therefore, it is logical to expect that the crafts positions in this case would reflect the racial balance of qualified craftsmen in the surrounding community, rather than the racial balance in entry level jobs at Tenneco.
[83] There was dispute at trial as to the proper correlation between categories in census data and the job categories at Tenneco. The census data used in the preceding paragraph, as well as that used by Dr. Levine gives figures for a category termed "Craftsmen, foremen, and kindred workers". Proceeding from job descriptions supplied by Tenneco, I include the following Tenneco positions within the census category: Controlman, Stillman, Second Class Pipefitter, First Class Pipefitter, First Class Carpenter, First Class Painter/Insulator, First Class Machinist, First Class Welder, and Electrician Instrumentman. The total number of employees in these positions is 111, including 12 blacks. Defendant's Exhibit 3. This amounts to a black representation of 10.81 per cent, very close to the 11.05 per cent relevant labor market.
[84] See Plaintiffs' Exhibit 4, Table 6.
[85] By "year" I refer to the employee's tenure at Tenneco rather than to a specific calendar year. For example, year one of an employee hired in 1970 is 1970, of an employee hired in 1971 it is 1971, and so forth.
[86] See Plaintiffs' Exhibit 4, Tables 6B and 6C. It may be of passing moment that with the use of a calculator I myself discovered numerous minor mathematical errors in these tables, although none were of such significance to change the ultimate outcome.
[87] The "proportion of whites ahead" varied from 10 per cent to 72 per cent, and in not one single test group did that percentage consistently rise or consistently fall as the years of employment progressed. See Plaintiffs' Exhibit 4, Table 6.
[88] See note 55, supra.
[89] The third, fourth, fifth and sixth years could not be tested in this manner since each of these years contained only four or fewer sample groups to compare.
[90] In rebuttal Dr. Levine attempted to argue that the sign test could not be used on this data because the figures being compared were not independent of one another, i.e. what happened in each successive year depended on what had occurred in the previous years. However, I believe Dr. Levine misconstrued Dr. Olson's analysis. Dr. Olson did not track each group's performance over the years. Rather, he compared each year of tenure among the different groups. To illustrate by example, Dr. Olson did not take the employees hired in 1971 and show that the "proportion of whites ahead" rose and fell for that group over the years in the following pattern: + - = + +. To have done this would indeed be an attempt to administer the sign test to data which were not independent. What Dr. Olson did was to take the first year "proportion of whites ahead" figure for the group hired in each year (six groups over the 1970 to 1976 period) and by comparing that figure to the expected average of 33 per cent derived the following sequence: - + - - = +. In other words, for the group hired in 1970, the figure fell below 33 per cent, in 1971 above, in 1972 below, in 1973 below, in 1974 it equaled 33 per cent, and in 1975 it again fell above. The groups compared are not in any manner related, and therefore the sign test was properly administered by Dr. Olson. See W. Dixon & F. Massey, Introduction to Statistical Analysis 336 (3d ed.1969).
[91] Defendant's Exhibits 6 and 7.
[92] For an opening as an operator trainee on September 19, 1973, a white employee, E. Calagesi, who had worked at Tenneco since June 7, 1973 was awarded the position over a black bidder D. Harris who had worked at Tenneco since April 12, 1973. Although this discrepancy was not explained and might form the basis of an individual claim of discrimination it can hardly be deemed to show any widespread pattern or practice of discrimination.
[93] Although the position of operator trainee is in the Operations Department, since it is an entry level position only someone in the Maintenance Department wishing to switch departments would ordinarily bid on an opening.
[94] In the case of operator trainee openings, I suspect that this is probably because the blacks with higher seniority occupied better paying positions in the Maintenance Department and were not willing to sacrifice this advantage in order to switch departments. However, since defendant did not supply more specific information on the non-bidders I cannot be certain that this was the case. The Supreme Court has found that a similar seniority system was not discriminatory because "[t]o the extent that it `locks' employees into [certain departments], it does so for all." International Brotherhood of Teamsters v. United States, 1977, 431 U.S. 324, 97 S. Ct. 1843, 1865, 52 L. Ed. 2d 396. It may be of note that the evidence reveals 26 instances in the operator trainee category in which no white employee submitted a bid.
[95] 1977, 431 U.S. 324, 97 S. Ct. 1843, 52 L. Ed. 2d 396.
[96] Id. 97 S.Ct. at 1869.
[97] I. e., after Title VII's effective enactment date. The major holding of this landmark case is that employees who suffered only pre-Act discrimination are not entitled to seniority or back pay relief because § 703(h) of Title VII protects bona fide seniority systems even though they perpetuate pre-Act discrimination. However, in this case no showing has been made of either pre- or post-Act discrimination, so International Brotherhood of Teamsters v. United States is not relevant on that point.
[98] 97 S.Ct. at 1866-67, n. 45, and 1871.
[99] Id. at 1871.
[100] Id. at 1871-72, n.53 (emphasis added).
[101] The Fifth Circuit recently held in James v. Stockham Valves & Fittings Co., 5 Cir. 1977, 559 F.2d 310, that "percentage of requests for specific jobs" by black employees may not be determinative of a claim of discrimination. In that case the district court found that because 61 per cent of white employees and 53 per cent of black employees received the job assignments they requested that there was no discrimination. The Fifth Circuit overturned that finding as "factually insufficient and legally irrelevant" citing four reasons for its conclusion: 1) over two-thirds of the work force was assigned to jobs without request; 2) the statistics did not reflect the number of blacks who were not hired in the first place; 3) the statistics did not reflect requests by blacks for transfers to traditionally white departments; 4) since the employer practiced blatant discrimination, many blacks were no doubt discouraged from making a request in the first place.
I believe that this case is factually distinguishable from the James case on each of these four points, and for that reason absence of bids by blacks is relevant here. First, Tenneco does not seek out current employees for openings. The system operates entirely by voluntary bid on the part of the individual. The only exception to this practice of which there was any evidence has been the occasional efforts of Tenneco to seek out and encourage black employees to bid for promotions. Second, I have already determined that in this case Tenneco's hiring policies and practices are not discriminatory. Third, the statistics here do not reflect any segregation of departments by race. And fourth, plaintiffs have not demonstrated blatant or even subtle discrimination which would discourage blacks from bidding on vacancies and therefore have not carried their initial burden as required by International Brotherhood of Teamsters v. United States, 1977, 431 U.S. 324, 97 S. Ct. 1843, 52 L. Ed. 2d 396. See note 100, supra, and accompanying text.
[102] With the one exception explained in note 92, supra.
[103] James v. Stockham Valves & Fittings Co., 5 Cir. 1977, 559 F.2d 310, suggests that the issue of whether a seniority system is "bona fide" within the meaning of § 703(h) of Title VII is relevant only when pre-Act discrimination is shown. In this case no evidence whatsoever has been adduced of pre-Act practices. However, to the extent that it may be relevant, I believe the seniority system in this case is a bona fide one under the standards set forth in International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S. Ct. 1843, 52 L. Ed. 2d 396, since 1) transferees between departments do not lose seniority; 2) the seniority system did not have its genesis in racial discrimination; and 3) the system was negotiated and has been maintained free from any illegal purpose.
[104] Defendant's Exhibits 8 through 12.
[105] The exhibits show that in eleven instances openings could not be filled by current employees because no employee, white or black, possessed the requisite qualifications. The total number of bids for these jobs was 48, of which 13 or 27 per cent were made by blacks.
[106] United States v. Jacksonville Terminal Co., 5 Cir. 1971, 451 F.2d 418, 445, cert. denied 1972, 406 U.S. 906, 92 S. Ct. 1607, 31 L. Ed. 2d 815.
[107] Rodriguez v. East Texas Motor Freight, 5 Cir. 1974, 505 F.2d 40, 56-7, vacated and remanded on other grounds 1977, 431 U.S. 395, 97 S. Ct. 1891, 52 L. Ed. 2d 453. See also, e. g., Myers v. Gilman Paper Corp., 5 Cir. 1977, 544 F.2d 837, 849, appeal pending.
[108] Albemarle Paper Co. v. Moody, 1975, 422 U.S. 405, 95 S. Ct. 2362, 2375, 45 L. Ed. 2d 280 (emphasis supplied).
[109] Smith v. Olin Chemical Corp., 5 Cir. 1977, 555 F.2d 1283, 1287.
[110] Local 189, United Papermakers & Paperworkers, AFL-CIO v. United States, 5 Cir. 1969, 416 F.2d 980, 989, cert. denied 1970, 397 U.S. 919, 90 S. Ct. 926, 25 L. Ed. 2d 100. See also Cotton v. Hinton, 5 Cir. 1977, 559 F.2d 1326.
[111] Defendant's Exhibit 4, Art. 8, Sect. 1.
[112] 15 out of 19. Defendant's Exhibit 17.
[113] See notes 8 and 9, supra, and accompanying text.
[114] See note 55, supra.
[115] W. Dixon & F. Massey, Introduction to Statistical Analysis 249-51 (3d ed. 1969) explains this test.
[116] Defendant's Exhibit 17. There is some dispute as to whether one black employee, E. Labat, should be included in this total since he simply left work one day and never returned. After two days absence he was discharged. If E. Labat is considered as having voluntarily resigned, the total fired during probation is lowered to fourteen.
[117] This figure would be lowered to 43 per cent if E. Labat is not counted as a "discharge".
[118] Defendant's Exhibit 15.
[119] See notes 8 and 9, supra, and accompanying text.
[120] See discussion at p. 241 supra on business necessity and the burden of proof.
[121] Defendant's Exhibit 17. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578313/ | 281 S.W.3d 137 (2008)
Todd A. DURDEN, Appellant,
v.
Melissa McCLURE, Appellee.
No. 04-08-00141-CV.
Court of Appeals of Texas, San Antonio.
November 19, 2008.
*138 Todd A. Durden, Fort Worth, pro se.
Melissa McClure, North Richland Hills, pro se.
Sitting: ALMA L. LÓPEZ, Chief Justice, CATHERINE STONE, Justice, and SANDEE BRYAN MARION, Justice.
OPINION
Opinion by SANDEE BRYAN MARION, Justice.
In this appeal, we consider whether the trial court erred in declaring a provision in the parties' divorce decree that allocated federal tax exemptions was void. Because we conclude the trial court erred, we reverse and render in part and remand for further proceedings.
BACKGROUND
On August 18, 2005, the trial court signed an Agreed Final Decree of Divorce, which contained the following provision pertinent to tax exemptions relative to the couple's three children:
The parties agree and IT IS ORDERED that [Todd] shall claim two of the children as a[sic] dependent [sic] for income tax purposes for odd-numbered tax years (2005, 2007, etc.) and that [Melissa] shall claim the remaining child(ren), if any, as dependents in the same odd years, and likewise, [Melissa] shall claim two of the children as dependents for income tax purposes for even-numbered tax years (2006, 2008, etc.) and that [Todd] shall claim the remaining child(ren), if any, as dependents in the same even years, and that the child(ren) for which the parent claims [a] dependency exemption shall be considered as living with that parent for such year. The parties agree to exchange IRS forms in this regard upon reasonable request to do so, and in no event later than April 1st of each year.
The Agreed Final Decree also provided, in a section entitled "Jurisdiction and Domicile," the following: "The parties stipulate that the provisions contained herein are part of a Court Order, and are not contractual."
In 2007, Todd received a $5,518 refund from the IRS, which he believed should be equally divided between the parties. When Melissa demanded the entire amount of the refund, Todd deposited the refund into the registry of the court. Melissa filed a Petition for Enforcement of Property Division, in which she claimed the $5,518 should be credited in full against her 2005 tax liability. Todd answered and counter-claimed that the $5,518 refund was an overpayment on the 2004 taxes and, therefore, the parties should share equally in the refund. Todd moved for summary judgment on two grounds: (1) the parties had overpaid their 2004 federal income taxes and the divorce decree specifically provided that the refund be divided equally between the parties ("the tax refund issue"), and (2) he and Melissa's agreement regarding sharing the tax exemption should be enforced as written ("the tax exemption sharing issue"). According to Todd, the decree constituted a written agreement concerning the division of property and liabilities, agreements regarding tax exemptions are not barred *139 by federal law, and such agreements are binding on the parties. Melissa responded by filing several motions
In her response to Todd's motion for summary judgment, Melissa asserted the overpayment should have been credited to her 2005 tax liability. Melissa also argued the divorce decree was not contractual in nature, but instead, was an order of the trial court. According to her, federal law allows parties to enter into agreements where the parent entitled to an exemption voluntarily releases it as part of a binding agreement to the other parent; however, federal law does not allow a trial court to order such a relinquishment. Therefore, Melissa argued the divorce decree was void to the extent it violated federal tax law by ordering her to relinquish her entitlement to the tax exemptions. In her motion for clarification of the divorce decree, Melissa again argued a state court does not have the authority to allocate tax exemptions and she asked the trial court to clarify the divorce decree, although she did not specify the manner in which the decree should be clarified. Finally, in her motion to dismiss, Melissa asked the trial court to dismiss Todd's enforcement action on the same grounds presented in her other motions: the trial court's lack of authority to allocate dependency exemptions.
The trial court held a hearing on all motions, following which it signed a Final Order that granted Todd's motion for summary judgment "as to the tax refund issue" and ordered that Todd and Melissa each owned one-half of the tax refund on deposit with the court's registry.[2] However, the court also stated it did "not grant summary judgment on the tax exemption sharing issue...." Finally, the court denied all further relief "except as to the Order Granting Motion for Clarification of Divorce Decree and the Order Granting Motion to Dismiss," which the trial court signed concurrently with its Final Order. In its clarification order, the trial court found that the above-quoted tax provision was void and that the provisions of the divorce decree were part of a court order and not contractual. Accordingly, the trial court clarified the terms of the decree as follows: "by voiding those terms found on page 9 of said decree [the above-quoted tax provision] which purports to allocate tax exemptions between the parties. Since this Court did not have the jurisdiction and authority to make such an order, this Court does not have the authority or jurisdiction to enforce any such order.... [T]he terms of the decree regarding exemptions is hereby void and of no effect...." In its dismissal order, the trial court dismissed "the portion of the suit" between the parties "regarding tax exemptions...."
On appeal, Todd asserts the trial court erred by denying that portion of his summary judgment on "the tax exemption sharing issue" and entering its clarification order and dismissal order because Melissa's motions were a collateral attack on the divorce decree and the court did not commit voidable error when it originally approved the decree.
TAX EXEMPTION
A trial court exceeds its authority when it orders a custodial parent "to release a dependency exemption allocated to her by the federal government" and awards the exemption to the noncustodial parent. In the Int. of C.C.N.S., 955 S.W.2d 448, 451 (Tex.App.-Fort Worth 1997, no pet.). As a general rule, a custodial parent is allowed a federal tax exemption for dependents. See 26 U.S.C.A. *140 § 151(c); see also id. § 152(a)(1) (defining "dependent"). One of the exceptions to the general rule is: "Notwithstanding subsection (c)(1)(B) ... if ... a child receives over one-half of the child's support during the calendar year from the child's parents... who are divorced ... and ... such child is in the custody of 1 or both of the child's parents for more than one-half of the calendar year, such child shall be treated as being the qualifying child ... of the noncustodial parent for a calendar year if the requirements described in paragraph (2) or (3) are met." Id. § 152(c)(1). Only paragraph (2) applies here, and that paragraph provides that "[f]or purposes of paragraph (1), the requirements described in this paragraph are met with respect to any calendar year if(A) the custodial parent signs a written declaration (in such manner and form as the Secretary may by regulations prescribe) that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year, and (B) the noncustodial parent attaches such written declaration to the noncustodial parent's return for the taxable year beginning during such calendar year." Id. § 152(c)(2). Thus, the Tax Code allows a parent, who is otherwise entitled to an exemption, to voluntarily relinquish that exemption. Id. The tax provision contained in the divorce decree here requires Melissa to relinquish the exemption by signing the written declaration allowing Todd to claim the exemption in odd-numbered years.
Central to Todd's arguments on appeal is his contention that the divorce decree is a consent judgment. Melissa counters that the decree is not a consent judgment, and she relies on a single sentence in the decree: "The parties stipulate that the provisions contained herein are part of a Court Order, and are not contractual." Therefore, Melissa argues that because the decree is not a consent judgment, the trial court did not have the authority to award tax exemptions, its order regarding the tax exemptions is void, and a void judgment is subject to collateral attack. Thus, the threshold issue before this court is whether the divorce decree is an agreement between the parties. If the decree was a consent judgment, the tax provision did not violate federal tax law. In the Int. of C.C.N.S., 955 S.W.2d at 451 n. 12 ("Of course, our holding does not restrict the trial court from entering such orders in a case where the parent entitled to the exemption voluntarily releases it as part of a binding agreement with the other parent.").
CONSENT JUDGMENT
The divorce decree is entitled "Agreed Final Decree of Divorce," although it does not specifically state that an agreement between the parties has been incorporated into the decree. Both parties signed the decree, approving it as to both form and substance. However, the presence of a party's signature approving the decree does not render the decree an agreed or consent judgment. Soto v. Soto, 936 S.W.2d 338, 342 (Tex.App.-El Paso 1996, no writ); Haworth v. Haworth, 795 S.W.2d 296, 298 (Tex.App.-Houston [14th Dist.] 1990, no writ). Also, the phrase "approved as to form and substance," standing alone, is insufficient to establish an agreed judgment. Oryx Energy Co. v. Union Nat'l Bank, 895 S.W.2d 409, 417 (Tex.App.-San Antonio 1995, writ denied). Nevertheless, the phrase may describe an agreed judgment when coupled with additional recitations in the judgment. See, e.g., Oryx Energy, 895 S.W.2d at 416; First American Title Ins. Co. v. Adams, 829 S.W.2d 356, 364 (Tex.App.-Corpus Christi 1992, writ denied).
All of the decretal paragraphs begin with a sentence that includes the *141 words "it is ordered." However, the trial court's use of the word "order" is not alone dispositive. McCollough v. McCollough, 212 S.W.3d 638, 647 (Tex.App.-Austin 2006, no pet.) (court disagreed with husband's argument that, because the trial court ordered the parties to do all things necessary to effectuate the agreement, this decretal language transformed the contractual alimony payments into court-ordered maintenance payments). "Courts should not give conclusive effect to the judgment's use or omission of commonly employed decretal words, but should instead determine what the trial court adjudicated from a fair reading of all the judgment's provisions." Wilde v. Murchie, 949 S.W.2d 331, 333 (Tex.1997). "Like other judgments, courts are to construe divorce decrees as a whole toward the end of harmonizing and giving effect to all that is written." Id. Here, many of the decretal paragraphs, even those that include the words "it is ordered," also state the "parties agree."
The tax provision is contained in a separate paragraph entitled "Tax Provisions Relative to the Children," and begins with the words "The parties agree and IT IS ORDERED...." (Emphasis added.) This provision specifically allows Todd to claim two of the children as dependents for tax purposes in odd-numbered years. This same paragraph ends with the sentence, "The parties agree to exchange signed IRS forms in this regard...." (Emphasis added.)
The decree also reflects the parties' agreement on other aspects of their divorce. The paragraph entitled "Transfer and Delivery of Property," states as follows: "It is understood by the parties that there will be certain documents necessary to be prepared and signed to effectuate the property division of the parties herein ordered[.]... The parties agree that each will sign any such documents...." (Emphasis added.) The paragraph entitled "Indemnification," states "The parties agree and it is ORDERED that each party will give the other party prompt written notice of any litigation threatened or instituted against either party...." (Emphasis added.) The paragraph entitled "Mediation of Future Disputes Alternative Dispute Resolution," begins with the sentence "The parties agree and IT IS ORDERED...." (Emphasis added.) Finally, the paragraph entitled "Decree Acknowledgment," states as follows:
[Todd] and [Melissa] each acknowledge that before signing the Final Decree of Divorce they have read this [decree] fully and completely, have had the opportunity to ask any questions regarding the same, and fully understand that the contents of this [decree] constitute a full and complete resolution of this case. [Todd and Melissa] acknowledge that they have not signed by virtue of any coercion, any duress, or any agreement other than those specifically set forth in the [decree].
In contrast to the repeated reference to "the parties agree[ment]," Melissa asserts the decree is not a consent judgment based on the so-called "stipulation." We are not convinced this single sentence, contained in a paragraph entitled "Jurisdiction and Domicile,"[3] controls the interpretation *142 of the entire decree. Whether the decree is interpreted under the law of judgments or the law of contracts, this court must attempt to harmonize all provisions of the decree to give effect to the entire decree. Shanks v. Treadway, 110 S.W.3d 444, 447 (Tex.2003) (interpreting divorce decree under rules regarding construction of judgments); McGoodwin v. McGoodwin, 671 S.W.2d 880, 882 (Tex. 1984) (interpreting agreed divorce decree under rules of contract interpretation); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) (same).
Based upon our reading of the entire decree, we conclude the parties entered into an agreement to share the federal tax exemptions relative to their children. Construing the decree as a consent judgment gives effect to the language of the entire document and is not inconsistent with the parties' stipulation that "the provisions contained [in the decree] are part of a Court Order, and are not contractual." This so-called "stipulation" merely evidences the parties' agreement to not seek contractual remedies or defenses to any future action to enforce the decree. Thus, Melissa's agreement to voluntarily relinquish her right to claim the exemption in odd-numbered years did not violate federal tax law and was binding on both parties. Accordingly, the trial court erred in denying Todd's motion for summary judgment on "the tax exemption sharing issue." This error, in turn, led the court to incorrectly determine that the tax provision contained in the divorce decree was void.
CONCLUSION
For the reasons stated above, we reverse the trial court's Order Granting Motion for Clarification of Divorce Decree and the Order Granting Motion to Dismiss, and we reverse that portion of the trial court's Final Order denying summary judgment in favor of Todd and we render judgment in favor of Todd on "the tax exemption sharing issue." We remand the cause for further proceedings consistent with this opinion.
NOTES
[2] No appeal has been taken from this determination.
[3] This paragraph reads, in full, as follows:
The Court finds that the pleadings are in due form and contain all the allegations, information, and prerequisites required by law. The Court, after receiving evidence, finds that it has jurisdiction of this case and of all parties and that at least sixty days have elapsed since the date the suit was filed. The Court finds that, at the time this suit was filed, [Todd] had been a domiciliary of Texas for the preceding six-month period and a resident of the county in which this suit was filed for the preceding ninety-day period. All persons entitled to citation were properly served. The parties stipulate that the provisions contained herein are part of a Court Order, and are not contractual. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578784/ | 12 So. 3d 273 (2009)
Liz MacINTYRE, as Trustee of the Helen M. Wedrall Trust, Appellant,
v.
Agnes WEDELL, Appellee.
No. 4D08-754.
District Court of Appeal of Florida, Fourth District.
May 20, 2009.
William R. Ponsoldt, Jr. of Wright, Ponsoldt & Lozeau Trial Attorneys, L.L.P., Stuart, for appellant.
Jeffrey H. Skatoff and Jennifer M. Arthur of Clark Skatoff LLP, Palm Beach Gardens, for appellee.
STEVENSON, J.
The issue in this appeal is whether a trustee may challenge the settlor's revocation of an inter vivos revocable trust, on undue influence grounds, after the settlor's death. We answer this question in the negative and affirm the trial court's order dismissing the instant claim brought by appellant, Liz MacIntyre as Trustee of the Helen M. Wedrall Trust.
Many years prior to this litigation, Helen M. Wedrall executed a revocable trust agreement transferring her assets to a revocable trust. Under the terms of Wedrall's will, the residue of her estate would pour over into the trust. At the time of Wedrall's death, the residue of Wedrall's trust was to be equally divided among three of her sisters, Agnes Wedell, Dorothy Ziegler, and Liz MacIntyre. Following Wedrall's death, MacIntyre, as Trustee of the Helen M. Wedrall Trust, filed suit against Wedell, alleging that, just weeks prior to her death, Wedrall had placed her money into an account that was jointly titled in Wedrall's and Wedell's names and that Wedrall had transferred cash and securities to Wedell. According to the allegations of the complaint, these transfers by Wedrall were made at a time when Wedrall was suffering from physical and mental ailments and were the product of Wedell's undue influence over Wedrall. Upon defendant Wedell's motion, the trial court dismissed the suit with prejudice, finding our supreme court's decision in Florida National Bank of Palm Beach County v. Genova, 460 So. 2d 895 (Fla. 1984), bars an undue influence challenge to a settlor's removal of funds from her revocable trust. We agree and affirm the dismissal.
In Genova v. Florida National Bank of Palm Beach County, 433 So. 2d 1211 (Fla. 4th DCA 1983), seventy-six-year-old Ann *274 Cleary married Mark Genova, who was thirty-two. During the marriage, Cleary created a revocable trust, naming herself and Florida National Bank of Palm Beach County as co-trustees. About two years later, Cleary and Genova divorced. During the dissolution proceedings, the trial court set aside Cleary's transfer of certain of her assets to Genova, finding the transfer was the result of undue influence. See id. at 1213. Several months after the divorce, Cleary and Genova remarried. Five days after the remarriage, Cleary wrote to the bank, indicating she wished to revoke her trust. Aware of the prior finding of undue influence, the bank refused to transfer the funds and, instead, filed a petition in the probate court, seeking instruction on how to proceed. Cleary filed a petition for writ of mandamus. The trial court found Cleary's attempts to revoke the trust were the product of her husband's undue influence and were, thus, invalid. Cleary appealed. This court reversed, finding that concepts of undue influence could not be resorted to in order to deprive a "settlor, who is the sole beneficiary of the trust during her lifetime ..., prior to her death, of her right to revoke the trust in the absence of a judicial determination or medical certification of her physical or mental incapacity." Id.
The supreme court affirmed our decision in Genova. In so doing, the court explained that a revocable trust is "a unique type of transfer" and "[b]y definition, ..., when a settlor sets up a revocable trust, he or she has the right to recall or end the trust at any time, and thereby regain absolute ownership of the trust property." 460 So.2d at 897. The settlor's retention of control "distinguishes a revocable trust from the other types of conveyances in which the principle of undue influence is applied, i.e., gifts, deeds, wills, contracts, etc." Id. The court further wrote:
The courts have no place in trying to save persons such as Mrs. Genova, the otherwise competent settlor of a revocable trust, from what may or may not be her own imprudence with her own assets. When she created this trust, she provided a means to save herself from her own incompetence, and the courts can and should zealously protect her from her own mental incapacity. However, when she created this trust, she also reserved the absolute right to revoke if she were not incompetent. In order for this to remain a desirable feature of a trust instrument, the right to revoke should also be absolute.
Id. at 898. Genova thus held that a co-trustee could not seek to preclude the settlor from revoking her trust on the grounds of undue influence, but suggested that the settlor could be precluded from revoking the trust if she were incompetent.
Appellant MacIntyre insists Genova does not control here because, in Genova, the settlor was alive at the time of the challenge to the revocation and, here, the settlor is deceased. MacIntyre points to the decision in Paananen v. Kruse, 581 So. 2d 186 (Fla. 2d DCA 1991). There, at the time Emma and Henry Carson moved into a retirement center, Emma Carson's will left her estate to her husband's nephew and, should the nephew and his wife predecease Carson, then to her great nieces. The nephew lived out-of-state and sought someone to help manage the Carsons' affairs. The director of the retirement center recommended Muriel Paananen, who did volunteer work at the center. Paananen helped Emma Carson with her business affairs and the two became friends. Emma Carson then executed a new will and revocable trust, the terms of which provided that the assets of the trust were to be used for the benefit of the Carsons during their lifetime and then for the benefit of the nephew during his life-time, *275 with the residue going to Paananen. Emma Carson's husband and the nephew died a short time later. After Emma Carson died, her great nieces, the beneficiaries under the 1985 will, filed suit, challenging the 1987 will and revocable trust on the ground that they were the product of Paananen's undue influence over Emma Carson. The trial court revoked probation of the 1987 will and invalidated the trust, finding both were the product of undue influence.
The Second District affirmed in Paananen and rejected the argument that Genova precluded an undue influence challenge to the validity of the trust.
Appellant argues that Genova also stands for the rule that undue influence is not an available remedy to revoke an inter vivos revocable trust where at the time of the action for revocation the settlor is deceased and the trust has ripened into a testamentary disposition. Such is not the law in this state any more than it is the law that a will, which is by its nature revocable by the testator up until his or her death, is not revocable on the basis of undue influence after the death of the testator.
581 So.2d at 188.[1]
Paananen is plainly distinguishable from the instant case. Despite the opinion's quoted language above speaking in terms of the revocation of an inter vivos revocable trust, the actual claim there was that the creation of the trust was the product of undue influence. The decision in Paananen noted that, at the time of the action there, the inter vivos trust had ripened into a testamentary disposition, i.e., the trust assets had poured-over into the 1987 will. Id. at 188. Here, the inter vivos trust was revoked during the settlor's lifetime and never ripened into a testamentary disposition. Further, the Genova decision itself plainly suggests the availability of an undue influence challenge to the settlor's revocation of his or her revocable trust should not turn upon whether the action is brought when the settlor is alive or deceased. Genova reached the supreme court as a consequence of the conflict between this court's decision in Genova and the Second District's decision in Hoffman v. Kohns, 385 So. 2d 1064 (Fla. 2d DCA 1980). In Genova, the settlor of the trust was alive, the settlor herself was attempting to revoke the trust, and the co-trustee bank refused to act on her attempted revocation. In Hoffman, the action challenging the decedent's revocation of the trust was brought by a would-have-been beneficiary of the trust after the settlor died. The Second District relied upon "undue influence" to disaffirm the decedent's revocation of the trust. The supreme court expressly disapproved this result in Hoffman after writing that "the principle of undue influence has no place in determining whether a competent settlor can revoke a revocable trust." 460 So.2d at 896.
In sum, we hold that, as a consequence of Genova, even after the settlor's death, the settlor's revocation of her revocable trust during her lifetime is not subject to challenge on the ground that the revocation was the product of undue influence. Thus, having considered all issues raised, *276 we affirm the dismissal, with prejudice, of the "undue influence" claim.
Affirmed.
WARNER and DAMOORGIAN, JJ., concur.
NOTES
[1] Paananen was decided in 1991. In 1992, the legislature enacted a statute providing that "[a] trust is void if the execution is procured by fraud, duress, mistake, or undue influence," see section 737.206, Florida Statutes (1993), and that language presently appears in section 736.0406, Florida Statutes (2008). In 2000, the legislature enacted section 737.2065, Florida Statutes (2000), which provides that "[a]n action to contest the validity of all or part of a trust may not be commenced until the trust becomes irrevocable." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578780/ | 12 So. 3d 363 (2009)
Jimmy LEWIS
v.
ODECO, INC., Murphy Exploration and Production Company and Diamond Offshore Drilling Company.
Jimmy Lewis
v.
Odeco, Inc., Murphy Exploration and Production Company and Diamond Offshore Drilling Company.
Nos. 2007-CA-0497, 2007-CA-1566.
Court of Appeal of Louisiana, Fourth Circuit.
April 8, 2009.
Opinion Granting Rehearing in Part and Denying Rehearing in Part May 27, 2009.
*366 J. Van Robichaux, Jr., Vance E. Ellefson, Robichaux Law Firm, New Orleans, LA, for Plaintiff/Appellee.
Michael P. Mentz, Alayne R. Corcoran, Hailey McNamara Hall Larmann & Papale, L.L.P., Metairie, LA and Antonio Clayton, Clayton Law Firm, Port Allen, LA, for Defendant/Appellant, Diamond Offshore Drilling, Inc.
(Court composed of Judge MICHAEL E. KIRBY, Judge TERRI F. LOVE, Judge DAVID S. GORBATY).
MICHAEL E. KIRBY, Judge.
In this consolidated case, the defendant, Diamond Offshore Drilling Incorporated (hereinafter referred to as "Diamond"), appeals three trial court judgments: 1) the December 5, 2006 judgment in favor of plaintiff, Jimmy Lewis, and against Diamond in the amount of $7,147,601.60, plus interest and costs of the proceedings; 2) The February 5, 2007 judgment denying Diamond's motion to annul judgment, motion for new trial or, alternatively, motion for judgment notwithstanding the verdict and motion to conform the judgment with the verdict and/or motion to amend the judgment; and 3) the October 5, 2007 judgment taxing costs for plaintiff's expert witnesses against Diamond. Plaintiff has answered the appeal regarding the December 5, 2006 and February 5, 2007 judgments.
On March 31, 1997, plaintiff filed a seaman's petition against defendants ODECO, *367 Inc., Murphy Exploration and Production Company, Diamond and their insurers for damages allegedly incurred by plaintiff while employed by defendants as a seaman, mechanic and member of the crew of the jack-up rig, Ocean Spartan. Plaintiff alleges that ODECO and/or Murphy Exploration and/or Diamond owned, operated, maintained, and/or controlled the Ocean Spartan in the territorial waters of the Country of Venezuela at all pertinent times. Plaintiff's petition states that state court jurisdiction was being invoked pursuant to the Jones Act, the General Maritime Law of the United States of America, the Savings to Suitors Clause, 28 U.S.C. § 1333, et seq., and any applicable general statute and/or federal jurisprudence and law.
In his original petition, plaintiff alleges that in May 1994, while in the service of the vessel, he became seriously ill when he was exposed to and ingested contaminated food and/or water, and contracted the disease sporadic inclusion body myositis ("SIBM"). He alleged that the cause of his illness and damages was the negligent acts and omissions of the master and crew of the Ocean Spartan, the unseaworthiness of the vessel, and the failure of defendants to furnish plaintiff with a safe place to work, safe food and water, appropriate inoculations, an adequate and competent crew, and prompt medical attention. Plaintiff further alleges that as a result of his illness, he has required painful and extensive medical treatment, has suffered severe pain and mental anguish, has become permanently disabled from working and severely handicapped in his other activities, and has lost earning capacity and the enjoyment of life's pleasures. Plaintiff alleges that defendants had, and continue to have, an obligation to provide him with maintenance and cure.
Plaintiff filed a first supplemental and amending petition on May 23, 2000. In that petition, he amended the original petition to allege that his illness was also the result of unprotected exposures to various chemicals. He further alleged that this exposure to toxic chemicals was a proximate and legal cause of his illness and damages.
Plaintiff filed a second supplemental and amending petition on May 12, 2004. In that petition, plaintiff alleged that while working for defendants as a member of the crew of the Ocean Spartan, he was forced to work eighteen hour days in 100 plus degree temperatures and high humidity, during which he was continually exposed to heavy metals, poisons and toxic chemicals, including but not limited to arsenic, mercury, lead and antimony, as well as contaminated and impure food and water. As a result of these working conditions, plaintiff alleged that his system was debilitated and his resistance weakened, making him more susceptible to injury, illness and disease. He further alleged that the damage to his body and nervous system has resulted in his being effectively paralyzed and confined to a wheelchair. In addition to the other allegations made against defendants in the original and first supplemental and amending petitions, plaintiff also alleged that defendants were arbitrary and capricious in their refusal to provide maintenance and cure. He further alleged that defendants' continued failure and refusal to produce any information that would assist plaintiff's diagnosis contributed to his damages.
Upon joint motion of plaintiff and defendants ODECO, Inc. and Murphy Exploration and Production Co., the trial court dismissed plaintiff's claims against those two defendants by order dated October 11, 2004. Plaintiff did not release Diamond and specifically reserved his rights against *368 that defendant. A jury trial was held in this matter in November 2006 between plaintiff and the only remaining defendant, Diamond. The jury interrogatories show that the jury found Diamond negligent under the Jones Act, and that the negligence was a cause in the development of plaintiff's condition. The jury also found that the vessel, Ocean Spartan, was unseaworthy, but that the unseaworthiness was not a proximate cause of plaintiff's condition. The jury found that plaintiff's condition arose while he was in the service of the Ocean Spartan, and that he was entitled to damages in the amount of $5,409,655.00, in addition to maintenance in the amount of $27,116.00 and cure in the amount of $1,710,830.60. The jury found that plaintiff was not damaged as a result of Diamond's unreasonable failure to pay him maintenance and cure, and awarded plaintiff no damages for the withholding of maintenance and cure.
On December 5, 2006, the trial court rendered judgment in favor of plaintiff, Jimmy Lewis, and against Diamond in the amount of $7,147,601.60, plus interest and costs of the proceedings. Diamond filed a motion to annul the judgment and a motion for new trial or, in the alternative, judgment notwithstanding the verdict and motion to conform the judgment to the verdict and/or motion to amend the judgment and to set expert fees. On February 5, 2007, the trial court rendered judgment denying all of Diamond's motions except for the motion to set expert fees, which the trial court took under advisement. The trial court rendered judgment on the issue of expert fees on October 5, 2007. In that judgment, the trial court taxed costs for plaintiff's expert witnesses against Diamond. Diamond appealed, and plaintiff answered the appeal as to the December 5, 2006 and February 5, 2007 judgments.
Before addressing the numerous assignments of error raised by Diamond, we note that plaintiff filed an answer to the appeal alleging additional errors on the part of the trial court. However, these assignments of error were not briefed, and are considered abandoned. See Uniform RulesCourts of Appeal, Rule 2-12.4; Folse v. Gulf Tran, Inc., XXXX-XXXX (La. App. 1 Cir. 2/23/04), 873 So. 2d 718.
In Diamond's first assignment of error, it argues that the trial court violated Rule 9.5 of the Rules for Civil Proceedings in District Courts. Rule 9.5 states:
All judgments, orders, and rulings requiring the court's signature must either be presented to the judge for signature when rendered or, if presented later, contain the typewritten name of the judge who rendered the judgment, order or ruling.
If presented later, the responsible attorney or the unrepresented party must circulate the proposed judgment, order or ruling to counsel for all parties and to unrepresented parties and allow at least three working days for comment before presentation to the court. When submitted, the proposed judgment, order or ruling must be accompanied by a certificate regarding the date or mailing, hand delivery or other method of delivery of the document to other counsel of record and to unrepresented parties, and stating whether any opposition was received.
This rule does not apply to default judgments.
Diamond asserts that the trial court instructed plaintiff's counsel to prepare and submit a judgment following trial. Diamond further alleges that it did not receive the proposed judgment prior to the court's signing of the judgment, and the judgment was not accompanied by a certificate reflecting the date of mailing or method of *369 delivery of the same. In response, plaintiff's counsel does not dispute these assertions by defense counsel. He states that he hand-delivered the proposed judgment to the judge's office before filing it because the judge "was leaving town for a week and action was necessary to place the judgment on the record." Plaintiff's counsel further states that Diamond made no comment on the judgment when it filed its motion to annul based on Rule 9.5.
Plaintiff's counsel's response does not dispute or even address the fact that Diamond was not given an opportunity to comment on the proposed judgment before it was presented to the trial court for signature. Plaintiff's counsel's does not offer an acceptable explanation for his actions, and we find his failure to comply with Rule 9.5 troubling. Furthermore, we find error on the part of the trial court in signing a judgment without certification that the provisions of Rule 9.5 had been followed. However, in these particular circumstances, we find this error to be harmless in that the non-compliance with Rule 9.5 did not affect the result in this case because the trial court simply adopted the jury's verdict in its judgment.
Diamond next argues that the trial court erred in admitting the testimony of plaintiff's medical experts following a Daubert hearing. Prior to trial, Diamond filed motions in limine to exclude the testimony of plaintiff's purported experts, Dr. James Carter and Dr. Russell Jaffe. In these motions, Diamond argued that neither Dr. Carter nor Dr. Jaffe is qualified by education or experience to offer expert testimony in this matter. Thus, Diamond argued that the testimony of Dr. Carter and Dr. Jaffe is not admissible under Louisiana Code of Evidence article 702, and lacks the indicia of relevance and evidentiary reliability required under Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993) and State v. Foret, 628 So. 2d 1116 (La. 1993), and should be excluded as a matter of law.
At the beginning of trial, the trial court ruled on Diamond's motions in limine to exclude the testimony of Drs. Carter and Jaffe. The Court denied Diamond's motion in limine to exclude the testimony of Dr. Jaffe, and Diamond applied for emergency supervisory writs with this Court as to Dr. Jaffe only. On November 14, 2006, this Court, in 2006-C-1485, denied Diamond's writ application, finding no abuse of the trial court's discretion. With regard to the motion in limine to exclude the testimony of Dr. Carter, the trial court ruled it was not accepting Dr. Carter as an expert in the causes of SIBM, but that Dr. Carter would be allowed to testify as to his treatment of plaintiff. Prior to ruling, the trial court referred to an earlier hearing on Diamond's Daubert motions, but the appeal record does not include a transcript of that proceeding.
On appeal, Diamond argues that the trial court erred in its rulings on the motions in limine to exclude the testimony of Drs. Carter and Jaffe.[1] As stated above, this Court denied the motion to exclude the testimony of Dr. Jaffe, finding that the trial court did not abuse its discretion. Plaintiff argues that this ruling is now the law of the case and should not be reconsidered. In Delta Chemical Corp., v. Lynch, XXXX-XXXX, p. 8 (La.App. 4 Cir. 2/27/08), *370 979 So. 2d 579, 585, this Court set forth the law regarding the law of the case doctrine as follows:
In Day v. Campbell-Grosjean Roofing & Sheet Metal Corp., 260 La. 325, 330, 256 So. 2d 105, 107 (La.1972), the Supreme Court stated:
With regard to an appellate court, the "law of the case" refers to a policy by which the court will not, on a subsequent appeal, reconsider prior rulings in the same case. This policy applies only against those who were parties to the case when the former appellate decision was rendered and who thus had their day in court. Among reasons assigned for application of the policy are: the avoidance of indefinite relitigation of the same issue; the desirability of consistency of the result in the same litigation; and the efficiency, and the essential fairness to both parties, of affording a single opportunity for the argument and decision of the matter at issue.
Nevertheless, the law-of-the-case principle is applied merely as a discretionary guide: Argument is barred where there is merely doubt as to the correctness of the former ruling, but not in cases of palpable former error or so mechanically as to accomplish manifest injustice. Further, the law-of-the-case principle is not applied so as to prevent a higher court from examining the correctness of the ruling of the previous court.
See also, Zatarain v. WDSU-Television, Inc., 95-2600, p. 10 (La.App. 4 Cir. 4/24/96), 673 So. 2d 1181, 1186 ("This court generally applies the `law of the case' doctrine when reviewing an issue decided on supervisory writs as part of the appeal of the case following a trial on the merits, except when it finds either that the previous decision is based on palpable error or that manifest injustice would result.").
Both plaintiff and Diamond were parties to this case when the issue of Dr. Jaffe's testimony was decided on supervisory writs. We do not find that the previous decision was based on palpable error or that manifest injustice would result if the law of the case doctrine is applied. Therefore, we find that the law of the case doctrine applies as to this Court's decision that the trial court did not abuse its discretion in denying the motion in limine to exclude the testimony of Dr. Jaffe.
With regard to the trial court ruling regarding Dr. Carter's testimony, we find no abuse of discretion in the trial court's decision to limit Dr. Carter's testimony to his treatment of plaintiff. The trial court ruled that Dr. Carter could not testify as to the cause of SIBM, and Dr. Carter confirmed his lack of knowledge as to the cause of SIBM in his trial testimony. We do not find that the trial court abused its discretion in its ruling as to the areas to which Dr. Carter could and could not testify.
This assignment of error has no merit.
Diamond next argues that there is no evidence of Jones Act negligence in this case, that plaintiff did not carry his burden of proving that his SIBM was caused by exposure to heavy metals or his employment with Diamond, and that the finding of causation was contrary to the evidence. It is undisputed that plaintiff has SIBM. What is disputed is whether or not plaintiff contracted this disease and other illnesses during his employment with Diamond.
In George v. Delta Queen Steamboat Co., XXXX-XXXX, pp. 10-11 (La.App. 4 Cir. 9/10/03), 854 So. 2d 476, 482-483, this Court summarized the legal standard for determining negligence under the Jones Act as follows:
*371 Federal jurisprudence in 1997 clarified that seamen in Jones Act negligence cases are bound to the standard of ordinary prudence, not to a lesser standard of care; i.e., according to the court, Jones Act seamen are required to act as reasonable seamen under the circumstances. Similarly, Jones Act employers are not held to a higher standard of care than ordinary negligence, but are required to act as reasonable employers under the circumstances. Gautreaux v. Scurlock Marine, Inc., 107 F.3d 331 (5th Cir.1997). Inconsistent federal jurisprudence was overruled by that decision.
A year later, the Louisiana Supreme Court adopted the above standard concerning Jones Act negligence enunciated in Gautreaux and stated:
The duty of care owed by an employer under the Jones Act is that of ordinary prudence, namely the duty to take reasonable care under the circumstances. The seaman bears the evidentiary burden of proving that a breach of the duty owed by the employer was a cause of his injuries. However, a seaman need only present "slight evidence" that his employer's negligence caused his injuries in order to reach the jury or to be sustained upon appellate review. The employer can introduce evidence of the seaman's own negligence to reduce damages through application of pure comparative fault principles. Like his employer, the seaman must meet the standard of ordinary prudence by acting as a reasonable seaman would act under the same circumstances.
Foster v. Destin Trading Corp[.], 95-226 at pp. 3-4 (La.5/30/97), 700 So. 2d 199, 208 (on rehearing) (citations omitted).
Additionally, the court in the same case reiterated the standard for unseaworthiness:
The owner of a vessel has a duty to furnish a seaworthy vessel. This duty is absolute and nondelegable. It extends to a defective condition of the ship, its equipment, or appurtenances. A ship's equipment and appurtenances include most objects and things on or attached to the vessel regardless of whether the item belongs to the ship or is brought aboard by a third party.
Id. at p. 5-6, 700 So.2d at 209 (citations omitted).
Diamond purchased the Ocean Spartan from ODECO in January 1992. At trial, the plaintiff testified that he worked as a motorman on the Ocean Spartan in the Gulf of Mexico starting in 1988, and became a mechanic in 1992 or 1993. He worked on this vessel when it was moved to Venezuela in February 1991, and worked on the vessel in Venezuela for three years. He was diagnosed with SIBM in early 1996. When the vessel went to Venezuela, plaintiff worked 28 days on and 28 days off. Each time he would arrive back on the rig, he began to have diarrhea, which would continue until he went home and then stop three to four days after he arrived home.
Plaintiff testified that the drinking water generated from the Alpha Laval water system tasted bad. He said Lake Maracaibo, where the vessel was located, was polluted. Plaintiff testified that some of the drinking water on the vessel was delivered by barge, but drinking water was also generated from an Alpha Laval "water maker." Plaintiff stated that water from the lake was used in the water system. He took samples of lake water to be tested, but admitted that he never saw any test results.
He said that at times the crew had no other water source to drink other than water from the water system. He said the temperature on the decks ranged from *372 103 to 110 degrees except for the days that it rained. He said that once he became a mechanic, he tried to correct the problems with the water system. Plaintiff also testified that his job involved working in and around the mud pit room. He said that "mud" is the term used for drilling fluid. He said the temperature in the mud pit room could get as high as 160 degrees. Plaintiff said he worked on the Ocean Spartan when it returned from Venezuela until May 1996 when his doctor advised him to quit working because of his worsening condition. He began to use a wheelchair in the early part of 1999.
On cross-examination, plaintiff testified that he did not know he was ill in 1991, but that he started to "tire out" in 1991. He would not admit to telling several doctors that his illness began in 1991. He stated that his doctors told him that his diarrhea-related issues were not related to his SIBM. While on the Ocean Spartan in Venezuela, he never heard anyone say that the water was not adequate for consumption. When asked about his allegation in his original petition that ODECO and Murphy Oil were responsible for his illness, his response was that he did not know at that time whether the responsible party was ODECO, Murphy Oil or the new company named Diamond Offshore.
Dennis Bailey, who helped create safety training manuals and safe drilling operations manuals for Diamond, testified that he inspected the Ocean Spartan when it was in Venezuela on only one occasion, and that was in 1991. He stated that the safety inspections conducted by Diamond did not include inspections of the water system. He said a rig mechanic is not supposed to mix chemicals.
Billy Plaisance, a driller on the Ocean Spartan in 1992, testified that oil-based drilling mud would spill onto the drilling floor during the course of operations. He said he had no knowledge that oil-based muds were washed overboard, but he knew that water-based muds, including some with diesel in them, were washed overboard into the lake.
James Chatham, an assistant driller on the Ocean Spartan, also testified that water-based mud was dumped in the lake, regardless of whether or not it contained diesel. Mr. Chatham testified that Soltex was one of the products used on the Ocean Spartan in Venezuela. He also testified that it was common knowledge that Lake Maracaibo was polluted, and that he could see that it was polluted. He stated that he had diarrhea when in Venezuela, but it would stop three to four days after he returned home.
Terry Petty, who was accepted as an expert in the operation of drilling rigs and petroleum engineering, testified that he conducted an investigation of the Alpha Laval water system at plaintiff's request. He said the water system is a distillation system that removes salt and some pollutants from raw water. He stated that the manufacturer of the system gave a specific warning that fresh water must not be produced from polluted water because such water can be unsuitable for human consumption.
Wade Reason, the Diamond rig superintendent who traveled with the Ocean Spartan to Venezuela, testified that lake water was never pumped directly into the potable water tanks when he was in Venezuela. But Mr. Reason testified on cross-examination that he worked 28 days on and 28 days off so he could only answer that question as to the time he was aboard the vessel. His understanding was that Lake Maracaibo was polluted. As to the disposal of oil-based mud, Mr. Reason testified that most of it was placed on the barge and the rest of it was washed and dumped overboard. He said that neither motormen *373 nor mechanics mix chemicals or handle the drilling mud additives.
The defense also presented the testimony of Calvin Barnhill, who was recognized as an expert in petroleum engineering. He was hired as a consultant by Diamond for this case, and was asked to review drilling reports and other information for the time period Diamond owned the Ocean Spartan. According to those reports, he said it "looks like" there were two wells that used oil-based mud, and that plaintiff was on the rig for 20 days while one of those wells was drilled in 1992 and for 28 days while the other well was drilled in 1993. He said he obtained this information from reports kept by Diamond. He said the drilling operations conducted in Lake Maracaibo, Venezuela were normal, routine drilling operations.
Mr. Barnhill testified that he found nothing out of the ordinary in the way drilling muds were used while the Ocean Spartan was in Venezuela. He stated that he is familiar with the drilling additive, Soltex, and he is not aware of any hazards regarding heavy metal exposure in the use of that product. He stated that the muds used onboard the Ocean Spartan were classified as non-hazardous oil field materials. On cross-examination, Mr. Barnhill stated that the mixing and treatment of certain chemicals in drilling fluids can be considered pollutants, depending on the levels and the methods of disposal. He acknowledged that he has not measured the amounts of chemicals in the oil fluids and drilling waste.
Joseph Wood, an expert in industrial hygiene, testified that the safety programs in place on the Ocean Spartan while in Venezuela were adequate. He said Soltex has been used in the drilling industry for a long time. He said Soltex contains no hazardous warnings for heavy metals. He did not know all of the components contained in Soltex. He said he had no way of knowing if heavy metals were in a drilling mud unless he tested it, and he said he has not tested drilling muds.
Felix Nowell, worked as a motorman on the Ocean Spartan when it moved to Venezuela. He said as a motorman, he did not have to mix chemicals in the mud pit room. He said one of his responsibilities was taking care of the water maker. He said he worked on the Alpha Laval water system. When it was first installed, he sent samples of the water in the system to be tested, and no one ever indicated to him that the water was unsafe for consumption. He said that water used in the water system came from "deep wells," which he described as a saltwater tower. He said he drank the water from the system and had no problems. He had no knowledge as to whether lake water flowed directly into the potable water tank. On cross-examination, Mr. Nowell said he was only on the Ocean Spartan in Venezuela for a short while, leaving in July 1991 to work on another rig.
The following is a summary of the expert medical testimony presented at trial.
Dr. James Carter
Dr. James Carter, a pediatrician and nutritionist, was accepted by the trial court as an expert in the areas of tropical medicine, heavy metal and its effects on the body, public health and nutrition, and integrated medicine. As stated above, the trial court did not accept him as an expert in the causes of SIBM. The court only allowed Dr. Carter to testify as to his treatment of plaintiff.
Dr. Carter testified that he first saw plaintiff on November 11, 2002, and as of the trial date, was still treating plaintiff on a continuing basis. Plaintiff's medical records showed that he had been diagnosed with SIBM and malignant hypertension. *374 Plaintiff was referred to Dr. Carter to check for heavy metal toxicity. Dr. Carter noted that plaintiff had been checked for gastrointestinal distress, specifically diarrhea, which cleared up each time he left Venezuela and would recur each time he returned to Venezuela.
Dr. Carter tested plaintiff for heavy metals, and found metals that are present in a common additive to drilling fluid called Soltex. Those metals include antimony, arsenic, cadmium, cobalt, lead, mercury, nickel and zinc. Plaintiff had high levels of each of these metals in his system. Dr. Carter's opinion is that it is more likely than not that the concentration of heavy metals came from drilling fluids. He treated plaintiff with a chelating medication called EDTA, which he described as a substance that goes into the body, grabs hold of metals and is excreted through the kidneys along with the metals attached to it. Dr. Carter said plaintiff showed progress with chelation therapy in that his mercury levels have fallen. His opinion is that plaintiff needs to continue chelation therapy in order to eliminate all of the metals from his system. His opinion is that plaintiff needs chelation therapy in combination with hyperbaric oxygen treatments he was receiving from Dr. Paul Harch.
Dr. Carter admitted that he does not know the cause of SIBM. But after reviewing plaintiff's medical records, he stated that there is a "suggestion" that he also has oxidative toxic stress at the cellular level, and that this can be caused by metals. When asked if it is his opinion that plaintiff's exposure to heavy metals in Venezuela caused his cells to not be able to do the normal things that they would otherwise be able to do, Dr. Carter responded:
Well, I think the exposure to metals again is the flagship that he may have been exposed to other environmental chemicals as well. But the exposure to metals is something we can measure. It does explain in part this gastrointestinal distress and how it comes and goes and that it is not an infectious illness that stops at the border, as I said earlier. It does explain the lead associated with hypertension. There's just no proof that those metals caused this Inclusion Body Myositis or adult muscular dystrophy. It's a case of guilt by association.
However, Dr. Carter then stated that environmental, chemical and heavy metal contamination that plaintiff was exposed to in Venezuela while working for Diamond is the most likely cause of all of plaintiff's illnesses.
On cross-examination, Dr. Carter testified that he got involved in plaintiff's treatment five years after this lawsuit was filed. He admitted he had not been to the rig where plaintiff worked and has no documentation as to what plaintiff's metal levels were when he was working in Venezuela. He also stated that plaintiff's mercury levels were normal in 1998. Dr. Carter testified that "in all likelihood" plaintiff got mercury in his system from working on the rig because mercury was in the drilling fluid additive used on the rig. When asked what his source was for his conclusion that mercury was in the drilling fluid additive, he responded that his information was from "several articles." He confirmed his earlier opinion stated in his deposition that Dr. King Engel is the world-renowned expert in SIBM, and that he would defer to his opinions on that disease. But when asked if he would defer to Dr. Engel if Dr. Engel disagreed with his opinion about metals in drilling fluid causing plaintiff's illnesses, Dr. Carter said he would not agree with that because he was dealing with the specifics of plaintiff's case, while Dr. Engel's opinions was of a more general nature.
*375 Dr. Paul Harch
Dr. Paul Harch was accepted as an expert in the fields of emergency medicine and hyperbaric treatment. Dr. Harch testified that plaintiff was referred to him for treatment by Dr. James Carter in early 2005. Dr. Harch first evaluated plaintiff on March 29, 2005. He treated plaintiff with hyperbaric oxygen therapy in an attempt to improve his SIBM. Plaintiff received forty treatments, and showed improvement. Plaintiff was videotaped before and after the treatments, and these videotapes were introduced into evidence. Dr. Harch's opinion is that the hyperbaric treatments helped plaintiff, and will continue to help him if he has more of these treatments. Dr. Harch admitted that he did not know of any other case where hyperbaric oxygen therapy was used for SIBM.
On cross-examination, Dr. Harch stated that plaintiff was the first patient he had ever seen with this disease. He also testified that plaintiff reported to him that his symptoms first appeared in late 1991.
Dr. John Olsen
Dr. John Olsen, an expert in the field of neurology, testified that he first saw plaintiff on October 5, 2006. On that visit, Dr. Olsen found that plaintiff had significant long-term damage from a myopathic process that looks like SIBM, but he noted that plaintiff's case is atypical. He stated that there is no well-defined etiology for this disease. Dr. Olsen said that specific treatment for SIBM is not available, but symptomatic treatment is available. He noted that the videotape recordings made while plaintiff received hyperbaric oxygen treatment from Dr. Harch showed that plaintiff had some response to this treatment but the improvement is only transient. He said he does not expect plaintiff to be cured of SIBM. Dr. Olsen said that cases of this disease are very rare, and he was unable to say what caused plaintiff's SIBM. When asked if plaintiff's weakness and gastrointestinal symptoms could have been caused when he was working off the coast of Venezuela, Dr. Olsen stated:
I think he was exposed to something, you know; and I think it was probably down there. Okay? That's what I think. Could I be wrong? Yes, I could be wrong.
On cross-examination, Dr. Olsen admitted that before his treatment of plaintiff, he was not sure he had ever seen SIBM. He acknowledged that SIBM is a progressive disease, and by the time a person recognizes the symptoms, they have usually had the disease "for a time." Plaintiff related to Dr. Olsen that he became symptomatic in late 1991. Dr. Olsen stated that no one knows what triggers SIBM.
Dr. Russell Jaffe
The deposition of Dr. Russell Jaffe was read into the record. The trial court recognized Dr. Jaffe as an expert in the fields of internal medicine, biochemistry, pathology, chemical immunology and clinical nutrition. Dr. Jaffe testified that he received plaintiff's medical records from Dr. Carter. He stated that he is the director of a laboratory in which he is the majority owner, but he does not have a medical practice. He has never seen plaintiff.
Based on his review of plaintiff's records and consultation with Dr. Carter, Dr. Jaffe stated his opinion that plaintiff was exposed to toxicants prior to working on the Ocean Spartan, but this prior exposure was not the cause of plaintiff's medical condition. His opinion was that the combination of lack of nutrients and the presence of bad toxicants in the working conditions on the Ocean Spartan exposed plaintiff to a heat shock stress that depressed his body's ability to neutralize the bad toxic minerals and/or pesticides to *376 which he was exposed. He suggested that hyperbaric oxygen therapy in combination with antioxidant therapy would be appropriate treatment for plaintiff's condition.
Dr. Jaffe stated that plaintiff's case is the first time he has ever been consulted regarding SIBM. He said that patients with SIBM are customarily treated by neurologists, and he is not a neurologist. When asked if he has found any credible scientific studies that relate SIBM to any particular cause, his response was, "[t]here are hypotheses." He further stated that he does not believe anyone in the world asserts that they know the cause of SIBM. He stated that he is not aware of any credible scientific studies that established that heavy metal exposure causes SIBM. Dr. Jaffe qualified that statement by saying that he has found strong evidence that exposure to certain toxic metals at the level plaintiff was allegedly exposed to, at a time when he was distressed because of heat shock exposure, would have reduced his innate protective antitoxic mineral production and made him susceptible to toxic metal accumulation. He further stated that toxic metal accumulation inside the mitochondria (described as independent organisms living inside cells) causes death to the mitochondria, and a dead mitochondria becomes an inclusion body.
Dr. Jaffe testified that the muscle weakness reported by plaintiff in 1991 may or may not have been related to his SIBM. Based on the medical histories he was provided, he stated that plaintiff began experiencing symptoms of SIBM in 1992. He could not say with a reasonable degree of medical certainty that plaintiff had SIBM before his diagnosis in 1994 or 1995. He said the latency period for SIBM is usually long, and can be anywhere from a few months to decades. However, he said plaintiff's case is atypical because the onset of the disease was at age 35, which is a young age for onset, and was fairly aggressive. Dr. Jaffe stated that he has not been involved with any studies regarding the treatment of patients with SIBM. He admitted that one hypothesis he considered was that plaintiff's illness may have occurred over 20 years. He said his first hypothesis was that plaintiff's illness was a slowly progressive condition that finally came to attention in 1994 or 1995. He said he later excluded this hypothesis after learning that plaintiff's condition progressed rapidly between 1991 and 1995. He said the rapid progression of plaintiff's illness caused him to conclude that his exposure to toxic chemicals while working on the Ocean Spartan was "a sufficient predisposing cause" of his illness.
On the subject of heat shock, Dr. Jaffe defined this condition as exposure to temperatures in excess of 140 degrees for a significant period of times, typically minutes. He said it was his understanding that plaintiff was exposed to temperatures in excess of 140 degrees while working in the mud room or pit on the Ocean Spartan. However, he admitted he had no personal knowledge that plaintiff was working in these conditions. Rather, he received this information from Dr. Carter. Dr. Jaffe said the relevance of heat shock to this case is that if he were exposed to this type of hot environment, it would reduce his body's ability to produce protective antitoxic molecules and would make him much more at risk of accumulation and toxic effects from the same toxicants that he might have been exposed to before at low levels. He also stated that it was his understanding that plaintiff was exposed to toxic metals and persisting organic dilutants such as pesticides while working on the Ocean Spartan. He acknowledged that plaintiff's history showed that he also used pesticides at his home.
*377 He said his conclusion that heat shock, followed by chronic low level exposure to toxic metals and pesticides, is part of the cause of SIBM is a hypothesis that has not been confirmed. He then stated that his opinion is that plaintiff would not have acquired SIBM if he had not been employed on the Ocean Spartan off the coast of Venezuela. Dr. Jaffe confirmed that there is no known cure for SIBM, and that he has seen no evidence that heat shock alone causes SIBM. It is Dr. Jaffe's opinion that Dr. Carter's differential diagnosis, treatment plan and opinion as to the causes of plaintiff's illness are correct. He stated that he was relying on the accuracy of information given to him by Dr. Carter in reaching his medical opinion in this case.
Dr. Jaffe stated that he believes plaintiff's condition has improved as a result of a combination of hyperbaric oxygen therapy treatments, treatments provided by Dr. Carter to rid plaintiff's body of toxins and dietary management. His opinion is that plaintiff will continue to improve if this course of treatment is followed. Dr. Jaffe's opinion is that if this course of treatment had been started when plaintiff was first diagnosed with SIBM, his physical condition would be considerably better, and he would have less disability. He said that his opinion is that plaintiff would not be wheelchair-bound if the appropriate medical therapy had begun closer to the time of his diagnosis. Dr. Jaffe stated that it is his considered medical opinion that the conditions under which plaintiff worked on the Ocean Spartan contributed to the cause of his current medical problem. However, he later admitted that he is not aware of any credible scientific evidence that SIBM is caused by heavy metal exposure or is effectively treated by hyperbaric treatment or removal of toxic metals.
Dr. John England
Dr. John England, recognized by the trial court as an expert in the field of neurology, testified by videotaped deposition. Dr. England has a subspecialty in neuromuscular disease, which encompasses treatment of individuals with SIBM. He stated that he evaluated plaintiff in August 1999. Dr. England described SIBM as being slowly progressive in most cases. He testified that SIBM has no known causes, only hypotheses and theories. He also testified that SIBM has no known cure. He said that by the time most patients have been diagnosed with SIBM, they have most likely had the disease for several years. Plaintiff's SIBM was diagnosed in 1995 by muscle biopsy, but plaintiff's medical history indicated that the onset of muscle weakness was in 1991. Dr. England stated that when a patient with SIBM first recognizes muscle weakness, then the disease has been present in the individual for a period of time, typically four to five years.
During the time period when Dr. England saw plaintiff, plaintiff's condition continuously deteriorated with no improvement despite treatments he was receiving from other physicians. He testified that there is no scientific or medical evidence to suggest that being a mechanic on an offshore drilling rig would have anything to do with the development of SIBM. He said there is no evidence that SIBM is related to any known environmental factor, occupational or otherwise. Dr. England stated that there is no credible scientific evidence that chelation therapy or hyperbaric chamber treatment helps SIBM. He further stated that he is not aware of any scientific medical studies that conclude that exposure to mercury causes SIBM. He said while heavy metal intoxication can cause problems in the nervous system, there are no reports of heavy metal intoxication causing direct effects on muscle. He further stated that mercury, in and of itself, *378 does not usually cause nerve or muscle problems. He said the current scientific conclusion is there are no effective treatments for SIBM.
Dr. John A. Sumner
Dr. John Sumner was accepted by the trial court as an expert in the field of neurology. He testified that he has a subspecialty in neuromuscular disease, including the disease of SIBM. He said he has diagnosed and treated patients with SIBM. Dr. Sumner examined plaintiff one time after he was already diagnosed with this disease. He said the cause of SIBM is unknown. He stated that plaintiff developed SIBM at age 35, which is early onset for this disease, but his SIBM was typical other than for the factor of early onset. Plaintiff told Dr. Sumner that he recognized his symptoms in 1991. Dr. Sumner testified that SIBM is usually a slowly progressive disease, and a person usually has the disease for a period of time before the symptoms are recognized. His opinion, based on his research, is that by the time a person with SIBM becomes wheelchair-bound, he or she has had the disease for a minimum of ten years, and typically many more years than that. Plaintiff first recognized muscle weakness in 1991 and starting using a wheelchair in 1996. Dr. Sumner's conclusion is that plaintiff's SIBM had been present since at least 1986.
Dr. Sumner stated that there is no known cure or demonstrated effective treatment for SIBM, and no scientific evidence that chelation therapy or hyperbaric oxygen treatment are effective treatments or cures for this disease. He also stated that there is no scientific evidence that heavy metal exposure causes SIBM. Dr. Sumner reviewed plaintiff's medical records and concluded that plaintiff did not have symptoms of heavy metal poisoning.
Dr. King Engel
Dr. King Engel, an expert in neurology and neuromuscular diseases, testified by videotaped deposition. He is the author of a book entitled, "Inclusion-Body Myositis and Myopathies," published in 1998 by Cambridge University Press. He stated that the causes of SIBM are unknown, and there is no known cure. Dr. Engel first saw plaintiff in June 1998. Plaintiff told him that he had progressive weakness in all four limbs since late 1992, and his weakness has worsened to the point where he has difficulty swallowing solid food. Dr. Engel performed a muscle biopsy, and confirmed plaintiff's diagnosis of SIBM. Plaintiff reported to Dr. Engel that he had received four courses of intravenous immunoglobulin starting in April 1996. Dr. Engel recommended two kinds of oral treatment, Carnitine and Co-Q-10, along with prednisone. He explained that Carnitine and Co-Q-10 are normal substances in our bodies, and are especially useful to mitochondrial function. He recommended these substances, which are available at health food stores without a prescription, because in SIBM patients, the mitochondria are abnormal. He said these medications can be helpful in assisting in symptomatic control.
Dr. Engel said it is fairly common for SIBM patients to have difficulty swallowing, but gastrointestinal problems such as diarrhea and upset stomach are not symptoms commonly seen in SIBM patients. He stated that his hypothesis regarding plaintiff's case is the existence of a virus in his system. He said his hypothesis was the probable but unproven cause of plaintiff's SIBM because no viral agent has been found in plaintiff's case.
Dr. William George
Dr. William George was accepted as an expert in the area of pharmacology and toxicology. He is not a physician, but *379 earned a doctorate degree in pharmacology with a specialization is toxicology. He reviewed laboratory reports of tests performed on plaintiff on several occasions after his employment with Diamond ended, and said that the levels of heavy metals in plaintiff's system were always within normal limits. His opinion, based on his research of toxicology literature, is that there is no evidence that SIBM is caused by metals.
In Domonter v. C.F. Bean Corporation, 99-1204, pp. 11-12 (La.App. 5 Cir. 4/25/00), 761 So. 2d 629, 637, the standard of review for Jones Act claims of negligence and unseaworthiness was summarized as follows:
The appropriate standard of review in a Jones Act and unseaworthiness claim is the manifest error or the clearly wrong standard. Foster v. Destin Trading Corp., on rehearing, 96-0803 (La.5/30/97), 700 So. 2d 199, 202. Where there is a conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel that its own evaluations and inferences are as reasonable. Brown v. Seimers, 98-694 (La. App. 5th Cir.1/13/99), 726 So. 2d 1018, 1021, writ denied, 99-0430 (La.4/1/99), 742 So. 2d 556; Rosell v. ESCO, 549 So. 2d 840, 844-45 (La.1989). The issue to be resolved by the reviewing court is not whether the factfinder was right or wrong, but whether his conclusion was a reasonable one. Brown v. Seimers, 726 So.2d at 1021; Stobart v. State, Through DOTD, 617 So. 2d 880, 882 (La.1993). Thus, where two permissible views of the evidence exist, the factfinder's choice between them cannot be manifestly erroneous or clearly wrong. Brown v. Seimers, 726 So.2d at 1021; Stobart v. State, Through DOTD, 617 So.2d at 882. However, where documents or objective evidence so contradict a witness's story, or the story itself is so internally inconsistent or implausible on its face that a reasonable factfinder would not credit the witness's story, the court of appeal may find manifest error, even in a finding purportedly based upon a credibility determination. Rosell v. ESCO, 549 So.2d at 844-45.
The jury found Diamond negligent under the Jones Act, and further found that this negligence was a cause in the development of plaintiff's condition. An employer's negligence may arise in many ways, including the failure to use reasonable care to provide a seaman with a safe place to work, the existence of a dangerous condition on or about the vessel, or any other breach of the duty of care. Foster v. Destin Trading Corporation, 96-0803 (La.5/30/97), 700 So. 2d 199, 208. Evidence of Diamond's negligence included testimony that Diamond employees improperly dumped oil-based muds into Lake Maracaibo and used polluted lake water in the water system used for drinking water. Plaintiff testified that his job duties included working with drilling muds in a room that reached temperatures as high as 160 degrees. The defense presented testimony to controvert this evidence, but the jury apparently believed the testimony showing that Diamond was negligent. While there are certainly two permissible views of the evidence in this case, the jury made credibility determinations and chose to believe the evidence supporting plaintiff's claim that Diamond was negligent under the Jones Act. Based on the evidence presented, we find no manifest error in the jury's conclusion on that issue.
On the issue of causation, a seaman need only present "slight evidence" that his employer's negligence caused his injuries. George v. Delta Queen Steamboat *380 Co., XXXX-XXXX, p. 11 (La.App. 4 Cir. 9/10/03), 854 So. 2d 476, 482. Even under the "slight evidence" standard, this case is a close call.
As stated above, after a Daubert challenge, the trial court ruled that Dr. Carter could not testify as to the causes of SIBM, but could only testify as to his treatment of plaintiff. Defense counsel made a general objection at the beginning of Dr. Carter's testimony to his testifying as to SIBM. Despite being instructed by the trial court as to the limitations on his testimony, Dr. Carter stated that environmental, chemical and heavy metal contamination that plaintiff was exposed to in Venezuela while working for Diamond is the most likely cause of all of his illnesses. This statement was clearly beyond the scope of Dr. Carter's qualifications to testify as determined by the trial court, and the trial court should have instructed the jury to disregard this statement. The trial court erred in failing to do so. However, this error was harmless in that Dr. Carter's testimony as to causation was cumulative to the testimony of Dr. Jaffe.
Dr. Jaffe testified that his opinion is that plaintiff's exposure to toxic chemicals, combined with heat shock, while working on the Ocean Spartan was a sufficient predisposing cause of his illnesses, including his SIBM. He admitted that his conclusion is a hypothesis that has not been confirmed. However, in Davis v. ODECO, 18 F.3d 1237 (5th Cir.1994), evidence of medical causation included an inconclusive hypothesis that exposure to hydrocarbons while working aboard the defendant's vessels caused plaintiff to contract a rare disease called Goodpasture's Syndrome, or GPS. The Court held that even though the evidence as to causation was tenuous, "there was not a complete absence of probative factual evidence on the issue of medical causationas there must be to overturn a jury verdict under the Jones Act." Id. at 1242. The Court further stated that the plaintiff was entitled to recovery under the Jones Act if he adduced probative evidence that the defendant's negligence played any part, however small, in the development of his condition. Id. at 1242-1243.
We find that plaintiff carried his burden of proving medical causation through the testimony of Dr. Jaffe. Although the evidence presented by plaintiff to establish medical causation is underwhelming, it is sufficient to support the jury's verdict under the "slight evidence" standard applicable to the causation prong of a liability determination in a Jones Act case.
In its next assignment of error, Diamond argues that the trial court committed error by improperly instructing the jury. One of the instructions to the jury included the following sentence: "Mr. Lewis alleges that his condition was caused by his exposure to toxic chemicals and heavy metals and the working conditions aboard the Ocean Spartan in Lake Maracaibo, Venezuela." The jurors sent a written note to the trial court stating, "We are having an issue with Mr. Lewis' `condition' and what that includes. Explain condition with the Jones Act negligence. Does it include all illnesses or just SIBM?" Both plaintiff's counsel and defense counsel agreed to substitute the word "illness" for the word "condition." The court told the jurors that only they could determine what illnesses may or may not have been caused by the conditions aboard the Ocean Spartan.
Diamond argues that plaintiff was diagnosed with three separate conditions: (1) SIBM, (2) gastrointestinal distress (diarrhea) and (3) hypertension. Diamond claims that the court erred in its clarified instruction by suggesting to the jury that proof of causation of any illness entitled *381 the plaintiff to recovery for all illnesses, including SIBM, for which Diamond claims there is no evidence of causation. Diamond's issue with the trial court's clarification to the jury seems to be that the court used the word "illnesses" instead of "illness." However, counsel for Diamond did not object at the time the court gave this clarification to the jury. Defense counsel's objection was made after the clarification and outside the presence of the jury. The objection was not timely. We find no merit in this argument.
Diamond next argues that the trial court erred in failing to grant a mistrial on three separate occasions and committed numerous errors in its evidentiary rulings, which resulted in substantial prejudice to Diamond. Diamond refers to several instances in which plaintiff's counsel made several allegedly inflammatory remarks about Diamond. Diamond also refers to instances in which it claims the trial court allowed plaintiff's counsel to improperly state the law to the jury. It also points out instances where plaintiff's counsel attempted to elicit testimony on issues that the court had ruled inadmissible.
Our review of the record reveals no error on the part of the trial court in denying Diamond's requests for mistrial. Furthermore, we find no basis for overturning the trial court's evidentiary rulings cited by Diamond. This assignment of error has no merit.
Before we address Diamond's assignment of error regarding the award of general damages, we will consider Diamond's arguments relating to the award of maintenance and cure to plaintiff. Diamond argues that the trial court erred in failing to submit a jury interrogatory asking the jury to determine the date when plaintiff reached maximum medical improvement. Included in the jury instructions is the following statement by the trial court:
The maintenance and cure duty terminates only when maximum cure has been reached. Maximum cure is the point where it is probable that further treatment will result in no betterment of the seaman's condition. Namely, any future treatment is for the purpose of reducing pain or maintaining him in the same condition.
As this instruction correctly states the law as to the issue of maximum medical improvement, the trial court did not err in failing to also include a jury interrogatory on the issue of the date of maximum medical improvement.
Diamond also argues that the trial court erred in failing to conform the judgment to reflect that under general maritime law, no maintenance or cure is owed once a disease/condition is determined to be incurable. The jury verdict included an award of $27,116.00 for maintenance and $1,710,830.60 for cure. The law as to the right to maintenance and cure was set forth in Dejean v. St. Charles Gaming Co., Inc., XXXX-XXXX, p. 3 (La.App. 3 Cir. 5/4/05), 903 So. 2d 521, 523-524, as follows:
"[T]he right to maintenance and cure must be construed liberally...." Barnes v. Andover Co., L.P., 900 F.2d 630, 633 (3rd Cir.1990). "Cure" involves the payment of therapeutic, medical, and hospital expenses, that are not otherwise furnished to the seaman, until the point of maximum cure. Pelotto v. L & N Towing Co., 604 F.2d 396 (5th Cir.1979); Taylor v. Mutual of Omaha Ins. Co., 520 So. 2d 1122 (La.App. 3 Cir.1987). "When maintenance and cure terminates is a question of fact to be determined on the evidence presented." Thurman v. Patton-Tully Transp. Co., 619 So. 2d 879, 881 (La.App. 3 Cir.1993). The duty of the shipowner to furnish medical care *382 continues until the sick or injured person has been cured or until the sickness or incapacity has been declared to be permanent. Farrell v. United States, 336 U.S. 511, 69 S. Ct. 707, 93 L. Ed. 850 (1949). Maintenance and cure extends during the period when a seaman is incapacitated and continues until he reaches maximum medical recovery. Breese v. AWI, Inc., 823 F.2d 100 (5th Cir.1987). It is the medical, not the judicial, determination of permanency that results in the termination of the right to maintenance and cure. Id. "[M]aximum cure is achieved when it appears probable that further treatment will result in no [b]etterment of the seaman's condition." Pelotto, 604 F.2d 396, 400. "Thus, where it appears that the seaman's condition is incurable, or that future treatment will merely relieve pain and suffering but not otherwise improve the seaman's physical condition, it is proper to declare that the point of maximum cure has been achieved." Id.
Although the medical experts testifying at trial agreed that there is no known cure for SIBM, Drs. Carter, Harch and Jaffe testified that certain therapies undergone by plaintiff have improved and will continue to improve his condition. Diamond presented the testimony of several medical experts who disagreed with the opinions of the plaintiffs' experts on this issue, but the jury apparently chose to believe the testimony that plaintiff's condition has and will continue to improve with chelation and/or hyperbaric oxygen therapy treatments. By awarding maintenance and cure benefits to plaintiff, the jury established through its verdict that it does not believe that plaintiff has reached maximum medical improvement. While there are certainly two permissible views of the evidence on this issue, we cannot say the jury was manifestly erroneous in choosing the evidence in support of an award of maintenance and cure benefits to plaintiff. This assignment of error is without merit.
Diamond also argues that the trial court judgment reflects a duplication of damages in favor of plaintiff. Specifically, Diamond objects to the fact that plaintiff was awarded maintenance and cure, in addition to a general damages award that included amounts that are the equivalent of maintenance and cure. Maintenance is a form of compensation that arises out of the employment contract and is a daily stipend for living expenses, or an amount covering expenses for the cost of food and lodging that is equivalent to the food and lodging that he would have received on the vessel. Domonter v. C.F. Bean Corporation, 99-1204, p. 18 (La.App. 5 Cir. 4/25/00), 761 So. 2d 629, 640. Cure is payment of the seaman's medical, therapeutic and hospital expenses, until that point in time when plaintiff reaches maximum medical recovery. Id.
While we find no error in the trial court's maintenance and cure awards, we do find that part of the general damages award is duplicative of the award for cure. The jury interrogatory form shows that the damages award of $5,409,655.00 represents future medical care, past income loss, future wages and found and impairment of earning capacity or ability in the future, including impairment in the normal progress in plaintiff's earning capacity due to his physical condition, physical pain and suffering including physical disability, impairment, inconvenience, and the effect of plaintiff's injuries and inconvenience on the normal pursuits and pleasures of life, past mental anguish and feeling of economic insecurity caused by plaintiff's disability, future mental anguish and feelings of economic insecurity caused by plaintiff's disability.
*383 An award for cure represents past and future medical care. The record shows that plaintiff's medical expenses as of the time of trial were $451,066.42. We conclude that of the $1,710,830.60 awarded for cure, $451,066.42 represents past medical expenses and $1,259,764.18 represents future medical expenses. Included in the general damages award is the item of future medical care. Thus, the general damages award of $5,409,655.00 must be reduced by $1,259,764.18 as this latter amount is duplicative of the award for cure. Accordingly, the general damages award will be amended to the amount of $4,149,890.82. We are not disturbing the amounts awarded to plaintiff for maintenance and cure, $27,116.00 and 1,710,830.62 respectively.
In another assignment of error, Diamond argues that the trial court erred in awarding excessive general and future medical damages that were not supported by the evidence. Specifically, Diamond argues that the evidence only established a possible causal link to gastrointestinal illness. As stated above, plaintiff carried his burden of proving causation as to all of his illnesses, including SIBM.
Diamond also alleges that plaintiff has offered no evidence of physical pain and suffering as a result of his SIBM. Diamond argues that plaintiff is not entitled to an award for pain and suffering because it alleges that the record contains no evidence that plaintiff suffered any physical pain or required any pain medication for his SIBM. According to Diamond's calculations, the jury awarded plaintiff $3,142,290.80 for pain and suffering. Diamond arrived at this figure by subtracting from the total damages award the amounts awarded for future medical expenses and past and future lost wages. Other than the award for future medical expenses, which we have found to be duplicative to the cure award, and the award for past and future wages, the general damages award includes physical pain and suffering including physical disability, impairment, inconvenience, and the effect of plaintiff's injuries and inconvenience on the normal pursuits and pleasures of life, past mental anguish and feeling of economic insecurity caused by plaintiff's disability, future mental anguish and feelings of economic insecurity caused by plaintiff's disability.
In Duncan v. Kansas City Southern Railway Co., XXXX-XXXX, p. 13 (La.10/30/00), 773 So. 2d 670, 682, the Louisiana Supreme Court stated:
General damages are those which may not be fixed with pecuniary exactitude; instead, they "involve mental or physical pain or suffering, inconvenience, the loss of intellectual gratification or physical enjoyment, or other losses of life or life-style which cannot be definitely measured in monetary terms." Keeth v. Dept. of Pub. Safety & Transp., 618 So. 2d 1154, 1160 (La.App. 2 Cir.1993). Vast discretion is accorded the trier of fact in fixing general damage awards. La. Civ.Code art. 2324.1; Hollenbeck v. Oceaneering Int., Inc., 96-0377, p. 13 (La.App. 1 Cir. 11/8/96); 685 So. 2d 163, 172. This vast discretion is such that an appellate court should rarely disturb an award of general damages. Youn v. Maritime Overseas Corp., 623 So. 2d 1257, 1261 (La.1993), cert. denied, 510 U.S. 1114, 114 S. Ct. 1059, 127 L. Ed. 2d 379 (1994). Thus, the role of the appellate court in reviewing general damage awards is not to decide what it considers to be an appropriate award, but rather to review the exercise of discretion by the trier of fact. Youn, 623 So.2d at 1260.
With the exception of the portion of the general damages award representing future medical care, or $1,259,764.18, we find *384 no abuse of the trier of fact's vast discretion in the balance of the general damages award. This assignment of error is without merit.
Diamond also argues that the award of future medical expenses is not proportionate with plaintiff's life expectancy as predicted by Dr. John Olsen. As stated above, we are amending the general damages award to subtract the amount for future medical care already included the cure award. However, we will address the correctness of the amount awarded for future medical care in the cure award.
A reading of Dr. Olsen's testimony shows that he stated that people with Lou Gehrig's disease, which he analogized to SIBM, die about 6 to 18 months after the disease affects swallowing, and his assumption is that the same would be true for SIBM patients such as plaintiff who have developed swallowing problems. Dr. Olsen did not offer an estimate as to plaintiff's life expectancy other than to say his prognosis is not good unless his condition is treated. Dr. Larry Stokes, an expert in vocational rehabilitation counseling and life-care planning, testified as to the range of plaintiff's estimated future medical expenses and said these expenses could be as high as $180,607.00 annually. Dr. Randolph Rice, an expert economist, reviewed the figures suggested by Dr. Stokes, and testified as to his opinion of plaintiff's future health care costs based on his estimation that plaintiff's life expectancy from the time of trial could be as much as 23.59 years. Based on the evidence presented on this issue, we cannot say the trial court abused its discretion in the award for future medical care included in the cure award.
In its next assignment of error, Diamond argues that the award for cure should be reduced because some of plaintiff's medical expenses were paid for by other sources including Medicare/Medicaid and plaintiff's wife's health insurance carrier. We do not find that Diamond has produced sufficient evidence to support its claim that it is entitled to credit for payments of medical expenses from collateral sources. This assignment of error is without merit.
Diamond argues that plaintiff is not entitled to pre-judgment interest. On the issue of interest, the trial court judgment stated that interest was awarded "at the legal rate, in accordance with law, and all costs of these proceedings." Post-trial, plaintiff filed a Motion to Set Pre-Judgment Interest, which was denied by the trial court. Thus, the trial court determined that plaintiff is not being awarded pre-judgment interest, and we find no abuse of the court's discretion in so ruling. This assignment of error is without merit.
In its next argument, Diamond argues that it has been prejudiced by an incomplete trial transcript. Specifically, Diamond argues that its objections to jury instructions, and the court's rulings on the same, were not transcribed by the court reporter. Counsel for Diamond cites a conversation between him and the court reporter, in which she allegedly told him that she had destroyed her notes and recordings once she prepared the transcript. Diamond contends that this was a violation of Uniform District Court Rule 4.0 and La. C.C.P. article 372, which requires a court reporter to retain her notes and recordings for at least two years after transcription is completed. We cannot verify from the record before us the allegations that Diamond has made regarding the court reporter. However, we note that the record includes some objections to jury instructions by Diamond and the court's rulings on the same. Assuming arguendo that the transcript omits other objections by Diamond, we find that any error was *385 harmless because the instructions given to the jury fairly and accurately set forth the legal principles applicable in this case. This assignment of error has not merit.
As stated above, the appeal of the judgment on the merits was consolidated with the appeal of the judgment taxing costs for expert witnesses against Diamond. In its October 5, 2007 judgment, the trial court taxed costs against Diamond for the following expert fees: $7,500.00 as to Dr. Carter, an additional $8,000.00 as to Dr. Jaffe, $824.00 as to Dr. England, $1,059.00 as to Dr. Engel, $1,375.00 as to Mr. Petty, $1,619.50 as to Dr. Rice and $1,500.00 as to Dr. Olsen. On appeal, Diamond argues that the trial court erred in awarding excessive and unreasonable amounts to plaintiff's experts, Drs. Jaffe and Carter. The trial court has the discretion to tax as costs expert fees for preparatory, non-testifying expenses, in addition to costs for time spent testifying at trial. Vela v. Plaquemines Parish Government, 2000-2221 to 2000-2224, p. 30 (La.App. 4 Cir. 3/13/02), 811 So. 2d 1263, 1282-1283. Based on the evidence presented on the issue of expert witness costs, we cannot say the award of expert costs was excessive or unreasonable. We find that the trial court did not abuse its discretion in its award of costs.
For the reasons stated above, we reduce the total amount of the trial court judgment in case number 2007-CA-0497 from $7,147,601.60 to $5,887,837.42. In all other respects, we affirm the judgment in case number 2007-CA-0497. We also affirm the trial court judgment in case number 2007-CA-1566.
AMENDED, AND AS AMENDED, AFFIRMED.
ON APPLICATION FOR REHEARING
MICHAEL E. KIRBY, Judge.
We grant the rehearing application of defendant, Diamond Offshore Drilling, Inc., for the sole purpose of correcting a misstatement made in our original opinion in the discussion of an allegedly improper jury instruction. During deliberations, the jurors sent a note asking the trial court to explain what was included in the term "condition" in the sentence in one of the jury instructions, which stated, "Mr. Lewis alleges that his condition was caused by his exposure to toxic chemicals and heavy metals and the working conditions aboard the Ocean Spartan in Lake Maracaibo, Venezuela." Plaintiff's counsel and defense counsel agreed to substitute the word "illness" for the word "condition." The jurors were brought back into the courtroom, and were told by the trial court that only they could determine what illnesses may or may not have been caused by the conditions aboard the Ocean Spartan.
Immediately after the jurors left the courtroom to resume deliberations, defense counsel objected to the trial court's clarified instruction, arguing that the statement suggested to the jury that proof of causation of any illness entitled the plaintiff to recovery for all illnesses, including SIBM, for which Diamond claims there is no evidence of causation. In our original opinion, we found that the defendant's objection was untimely because it was raised outside the presence of the jury.
On rehearing, defendant argues that the objection was timely because it was made immediately after the jury left the courtroom. The defense cites La. C.C.P. article 1793(C), which states:
A party may not assign as error the giving or the failure to give an instruction unless he objects thereto either before the jury retires to consider its verdict or immediately after the jury retires, stating specifically the matter *386 to which he objects and the grounds of his objection. If he objects prior to the time the jury retires, he shall be given an opportunity to make the objection out of the hearing of the jury.
Because the record confirms that the objection was made immediately after the jurors left the courtroom to resume deliberations, the statement in our original opinion that defendant's objection to the clarified jury instruction was untimely was incorrect.
Although the objection was timely, we nonetheless find the defendant's assignment of error on the issue of the jury instruction to be without merit. We conclude that the statement at issue made by the trial court to the jury does not constitute reversible error.
This rehearing application is granted only for the purpose of correcting the misstatement regarding the timeliness of the defendant's objection. In all other respects, the rehearing application is denied. We affirm the judgment rendered in our original opinion.
REHEARING APPLICATION GRANTED IN PART; DENIED IN PART; JUDGMENT AFFIRMED.
NOTES
[1] Diamond also alleged as error the trial court's failure to exclude the testimony of Dr. Paul Harch and Dr. John Olsen, but did not brief the objection to the testimony of these two witnesses. Therefore, Diamond's arguments as to the failure to exclude the testimony of Drs. Harch and Olsen are abandoned. See Uniform RulesCourts of Appeal, Rule 2-12.4; Folse v. Gulf Tran, Inc., XXXX-XXXX (La. App. 1 Cir. 2/23/04), 873 So. 2d 718. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578789/ | 134 Mich. App. 429 (1984)
351 N.W.2d 315
GIBBS
v.
GENERAL MOTORS CORPORATION
Docket No. 71372.
Michigan Court of Appeals.
Decided May 1, 1984.
Grant & Busch (by David B. Grant), for Leon Gibbs.
Mark R. Flora, for General Motors Corporation.
Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, and Jack Blumenkopf, Assistant Attorney General, for Michigan Employment Security Commission.
Before: ALLEN, P.J., and V.J. BRENNAN and N.J. KAUFMAN,[*] JJ.
PER CURIAM.
The Michigan Employment Security Commission (MESC) appeals as of right from an order entered May 2, 1983, in Wayne County Circuit Court. In that order, the circuit court reversed the decision of the MESC Board of Review denying Leon Gibbs's claim for trade readjustment allowance (TRA) benefits. On appeal, Gibbs's employer, General Motors Corporation, Cadillac Motor Car Division, seeks an order reversing the circuit court's decision.
To qualify for TRA benefits, Gibbs had to have *431 at least 26 weeks of employment at wages of $30 or more in the 52 weeks immediately prior to being separated from "adversely affected employment". 19 USC 2291. The MESC referee noted that Gibbs had 19 weeks of such employment during the appropriate qualifying period, January 14, 1979, through January 12, 1980. Gibbs was on sick leave from Cadillac from June 29, 1979, until January, 1980, and during that period received sickness and accident benefits. The MESC referee, following guidelines of the United States Department of Labor, found that sickness and accident payments do not constitute qualifying wages or employment for the purposes of the Trade Act of 1974 and, therefore, denied Gibbs's claim.
The MESC Board of Review upheld the referee's decision. On appeal, the Wayne County Circuit Court reversed.
The question before us is whether a period of absence due to illness during which sick pay is received constitutes "employment at wages" for the purposes of qualifying for TRA benefits. The MESC and General Motors Corporation contend that the decisions of the referee and the MESC Board of Review correctly interpreted the Federal Trade Act of 1974 and, under the act, the sickness and accident payments received by Gibbs did not qualify as wages or employment. We agree.
Under the Trade Act of 1974, the United States Secretary of Labor has the authority to certify a group of workers eligible to apply for TRA benefits. 19 USC 2272, 2273. Also, the Secretary has the power to authorize a state agency, such as the MESC, to act as its agent in receiving and processing applications for TRA benefits. 19 USC 2311(a).
The act also provides that judicial review of a state agency's determination as to eligibility for *432 TRA benefits is to be in the same manner as the agency's determination made under applicable state law. 19 USC 2311(d). Under Michigan law, a decision by the MESC may be reversed only where it is contrary to law or is not supported by competent, material, and substantial evidence on the whole record. MCL 421.38(1); MSA 17.540(1).
Recently, in Paison v Ford Motor Co, 134 Mich. App. 124; 351 NW2d 197 (1983), lv applied for (1983), this Court addressed the same issue as presented to us in the instant case and the panel affirmed the lower court's order affirming the determination by the MESC that sick pay benefits did not constitute wages for employment within the meaning of the Trade Act of 1974.[1]
In light of the Paison decision, we cannot conclude that the MESC Board of Review's determiniation was contrary to law. Therefore, we must reverse the lower court's order reversing the decision of the MESC Board of Review. In our opinion, deference should be given to the interpretation of the federal statute by the agency administering it. We believe that the agency is in a better position to determine eligibility under the statute. Until contrary interpretations of the statute are resolved on the federal level, or a decision of our Supreme Court to the contrary, uniformity of application would be achieved among the states by following the agency's interpretation. Final resolution of the issue by the federal courts will ultimately flow back through the agency administering the statute and any change in statutory interpretation will be applied at the agency level as controlling law.
Reversed.
NOTES
[*] Former Court of Appeals Judge, sitting on the Court of Appeals by assignment.
[1] We do note that in International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v Donovan, 568 F Supp 1047, 1048 (D DC, 1983), the district court reached a result contrary to this decision and the Paison, supra, decision. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578333/ | 35 So. 3d 20 (2008)
E.S., JR.
v.
A.B.
No. 2070753.
Court of Civil Appeals of Alabama.
December 19, 2008.
Decision of the Alabama Court of Civil Appeal Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578348/ | 35 So. 3d 17 (2008)
NOVA BURNS BRIGHT
v.
ROBERT BURNS ET AL.
No. 2070326.
Court of Civil Appeals of Alabama.
November 7, 2008.
Decision of the Alabama Court of Civil Appeal Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3041910/ | United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 06-1404
___________
United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* District of Nebraska.
Kevin J. Yale, *
* [UNPUBLISHED]
Appellant. *
___________
Submitted: February 6, 2007
Filed: February 7, 2007
___________
Before COLLOTON, HANSEN, and BENTON, Circuit Judges.
___________
PER CURIAM.
Kevin J. Yale appeals the sentence imposed by the district court1 after he
pleaded guilty to conspiring to distribute and possess with intent to distribute 500
grams or more of a methamphetamine mixture, in violation of 21 U.S.C. § 846. In a
brief filed under Anders v. California, 386 U.S. 738 (1967), counsel argues that Yale’s
262-month prison sentence, imposed upon consideration of an advisory Guidelines
range of 262-327 months, is too harsh in comparison to the sentences of his co-
conspirators.
1
The Honorable Laurie Smith Camp, United States District Judge for the
District of Nebraska.
We find no abuse of discretion in the district court’s refusal to grant Yale a
downward variance to accomplish sentencing parity, especially where, in opposing the
variance, the government had stated without objection that Yale’s case was
distinguished by an extensive criminal record and the existence of a weapon. See
United States v. Plaza, 471 F.3d 876, 880 (8th Cir. 2006) (while unwarranted
sentencing disparities are to be avoided, district court evaluating potential disparity
must compare defendants with similar records who have been found guilty of similar
conduct; reversing downward variance where coconspirators had different criminal
history categories, role-related adjustments, drug quantities, and Guidelines ranges).
After reviewing the record independently under Penson v. Ohio, 488 U.S. 75
(1988), we have found no nonfrivolous issues. Accordingly, we affirm the judgment
of the district court, and grant counsel’s motion to withdraw.
______________________________
-2- | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1496151/ | 71 F.2d 61 (1934)
THE CRICKET.
PETERSON
v.
CRICKET SHIPPING CO.
No. 7212.
Circuit Court of Appeals, Ninth Circuit.
May 31, 1934.
*62 S. T. Hogevoll, of San Francisco, Cal., for appellant.
John H. Black and James M. Wallace, both of San Francisco, Cal., for appellee.
Before WILBUR, SAWTELLE, and GARRECHT, Circuit Judges.
GARRECHT, Circuit Judge.
On January 26, 1932, the steamship Cricket was crossing the bar at Gray's Harbor, Washington, bound for the city of Aberdeen in that state. A huge wave swept over the stern of the ship, breaking forward. It struck with such force as to sweep over, not only the poop deck, but the boat deck above and the wash reached even to the bridge. The railing on the boat deck, made of one-inch galvanized iron pipe, was carried away, as were several heavy vegetable crates on the boat deck. An anchor weighing over four hundred pounds was torn loose from its lashings on the poop deck and moved several feet. A ladder made of the same material as the railing above described extended from the poop deck to the boat deck on the starboard side of the vessel. This ladder was constructed of pieces of one-inch galvanized iron pipe and tee fittings. It was approximately eight feet long and there were six or eight steps or cross pieces. It was affixed top and bottom by flanges, into which the vertical pipes were screwed. Each of the two lower flanges was bolted to the poop deck by means of four bolts, while the two upper flanges were bolted to the deck beams with two five-eighths inch bolts each.
Appellant and another seaman were on the first or poop deck when they became aware of their danger. Both ran for the ladder, the other seaman getting there first and scrambling to safety. As appellant mounted this ladder the wave struck with such force that the ladder was sheared from all four of its fastenings. Appellant was washed against the railing of the lower deck. Peculiarly enough, the bolts affixing the ladder to the deck, at either end, were not even loosened; the vertical pieces of pipe were sheared off even with the flanges.
Peterson filed a libel against the steamship Cricket, alleging the ladder to be defective and that by reason thereof he sustained a fractured hip in his fall to the deck and double pneumonia by reason of immersion; further, that he is unable to follow his usual occupation as seaman, because of such injury. Damages were asked in the sum of $5,000, together with maintenance. The Cricket Shipping Company claimed and answered, denying duty, negligence, and injury. It alleged contributory negligence and assumption of risk, as well as seaworthiness of the vessel. Further, it pleaded an unqualified release and discharge in writing, signed by libelant.
The District Court found the facts to be substantially as above set forth and also found that the ladder was properly constructed of iron pipe and securely affixed at both the upper and lower ends and that the vessel was in all respects seaworthy and adequate for intended use prior to the accident. Further, that appellant's injuries were not caused by unseaworthiness or defect in the vessel or equipment. The court also found that libelant had received the sum of $100 from libelee and executed a release therefor and that he had subsequently resumed work and followed his calling.
The court concluded that the libelant was not entitled to damages or to any award for wages or maintenance and decree was entered dismissing the libel. The appeal is taken from this decree.
The general maritime law in cases of injuries suffered by seamen is well stated by Mr. Justice Brown in The Osceola, 189 U.S. 158, 175, 23 S. Ct. 483, 487, 47 L. Ed. 760, as follows:
"1. That the vessel and her owners are liable, in case a seaman falls sick, or is wounded, in the service of the ship, to the extent of his maintenance and cure, and to his wages, at least so long as the voyage is continued.
"2. That the vessel and her owner are, both by English and American law, liable to an indemnity for injuries received by seamen in consequence of the unseaworthiness of the ship, or a failure to supply and keep *63 in order the proper appliances appurtenant to the ship. Scarff v. Metcalf, 107 N.Y. 211, 13 N.E. 796 [1 Am. St. Rep. 807].
"3. That all the members of the crew, except, perhaps, the master, are, as between themselves, fellow servants, and hence seamen cannot recover for injuries sustained through the negligence of another member of the crew beyond the expense of his maintenance and cure.
"4. That the seaman is not allowed to recover an indemnity for the negligence of the master, or any member of the crew, but is entitled to maintenance and cure, whether the injuries were received by negligence or accident."
The above matter is quoted in Chelentis v. Luckenbach S. S. Co., 247 U.S. 372, 380, 38 S. Ct. 501, 62 L. Ed. 1171, and cited in Pacific S. S. Co. v. Peterson, 278 U.S. 130, 136, 49 S. Ct. 75, 73 L. Ed. 220. And the latter case holds that the seaman is entitled to but one indemnity by way of compensatory damages.
While it is the duty of the owner to use due diligence to see that the ship and its appliances are seaworthy, he is not necessarily an insurer of safety (Burton v. Greig [D. C.] 265 F. 418, 420, affirmed [C. C. A.] 271 F. 271, 272), nor is the owner bound to furnish the best, safest, and most convenient structures (The Santa Clara, 206 F. 179, 180 [D. C. N. Y.]).
The life of a seaman is hard. The nature of his calling subjects him to many dangers. One of these is the hazards of a heavy sea. The sailor knows this and assumes the risks incidental to his calling. In Maloney, etc., v. U. S., 7 F. Supp. 15, 1928 A. M. C. 288, the deceased was struck by a heavy wave (the first to come on deck), which threw him down a stairway causing injuries from which he died. It was held that the accident was due to natural perils of navigation, which Maloney assumed.
"* * * The rule is well settled that in cases on appeal in admiralty, when the questions of fact are dependent upon conflicting evidence, the decision of the district judge, who had the opportunity of seeing the witnesses and judging their appearance, manner, and credibility, will not be reversed unless it clearly appears that the decision is against the evidence. The Albany [C. C.] 48 F. 565, and authorities there cited." The Alijandro, 56 F. 621, 624 (C. C. A. 9).
The foregoing rule is uniformly followed. The Beaver (C. C. A.) 253 F. 312; The Mazatlan (C. C. A.) 287 F. 873; Siciliano v. California Sea Products Co. (C. C. A.) 44 F. (2d) 784; Rideout v. Charles Nelson Co. (C. C. A.) 55 F.(2d) 783; The Yale (C. C. A.) 58 F.(2d) 974; The Mabel (C. C. A.) 61 F. (2d) 537. The cases cited are all from this circuit.
However, mindful of the fact that an appeal in an admiralty case is a trial de novo, we have with diligence examined the entire record. Our examination leads to the conclusion that not only is there no manifest error in the findings of the lower court but, on the contrary, the findings are fully supported by the evidence.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1918448/ | 17 Neb.App. 431
STATE OF NEBRASKA, APPELLEE,
v.
MICHAEL D. SCHURMAN, APPELLANT.
No. A-08-383.
Court of Appeals of Nebraska.
Filed March 10, 2009.
Michael O. Mead, of Law Offices of Richard L. Alexander, for appellant.
Jon Bruning, Attorney General, and Nathan A. Liss for appellee.
INBODY, Chief Judge, and MOORE and CASSEL, Judges.
INBODY, Chief Judge.
INTRODUCTION
Michael D. Schurman appeals the decision of the Adams County District Court affirming the Adams County Court's denial of Schurman's motion to withdraw his no contest pleas to third degree assault and third degree domestic assault. Schurman also claims that the district court erred in failing to find that the sentences imposed upon him were excessive. For the reasons set forth herein, we reverse the decision of the district court, vacate Schurman's convictions and sentences, and remand for further proceedings.
STATEMENT OF FACTS
On August 15, 2006, Schurman was charged in Adams County Court with third degree assault, in violation of Neb. Rev. Stat. § 28-310 (Reissue 2008), and third degree domestic assault, in violation of Neb. Rev. Stat. § 28-323(4) (Reissue 2008), both Class I misdemeanors. At the August 15 arraignment, Schurman appeared without counsel. Schurman stated that he did not understand the complaint but that he was "just gonna plead guilty right now." When asked if Schurman understood the rights that were previously read, Schurman stated, "Well, I'm not an attorney so your language is way over my head." However, Schurman did not want the clerk magistrate to go over the rights a second time and stated that he did not want an attorney and did not want an attorney appointed to represent him.
Once the clerk magistrate explained the different pleas to Schurman, Schurman stated that he understood and was ready to enter pleas of no contest to both counts. Schurman entered pleas of no contest which were accepted by the clerk magistrate. Following the entry of the pleas, Schurman stated that he did not want to be considered for probation. The following statements also occurred during the hearing:
MR. SCHURMAN: I I Sir I know it's can't back up now. But I don't understand. If I would get out of here, I can't go get my personal belongings.
....
MR. SCHURMAN: I don't understand what's goin' on. I'd just as soon be put inside so I can't get in trouble again because I don't understand this. How do I get my clothes?
....
MR. SCHURMAN: Now, can I get my furniture and all that?
....
MR. SCHURMAN: Just throw me in jail, right now.....
MR. SCHURMAN: No, just take me right now.
....
MR. SCHURMAN: I'm all mixed up. I don't understand it. So . . . .
....
MR. SCHURMAN: I don't understand. I'm lost.
MR. SCHURMAN: I know. I'm I I'm lost.
THE COURT: Have you had any mental problems in the past that I'm not aware of?
MR. SCHURMAN: No.
THE COURT: No?
MR. SCHURMAN: Well I've been in there once before Yeah, but it's all But that's been a long time ago.
THE COURT: Okay. So you're lost because of what?
MR. SCHURMAN: I'm lost because how do I get my vehicle, how do I get my clothes, and all that stuff.
MR. SCHURMAN: See, I'm so lost, I don't know what's goin' on.
The following colloquy then occurred between the clerk magistrate and the county attorney:
THE COURT: My question to the County Attorney: Should I back track a little bit and just go ahead and appoint the public defender on this so we make sure we get this done correctly?
[County attorney]: Probably wouldn't be a bad idea. I guess I would ask that the Public Defender be appointed for him, to help him in this; and then if they decide they want to do a motion to withdraw the pleas, and then they can worry we can worry about that later. I think he's I think he's understood why he was here, and he made a conscious decision to plead guilty (sic).
The clerk magistrate did appoint counsel for Schurman for the sentencing phase of the proceedings. Counsel proceeded to file a motion requesting that the court allow Schurman to withdraw his no contest pleas for the reason that the pleas were not knowingly and voluntarily made. A hearing thereon was held on November 17, 2006, at which time the State objected to Schurman's motion to withdraw his pleas. Schurman testified that he did not understand what was happening to him on the day of the pleas and did not have a thorough understanding of what was required for him to enter his pleas. He further testified that he has been diagnosed with bipolar disorder and has hearing loss. Schurman also testified that, the night before his arraignment, he did not get any sleep because he was in jail, and that although he tried to ask for a telephone call so that he could call his lawyer, he was not allowed a telephone call.
On February 21, 2007, the county court denied Schurman's motion to withdraw his pleas. Thereafter, Schurman was sentenced to 30 days' imprisonment on each count with the sentences ordered to be served concurrently. Schurman appealed to the Adams County District Court, which affirmed the county court's denial of his motion to withdraw his pleas and the sentences imposed upon Schurman. With regard to the county court's denial of Schurman's motion to withdraw his pleas, the district court found that "[i]t is clear from the record [that Schurman's] plea was freely, voluntarily and intelligently given. [Schurman's] confusion was on post plea issues not related to his plea of No Contest." Schurman has now timely appealed to this court.
ASSIGNMENTS OF ERROR
Schurman contends that the district court abused its discretion in refusing to allow him to withdraw his no contest pleas and in imposing excessive sentences.
STANDARD OF REVIEW
[1] Prior to sentencing, the withdrawal of a plea forming the basis of a conviction is addressed to the discretion of the trial court, and its ruling will not be disturbed on appeal absent an abuse of that discretion. State v. Williams, 276 Neb. 716, 757 N.W.2d 187 (2008); State v. Schneider, 263 Neb. 318, 640 N.W.2d 8 (2002).
ANALYSIS
Schurman first contends that the district court abused its discretion in refusing to allow him to withdraw his no contest pleas.
[2-4] After the entry of a plea of guilty or no contest, but before sentencing, a court, in its discretion, may allow a defendant to withdraw his or her plea for any fair and just reason, provided that the prosecution has not been or would not be substantially prejudiced by its reliance on the plea entered. State v. Williams, supra. The burden is on the defendant to establish by clear and convincing evidence the grounds for withdrawal of a plea. Id. The right to withdraw a plea previously entered is not absolute, and, in the absence of an abuse of discretion on the part of the trial court, refusal to allow a defendant's withdrawal of a plea will not be disturbed on appeal. Id.
The evidence presented by Schurman in support of his motion to withdraw his pleas establishes that he exhibited confusion during the plea hearing and that the clerk magistrate acknowledged as much at the end of the hearing when he asked the county attorney if an attorney should be appointed for Schurman. The county attorney agreed that appointing an attorney for Schurman would not be a bad idea and even acknowledged that, if the attorney wanted to file a motion to withdraw the pleas, the issue could be handled at a later time. Schurman testified that he has been diagnosed with bipolar disorder and has a hearing loss and that he was arrested the day before the hearing and was not able to sleep while in jail. Based on the record presented, Schurman established, clearly and convincingly, that his obvious confusion during the plea hearings, during which he was not represented by counsel, presents serious questions as to whether Schurman's plea was in fact freely, voluntarily, and intelligently entered. Further, the State would not have been substantially prejudiced by allowing Schurman to withdraw his no contest pleas as there was no plea agreement in this case and Schurman's plea occurred on the same day that the charges were filed. Therefore, we find that the denial of Schurman's motion to withdraw his no contest pleas was an abuse of discretion. Having made this determination, we need not consider Schurman's claim that the sentences imposed were excessive. Thus the decision of the district court is reversed, Schurman's convictions and sentences are vacated, and this cause is remanded to the district court to remand to the county court for further proceedings.
CONVICTIONS AND SENTENCES VACATED. REVERSED AND REMANDED FOR FURTHER PROCEEDINGS. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/4515774/ | Opinion issued March 12, 2020
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-20-00015-CV
———————————
IN RE PARTNER INDUSTRIAL COATINGS LP, PARTNER INDUSTRIAL
LP, TODD BROCK, BLAINE BOUDREAUX, BRENDAN BOUDREAUX,
STEPHANIE BUTLER, JOSE “SHORTY” MANDUJANO AND KARI
SJOLANDER, Relator
Original Proceeding on Petition for Writ of Mandamus
MEMORANDUM OPINION
Relators, In re Partner Industrial Coatings LP, Partner Industrial LP, Todd
Brock, Blaine Boudreaux, Brendan Boudreaux, Stephanie Butler, Jose “Shorty”
Mandujano, and Kari Sjolander, filed a petition for writ of mandamus challenging
the trial court’s order signed November 12, 2019, denying motions to sever and
abate.1 Relators and real parties in interest, Brock Holdings III, LLC and Custom
Blast Services, Inc., have filed a joint motion to dismiss the proceeding as moot
because the parties have reached a settlement.
We grant the motion and dismiss the petition. Any pending motions are
dismissed as moot.
PER CURIAM
Panel consists of Chief Justice Radack and Justices Kelly and Goodman.
1
The underlying case is Brock Holdings III, LLC, and Custom Blast Services, Inc. v.
Partner Industrial, LP, Todd Brock, Partner Industrial Coatings, Blaine
Boudreaux, Brendan Boudreaux, Stephanie Butler, Jose “Shorty” Mandujano, and
Kari Sjolander, cause number 2019-30612, pending in the 190th District Court of
Harris County, Texas, the Honorable Beau A. Miller, presiding.
2 | 01-03-2023 | 03-13-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/1578785/ | 351 N.W.2d 54 (1984)
217 Neb. 654
Carol T. THYNNE, Appellee,
v.
CITY OF OMAHA, Appellant.
No. 83-332.
Supreme Court of Nebraska.
June 22, 1984.
Herbert M. Fitle, Omaha City Atty., James E. Fellows and Thomas O. Mumgaard, Omaha, for appellant.
Leo A. Knowles and John F. Thomas of McGrath, North, O'Malley & Kratz, P.C., Omaha, for appellee.
KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ.
CAPORALE, Justice.
As the result of an automobile accident, appellee, Carol T. Thynne, brought suit against the appellant, City of Omaha, under *55 the Nebraska Political Subdivisions Tort Claims Act. The city appeals from the $351,385.94 judgment entered against it. We reverse and remand for a new trial solely on the issue of damages.
On Friday evening, January 9, 1981, as Thynne was returning home from work at Bergan Mercy Hospital in Omaha, where she was employed as a nurse anesthetist, the vehicle Thynne was driving was struck from the rear by an Omaha police cruiser. While there are minor discrepancies in their recapitulations of the accident, both Thynne and the police officer agree that Thynne was stopped in the inside westbound lane of Pacific Street because cars in front of her had stopped awaiting an opportunity to turn left onto 97th Street. The police officer attributed the cause of the accident to his following too closely and not being able to stop once he noticed Thynne's vehicle.
When Thynne finally reached her home, after the accident was investigated and it was determined that she could drive her vehicle, she was feeling nauseous and was still suffering from a headache that set upon her shortly after the accident. Upon awaking Saturday morning Thynne still had the headache, and, in addition, her neck, face, and right arm were sore. She made an appointment to see her family physician on Monday.
On Monday Thynne went to work and was informed by the physician in charge to return home and see her family physician before returning to work. Thynne saw her physician that day, and he recommended that she apply heat and take aspirin. He also prescribed pain-relieving drugs, along with instructions that she not return to work. By the next weekend Thynne's pain had increased. She suffered spells of dizziness, diminished hearing, and pain in her jaws. She again called her family physician, but he was unavailable. Thynne's husband then called the family dentist, who made a house call. The dentist diagnosed Thynne's problem as a temporomandibular joint dysfunction, which involves the main joints of the jaw, and fitted her with a mouthpiece designed to relieve tension on the temporomandibular joint.
On March 5, 1981, Thynne attempted to return to work and was required by her employer to see an orthopedic physician. The orthopedist diagnosed an acute cervical sprain. He advised her to rest, apply heat, and take medication for pain.
Thynne's pain lingered on through the year, and in January of 1982 Thynne's orthopedist sent her to a neurologist, who placed her in the hospital, where tests were conducted and physical therapy was prescribed. In the summer of 1982 Thynne traveled to California, on the advice of her family dentist, to be treated by a specialist in temporomandibular joint dysfunction. The specialist's treatment consisted of, among other things, the use of herbs and acupuncture.
Thynne has not returned to work and continues to complain of pain in her neck and jaws, along with numbness in her right hand. Several physicians who have examined Thynne find no X-ray or other "objective" physical evidence of the cause for her continuing pain. They also opine that Thynne's pain may be the result of a functional overlay, that is to say, the etiology of the pain is emotional rather than physiological. No physician has doubted the existence of Thynne's pain; one physician thought that it would be easier to treat her once the stress of litigation was gone. While several physicians who have examined Thynne expressed the opinion that she should return to work on at least a parttime basis, neither Thynne's family physician nor her orthopedist has recommended that she do so.
On March 9, 1983, 5 days prior to the March 14, 1983, scheduled trial date, the city filed a motion to compel an examination of Thynne on March 11, 1983, by a clinical psychologist. In connection with the timing of this motion, we note that the parties stipulated on or about September 24, 1982, that all discovery was to be completed on or before December 1, 1982. However, neither party abided by this stipulation. On February 8, 1983, Thynne *56 scheduled the deposition of a medical expert to be taken in Los Angeles, California, on March 8, 1983; on February 18, 1983, Thynne filed supplemental answers to interrogatories which, among other things, added the name of a registered physical therapist as an additional "medical practitioner" who examined or treated her; on February 23, 1983, Thynne scheduled the taking of her orthopedist's deposition on March 3, 1983; and on March 1, 1983, Thynne again supplemented her answers to interrogatories by the addition of another physician as one who had examined or treated her, and listed other witnesses. The city's March 9 motion was denied on March 10, 1983, by a judge other than the one presiding at the trial.
The city assigns six errors to the trial court, none of which is directed to the issue of liability. Since we hold that the failure to grant the city's motion for examination requires a reversal and vacation of the judgment, a discussion of the issues raised by the city's other assignments, which relate to the amount of the judgment, is unnecessary.
Pursuant to Neb.Rev.Stat. § 25-1273.01 (Cum.Supp.1982), this court adopted the Nebraska Discovery Rules, which govern the conduct of discovery in civil cases. Neb.Ct.R. 35(a) (Rev.1983) provides:
Order for Examination. When the mental or physical condition (including the blood group) of a party, or of a person in the custody or under the legal control of a party, is in controversy, the court in which the action is pending may order the party to submit to a physical or mental examination by a physician or to produce for examination the person in his or her custody or legal control. The order may be made only on motion for good cause shown and upon notice to the person to be examined and to all parties and shall specify the time, place, manner, conditions, and scope of the examination and the person or persons by whom it is to be made.
The city's motion was accompanied by the affidavit of the city's attorney, which stated that Thynne's attorneys had refused to permit the requested examination. It also stated that since the deposition testimony of several of the expert witnesses indicated that there was no evidence of a physiological cause of Thynne's pain, and the pain might be due to emotional factors, such an examination was necessary to determine the nature and extent of Thynne's injuries.
Our review of the denial of the city's motion begins with the observation that the granting or denying of a motion to compel a physical or mental examination of a party is grounded in the sound discretion of the trial court. Absent an abuse of that discretion, the trial court's ruling must stand. Hoegerl v. Burt, 215 Neb. 752, 340 N.W.2d 428 (1983); Moninger v. Moninger, 202 Neb. 494, 276 N.W.2d 100 (1979).
There is no argument that Thynne's mental condition was in controversy. Several physicians, including some of those personally retained by Thynne, could not point to an objective physiological cause of Thynne's continuing pain. Some of these physicians thought there might be an emotional or psychological component to Thynne's pain. Thynne argues that because of the timing of the city's motion, it should not have been granted. Thynne does not argue that her case would have been unduly prejudiced by her submission to the psychological examination 3 days before trial. Nor does she argue that the examination would have presented undue inconvenience. We think the trier of fact, the trial judge in this case, might well have been aided in his evaluation of Thynne's future pain and prospects for recovery by such an examination conducted at a point close in time to the trial. We have previously held that such an examination may, in the sound discretion of the trial judge, even be ordered during trial. Hoegerl v. Burt, supra; Ziskovsky v. Miller, 120 Neb. 255, 231 N.W. 809 (1930); O'Brien v. Sullivan, 107 Neb. 512, 186 N.W. 532 (1922). See, also, Annot., 9 A.L.R. 3d 1146 (1966).
Accordingly, we conclude that Thynne's mental condition was in controversy, good *57 cause for her psychological evaluation was shown, and the order was not sought at a time when Thynne's case would have been unfairly prejudiced or the start of the trial delayed.
Discovery rule 35 provides that a court ordered physical or mental examination must be conducted by a "physician." The question becomes whether the term physician includes a licensed clinical psychologist, a matter in which the judge overruling the motion had no prior guidance from this court. Thynne argues that a clinical psychologist does not fit into the definition of physician offered by Neb.Rev.Stat. §§ 71-1,102 et seq. (Reissue 1981), which deal with licensing. While we do not find a definition of the term physician in any of those statutes, § 71-1,102 provides that persons who publicly profess to be physicians are deemed to be engaged in the practice of medicine. Even if it be assumed from a reading of those statutes that the term physician, as used therein, means only someone who practices medicine or surgery, a question we do not decide, we believe that the statutes constituting the Nebraska Evidence Rules, Neb.Rev.Stat. §§ 27-101 et seq. (Reissue 1979), provide better guidance.
Section 27-504(1)(b) defines physician, for the purpose of determining when a physician-patient privilege obtains, as including a practicing clinical psychologist who is licensed or certified as such. It seems to us that if the services rendered by a psychologist are of a nature as to give rise to a physician-patient privilege, it follows that a party in a lawsuit which presents a controversy as to a condition which psychologists investigate or treat ought to be able to employ the services of such practitioners.
Our review of the case law in this relatively untilled legal field discovers only one jurisdiction which has reported cases of any relevance. In Reuter v. Superior Ct., Cty. of San Diego, 93 Cal. App. 3d 332, 155 Cal. Rptr. 525 (1979), the question was whether a trial court abused its discretion by ordering that a mother and son, seeking recovery for the wrongful death of their husband and father, submit to psychological tests to be administered by a psychologist. The California court held that a psychologist was not a physician. It reached that conclusion because the order was based upon a statutory discovery provision which provided that such examinations be conducted by physicians and that elsewhere the California statutes define physician as "`any person holding a valid and unrevoked physician's and surgeon's certificate or certificate to practice medicine and surgery, issued by the Board of Medical Examiners....'" Id. at 338, 155 Cal.Rptr. at 529. The reviewing court found the trial court's order proper because that psychological evaluation was to be conducted by a psychologist who was working under the general direction of a psychiatrist. On the other hand, Browne v. Super. Court for Cty. of Santa Clara, 98 Cal. App. 3d 610, 159 Cal. Rptr. 669 (1979), held that an order requiring a party to submit to the physical examination of a rehabilitation expert was improperly granted because the expert was not a physician. Since these California cases are based upon a statutory scheme which contains a definition of the term physician, we do not find them persuasive.
Counsel for the city has called our attention to the unreported memorandum and order in Massey v. Manitowoc Co., 101 F.R.D. 304 (E.D.Pa.1983) (order granting examination), which concluded that a licensed psychologist can be treated as a physician for the purpose of conducting an examination under Fed.R.Civ.P. 35, the parent of our rule 35. In part that court reasoned:
It is perfectly reasonable to allow qualified psychologists to administer psychological tests once it has been determined psychological testing is appropriate in a particular case. The argument is not mere bootstrapping. Considering their required specialized training and experience, psychologists will in some instances be best qualified to administer examinations that require psychological testing. That is what they have been trained to *58 do. To require that only a medical doctor, who may or may not have received specialized training in psychiatry or psychology, be permitted to administer the tests because Rule 35 permits utilizing only a "physician," would not serve the ends of justice.
The paucity of precedent leaves us free to write upon a clean slate in regard to this issue. Webster's New Collegiate Dictionary (1974) defines the word physician as "a person skilled in the art of healing." Neb.Rev.Stat. § 71-3832 (Reissue 1981) defines clinical psychology as "that branch of psychology concerned with the assessment, diagnosis, and treatment of mental, emotional, and behavioral disorders." In order to practice as a clinical psychologist, one must either hold a doctoral degree in clinical psychology and have at least 1 year of postdoctoral clinical experience or pass an examination. Neb.Rev.Stat. § 71-3835 (Reissue 1981).
The use of the testimony of clinical psychologists has become commonplace in cases involving the best interests of children, and we find it helpful when we exercise our powers as "parens patrie" of minors, incompetents, and other legally disabled persons.
In short, we believe that clinical psychologists, although they, just as medically trained physicians, are not always successful in their treatment efforts, are skilled at and engage in the art of healing. We therefore now inscribe on our heretofore clean slate that clinical psychologists are physicians within rule 35 of the Nebraska Discovery Rules. The fact that the examination sought was to be conducted by a licensed clinical psychologist afforded the trial court no ground to deny the city's motion.
Nor do we find any merit in Thynne's suggestion that the city, having already had her examined by an orthopedist, could not require a second examination. It desired an examination by an expert trained in a discipline not within its first expert's area of expertise on a matter in issue and was entitled to pursue that line of inquiry.
Our review of the record leads us to conclude that the denial of the city's motion for an order compelling Thynne to be examined prejudiced the city's presentation of its case and was an abuse of discretion.
REVERSED AND REMANDED FOR A NEW TRIAL ON THE ISSUE OF DAMAGES. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578365/ | 351 N.W.2d 67 (1984)
217 Neb. 740
STATE of Nebraska, Appellee,
v.
Gerold D. CHRISTIANSEN, Appellant.
No. 83-800.
Supreme Court of Nebraska.
June 22, 1984.
*68 Joseph J. Vance, Omaha, for appellant.
Paul L. Douglas, Atty. Gen., and Linda L. Willard, Lincoln, for appellee.
KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, SHANAHAN, and GRANT, JJ.
PER CURIAM.
In his sole assignment of error defendant-appellant, Gerold D. Christiansen, challenges the sufficiency of the evidence to support his conviction of third offense drunk driving. While we reject that assignment and affirm the conviction, we must, on the basis of plain error not assigned, vacate the sentence and reverse and remand the cause for further proceedings.
In the early morning hours of February 13, 1983, an Omaha police officer was driving his cruiser southbound on Interstate 480 approaching the Leavenworth Street freeway entrance ramp. The officer noticed a vehicle on the ramp entering the freeway, the driver apply the brakes upon entering the traffic flow, proceed for a half block in the right-hand lane, and then, without signaling its intention, swerve into the center lane, nearly colliding with the officer. The officer turned on his overhead lights to stop the vehicle, and as the vehicle was being stopped, watched a woman climb from the rear seat and take the driver's position in the car.
Christiansen, whom the police officer testified he saw operating the vehicle at the time of the near collision, was given field sobriety tests and transported to the police station, where a breath test revealed a .197 percent alcohol content.
Christiansen was charged with negligent driving, "fourth" offense driving while intoxicated, and improper display of plates. During a bench trial before a judge of the Omaha Municipal Court, Christiansen and the three other persons riding in his vehicle testified that he was not driving the vehicle at any time during the encounter with the police officer.
The municipal court judge found Christiansen guilty of driving while intoxicated, and also found that he had been convicted on at least two prior occasions of drunk driving when represented by counsel.
Christiansen attacks the sufficiency of the evidence with the lone contention that his testimony and that of the three passengers in the automobile, that he was not driving the vehicle when it nearly collided with the police officer, created a reasonable doubt as to his guilt. The three persons testifying were his wife, his niece, and the niece's husband. The police officer specifically testified that Christiansen was operating the vehicle and that he saw Christiansen's niece climb from the back *69 seat and place herself behind the steering wheel.
In determining the sufficiency of evidence to sustain a criminal conviction, this court does not resolve conflicts in the evidence, pass upon the credibility of witnesses, determine the plausibility of explanations, or weigh the evidence, and a verdict rendered thereon must be sustained if, taking the view of such evidence most favorable to the State, there is sufficient evidence to support it.
State v. Miner, 216 Neb. 309, 313, 343 N.W.2d 899, 902 (1984).
Taking the view of the evidence most favorable to the State, there is sufficient evidence to support the trial court's finding that Christiansen was operating the motor vehicle.
We now move on to the matter of plain error, which we can, at our option, note. Neb.Rev.Stat. § 25-1919 (Reissue 1979); State v. Ellis, 216 Neb. 699, 345 N.W.2d 323 (1984); Neb.Ct.R. 9D(1)d (Rev.1983).
At the sentencing hearing the following dialogue took place:
[Judge]:
All right. This is a third conviction, Mr. Christiansen, and they, obviously, proposed, the Probation Office, are very extensive, the conditions of probation. And they are outlined in this order. You understand, as I told you, when you appeared before the Court originally, that you were facing a mandatory 90 days in the County Jail, and a $500.00 fine, and a lifetime suspension of your driving privilege. You had a lot of chances. You keep coming back, Gerald [sic], but my understanding is that the Probation Officer, Mr. Cassler, in this case, feels that you do have the possibility, and hopefully, the attitude to comply with the probation and do what you are supposed to. This is your last shot, you understand that. If you don't follow this, the Court will not hesitate to violate you, and take your license, and I can put you in jail for six months, you understand that. So, this is your break, and I realize, you know, it's not easy, but you are going to have to go through all these restrictions and follow them to the letter. In the long run, Gerald [sic], it's a penalty to you, but it's for your benefit, but if you can try to get this whipped because if you don't, eventually you are going to kill someone. And then you are going to end up in the penitentiary, or you are going to kill yourself. You understand that, don't you?
Mr. Christiansen:
Yeah, I do.
[Judge]:
All right. Well, as I said, the conditions required by law, you have to serve mandatory seven days in County Jail. And what we've done, is, the Defendant is sentenced to 90 days in the Douglas County Jail, to be served 30 days to be served at the time of sentencing, which is now. You will have to serve the 30, and the 60 days will be on a show cause basis, to handle your probation and do what you are supposed to be doing. Then, that will take care of that, and your driving privilege, of course, as required by law, is suspended for at least one year, and you are going to be placed on probation for a period of three years. Now, if you agree to those conditions, you should sign it at the bottom where it says, "Defendant."
[Christiansen's trial attorney]:
Would you set an appeal bond, Your Honor?
[Judge]:
Oh, sure, well, I'll just sentence him, and we won't have to place him on probation, because that way, okay, what I will do, then, is sentence you to a $500.00 fine. You were so courteous, Joe, you should have said that in the first place, and I wouldn't have had to gone through all that, 90 days in County Jail, and lifetime suspension of driver's, driving privilege.
....
[Judge]:
*70 Okay. All right, that will be the order, then, 90 days in the County Jail, $500.00 fine, and lifetime suspension. I'll set the appeal bond at $300.00.
[Christiansen's trial attorney]:
I wonder, could you make it $200.00, Judge. He showed up here.
[Judge]:
$200.00.
Once the municipal court judge had placed Christiansen on probation, as we find he did by his pronouncement, the effort to sentence him otherwise was a nullity.
In State v. Snider, 197 Neb. 317, 248 N.W.2d 342 (1977), the defendant was sentenced, upon violation of his probation, to a term of 1 to 2 years' imprisonment, with credit for time spent in jail awaiting the sentencing hearing. On his way out of the courtroom the defendant slammed a door. The judge, obviously unhappy with such conduct, called the defendant back and resentenced him to a term of 1 to 2 years without jail credit. We held the latter sentence ineffectual, and stated: "The rule is that a sentence validly imposed takes effect from the time it is pronounced and that a subsequent sentence fixing a different term is a nullity." Id. at 319, 248 N.W.2d at 343. See, also, State v. Kinney, 217 Neb. 701, 350 N.W.2d 552 (1984); State v. Sliva, 208 Neb. 647, 305 N.W.2d 10 (1981); State v. Cousins, 208 Neb. 245, 302 N.W.2d 731 (1981).
Accordingly, the judgment of conviction is affirmed and the matter remanded to the district court with directions to remand the cause to the municipal court for further proceedings consistent with this opinion.
AFFIRMED IN PART, AND IN PART REVERSED AND REMANDED WITH DIRECTIONS.
CAPORALE, J., participating on briefs. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919877/ | 91 B.R. 730 (1988)
In re Herman Neil YOUNG, Debtor.
Civ. A. No. 88-2460.
United States District Court, E.D. Louisiana.
August 30, 1988.
Thomas E. Schafer, III, New Orleans, La., for plaintiff.
David V. Adler, Trustee, Metairie, La., for respondent.
MEMORANDUM OPINION
MENTZ, District Judge.
The bankrupt in this matter desires to convert his Chapter 7 proceeding into a Chapter 13 proceeding. This application was filed on May 22, 1987 and at the same time an amended schedule of debts and a Chapter 13 plan was filed. The bankruptcy judge found that the realignment of debts placed twenty-three creditors on Schedule A-3 reflecting that their debts were unsecured. Three creditors, American Construction Company, Corsair Construction Company, and Schrader & Young, Inc., were granted a relief from the automatic stay of Section 362 of the Bankruptcy Code on July 30, 1987 in order that they might be entitled to proceed in state court for the purpose of liquidation of their respective claims.
Section 706(a) of the Bankruptcy Code provides that the debtor in a Chapter 7 proceeding may convert his case to Chapter 13 at any time. Section 109(e) of the Bankruptcy Code provides the eligibility requirements of an individual to file a Chapter 13 proceeding as follows:
Only an individual with regular income that owes, on the date of the filing of the petition, non-contingent, liquidated, unsecured debts of less than $100,000.00 and non-contingent, liquidated, secured debts of less than $350,000.00, or an individual with regular income and such individual's spouse, except a stockbroker, or a commodity broker, that owe, on the date of the filing of the petition, non-contingent, liquidated, unsecured debts that aggregate less than $100,000.00 and non-contingent, liquidated, secured debts of less than $350,000.00, may be a debtor under Chapter 13 of this title.
The Court notes that the eligibility requirement refers to debts as of "the date of the filing of the petition."
*731 The bankruptcy court ordered a hearing to determine the nature of the bankruptcy debts in order to establish that the debtor met the eligibility requirements of Section 109(e). The Court found that the debtor failed to offer any proof or introduce any evidence regarding the nature of the debts and for this reason found the debtor not eligible to convert to Chapter 13.
However, the Court had permitted the bankrupt to file an amended schedule of debts at the time the Chapter 13 plan was offered. This Court is of the opinion that the bankruptcy judge should have permitted the conversion to Chapter 13 on the basis of the record as it stood, having permitted the amended schedule to be filed.
The revised schedule filed with the motion to convert reflected secured debts of $53,439.82 and unsecured debts of $43,044.00 which is clearly within the perimeters of Section 109(e).
Accordingly, the Court will permit the debtor to convert to Chapter 13. The Court notes that the response filed by David Adler, trustee, for the bankrupt recites as follows:
Although the claims which are intended to be allowed are less than $100,000.00, other claims exist which, if they had been filed timely, would be allowed. The net sum would then exceed $100,000.00.
At a hearing held in this office, the trustee indicated that his opposition at most was nominal and that he did not ask his attorney to be present for this reason.
At the hearing the parties also discussed the possible sale of the annuity, which is being paid to the estate in monthly payments, and which could possibly result in the payment of all creditors.
Accordingly,
IT IS ORDERED that the annuity not be paid or redeemed without the specific permission of the bankruptcy judge.
IT IS FURTHER ORDERED that the debtor be authorized to convert his Chapter 7 proceeding into a Chapter 13 proceeding. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1581590/ | 42 So.3d 803 (2010)
J.O., a juvenile, Appellant,
v.
The STATE of Florida, Appellee.
No. 3D08-3119.
District Court of Appeal of Florida, Third District.
March 24, 2010.
Rehearing Denied April 29, 2010.
Carlos J. Martinez, Public Defender, Maria E. Lauredo and Michael T. Davis, Assistant Public Defenders, for appellant.
Bill McCollum, Attorney General, Nikole Hiciano, Assistant Attorney General, for appellee.
Before GERSTEN, SHEPHERD, and LAGOA, JJ.
SHEPHERD, J.
J.O., a juvenile, appeals an adjudication of guilt of the crime of grand theft. Because this crime was not charged in the *804 petition filed against him, we reverse the adjudication.
This case arises out of the theft of a motor scooter. On March 5, 2008, the victim, Joe Weatherby, reported his scooter stolen from his home in Key West, Florida. About two-and-one-half-months later, Officer Keohane of the Key West Police Department saw a juvenile driving the scooter. The juvenile told the officer he had borrowed the scooter from J.O.
Officer Keohane went to J.O.'s house and questioned him. J.O. confirmed he lent the scooter to the juvenile, and explained he had purchased it from an individual named Danny for $1200. Weatherby testified that after the scooter was returned to him, J.O. went to Weatherby's house and told him his brother had stolen the scooter. J.O. then asked permission to retrieve his baseball cap and computer discs left inside the scooter seat. Officer Keohane admitted there was no evidence suggesting J.O. ever intended to sell the scooter, or that J.O. did anything with the scooter other than possess it and loan it to a friend.
J.O. was charged with "traffic[king] in, or endeavor[ing] to traffic in, a scooter, which was property [of] Joe Weatherby, [which J.O.] knew or should have known was stolen, contrary to Florida Statute 812.019(1)." The trial court concluded the evidence was insufficient to establish J.O. trafficked in stolen property. However, the court proceeded to find him guilty of grand theft, a category two lesser-included offense of trafficking, which was not charged in the petition. In so doing, the court reversibly erred.
A conviction based upon a category two lesser-included offense is sustainable over a proper objection[1] only if: (1) the charging document includes all of the elements of the lesser; and (2) the evidence admitted would support a conviction on the lesser. See Brown v. State, 206 So.2d 377, 383 (Fla.1968); Pittman v. State, 22 So.3d 859 (Fla. 3d DCA 2009); see also Neals v. State, 962 So.2d 926, 928 (Fla. 4th DCA 2007) (finding no merit in defendant's assertion that trial judge reversibly erred in refusing to charge jury on the offense of theft under section 812.014, where information only charged defendant with trafficking under section 812.019(1) because "the elements of [theft] were not included within the charging document") (citing Moore v. State, 932 So.2d 524, 527 (Fla. 4th DCA 2006)). In this case, although it is arguable that the second of this two-pronged test is met, the first is not.
The statute under which J.O. was charged, § 812.09(1), Fla. Stat. (2008), states that "[a]ny person who traffics in, or endeavors to traffic in, property that he or she knows was stolen shall be guilty of a felony of the second degree, punishable as provided in ss. 775.082, 775.083, and 775.084." As used in this section, "traffic" means:
(a) To sell, transfer, distribute, dispense, or otherwise dispose of property, or
(b) To buy, receive, possess, obtain control of, or use property with the intent to sell, transfer, distribute, dispense, or otherwise dispose of such property.
§ 812.012(8).
The theft statute, set forth in section 812.014, provides, in relevant part:
*805 (1) A person commits theft if he or she knowingly obtains or uses, or endeavors to obtain or use, the property of another with the intent to, either temporarily or permanently:
(a) Deprive the other person of a right to the property or a benefit from the property, or
(b) Appropriate the property to his or her own use or to the use of any person not entitled to the use of the property.
§ 812.014(1), Fla. Stat. (2008) (emphasis added).
A careful review of the charging petition in this case reveals the State generally alleged a violation of the trafficking statute, without specifically setting forth any of the aforementioned elements of the offense. Thus, the petition naturally fails to set forth the elements substantiating a lesser charge of grand theft, and the crime therefore fails as a permissible lesser-included offense in this circumstance. See Townsley v. State, 443 So.2d 1072, 1073 (Fla. 1st DCA 1984) (holding "evidence was sufficient to create an inference that appellant was guilty of theft ... however appellant was not charged with theft under section 812.014, but instead was charged under section 812.019 with dealing in stolen property").
As we have reaffirmed recently, no principle of procedural due process is more clearly established than notice of the specific charge and the opportunity to be heard in trial on the issues raised by that charge, if desired. See Pittman v. State, 22 So.3d 859, 861 (Fla. 3d DCA 2009) (citing Ray v. State, 403 So.2d 956 (Fla. 1981)). These are among the constitutional rights of everyone accused in a criminal proceeding in all courts, state or federal. Pittman, 22 So.3d at 861. The order of the trial court adjudicating the defendant delinquent on the offense of grand theft in this case violates that basic principle.
Reversed.
NOTES
[1] The objection made in this case during the defendant's motion for judgment of acquittal was that "the State charged J.O. with the wrong statute." We find this argument sufficient to put the trial judge on notice he was departing from legal principle. See § 924.05(1)(b), Fla. Stat. (2008). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/4558408/ | Fourth Court of Appeals
San Antonio, Texas
August 19, 2020
No. 04-20-00291-CR
Neil Howard MCGINNIS,
Appellant
v.
The STATE of Texas,
Appellee
From the 451st Judicial District Court, Kendall County, Texas
Trial Court No. 6776
Honorable Kirsten Cohoon, Judge Presiding
ORDER
On August 10, 2020, we advised the court reporter that the records were late. On August
17, 2020, court reporter Connie Calvert advised this court that counsel has not asked her to
prepare the reporter’s records.
We ORDER Appellant to provide written proof to this court within TEN DAYS of the
date of this order that (1) Appellant has delivered a written request to prepare the reporter’s
records to court reporter Connie Calvert that designates any exhibits to be included, see TEX. R.
APP. P. 34.6(b), and (2) either the arrangements have been made to pay the reporter’s fee, or
Appellant is entitled to free reporter’s records, see TEX. R. APP. P. 20.2.
If Appellant fails to respond as ordered, Appellant’s briefs will be due within THIRTY
DAYS of the date of this order, and the court will only consider those issues or points raised in
Appellant’s briefs that do not require a reporter’s record for a decision. See TEX. R. APP. P.
37.3(c).
_________________________________
Patricia O. Alvarez, Justice
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said
court on this 19th day of August, 2020.
___________________________________
Michael A. Cruz,
Clerk of Court | 01-03-2023 | 08-25-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/1578383/ | 12 So. 3d 357 (2009)
Victoria DIXON Individually and o/b/o The Minors and Barbara Jackson
v.
DIRECT GENERAL INSURANCE COMPANY OF LOUISIANA.
No. 2008 CA 0907.
Court of Appeal of Louisiana, First Circuit.
March 27, 2009.
*358 Christopher L. Whittington, Randolph A. Piedrahita, Baton Rouge, LA, for Plaintiffs/Appellants, Victoria Dixon, individually and on behalf of the minors LaSadie Dixon and Steven Dixon, and Barbara Jackson.
Kimberly R. Louper, Matthew W. Bailey, Baton Rouge, LA, for Defendant/Appellee, Direct General Insurance of Louisiana.
Before KUHN, GUIDRY, GAIDRY, McDONALD, and HUGHES, JJ.
KUHN, J.
This appeal presents the issue of whether an uninsured/underinsured motorist ("UM") bodily injury coverage waiver form is invalid simply because it does not *359 bear the name of the insurer. Where the pertinent designated spaces on the UM form are filled out and the requirements of Duncan v. U.S.A.A. Ins. Co., 06-363 (La.11/29/06), 950 So. 2d 544, are met, the absence of the insurance company's name from the form does not render it invalid, despite the language of Louisiana Insurance Rating Commission ("LIRC") Bulletin 98-01. Thus, we affirm the trial court's judgment that granted the defendant-insurer's motion for summary judgment and denied the plaintiffs' motion for summary judgment, dismissing plaintiffs' claims with prejudice.
I. FACTUAL AND PROCEDURAL HISTORY
On November 21, 2007, plaintiffs, Barbara Jackson and Victoria Dixon, individually and on behalf of her minor children, LaSadie Dixon and Steven Dixon, filed a petition for damages against defendant, Direct General Insurance Company of Louisiana ("Direct General"). The petition alleged that on February 9, 2007, while Ms Dixon's vehicle was stopped at an intersection, it was rear-ended by another vehicle, which was driven by Demecca Johnson. Ms. Dixon's children and Ms. Jackson were passengers in Ms. Dixon's car, and the petition asserts that all four sustained injury resulting from the accident.
According to the petition, Allstate Insurance Company, Ms. Johnson's insurer, paid its policy limits to plaintiffs. Plaintiffs further averred that Direct General provided UM coverage on the vehicle driven by Ms. Dixon and plaintiffs' damages exceeded the underlying amount of coverage. Accordingly, they sought a judgment against Direct General in their favor.
Direct General answered the petition, generally denying liability on the basis that Ms. Dixon "properly and legally rejected uninsured motorist coverage, and therefore, did not have any uninsured or underinsured motorist coverage in effect at the time of the accident sued upon." Thereafter, Direct General filed a motion for summary judgment, seeking the dismissal of plaintiffs' claims on the basis that Ms. Dixon had rejected UM coverage in conjunction with her application for liability coverage with Direct General. Plaintiffs, in turn, filed a cross motion for summary judgment, seeking a declaration that Direct General's policy afforded UM coverage in an amount equal to the liability limits of the policy.
Following a hearing, the trial court found the UM form established a valid waiver of UM coverage and granted Direct General's motion for summary judgment. The judgment further denied plaintiffs' motion for summary judgment and dismissed plaintiffs' claims with prejudice at plaintiffs' costs. Plaintiffs have appealed, urging the UM form signed by Ms. Dixon "did not comply with the requirements of La. R.S. 22:680(1)(a)(i) and LIRC 98-01 and is therefore invalid," because it failed to identify Direct General as the insurance company.[1]
II. ANALYSIS
When an appellate court reviews a trial court judgment on a motion for summary judgment, it applies the de novo standard of review, "using the same criteria that govern the trial court's consideration *360 of whether summary judgment is appropriate, i.e., whether there is a genuine issue of material fact and whether the mover is entitled to judgment as a matter of law." Gray v. American Nat'l Property & Cos. Co., 07-1670, p. 6 (La.2/26/08), 977 So. 2d 839, 844, see La. C.C.P. art. 966(B). In reviewing this judgment, we must apply the burden of proof imposed upon a movant in a motion for summary judgment, which is set forth as follows in La. C.C.P. art. 966(C)(2):
The burden of proof remains with the movant. However, if the movant will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the movant's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Thereafter, if the adverse party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact.
When a case involves cross motions for summary judgment, the court should determine whether either party has established there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Id. The issue of whether an insurance policy, as a matter of law, provides or precludes coverage is a dispute that can be resolved properly within the framework of a motion for summary judgment. Green v. State Farm Mut. Auto. Ins. Co., 07-0094, p. 3 (La.App. 1st Cir.11/2/07), 978 So. 2d 912, 914, writ denied, 08-0074 (La.3/7/08), 977 So. 2d 917.
Under the UM coverage statute, La. R.S. 22:1295, the requirement of UM coverage is an implied amendment to any automobile liability policy, even when not expressly addressed, as UM coverage will be read into the policy unless validly rejected.[2]See Duncan, 06-363 at p. 4, 950 So.2d at 547. UM coverage embodies a strong public policy. Id. The object of UM *361 coverage is to provide full recovery for automobile accident victims who suffer damages caused by a tortfeasor, who is not covered by adequate liability insurance. Id. UM rejection "shall be made only on a form prescribed by the commissioner of insurance." La. R.S. 22:1295(1)(a)(ii). This statute provides, in part, that "[a] properly completed and signed form creates a rebuttable presumption that the insured knowingly rejected coverage, selected a lower limit, or selected economic-only coverage." Id.
The UM coverage statute is to be liberally construed. Duncan, 06-363 at p. 4, 950 So.2d at 547. Accordingly, the insurer bears the burden of proving any insured named in the policy rejected in writing the coverage equal to bodily injury coverage or selected lower limits. Id., 06-363 at p. 5, 950 So.2d at 547. Ultimately, a determination of whether Direct General was entitled to summary judgment depends on whether it carried its burden of producing factual support sufficient to establish that it would be able to satisfy its evidentiary burden of proof at trial, i.e., by producing a valid UM coverage form by which the named insured under the policy, Ms. Dixon, rejected such coverage.
On December 2, 2006, Ms. Dixon completed an application for automobile liability insurance with Direct General. Included in the application was a form entitled, "Uninsured/Underinsured Motorist Bodily Injury Coverage Form." The parties do not dispute that Ms. Dixon signed this form after initialing the selection that indicated she did not want UM bodily injury coverage.[3] Plaintiffs contend however, that the form is invalid because it does not fully comply with Bulletin 98-01 in that it fails to name the insurer.
By 1997 La. Acts, No. 1476, § 3, the Louisiana Legislature amended La. R.S. 22:1406 D(1)(a),[4] to mandate that the rejection, selection of lower limits, or selection of economic-only UM coverage be made only on a form prescribed by the commissioner of insurance. In response to the legislature's mandate in Act 1476, the commissioner of insurance issued Bulletin 98-01. In the section of Bulletin 98-01 entitled, "UNINSURED/UNDERINSURED MOTORIST BODILY INJURY COVERAGE FORM," it states "[w]ith this Bulletin[,] the LIRC distributes the form prescribed by the Commissioner of Insurance for the selection of lower coverage limits, selection of economic-only coverage, or rejection of uninsured and underinsured motorist coverage." Bulletin 98-01 further states:
The prescribed UM Form is required by law to be used with all automobile insurance policies delivered or issued for delivery in Louisiana. For identification purposes, the company name must be placed at the lower left-hand corner and the policy number at the lower right-hand corner of the Form.
[Emphasis in original.]
The court in Duncan examined the UM form prescribed by the commissioner of insurance and found that it outlined six tasks:
(1) initialing the selection or rejection of coverage chosen; (2) if limits lower than *362 the policy limits are chosen (available in options 2 and 4), then filling in the amount of coverage selected for each person and each accident; (3) printing the name of the named insured or legal representative; (4) signing the name of the named insured or legal representative; (5) filling in the policy number; and (6) filling in the date.
Duncan, 06-363 at 11-12, 950 So.2d at 551. Because the form completed by the insured in Duncan did not include a policy number, the court found the form was invalid. Duncan, 06-363 at 14-15, 950 So.2d at 553.[5]
In the present matter, it is undisputed that the six tasks outlined by the Duncan court for a valid UM waiver are met. We conclude the absence of the insurance company's name in the lower-left hand corner of the form does not negate the form's effectiveness, despite the language of LIRC Bulletin 98-01. Because the Duncan requirements have been met, the UM form is valid. Gingles v. Dardenne, 08-2995, p. 1 (La.3/13/09), 4 So. 2d 799 (per curiam), wherein the Supreme Court addressed the issue presented herein; i.e., is a UM rejection form that lacks the insurance company's name "properly completed" as required by La. R.S. 22:1295(l)(a)(ii)?[6] Finding that "the pertinent designated spaces on the form were filled out," and the six Duncan requirements for a compliant UM rejection form were satisfied, the court granted summary judgment in favor of the insurer.
Because the waiver form in the instant case meets the requirements of La. R.S. 22:1295, bears the proper form proscribed by the Louisiana Commissioner of Insurance, meets all of the requirements of Duncan, and as such, contains all essential information to accurately identify the applicable policy at issue, it is valid and enforceable. Requiring the UM form to bear the name of the insurance company where there is no uncertainty regarding the policy to which the form pertains would be a hyper-technical, absurd result. See Harper v. Direct General Ins. Co., 08-2874, p. 2 (La.2/13/09), 2 So. 2d 418. The purpose of requiring the UM waiver to be clear and unmistakable is to establish that the insured knowingly waived coverage under a particular policy. In this case, we find the form executed by plaintiff herein complies with the formal requirements of law in that there is a clear rejection of UM coverage, the form is signed and dated, and it contains the policy number and the name of the insured.
Accordingly, by submitting the applicable UM form in support of its motion for summary judgment, Direct General produced factual support sufficient to establish that it would be able to satisfy its evidentiary burden of proof at trial, i.e., that Ms. Dixon rejected UM coverage by initialing and signing the UM form, indicating she did not want UM coverage. At that point, the burden shifted to plaintiffs to rebut the presumption that Ms. Dixon knowingly rejected UM coverage. Because plaintiffs presented no evidence to *363 counter the valid UM coverage form, we conclude, as the trial court did, that there are no genuine issues of material fact, and that Direct General is entitled to judgment as a matter of law.
III. CONCLUSION
For these reasons, we affirm the trial court's judgment. Plaintiffs, Barbara Jackson and Victoria Dixon, are each assessed with one-half of the appeal costs.
AFFIRMED.
GAIDRY, J. concurs with reasons.
GUIDRY, J. concur.
GAIDRY, J., concurring.
I respectfully concur in the result reached by the majority, as we are bound by the supreme court's holding in the recent case of Gingles v. Dardenne, 08-2995 (La.3/13/09), 4 So. 2d 799. But I must express my disagreement with the rationale utilized by the supreme court. In Duncan v. U.S.A.A. Ins. Co., 06-363 (La.11/29/06), 950 So. 2d 544, the supreme court reviewed the form prescribed by the commissioner of insurance for selection of UM coverage alternatives, noting that the bulletin prescribing the form specifically stated that "the company name must be placed at the lower left-hand corner and the policy number at the lower right-hand corner of the Form." I fail to see the logical distinction in result between an insurer's failure to "fill in" or place a policy number in the designated location (Duncan) and an insurer's failure to place its company name in the designated location (Gingles). Both tasks are plainly required by the commissioner's bulletin and form, although the latter was not mentioned in Duncan.
NOTES
[1] Pursuant to La. Acts 2008, No. 415, effective January 1, 2009, the current provisions of Title 22 of the Louisiana Revised Statutes of 1950 were redesignated into a new format and number scheme without changing the substance of the provisions. Pursuant to this redesignation, La. R.S. 22:680 was renumbered and the UM coverage statute is now codified in La. R.S. 22:1295(1)(a).
[2] La. R.S. 22:1295(1)(a), provides, in pertinent part:
(i) No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle designed for use on public highways and required to be registered in this state or as provided in this Section unless coverage is provided therein or supplemental thereto, in not less than the limits of bodily injury liability provided by the policy, under provisions filed with and approved by the commissioner of insurance, for the protection of persons insured thereunder who are legally entitled to recover nonpunitive damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, sickness, or disease, including death resulting therefrom; however, the coverage required under this Section is not applicable when any insured named in the policy either rejects coverage, selects lower limits, or selects economic-only coverage, in the manner provided in Item (1)(a)(ii) of this Section. . . .
(ii) Such rejection, selection of lower limits, or selection of economic-only coverage shall be made only on a form prescribed by the commissioner of insurance. The prescribed form shall be provided by the insurer and signed by the named insured or his legal representative. The form signed by the named insured or his legal representative which initially rejects such coverage, selects lower limits, or selects economic-only coverage shall be conclusively presumed to become a part of the policy or contract when issued and delivered, irrespective of whether physically attached thereto. A properly completed and signed form creates a rebuttable presumption that the insured knowingly rejected coverage, selected a lower limit, or selected economic-only coverage. . . .
[3] Ms. Dixon's initials are placed on the form adjacent to the following language:
I do not want UMBI Coverage. I understand that I will not be compensated through UMBI coverage for losses arising from an accident caused by an uninsured/underinsured motorist.
[4] Louisiana Revised Statute 22:1406 D was redesignated as La. R.S. 22:680 by Acts 2003, No. 456, § 3. La. R.S. 22:680 has since been renumbered and is now set forth in La. R.S. 22:1295, See fn. 1, supra.
[5] We note, however, that since Duncan was decided, the supreme court has recognized that the omission of the policy number does not invalidate a UM waiver form if the policy number does not exist at the time the form is completed. Carter v. State Farm Mut. Auto. Ins. Co., 07-1294 (La. 10/5/07), 964 So. 2d 375. In Gray, the court stated that in a case where the policy number is not available, only five "tasks" would be necessary for a valid UM selection form. Gray, 07-1670 at p. 11 n. 2, 977 So.2d at 847 n. 2.
[6] We note that the Gingles decision references 22:608(1)(a)(ii), without referencing its redesignation as La. R.S. 22:1295(1)(a)(ii), pursuant to La. Acts 2008, No. 415, effective January 1, 2009. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578381/ | 351 N.W.2d 654 (1984)
STATE of Minnesota, Respondent,
v.
Norman HAYES, Appellant.
No. C6-84-75.
Court of Appeals of Minnesota.
July 10, 1984.
Review Denied September 12, 1984.
*655 Hubert H. Humphrey, III, Atty. Gen., State of Minn., Paul R. Kempainen, Sp. Asst. Atty. Gen., St. Paul, Stephen C. Rathke, Crow Wing County Atty., Brainerd, for respondent.
C. Paul Jones, Minn. State Public Defender, Mark F. Anderson, Asst. State Public Defender, University of Minn., Minneapolis, for appellant.
Considered and decided by POPOVICH, C.J., NIERENGARTEN and RANDALL, JJ., with oral argument waived.
OPINION
POPOVICH, Chief Judge.
Appellant's convictions for three counts of burglary, furnishing liquor to a minor and contributing to the delinquency of a minor were based, in large part, on the testimony of the fellow participants. On appeal, he contends these individuals were accomplices and their testimony was insufficiently corroborated to sustain his convictions. We disagree and affirm.
FACTS
On April 20, 1983, appellant, age 28, was "driving around" near Crosby, Minnesota with Dwayne Mattson, age 18. They picked up John Crimmins, age 17, and Laurissa and Virginia DeBord, ages 17 and 16 respectively. They were all drinking beer which appellant and Mattson had purchased. About 11:00 p.m. appellant picked up John Pettit and Dean Crimmins, ages 17 and 16 respectively.
Appellant then bought gas near his home on Island Lake. At that time, he and Mattson apparently discussed burglarizing some cabins. Appellant drove the car to a pump house on Island Lake, a glass window was broken and several items including an outboard motor, television, stereo, tackle boxes, and tools were stolen. Appellant then drove to a remote area about one-half mile from his home and while the young women remained in the car, the others broke into two summer cabins. Stolen property was placed in appellant's trunk and in the back seat of the car where the young women were seated. Appellant then drove everyone to his home. They all assisted in transferring the stolen property from the car to appellant's white Ford pickup truck and returned to the cabins.
Appellant backed his truck into the sandy driveway, leaving distinct tire tracks. The young women remained in the truck while appellant and the boys loaded additional stolen property into the truck. After everyone reentered the truck, appellant drove to a friend's home in Crosby to borrow some gas money.
Appellant drove the group to the Twin Cities area where he attempted to sell some of the property. The following day the *656 group got back in the truck and headed home. Appellant stopped at a relative's home near Princeton to store the remaining stolen property. By the late evening or early morning hours of April 21-22, appellant dropped everyone at their respective homes.
At the court trial the six other participants testified. Three of the juveniles, John Pettit and the two Crimmins, were adjudicated delinquent as a result of their participation. Appellant was convicted of three counts of burglary, one count of furnishing liquor to a minor and one count of contributing to the delinquency of a minor. His concurrent sentence was 21, 25 and 32 months for the burglary convictions, one year for furnishing liquor to a minor and 90 days for contributing to the delinquency of a minor.
ISSUE
Was the accomplice testimony sufficiently corroborated to justify appellant's convictions?
ANALYSIS
Appellant contends the testimony of his accomplices was insufficiently corroborated to sustain his convictions. Minn.Stat. § 634.04 (1982) provides:
A conviction cannot be had upon the testimony of an accomplice, unless it is corroborated by such other evidence as tends to convict the defendant of the commission of the offense, and the corroboration is not sufficient if it merely shows the commission of the offense or the circumstances thereof.
1. An accomplice is one who has been or could be convicted of the same offense as the accused. State v. Jones, 347 N.W.2d 796 at 800 (Minn.1984); In the Matter of the Welfare of D.M.K., 343 N.W.2d 863, 866 (Minn.Ct.App.1984). The state concedes the men with appellant were accomplices. The critical issue is whether the two young women were accomplices. The evidence is clear, the young women were present during the burglaries, i.e. in the car and subsequently in the truck, and they actively assisted in transferring stolen property from appellant's car to his pickup truck. Appellant contends they would be liable under Minn.Stat. § 609.05, subd. 1 (1982), for intentionally aiding, advising, hiring counseling or conspiring with or otherwise procuring another to commit the crime.
We agree with appellant; the young women's participation rose to the level of active conduct needed to satisfy Minn.Stat. § 609.05, subd. 1. "Presence, companionship and conduct before and after the offense are circumstances from which a person's participation may be inferred." D.M.K., 343 N.W.2d at 867. The young women were present and knew what was transpiring. This is not a case where they merely received stolen goods and were not accomplices to the theft. See State v. Swyningan, 304 Minn. 552, 229 N.W.2d 29 (1975). Their conduct shows "a high level of activity on the part of an aider and abetter in the form of conduct that encourages another to act." State v. Ulvinen, 313 N.W.2d 425, 428 (Minn.1981). See D.M.K., 343 N.W.2d at 867-68. See also State v. Garretson, 293 N.W.2d 44 (Minn. 1980); State v. Parker, 282 Minn. 343, 164 N.W.2d 633 (1969). The evidence shows the young women could have been convicted of burglary.
2. In reviewing accomplice testimony to determine the sufficiency of corroborative evidence, we view the evidence in the light most favorable to the state. State v. Adams, 295 N.W.2d 527, 533 (Minn.1980). Corroboration need not be such as to establish a prima facie case. See Jones, at 799. It "is sufficient if it restores confidence in the accomplices testimony, confirming its truth and pointing to defendant's guilt in substantial degree." State v. Houle, 257 N.W.2d 320, 324 (Minn. 1977); see Jones, at 799. Here, there is ample corroboration: 1) investigating officers testified to the distinctive and unusual truck tire tracks in the sand driveway at the crime scene which matched appellant's tire tread. 2) The area where the burglaries *657 occurred was very remote and only one-half mile from appellant's home. This tends to corroborate the accomplices' testimony that they were unfamiliar with the area and tends to show appellant knew the area. 3) Appellant told investigating officer Deputy Rudquist that he would attempt to regain the stolen property after being told he was believed to be involved in the burglaries. This evidences a guilty mind. 4) Deputy Rudquist also testified he was later informed by appellant that appellant was unable to get the property back and implicated the Crimmins. 5) The next day John Crimmins and John Pettit returned a truckload of stolen property. 6) Deputy Rudquist's testimony corroborates John Crimmins testimony as to the series of events. 7) Testimony by three witnesses of the car being driven through yards and across lawns. We believe that appellant's convictions are supported by the evidence.
3. Appellant contends his conviction for furnishing liquor to a minor cannot stand because the persons with him were accomplices to that crime since they all admitted drinking the malt liquor furnished by appellant. Minn.Stat. § 340.73, subd. 1 (1982) provides:
It is unlawful for any person, except a licensed pharmacist to sell, give, barter, furnish, deliver, or dispose of, in any manner, either directly or indirectly, any intoxicating liquors or non-intoxicating malt liquors in any quantity, for any purpose, to any person under the age of 19 years, or to any obviously intoxicated person.
The state concedes that minors can be criminally liable under this section but contends that under an exception to accomplice liability, the minors here are not accomplices to this offense. The exception is
where the acts of several participants are declared by statute to constitute separate and distinct crimes, then the participants guilty of the crime are not accomplices of those who are guilty of separate and distinct crime.
State v. Jones, 311 Minn. 472, 473, 249 N.W.2d 893, 893 (1977). In Jones, prostitutes in a house of prostitution were held not to be accomplices of the "employer" because their conduct constituted a separate statutory offense from that of managing a place of prostitution. Id. at 473-74, 249 N.W.2d at 894.
The legislature enacted a separate provision applicable to the minors. Minn.Stat. § 340.731 (1982) provides in part:
[i]t shall be unlawful for . . . (2) a person under the age of 19 years to consume any intoxicating liquor or to purchase, attempt to purchase or have another purchase for him or her any intoxicating liquors; . . . .
The conduct of the minors here was covered by a distinct statutory provision. They were not accomplices to the crime of furnishing liquor to a minor. As such, their testimony was clearly sufficient to convict appellant of this offense.
4. Finally, appellant challenges his conviction for contributing to the delinquency of a minor. Minn.Stat. § 260.315 (1982) provides in part:
Any person who by act, word or omission encourages, causes or contributes to the neglect or delinquency of a child, . . . shall be guilty of a misdemeanor.
"The protection of the morals and general well-being of minors is obviously what the statute aims at." State v. Sobelman, 199 Minn. 232, 234, 271 N.W. 484, 485 (1937). Minors may be criminally liable under this statutory provision. Op.Att'y.Gen. 218-J-12 (1950). The state contends the two young women were not accomplices to this offense since they were never adjudicated delinquent as a result of the offenses committed. An adjudication of delinquency, however, is not required for a prosecution of contributing to the delinquency of a minor. 31 Op.Att'y.Gen. 91 (1958).
DECISION
There is sufficient independent evidence corroborating the accomplices' testimony. The appellant's convictions for burglary, furnishing liquor to a minor, and *658 contributing to the delinquency of a minor are supported by the evidence.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919919/ | 91 B.R. 451 (1988)
In re Forrest LITTLE and Janet Little, dba Little's Farm Supply, Debtors.
Bankruptcy No. 1-85-01687.
United States Bankruptcy Court, S.D. Ohio, W.D.
September 26, 1988.
Peter J. Strauss, Cincinnati, Ohio, for debtors.
Mark Florence, Lebanon, Ohio, for PCA.
DECISION and ORDER ON OBJECTION TO PCA CLAIM
BURTON PERLMAN, Bankruptcy Judge.
Debtors filed a Chapter 11 petition under the Bankruptcy Code on July 5, 1985. What is now before us is an objection by debtors to a claim of Production Credit Association of the Fourth District ("PCA") *452 on the ground that the value of their collateral, $157,000.00, is overstated. This question first surfaced, so far as the court is concerned, at a pretrial conference on objections to claims held March 4, 1988. (Doc. # 152.)[1] Prior to the pretrial conference on March 4, 1988, debtors' Second Amended Plan had been confirmed as modified, on September 23, 1987.
Prior to entry of the order of confirmation, there had been extensive proceedings in the case. Debtors filed their initial plan of arrangement on January 22, 1986. An amended plan was filed February 21, 1986. A hearing on confirmation of the amended plan was held April 21, 1986. The plan was not confirmed, for objections of creditors persisted, and debtors were in a negotiating posture with a number of them. Debtors subsequently filed a second amended plan which was represented to the court to contain consensual agreements with the several objectors and non-acceptors, so that the plan as further amended by the agreement was now in condition for confirmation. The second amended plan was then noticed to creditors. The only objection then filed was by PCA. Debtors asked that the court consider whether the plan was fair and equitable with respect to PCA so that the plan could be confirmed without the affirmative vote of PCA, pursuant to 11 U.S.C. § 1129(b). Such a hearing was held. Thereafter, on June 18, 1987, our Decision and Order was entered. We then denied confirmation because debtors' second amended plan could not be confirmed because it failed to provide that PCA retain its liens, and also that no adjustment of the proposed deferred payments were provided in the plan. 75 B.R. 128.
In the course of that Decision and Order, we stated (at p. 2): "It was stipulated further, that the value of collateral available to PCA in the real estate mortgaged to it by debtors was $157,000.00." That is, debtors and PCA settled their dispute as to the value of PCA's collateral, and agreed to a value of $157,000.00.
Debtors then modified their second amended plan to overcome the grounds which we stated as bases for failure to confirm in our Decision and Order of June 18, 1987.
Order Confirming Second Amended Plan as Modified was then entered September 23, 1987. In that Order (p. 2) there appears a statement amending language of the second amended plan to read:
Production Credit Association is the holder of a secured claim in the principal amount of $162,678.98, secured by a note and first and second mortgages on certain land valued at $157,000.00. Said claimant will be paid $157,000.00 in annual installments of $50,000.00, commencing January 1, 1988, with installments due on the same date of each subsequent year until the $157,000.00 and the interest on the full principal amount are paid in full . . .
On June 3, 1988, we held a final pretrial conference preliminary to hearing debtors' objection to the proof of claim of PCA. In the pretrial order entered after that conference, the following appears:
Debtors believe that PCA is secured by mortgages on fewer tracts of land than PCA claims and therefore the secured claim of PCA should be reduced. The threshold legal question before us then is whether debtors are precluded from raising that question given the present posture of the case.
Counsel shall submit simultaneous memoranda by June 17, 1988 on this issue.
PCA, on June 17, 1988, filed Memorandum Objecting to Relitigation of Security. Such memorandum was directed at the merits of the objection. It did not address the threshold preclusion issue which we had requested be addressed. Debtors for their part did not file any memorandum at all as *453 required by the pretrial order. Instead, they filed Motion for Modification of Second Amended Plan of Arrangement. The ultimate issue raised in debtors' objection to claim, and also in their motion to modify, is whether PCA is secured by collateral of the value of $157,000.00. More specifically, debtors assert that they were mistaken when they entered into a settlement with PCA, for at that time they believed that a certain mortgage which they now say should have been cancelled, was valid. They assert that PCA's valid collateral is only worth $57,000.00, not the $157,000.00 to which they agreed. The filing by debtors of a motion to modify their confirmed plan does not remove the necessity that we noted in our pretrial order, whether debtors should now be precluded from raising this question.[2]
The issue as we perceive it is whether debtors may, at this time in this bankruptcy case, disavow a settlement agreement they entered into with a major creditor on the ground of a mistake of fact at the time of entering into the settlement. We hold that they are precluded from so doing. To hold otherwise would require that we wipe clean the whole slate of this Chapter 11 case beginning at least with the filing of debtors' first disclosure statement on January 22, 1986 through confirmation of their second amended plan and start the entire process again.
In debtors' first disclosure statement they informed creditors that PCA was a secured creditor, in the amount of $137,678.98. In their second amended disclosure statement filed August 25, 1986 they informed creditors that there was a dispute between debtors and PCA as to the principal amount of PCA's claim, with debtors asserting it was $138,678.98, while PCA claimed it to be $162,678.98. This dispute was settled by the parties at $157,000.00, and that settlement was reflected in our order of June 18, 1988 and expressly set out in order confirming the second amended plan. It is too late now for debtors to attempt to undo all of those events.
Fundamental in the scheme of Chapter 11 under the Bankruptcy Code is the role of the disclosure statement. One need only review 11 U.S.C. § 1125 to confirm that observation:
11 U.S.C. § 1125. Postpetition disclosure and solicitation
(a) In this section
(1) "adequate information" means information of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records, that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the plan, but adequate information need not include such information about any other possible or proposed plan; and
(2) "investor typical of holders of claims or interests of the relevant class" means investor having
(A) a claim or interest of the relevant class;
(B) such a relationship with the debtor as the holders of other claims or interests of such class generally have; and
(C) such ability to obtain such information from sources other than the disclosure required by this section as holders of claims or interests in such class generally have.
(b) An acceptance or rejection of a plan may not be solicited after the commencement of the case under this title [11 U.S.C. §§ 101 et seq.] from a holder of a claim or interest with respect to such claim or interest, unless, at the time of or before such solicitation, there is transmitted to such holder the plan or a summary of the plan, and a written disclosure statement approved, after notice and a hearing, by the court as containing *454 adequate information. The court may approve a disclosure statement without a valuation of the debtor or an appraisal of the debtor's assets.
* * * * * *
It is apparent to us that if debtors were now permitted to litigate the question of whether PCA is secured by collateral of a value only of $57,000.00 rather than $138,678.98, as debtors earlier contended, or $157,000.00 as debtors and PCA agreed, and were successful in the effort, in fairness to unsecured and other creditors, the order of confirmation would have to be vacated. In the context of this case, a reduction in the amount of secured indebtedness by an amount in the neighborhood of $80,000.00 to $100,000.00 would have a substantial impact on the willingness of other creditors to accept what was offered to them. In order to meet the statutory requirements of Chapter 11, then, creditors would have to be furnished a new disclosure statement reflecting the adjusted status of PCA. Only then could it be said that creditors had the adequate information contemplated by § 1125.
To hold otherwise would be to violate the principle that effective working of Chapter 11 demands that there be finality of orders of confirmation. In re Astroglass Boat Co., Inc., 32 B.R. 538, 543 (Bankr.M.D. Tenn.1983). See also, In re Blanton Smith Corp., 81 B.R. 440 (D.S.M.D.Tenn. 1987). The principle is apparent as well from the statute itself. At 11 U.S.C. § 1144, it is provided that an order of confirmation may be revoked only if it was procured by fraud and then only if a request is made within 180 days of confirmation.
One may surmise that the reason that debtors filed their motion to modify in response to our pretrial order requiring memoranda on preclusion by time, was to stake out a position that the time parameters for plan modification pursuant to 11 U.S.C. § 1127 were controlling here. We reject that premise. What is at hand here is no mere modification of debtors' plan. The settlement that debtors wish to abrogate is expressly set out in the order of confirmation. To grant debtors the relief they seek requires relief from that order.
The subject of relief from orders is dealt with in Rule 60 of the F.R.Cv.P. made applicable to bankruptcy by B.R. 9024. That rule makes provision for relief from mistake, inadvertence, excusable neglect, newly discovered evidence, etc. In order to procure relief for one of these reasons, a motion must be filed, and the motion must be made in a reasonable time. Suffice it to say that our analysis above persuades us that debtors have not acted in a reasonable time.
The objection of debtors to the claim of PCA on grounds that the value of the collateral of PCA is overstated is overruled. In addition, debtors' motion to modify their plan is denied.
So Ordered.
NOTES
[1] The pretrial conference was held pursuant to an objection to allowance of claims filed by debtors on January 27, 1988. (Doc. # 146.) With respect to the claim of PCA, the only ground of objection stated is "that Debtors do not believe that Creditor is entitled to interest on its claim whether same be pre-petition or post-petition interest." There is no mention of a question about the value of PCA's collateral.
[2] The question debtors seek now to have adjudicated is not correctly raised procedurally either on an objection to claim or motion to modify plan. Rather should it be the subject of an adversary proceeding. B.R. 7001(2); In re Yagow, 62 B.R. 73 (Bankr.N.D.1986) PCA has not objected on this ground and so we will not dispose of this matter on that basis. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578382/ | 133 Mich. App. 566 (1984)
351 N.W.2d 242
FARMINGTON EDUCATION ASSOCIATION
v.
FARMINGTON SCHOOL DISTRICT
Docket No. 67038.
Michigan Court of Appeals.
Decided April 3, 1984.
Mary Hannorah Job, for plaintiff.
Clark, Hardy, Lewis, Pollard & Page, P.C. (by Richard M. Tuyn), for defendant.
Amicus Curiae:
Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, and Felix E. League and Dianne Rubin, Assistants Attorney General, for Department of Civil Rights.
Before: ALLEN, P.J., and BEASLEY and M.E. CLEMENTS,[*] JJ.
PER CURIAM.
Plaintiffs appeal as of right from an order entered in the Oakland County Circuit Court which granted defendant's motion for summary judgment and denied plaintiffs' motion for summary judgment.[1]
*568 At issue is whether the parties' collective-bargaining agreement discriminates on the basis of marital status or sex, contrary to the Elliott-Larsen Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq., or violates the public policy of the State of Michigan by denying hospitalization insurance to teachers who receive such insurance from other sources. This case comes to us on a stipulated record, and the pertinent facts will be briefly set forth.
The 1981-1983 collective-bargaining agreement between the parties contains a clause which provides for "no double coverage" with respect to hospitalization insurance. This provision precludes any teacher who receives hospitalization coverage from an outside source from receiving "MESSA Super Med II Hospitalization Coverage" (hereinafter Super Med II) which the parties agree is "the best insurance coverage". Those teachers ineligible for hospitalization insurance through the school district receive an additional $5,000 life insurance benefit plus $240 payable as additional salary in a tax deferred annuity or available to purchase MESSA variable insurance options or a combination of both.
Of the 697 teachers employed by defendant, 126 teachers were denied their own Super Med II policies due to insurance coverage through other sources. All but five of these teachers are married females. However, 31 of the 121 married female teachers ineligible for their own Super Med II policies continue to receive Super Med II coverage as dependents on their teacher-spouse's Super Med II policy. In addition, 40 teachers eligible for insurance elsewhere dropped some portion of this coverage, *569 but still do not insure one or more dependents on the insurance available through defendant. All 40 of these teachers are female, and all but 2 of these teachers are married. Finally, 115 teachers eligible for insurance for themselves and their families elsewhere simply discontinued this coverage and are now covered exclusively by Super Med II offered through the school district. Of these 115 teachers, 81 are married females; 31 are married males, and 3 are single males.
The parties stipulate that the inclusion of the no double coverage provision in their collective-bargaining agreement saves the school district a considerable sum of money over any savings realized from a typical "coordination of benefits" provision in the policy of insurance itself. Considering only the 126 teachers who were completely denied their own Super Med II policies, assuming that all of these employees could and would elect full family Super Med II coverage, defendant would have to pay an additional $312,984 per year in premiums. The current cost of the additional compensation for teachers ineligible for their own Super Med II policies is $31,449. Thus, under the parties' assumptions, $281,535 is saved by defendant through the "no double coverage" provision in the collective-bargaining agreement.[2] The parties stipulate that this savings is used for "increased employee benefits and improved school programs".
Individual plaintiffs Buckler and Hammar testified *570 at depositions that they could not be dropped from a spouse's hospitalization insurance policy. Buckler contended that she was so informed by a representative of her spouse's employer. Hammar supported his contention with a letter from his spouse's employer's insurer which indicated that neither he nor his wife could drop the insurance coverage provided by his spouse's employer. Individual plaintiff McCracken filed an affidavit which stated that she could not drop the hospitalization coverage offered by her spouse's employer. Individual plaintiff Haun testified that she withdrew from her spouse's insurance plan, but that certain medical expenses resulting from a pregnancy, which were not covered by Super Med II, would have been covered by her spouse's policy had she not been required to drop the coverage.
Section 202 of the Elliott-Larsen Civil Rights Act, MCL 37.2202; MSA 3.548(202), provides in pertinent part:
"Sec. 202. (1) An employer shall not:
"(a) Fail or refuse to hire, or recruit, or discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of religion, race, color, national origin, age, sex, height, weight, or marital status.
"(b) Limit, segregate, or classify an employee or applicant for employment in a way which deprives or tends to deprive the employee or applicant of an employment opportunity, or otherwise adversely affects the status of an employee or applicant because of religion, race, color, national origin, age, sex, height, weight, or marital status.
"(c) Segregate, classify, or otherwise discriminate against a person on the basis of sex with respect to a term, condition, or privilege of employment, including a benefit plan or system."
*571 Section 202 of the Elliott-Larsen Civil Rights Act is modeled after § 703 of Title VII of the Civil Rights Act of 1964, 42 USC 2000e-2. Two theories of recovery have been recognized under Title VII by the federal courts, namely, "disparate treatment" and "disparate impact". International Brotherhood of Teamsters v United States, 431 U.S. 324, 335-336, fn 15; 97 S. Ct. 1843; 52 L. Ed. 2d 396 (1977), the Supreme Court explained the differences between these twin theories of recovery as follows:
"`Disparate treatment' such as is alleged in the present case is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. Proof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment. See, e.g., Arlington Heights v Metropolitan Housing Dev Corp, 429 U.S. 252, 265-266. Undoubtedly disparate treatment was the most obvious evil Congress had in mind when it enacted Title VII. See, e.g., 110 Cong Rec 13088 (1964) (remarks of Sen. Humphrey) (`What the bill does * * * is simply to make it an illegal practice to use race as a factor in denying employment. It provides that men and women shall be employed on the basis of their qualifications, not as Catholic citizens, not as Protestant citizens, not as Jewish citizens, not as colored citizens, but as citizens of the United States').
"Claims of disparate treatment may be distinguished from claims that stress `disparate impact.' The latter involve employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. See infra, at 349. Proof of discriminatory motive, we have held, is not required under a disparate impact theory. Compare, e.g., Griggs v Duke Power Co, 401 U.S. 424, 430-432, with McDonnell Douglas Corp v Green, 411 U.S. 792, 802-806. See generally B. Schlei & P. Grossman, Employment *572 Discrimination Law 1-12 (1976); Blumrosen, Strangers in Paradise: Griggs v Duke Power Co and the Concept of Employment Discrimination, 71 Mich. L Rev 59 (1972). Either theory may, of course, be applied to a particular set of facts."
This Court has specifically recognized a "disparate treatment" theory of the case under the Elliott-Larsen Civil Rights Act. Schipani v Ford Motor Co, 102 Mich. App. 606, 617; 302 NW2d 307 (1981). Under a disparate treatment theory, plaintiffs must make a showing that defendant had a discriminatory motive to establish a prima facie case. McDonnell Douglas Corp v Green, 411 U.S. 792, 802-806; 98 S. Ct. 1817; 36 L. Ed. 2d 668 (1973).
In this case, plaintiffs' complaint fails to allege that defendant acted with a discriminatory motive in bargaining for, and incorporating into, the parties' collective-bargaining agreement the no double coverage clause. Moreover, the parties' stipulation of facts and the various depositions and affidavits filed in this case fail to reveal any such discriminatory purpose. In fact, the parties stipulated that the purpose of the no double coverage clause was to obtain savings to be used to "increase employee benefits and improve school programs". We note also that defendant did not impose the no double coverage provision on the plaintiffs but, rather, the provision was negotiated by defendant and the plaintiff educational association during the process of collective bargaining. These facts preclude a finding that defendant acted with a discriminatory purpose.
We now consider plaintiffs disparate impact theory, i.e., that a facially neutral employment practice burdens the protected classes of women and married persons more harshly than others. To prevail on such a theory, discriminatory motive *573 need not be proven. Teamsters v United States, supra. Before turning to the merits of this theory, however, we first address defendant's contention that Michigan should not recognize a disparate impact theory of recovery under the Elliott-Larsen Civil Rights Act.
Although there currently exist no holdings by the Michigan appellate courts which embrace the disparate impact theory, for several reasons we believe that this theory is available to litigants pressing claims under the Elliott-Larsen Civil Rights Act. First, while the Michigan courts are not compelled to construe the act in accord with the construction given Title VII,[3] thus far, where they have failed to follow federal precedents under Title VII, they have concluded that the state act provides greater rights to aggrieved litigants. See, inter alia, Northville Public Schools v Civil Rights Comm, 118 Mich. App. 573, 576-577; 325 NW2d 497 (1982); Dep't of Civil Rights ex rel Jones v Dep't of Civil Service, 101 Mich. App. 295; 301 NW2d 12 (1980). Second, there are indications that the Michigan Supreme Court will hold that a disparate impact theory may be advanced under the Elliott-Larsen Civil Rights Act. In separate opinions in Dep't of Civil Rights ex rel Parks v General Motors Corp, 412 Mich. 610, 622, 646-648; 317 NW2d *574 16 (1982), four justices strongly indicated that, in a proper case brought under the Fair Employment Practices Act, MCL 423.301 et seq.; MSA 17.458(1) et seq., now replaced by the more comprehensive Elliott-Larsen Civil Rights Act, a disparate impact theory would be appropriate. Third, the Michigan Civil Rights Commission adopted interpretive guidelines in 1972 which recognize the theory of disparate impact. Although these guidelines are not conclusive, this Court has recognized that they are entitled to careful consideration and has found them persuasive in the past. Dep't of Civil Rights v Dep't of Civil Service, supra, p 303.[4] Fourth, defendant advances no compelling reasons, based either on policy or presumed legislative intent, to reject the disparate impact analysis.
Defendants further assert that, even if disparate impact analysis is appropriate under the Elliott-Larsen Civil Rights Act, because the United States Supreme Court has never used this analysis in a case involving an alleged violation of § 703(a)(1) of Title VII (pertaining to "compensation, terms, conditions, or privileges of employment") but, rather, only to § 703(a)(2) violations (pertaining to "employment opportunities or * * * status as an employee"), that it should be deemed inapplicable in Michigan except to employment status cases. The United States Supreme Court has reserved the issue of whether it will recognize disparate impact analysis in cases involving fringe benefits. City of Los Angeles, Dep't of Water & Power v Manhart, *575 435 U.S. 702, 710, fn 20; 98 S. Ct. 1370; 55 L. Ed. 2d 657 (1978); Nashville Gas Co v Satty, 434 U.S. 136, 144-145; 98 S. Ct. 347; 54 L. Ed. 2d 356 (1977). At the same time, however, the United States Supreme Court has never disapproved the use of the disparate impact model in fringe benefit cases, and some federal decisions have concluded that such analysis is appropriate. See, e.g., Wambheim v J C Penney Co, Inc, 705 F2d 1492, 1494 (CA 9, 1983). Given the liberal construction of this state's civil rights statutes heretofore adopted by the appellate courts, we choose to follow the federal decisions which apply disparate impact analysis to fringe benefit cases when it has been pled.
The circuit court concluded that an "employment opportunity" as used within the meaning of MCL 37.2202(1)(b); MSA 3.548(202)(1)(b) did not encompass fringe benefits such as hospitalization insurance and, thus, found for defendant. We need not devote extensive analysis to this issue because, regardless of the meaning to be accorded the term "employment opportunity", we find that MCL 37.2202(1)(a); MSA 3.548(202)(1)(a), which prohibits any discrimination against an individual with respect to "compensation or a term, condition, or privilege of employment" because of, among others, sex and marital status, is applicable here. Whether or not the ability to obtain hospitalization insurance is an "employment opportunity", it certainly is encompassed as "compensation or a term, condition, or privilege of employment".
We now turn to the merits of plaintiffs' claims of disparate impact. We initially note that a completely neutral practice will always have a disproportionate impact on some group, and discrimination need not always be inferred from such consequences. City of Los Angeles, Dep't of Water & *576 Power v Manhart, supra. We are ultimately persuaded that plaintiffs have failed to prove that they are "burdened" within the meaning of disparate impact analysis as a consequence of defendant's actions.
In Griggs v Duke Power Co, 401 U.S. 424, 431; 91 S. Ct. 849; 28 L. Ed. 2d 158 (1971), the Supreme Court noted that "[d]iscriminatory preference, for any group, majority or minority, is precisely and only what Congress has proscribed". In our view, this observation is equally applicable to the Elliott-Larsen Civil Rights Act. On the facts of this case, we are simply unable to conclude that the parties' no double coverage provision in their collective-bargaining agreement operates to create a preference for males and single persons. It is crucial to our analysis that any teacher employed by defendant has an absolute right under the parties' contract to elect to obtain Super Med II coverage by dropping other hospitalization coverage.[5] The element of a choice between reasonable options given to the individual employee precludes a determination that defendant's actions invidiously burden either women or married teachers.[6] To illustrate *577 the importance of reasonable choice to our analysis, the present scenario may be distinguished from a contractual provision which, for instance, denies hospitalization insurance to any employee who has hospitalization insurance available through another person's employer's group hospitalization plan, whether or not that employee in fact carries this hospitalization insurance or even wants it. In this hypothetical scenario, where a married employee would have no opportunity to elect hospitalization insurance offered by her employer simply because her husband had such insurance available for her through his employer, the married employee might well be found to be unfairly burdened by a seemingly neutral employment practice.
Although the question of disparate impact in fringe benefits has not been extensively addressed by the federal courts, at least one district court has employed an analysis which focuses on the element of choice which we find significant in concluding that no disparate impact has been proven here. In United Independent Flight Officers, Inc v United Air Lines, Inc, 572 F Supp 1494, 1506 (ND Ill, 1983), the court rejected plaintiffs' disparate impact age discrimination theory, holding that plaintiff pilots were not unfavorably situated because of their ages but, rather, because they had voluntarily chosen not to contribute to the pilots' pension plan before defendant undertook complete funding of the plan in 1965. Similarly, the teachers in this case, to the extent that they can be deemed unfavorably situated, are not burdened by the actions of defendant, but, for the most part, because they voluntarily made choices from among various reasonable options made available by defendant.
*578 Plaintiffs also contend that the no double coverage provision contravenes the public policy of this state as expressed in the married women's property act, MCL 557.24; MSA 26.165(4), and §§ 3436, 3438, and 3440 of the Insurance Code of 1956, MCL 500.100 et seq.; MSA 24.1100 et seq., which permit coordination of benefits provisions in insurance policies. We find that the cited statutory provisions are simply inapplicable to the no double coverage provision contained in the parties' collective-bargaining agreement.
Affirmed. No costs, a public question concerning the proper construction to be given a statute of critical significance to this case.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] Although the parties denoted their motions as being for summary judgment, defendant contends that the parties really submitted this dispute under the agreement on the case provisions of GCR 1963, 111.10, and this is not disputed by plaintiffs. This is consistent with the parties' presentation of arguments before the circuit court. The attorneys for both parties considered the settled record to set the factual boundaries of this dispute. Neither party argued that it might not be possible for the lower court to grant summary judgment on the stipulated record because disputes existed over other facts which, depending on what the court deemed significant, needed to be developed before judgment could enter. We do not believe that the standard for reviewing summary judgment motions pursuant to GCR 1963, 117.2(3) is applicable here or, if it is, that, in light of this stipulated record, either party may now claim that it wants to present additional facts.
[2] In fact, the assumption that all 126 teachers would elect full family Super Med II coverage if they had this choice is highly dubious. First, it is highly unlikely that all 126 of these teachers are married with children. Second, it is highly unlikely that at least some of these teachers would not elect to obtain the alternative hospitalization coverage offered by defendant in lieu of an additional hospitalization insurance policy which contains a coordination of benefits provision. The value to the teacher of an additional hospitalization insurance policy will be negligible except, perhaps, for the most heavy users of medical services.
[3] Generally, when the Michigan Legislature models legislation after the existing statute of another jurisdiction, as a rule of construction intended to aid in discovering legislative intent, it is presumed that the Legislature intended to adopt any construction placed upon the statute by the courts of the jurisdiction from which that statute was taken. See, e.g., Cleveland-Cliffs Iron Co v First State Ins Co, 105 Mich. App. 487, 493-494; 307 NW2d 78 (1981). This Court has implicitly adopted this rule of construction in a number of decisions involving the Elliott-Larsen Civil Rights Act or its less comprehensive precursor, the Fair Employment Practices Act, MCL 423.301 et seq.; MSA 17.458(1) et seq. See, inter alia, Clark v Uniroyal Corp, 119 Mich. App. 820; 327 NW2d 372 (1982); Bouwman v Chrysler Corp, 114 Mich. App. 670; 319 NW2d 621 (1982); Gallaway v Chrysler Corp, 105 Mich. App. 1; 306 NW2d 368 (1981).
[4] This flows from the rule of construction that an administrative body's interpretation of the statute which it is charged with administering is entitled to great weight when attempting to ascertain legislative intent. See, inter alia, Jerome v Crime Victims Compensation Bd, 119 Mich. App. 648, 653; 326 NW2d 593 (1982); Szabo v Ins Comm'r, 99 Mich. App. 596, 598; 299 NW2d 364 (1980); Artman v College Heights Mobile Park, Inc, 20 Mich. App. 193, 198; 173 NW2d 833 (1969).
[5] In fact, plaintiffs did tend to prove that three of the four named plaintiffs could not elect to be covered by Super Med II because of a spouse's employer's employment practices. We do not consider defendant to be responsible for the employment practices of other employers. Because none of these employers are parties to this suit, we need not express an opinion on the question of whether an employer which forces its employee's spouse to accept unwanted hospitalization insurance discriminates on the basis of marital status within the meaning of the Elliott-Larsen Civil Rights Act.
[6] When we are considering married teachers, the choice offered by defendant is, of course, actually a decision to be made jointly with a spouse. Conceivably, an employee of defendant could be thwarted in her desire to elect Super Med II because her spouse refuses to cooperate with her by dropping her from the hospitalization insurance offered through his employer. To the extent that this actually is a problem for any of the plaintiffs, we simply do not believe that the Elliott-Larsen Civil Rights Act was intended to provide protection from the unwillingness of a spouse to cooperate with his partner. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578396/ | 351 N.W.2d 391 (1984)
In the Matter of James KNAPP.
No. C9-84-801.
Court of Appeals of Minnesota.
July 10, 1984.
*392 Gerald Chester, Minneapolis, for appellant.
Thomas Johnson, Hennepin County Atty., LaRae Bradley, Staff Atty., Minneapolis, for respondent.
Considered and decided by POPOVICH, C.J., and NIERENGARTEN and RANDALL, JJ., with oral argument waived.
OPINION
RANDALL, Judge.
Knapp appeals the order of the trial court finding him mentally ill and committing him to Anoka State Hospital. We affirm.
FACTS
A restraining order against appellant was issued in October 1983 to keep him away from his parents' home. Nonetheless, Knapp repeatedly returned to the family home, causing his parents fear and anxiety and requiring the intervention of police and Knapp's uncle. In February 1984, when Knapp's uncle, Jerome Gewecke, was asked to remove appellant, Knapp threatened Gewecke and struck him, breaking his glasses. On March 14, 1984, Knapp admitted himself to the Crisis Intervention Center. He was malnourished and had frostbitten feet.
A petition for commitment was filed on March 20, 1984, and trial was held on April 3, 1984. Appeal was taken on May 4, 1984, from an order for commitment dated April 3, 1984.
The trial court found that Knapp suffered from schizophrenia, that he had recently threatened others, and that treatment at Anoka State Hospital was needed. Less restrictive alternatives were rejected because of Knapp's refusal to accept regulation.
ISSUE
Whether the trial court properly committed Knapp to Anoka State Hospital as mentally ill.
ANALYSIS
Minn.Stat. § 253B.09, subd. 1 (1982) provides that:
If the court finds by clear and convincing evidence that the proposed patient is a mentally ill . . . person and . . . it finds that there is no suitable alternative to judicial commitment, the court shall commit the patient to the least restrictive treatment facility which can meet the patient's treatment needs[.]
The definition of "mentally ill person" is found in Minn.Stat. § 253B.02, subd. 13 (Supp.1983).
"Mentally ill person" means any person who has an organic disorder of the brain or a psychiatric disorder of thought, mood, perception, orientation, or memory which grossly impairs judgment, behavior, capacity to recognize reality, or to reason or understand, which (a) is manifested by instances of grossly disturbed behavior or faulty perception; and (b) poses a substantial likelihood of physical harm to himself or others as demonstrated by (i) a recent attempt or threat to physically harm himself or others, or (ii) a failure to provide necessary food, clothing, shelter or medical care for himself, as a result of the impairment.
Knapp argues that he was not shown to be mentally ill and that the trial court failed to commit him to the Bill Kelly House, a community based treatment facility less restrictive than Anoka State Hospital.
Both Mourits Sorensen, the court appointed examiner, and James Jacobson, the examiner appointed at Knapp's request, diagnosed Knapp as suffering from chronic schizophrenia. Dr. Jacobson further noted Knapp's paranoid ideation, his extreme difficulty relating to people and the chance of injury to others if Knapp was confronted. The trial court found that Knapp had recently threatened to harm others, including his parents. The evidence shows that Knapp had struck his uncle and that his hostility toward other patients and the *393 staff at Hennepin County Medical Center required his transfer to a locked ward. The evidence also shows Knapp did not take care of himself.
Although the statute requires only a showing of a recent attempt or threat of harm or a failure to provide necessities, the evidence supports a finding of likely physical harm on both bases. Knapp lived in his car, was malnourished when admitted to the Crisis Intervention Center, had frostbite and was not taking prescribed medications. His failure to provide food, shelter and proper medical care for himself supports the trial court's conclusion that Knapp is mentally ill, as defined by Minn. Stat. § 253B.02, subd. 13 (Supp.1983).
Appellant argues that the trial court erred in refusing to commit Knapp to the Hennepin County Medical Center while awaiting admission to the Bill Kelly House. However, appellant overlooks the evidence in support of commitment to Anoka State Hospital. For example, Knapp had missed appointments to discuss admission to the Bill Kelly House and the Hennepin County Medical Center staff had expressed an unwillingness to continue treating Knapp after trial because of his propensity not to follow medical advice. Also, the trial court noted on the record, there was little chance of obtaining admission to the Bill Kelly program for at least five weeks. Both Vennes, the psychiatric social worker, and Sorenson recommended commitment to Anoka State Hospital. Sorenson testified that Knapp was incapable of making a decision for voluntary commitment. Gewecke told the court that Knapp had refused to take his medications after release from treatment on prior occasions. The evidence supports the conclusion of the trial court that Knapp is currently unsuited to alternatives less restrictive than commitment to Anoka State Hospital.
DECISION
The trial court found, by clear and convincing evidence, that Knapp is mentally ill and that there was no suitable alternative to commitment. The trial court properly committed Knapp to Anoka State Hospital.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578393/ | 351 N.W.2d 438 (1984)
Duane E. BUZICK, Petitioner and Appellee,
v.
NORTH DAKOTA STATE HIGHWAY COMMISSIONER, Respondent and Appellant.
Civ. No. 10624.
Supreme Court of North Dakota.
July 11, 1984.
*439 Brian W. Nelson, Fargo, for petitioner and appellee. Submitted on brief.
Robert E. Lane, Asst. Atty. Gen., North Dakota State Highway Dept., Bismarck, for respondent and appellant. Submitted on brief.
GIERKE, Justice.
The Commissioner appeals from a district court judgment directing that Duane E. Buzick be granted an administrative hearing on the revocation of his license to operate a motor vehicle and that Buzick receive temporary driving privileges until the hearing is held. We reverse.
Buzick was arrested for driving while under the influence of intoxicating liquor and issued a temporary operator's permit on September 16, 1983. On September 22, 1983, counsel for Buzick mailed a request for a hearing. The Commissioner denied the request on the ground that it was untimely and issued an order of revocation. Buzick appealed to the district court, which held that Buzick's request for a hearing was timely pursuant to Rule 6, N.D.R. Civ.P.
Under Section 39-20-05(1), N.D.C.C., before revoking a person's license the Commissioner must give the person an opportunity for a hearing if he mails a request for a hearing "within five days after the issuance of the temporary operator's permit." Buzick's request for a hearing was mailed on the sixth day after his temporary operator's permit was issued. The Commissioner, asserting that the five-day period should be computed in accordance with Section 1-02-15, N.D.C.C.,[1] concluded that Buzick's request for a hearing was untimely. Buzick asserts that the five-day period should be computed under Rule 6, N.D.R. Civ.P. Under Rule 6, N.D.R.Civ.P., Saturdays, Sundays, and legal holidays are excluded in the computation of time periods of less than seven days. Consequently, if Rule 6, N.D.R.Civ.P., is applicable, Buzick's request for a hearing was timely.
Rule 1, N.D.R.Civ.P., provides that "[t]hese rules govern the procedure in the district courts." (Emphasis added.) Thus, the rules are facially applicable only in court proceedings and not in other kinds of proceedings unless otherwise provided by statute.
In Amoco Oil Company v. Job Service North Dakota, 311 N.W.2d 558 (N.D.1981), Amoco sought an intra-agency bureau review of a Job Service appeals tribunal decision. The bureau denied the request on the basis that it was untimely. This Court determined that the request was one day late. Against Amoco's contention that Rule 6, N.D.R.Civ.P., was applicable and made the request timely, we said, 311 N.W.2d at 562:
"We are not aware of any rule or case law which provides that the rules of civil procedure apply to proceedings within an agency or intra-agency appeals as distinguished from appeals from the decision of an agency to the district court. We have held that the court-adopted rules apply to appeals from an administrative agency to the district court, and for that matter, appeals from the district court to *440 the Supreme Court; but no case has been called to our attention and our research does not reflect a decision of this Court which has held that the Court-adopted rules of procedure apply to intra-agency appeals and procedures."
Buzick's request for a hearing was untimely under Section 1-02-15, N.D. C.C., and Rule 6, N.D.R.Civ.P., is inapplicable to a request for an administrative hearing.
For the reasons stated, the judgment is reversed.
ERICKSTAD, C.J., and PEDERSON, VANDE WALLE and SAND, JJ., concur.
NOTES
[1] "1-02-15. Computation of time.The time in which any act provided by law is to be done is computed by excluding the first day and including the last, unless the last is a holiday, and then it also is excluded...."
The section has been superseded for criminal process. See explanatory note to Rule 45, N.D. R.Crim.P., and Rule 59, N.D.R.Crim.P. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578398/ | 351 N.W.2d 424 (1984)
217 Neb. 883
In re INTEREST OF D.R. and S.B., children under 18 years of age.
STATE of Nebraska, Appellee,
v.
D.R. et al., Appellants.
No. 83-811.
Supreme Court of Nebraska.
July 13, 1984.
*425 Donald W. Walters, Grand Island, for appellants.
Gary L. Schacht, Chief Deputy Hall County Atty., Grand Island, for appellee.
James D. Livingston, Grand Island, guardian ad litem.
KRIVOSHA, C.J., WHITE, and CAPORALE, JJ., and McCOWN and BRODKEY, JJ., Retired.
WHITE, Justice.
This is an appeal from the district court for Hall County, Nebraska, affirming the order of the county court which terminated the parental rights of J.B. to S.B. The order also terminated the parental rights of J.B. to D.R. Additionally, the parental rights of the natural father, D.R., to D.R. were terminated. J.B. and D.R. appeal. We affirm, keeping in mind that we review the matter de novo upon the record and that an order terminating parental rights must be supported by clear and convincing evidence. In re Interest of Hill, 207 Neb. 233, 298 N.W.2d 143 (1980); In re Interest of J. and R., 216 Neb. 183, 342 N.W.2d 660 (1984).
The evidence discloses that J.B. is the mother of four children, the oldest of which is not now subject to the juvenile statutes. Legal custody of the second oldest child is in the Hall County Division of Public Welfare and physical custody is in a foster home because the child ran away from home after an incident in which she was the subject of a sexual assault by a brother of the appellant D.R. The brother was convicted and sentenced to a term in the Nebraska Penal and Correctional Complex. Therefore, these two children are not involved in this matter; rather, this action concerns the extended saga of the two younger children, S.B., who was born on February 23, 1972, and D.R., who was born on January 19, 1982.
Appellants, D.R. and J.B., are not married, and D.R. is the natural father of D.R. The whereabouts of the natural father of S.B., to whom J.B. was also not married, are unknown. The older two children were born in wedlock, and J.B. remains legally married to their father. Although the petition which is the subject of this appeal was filed on February 23, 1983, and the order terminating parental rights was entered on April 20, 1983, one or more of J.B.'s children have been the subject of juvenile court action since 1970. The juvenile petition alleges that S.B. and D.R. are minor children who are neglected and lack proper care, and are in a situation injurious to their health, morals, or well-being. Neb.Rev.Stat. § 43-247(3)(a) (Cum.Supp.1982).
Shortly after S.B.'s birth, she was admitted to Lutheran Memorial Hospital in Grand Island, Nebraska, under the diagnosis of failure to thrive. In other words, the child was malnourished, had gained inadequate weight, and was in a life-threatening situation. The child gained weight, and was released on April 17, 1972. Shortly thereafter, S.B. was again admitted to Lutheran Memorial Hospital suffering from the same condition, which, according to the physician's reports, was attributable to a failure to receive adequate nourishment. S.B. was not returned to her mother's custody until August 1973. The evidence indicates that during this period of time, the services of the Hall County Division of Public Welfare, the department of health, the public health nurses, and the county extension service were utilized in various attempts to train J.B. and, by that time, D.R., who had moved in with J.B., in basic housekeeping skills, cleanliness, diet preparation, personal hygiene, and child care. In June 1974 the appellants moved to North Platte, Nebraska, and the supervision of the case was transferred to the Lincoln County Division of Public Welfare. The situation with respect to the older children's nonattendance at school and the disordered and filthy housekeeping practices continued. Subsequently, in 1978, the parties returned to Hall County, where extended social service activities, including ADC *426 payments and various other state and federal welfare programs, continued. It was during this time that the juvenile activities of the older two children were principally involved.
In February 1983 the petition to secure temporary custody of S.B. and D.R. was filed. The evidence discloses that the rental property occupied by the family was literally filled with garbage, there was clothing 2 to 3 feet deep on the floor of the bathroom, and there was opened and spoiled food throughout the house. The house was heated by electric heaters because the gas had been shut off. Previously, J.B. had been advised by the welfare departments to apply for certain additional welfare aid. She refused to do so. At this time S.B. and D.R. were taken into physical custody. S.B. was small for her age and underweight, but in generally acceptable health. D.R., who was approximately 1 year old, was in good physical health, bearing no signs of abuse. The home was determined to be a fire hazard and showed evidence of a recent fire caused by the trash surrounding the space heaters. The meals were prepared in an electric frying pan and, although there was refrigeration, the refrigerator was unclean and contained a large amount of spoiled foods and liquids.
Essentially, appellants do not contest that the physical condition of the home, at the time the children were taken from them, was dangerous to the health and well-being of S.B. and D.R., nor do they deny that substantially the same conditions persisted for a period of over 10 years, from the time of the first welfare contacts in 1970. Rather, they point out that the children showed no evidence of physical abuse and that the children were not in bad health when they were taken from them in February 1983.
At the time of the hearing on April 4, 1983, appellants were living in a less expensive rental property, and they introduced photographs showing the condition of the home. The photographs indicate a wellkept home, with good housekeeping standards evident. Both at the time of the hearing and for some time prior thereto, J.B. and D.R. were unemployed. Their sole source of income was ADC and various other welfare benefits, food stamps, etc. While the evidence indicates that D.R. had made extended efforts to obtain work, J.B. had not sought employment because she wished to remain home with her youngest child, D.R. In spite of this the evidence indicates that D.R. did all of the cooking for the family.
The appellee points out, and the evidence supports its contention, that the now clean and neat household of appellants is one of numerous repetitive acts of improvement and then a subsequent decline in household standards until the home becomes unfit and dangerous for adults, much less minor children, to reside in. A caseworker testified that, in spite of their protestations, the only time the appellants would attempt to comply with even the most basic of housekeeping standards, so as not to endanger the health or safety of their children, was after threats of removal were made; then those standards would be maintained for only a short period of time. This cycle is now into its 13th year.
During the educational and training process of various agencies, the appellants appeared interested, and listened. However, based on psychological studies, there was apparently no interest or incentive to apply those standards on a day-to-day, regular basis. It was the opinion of the caseworker, based on her experience, that if the children, S.B. and D.R., were not removed from the home, supervision must continue on a frequent, regular basis until the children reached maturity. Furthermore, the caseworker testified that the best efforts of the welfare department to train or motivate J.B. and D.R. have been a total and absolute failure.
The county court for Hall County in 1972 terminated the parental rights of J.B. to S.B. On appeal the district court for Hall County reversed. While we recognize that custody of minor children is a fundamental right and that it should not be lightly disturbed, we have also held where there *427 are reasonable grounds to believe that the conditions giving rise to a parent's inability to care for children will continue for a prolonged and indefinite period, the parental rights may be terminated when the action is in the best interests of the minor children. In re Interest of M., 215 Neb. 383, 338 N.W.2d 764 (1983).
D.R. is now slightly over 2 years old. To suggest that the preservation of the parental rights of appellants requires that the welfare department actively supervise and closely watch, and, if necessary, threaten and cajole, in order to ensure that the appellants will provide adequate care so as not to the endanger the life or health of their children borders on the preposterous. Appellants have indicated, through the 13-year history of their relationship with the department of public welfare and the juvenile court, that they are either unwilling or unable to, on a sustained basis, provide proper parental care for the minor children. The record discloses that this is the fourth time that physical custody of S.B. has been removed from J.B. Four times is enough. To further subject D.R., a child of tender years, to such an environment cannot be said to be in the best interests of the child.
Appellants' contention that the county and district courts' orders relied on a statutory provision other than that alleged in the petition is not supported by the record and is therefore without merit.
We find by clear and convincing evidence that the best interests of the minor children, S.B. and D.R., require that the parental rights of J.B. and D.R. be terminated.
AFFIRMED.
KRIVOSHA, Chief Justice, dissenting.
I must respectfully dissent from the majority in this case. While I concede that the parents in this case are not likely to be designated "parents of the year," I likewise believe that the evidence does not disclose either physical abuse or conditions eminently harmful to the children, thereby compelling state intervention. I continue to be convinced that "best interests of the children" means within the context of their natural family home and does not imply that children should be removed from their parents if, by doing so, they may move up in life. I would have concluded that the record was insufficient to establish by clear and convincing evidence that the best interests of the minor children require that the parents' parental rights be terminated, and I would have reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578424/ | 12 So. 3d 763 (2009)
WILSON
v.
STATE.
No. 5D09-864.
District Court of Appeal of Florida, Fifth District.
June 30, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578391/ | 419 Mich. 230 (1984)
351 N.W.2d 822
PEOPLE
v.
CASH
Docket No. 68064, (Calendar No. 18).
Supreme Court of Michigan.
Argued June 7, 1983.
Decided July 19, 1984.
Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, Conrad J. Sindt, Prosecuting Attorney, and Richard A. Pattison, Assistant Prosecuting Attorney, for the people.
State Appellate Defender (by Herb Jordan) for the defendant.
WILLIAMS, C.J.
The main issue presented in this case requires us to reconsider whether a reasonable mistake of fact as to a complainant's age is a defense to a statutory rape charge. Over 61 years ago, this Court enunciated a rule rejecting such a defense in People v Gengels, 218 Mich. 632; 188 N.W. 398 (1922), which involved a similar charge under the former statutory rape statute. We reaffirm the Gengels rule and likewise reject this defense in cases brought under § 520d(1)(a) of the third-degree criminal sexual conduct statute.[1]
This appeal raises two additional issues: (1) whether the trial court abused its discretion in not permitting cross-examination of the complainant or her mother regarding the complainant's lifestyle; and (2) whether the prosecution's argument *235 and introduction of evidence concerning a forcible rape denied defendant a fair trial. We answer each of these issues in the negative, and therefore we affirm defendant's conviction.
I. FACTS
On the evening of September 23, 1979, the complainant, who was one month shy of her 16th birthday, met the defendant at a Greyhound bus station in Detroit. The complainant was running away from home at the time. After talking with complainant for a couple of hours and gaining her trust, defendant persuaded complainant to accompany him on a drive in his car. They drove to a motel in Marshall, Michigan, where two separate acts of sexual intercourse took place. The complainant managed to leave the motel room undetected after defendant fell asleep, and awakened the person in charge of the motel, who in turn called the police. The defendant was charged with two counts of third-degree criminal sexual conduct, namely, engaging in sexual penetration with a person between the ages of 13 and 16 years. Documents found in the court file indicate that at the time of the offense, the defendant was 30 years old.
At the preliminary examination, complainant admitted that she told defendant that she was 17 years old. The defendant had also indicated to the police at the time of his arrest that the complainant told him she was 17. The complainant was described by defendant as being 5' 8" tall and weighing about 165 pounds.
Prior to trial, defendant brought a motion requesting that the jury be instructed that a reasonable *236 mistake as to the complainant's age is a defense, or, in the alternative, that the charges be dismissed on the ground that the complainant is collaterally estopped from asserting that she was 16 since at the time of the offense she stated that she was 17. Following a hearing, the trial court denied defendant's motion and entered its opinion and order to that effect.
During the course of jury voir dire, defendant asserted his right to represent himself. The trial court permitted defendant to proceed in his own defense with his attorney remaining present to assist defendant. At trial, the complainant testified that she had voluntarily, though reluctantly, engaged in sexual intercourse with defendant out of fear that defendant would otherwise harm her. Defendant tried to impeach the complainant with questions about her lifestyle to show that she was "street-wise", but the trial court prohibited this cross-examination. Defendant was also prohibited from questioning complainant's mother as to her daughter's lifestyle.
Sergeant Max Faurot of the Calhoun County Sheriff's Department was called to testify for the prosecution. The relevant portions of that testimony follow:
"Q. Do you recall whether or not you were dispatched to Marshall Heights Motel at some point on the morning of September 24th?
"A. Yes, I was.
"Q. Do you know with regards to what?
"A. Yes, my dispatcher advised that she had a call from the motel that there had been a rape. That there had been a rape at that location, that the suspect was around and in one of the motel rooms, and that the victim was in the office with the manager of the motel."
*237 The trial court instructed the jury that the defense theory was one of mistake of fact and that defendant reasonably believed that complainant had reached the age of consent. Over defendant's objection, the court later instructed the jury that "[i]t is no defense that the defendant believed that [the complainant] was 16 years old or older at the time of the alleged act".
The defendant was found guilty by the jury of third-degree criminal sexual conduct, MCL 750.520d(1)(a); MSA 28.788(4)(1)(a), and was sentenced to a term of from 5 to 15 years in prison. The Court of Appeals affirmed defendant's conviction in an unpublished per curiam opinion. We granted leave to appeal on August 10, 1982. 414 Mich. 868.
II. REASONABLE-MISTAKE-OF-AGE DEFENSE
A. The Gengels Decision
This Court first stated that a good-faith or reasonable mistake as to the complainant's age is not a defense to a statutory rape charge in People v Gengels, 218 Mich. 632; 188 N.W. 398 (1922), nearly 61 years ago. In that case, the defendant was convicted under the predecessor to the current criminal sexual conduct statute of carnally knowing a female child under 16 years of age. The defendant testified that the complainant told him that she was 18 years old. This Court reversed the defendant's conviction and granted a new trial on the ground that the prosecutor had impermissibly impeached the defendant by collateral evidence of similar acts. While recognizing that such evidence may be admissible where guilt of a particular crime depends on intent, the Court noted:
"But in the crime charged here proof of the intent *238 goes with proof of the act of sexual intercourse with a girl under the age of consent. It is not necessary for the prosecution to prove want of consent. Proof of consent is no defense, for a female child under the statutory age is legally incapable of consenting. Neither is it any defense that the accused believed from the statement of his victim or others that she had reached the age of consent. 33 Cyc, p 1438, and cases cited." Gengels, supra, p 641.
The Gengels decision has only been cited once in this state's courts for the proposition that mistake of age is not a defense to a statutory rape charge. People v Doyle, 16 Mich. App. 242; 167 NW2d 907 (1969), lv den 382 Mich. 753 (1969).[2] In Doyle, the defendant was charged with taking indecent liberties with a female under 16 years of age.[3] The Court of Appeals observed that "[c]urrent social and moral values make more realistic the California view that a reasonable and honest mistake of age is a valid defense to a charge of statutory rape, People v Hernandez, 61 Cal 2d 529; 39 Cal Rptr 361; 393 P2d 673 (1964)". Id., p 243. The Court, however, concluded that it was bound to follow the Gengels rule and therefore refused to adopt the mistake-of-age defense in indecent liberties cases. Neither in Gengels nor in Doyle was the constitutionality of the rule prohibiting the defense of a reasonable mistake of age to a statutory rape charge squarely presented.
B. Is Gengels Still Viable?
This Court for the first time has the opportunity to review the rule announced in Gengels and determine whether it is still viable under the successor provision of the third-degree criminal *239 sexual conduct statute and, if so, whether it comports with a defendant's right to due process.
The statute reads, in relevant part:
"(1) A person is guilty of criminal sexual conduct in the third degree if the person engages in sexual penetration with another person and if any of the following circumstances exists:
"(a) That other person is at least 13 years of age and under 16 years of age." MCL 750.520d; MSA 28.788(4).
"Sexual penetration" is defined as:
"[S]exual intercourse, cunnilingus, fellatio, anal intercourse, or any other intrusion, however slight, of any part of a person's body or of any object into the genital or anal openings of another person's body, but emission of semen is not required." MCL 750.520a(h); MSA 28.788(1)(h).
In the present case, defendant directly attacks the constitutionality of the above statute on due process grounds for imposing criminal liability without requiring proof of specific criminal intent, i.e., that the accused know that the victim is below the statutory age of consent. In particular, he argues that the crime of statutory rape is rooted in the common law and, as with other common-law offenses, the element of intent must be implied within the statutory definition of a crime, absent clear legislative language to the contrary.[4] We are urged by defendant to construe the statute's silence with respect to the element of intent as not negating the defense of a reasonable mistake of fact as to the complainant's age.
In support of his argument, defendant relies primarily on two out-of-state cases which represent the minority view that, in a statutory rape prosecution, *240 an accused's reasonable, though mistaken, belief that the complainant was of the age of consent is a valid defense.[5]People v Hernandez, 61 Cal 2d 529; 39 Cal Rptr 361; 393 P2d 673 (1964); State v Guest, 583 P2d 836 (Alas, 1978). In both these cases, the Court engrafted a mens rea element onto the statutes in question where they were otherwise silent as to any requisite criminal intent.
The vast majority of states, as well as the federal courts, which have considered this identical issue have rejected defendant's arguments and do not recognize the defense of a reasonable mistake of age to a statutory rape charge.[6] For the reasons discussed below, we agree with the majority's position.
After careful examination of the statute in the instant case and its legislative history, we are persuaded that the Legislature, in enacting the new criminal sexual conduct code, 1974 PA 266, intended to omit the defense of a reasonable mistake of age from its definition of third-degree criminal sexual conduct involving a 13- to 16-year-old, and we follow the legislative intention.
*241 First, a general rule of statutory construction is that the Legislature is "presumed to know of and legislate in harmony with existing laws". People v Harrison, 194 Mich. 363, 369; 160 N.W. 623 (1916). The Legislature must have been aware of our earlier decision rejecting the reasonable-mistake-of-age defense under the old statutory rape statute. Had the Legislature desired to revise the existing law by allowing for a reasonable-mistake-of-age defense, it could have done so, but it did not do so.[7] This is further supported by the fact that under another provision of the same section of the statute, concerning the mentally ill or physically helpless rape victim, the Legislature specifically provided for the defense of a reasonable mistake of fact by adding the language that the actor "knows or has reason to know" of the victim's condition where the prior statute contained no requirement of intent.[8] The Legislature's failure to include similar language under the section of the statute in question indicates to us the Legislature's intent to adhere to the Gengels rule that the actual, and not the apparent, age of the complainant governs in statutory rape offenses.
Second, while the crime of statutory rape has its origins in the English common law,[9] Michigan's *242 new criminal sexual conduct statute represents a major attempt by the Legislature to redefine the law of sexually assaultive crimes, including that of statutory rape. See People v Willie Johnson, 406 Mich. 320, 327; 279 NW2d 534 (1979); People v Langworthy, 416 Mich. 630, 658; 331 NW2d 171 (1982) (LEVIN, J., dissenting). It is well established that the Legislature may, pursuant to its police powers, define criminal offenses without requiring proof of a specific criminal intent and so provide that the perpetrator proceed at his own peril regardless of his defense of ignorance or an honest mistake of fact. United States v Balint, 258 U.S. 250, 252; 42 S. Ct. 301; 66 L. Ed. 604 (1922); Williams v North Carolina, 325 U.S. 226, 238; 65 S. Ct. 1092; 89 L. Ed. 1577 (1945), reh den 325 U.S. 895 (1945). In the case of statutory rape, such legislation, in the nature of "strict liability" offenses, has been upheld as a matter of public policy because of the need to protect children below a specified age from sexual intercourse on the presumption that their immaturity and innocence prevents them from appreciating the full magnitude and consequences of their conduct.
Analysis of the statutory scheme adopted by the Legislature to define criminal sexual conduct further reveals that the Legislature cannot reasonably be said to have intended that a defense based on reasonable mistake of fact concerning the victim's age be available to persons charged under the act.
We are dealing with a statute, passed by the Legislature just nine years ago, which shows, on its face, that the age of the victim was carefully considered in defining and establishing the severity of the criminal conduct. The age of the victim is balanced against the nature of the sexual conduct *243 to establish a graduated system of punishment. See MCL 750.520b-750.520d; MSA 28.788(2)-28.788(4).
Under the prior rape or carnal knowledge statute, sexual penetration of a female under the age of 16 was defined as rape, punishable by life imprisonment or any term of years. 1931 PA 328, § 520. In 1974, when the Legislature revised the law of criminal sexual conduct, it could have retained this definition of "statutory rape" and could have continued to punish it as criminal sexual conduct in the first degree, i.e., by life imprisonment or any term of years. The Legislature chose not to do so. The Legislature, alternatively, could have completely decriminalized consensual sexual activity with a person between the ages of 13 and 16, or, for that matter, it could have made age irrelevant. But it chose not to do so.[10] What the Legislature did choose to do was to create a system of definitions and punishments which considers the age of the victim, the type of sexual contact, and several limited situations in which the relationship of authority between victim and defendant warrant, in the legislative judgment, an increase in punishment.
Thus, the Legislature has determined that sexual penetration of a victim under 13 years of age is first-degree criminal sexual conduct which is punishable by life imprisonment or any term of years. MCL 750.520b(1)(a), 750.520b(2); MSA 28.788(2)(1)(a), 28.788(2)(2). But sexual penetration of a victim 13 or older, but under 16 years of age, is third-degree criminal sexual conduct, with a *244 maximum punishment of 15 years in prison. MCL 750.520d(1)(a), 750.520d(2); MSA 28.788(4)(1)(a), 28.788(4)(2). However, if the victim is at least 13, but less than 16 years of age, and is a member of the defendant's household or related to the defendant, a person who engages in sexual penetration of that victim is guilty of first-degree criminal sexual conduct and may receive a maximum sentence of life imprisonment. MCL 750.520b(1)(b), 750.520b(2); MSA 28.788(2)(1)(b), 28.788(2)(2).
These discrete choices made by the Legislature evidence careful consideration of age and a deliberate determination to retain the law of statutory rape where the prohibited conduct occurred and the victim was within the protected age group.
One critic has argued that the exclusion of a reasonable-mistake-of-age defense in statutory rape cases is no longer justified given the increased age of consent,[11] the realities of modern society that young teens are more sexually mature, and the seriousness of the penalty as compared with other strict liability offenses.[12] We are not convinced that the policy behind the statutory rape laws of protecting children from sexual exploitation and possible physical or psychological harm from engaging in sexual intercourse is outmoded. Indeed, the United States Supreme Court recently acknowledged the state's authority to regulate the sexual behavior of minors in order to promote their physical and mental well-being, even under a gender-based statutory rape law.[13]
*245 C. Is the Defense of a Reasonable Mistake of Age Constitutionally Mandated?
Contrary to defendant's contention, the mistake-of-age defense, at least with regard to statutory rape crimes, is not constitutionally mandated. We quote with approval the following language from Nelson v Moriarty, 484 F2d 1034, 1035-1036 (CA 1, 1973):
"Petitioner claims that his honest belief that the prosecutrix of the statutory rape charge was over sixteen years of age should constitute a defense, of constitutional dimensions, to statutory rape. The effect of mens rea and mistake on state criminal law has generally been left to the discretion of the states. * * * The Supreme Court has never held that an honest mistake as to the age of the prosecutrix is a constitutional defense to statutory rape, * * * and nothing in the Court's recent decisions clarifying the scope of procreative privacy, * * * suggests that a state may no longer place the risk of mistake as to the prosecutrix's age on the person engaging in sexual intercourse with a partner who may be young enough to fall within the protection of the statute. Petitioner's argument is without merit."
Moreover, given the already highly emotional setting of a statutory rape trial, the allowance of a mistake-of-age defense would only cause additional undue focus on the complainant by the jury's scrutinizing her appearance and any other visible signs of maturity. The obvious problem is that because early adolescents tend to grow at a rapid rate, by the time of trial a relatively undeveloped young girl or boy may have transformed into a young woman or man. A better procedure would be to permit any mitigating and ameliorating evidence in support of a defendant's mistaken *246 belief as to the complainant's age to be considered by the trial judge at the time of sentencing.[14]
We again note that our decision is in line with the preponderant majority of jurisdictions, both state and federal, which do not recognize the reasonable-mistake-of-age defense for statutory rape offenses and have likewise upheld against due process challenges their respective statutes' imposition of criminal liability without the necessity of proving the defendant's knowledge that the victim was below the designated age. Accordingly, we reaffirm our earlier opinion in Gengels and reject the reasonable-mistake-of-age defense for cases brought under § 520d(1)(a) of the third-degree criminal sexual conduct statute.
III. EVIDENCE OF COMPLAINANT'S LIFESTYLE
Defendant asserts that the trial court denied his Sixth Amendment right of confrontation and cross-examination by precluding any inquiry into evidence of complainant's lifestyle. Defendant maintains that this evidence was essential to impeach complainant's credibility and to show her bias against defendant. Specifically, defendant argues that the evidence would have refuted complainant's testimony that she was naive and unsophisticated and supported his defense of consensual intercourse.
The trial court excluded the evidence on the ground that it was immaterial to the charges in the instant case. The Court of Appeals stated:
*247 "Defendant also argues that the trial court erred in restricting the cross-examination of complainant and her mother with regard to complainant's allegedly `streetwise' life-style. A trial judge is afforded wide discretionary latitude in limiting cross-examination, and his decision will not be reversed on appeal absent a clear abuse of that discretion. People v Taylor, 386 Mich. 204, 208; 191 NW2d 310 (1971). Here, defendant was given the opportunity to cross-examine complainant and her mother on all aspects of the case. It was only when the questioning turned to complainant's character and life-style that the court restricted the line of inquiry. We are not persuaded that the court abused its discretion. See 1 Gillespie, Michigan Criminal Law & Procedure (2d ed), § 401, p 613." Unpublished opinion per curiam of the Court of Appeals, decided September 16, 1981 (Docket No. 52145).
We agree with the conclusion of the Court of Appeals.[15]
In People v Williams, 416 Mich. 25; 330 NW2d 823 (1982), this Court was confronted with a similar issue in a first-degree criminal sexual conduct case. There we held that evidence of the complainant's reputation as a prostitute was irrelevant to impeach her credibility and to the issue of consent.
The exclusion of evidence regarding complainant's lifestyle is even more compelling in the present case. First, as previously mentioned, there is no issue of consent in a statutory rape charge because a victim below the age of consent is conclusively presumed to be legally incapable of giving *248 his or her consent to sexual intercourse.[16] Second, any evidence that complainant was sexually experienced would be irrelevant to attack her character for truthfulness. MRE 608. Finally, we find no logical connection between such evidence and complainant's alleged bias in filing charges against defendant.
Thus, on the basis of the foregoing, we find that the trial court did not abuse its discretion in excluding this evidence.
IV. PROSECUTOR'S IMPROPER ARGUMENT
Defendant refers to several instances during the trial where he claims the prosecutor improperly argued or elicited evidence tending to support a theory of forcible rape. Defendant contends that as a result he was placed in the predicament of having to defend against a greater uncharged offense without fair notice as required by due process.
The initial reference to forcible rape occurred during the prosecutor's opening statement when he argued that complainant was an "unwilling partner". We find no grounds for reversal given that defendant's objection to this remark was immediately sustained by the trial court.
Then, on direct examination of the complainant, the prosecution inquired into evidence of bullet holes on the dashboard of the car driven by defendant, defendant's use of a razor blade in putting on the car's license plate, and complainant being told by defendant that a gun was in the vehicle's trunk, although the gun was not found at the time *249 of arrest. The trial court did not sustain defendant's objections to this questioning.
While we note that these brief references to forcible rape were improvident, we also realize that to a certain extent they were unavoidable, being part of the res gestae of the offense. See People v Delgado, 404 Mich. 76, 83; 273 NW2d 395 (1978); People v Bostic, 110 Mich. App. 747, 749-750; 313 NW2d 98 (1981). This evidence was necessary to convey to the jury "the complete story", namely, the events leading up to the alleged sexual act, and to explain complainant's covert departure from the motel room and the summoning of the police. See People v Spillman, 399 Mich. 313, 321; 249 NW2d 73 (1976). However, in view of the overwhelming evidence against the defendant, we find that any error which may have resulted from introduction of this evidence before the jury is harmless beyond a reasonable doubt.[17]
Defendant next singles out the prosecutor's inquiry of the examining physician as to whether he was "an expert in sexual assault matters" as another example of the prosecutor's injection of forcible rape evidence. Again, we find no cause for reversal where the defendant's objection to this particular question was sustained by the trial court.
Last, during closing argument, the prosecutor reminded the jury about the testimony regarding the gun and the knife, but quickly dismissed this testimony and only argued the elements of the charged offense. The defendant did not timely object to this argument at trial. This alleged prejudicial remark by the prosecutor in closing argument where the prejudicial effect was minimal and *250 could have been cured by a timely cautionary instruction does not require reversal. See People v Duncan, 402 Mich. 1, 16-17; 260 NW2d 58 (1977).
Consequently, we find that the prosecutor's argument and introduction of evidence did not deny defendant a fair trial.
V. CONCLUSION
We find that the Legislature intentionally omitted the defense of a reasonable mistake of age from its statutory definition of third-degree criminal sexual conduct involving a 13- to 16-year-old. Moreover, we hold that this defense is not constitutionally compelled.
Furthermore, we find that the trial court did not abuse its discretion in excluding evidence regarding complainant's lifestyle since such evidence was irrelevant to impeach her credibility or to show her bias toward defendant.
Finally, we find no error requiring reversal in the prosecutor's brief references to evidence of forcible rape in his argument to the jury and on direct examination of the complainant and the examining physician.
Accordingly, we affirm defendant's conviction.
RYAN, BRICKLEY, CAVANAGH, and BOYLE, JJ., concurred with WILLIAMS, C.J.
KAVANAGH, J. (dissenting).
Defendant was convicted by a jury of criminal sexual conduct in the third degree, MCL 750.520d(1)(a); MSA 28.788(4)(1)(a), on March 7, 1980. Prior to trial, defendant moved to be allowed to present the defense of mistake of age, arguing that consciousness of wrongdoing is an essential element of criminal liability. Defendant's motion was denied. *251 Defendant's entire defense at trial was mistake of fact. He claimed that he honestly believed that the prosecutrix was 17 years of age at the time of the offense. The Court of Appeals affirmed defendant's conviction in an unpublished per curiam opinion.
Michigan has a long history of insistence on the establishment of mens rea in felony cases. In Pond v People, 8 Mich. 150, 174 (1860), Justice CAMPBELL observed:
"A criminal intent is a necessary ingredient of every crime. And therefore it is well remarked by Baron Parke in Regina v Thurborn, 2 C & K 832, that `as the rule of law, founded on justice and reason, is that actus non facit reum, nisi mens sit rea, the guilt of the accused must depend on the circumstances as they appear to him.' And Mr. Bishop has expressed the same rule very clearly, by declaring that `in all cases where a party, without fault or carelessness, is misled concerning facts, and acts as he would be justified in doing if the facts were what he believed them to be, he is legally as he is morally innocent': 1 Bish Cr L, § 242."
Justice FITZGERALD adverted to this principle in quoting Gegan, Criminal Homicide in Revised New York Penal Law, 12 NY L Forum 565, 586 (1966), in People v Aaron, 409 Mich. 672, 708; 299 NW2d 304 (1980):
"`If one had to choose the most basic principle of the criminal law in general * * * it would be that criminal liability for causing a particular result is not justified in the absence of some culpable mental state in respect to that result * * *.'"
Disallowing a defense of reasonable mistake of fact obviates proof of mens rea. While this practice has been approved in misdemeanor cases, we are cited no case, nor has our research uncovered one, *252 wherein this Court has sanctioned it in felony cases.
Recognizing the defense of a reasonable mistake of age to a charge of statutory rape, however, does not imply that the defendant must have in fact known the person was under age. Instead, when the defense is raised, the factfinder need only determine whether the defendant honestly believed that the prosecutrix was an adult and, if so, whether the belief was reasonable.
Reasonable mistake of age should not be confused with the rule that a person under the statutory age is legally incapable of consent. Consent of the underage person is not the issue here. It is the defendant's state of mind. The gravamen of the charged offense is voluntary intercourse with an underage person. Just as proof of coercion of a defendant would defeat the charge, so should defendant's reasonable mistake of the fact of age. In neither instance could there be mens rea, for in each case there would be no free election to do the thing forbidden.
LEVIN, J., concurred with KAVANAGH, J.
NOTES
[1] The statutory rape statute in effect at the time of Gengels, which prohibited carnal knowledge of a female under 16, MCL 750.520; MSA 28.788, was repealed by 1974 PA 266 and replaced by the new criminal sexual conduct statute, MCL 750.520a et seq.; MSA 28.788(1) et seq. The purpose of the new statute was to codify, consolidate, define, and prescribe punishment for a number of sexually assaultive crimes under one heading. See People v Willie Johnson, 406 Mich. 320, 327-330; 279 NW2d 534 (1979). In furtherance of this goal, the Legislature created four degrees of criminal sexual conduct, the first three of which comprise the "new" statutory rape law. Under the new law, sexual penetration or contact with a person under 13 years old is distinguished from sexual penetration with a person between the ages of 13 and 16. We are concerned in the present case only with the latter age group, although we note that the same policy considerations advanced here could apply with even greater force to the under-13 age group.
[2] Gengels has also been cited for this rule by the federal courts; see United States v Mack, 112 F2d 290, 292 (CA 2, 1940).
[3] MCL 750.336; MSA 28.568 (since repealed by 1974 PA 266).
[4] See, e.g., People v Aaron, 409 Mich. 672, 722-723; 299 NW2d 304 (1980).
[5] See generally Anno: Mistake or Lack of Information as to Victim's Age as Defense to Statutory Rape, 8 ALR3d 1100.
A few states have adopted, by statute, the reasonable-mistake-of-age defense in statutory rape cases. See, e.g., Alas Stat § 11.41.445(b); Ariz Rev Stat Ann § 13-1407(B); Ark Stat Ann § 41-1802(3); Ill Ann Stat, ch 38, § 11-4(c) (Smith-Hurd); Ky Rev Stat § 510.030; Mont Code Ann § 45-5-506(1); Wash Rev Code Ann § 9A.44.030(2).
This defense has also been adopted in limited fashion in the 1962 Proposed Draft of the Model Penal Code § 213.6(1), which reads:
"(1) Mistake as to Age. Whenever in this Article the criminality of conduct depends on a child's being below the age of 10, it is no defense that the actor did not know the child's age, or reasonably believed the child to be older than 10. When criminality depends on the child's being below a critical age other than 10, it is a defense for the actor to prove that he reasonably believed the child to be above the critical age."
[6] See, generally, cases cited in Anno, fn 5.
[7] See People v Langworthy, 416 Mich. 630, 644; 331 NW2d 171 (1982), in which this Court, applying the same reasoning, held that the defense of voluntary intoxication was unavailable to a defendant facing a first-degree criminal sexual conduct charge where the statutory language indicated no legislative intent to require proof of specific intent.
[8] MCL 750.520d(1)(c); MSA 28.788(4)(1)(c), formerly MCL 750.341; MSA 28.573 (ravishment of a female patient in an institution for the insane); see People v Davis, 102 Mich. App. 403; 301 NW2d 871 (1980).
[9] For a thorough discussion of the history of statutory rape law, tracing its development from thirteenth-century England, see Myers, Reasonable Mistake of Age: A Needed Defense to Statutory Rape, 64 Mich. L Rev 105, 109-111 (1965); see also Hall, General Principles of Criminal Law (2d ed), pp 338-339, 373-376.
[10] The Legislature also could have followed the lead of those states which had previously adopted, by statute, the reasonable-mistake-of-age defense in statutory rape cases. See, e.g., Ill Ann Stat, ch 38, § 114(c) (Smith-Hurd). See also the 1962 Proposed Draft of the Model Penal Code § 213.6(1).
[11] The statutory age of consent has gradually risen from the original age of 10 years old to 16 on up to 21, varying among the states. See Myers, fn 9 supra, pp 110-111, fn 44.
[12] See Myers, fn 9 supra, pp 125-127. The penalty for third-degree criminal sexual conduct is up to a maximum of 15 years imprisonment. MCL 750.520d(2); MSA 28.788(4)(2).
[13] See Michael M v Superior Court of Sonoma County, 450 U.S. 464, 472, fn 8; 101 S. Ct. 1200; 67 L. Ed. 2d 437 (1981), wherein the Court upheld, against an equal protection challenge, California's statutory rape law which exclusively punished male perpetrators.
[14] See State v Elton, 657 P2d 1261, 1262 (Utah, 1982). For example, some mitigating factors which a trial judge may take into consideration in imposing a sentence are the relative ages and relationship of the parties involved. We note that a more sympathetic sentencing situation would have been presented than in the case at bar had a 17-year-old defendant been prosecuted for relations with his almost 16-year-old girlfriend.
[15] Because we decide this issue, as did the courts below, on the narrow ground that the proffered cross-examination was irrelevant, we need not determine whether Michigan's "rape shield" law, MCL 750.520j; MSA 28.788(10), was applicable to exclude the evidence in this case. See People v Williams, 416 Mich. 25, 32; 330 NW2d 823 (1982).
[16] People v Gengels, 218 Mich. 632, 641; 188 N.W. 398 (1922); People v Bennett, 205 Mich. 95; 171 N.W. 363 (1919).
[17] See People v Robinson, 386 Mich. 551, 563; 194 NW2d 709 (1972); MCL 769.26; MSA 28.1096; GCR 1963, 529.1. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578425/ | 439 F. Supp. 165 (1977)
Loren L. FLOREY, Plaintiff,
v.
AIR LINE PILOTS ASSOCIATION, INTERNATIONAL and Northwest Airlines, Inc., Defendants.
No. 4-77-Civ. 223.
United States District Court, D. Minnesota, Fourth Division.
September 26, 1977.
As Amended November 15, 1977.
*166 *167 Russell J. Jensen, St. Paul, Minn., for plaintiff.
Gary Green, Daniel M. Katz, Attys., Washington, D.C., Patrick A. Brennaman and Owen J. Dratler, Minneapolis, Minn., for defendant Air Line Pilots.
David A. Ranheim, Dorsey, Windhorst, Hannaford, Whitney & Halladay, Minneapolis, Minn., for defendant Northwest Airlines.
MEMORANDUM ORDER
LARSON, District Judge.
Plaintiff, a retired commercial airline pilot, has instituted this suit against his former employer, Northwest Airlines, Inc. (NWA), and his former labor union, Air Line Pilots Association, International (ALPA), making various allegations of impropriety in connection with the revocation of his first class medical certificate by the Federal Aviation Administration (FAA) and with his subsequent "forced retirement." Defendant ALPA filed motions to quash service and to dismiss the complaint for failure to state a cause of action. NWA subsequently entered its own motion to dismiss for failure to state a claim or, in the alternative, for summary judgment.
ALPA's motion to quash service was brought on the grounds that process was not properly served. Service was made upon a local office of ALPA by certified mail and upon an ALPA attorney in Washington, D.C., personally. ALPA contends that neither of these procedures complies with the rules of civil procedure. Specifically, ALPA correctly contends that service outside the State is effective under Federal Rule of Civil Procedure 4(f) only if authorized by State statute. Minnesota long arm statutes permit out-of-state service only upon nonresident defendants. See Minn. Stat. §§ 303.13 and 543.19. ALPA is a resident of Minnesota, because its members reside in this State. R. H. Bouligny, Inc. v. United Steelworkers of America, 336 F.2d 160 (4th Cir. 1964). Thus, service in Washington is ineffective. ALPA also argues that Rule 4(d)(3) requires local service upon residents to be made personally. Since the *168 only service made within Minnesota was mailed, ALPA concludes, the Court must quash service.
Plaintiff defends local service by mail in this case on the authority of Rule 4(d)(7), which permits service in accordance with State law, and some early Minnesota case law, which indicates that where service is made by mail and actually reaches the party to be served within the required time, it is equivalent to personal service. See e. g., State v. Pierce, 257 Minn. 114, 100 N.W.2d 137 (1959); Van Aernman v. Winslow, 37 Minn. 514, 35 N.W. 381 (1887). The Court doubts that the case law cited by plaintiff may be relied on, however, for it antedates the promulgation of the Minnesota Rules of Civil Procedure, which track the Federal rules in most respects, including the service provisions of Rule 4. The Court understands that State officials do not serve civil process by mail.
The Court will nonetheless deny defendant's motion to quash service in this case. The Court takes judicial notice that the United States Marshall in this district has undertaken to serve civil summons and complaints by certified mail. Prior to the use of the mails, the Marshal had incurred a substantial deficit as a result of the disparity between the actual cost of personal service and the maximum statutory fee for civil process. Use of the mails produces a substantial savings, yet it is as effective as personal service. The certified mail receipt provides a record of the date of delivery and of the identity of the recipient. The Marshal notified local counsel of its program in two local journals, Hennepin Lawyer, November-December, 1976, p. 26, and Ben & Bar, Vol. 33, No. 5 (November 1976), p. 16. The Marshal has employed this program for nearly a year now in thousands of cases and the Court is unaware of any previous objections.
ALPA has suffered no prejudice by the method of service implemented by the U.S. Marshal. It has already appeared before the Court in connection with its motion to dismiss. ALPA has a local office, and if a motion to quash were granted here, the Marshal could easily serve ALPA again. The Court views this motion to quash as a dilatory action. Plaintiff has relied in good faith on the Marshal's program, and should not be penalized. To grant this motion would merely postpone disposition on the merits and could result in a new hearing on the very issues already before the Court. Under the circumstances of this case, the motion to quash is without merit.
ALPA has also filed a motion to dismiss the complaint for failure to state a claim upon which relief can be granted. NWA has entered a motion to dismiss or, in the alternative, a motion for summary judgment. Before discussing the merits of those motions, it is useful to summarize the sequence of events giving rise to plaintiff's complaint.
In 1972 representatives of NWA approached plaintiff concerning his need to enter an alcohol rehabilitation program. ALPA representatives were summoned and, after a meeting with all parties present, ALPA recommended that plaintiff submit to the program. NWA granted a short leave of absence without pay to accommodate that end. The program lasted four months, after which plaintiff returned to the service of NWA. The FAA had apparently learned of plaintiff's status for it thereafter conditioned plaintiff's continued certification as a commercial airline pilot upon semiannual physicals and semiannual satisfactory reports from both defendants. For some time plaintiff continued to pilot NWA aircraft without incident. In 1976, however, ALPA refused to issue a letter to the FAA "attesting" to the sobriety of the plaintiff. Thereupon, the FAA medical examiner revoked plaintiff's medical certificate. Since he could no longer pilot aircraft for NWA, NWA permitted plaintiff to take an early retirement. Plaintiff has filed no grievances, complaints or petitions for review or appeal with ALPA, NWA or the FAA. Plaintiff makes no claim against the FAA. Plaintiff seeks to recover from NWA and ALPA back pay both for the four month period during which he was on leave without pay in 1972 and for the period *169 beginning at the date of the "termination" and extending to his expected date of normal retirement. He also seeks punitive damages and attorneys' fees.
Plaintiff's complaint is difficult to parse, and his memoranda in opposition to defendants' motions to dismiss are of little assistance in understanding his view of the legal relations between plaintiff, the FAA, ALPA and NWA. For example, the facts he alleges indicate that the gravamen of plaintiff's complaint is the revocation of his certificate by the FAA, but he makes every effort to attribute liability to ALPA and NWA.
The bulk of plaintiff's argument suggests that ALPA has breached its duty of fair representation, causing his injuries, and that ALPA is therefore liable to him in damages. ALPA contends, on the other hand, that this case has nothing to do with the duty of fair representation because plaintiff's difficulties involved the FAA, not NWA. NWA supplements ALPA's argument by noting the statutory provisions prescribing procedures for appeals from FAA actions.
Plaintiff's analysis under his unfair representation claim implicates a large number of actions and omissions by ALPA. The most significant of these involve ALPA's alleged relationship with the FAA. Plaintiff contends that ALPA played some impermissible role in establishing the conditions attached to the renewal of his medical certificate by the FAA. Moreover, plaintiff alleges that ALPA's refusal to attest to plaintiff's sobriety "forced" the FAA to rescind his certification. Plaintiff further argues that ALPA somehow prevented the FAA from according him a hearing concerning the revocation of his certificate. There are other alleged violations of the fair representation duty but the Court will focus on those enumerated above for the present.
To understand the contours of the duty of fair representation it is useful to review its origins.
"The federal labor laws, in seeking to strengthen the bargaining position of the average worker in an industrial economy, provided for the selection of collective-bargaining agents with wide authority to negotiate and conclude collective bargaining agreements on behalf of all employees in appropriate units, as well as to be the employee's agent in the enforcement and administration of the contract. Wages, hours, working conditions, seniority, and job security therefore became the business of certified or recognized bargaining agents, as did the contractual procedures for the processing and settling of grievances, including those with respect to discharge." Hines v. Anchor Motor Freight, 424 U.S. 554, 563, 96 S. Ct. 1048, 1056, 47 L. Ed. 2d 231 (1976).
The exclusive power of these agents, elected by the majority, necessarily "extinguishes the individual employee's power to order his own relations with his employer." NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 180, 87 S. Ct. 2001, 2006, 18 L. Ed. 2d 1123 (1967). Thus the majority, in its election of a representative, assumes a substantial power over the interests of the minority groups. In order to ensure that "no individual union member may suffer invidious, hostile treatment at the hands of the majority of his co-workers," Motor Coach Employees v. Lockridge, 403 U.S. 274, 301, 91 S. Ct. 1909, 1924, 29 L. Ed. 2d 473 (1971), the courts have established the doctrine of fair representation which imposes "upon the bargaining agent a responsibility equal in scope to its authority." Hines v. Anchor Motor Freight, 424 U.S. 554, 564, 96 S. Ct. 1048, 1056, 47 L. Ed. 2d 231 (1976). Representatives who abuse their fiduciary duty are liable in damages, under this doctrine, to injured members of the union.
Although both the power and the duty of the bargaining agent to act are broad, neither is without limit. Implicit in every opinion imputing the fair representation duty to a union is some controversy concerning the enforcement or administration of the employment contract. Plaintiff's complaint presents no contractual controversy; rather, plaintiff challenges the actions of ALPA as they influenced the *170 decisions of a Federal administrative agency. It is true that ALPA's failure to issue a favorable report on plaintiff's behalf played an important role in the FAA decision to revoke plaintiff's medical certificate and that the revocation in turn had an inescapable effect on plaintiff's employment. But ALPA's capacity in the FAA certification program was at most an advisory one. Plaintiff has alleged no facts to justify an inference that ALPA manipulated the FAA in order to sabotage him indirectly. Thus a link between ALPA's actions and any abuse of plaintiff's contractual interests is tenuous.[1] Moreover, courts justify the fair representation duty on the need to circumscribe the exclusive discretion possessed by the union. ALPA owed plaintiff no duty of representation before the FAA, nor did its assistance to the FAA prevent plaintiff from procuring independent representation or representing himself before the FAA. Thus the exclusivity factor is absent. Finally, while ALPA owed plaintiff a duty to act as his agent with NWA, plaintiff never called upon ALPA to act in that role. Thus the Court can find no rationale that would justify application of the doctrine of fair representation to the facts alleged by plaintiff.
The Court is not without sympathy for plaintiff's sense of betrayal. ALPA assumed an inconsistent posture serving both as plaintiff's advocate and as the FAA's watchdog that must inevitably have created a rift between plaintiff and ALPA. ALPA's authority to assist the FAA is unclear and, if ALPA intended its action to benefit plaintiff, that purpose was lost on its intended beneficiary. Still, ALPA's actions cannot be fairly said to have implicated the sort of concerns that give rise to the doctrine of fair representation. ALPA's liability to plaintiff, if any, must be measured under standards other than those of the doctrine of fair representation.
Plaintiff's unfair representation claim falls for another reason.
"In order to state a claim of unfair representation, the plaintiff
* * * must have more than conclusory statements alleging discrimination. In particular plaintiffs must make a showing that the action or inaction * * * complained of was motivated by bad faith, for the gravaman (sic) of the rule is `hostile discrimination.' An allegation that certain conduct of the [Union] * * * is `invidious' and `discriminatory,' without a concomitant identification of lack of good faith, will not set forth a claim sufficient to call for the use of the Steele doctrine [Steele v. Louisville & Nashville R. R. Co., 323 U.S. 192, 65 S. Ct. 226, 89 L. Ed. 173 (1944)].
Gainey v. Brotherhood of Railway & Steamship Clerks, 313 F.2d 318, 323 (3rd Cir. 1963) (emphasis supplied.)" Augspurger v. Brotherhood of Locomotive Engineers, 510 F.2d 853, 859 (8th Cir. 1975).
Though plaintiff's complaint is replete with legal conclusions that ALPA discriminated against plaintiff, it is devoid of facts that would justify an inference of impermissible motive.[2] Significantly, plaintiff does not even allege that he had never experienced difficulty with alcohol. Nor does plaintiff allege that ALPA used his alcoholism as a pretext to disguise other proscribed motives. The most that could be inferred from the facts alleged is a misguided intermeddling in affairs beyond the proper scope of a union's duties. That is not *171 enough. See Motor Coach Employees v. Lockridge, 403 U.S. 274, 301, 91 S. Ct. 1909, 29 L. Ed. 2d 473 (1971); Vaca v. Sipes, 369 U.S. 171, 190, 87 S. Ct. 903, 17 L. Ed. 2d 842 (1967).
Thus far the Court has discussed only those allegations pertaining to ALPA's alleged involvement with the FAA. Plaintiff makes two other allegations of impropriety against ALPA. First, plaintiff complains that ALPA's representation of him in 1972 was inadequate. This claim could give rise to a potentially troublesome statute of limitations question, see Butler v. Local Union 823, 514 F.2d 442, 447-48 (8th Cir. 1975), but the Court need not reach that issue. Here again plaintiff fails to allege any substantial indicia of bad faith. Moreover, plaintiff accepted the leave of absence voluntarily. In addition, plaintiff would face insurmountable hurdles in the exhaustion of remedies doctrine against either ALPA or NWA on this claim. See Brady v. Trans World Airlines, Inc., 401 F.2d 87, 104 (3d Cir. 1968) (applying bar to claim against union).
Plaintiff's remaining unfair representation claim appears to be that ALPA failed to provide him with a promised alcohol rehabilitation program. It is impossible to perceive the relation of this claim to the doctrine of fair representation. Plaintiff may intend to allege a contract claim of some sort, but his complaint as it stands does not sufficiently identify the source or nature of ALPA's obligation to plaintiff to justify any relief in this regard.
Though plaintiff desires recovery from ALPA, plaintiff's attentions would better be directed at the FAA. Under 49 U.S.C. §§ 1421-1429, the FAA Administrator bears the responsibility to promulgate and enforce rules for the safe regulation of civil aeronautics. In particular, 49 U.S.C. § 1422 confers on the Administrator the power to regulate and issue airman certificates which authorize individuals to serve on commercial aircraft. The FAA Administrator has promulgated regulations to help accomplish his duties. Under 14 C.F.R. § 61.3(c) individuals desiring a pilot certificate must procure a medical certificate. 14 C.F.R. §§ 67.13(d)(1)(i)(c), 67.15(d)(1)(i)(c) and 67.17(d)(1)(i)(c) provide that individuals with a history of alcoholism may not receive medical certificates. The FAA Administrator has delegated the responsibility for determining qualifications for medical certificates to the Federal Air Surgeon and others pursuant to 49 U.S.C. § 1355(a). See 14 C.F.R. § 67.25(a) and (c).
Specific statutes govern review of actions taken by the FAA or its agents that affect any person. Under 49 U.S.C. § 1429, the FAA is obligated to provide the holder of a medical certificate a hearing before issuing any order amending, suspending or revoking such certificate. See 14 C.F.R. § 67.27. Under 49 U.S.C. § 1355(b), a person affected by any action taken by any private person exercising authority delegated by the Administrator may apply for reconsideration of such action by the Administrator. See 14 C.F.R. § 67.25(b). The Administrator's orders are appealable to the National Transportation Safety Board under 49 U.S.C. § 1903(a)(9). Orders of that agency, in turn, are appealable to the United States Courts of Appeals under 49 U.S.C. § 1486.
Thus, it is plain that Congress intends that the FAA shall regulate the certification of commercial pilots. Congress also plainly intends that individuals injured by actions of the FAA should pursue the remedies within that agency. This Court has no authority to restore plaintiff's medical certificate. Cf. Priority Air Dispatch, Inc. v. NTSB, 514 F.2d 1335, 1336 (D.C.Cir.1975). It would make little sense to permit plaintiff to sue private parties for damages that a prompt and proper administrative appeal might have prevented when he has disregarded the extensive procedural protections specifically applicable to his situation. The Eighth Circuit has ruled in somewhat analogous cases that the complaint should be dismissed in favor of the primary jurisdiction of the appropriate administrative agency. See Anderson v. UTU, 557 F.2d 165 (8th Cir. 1977); Augspurger v. Brotherhood of Locomotive Engineers, 510 F.2d 853 (8th Cir. 1975). Had plaintiff stated a cause of *172 action against ALPA, the doctrine of primary jurisdiction might have applied here.
In sum, plaintiff has failed to state an unfair representation claim against ALPA. Plaintiff had attempted to piggyback in a claim against NWA on the grounds that once the Court assumed jurisdiction over a union in an unfair representation case, it is automatically appropriate to assume jurisdiction over the employer. Plaintiff conceded in his memorandum, however, that "[e]xcept to the extent that Northwest concurred, most of the injury complained of by plaintiff occurred at the instance of defendant ALPA." Plaintiff has not alleged any specific contractual breaches against NWA. Moreover, plaintiff has conceded that his exclusive remedy for such claims against NWA would lie with the Northwest Airlines Pilots' System Board of Adjustment. Agreement between Northwest Airlines, Inc., and the Air Line Pilots in the service of Northwest Airlines, Inc., §§ 19, 20, and 21. Plaintiff must exhaust his contractual remedies with NWA before this Court can take cognizance of his claims. See Andrews v. Louisville & Nashville R. R., 406 U.S. 320, 325, 92 S. Ct. 1562, 32 L. Ed. 2d 95 (1972); Dones v. Eastern Air Lines, Inc., 408 F. Supp. 1044 (D.Puerto Rico 1975); Ciaccio v. Eastern Air Lines, Inc., 354 F. Supp. 1272, 1275 (E.D.N.Y.1973); West v. American Airlines, Inc., 352 F. Supp. 1278 (N.D.Ill.1972). Thus the Court need not face any breach of contract claim against NWA.
Two matters remain for discussion. First, plaintiff implies in various parts of his complaint that both NWA and ALPA abused his constitutional rights to due process and equal protection. Cases too numerous to recite have held that neither the Fifth nor the Fourteenth Amendments to the Constitution restrict private conduct. See e. g. Driscoll v. Int. Union of Operating Engineers, 484 F.2d 682 (7th Cir. 1973), cert. denied 415 U.S. 960, 94 S. Ct. 1490, 39 L. Ed. 2d 575; Aikens v. Abel, 373 F. Supp. 425, 434 (W.D.Pa.1974). Plaintiff has made no effort to link the actions of either NWA or ALPA to either Federal or State action.
Plaintiff also relies on an implied cause of action under the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act Amendments of 1974 and 1976, 42 U.S.C. §§ 4541, et seq. The Court concludes that that legislation does not confer any private cause of action against private employers or unions. Nor can it be understood to confer on alcoholics the sort of protections bestowed on racial and religious minorities by the Fourteenth Amendment and civil rights legislation.
IT IS ORDERED:
1. That the motion of Air Line Pilots Association International to quash service is denied.
2. That the motion of Air Line Pilots Association International to dismiss the complaint in its entirety is granted.
3. That the motion of Northwest Airlines, Inc., to dismiss the complaint in its entirety is granted.
NOTES
[1] Plaintiff relies heavily upon Brady v. Trans World Airlines, Inc., 401 F.2d 87 (3d Cir. 1968), for the proposition that any action of the union that affects its members is subject to the doctrine of fair representation, but plaintiff mistakes the holding of that decision. That court expressly refused to permit recovery on an unfair representation claim because of a failure to exhaust internal union remedies.
[2] Plaintiff appears to contend that alcoholism is an impermissible consideration much like race or religious preference. The Court cannot accept such a contention and relies upon the conclusion of the FAA that alcoholism is incompatible with piloting commercial aircraft. See 14 C.F.R. §§ 67.13(d)(1)(i)(c), 67.15(d)(1)(i)(c), and 67.17(d)(1)(i)(c). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578403/ | 351 N.W.2d 319 (1984)
MINNESOTA ENERGY AND ECONOMIC DEVELOPMENT AUTHORITY, Respondent,
v.
David L. PRINTY, as Secretary of the Minnesota Energy and Economic Development Authority, Appellant.
No. CX-84-399.
Supreme Court of Minnesota.
May 11, 1984.
*321 Lindquist & Vennum, R. Walter Bachman, and James P. McCarthy, Minneapolis, for appellant.
Hubert H. Humphrey, III, Atty. Gen., Christie B. Eller and Barry R. Greller, Sp. Asst. Attys. Gen., St. Paul, for respondent.
Heard, considered and decided by the court en banc.
ORDER
SCOTT, Justice.
IT IS ORDERED that:
The order filed herein on May 4, 1984, is hereby withdrawn, and the following order is substituted:
1. The judgment of the Hennepin County District Court, the Honorable David R. Leslie, entered February 27, 1984, be, and the same is, affirmed;
2. The findings of fact, conclusions of law, order for judgment, and the memorandum of the Hennepin County District Court, the Honorable David R. Leslie, filed February 27, 1984, attached hereto and incorporated herein, are adopted as the opinion of this court.
STATE OF MINNESOTA DISTRICT COURT
COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT
Minnesota Energy and Economic Court File No. MC84-347
Development Authority, an Agency
of the State of Minnesota,
Plaintiff,
vs.
David L. Printy, as Secretary
of the Minnesota Energy and
Economic Development Authority,
Defendant.
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER FOR JUDGMENT
DAVID R. LESLIE, Judge.
This matter came on for hearing before the undersigned on February 23, 1984, upon the parties' separate motions for summary judgment. The plaintiff was represented by Barry R. Greller and Christie B. Eller, Special Assistant Attorneys General. The defendant was represented by R. Walter Bachman, Esq. and James P. McCarthy, Esq. of the firm of Lindquist and Vennum. Based upon the oral argument of counsel and upon all the pleadings, affidavits, exhibits, *322 stipulation, files and records and proceedings herein, the Court makes the following determinations.
FINDINGS OF FACT
The Authority and the Act
1. The Minnesota Energy and Economic Development Authority (hereinafter "the Authority") is a public agency of the State of Minnesota created by Minn.Laws 1983 ch. 289 (codified as Minn.Stat. §§ 116J.875 to 116J.926 and hereinafter referred to as "the Act"). The Authority is the legal successor to the Minnesota Small Business Finance Agency created by Minn.Laws 1980 ch. 547 as amended.
2. The members and governing body of the Authority consist of the Commissioner of the Department of Energy and Economic Development (hereinafter "the Department") and ten individuals appointed by the Governor. (Minn.Stat. § 116J.89, subd. 8 (Supp.1983)).
3. The Governor appoints the Chairman of the Authority (Minn.Stat. § 116J.89, subd. 8 (Supp.1983)). In August, 1983, Mark B. Dayton, the Commissioner of the Department, was duly appointed as Chairman of the Authority.
4. The Commissioner of the Department is required to appoint staff as necessary for the administration of the Authority. (Minn.Stat. § 116J.89, subd. 10 (Supp. 1983)). The Financial Management Division of the Department provides staff, performs credit checks, financial analysis and other duties as required by the Authority. Affidavit of M. Jean Laubach.
5. The Act was passed to promote the welfare and prosperity of the State by maintaining and increasing the career and job opportunities of its citizens; by reducing, controlling, and preventing environmental pollution and waste of resources; and by protecting and enhancing the tax base on which state and local governments depend for the financing of public services. (Minn.Stat. § 116J.89, subd. 2 (1982), as amended by Minn.Laws 1983 ch. 289 § 74).
6. The Authority is empowered to issue bonds, implement loan programs, insure loans and provide financial assistance as a partnership between the public and private sectors, for the public purposes of:
(a) providing financial assistance to eligible small businesses for projects on sufficiently favorable terms to assist and encourage the establishment, maintenance and growth of small businesses and employment opportunities in Minnesota;
(b) providing financial assistance to eligible small businesses for projects which will help prevent, reduce, abate or control noise, air or water pollution or contamination; and
(c) providing financial assistance to promote the conservation of energy, the reduction of the uses of conventional fuels as a source of energy, and the development of alternative and renewable energy resources.
(Minn.Stat. §§ 116J.875, 116J.89 and 116J.921).
7. The Authority is empowered by the Act to issue and sell bonds and to use the proceeds to make loans to eligible small businesses for business development projects, pollution control projects and qualified energy projects (Minn.Stat. §§ 116J.90, 116J.91 and 116J.925).
8. Neither the State of Minnesota nor any agency or political subdivision of the State is liable on any bonds issued by the Authority, and such bonds do not constitute a debt or loan of credit of the State. Therefore, neither the full faith and credit nor the taxing power of the State is pledged to the repayment of such bonds. (Minn.Stat. § 116J.89, subd. 3.)
9. Minn.Stat. § 116J.89, subd. 1c creates the economic development fund and provides that all money in the fund is appropriated to the Authority to accomplish the Authority's business development and pollution control purposes. Minn.Laws 1983 ch. 301 § 28 appropriated $15,000,000 to the economic development fund.
10. Minn.Stat. § 116J.925, subd. 3 creates the energy development fund and provides *323 that the Authority may use the fund in connection with bonds issued to make loans for qualified energy projects. Minn. Laws 1983 ch. 301 § 28 appropriated $1,800,000 to the energy development fund.
11. The Authority is empowered by the Act to issue and sell bonds and to use the proceeds to make loans to eligible small businesses for business development projects (Minn.Stat. §§ 116J.90 and 116J.91).
12. The Authority is empowered by the Act to insure loans made to eligible borrowers by private lending institutions for qualified energy projects (Minn.Stat. § 116J.924). Minn.Stat. § 116J.924, subd. 2 creates the energy loan insurance fund and provides that the Authority may use the fund in connection with insurance of such loans. Minn.Laws 1983 ch. 301 § 28 appropriated $7,500,000 to the energy loan insurance fund.
13. In an effort to meet the needs of Minnesota businesses for financing, the Authority established three pilot programs pursuant to Minn.Stat. §§ 116J.875 to 116J.926 (1982 & Supp.1983). These programs are: the Business Loan Bond Insurance Pilot Program, the Energy Development Loan Pilot Program; and the Energy Loan Insurance Pilot Program. Dayton Aff.
The Business Loan Bond Insurance Pilot Program
14. The Business Loan Bond Insurance Pilot Program was created pursuant to Minn.Stat. §§ 116J.875 to 116J.91 (1982 & Supp.1983). It is intended to provide "business loans" to "eligible small businesses" located in Minnesota which are starting or expanding and are creating new jobs and/or installing or improving equipment or facilities to control pollution. Loans may also be made to assist businesses which would otherwise reduce their employment or other activities within Minnesota without the financing provided by the program. Dayton Aff.; Laubach Aff.; Exs. K, K-1, L.
15. Funds for business loans primarily will be raised through the sale of revenue bonds issued by the Authority, the interest on which is generally exempt from federal income taxes. These debt instruments will generally take the form of long term, fixed rate loans for land, buildings, capital improvements or equipment. Business development loans generally will be provided at interest rates below those normally available to the small business. By pooling bond issues and increasing the investment of private capital in connection with business loans, the Authority's program facilitates a partnership between the private and public sectors. Ex. K-1.
16. Additional security for the business loan bonds will be provided through the use of appropriated dollars in the Economic Development Fund either (1) to purchase private bond insurance and/or to fund a debt service reserve fund to be used in conjunction with the private bond insurance, or (2) through segregated accounts within the Economic Development Fund pledged to each loan made under the Program. By so securing the bond issue, it will be possible to provide financial assistance to small businesses which otherwise would be unable to receive financing at all or only at such unfavorable terms or conditions as to make their projects not economically feasible. Ex. K-1.
17. Ultimate approval of an application for a loan under the Business Development Loan Bond Insurance Pilot Program will depend upon a determination that the business entity applying for a loan is creditworthy under generally accepted commercial lending credit evaluation practices, that the financial analysis of the business's performance shows it is adequate to reasonably assure that the loan will be repaid, and that the State of Minnesota will benefit in the form of new jobs created, expanded state or local tax bases, improvement of economic activities in depressed areas of the State, other economic and employment benefits, or pollution abatement or other environmental enhancements. Ex. K-1; Dayton Aff.; Laubach Aff.
*324 18. The Business Loan Rules previously adopted by the Small Business Finance Agency were transferred to the Authority, as successor to the Small Business Finance Agency. These rules are set forth in 4 MCAR §§ 14.001-14.023. Ex. J.; Dayton Aff.
19. According to the procedural guides for the three pilot programs set up by the Authority, an extensive credit check must be performed on each applicant. The Financial Management Division of the Minnesota Department of Energy and Economic Development is responsible for performing this credit evaluation. Laubach Aff.; Exs. K-1, L-1 and N.
20. Under the Business Loan Bond Insurance Pilot Program Procedural Guide, Ex. K-1, in cases where there is a private insurer, the private insurer is responsible for part of the credit review of the borrower. The general guide for credit analysis to be followed in this program is set forth in Robert Morris Associates, Annual Statements Studies, Philadelphia, Pennsylvania. There are five major areas covered by the credit review: (1) personal credit references; (2) site visit; (3) technical analysis of business's product or equipment to be purchased; (4) cash flow analysis; and (5) findings of public purpose.
21. The personal credit references of the owners, partners or major shareholders (if the business is closely-held) are to be evaluated when a personal guarantee or pledge of personal assets is a condition of the business development loan. Only if the personal credit reports are favorable will the business development loan be approved. Ex. K-1; Laubach Aff.
22. A staff member or representative of the Financial Management Division must personally visit the site where the business is located or where the borrower proposes to do business prior to adoption of the final resolution. To the extent feasible, the equipment the borrower proposes to acquire must also be examined. A report of the visit and examination becomes part of the business development loan file. Ex. K-1; Laubach Aff.
23. In those cases where the staff of the Financial Management Division is unfamiliar with the technology associated with the capital expenditure to be financed by the business development loan, the staff may require technical documentation from a reputable testing laboratory, engineering firm or other source of technical information. Such information shall be required only if it is necessary to verify the claims made by the borrower for the performance of a product manufactured by the borrower, or for a piece of equipment to be acquired by the borrower with the proceeds of a business loan. The staff may require documentation of the claims for the performance of products produced by the borrower in the form of reports from independent testing agencies (such as Underwriters' Laboratories) which are generally recognized to have expertise in the area. Ex. K-1; Laubach Aff.
24. To assure that the business development loan will be repaid, an analysis of the financial data in the file must be made. This includes documentation of the past performance of the company and projection of future performance. Ex. K-1; Laubach Aff.
25. The business development loan must also meet certain additional standards relating to public purpose. Ex. K-1. A business development loan is recommended for approval to the Authority only after it has been determined by staff of the Financial Management Division that the following standards of public purpose have been met:
A. The borrower is an "owner" and an "eligible small business" as defined in the Act;
B. The small business reasonably can be expected to maintain a sound financial condition and to retire the principal and pay the interest on the loan in accordance with the terms of the loan agreement;
C. The project is economically feasible with a reasonable expectation that *325 the life of its economic feasibility will exceed the maturity of the loan;
D. Except in the case of loans for pollution control facilities, the project will create or maintain a sufficient number and type of jobs to justify Authority participation in its financing, and the use of appropriated monies in the Economic Development Fund for insurance will enhance the creation or maintenance of jobs as a result of the loan;
E. The project feasibility is sufficient to allow the Authority to sell the bonds required for its financing;
F. The project and its development are economically advantageous to the state, the provision to meet increased demand upon public facilities as a result of the project is reasonably assured, and the energy sources to support the successful operation of the new project are adequate;
G. Except in the case of a loan for pollution control facilities, if the project has the effect of a transfer of jobs from one area of this state to another, there is sufficient evidence in the loan file to determine that the project is economically advantageous to the state or that the project is necessary to the continued operation of the business enterprise within the state;
H. The project will assist in fulfilling the purposes of the Act, including the preferences and priorities set forth in Minn.Stat. § 116J.89; and
I. If the project includes pollution control facilities, such facilities will help prevent, reduce, abate or control noise, air or water pollution or contamination in accordance with the provisions of the Act.
The Energy Development Loan Pilot Program
26. The Energy Development Loan Pilot Program of the Minnesota Energy and Economic Development Authority is created pursuant to Minn.Stat. §§ 116J.921 to 116J.923 and 116J.925 (Supp.1983). It is intended to provide "energy" loans to individuals, partnerships, corporations or other entities for the financing of capital improvements to be used in connection with a trade or business if the principal purpose of the improvement is energy conservation or the reduction of the use of conventional fuels as a source of energy. Exs. L, L-1 and M; Dayton Aff.
27. The program is intended to assist businesses located in Minnesota which require financing to improve the efficiency with which they use energy or to finance the costs of conversion from conventional to alternative sources of energy. Energy development loans may also be used to finance certain costs associated with the production of energy or fuels from alternative energy resources. Eligible business entities engaged in the production of peat, biomass, solar energy, wind, municipal wastes, agricultural or forestry wastes, hydropower and agricultural crops suitable for conversion to an energy fuel, as well as certain other alternative energy production enterprises, may also receive energy loans. Ex. L-1; Dayton Aff.
28. Funds for energy development loans will primarily be raised through the sale of revenue bonds issued by the Authority, the interest on which is generally exempt from federal income taxes. Loans are expected to carry interest rates below those generally available in the financial markets for loans with similar terms and security. These debt instruments will generally take the form of long term, fixedrate loans for land, buildings, capital improvements or equipment. By pooling bonds and inducing the investment of private capital in connection with the energy development loans, the Authority's program facilitates a partnership between the private and public sectors. Ex. L-1; Dayton Aff.
29. Additional security for the bonds may be provided through segregated reserve accounts within the Energy Development Fund pledged to each loan made under *326 the Program. By providing such security for the bond issue, it will be possible to provide financial assistance to businesses which otherwise would be unable to receive financing due to risk factors associated with loans to such loan recipients. Ex. L-1; Dayton Aff.
30. Ultimate approval of an application for a loan under the Program depends, in part, upon a determination that the business entity applying for the energy development loan is creditworthy under generally accepted commercial lending credit evaluation practices, that the financial analysis of the performance of the business shows it is adequate to reasonably assure that the loan will be repaid and that the State of Minnesota will benefit through a reduction in the State's dependence on conventional fuels, through energy conservation, or through development of alternative or renewable. Ex. L-1; Dayton Aff.; Laubach Aff.
The Energy Loan Insurance Pilot Program
31. The same five major areas covered by the analysis under the Business Loan Bond Insurance Pilot Program are covered by the credit analysis under the Energy Development Loan Pilot Program. There are two areas where differences in the standards occur. First, all energy development projects must be reviewed for technical feasibility. Second, the public purpose standards vary slightly. Ex. L-1; Laubach Aff.
32. An energy development loan is recommended for approval when the following public purpose standards for the Energy Development Loan Pilot Program have been met:
A. The loan recipient is eligible to apply for the loan as provided in the Act, its rules and the Procedural Guide;
B. The loan recipient reasonably can be expected to maintain a sound financial condition and to retire the principal and pay the interest on the loan made and insured in accordance with the terms of the loan agreement;
C. The money saved or income produced by the capital improvements may reasonably be expected to exceed their total costs to the loan recipient within the greater of the term of the energy development loan or the economic useful life of the project;
D. The Authority may reasonably be expected to sell the bonds if any are required for financing;
E. The project and its development are economically advantageous to the State, that the provision to meet increased demand upon public facilities as a result of the project is reasonably assured, and that any feedstock availability, resource base or energy sources necessary to support the successful operation of the project is adequate;
F. The project will tend to foster a reliable supply of energy to Minnesota's households, business establishments or municipalities, tend to reduce Minnesota's dependence on imported energy sources, or serve some other energy related public purpose;
G. The project has a principal purpose of 1) energy conservation, 2) reduction of the usage of conventional fuels as a source of energy, or 3) development of Minnesota's alternative energy resources; and
H. The project satisfies the priorities and criteria of the Act.
Ex. L-1; 4 MCAR §§ 14.051-14.059.
33. The Energy Loan Insurance Pilot Program of the Minnesota Energy and Economic Development Authority is created pursuant to Minn.Stat. §§ 116J.921 through 116J.924. The program is intended to provide insurance for loans made by financial institutions for "qualified energy projects". These projects include acquiring, installing or constructing land, buildings, capital improvements or equipment for (1) conservation of energy or use of alternative or renewable energy resources in the operation of a business, (2) recovery or production from alternative or renewable energy resources of energy to be sold *327 in the course of business, or (3) production for sale in the course of business of equipment for the conservation or recovery of energy or for the use of energy from alternative or renewable resources. Exs. M, N; Dayton Aff.
34. By sharing the risk with private lenders, the State will facilitate investment of private capital in energy efficiency and will promote the creation of jobs, both directly and indirectly, by reducing energy consumption and by developing Minnesota's alternative energy resources. This partnership between the private and public sectors will enable emerging energy businesses to obtain capital and other financial resources necessary to fund their development. Ex. N; Dayton Aff.
35. The Energy Loan Insurance Pilot Program is currently structured to insure loans for "qualified energy projects" in an amount up to 90% of the principal amount of the loan. The Authority intends to use the monies in the energy loan insurance fund as an insurance pool which will insure a smaller percentage of loans for "qualified energy projects" than is the case under this pilot program. Once a pool of loans has been created, the energy loan insurance fund will operate in a manner similar to other insurance pools. Individual loans will be insured up to a contract amount, but the aggregate amount of the loans in the pool will be insured, in total, up to a lesser amount than the insurance for any given loan. Ex. N; Dayton Aff.
36. Because the pilot program is operating on a small scale basis, there are not a sufficient number of loans to leverage the risk of default with respect to any particular loan. Therefore, it is not feasible to operate the loan fund as a pool at this time. For this reason, the pilot program did not leverage funds within the energy loan insurance fund but rather dedicated a fixed amount of funds into an account set aside to insure a particular loan. Dayton Aff.
37. The same five areas of financial analysis required by the Business Loan Bond Insurance Pilot Program are required by the guidelines for the Energy Loan Insurance Pilot Program. In this program, the lender applying for insurance is required to perform the personal credit reference check and the cash flow analysis. Ex. N; 4 MCAR §§ 14.071-14.080.
38. The lender must also provide information related to the following requirements as part of the application for insurance. Upon receipt of appropriate information from the borrower, the lender must certify:
A. That the borrower is eligible to apply for the loan as provided in the Act, its rules and the Procedural Guide;
B. That the project is a Qualified Energy Project as defined in the Act;
C. That the borrower reasonably can be expected to maintain a sound financial condition and to retire the principal and pay the interest on the loan made and insured in accordance with the terms of the loan agreement;
D. That the money saved or income produced by the Qualified Energy Project may reasonably be expected to exceed its total costs to the borrower within the greater of the term of the energy loan insurance or the economic useful life of the Qualified Energy Project;
E. That the project satisfies the priorities and criteria of the Act.
Ex. N; 4 MCAR §§ 14.071-14.080.
39. Once the lender has provided the results of these checks to the Authority, the Financial Management Division performs the site visit and the technical analysis. Ex. N; Laubach Aff.
Program Implementation
40. As required by the procedural guides of all three pilot programs, a notice of program announcement was published. On November 17, 1983, a Notice of Program Announcement appeared in the Minneapolis Star and Tribune. Dayton Aff.; Ex. Q.
41. The required financial analysis was performed by the Financial Management *328 Division on each of the applications received by the Authority during the Pilot Program application period. Big Stone, Inc., (hereinafter "Big Stone"), Northland Glass Industries (hereinafter "Northland Glass"), and North Atlantic Technologies, Inc. (hereinafter "North Atlantic"), all received a favorable financial analysis and their applications were recommended for approval. Laubach Aff.
42. The Board of Directors of the Authority met on November 16, 1983, to establish these pilot programs. At that meeting the three pilot programs were discussed and resolutions adopting the procedural guides and setting funding limits for each program were passed. The resolutions adopted at the November 16 meeting pertaining to these programs were MEEDA Resolutions No. 83-51, 83-52, 83-53, 83-54, and 83-55. Dayton Aff.; Exs. K, L, M and O.
43. In MEEDA Resolution No. 83-52 the procedural guide and application for the Business Loan Bond Insurance Pilot Program were adopted. Ex. K.
44. MEEDA Resolution 83-52 authorized the Financial Management Division to accept applications for an amount not to exceed $3,000,000 in qualified financing. In addition, up to $900,000 was allocated from the Economic Development Fund ("Fund") to purchase private bond insurance or to fund a debt service reserve fund and for other eligible expenses. Any unexpended funds are required to be returned to the Fund after completion of the pilot program. Ex. K.
45. The application period for the Business Development Bond Insurance Pilot Program ran from November 17, 1983 through December 31, 1983. Ex. K.
46. In MEEDA Resolution No. 83-55, the procedural guide and application for the Energy Development Loan Pilot Program were adopted. Ex. L.
47. MEEDA Resolution 83-55 authorized the Financial Management Division to accept applications for an amount not to exceed $750,000 in qualified financing. In addition, up to $200,000 was allocated from the Economic Development Fund to fund a debt service reserve fund and other eligible expenses. Any unexpended funds are required to be returned to the Fund after completion of the pilot program. Ex. L.
48. The application period for the Energy Development Pilot Program ran from November 17, 1983 through December 31, 1983. Ex. L.
49. In MEEDA Resolution No. 83-55, temporary rules for the Energy Development Loan Pilot Program were adopted. These rules, which are contained in 4 MCAR §§ 14.051-14.059, outline the procedure the Authority must follow once a completed application is received for the Energy Development Loan Pilot Program. Exs. L, L-1.
50. In MEEDA Resolution No. 83-54, the procedural guide and applications for the Energy Loan Insurance Pilot Program were adopted. Ex. M.
51. Up to $800,000 from the Energy Loan Insurance Fund was allocated for the Energy Loan Insurance Pilot Program and other eligible expenses. Any unexpended funds are required to be returned to the Fund after completion of the pilot program. Ex. M.
52. The application period for the Energy Loan Insurance Pilot Program ran from November 17, 1983 through December 31, 1983. Ex. M.
53. In MEEDA Resolution No. 83-51 temporary rules for the Energy Loan Insurance Program were adopted. These rules, which are contained in 4 MCAR §§ 14.071-14.080, outline the procedure the Authority must follow once a completed application is received for the Energy Loan Insurance Pilot Program. Dayton Aff.; Ex. N.
54. On December 21, 1983, a meeting at the Board of Directors of the Authority was held. Dayton Aff.
55. At the December 21 meeting, MEEDA Resolution 83-60 was adopted. That resolution is the preliminary resolution for the Big Stone projects. In that resolution, *329 the Authority accepted Big Stone's application and gave the projects preliminary approval. Ex. A.
56. Also at the December 21, 1983 meeting, the Board adopted two resolutions amending the Energy Loan Insurance Procedural Guide and Agreements. MEEDA Resolution No. 83-62 amends the sections of the Procedural Guide pertaining to fees and rate of coverage. MEEDA Resolution 83-61 amends the Participating Lenders Agreement to clarify it and to facilitate participation by lenders. Dayton Aff.; Ex. O.
57. Also adopted on December 21, 1983, was MEEDA Resolution No. 83-63, granting preliminary approval to the North Atlantic project. Ex. G.
58. Another meeting of the Board of Directors of the Authority was held on December 29, 1983. At that meeting the preliminary resolution approving the Northland Glass project was adopted. The Northland Glass preliminary resolution is MEEDA Resolution No. 83-64. Ex. D; Dayton Aff.
59. At the December 28 Board meeting, two letters were received from David Printy, Secretary to the Board of Directors of the Authority, respectfully declining on advice of counsel to proceed as directed on the North Atlantic, Northland Glass and Big Stone resolutions. Ex. C; Ex. F; Dayton Aff.; Printy Aff.
60. MEEDA Resolution 63-65, authorizing commencement of legal action to determine the validity of the agreements to be entered into pursuant to Resolutions No. 83-60, 83-63 and 83-64, was adopted after Mr. Printy's refusal to act. Dayton Aff.; Ex. P.
Big Stone Projects and Community Benefits
61. On December 28, 1983, a Memorandum of understanding between the Authority and Big Stone detailing the respective obligations of the Authority and Big Stone in connection with loans to be made to Big Stone to be made by the Authority was executed by David C. Kraus, President of Big Stone, Inc. The loans are to be financed by the issuance by the Authority of revenue bonds, by the payment by the Authority of certain fees, and by the establishment by the Authority of reserve funds and bond insurance accounts with respect to the bonds. Ex. B; Kraus Aff.
62. Big Stone will contribute at least ten percent of the total capital costs of the projects in the form of an equity contribution of $68,400 to fund the projects. Ex. B; Kraus Aff.
63. Big Stone is ready, willing and able to proceed with the projects upon the terms and conditions set forth in the Memorandum of Understanding. Kraus Aff.
64. On December 20, 1983 Dougherty, Dawkins, Strand & Yost, Inc. (hereinafter "Dougherty") together with Van Kampen Meritt, Inc., entered into a commitment to underwrite the Big Stone bonds. Ex. R. Dougherty would not have entered into the commitment if the bonds were not to be insured. Peterson Aff. Dougherty continues to be ready, willing and able to fulfill this commitment. Peterson Aff.; Ex. R.
65. Van Kampen Merritt, Inc. continues to be ready, willing and able to fulfill this commitment. Van Kampen Merritt, Inc., would not have entered into the commitment to purchase the bonds if the bonds were not to be insured. Trim Aff.; Ex. R.
66. On December 6, 1983, Victor R. Haen, the treasurer of Big Stone, submitted an application to the Authority for financial assistance for a business development project, a pollution control project and an energy conservation project. Kraus Aff.
67. Each of the projects is within the corporate purposes authorized by the Articles of Incorporation of Big Stone. Mr. Haen was authorized to submit the application on behalf of Big Stone. Kraus Aff.
68. The business development project at Big Stone consists of installation of equipment to freeze vegetables in bulk for later processing into canned bean salads; canned peas and carrots; and canned mixed vegetables. The project will be located at Big *330 Stone's facility in Ortonville, Minnesota. Kraus Aff.
69. The ability to freeze vegetables for later canning will enable Big Stone to increase its efficiency by using its own raw vegetable stocks rather than purchasing frozen vegetables from other processors. The total estimated cost of the proposed project is $234,000. Kraus Aff.
70. Project costs include $64,000 for a 7 to 10 ton tunnel freezer, $25,000 for compressors and other equipment; $75,000 for building modifications for a "cold holding" room; $10,000 for totes (containers for frozen vegetables); and $60,000 for electrical, plumbing and equipment installation. Kraus Aff.
71. The project will provide 6 summer season jobs with an increase to the annual payroll of $27,300. The jobs created are new jobs and the project will not have the effect of transferring jobs from one area in Minnesota to another area in Minnesota. Kraus Supp.Aff.; Auger Aff.
72. The estimated useful life of the business development project is between 10 and 20 years. Kraus Aff.
73. No additional public facilities will be needed to support the business development project. Kraus Aff.
74. The pollution control project at Big Stone consists of the installation of a forcemain and irrigation system to provide wastewater treatment which will enable the company to meet state and federal water pollution laws and rules at its facility located in Arlington, Minnesota. Installation of the pollution control project is required as the result of a stipulation agreement entered into between Big Stone and the Minnesota Pollution Control Agency (hereinafter "PCA"), effective February 23, 1983. Kraus Aff.; Gardebring Aff.; Ex. U.
75. The PCA has determined that the existing pollution control facilities used by Big Stone do not provide acceptable waste treatment. The PCA has documented that overspray and runoff of waste water has occurred. Two fish kills have occurred in nearby surface waters because of the runoff from the spray field. Gardebring Aff.; Ex. U.
76. The PCA has previously granted Big Stone an extension of time for compliance with pollution control permits due to economic hardship to Big Stone if immediate compliance was required. Gardebring Aff.; Ex. U.
77. The PCA stipulation agreement requires Big Stone to construct the new spray field in three stages. If the system is not completed by 1985, the PCA is prepared to enforce the stipulation agreement. Gardebring Aff.; Ex. U.
78. Construction of the Big Stone pollution control project will improve water quality through the abatement of pollution. The improvement in water quality will improve the environment and help perserve public health.
79. The energy conservation project at Big Stone consists of the installation of equipment to use hot discharge water from the canning process for boiler infeed water. The total estimated cost of the proposed project is $30,000. Project costs include $20,500 for custom equipment; $1,500 for engineering and design; and $8,000 for installation. It is estimated that the project will save $15,075 per year in natural gas costs and $1,200 per year in water costs. Kraus Aff.; Dumagan Aff. After prorating these project costs, it will cost the Big Stone $.81 to avoid consuming each one million BTU of natural gas, which would cost $5.50 if it were consumed. Therefore, the net gain from the investment is $4.69 per one million BTU of natural gas conserved. Dumagan Aff.
80. The impact of the Big Stone project on the community of Ortonville will be as follows:
a. Expansion of Local Tax Base. While the assessed value of the City of Ortonville increased by approximately 27% between the years 1979 and 1983, local taxes collected increased less than 9% during the same period, according to data obtained from the Minnesota Department *331 of Revenue. The reason for this inconsistency is a decrease in the mill rate and an increase in state tax credits. The taxes collected in Ortonville have, in fact, decreased from $750,175 in 1979 to $704,163 in 1983. The proposed Big Stone business expansion project, a $165,000 capital improvement, will generate approximately $2,310 in new local property taxes to be shared by the city, county, and school district.
b. Creation of New Jobs. The proposed business development and expansion by Big Stone is expected to create six part-time positions in the City of Ortonville. The net impact is expected to benefit low and moderate income persons at entry level wage scales. The freezer will also help to turn what has, in the past, been a seasonal business cycle into a year round operation that will help to balance out demands on other phases of production. Each new part-time position will consist of 1,300 workhours per year.
c. Benefit To Low and Moderate Income Persons. A major state and federal objective of economic development assistance programs is to provide direct benefits to low and moderate income persons. Low and moderate income is defined as 80% of the median income for the area. The median family income for the City of Ortonville in 1979 was $17,064. Big Stone, Inc., proposes to hire six part-time employees (3.75 full-time equivalents) to operate the freezing equipment on a seasonal basis. Wages for these positions will be approximately $3.50 per hour, which is equivalent to $7,270 per year. Thus, these positions will tend to be filled by persons of low and moderate income. It is also anticipated that the positions created may provide sources of supplemental income for underemployed area residents.
d. Secondary Impact of Project. The secondary impact of the Big Stone Project will include temporary construction jobs ($60,000), and local spending within the Ortonville economy which will result from the increase in the payroll of Big Stone at its Ortonville plant.
Auger Aff.
81. Conventional commercial financing for the business development, pollution control and energy conservation projects is unavailable on the terms set forth in the Memorandum of Understanding with the Authority. Kraus Aff. The availability of financing from the Authority is a substantial inducement for Big Stone to undertake the projects to be so financed. Kraus. Aff.
Northland Glass Project and its Community Benefits
82. On December 29, 1983, a Memorandum of Understanding between the Authority and Northland Glass detailing the respective obligations of the Authority and Northland Glass in connection with a loan to Northland Glass to be made by the Authority was executed by Randall L. Johnson, President of Northland Glass. The loan is to be financed by the issuance by the Authority of revenue bonds and the payment by the Authority of certain fees and the establishment by the Authority of reserve funds and bond insurance accounts with respect to the bonds. Ex. E; Johnson Aff.
83. Northland Glass will contribute ten percent of the total capital costs of the project in the form of an equity contribution of $75,000 to fund the project. Ex. E; Johnson Aff.
84. Northland Glass continues to be ready, willing and able to proceed with the business development project upon the terms and conditions set forth in the Memorandum of Understanding. Kraus Aff.
85. On December 23, 1983, Security State Bank of St. Michael (hereinafter "Security State Bank") continually committed to purchase the Northland Glass bonds. Ex. S. Security State Bank would not have entered into the commitment if the bonds were not to be insured. Security State Bank continues to be ready, willing and able to fulfill this commitment to buy the bonds when issued. Ederer Aff.; Ex. S.
*332 86. On November 23, 1983, Randall L. Johnson, President of Northland Glass, submitted an application for financial assistance for a business development project to the Authority. The business development project is within the corporate purposes authorized by the Articles of Incorporation of Northland Glass. Johnson Aff.
87. The Northland Glass business development project consists of the acquisition and installation of a furnace capable of manufacturing horizontally tempered glass with a 1/8 inch tempering capacity. The glass tempering furnace will be installed at the Company's present facility located in Albertville, Minnesota. Johnson Aff.
88. The ability to produce tempered glass will permit Northland to supply needs for horizontal tempered glass in the six state region of Minnesota, Wisconsin, Iowa, North Dakota, South Dakota and Eastern Nebraska. The nearest competitive glass tempering furnace is located in Chicago. Tempered glass is three to five times stronger than regular (annealed) glass of the same thickness. Johnson Aff.
89. When subject to strains beyond its limits, tempered glass will disintegrate into innumerable blunt, cubical fragments, which helps protect people from serious injury. With tempered glass, any holes, cut-outs or edgework must be done prior to the tempering process. Tempered glass is a safety glazing material. Its use has increased since 1977, when federal regulations mandated the use of tempered glass in commercial and residential construction. Johnson Aff.
90. The total estimated cost of the proposed business development project at Northland Glass is $750,000. Project costs include $625,000 for a tempering furnace, $50,000 for hook-up costs, $35,000 for a glass washer, $30,000 for glass cutting support equipment and $10,000 for glass seamers. Johnson Aff.
91. The Northland Glass project will provide 20 jobs with an increase to the annual payroll. The jobs created are new jobs and the project will not have the effect of transferring jobs from one area of Minnesota to another area of Minnesota. Johnson Aff.; Auger Supp. Aff.
92. The estimated useful life of the Northland Glass project is between 15 and 20 years. Johnson Aff.
93. The primary impact of the Northland Glass business development project will be in new jobs created. The project will create a total of 20 new full-time jobs (13 male and 7 female). This represents an average cost of $37,500 per job, which compares favorably with the $100,000 per job cost for a Fortune 500 firm. The increase in annual payroll resulting from the 20 new positions will be approximately $405,600 per year. The increase in the payroll will stimulate up to approximately $608,400 in spending within the Albertville economy, because of the multiplier effect of the increase in the payroll. Auger Supp. Aff.
94. Conventional financing is not available on the terms set forth in the Memorandum of Understanding between the Authority and Northland Glass. Johnson Aff. The availability of financing from the Authority is a substantial inducement for Northland Glass to undertake the business development project. Johnson Aff.
North Atlantic Project and its Community Benefits
95. On December 21, 1983, the Minnesota Energy and Economic Development Authority Energy Loan Insurance Pilot Program Participating Lenders Agreement was executed on behalf of Norwest Bank Minneapolis, N.A., (hereinafter "Norwest Bank") by Thomas Linhares, Vice President. Ex. H; Linhares Aff.
96. North Atlantic continues to be ready, willing and able to proceed with the energy loan on the terms and conditions set forth by the lender, Norwest Bank. North Atlantic is also ready, willing and able to enter the Energy Loan Agreement with Norwest Bank and the Authority for insuring the loan. Appert Aff.
97. On November 30, 1983, John J. Appert, treasurer and secretary of North Atlantic *333 submitted an application to Norwest Bank for an energy loan under the Authority's pilot program. Appert Aff.; Linhares Aff.
98. Norwest Bank continues to be ready, willing and able to make the loan to North Atlantic on the terms and conditions set forth in its letter to North Atlantic granting a conditional line of credit. Linhares Aff.; Ex. T.
99. On December 2, 1983, John J. Appert submitted an Energy Loan Insurance Pilot Program Borrowers Application to the Authority on behalf of North Atlantic. Appert Aff.
100. On December 20, 1983, John J. Appert accepted, on behalf of North Atlantic, a conditional loan commitment from Norwest Bank and agreed to all the terms and conditions therein. As treasurer and secretary of North Atlantic, Mr. Appert is authorized to file such applications and accept loan commitments as well as to obligate North Atlantic to the terms and conditions of such loans. Appert Aff.; Linhares Aff.
101. The projects to be financed through the pilot program loan to North Atlantic are the design, manufacture and installation of open channel air preheater systems (hereinafter "OCAP") at various industrial sites, primarily in Minnesota and the surrounding states. North Atlantic expects to finance 5 or 6 projects with the proceeds of the loan. Such projects are within the corporate purposes of North Atlantic. Appert Aff.
102. North Atlantic contracts with Sterner Industries in Winsted, Minnesota, and Lindorfer Engineering Co., in Roseville, Minnesota, for heat exchanger fabrication and assembly, and with Wolkerstarfer Company, Inc., in New Brighten, Minnesota, for surface coating of heat exchanger plates. Appert Aff.
103. An example of the type of project that North Atlantic will finance with this loan is the OCAP recently installed by North Atlantic at Anderson Customer Processing, Inc., Little Falls, Minnesota. That project involved the design, fabrication, and installation of a heat exchanger to recover sensible and latent heat from a milk drier exhaust system. The recovered heat is transferred to the fresh air entering the drier. The design work on this project began August 2, 1983 and the OCAP will be put into operation February 6, 1984. The heat exchanger will recover 1.44 million BTU/hr. at the design conditions. The OCAP has a useful life of 20 years. Appert Aff.
104. Each OCAP is expensive, costing approximately $80,000. Appert Aff. In the case of the typical energy conservation project proposed to be installed by North Atlantic, the average cost of avoiding consumption ranges from $.28 to $.63 per million cubic feet of natural gas. The average commercial price of natural gas ranges from $4.87 to $5.22. Since the savings in million cubic feet of natural gas per year can range from 8,000 to 30,000 million cubic feet, the installation of such energy conservation equipment will result in substantial savings of natural gas and reduce dependence upon imported fuel. It will also beneficially effect the economy because savings from energy conservation will be available for alternative investments.
105. Conventional financing on the terms available through the Authority insurance program is not available to North Atlantic. Appert Aff.; Linhares Aff.
Need for and Benefits from Business Development Financing Programs
106. The ability of small businesses to secure adequate financing is often limited. Interest costs may be prohibitively high, banks may be loaned to their lending limits, or the geographic location of major lenders may not be accessible to the potential borrower. Dayton Aff.; Laubach Aff.; Auger Aff.; Constance Aff.; Peterson Aff.; Trim Aff.
107. The primary sources of financing business development projects in Minnesota are commercial banks, savings and loan associations, insurance companies, venture capital companies, and public sources, such as municipal industrial revenue bonds, and *334 state or federal loan and grant programs. Dayton Aff.; Auger Aff.
108. The use of industrial revenue bonds in Minnesota has increased dramatically in recent years. However, it is impractical to finance small business loans for less than $100,000 with industrial revenue bonds because of high legal and underwriting costs. Also, pending federal legislation threatens the tax exempt status of industrial revenue bonds and may restrict the amount of industrial revenue bonds that can be issued in each state. Dayton Aff.
109. Because of the importance of small and medium sized businesses in job creation and the difficulties these business have in obtaining financing, there is need and support for the expenditure of state funds to assist the establishment or expansion of small and medium-sized businesses in Minnesota. Dayton Aff.; Laubach Aff.; Auger Aff.; Constance Aff.
110. Public financing is of great importance in that it leverages private financing. Private lenders generally provide only part of the financing for a project, and the borrower is expected to provide the balance. For small businesses, it is often difficult to make up the balance, and good business development projects may never be undertaken for lack of financing. Public financial assistance helps bridge the gap between what the private lender will loan and what the small business needs to finance a project. Dayton Aff.; Auger Aff.; Constance Aff.
111. Providing public financing for business development at less than market interest rates creates incentives for additional private investment and enables a business to have more capital available for operating purposes. Lower downpayments and lower interest costs made available through public financing enable a business owner to conserve working capital while, at the same time, increasing the rate of return on investment. The result is an economically more stable business. Dayton Aff.; Constance Aff.
112. Providing public service to commercial and industrial areas in a community is expensive from the standpoint of local government. Public safety, fire protection, public works, and utilities are more costly in commercial/industrial areas than residential areas. Public and private investments in commercial areas result in increased taxable property values, which helps balance out the high costs of providing public service and ensure that local tax receipts are sufficient to pay local government costs. The beneficiaries of an increased local tax base are the general public. Dayton Aff.; Constance Aff.; Peterson Aff.; Trim Aff.
113. Public financial assistance also helps small businesses invest in new plants and equipment which they could not otherwise afford. When a business invests in new plants or equipment, new permanent jobs are normally created. Residential construction normally results only in temporary construction jobs, while commercial and industrial construction results in both construction jobs and long-term manufacturing and business jobs. New equipment or plant expansion normally improves productivity, which means new inventory handlers, sales staff, shippers, and administrators will be hired. Dayton Aff.; Auger Aff.; Constance Aff.
114. Public financing of business development helps create jobs. New and expanding businesses normally establish entry level jobs which can be filled by persons with minimal training or employment experience. Because these people are the ones hardest hit by unemployment, financing small business expansion has tremendous public benefit. Dayton Aff.; Auger Aff.
115. In addition to the direct benefits derived from public financing of small business expansion increased tax base and employment there are favorable secondary economic effects. Jobs are created in businesses not directly financed because of the increased demand for goods and services by the new employees of the financed business. Additionally, business development around the financed business may *335 increase to provide raw materials for that business or an outlet for its finished products. Dayton Aff.; Auger Aff.; Constance Aff.
116. The major advantage of the Authority over its predecessor, the Small Business Finance Agency, is that it is a "one stop shop" for all financing programs offered small businesses by the state. The owner or manager of a small business only has to talk to one person to find out what program of financial assistance will best meet the needs of his business. The Authority's employees are cross-trained on all programs to provide the easiest, most efficient service. No longer is it necessary for a small business owner to travel between a variety of state offices to explore possible sources of financial assistance for business expansion. Laubach Aff.
117. On the average, for each $55,500 loaned to a small business by the Small Business Finance Agency (the predecessor agency of the Authority) for a business development project, one full-time job was created. Money loaned to businesses for expansion by federal, state or local government does serve to create jobs. Laubach Aff.
118. In Minnesota, municipalities that intend to issue revenue bonds must have those bond issues approved by the Commissioner of Energy, Planning and Development pursuant to Minn.Stat. § 474.01 (1982). The application must include the proposed amount of the bond issue and the approximate number of jobs to be created. Based on applications for bonding approved from 1970 through 1983, there was to be an average expenditure of $46,600 for each full-time job created. If pollution control issues are eliminated from the calculations, the per job cost in 1981 was $40,200; in 1982 was $36,400; and in 1983 was $36,700. After July 1, 1983, the approval of bond issues pursuant to Minn.Stat. § 474.01 was transferred to the Authority by Minn.Laws 1983, ch. 289, § 113. Laubach Aff.
119. Sale of revenue bonds to finance business expansion creates jobs at a reasonable cost. This type of financing is necessary to fill a gap left by the commercial loan policies of conventional lenders which favor larger established companies. Frequently, the minimum loan requirements of commercial banks prevent financing projects for small businesses. There is a need on the part of small businesses for financial support from government if they are to create jobs. Laubach Aff.; Peterson Aff.; Trim Aff.
Need for and Benefits from Pollution Control Financing Programs.
120. Under Minn.Stat. ch. 116, the MPCA was created to meet the various and complex water, air and land pollution problems in affected areas of the State. MPCA's statutory objective is to achieve a reasonable degree of purity of water, air and land resources of the state consistent with the maximum enjoyment and use thereof in furtherance of the welfare of the people of the state. Gardebring Aff.
121. MPCA is responsible for administering and enforcing statutes and rules relating to pollution of any water, air and land in the State of Minnesota. Gardebring Aff.
122. The State is trustee of the waters of the State. The legislature has declared that it is the policy of the state to provide for the prevention, control, and abatement of pollution of all waters of the State, so far as feasible and practical, in furtherance of conservation of such waters and protection of the public health and in furtherance of the development of the economic welfare of the state. Gardebring Aff.
123. Abatement of pollution of the water, air, and land is a primary concern of our citizenry. Preservation of public health and welfare through abatement of pollution is an essential governmental function. Gardebring Aff.
124. Small businesses experience difficulty in obtaining financing for necessary pollution control projects. Kraus Aff.
125. Public financial assistance to small businesses for the costs of pollution control equipment can bring the costs of such equipment to a manageable level for small *336 businesses. Such financial assistance will increase the installation of pollution control facilities and, thus improve the environment and public health.
126. Pollution control financial assistance to small businesses will retain jobs which might otherwise be lost if small businesses were forced to close because of their inability to obtain financing for required pollution control projects.
Need for and Benefits from Energy Conservation and Alternative Energy Development Programs.
127. Energy used in Minnesota is almost wholly an imported commodity. By reducing the outflow of energy expenditures from the state, investments in energy conservation will tend to increase the total amount of financial resources for all types of investments within the state, provided that the investments in energy conservation are cost-effective or competitive vis-a-vis other investments, such as those for business expansion. Dumagan Aff.
128. Energy conservation investments have been viewed by conventional financing sources in a manner different from investments for business expansion. It is reasonable for the Legislature to determine that the asymmetrical treatment between these two types of investments needs to be corrected, since the impacts of these two investments on business profitability are in parallel directions. Whereas, investments for business expansion tend to increase the revenue side, investments in energy conservation tend to decrease the cost side. Dumagan Aff.
129. If an investment in energy conservation has an internal rate of return higher than the market rate of interest, then the investment cost per unit of conserved energy is less than the price paid for the same unit of energy if it were instead consumed. In this connection, energy conservation is, in principle, the same as energy production, in that energy conservation increases the supply of energy to uses other than the point of use where conservation occurred. When viewed in this light, cost effective energy conservation in Minnesota is the same as producing energy at a cost per unit cheaper than the price per unit of imported energy. Dumagan Aff.
130. It is reasonable for the Legislature to determine that it makes economic sense to invest in energy conservation in Minnesota. The opportunities to achieve net gains from energy conservation have not as yet been exhausted. Dumagan Affidavit.
131. Very little conventional financing is available for energy conservation companies because most such companies are new and have unknown and unproven technologies. Linhares Aff.; Appert Aff.; Kraus Aff.
132. Financial assistance programs such as the Authority's energy loan and energy loan insurance program are necessary if energy conservation businesses are to be financed. Linhares Aff.
CONCLUSIONS OF LAW
1. The issuance of bonds, the making of loans, the insurance of bonds, the payment of certain fees in connection with said bonds, and the insurance of loans, in connection with the business development, pollution control and energy conservation programs of the plaintiff, as provided by the Act, constitute expenditures of public funds for public purposes and do not violate Minn. Const. art. X, § 1.
2. The issuance of bonds, the making of loans, the insurance of bonds and the payment of certain fees in connection with said bonds, in connection with the business development, pollution control and energy conservation projects of Big Stone as provided by the Act, constitute expenditures of public funds for public purposes and do not violate Minn. Const. art. X, § 1.
3. The issuance of bonds, the making of loans, the insurance of bonds and the payment of certain fees in connection with said bonds, in connection with the business development *337 project of Northland Glass as provided by the Act, constitute expenditures of public funds for public purposes and do not violate Minn. Const. art. X, § 1.
4. The insurance of loans in connection with the energy conservation project of North Atlantic as provided by the Act, constitutes an expenditure of public funds for a public purpose and does not violate Minn. Const. art. X, § 1.
5. The issuance of bonds, the making of loans, the payment of certain fees in connection with said bonds, and the insurance of loans, in connection with the business development, pollution control and energy projects of Big Stone, Northland Glass and North Atlantic as provided by the Act, will not make the State a party in carrying on works of internal improvement contrary to the Minn. Const. art. XI, § 3.
6. The bonds, bond insurance and loan insurance which plaintiff is empowered by the Act to issue do not constitute a public debt within the meaning of Minn. Const. art. XI, § 4.
7. The issuance of bonds, the making of loans, the insurance of bonds, the payment of certain fees in connection with said bonds, and the insurance of loans, in connection with the business development, pollution control and energy projects of Big Stone, Northland Glass and North Atlantic do not result in the credit of the State being given or loaned in aid of any individual, association or corporation within the meaning of Minn. Const. art. XI, § 2.
8. The Act does not unconstitutionally delegate the power of the Legislature to the plaintiff, an agency of the State, within the meaning of Minn. Const. art. III, § 1.
9. The Act does not unconstitutionally delegate the power of the Legislature either to the United States Congress or to any agency of the Government of the United States within the meaning of Minn. Const. art. III, § 1.
10. Defendant is authorized, empowered and obligated to execute the documents and to perform all other necessary acts in connection with the sale and issuance of bonds, the making of loans, the insurance of bonds, the payment of certain fees in connection with said bonds, and the insurance of loans, in connection with the business development, pollution control and energy conservation projects of Big Stone, Northland Glass and North Atlantic.
11. Plaintiff is entitled to Summary Judgment granting to it all relief requested in its Complaint.
ORDER FOR JUDGMENT
IT IS HEREBY ORDERED that plaintiff be and hereby is awarded judgment declaring the issuance of bonds, the making of loans and the insurance of loans or bonds by plaintiff in connection with the business development, pollution control and energy conservation projects of Big Stone, Northland Glass and North Atlantic, as provided by the Act, are constitutional and valid in all respects.
IT IS FURTHER ORDERED that defendant be and hereby is directed to carry out his statutory responsibilities and duties with respect to the execution of documents and performance of all other necessary acts in connection with the issuance of these bonds, the making of these loans, the insurance of these bonds, the payment of certain fees in connection with said bonds, and the insurance of these loans.
LET JUDGMENT BE ENTERED ACCORDINGLY.
The attached Memorandum is made a part hereof.
MEMORANDUM
This declaratory judgment action is brought by plaintiff, Minnesota Energy and Economic Development Authority, against David L. Printy, as Secretary of plaintiff, to obtain a declaration of the constitutional validity of the Minnesota Energy and Economic Development Act, Minn. *338 Stat. §§ 116J.875-116J.926 (1982 & Supp. 1983) (hereinafter "the Act"). The Act has essentially three purposes: (1) business development; (2) pollution control; and (3) energy financing. The constitutionality of the Act was challenged by defendant by his refusal to approve applications for funding under the respective statutory programs. His refusal is based on four grounds:[1] (1) that the Act provides for expenditures of public funds for private purposes; (2) that the Act makes the State a party in carrying on works of internal improvement; (3) that the Act provides for the contracting of public debt and pledges the credit of the state in aid of private corporations and (4) that the Act impermissibly delegates the power of the legislature. For the reasons discussed below, the Court finds the Act constitutional and valid in all respects, both on its face and as applied to projects challenged in this action.
1. Determination of Public Purpose.
It is axiomatic that public funds may only be used for public purposes. Article X, § 1 of the Minnesota Constitution expressly provides: "taxes shall be . . . levied and collected for public purposes." This principle is also implicit in the language of article XI, § 2 and article XII, § 1 which provide:
The credit of the state shall not be given or loaned in aid of any individual, association or corporation....
Minn. Const. art. XI, § 2.
The Legislature shall pass no local or special law . . . authorizing public taxation for a private purpose.
Minn. Const. art. XII, § 1.
Numerous Minnesota cases have set forth the parameters for determining whether an expenditure of public funds is for a public purpose. It has long been recognized that the meaning of public purpose is not static, but instead is ever evolving in light of contemporary conditions.[2] Perhaps the most complete and often cited statement of the factors to be considered in determining whether a valid public purpose is present is found in Visina v. Freeman:
What is a "public purpose" that will justify the expenditure of public money is not capable of a precise definition, but the courts generally construe it to mean such an activity as will serve as a benefit to the community as a body and which, at the same time, is directly related to the functions of government.
Visina v. Freeman, 252 Minn. 177, 184, 89 N.W.2d 635, 643 (1958).
Recent decisions have established that while legislative determinations of public purpose are not binding upon the courts, they are entitled to great weight. *339 Lifteau v. Metropolitan Sports Facilities Commission, 270 N.W.2d at 754-55; Minnesota Housing Finance Agency v. Hatfield, 297 Minn. at 167, 210 N.W.2d at 305-06; City of Pipestone v. Madsen, 287 Minn. at 364-65, 178 N.W.2d at 599-600; Housing and Redevelopment Authority of St. Paul v. Greenman, 255 Minn. 396, 403-04, 96 N.W.2d 673, 679 (1959). As the Supreme Court has stated, "This presumption necessarily makes the scope of review of such governmental decisionmaking extremely narrow, and a reviewing court should overrule a legislative determination that a particular expenditure is made for a public purpose only if that determination is manifestly arbitrary and capricious." R.E. Short Co. v. City of Minneapolis, 269 N.W.2d at 337. The Minnesota Supreme Court has held that "extraneous factors such as the mode of financing have no bearing on the issue of public purpose." Lifteau v. Metropolitan Sports Facilities Commission, 270 N.W.2d at 754 n. 6; R.E. Short Co. v. City of Minneapolis, 269 N.W.2d at 339 n. 6. The proper focus of inquiry for this Court is whether the expenditures will benefit the community as a whole and are related to the functions of government, Visina v. Freeman, 252 Minn. 184-85, 89 N.W.2d at 643.
2. The Expenditure Of Public Funds For Acquisition Of New, Or Improvement Of Existing, Personal Or Real Property Constitutes An Expenditure For A Public Purpose.
A significant purpose of the Act is to promote the welfare and prosperity of the State by maintaining and increasing the career and job opportunities of its citizens and protecting and enhancing the tax base on which state and local governments depend upon for the financing of local governments. Minn.Stat. § 116J.88, subd. 7 (Supp.1983). As discussed above, a legislative determination of public purpose, will only be overruled if it is manifestly arbitrary or unreasonable. R.E. Short Co. v. City of Minneapolis, 269 N.W.2d at 337. Defendant has failed to meet his burden of establishing that the legislative determination that the expenditures of public funds for the business development projects in question should be overruled.
It is clear that the community as a whole will benefit from the expenditures of public funds in connection with the business development projects of Big Stone and Northland Glass, both of which are small businesses. This is amply demonstrated by a review of the anticipated benefits of these projects which are documented in the affidavits submitted by plaintiff. The business development program projects for Big Stone and Northland Glass will fulfill the stated legislative purpose of job creation and improving the local tax base. Defendant has not disputed this evidence.
The specific community benefits from the Big Stone and Northland Glass business development projects, as set forth in the Findings of Fact, demonstrate that the community at large will benefit. Creation of new jobs is of vital importance to the State of Minnesota, particularly in times of recession. The Minnesota Supreme Court has long recognized the expenditure of public funds to provide jobs is a public purpose. In Moses v. Olson, 192 Minn. 173, 255 N.W. 617 (1934), the Court upheld a depression-era work relief program as unquestionably serving a public purpose. In Chun King Sales, Inc. v. County of St. Louis, 256 Minn. 375, 98 N.W.2d 194 (1959), the Court found the purchase by the State of a building and equipment to lease to a private company served the public purpose of alleviating unemployment in St. Louis County. In addition to the business development and job creation programs at issue in this case, the 1983 Minnesota Legislature also passed other legislation aimed at providing jobs for Minnesotans, including the Minnesota Emergency Employment Act, Minn.Laws 1983, ch. 312, art. 7, and the Minnesota Job Skills Partnership Act, Minn.Stat. ch. 116L (Supp.1983).
As set forth in the Findings of Fact, business development projects result in the creation of new jobs. During the period from 1969 through 1976, small businesses generated 86.7% of all new private sector *340 jobs. During the same time period, the nation's largest 1,000 corporations contributed only ½ of one percent of the new jobs created. Several studies have demonstrated the important role of small businesses in creating jobs and stimulating economic growth. The number of jobs created by business development projects is further demonstrated by the experience of plaintiff's predecessor agency, the Small Business Finance Agency, in creating jobs by financing business development projects through the issuance standard conduit-type of revenue bonds. That the issuance of revenue bonds to finance business expansion creates jobs at a reasonable cost is also demonstrated by the experience of municipalities in Minnesota which have financed business development projects through the issuance of revenue bonds. It is, thus, amply demonstrated that providing financing to small businesses creates jobs. It is also undisputed that small businesses, for the very reason that they are small, experience difficulty in obtaining financing.
The benefits from the Big Stone and Northland Glass projects are very much like the community benefits which resulted from the municipal industrial development financing project approved by the Minnesota Supreme Court in City of Pipestone v. Madsen. As the Court stated in that case:
Providing gainful employment for our people will increase their purchasing power, improve their living conditions, and relieve the demand for unemployment and welfare assistance. New or modernized buildings will add properties to the tax lists and increase the tax base. There is little doubt that the establishment of new and improved industry will measurably increase the resources of the community, promote the economy of the state, and thereby contribute to the welfare of its people. These benefits are clearly public in nature.
287 Minn. at 372, 178 N.W.2d at 603. Just as the benefits in Pipestone were "clearly public in nature," so too are the benefits which will result from the business development financing challenged in the instant case.
While it is undisputed that both Big Stone and Northland Glass will receive a large benefit from this program, that fact alone does not invalidate the program. Visina v. Freeman, 252 Minn. at 184-85, 89 N.W.2d at 649. In Pipestone, the court upheld the Municipal Industrial Revenue Bond Act against a challenge that the particular private corporation which was to be the beneficiary of the revenue bonds would receive a large benefit. In so holding, the Court applied the following analysis:
Since the legislative enactment and the proposed project pursuant thereto are reasonably designed to combat a problem within the competence of the legislature, and since the public will benefit from the project, the project is sufficiently public in nature to withstand constitutional challenge.
Id. at 287 Minn. 373, 178 N.W.2d at 603-04.
It is well settled that economic development financing is a proper function of government. In Pipestone, the Court noted that, as of the date of its opinion, the highest appellate courts of 22 jurisdictions had upheld the validity of legislation authorizing government industrial development bonds or other types of financial assistance; thirteen states had provided for such financing by constitutional provisions; and only four states had determined that economic development financing did not serve a governmental function. It is well established that Minnesota and the great majority of other jurisdictions hold that government financing for economic development serves a public purpose.
Defendant seeks to distinguish this case from prior Minnesota cases which have recognized that economic development financing serves a public purpose on the ground that the type of financial assistance is different. As previously noted, the Minnesota Supreme Court has stated that the mode of financing is not relevant to a determination of whether a public purpose exists. Lifteau v. Metropolitan Sports Facilities Commission, 270 N.W.2d at 754, n. 6; R.E. *341 Short Co. v. City of Minneapolis, 269 N.W.2d at 339, n. 6.
The majority of Minnesota cases approving business development financing have involved conduit revenue financing where the state or municipal authority issues the bonds, purchases the property and enters into an extended lease with the private corporation.[3] In conduit financing, the revenue bonds are to be repaid solely out of the proceeds from the leases. See generally Minnesota Housing Finance Agency v. Hatfield, 297 Minn. 155, 210 N.W.2d 298; Higher Education Facilities Authority v. Hawk, 305 Minn. 97, 232 N.W.2d 106; City of Pipestone v. Madsen, 287 Minn. 357, 178 N.W.2d 594; Port Authority of City of St. Paul and Others v. Fisher (Port Authority I), 269 Minn. 276, 132 N.W.2d 183; Port Authority of City of St. Paul and Others v. Fisher (Port Authority II), 275 Minn. 157, 145 N.W.2d 560. Financing through general obligation bonds or tax appropriations has usually been limited to circumstances where the state or municipality will develop a government owned and operated facility.[4] However, the Court upheld the constitutionality of expenditures of appropriated funds for loans to nonprofit corporations as seed money for the development of new low income housing in Minnesota Housing Finance Agency v. Hatfield, 305 Minn. 155, 210 N.W.2d 298. The Court has also implicitly permitted the direct expenditure of appropriated funds by the payment of costs of condemnation. E.g., City of Minneapolis v. Wurtele, 291 N.W.2d 386 (Minn.1980); Housing and Redevelopment Authority of Minneapolis v. Froney, 305 Minn. 450, 234 N.W.2d 894 (1975); Housing and Redevelopment Authority v. Greenman, 255 Minn. 396, 96 N.W.2d 673 (1959). The expenditure of public funds permitted through the redevelopment statutes is analogous to the expenditures of appropriated funds for costs of issuance and insurance reserve accounts which are permitted by the Act in question.
For the reasons discussed above, the expenditures questioned in the instant case for business development projects are constitutionally permissible expenditures for a public purpose.
3. The Expenditure Of Public Funds For Acquisition Of Pollution Control Equipment At Existing Facilities Of Private Businesses Constitutes An Expenditure For A Public Purpose.
The Act specifically declares that it was "enacted to promote the welfare and prosperity of the state . . . by reducing, controlling, and preventing environmental pollution...." Minn.Stat. § 116J.89, subd. 2 (Supp.1983). By providing such financial assistance, the cost to small businesses of pollution control equipment and disposal of waste will be reduced to a "manageable level." Minn.Stat. § 116J.89, subd. 1 (1982).
The Big Stone pollution control project consists of the installation of a forcemain and irrigation system to provide waste water treatment which will enable the company to meet state and federal water pollution laws and rules at its facility located in Arlington, Minnesota. The public has an interest in the prevention of pollution of air and water and land in the State and, further, that the police powers of the State extend to the control of pollution and disposal of waste in the State. The Minnesota Supreme Court has explicitly approved the expenditure of public funds for the construction *342 of public facilities for the control of pollution. Minnesota Pollution Control Agency v. Hatfield, 294 Minn. 260, 200 N.W.2d 572 (1973). In that case, the Court approved the issuance of state bonds for pollution control loans and grants to political subdivisions for the construction of pollution control facilities. In upholding the state bonds, the Court held:
Pollution of our air and waters has now become one of the chief concerns of our citizenry. It must be generally conceded that alleviation of pollution in our waters in order that they may be made safe for human consumption and safe for recreational purpose and the propagation of fish involves the preservation of the public health as well as the public welfare and as such it constitutes a governmental function. . . .
Id. 294 Minn. at 265, 200 N.W.2d at 575. The PCA case is persuasive evidence of the fact that a public purpose is served by pollution control expenditures.
Pursuant to the test formulated in Visina v. Freeman, 252 Minn. 177, 89 N.W.2d 635 (1958), discussed above, an activity has a public purpose if it is one which "will serve as a benefit to the community as a body and which, at the same time, is directly related to the functions of government." Id. at 184, 89 N.W.2d at 643. Thus, it first must be established that a public benefit will inure from the proposed activity. In this case the public benefit is clear. The construction of the pollution control project at Big Stone is designed to eliminate runoff of waste water which has resulted in pollution to public waters of the State. The benefit to the public from abatement of pollution is clear, whether the abatement of pollution results from the construction of private or publicly owned pollution control facilities.[5]
It is well settled that legislative determinations of public purpose should be overruled only if it can be established that the particular expenditure is manifestly arbitrary or capricious. E.g., R.E. Short Co. v. City of Minneapolis, 269 N.W.2d 331, 340 (1978). Defendant's naked assertion that the benefit to the public is only incidental in comparison to the benefit to Big Stone does not satisfy the heavy burden which the defendant must bear in establishing that the challenged expenditure is not for a public purpose. Defendant's burden is particularly heavy since it is well settled that a private corporation's receipt of a large benefit from public financial assistance does not in and of itself invalidate the project. City of Pipestone v. Madsen, 287 Minn. 357, 178 N.W.2d 594 (1970). The combatting of pollution is clearly a subject matter which is within the competence of the Legislature. The benefits from the installation of pollution control facilities to the public through the protection of the air, land and waters of the State is clear. While some private benefit will result, the project is sufficiently public in nature to withstand constitutional challenge.
The second factor set forth by the court in Visina v. Freeman, 252 Minn. at 184-85, 89 N.W.2d at 643, which must be satisfied before a public purpose can be established is that the project financed is one that is directly related to the function of government. Again, the abatement of pollution is a legitimate function of government. Minnesota Pollution Control Agency v. Hatfield, 294 Minn. at 265, 200 N.W.2d at 575; Gardebring Aff.
The great weight of authority from other jurisdictions has upheld the constitutionality of providing public financial assistance for pollution control facilities to private companies through revenue bond financing. E.g., Advisory Opinion Regarding Constitutionality *343 of PA 1975 No. 301, 400 Mich. 270, 254 N.W.2d 528 (1977); Opinion of the Justices, 113 N.H. 201, 304 A.2d 89 (1973); State ex rel. Brennan v. Bowman, 89 Nev. 330, 512 P.2d 1321 (1973); Opinion of the Justices, 359 Mass. 769, 268 N.E.2d 149 (1971); Fickes v. Missoula Co., 155 Mont. 258, 470 P.2d 287 (1970).
For the reasons discussed above, the expenditure of public funds for pollution control projects at private facilities is constitutionally permissible because it serves a public purpose.
4. The Expenditures Of Public Funds For The Installation Of Equipment For Conservation Of Energy And For Production For Sale Of Equipment For Conservation Of Energy Is For A Public Purpose.
The Act provides for two types of energy financing programs the energy loan program and the energy loan insurance program. Minn.Stat. §§ 116J.925-116J.926. The energy financing programs authorized by the Act serve a public purpose since they will benefit the community, energy conservation is a proper government concern, and undue private benefit will not result.
Energy conservation and development of alternative energy have become important concerns of Minnesota citizens. The reason for the great concern to the State of Minnesota is that the energy used in Minnesota is almost entirely imported. Therefore, cost effective investments in energy conservation will have the effect of increasing the total amount of Minnesota's financial resources for all other types of investments. Energy conservation is, in principle, the same as energy production, and achieving cost-effective energy conservation in Minnesota is the same as producing energy at a cost per unit cheaper than the price per unit of imported energy.
As energy conservation and development of alternative energy resources involve new technology, there is little conventional financing available. Because conventional financing sources view energy conservation projects differently than business loans, even though they have parallel impacts on business profitability, investment opportunities are being foregone even though they would be cost effective. Because such energy conservation investments are being foregone, Minnesota is wasting valuable energy resources, and money is being spent on energy which would be available for other types of investments within the state.
Defendant argues that the benefits from the North Atlantic project are too speculative because there is no requirement that heat exchangers be installed in Minnesota. While Minn.Stat. § 116J.924 does not require that the qualified energy projects be installed in the State, the rules promulgated by the plaintiff provide that projects will only be approved if they are economically advantageous to the State, facilitate a reliable source of energy to Minnesota and diminish Minnesota's reliance on imported energy. 4 MCAR § 14.073. As illustrated by this project, plaintiff will evaluate the impacts from the projects before insuring the loan. In this case, the benefits to Minnesota are clear as North Atlantic uses Minnesota subcontractors, and the proceeds of the loan are expected to finance projects primarily in Minnesota and the surrounding states. Furthermore, courts have found a public purpose even though most of the benefit goes out of state. Square Butte Electric Cooperative v. Hilken, 244 N.W.2d 519 (N.D.1976) (approving condemnation for a power line even though most power will go out of state); Adams v. Greenwich Water Co., 138 Conn. 205, 83 A.2d 177 (1977) (approving eminent domain for reservoir which will also benefits citizens of another state). Similarly, the Minnesota Supreme Court approved the purchase by the state of a building and equipment to lease it to a private company as serving the public purpose of providing a market for area agricultural products and alleviating unemployment, even though there was no requirement that Minnesota products be used. Chun King *344 Sales, Inc. v. County of St. Louis, 256 Minn. 375, 98 N.W.2d 194 (1959).
The energy needs of the people of Minnesota are a proper governmental concern. The energy financing programs established by the Act are but one of several steps taken by the Legislature in reaction to the growing concern about Minnesota's dependence on imported energy.
While there have been no Minnesota cases specifically addressing the use of public funds for the development of energy conservation and alternative energy resources by providing financial assistance to private facilities, Minnesota has long approved the issuance of revenue bonds for municipal utilities. Williams v. Village of Kenyon, 187 Minn. 161, 244 N.W. 558, 561 (1932). Since energy conservation is in principle the same as energy production, the longstanding recognition of energy production as a valid public purpose is persuasive. Additionally, the interest and concern of the state in conserving energy is very much like the interest and concern of the citizenry of the State of Minnesota in preventing pollution, recognized by the Minnesota Supreme Court in Minnesota Pollution Control Agency v. Hatfield, 294 Minn. at 265, 200 N.W.2d at 575.
Energy conservation and alternative energy development have been held to be a public purpose in all but one of five cases considering the question. Nicoll v. City of Eugene, 52 Or.App. 379, 628 P.2d 1213 (1981); Douglas v. Judge, 174 Mont. 32, 568 P.2d 530 (1977); State ex rel. Douglas v. Thone, 204 Neb. 836, 286 N.W.2d 249, 252-254 (1979); In Idaho Water Resource Board v. Kramer, 97 Idaho 535, 548 P.2d 35 (1976). The only case which found no public purpose in an energy related project is State ex rel. McLeod v. Riley, 276 S.C. 323, 278 S.E.2d 612 (1981). In Riley, the South Carolina Supreme Court invalidated a statute permitting the issuance of general obligation bonds to finance an alcohol fuel development loan program. The court found that any public benefit from such a program was too indirect and speculative to pass constitutional muster. 278 S.E.2d at 615. The Court's rationale in Riley is much like that of the minority cases finding industrial revenue bonds not for a public purpose because the public benefit was found to be indirect. The Minnesota Supreme Court has consistently rejected such a narrow approach to a determination of public purpose, City of Pipestone v. Madsen, 287 Minn. 357, 178 N.W.2d 594 (1970), and, indeed, has held that a public purpose exists even if a private corporation "will receive a large benefit." Id. 287 Minn. at 373, 178 N.W.2d at 603.
Accordingly, the Court follows the liberal approach to public purpose of the Minnesota Supreme Court and the majority trend of cases from other jurisdictions and finds that energy conservation and the development of alternative energy constitutes a public purpose.
5. Plaintiff Will Not Be A Party In Carrying On Works Of Internal Improvement Under The Business Loan, Pollution Control Loan Or Energy Loan Programs.
Article XI, Section 3 of the Minnesota Constitution[6] provides that the State of Minnesota "shall not be a party in carrying on works of internal improvements except as authorized by this constitution." This prohibition has always been given a strict construction by the Minnesota Supreme Court.
The Minnesota Supreme Court has generally limited the application of the internal improvements clause by broadly construing those activities which constitute "legitimate governmental functions," which were never intended to fall within the constitutional prohibition. Based upon its broad interpretation of those activities which constitute a proper function of State government, the Court has, in numerous decisions in recent years, refused to strike down acts *345 of the Legislature on the ground that they made the State a party to a work of internal improvement. In so doing, the Court has determined that if the internal improvements clause is not to present a continuing obstacle to the Legislature and its attempt to respond to public needs, the constitution must be read to permit the State to engage in those activities which are a proper function of State government.
In Visina v. Freeman, 252 Minn. 177, 193-94, 89 N.W.2d 635, 648-49 (1958) (citations omitted), the Court observed that in determining what constitutes a proper governmental function, the Constitution must be interpreted in light of contemporary conditions:
While the plain meaning of language used in our fundamental law may not be tampered with to accomplish a desired result no matter how archaic it has become by virtue of social and economic changes which have occurred since its adoption, neither should the proper interpretation of constitutional provisions ignore such changes. In determining whether an act of the legislature contravenes a constitutional provision, we should endeavor to interpret the provision in the light of existing conditions, particularly when those conditions could not have been foreseen at the time the Constitution was adopted. If the Great Lakes-St. Lawrence Seaway had been a reality instead of a dream when our Constitution was adopted, it can hardly be supposed that the framers of our Constitution, and the people who adopted it, would have proscribed the expenditure of public money to improve harbor and dock facilities to enable our State to have contact by water transportation with all other ports of the world. The limitation on spending public money for internal improvements obviously was not intended to circumscribe such activity. In a true sense, the development of a seaport to facilitate water transportation between our state and other parts of the world is not an internal improvement at all. While we held that the term "internal improvements" includes any public improvement in Rippe v. Becker, it must be kept in mind, that in discussing the term, we did not dare have in mind any such thing as the development of a seaport. It seems to us that such improvement could not have been within the contemplated meaning of this constitutional proscription, nor would it be proper to so construe the Constitution as to include it within the meaning of "internal improvements."
Accordingly, although the Court in Rippe v. Becker, 56 Minn. 100, 57 N.W. 331 (1894), had specifically stated that the internal improvements clause was intended to restrain State government in the improvement of rivers and harbors, the Court in Visina found no barrier to development of a seaport at Duluth.
The Court in Visina also observed:
While this case may illustrate the need for some constitutional revision, the fact remains that the right to amend the Constitution rests with the people and should not be usurped by the courts in the guise of judicial interpretation. At the same time, when it becomes necessary to interpret the provisions of the Constitution in the light of conditions which exist today that could not be contemplated at the time our Constitution was adopted, we should attempt to give it a reasonable meaning as applied to present conditions if that can be done without doing violence to the express language used in the Constitution itself. If the language of the Constitution permits, we should give it that meaning which would have been expressed when adopted if the present conditions that are involved had then existed or had been within the contemplation of those who drafted the instrument.
252 Minn. at 194, 89 N.W.2d at 649.
In Minn. Pollution Control Agency v. Hatfield, 294 Minn. 260, 200 N.W.2d 572 (1972), the Court affirmed its holding in Visina that the internal improvements prohibition must be interpreted in light of current *346 notions of what constitutes a proper function of state government:
Pollution of our air and waters has now become one of the chief concerns of our citizenry. It must be generally conceded that alleviation of pollution in our water. . . involves the preservation of the public health as well as the public welfare, and as such it constitutes a governmental function for which the expenditure of public money does not contravene [the constitutional provision] prohibiting the expenditure of such funds for internal improvements.
294 Minn. at 265, 200 N.W.2d at 575. In Minnesota Housing Finance Agency v. Hatfield, 297 Minn. 155, 210 N.W.2d 298 (1972), the Court, after observing that the internal improvements clause has, historically, been given a fairly limited reading, again affirmed its holding in Visina that the "categories of allowable and forbidden state activities are not static." 297 Minn. at 164, 210 N.W.2d at 304. The Court noted that since its earliest decisions, it had upheld a variety of legislative enactments as accepted governmental functions which were not prohibited as works of internal improvements. Acting consistently, it upheld a plan to provide the financing of housing for persons of low and moderate income as a proper function of State government.
The purposes for which plaintiff has adopted its business loan, pollution control, and two energy loan programs are set forth in detail in the Findings of Fact. Both the Legislature and plaintiff have concluded that the accomplishment of these purposes constitutes a proper function of State government. Since these purposes are proper for the expenditure of public money, it follows that they are proper functions of State government and that their accomplishment should not be frustrated by the prohibition against carrying on works of internal improvement.[7]
Here, the defendant has introduced no evidence in support of his position that the development of programs and approval of loan and insurance applications by plaintiff do not constitute a proper function of government. Defendant has failed to meet the heavy burden of demonstrating beyond a reasonable doubt that the statute, programs, or projects are constitutionally infirm.
6. The Issuance Of Bond Insurance And Loan Insurance By Plaintiff Does Not Create Public Debt.
The purposes for which "public debt may be contracted" are limited by article XI of the Minnesota Constitution. The manner in which, and the purposes for which, the State may contract public debt are set forth in article XI, §§ 4-7. "Public debt" is defined in article XI, § 4, which provides:
The public debt includes any obligation payable directly in whole or in part from a tax of statewide application on any class of property, income, transaction or privilege, but does not include any obligation which is payable from revenues other than taxes.
In Minnesota Housing Finance Agency v. Hatfield, the Court held that the bonds and notes were not
"payable directly, in whole or in part, from a tax of State-wide application" but solely from the revenues paid by the owners of the projects MHFA finances. The statute sets out detailed requirements for the establishment of bond and loan funds which are to be used to repay the loans and specifically states that the bonds are not debts or liabilities of the state. Additionally, the specific notes at *347 issue state on their face that the bonds are repayable "solely from the South High Construction Loan Account" and are not debts of the state.
297 Minn. 163, 210 N.W.2d at 303. In reaching its decision, the Court relied on prior Minnesota decisions upholding the constitutionality of bonds to be paid solely out of special funds, Williams v. Village of Kenyon, 187 Minn. 161, 244 N.W. 558 (1932) (bonds to be paid out of income from a generating plant); Fanning v. University of Minnesota, 183 Minn. 222, 236 N.W. 217 (1931) (bonds to be paid solely out of earnings of a University dormitory). Additionally, the Court noted that "[o]ther states have consistently held that revenue bonds which specifically deny any liability of the state do not constitute state debt within the meaning of provisions similar to Minn. Const. art. IX, §§ 6 and 7."[8]Minnesota Housing Finance Agency v. Hatfield, 297 Minn. at 163, 210 N.W.2d at 303.
The Minnesota Supreme Court has also applied the special fund doctrine to uphold the constitutionality of bonds, even when the bonds were to be repaid out of a fund derived from the levy and collection of a tax which was specifically authorized for that purpose. Visina v. Freeman, 252 Minn. 177 at 189, 89 N.W.2d 635 at 652 (construction of terminal and port facilities from special tax in aid of port development); Naftalin v. King, 257 Minn. 498, 499-502, 102 N.W.2d 301, 302-04 (construction of state institutions paid out of proceeds of tax on homesteads); Lifteau v. Metropolitan Sports Facility Commission, 270 N.W.2d at 755 (construction of stadium to be paid out of revenues from stadium and from special metropolitan tax).
Nowhere in the Act is there any language which would even imply that the bond insurance or loan insurance is to be repaid out of future state-wide appropriations. Indeed, the Act contains an explicit provision that is virtually identical to the language found in the municipal revenue bond statute, Minn.Stat. ch. 474 and the housing finance agency statute, Minn.Stat. ch. 462A, which provides:
Neither the state nor any other agency or political subdivision of the state shall be liable on any bond, note or other obligation of the agency, and no bond, note or other obligation of the agency shall constitute a debt or loan of credit of the state or any political subdivision or any individual member of the agency.
Minn.Stat. § 116J.89, subd. 3 (1982). Additionally, Minn.Stat. § 116J.91, subd. 12 (Supp.1983) provides that bonds are to be paid solely from the particular monies, assets or revenues derived from its programs or from specific reserve funds which have previously been pledged for the bonds.
There is nothing in the Act that would require plaintiff to provide for the bond insurance or loan insurance out of anything other than revenues derived from its loan programs or the special accounts created out of already appropriated funds. Moreover, a careful review of the resolutions of plaintiff, the memoranda of agreement and the participating lenders agreement clearly indicates that the specific bonds, bond insurance and loan insurance are to be repayable solely out of proceeds from the loans or, in the event of default, from the special insurance accounts created out of already segregated funds. Here, the bond insurance and loan insurance are not funded out of future appropriations. Instead, they are funded from money that has already been appropriated by the Legislature. Thus, the evil of pledging the future credit of the state is simply not present in this case.
Moreover, this analysis is supported by cases from other jurisdictions. The general rule is that an obligation for which an appropriation is made at the time of its creation from funds already in existence is not within the operation of a limitation on public debt clause. 72 Am.Jur.2d States § 81. In Witzenburger v. Wyoming Community Development Authority, 575 P.2d *348 1100, 1132-35 (Wyo.1978), the Wyoming Supreme Court held that no debt was created because the community development authority bonds at issue were payable only from current appropriations and did not create a debt in excess of money already appropriated. 575 P.2d at 1133. Both Rhode Island and Pennsylvania have upheld appropriations to fund reserve accounts for housing finance agencies even if there is a mandatory requirement that that appropriation be included in the governor's budget. Opinion to the Governor, 112 R.I. 151, 308 A.2d 809 (1973); Johnson v. Pennsylvania Housing Finance Agency, 453 Pa. 329, 309 A.2d 528 (1973). Courts have consistently held that there is no public debt created when the legislature is permitted, but not required, to make appropriations to the agency.[9] The Michigan Supreme Court upheld a provision providing for voluntary appropriations as not being a public debt and stated that if in future an actual appropriation was made it would not alter the status of the bonds as revenue bonds and would not make them a public debt. In Re Advisory Opinion re the Constitutionality of P.A. 1975 Number Abbreviated 301, 400 Mich. 270, 254 N.W.2d 528, 535 (1977).
Finally, the Maryland Supreme Court struck down a program for insuring payment of mortgages on the grounds that it created a public debt. However, in so holding the court noted:
Had Maryland chosen to fund the guarantee by appropriations to the authority, no problem would have arisen. It was the pledge of the State's credit to support the Authority's guarantee of loans indefinite in duration and uncertain in amount, to be made in aid of private industry for the repayment of which the counties and municipalities themselves are not responsible, which was fatal.
Maryland Industrial Development Finance Authority v. Helfrich, 250 Md. 602, 243 A.2d 869, 879 (1968). Accord, State ex rel. Douglas v. Thone, 204 Neb. 836, 286 N.W.2d 249 (1979). While there are cases to the contrary, e.g., Casey v. South Carolina State Housing Authority, 264 S.C. 303, 215 S.E.2d 184 (1975), they represent a minority view.
The bond insurance and loan insurance programs of plaintiff do not suffer the fatal flaw of pledging future appropriations. The bond insurance and loan insurance are specifically restricted to payment from revenues of plaintiff and from already appropriated funds which have been placed in segregated accounts. Accordingly, it must be concluded that the bond insurance and loan insurance programs of the authority do not create a public debt within the meaning of the state constitution.
7. The Bond Insurance and Loan Insurance Which Plaintiff is Empowered to Issue Does Not Constitute an Impermissible Pledge of the Credit of the State.
The bond insurance and loan insurance funds are not violative of article 11, § 2 of the Minnesota Constitution which provides:
The credit of the state shall not be given or loaned in aid of any individual, association or corporation except as hereinafter provided.
The Minnesota Supreme Court has consistently construed this provision as not prohibiting the lending of the credit of the state in aid of an individual or corporation if it is done primarily for a public purpose. E.g., Minnesota Housing Finance Agency v. Hatfield, 297 Minn. 155, 210 N.W.2d 298 (1973); City of Pipestone v. Madsen, 287 Minn. 357, 178 N.W.2d 594 (1970); Visina *349 v. Freeman, 252 Minn. 177, 89 N.W.2d 635 (1958). As discussed at length in this memorandum, the expenditures challenged are for a public purpose and, thus, are constitutional pursuant to the Minnesota Supreme Court's longstanding construction of the lending of the credit of the state clause.
This Court will not depart from the Minnesota Supreme Court's prior analysis and adopt Maine's interpretation of its similarly worded constitutional prohibition against lending the credit of the state to private individuals. In Common Cause v. State of Maine, 455 A.2d 1 (Me.1983), the Maine Supreme Court construed the credit clause to only bar suretyship debts. Id. at 28. The Maine Supreme Court looked to the historical basis for the credit clause and stated that the purpose of the clause was "to remove this delusion of suretyship with its snare of temptation". Even if the interpretation of the Maine Supreme Court were adopted, the clause would not be violated since the State is not placing itself in the position of providing bond insurance or loan insurance from future state-wide tax revenues.
This case does not present unrestricted pledges to insure bonds or insure loans out of future tax revenues. Instead, this case deals with limited insurance of bonds and loans from already appropriated funds which are kept in segregated accounts. It is clear from the Act, the structure of the bonds, agreements, and loans in question that future tax appropriations are not required to be used to insure the bonds or loans in question.
Whether the expenditures of public funds for bond insurance and loan insurance programs are "good" or "bad" from a policy standpoint is a question for the Legislature not this Court. The following discussion in the Minnesota Supreme Court's recent decision in upholding the domed stadium bonds is illuminating:
We are not persuaded by plaintiff's argument that the law is bad because it benefits indirectly some private individuals or corporations; that it is economically unsound; that stadia all over the country have experienced cost overruns; and that the new stadium, if built, will prove to be a "loser" from a revenue standpoint. These arguments are proper arguments to be made to the legislature, or to the Commission itself. It might very well prove to be the case that the revenues from a new stadium, from the admissions tax and from the 2 percent tax on liquor, will be insufficient to pay for both bond principal and interest and for the operations and administrative expenses. But this is a gamble that the bond holders will have to be prepared to take. Decisions such as these are economic matters and political decisions to be made by legislative bodies, not the courts.
Lifteau v. Metropolitan Sports Facilities Commission, 270 N.W.2d 749, 755 (1978).
The bond insurance and loan insurance programs of the plaintiff are not an unconstitutional lending of credit of the state since they are for a public purpose and do not create a public debt.
8. The Act Does Not Unduly Delegate Legislative Power To Plaintiff.
The leading Minnesota case on delegation by the legislative branch to a state administrative agency is Lee v. Delmont, 228 Minn. 101, 36 N.W.2d 530 (1949). In upholding the constitutionality of a barber's licensing statute in Lee the Court observed:
The policy of the law and the standard of action to guide the administrative agencies may be laid down in very broad and general terms. What is a sufficiently definite declaration of policy and standard obviously varies in some degree according to the complexity of the subject to which the law is applicable. The discretionary power to ascertain the operative facts normally carries with it the power to make rules and regulations pursuant to which the power is exercised.[10]
*350 The Minnesota decisions since Lee have consistently followed the principle that adequate statutory standards may be laid down in broad and general terms. Under this principle, the Minnesota Supreme Court has consistently upheld state legislation against a challenge of unconstitutional delegation of legislative power.[11] In a series of decisions, the Court has upheld delegations of legislative power to the Metropolitan Airports Commission (State ex rel. Interstate Air-Parts, Inc. v. Minneapolis-St. Paul Metropolitan Airports Comm'n, 223 Minn. 175, 188-91, 25 N.W.2d 718, 727-28 (1947)), a local housing and redevelopment authority (Thomas v. Housing & Redevelopment Authority of Duluth, 234 Minn. 221, 247-50, 48 N.W.2d 175, 192 (1951)), a seaway port authority (Visina v. Freeman, 252 Minn. 177, 199-200, 89 N.W.2d 635, 652-53 (1958)), the Commissioner of Highways (Anderson v. Comm'r of Highways, 267 Minn. 308, 311-14, 126 N.W.2d 778, 780-83 (1964) (determining whether an individual was a "habitual violator" of the traffic laws)), and the PCA (Minnesota Pollution Control Agency v. Hatfield, 294 Minn. 260, 266-67, 200 N.W.2d 572, 576 (1972)).[12]
The primary authority relied upon by defendant to support his argument that the Act unconstitutionally delegates legislative power to the authority, Douglas v. Judge, 174 Mont. 32, 568 P.2d 530, 535 (1977), is distinguishable. The statute under review in Douglas authorized a state agency to make renewable resource development loans to farmers and ranchers. Although the statute was upheld on "public purpose" grounds, the Court found that the legislative direction that loans be made "for any worthwhile project" failed to provide a sufficient standard or direction to the agency as to the approval of loan applications. In the statute under review, the legislative standards are far more restrictive than the "worthwhile project" language which Douglas held to be inadequate. The Court noted that two other grant and loan programs, wherein the Legislature retained authority to approve grants and loans, involved no unconstitutional delegation. 568 P.2d at 534-35.
Regardless whether or not our Supreme Court would follow the Douglas decision in an identical case,[13] it is clear to this Court that in a complex area it is necessary and appropriate for the legislature to delegate in broad and general terms.
Nor are the Act's provisions relating to energy loan insurance and energy development loans defective for lack of adequate *351 statutory standards. The legislative policy with respect to both of these energy-related programs is set forth in Minn.Stat. § 116J.921 (Supp.1983). The plaintiff's legislative mandate is to foster cooperation between government and the private sector of the economy to assure that Minnesota has available a reliable, economic supply of energy. Legislative intent with respect to what constitutes conservation, alternative energy resources, renewable energy resources, and energy recovery is specifically set forth in the definitional provisions of Minn.Stat. § 116J.922 (Supp. 1983). The Legislature further provided that plaintiff's powers be broadly interpreted "to facilitate innovative leadership in all areas of energy, including policy setting, goal definition, strategy planning, conservation, development of renewable and alternative energy resources, energy recovery, and monitoring." Minn.Stat. § 116J.923, subd. 3 (Supp.1983). In administering its energy programs the Authority, is specifically directed by the Act to focus on "job creation" and to accommodate the needs of low income families and persons. Minn.Stat. § 116J.923, subd. 5 (1983). Significantly, the Act also provides for close legislative monitoring of plaintiff's operations in the energy area by mandating planning, including planning as to appropriate reserve and guarantee fund levels, and by mandating annual reporting to the Legislature. Minn.Stat. § 116J.923, subd. 9 (Supp. 1983). Each of the Authority's energy programs is subject to the foregoing guidelines, standards and legislative supervision. In addition to these general standards, specific standards apply to the energy loan insurance program. The Act expressly authorizes plaintiff to establish eligibility requirements for insurance by rule, Minn. Stat. § 116J.924, subd. 3(b) (Supp.1983), and these standards are now in effect. 4 MCAR §§ 14.071-14.080.
It is acceptable for the Legislature to allow plaintiff to promulgate reasonable eligibility requirements by rule, rather than fixing them by statutory provision. These requirements are the kind of "details" which are properly delegated to an administrative agency, particularly in a complex and fast-changing area where the purpose of the legislative program is to foster cooperation between government and lenders in the promotion of energy conservation. Similarly, the Legislature has established adequate standards in connection with the making of energy development loans.
The Legislature has not unconstitutionally delegated its authority by enacting the energy loan insurance and energy development loan programs.
9. The Act Does Not Unduly Delegate Legislative Power to the Federal Government.
Defendant also alleges that the economic development and pollution control loan provisions of the Act are defective because they unconstitutionally delegate the power to determine who may receive loans to an agency of the United States Government. Defendant's argument is based upon the provisions of Minn.Stat. § 116J.88, subd. 4 (Supp.1983) which defines "eligible small businesses," the class of applicants eligible for loans under Minn. Stat. § 116J.90 (Supp.1983). Defendant's objection is that the definition of eligible small business incorporates by reference the definition of small business contained in regulations of the United States small business administration, "as amended from time to time."
Defendant's attack on the definition of "eligible small business" relies upon Wallace v. Commissioner of Taxation, 289 Minn. 220, 184 N.W.2d 588 (1971). In Wallace the court held that a state tax law incorporating certain internal revenue code provisions should be interpreted to incorporate those provisions as of the date the state law was enacted and not as the provisions might be amended by Congress. The Court based its decision, in part, upon the express constitutional provision that: "The power of taxation shall never be surrendered, suspended or contracted away." Minn. Const. art. X, § 1.
*352 In contrast to the tax exclusions under review in Wallace, which had a direct and immediate impact upon a Minnesota resident's tax liability, the definition of "eligible small business" does not directly determine which businesses will receive a loan from plaintiff. The ultimate determination as to whether to grant a business development or pollution control loan rests with plaintiff and not with the federal SBA. The definition of eligible small business merely specifies what "size standards" a business must meet in order to be eligible for a loan from plaintiff. In referencing federal regulations, the Legislature has adopted a generally accepted size standard to broadly define the category of eligible loan applicants.
In addition, the Wallace case itself notes an exception to its rule for statutes which "are auxillary in nature and seek to achieve uniformity in implementation of national programs and policies." 289 Minn. at 228, 184 N.W.2d at 592.[14] Here, although the Act is not "auxillary" to a federal statute, there are good reasons to coordinate federal and state eligibility requirements. The definition of small business contained in federal regulations is a generally accepted one, and is a definition which financial institutions and lenders commonly apply in the regular course of their business. Had the Legislature chosen to draft an entirely new set of size standards or to tie Minnesota's legislation to the federal size standards in effect at the time it was enacted, it would have created a confusing "double standard" for lenders which might have discouraged their participation in plaintiff's programs.
NOTES
[1] It is important to note at the outset that defendant's burden in challenging the constitutionality of the Act is a heavy one. It is well settled "that acts of the legislature are presumed to be constitutional and will not be declared unconstitutional unless their invalidity appears clearly or unless it is shown beyond a reasonable doubt that they violate some constitutional provisions. Statutes are to be construed so as to uphold their constitutionality." Higher Education Facilities Authority v. Hawk, 305 Minn. 97, 103, 232 N.W.2d 106, 110 (1975) (citations omitted). As the United States Supreme Court has noted, when a state legislature speaks, the public interest has been declared in terms which are "well-nigh conclusive." Berman v. Parker, 348 U.S. 26, 32, 75 S. Ct. 98, 102, 99 L. Ed. 27 (1954).
[2] See, e.g., Lifteau v. Metropolitan Sports Facilities Commission, 270 N.W.2d 749, 754-55 (Minn. 1978) (construction of sports facility for use by professional sports teams is a public purpose); R.E. Short Co. v. City of Minneapolis, 269 N.W.2d 331, 337-38 (Minn.1978) (construction of parking facility to be leased to private developer and to induce other private development is a public purpose); Minnesota Housing Finance Agency v. Hatfield, 297 Minn. 155, 210 N.W.2d 298 (1973) (construction of low and moderate income housing by nonpublic agencies is a valid public purpose); Minnesota Pollution Control Agency v. Hatfield, 294 Minn. 260, 200 N.W.2d 572 (1973) (construction of municipal pollution control projects is a public purpose); City of Pipestone v. Madsen, 287 Minn. 357, 178 N.W.2d 594 (1970) (construction of industrial facilities to be leased on a long term lease to a private corporation is a public purpose); Visina v. Freeman, 252 Minn. 177, 89 N.W.2d 635 (1958) (construction of port facilities is a public purpose); Central Lumber Co. v. City of Waseca, 152 Minn. 201, 188 N.W. 275 (1922) (operation of a lumber and coal yard is a public purpose).
[3] To focus upon whether the particular facility being financed is constructed with public funds and then leased to a private corporation or whether the private company is directly loaned the funds to construct the facility, is a distinction without a difference. Most of the long-term leases in question grant the lessee many of the commonly understood incidents of outright ownership. In many instances the leases are for the projected useful life of the improvements so constructed.
[4] See R.E. Short Company v. City of Minneapolis, 269 N.W.2d 331; Lifteau v. Metropolitan Sports Facilities Commission, 270 N.W.2d 749; Minnesota Pollution Control Agency v. Hatfield, 294 Minn. 260, 200 N.W.2d 572; Visina v. Freeman, 252 Minn. 177, 89 N.W.2d 635.
[5] The Court does not find the Stanley v. Department of Conservation and Development, 284 N.C. 15, 199 S.E.2d 641 (N.C.1973), to be persuasive. Constitutional Law Public Purpose Restricting Revenue Bond Financing of Private Enterprise, 52 N.C.L.Rev. 859 (1974). The court in Stanley held that the public interest could be served by the assertion of the police powers to abate pollution and that it would be preferable to achieve the result through the exercise of the state police power without the expenditure of public funds. Moreover, Stanley can be factually distinguished.
[6] Prior to the amendment and restructuring of the Minnesota Constitution on November 5, 1974, the prohibition against works of internal improvement appeared in Article IX, Section 5, of the Constitution of 1857, as amended, and is referred to as such in the pre-1974 cases.
[7] In Visina v. Freeman, 252 Minn. 177, 184, 89 N.W.2d 635, 643, the Court noted that the concepts of "public purpose" and "proper governmental function" are closely related:
What is a "public purpose" that will justify the expenditure of public money is not capable of a precise definition, but the Courts generally construe it to mean such an activity as will serve as a benefit to the community as a body and which, at the same time, is directly related to the functions of government.
This definition of public purpose was cited by the Court with approval in City of Pipestone v. Madsen, 287 Minn. 357, 364, 178 N.W.2d 594, 599 (1970).
[8] The Minnesota Constitution was revised for structure and form in 1973. At that time the provisions relating to public debt in what was then article IX, §§ 6 and 7 were restructured and were placed in article XI, §§ 4 through 7.
[9] Infants v. Virginia Housing and Development Authority, 221 Va. 659, 272 S.E.2d 649 (1980); In re Interrogatories by Colorado Senate, 193 Colo. 298, 566 P.2d 350 (1977); John R. Grubb, Inc. v. Iowa Housing Finance Authority, 255 N.W.2d 89 (Iowa 1977); In re the Constitutionality of ORS, 465.720, 272 Or. 398, 537 P.2d 542 (1975); Opinion of the Justices to House of Representatives, 368 Mass. 880, 335 N.E.2d 362 (1975); Maine State Housing Authority v. Depositors Trust Co., 278 A.2d 699 (Me.1971); Maryland Industrial Development Finance Authority v. Meadow-Croft, 243 Md. 515, 221 A.2d 632 (1966).
[10] 228 Minn. at 114, 36 N.W.2d at 539 (citations and footnotes omitted) (emphasis added). The court specifically observed that in a complex area, an adequate statutory standard might consist of a direction that the agency act "in the public interest." 228 Minn. at 114 n. 12, 36 N.W.2d at 539 n. 11.
[11] Defendant cites no Minnesota decisions, either before or after Lee, which invalidated a delegation of legislative power to a state administrative agency. Wallace v. Commissioner of Taxation (discussed infra) involved a claim that a statute improperly delegated the taxing power to an outside agency, the federal government. In addition, the Wallace case was decided upon statutory construction rather than constitutional grounds.
[12] The Court's decision in State ex rel. Foster v. City of Minneapolis, 255 Minn. 249, 97 N.W.2d 273 (1959), which invalidated a delegation of legislative power to private property owners in connection with their zoning rights, did not involve a delegation to a state agency and apparently was based upon 14th amendment due process rather than separation of powers considerations. Id. at 253, 97 N.W.2d at 275. Accord, Remington Arms Co. v. G.E.M. of St. Louis, Inc., 257 Minn. 562, 102 N.W.2d 528 (1960) (delegation without hearing or standards to private parties of power to set prices under fair trade law is unconstitutional).
[13] The modern view of the delegation doctrine is that clear legislative standards are no longer required to avoid an unconstitutional delegation where the rights of the public are protected against an abuse of administrative power by (1) adequate "procedural safeguards" or (2) adequate "administrative standards," which have been established by the agency pursuant to a grant of rulemaking authority. 1 K. Davis Administrative Law Treatise §§ 3.14-3.15 (2d ed. 1978 & Supp.1982). See, State ex rel. Douglas v. Nebraska Mortgage Fund, 204 Neb. 445, 283 N.W.2d 12 (1979) (modern tendency is to permit delegation in light of complexity of economic and governmental conditions).
[14] This principle was recently affirmed by the Court in Minnesota Recipients Alliance v. Noot, 313 N.W.2d 584, 586-87 (Minn.1981). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1580670/ | 919 F. Supp. 1242 (1996)
Jewell R. DALE, Plaintiff,
v.
INDIANAPOLIS POLICE DEPARTMENT, Defendant.
No. IP 94-1950 C B/S.
United States District Court, S.D. Indiana, Indianapolis Division.
March 8, 1996.
*1243 Kenneth T. Roberts, Roberts & Bishop, Indianapolis, Indiana, for Plaintiff.
James S. Stephenson, Stephenson Daly Morow & Kurnick, Indianapolis, Indiana, for Defendant.
ENTRY
BARKER, Chief Judge.
Plaintiff Jewell Dale brings this suit under Title VII, 42 U.S.C. § 2000e et seq., the Equal Pay Act, 29 U.S.C. § 206(d), and Indiana state common law, alleging that she was discriminated against on the basis of her race and gender. The matter is currently before the Court on defendant's motion for summary judgment and plaintiff's motion seeking leave to amend the complaint. For the reasons stated below, defendant's motion is granted in part, denied in part and denied as moot in part; plaintiff's motion is granted.
*1244 I. FACTUAL BACKGROUND.
Jewell Dale is an African-American female who applied to the Indianapolis Police Department ("IPD" or "the Department") in August of 1992. Like the thousands of other applicants to apply that year, she was required to navigate a lengthy pre-hiring process that included a written examination, a physical agility test, an oral interview, a lie detector test and a psychological examination. Unlike most of the other applicants, however, Dale advanced beyond the pre-hiring phase and, on December 27, 1993, was sworn in with twenty-eight others as a member of IPD's 81st Recruit Class.
By all accounts, Ms. Dale had a difficult time at the training academy. According to Dale, fault lies with her instructors, Officers Deborah Robertson and Lloyd Crowe, who treated her more harshly and less supportively than they did the other mostly white, mostly male trainees. She claims, for example, that some of her classmates, "whose skill levels were inferior to hers, received higher scores than she did." (Plaintiff's Brief in Response, p. 5). She also claims that Crowe made derogatory remarks about African-American women, calling them lazy and incapable of performing police work.
According to the Department, however, Dale's difficulties stemmed from her poor physical condition and a lack of self-confidence, assertiveness and presence of mind, all of which caused her performance to be consistently substandard. For example, her December 27, 1993 performance report rates her oral communication skills, demeanor and motivation as "below expected." (Foley Aff., Exh. J). Her physical condition was also rated as generally "very poor." (Id.). Five months later, while her physical conditioning showed significant improvement, her performance was rated as either "unacceptable" or "below expected" in the five other performance categories. (Foley Aff., Exh. Z).
On April 26, 1994, Captain Timothy Foley, the Branch Commander of the Training Academy recommended to Chief of Police, James Toler, that Dale be terminated as a member of the Department. On May 6, 1994, Dale took the Defensive Tactics Practical exam for the second time, having failed it earlier on April 16. Like before, she missed eight of the twenty-five items on the test. (Foley Aff., Exh. AA). After several hours of remedial training, she took the exam a third time and again failed. (Foley Aff., Exh. BB). Finally, on May 20, 1994, Foley and Crowe accompanied Dale to Chief Toler's office, where her employment with the Department was terminated.
II. ANALYSIS.
The Department filed the instant motion for summary judgment on January 11, 1996. Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ. Proc. 56(c). The burden rests squarely on the party moving for summary judgment to show "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 2554, 91 L. Ed. 2d 265 (1986). This "standard is applied with added rigor in employment discrimination cases, where intent and credibility are crucial issues." DeLuca v. Winer Industries, Inc., 53 F.3d 793, 797 (7th Cir.1995). Nevertheless, the nonmoving party responding to a properly made and supported summary judgment motion still must set forth facts showing that there is a genuine issue of material fact and that a reasonable jury could return a verdict in its favor. See Wolf v. City of Fitchburg, 870 F.2d 1327, 1329 (7th Cir.1989).
A. Race and Sex Discrimination Claims
The gravamen of Dale's suit is that the Department terminated her employment on account of her gender and race. To succeed on these claims, plaintiff must establish that she has been the victim of intentional discrimination, see Hong v. Children's Memorial Hospital, 993 F.2d 1257, 1261 (7th Cir.1993), cert. denied, ___ U.S. ___, 114 S. Ct. 1372, 128 L. Ed. 2d 48 (1994), which she can do in two different ways: (1) by offering *1245 direct proof of discrimination, see Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268 (1989), or (2) by relying on indirect evidence using the McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668 (1973), burden-shifting method of proof. See Bruno v. City of Crown Point, 950 F.2d 355, 361 (7th Cir. 1991), cert. denied, 505 U.S. 1207, 112 S. Ct. 2998, 120 L. Ed. 2d 874 (1992).
Under the indirect method, which is the only method implicated here, the plaintiff carries the initial burden of establishing a prima facie case of discrimination. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S. Ct. 1089, 67 L. Ed. 2d 207 (1981). To satisfy that burden, plaintiff must show that (1) she is a member of a protected class, (2) she was meeting the legitimate expectations of her employer, (3) she suffered from an adverse employment action, and (4) others outside the protected class were treated more favorably. EEOC v. Our Lady of the Resurrection Medical Center, 1996 WL 70274, at *4 (7th Cir. Feb. 20, 1996); Loyd v. Phillips Brothers, Inc., 25 F.3d 518, 522-23 (7th Cir.1994). Once the prima facie case is established, the burden of production shifts to the employer "to articulate some legitimate, nondiscriminatory reason" for its actions. McDonnell Douglas, 411 U.S. at 802, 93 S.Ct. at 1824; Wolf v. Buss America, Inc., 77 F.3d 914, 919 (7th Cir.1996). The burden then returns to the plaintiff to show that the reason offered by the employer was not the real reason for the challenged action, but merely a pretext.[1]Johnson v. University of Wisconsin-EauClaire, 70 F.3d 469, 478 (7th Cir.1995). Importantly, the ultimate burden of persuasion remains at all times with the plaintiff to prove that the employer intentionally discriminated against her. St. Marys Honor Center v. Hicks, 509 U.S. 502, ___, 113 S. Ct. 2742, 2747, 125 L. Ed. 2d 407 (1993).
Here, there is some doubt as to plaintiff's ability to establish that she was meeting the legitimate expectations of the Department, the second element of her prima facie burden. Specifically, IPD points to nine separate "contact sheets,"[2] (Foley Aff., Exhs. B, C, D, E, F, G, I, K, N), fourteen different "inter-department communication[s]," (Foley Aff., Exhs. H, M, O, P, R, S, T, U, V, W, X, Y, AA, BB), two fitness evaluations (Id., Exhs. A, L), two trainee performance reports, (Id., Exhs. Q, Z), as well as the affidavits of her Academy instructors and two fellow classmates, all of which attest to or document the deficiencies of her performance. Nevertheless, plaintiff swears that her performance was adequate, her alleged deficiencies either exaggerated or falsified and, apparently, that is generally sufficient to satisfy the prima facie burden: a "determination that an individual is performing a job well enough to meet an employer's legitimate expectations, when made in the context of a prima facie case, may be based solely upon the employee's testimony concerning the quality of [her] work." Rush v. McDonald's Corp., 966 F.2d 1104, 1114 n. 35 (7th Cir.1992), quoting Williams v. Williams Elecs., Inc., 856 F.2d 920, 923 n. 6 (7th Cir.1988).[3]
*1246 Plaintiff's self-interested assertions of competence, however, are insufficient to suggest that IPD's non-discriminatory reason for the termination that Dale was not cut out to be a police officer is pretextual. Dale v. Chicago Tribune Co., 797 F.2d 458, 464-65 (7th Cir.1986). Pretext "means a lie, specifically a phony reason for some action." Russell v. Acme-Evans Co., 51 F.3d 64, 68 (7th Cir.1995). Thus, "we are not concerned with the correctness" or the accuracy of IPD's assessment of plaintiff's skills, Rand v. CF Industries, Inc., 42 F.3d 1139, 1146 (7th Cir.1994), but only with whether the Department honestly believed in the reason it gave for terminating her. Wolf, 77 F.3d at 919-20.[4]
To suggest that her substandard performance did not actually motivate the Department's decision, plaintiff recounts a comment made to her by one of her instructors, Officer Crowe, to the effect "that black women are not cut out to do police work because most ... are lazy." (Dale Aff., ¶ 16). This alleged comment is troubling for if it were actually made, and for purposes of this motion we must assume that it was, it gives rise to a permissible (though not the only possible) inference that Crowe the person most responsible for evaluating the mettle of potential officers believed that black women lack the right stuff. See Gatlin v. Jewel Food Stores, 699 F. Supp. 1266, 1268 (N.D.Ill. 1988).
Of course, it was either Branch Commander Foley or Chief Toler (or both) who made the decision to terminate Dale, not Crowe. Significantly, "where the discharging official made the discharge decision alone, discriminatory thoughts and motives of lower officials cannot be attributed to the discharging official." Jardien v. Winston Network, Inc., 888 F.2d 1151, 1155 (7th Cir. 1989); see also Oxman v. WLS-TV, 12 F.3d 652, 660 (7th Cir.1993). However, the converse is also true; where a lower official "persuades his supervisors to endorse his decision to fire," Shager v. Upjohn Co., 913 F.2d 398, 402 (7th Cir.1990), or "recommend[s]" the dismissal of, EEOC v. Manville Sales Corp., 27 F.3d 1089, 1094 (5th Cir. 1994), or otherwise provides "input" in an employee's termination, Jardien, 888 F.2d at 1155, the superior can be liable for endorsing or "act[ing] as the conduit of" the subordinate's prejudice. Shager, 913 F.2d at 405.[5] Thus, because there is evidence to suggest that Crowe played an important role in training and evaluating the abilities of the 81st Recruit Class and that he harbored a discriminatory animus, a reasonable factfinder could infer that his prejudice infected his recruit evaluations and that his superiors then relied on this tainted information.
We do not deny, however, that plaintiff faces an uphill battle in this case. The Department has comprehensive documentation from several different instructors of Dale's alleged deficiencies. In addition, Officer Crowe, the alleged villain, is himself an African-American. And even if Dale succeeds in showing that race or gender was a motivating factor in Crowe's evaluations and that Chief Toler relied on those evaluations, she cannot recover damages if the Department demonstrates that the same action would have been taken in the absence of the impermissible motivating factor. 42 U.S.C. § 2000e-5(g)(2)(B)(ii); see Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268 (1989); Doll v. Brown, 75 F.3d 1200, 1202-03 (7th Cir.1996). These, however, are questions to be explored at trial. Accordingly, defendant's summary judgment motion is denied insofar as it related to Dale's Title VII claims.
B. Equal Pay Act and State Law Claims
In her Brief in Response, plaintiff agrees to abandon her Equal Pay Act and pendent *1247 state tort actions. Accordingly, defendant's motion is granted insofar as these claims are concerned.
C. Failure to Name a Proper Defendant and Plaintiff's Motion To Amend the Complaint
Finally, defendant seeks summary judgment on the ground that the Department is not a proper party defendant. Plaintiff has since moved for leave to amend her complaint to cure this alleged defect. Because leave shall be freely given when justice so requires, Fed.R.Civ.P. 15(a), and because defendant can identify no accompanying prejudice, we grant plaintiff's motion for leave to amend. Defendant's summary judgment motion is therefore denied as moot to the extent it is premised on the naming of an improper party defendant.
III. CONCLUSION.
For the reasons set forth above, the Court finds that material issues of fact preclude summary judgment of plaintiff's Title VII claims. The Court also finds that summary judgment is warranted as to plaintiff's Equal Pay Act and state common law claims. Finally, we grant plaintiff's motion seeking leave to amend the complaint, thus mooting defendant's summary judgment motion insofar as it relies on plaintiff's failure to name a proper party defendant. Accordingly, defendant's summary judgment motion is GRANTED IN PART, DENIED IN PART, AND DENIED AS MOOT IN PART. Plaintiff's motion to amend is GRANTED, and we HEREBY ORDER that plaintiff's tendered first amended complaint be filed as of the date of this Entry.
It is so ORDERED.
NOTES
[1] Plaintiff may establish pretext by showing that the defendant's proffered reasons either (1) have no basis in fact, (2) did not actually motivate the employer's decision, or (3) were insufficient to motivate the discharge. Samuelson v. Durkee/French/Airwick, 976 F.2d 1111, 1114 (7th Cir. 1992).
[2] A "contact sheet" is a form completed by a training instructor that "is intended to assist in recruit evaluation by documenting minor incidents involving recruit officers." (See Foley Aff., Exh. B).
[3] We admit that absolute reliance on Dale's assertions concerning the sufficiency of her performance is somewhat problematic in this case. As noted by IPD, Dale "was not hired to be a `recruit trainee,' but rather to progress in her abilities to become a police officer." (Defendant's Brief in Support, p. 15). Thus, because Dale was not yet a police officer, her basis for asserting that she would have performed the job adequately is at best tenuous.
This is not to say, however, that plaintiff has no basis for so asserting. Indeed, she swears that her performance at the Academy exceeded that of several classmates who, despite comparably deficient performances, were graduated to the rank of patrolman. Moreover, she presents facts to suggest that her instructors tampered with her evaluations and rigged exercises to ensure her failure. Thus, because these declarations, if taken as true, could lead a reasonable factfinder to conclude that her performance was actually sufficient to meet IPD's legitimate expectations, they are sufficient to withstand the instant motion.
[4] "In this regard, Dale must do more than challenge the judgment of [her] superiors through [her] own self-interested assertions. `[The employee's] perception of [her]self ... is not relevant. It is the perception of the decision maker which is relevant.'" Dale, 797 F.2d at 464-65.
[5] See also Lam v. Univ. of Hawai'i, 40 F.3d 1551, 1560 (9th Cir.1994) ("discrimination at any stage of the ... hiring or promotion process may infect the ultimate employment decision"); Courtney v. Biosound, Inc., 42 F.3d 414, 419 (7th Cir.1994) (subordinate's remark allegedly showing age bias is relevant only if that "intent could reasonably be attributed to the primary decision maker"). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578804/ | 281 S.W.3d 62 (2008)
In the Matter of J.A.B., A Juvenile.
No. 08-06-00097-CV.
Court of Appeals of Texas, El Paso.
April 17, 2008.
*63 Ruben P. Hernandez, El Paso, TX, for Appellant.
Jose R. Rodriguez, County Atty., El Paso, TX, for Appellee.
Before CHEW, C.J., CARR, J; and GOMEZ, J. (sitting by assignment).
OPINION
KENNETH R. CARR, Justice.
J.A.B., a juvenile, appeals the agreed dispositional judgment and order committing him to the Texas Youth Commission under a determinate sentence of fifteen years. J.A.B. pleaded true to engaging in delinquent conduct by committing aggravated assault with a deadly weapon. We affirm.
I. SUMMARY OF THE EVIDENCE
A hearing was held on J.A.B.'s motion to suppress his written and oral statements given to the police. The court granted the motion with regard to the two oral statements, but denied the motion with regard to the written statement.
Alberto Hernandez, an investigator with the El Paso Police Department, testified at the hearing on the motion to suppress the evidence. He testified that he had information that J.A.B. was a potential witness to a shooting, as he was riding in the vehicle involved in the shooting. On January 18, 2006, at about one o'clock in the afternoon, Detectives Hernandez and Ramon Lucero went to Cesar Chavez Academy and spoke with the principal. Hernandez spoke with J.A.B.'s mother, and she consented to have the child leave the school. J.A.B. also agreed to accompany the detectives to the Mission Valley Regional Command Center, which was staffed with a juvenile processing center. Detective Hernandez testified that J.A.B. was not in custody. During the interview, J.A.B. denied any involvement in the shooting. He stated that he was in the vehicle and that the occupants were looking for certain persons, in order to fight them, but they could not find them, and he went home.
During the interview, Detective Hernandez received a telephone call from another investigator, who told him that one of the other occupants of the vehicle had stated that J.A.B. had been the shooter during the incident. Hernandez stopped the interview and informed J.A.B. that he had been implicated as the shooter, and he was *64 not free to leave. He was escorted to the certified juvenile processing center located within the Mission Valley Regional Command Center for processing. As he was being fingerprinted, J.A.B. stated that he was in the car at the time of the shooting, but he was afraid to say anything, due to fear of retaliation upon his mother. This statement was not made in response to any questioning. He was told to stop speaking and was given his Miranda warnings. Another officer, Detective Aguirre, notified J.A.B.'s mother, and he was transported to the Juvenile Probation Department.
When the interview at the Juvenile Probation Department was completed, the officers were informed that J.A.B. wanted to provide a statement. He was taken to a magistrate, and he was then taken back to the Juvenile Probation Department, where he provided a statement indicating that he was the shooter in the incident. He was then transported back to the magistrate, where he signed the statement. J.A.B. was then returned to the Juvenile Probation Department.
Judge Rick Olivo testified that he was the magistrate who interviewed J.A.B. on January 18. J.A.B. was brought to the court by two detectives. Upon learning that J.A.B. wanted to make a statement, Olivo interviewed him and provided him with the requisite statutory warnings. J.A.B. was calm and did not appear to be nervous or intimidated. He indicated that he still wanted to give a statement to the police. J.A.B. was handcuffed and taken away by the detectives. At 8:45 p.m., J.A.B. was brought back before Judge Olivo, after he had given his statement, to determine whether the statement was given voluntarily. Again, J.A.B. was not nervous, and he did not appear to be intimidated. He told Judge Olivo that his statement was voluntary and that he had not been coerced.
Detective Lucero testified that he was with Detective Hernandez at the school and during the interview at the police station. Lucero testified that J.A.B agreed to accompany them to the police station. He was not in custody at the time, as he was merely a potential witness. The detective stated that J.A.B. was told he was not under arrest, and he could leave at any time. Neither he nor Hernandez was in a police uniform. J.A.B. was not handcuffed, and he was told he could stop the interview at any time.
Detective Jimmy Aguirre testified that he aided in the interviewing of J.A.B. During the entire interview, J.A.B. was coherent and was willing to talk to the officers. He was not threatened nor intimidated. After the information that implicated J.A.B. was received, he was placed in custody. Forty minutes later, Aguirre called J.A.B.'s mother, Ursula Bernard, notified her that J.A.B. was in custody, and explained to her the reason for his having been placed in custody.
Bernard testified that, when the principal at her son's school called her, he did not relate that the investigation centered around an attempted murder case. Furthermore, when she received the call from Detective Aguirre, he did not tell her for what her son was being detained. Bernard testified that, had she known the nature of the investigation, she would not have allowed him to be taken from the school, and she would not have allowed him to give a statement at the police station. J.A.B. testified that, when he gave his statement, he did not understand his rights and he would not have given the statement, but for his detention for the entire day at the police station. He stated that he was forced to give the statement by the officers in that he was "egged on" *65 to give the written statement. J.A.B. related that Judge Olivo did not tell him that any prior oral statement that he had given could not be used against him. Had he been so warned, he would not have given the statement.
II. DISCUSSION
In Issues Nos. One and Two, J.A.B. contends that he was in custody from the inception of his involvement with the police and that his due process rights were violated under section 51.095(a) of the Texas Family Code and article 38.22 of the Texas Code of Criminal Procedure. He asserts further that his written statement was coerced and involuntarily given. We review a trial court's ruling on a motion to suppress in the light most favorable to the ruling. See State v. Kelly, 204 S.W.3d 808, 818 (Tex.Crim.App.2006). A trial court judge is uniquely situated to observe the demeanor and appearance of a witness and to make factual determinations. See State v. Ross, 32 S.W.3d 853, 855 (Tex.Crim.App.2000); Villarreal v. State, 935 S.W.2d 134, 138 (Tex.Crim.App. 1996). A trial court's ruling on a motion to suppress is typically reviewed for an abuse of discretion, because the trial court has the discretion to believe or disbelieve witness testimony. Jeffley v. State, 38 S.W.3d 847, 853 (Tex.App.-Houston [14th Dist.] 2001, pet. ref'd) (citing Johnson v. State, 871 S.W.2d 744, 748 (Tex.Crim.App.1994)). Almost total deference is given to the trial court's rulings on mixed questions of law and fact that are based on an evaluation of credibility and demeanor. Id. (citing Loserth v. State, 963 S.W.2d 770, 772 (Tex. Crim.App.1998)). However, mixed questions of law and fact that are not based on evaluations of credibility or demeanor, such as the question of whether an interrogation is custodial, are reviewed de novo. Id. The trial court's ruling will be upheld, if it is reasonably supported by the record and is correct on any theory of law applicable to the case. Ross, 32 S.W.3d at 855-56; Villarreal, 935 S.W.2d at 138.
In general, a person is in custody if a reasonable person under the same circumstances would believe that his freedom of movement was restrained to the degree associated with a formal arrest. Dowthitt v. State, 931 S.W.2d 244, 254 (Tex.Crim.App.1996) (citing Stansbury v. California, 511 U.S. 318, 114 S. Ct. 1526, 128 L. Ed. 2d 293 (1994)). When the person involved is a minor, courts consider his age and all the circumstances surrounding the interrogation to decide whether there was a formal arrest or a restraint of movement to the degree associated with formal arrest. In re V.P., 55 S.W.3d 25, 31 (Tex. App.-Austin 2001, pet. denied). Stated another way, the court's inquiry is whether, based on the objective circumstances, a reasonable child of the same age would believe his freedom of movement was significantly restricted. In re D.A.R., 73 S.W.3d 505, 511 (Tex.App.-El Paso 2002, no pet.). The factors relevant to the determination of whether a child is in custody include whether there was probable cause to arrest; the focus of the investigation; and, to the extent communicated or manifested, the officer's subjective intent and the child's subjective beliefs. Dowthitt, 931 S.W.2d at 254.
The State maintains that the first oral statement, where J.A.B. stated that the individuals they wanted to attack were never found, was made before he was in custody. The State also asserts that the second statement, made after he was in custody, was not made in response to questioning. However, since the court found that these oral statements were inadmissible, we will conduct our analysis of the admissibility of J.A.B.'s written statement in light of that ruling; we will not *66 speculate on the grounds the court utilized in determining that the two oral statements were inadmissible, because those determinations are not before us. See In re R.J.H., 79 S.W.3d 1, 7 (Tex.2002). There was certainly evidence before the court that Appellant was not in custody, until the phone call was received that implicated J.A.B.
For a statement to be involuntary, there must have been "`official, coercive conduct of such a nature that any statement obtained thereby was unlikely to have been the product of an essentially free and unconstrained choice by its maker.'" Id. at 6 (citing Alvarado v. State, 912 S.W.2d 199, 211 (Tex.Crim.App.1995)). There was adequate testimony for the court to determine that J.A.B. was not coerced by the officers who interviewed him. Judge Olivo stated that J.A.B. did not appear intimidated, and his demeanor was calm.
In response, J.A.B. cites Griffin v. State, 765 S.W.2d 422 (Tex.Crim.App.1989), for the proposition that, if a juvenile gives a written statement after having given an inadmissible oral statement, a magistrate must explain to the juvenile that his prior oral statements may not be used against him. However, the juvenile must additionally show that the written statement was involuntarily given, and the admissibility of the written confession is determined based upon the totality of the circumstances under which the statement was made. Id. at 429 ("unless an initial statement, albeit unwarned, is actually `involuntary,' the Miranda warning preceding a subsequent statement `ordinarily should suffice to remove the conditions that precluded admission of the earlier statement'") (citing Oregon v. Elstad, 470 U.S. 298, 314, 105 S. Ct. 1285, 1296, 84 L. Ed. 2d 222 (1985)). In the instant case, notwithstanding J.A.B.'s testimony that he would not have given the statement had he known that the oral statements could not be used against him, viewing the totality of the circumstances, we find that the court did not err in finding the written statement admissible. The court could well have disbelieved J.A.B.'s testimony and there is evidence that he knew he could stop the interview at any time. Further, there is evidence that he was not coerced to give the statement and that his demeanor was calm and coherent throughout the entire process.
Issues Nos. One and Two are overruled.
In Issue No. Three, J.A.B. maintains that the notice given to his mother, pursuant to section 52.02 of the Family Code, was inadequate. This section provides, in relevant part:
(b) A person taking a child into custody shall promptly give notice of the person's action and a statement of the reason for taking the child into custody, to:
(1) the child's parent, guardian, or custodian....
Tex. Fam.Code Ann. § 52.02(b)(1).
Initially, we note, notwithstanding the testimony of Ursula Bernard to the contrary, that the court was entitled to believe the testimony of Detective Aguirre, who stated that he informed Bernard of the reason why J.A.B. was detained. The court could therefore have reasonably determined that the notice was timely, given the fact that the processing of J.A.B. through the juvenile probation system had just begun, and that J.A.B.'s mother had an adequate opportunity to intervene. Furthermore, even if we were to assume that the forty-minute delay constituted a violation of the Family Code, there must be a causal connection between the violation and the obtaining of the statement. Gonzales v. State, 67 S.W.3d 910, 913 (Tex. Crim.App.2002). Given the extensive processing that ensued after J.A.B. was *67 placed in custody, we find there was no causal connection. Issue No. Three is overruled.
III. CONCLUSION
We affirm the judgment of the trial court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578421/ | 351 N.W.2d 784 (1984)
BANCO MORTGAGE COMPANY, Appellee,
v.
Danial J. STEIL and Sandra K. Steil, Appellants.
No. 83-866.
Supreme Court of Iowa.
July 18, 1984.
*785 Robert J. Hearity of O'Brien Law Firm, P.C., Oelwein, for appellants.
Robert C. Griffin of Gallagher, Langlas & Gallagher, P.C., Waterloo, for appellee.
William J. O'Keefe, Des Moines, for amicus curiae Veterans Admin.
Considered en banc.
CARTER, Justice.
The issue on appeal in this mortgage foreclosure action is whether the district court erred in a pre-decree declaratory ruling that the provisions of the mortgage instrument do not impose upon the plaintiff-mortgagee a waiver of its right to claim a deficiency judgment against the mortgagors following execution sale. For reasons which are set forth later in this opinion, we affirm that ruling.
The ruling of the district court from which appeal has been taken came in response to a motion filed in the foreclosure action by the defendants-mortgagors. In *786 the motion, they asserted that they had abandoned the mortgaged property, a residence in Oelwein, Iowa. They further asserted that as a result of their act of abandonment, two legal consequences automatically result with respect to the pending action to foreclose the mortgage: (1) the period of redemption from any execution sale of the mortgaged property is reduced to sixty days; and (2) the right of the mortgagors to claim a deficiency judgment against the mortgagee is automatically waived.
The applicable provisions of the mortgage read as follows:
10. It is further agreed that in the event of the foreclosure of this mortgage and sale of the property by sheriff's sale on special execution in said mortgage foreclosure proceedings, the time of one year for redemption from said sale provided by the statutes of the State of Iowa, shall be reduced to six months, provided the mortgagee waives in said foreclosure proceedings any rights to a deficiency judgment against the mortgagor(s) which may arise out of the foreclosure proceedings.
11. It is further agreed, under Chapter 628, Code 1966, as amended that in the event of such foreclosure, and in the event of the finding by court decree of such foreclosure that the real estate hereinabove set out has been abandoned by the owners and persons personally liable under the mortgage at the time of foreclosure, the period of redemption from foreclosure sale will be reduced to 60 . . . days. In such event the mortgagee waives right to a deficiency judgment against the mortgagor or his successors in interest, subject to the other provisions of the above referenced law as amended.
For purposes of the district court's ruling on the mortgagors' motion, the parties stipulated that they had in fact abandoned the mortgaged property. At the time the motion was heard and determined by the district court, there had been no entry of judgment or decree of foreclosure, and no issue concerning the period of redemption had been presented to the court.
In ruling that there has not at this point been a waiver by the mortgagee of its right to a deficiency judgment following execution sale of the mortgaged property, the district court observed:
Paragraphs 10 and 11 of the mortgage, as well as the provisions of chapter 628.26 and 628.27 of the Code of Iowa, provide that, if the mortgagee is to waive its right to deficiency judgment in a mortgage foreclosure proceeding, such waiver must be made in said foreclosure proceeding and not in any mortgage document.
The mortgagors contend on appeal that this ruling was in error. We consider that issue but only after examination of a jurisdictional question not argued by either party.
I. Necessity of Allowing Permission to Appeal Under Iowa R.App.P. 1(c).
The order which defendants have appealed was entered in response to a motion filed in the mortgage foreclosure action. Such order was clearly not a final judgment under Iowa Rule of Appellate Procedure 1(a). We have no jurisdiction to review it as such. We are empowered, however, under Iowa Rule of Appellate Procedure 1(c), to act upon an appeal improvidently taken from an interlocutory order by treating the papers as an application for permission to appeal in advance of a final judgment. Lerdall Construction Co. v. City of Ossian, 318 N.W.2d 172, 174-76 (Iowa 1982).
We have some concern that in the past our application of rule 1(c) has perhaps produced more appeals from interlocutory orders than would have been granted had permission to appeal been sought by the appellant at the outset under rule 2(a). Often the lack of finality does not become apparent to this court until the briefs of the parties have been filed and substantial time has already been consumed in the appeal process. Although dismissal of an appeal at this stage is, arguably, economic waste, permitting the appeal to continue *787 adds to the problem of piecemeal litigation and multiple appeals which the finality requirement is designed to prevent. We therefore must caution counsel for litigants who are dissatisfied with interlocutory rulings against relying on rule 1(c) as a means of avoiding the requirements of rule 2(a). We also invite appellees in such situations to file motions challenging the lack of finality at the earliest opportunity in order to avoid undue time and expense by the parties on an appeal which may ultimately be dismissed for lack of jurisdiction.
In Lerdall, 318 N.W.2d at 174-76, we made two determinations on the application of rules 1(a), 1(c) and 2(a). The first determination was that the test for granting permission to appeal under rule 1(c) is the same as that which has been applied under rule 2(a). We continue to adhere to this view. The second determination which we made in Lerdall was based on the decision in Dorman v. Credit Reference & Reporting Co., 213 Iowa 1016, 1019, 241 N.W. 436, 438 (1932). In reliance on that decision, we indicated that if a particular ruling or order will inhere in the final judgment so as to be subject to challenge on appeal therefrom, no appeal in advance of final judgment may be allowed.
Upon reexamination, we conclude that the criteria for granting appeals in advance of final judgment, which we articulated in Lerdall and Dorman, are unduly rigid. In exceptional situations, the interest of sound and efficient judicial administration can best be served by allowing interlocutory orders to be appealed in advance of final judgment even if such orders will ultimately be reviewable on appeal from the final judgment in the case. These situations will usually involve a pretrial determination of a controlling issue of law as to which there is a substantial basis for a difference of opinion and immediate appellate resolution of the issue will materially advance the progress of the litigation. It is such situations which are made eligible for the granting of an interlocutory appeal in federal court litigation under 28 U.S.C. section 1292(b). See generally Bonner and Appler, Interlocutory Appeals and Mandamus, Litigation, Autumn 1978 at 26-28.
We should emphasize that we are talking about exceptional cases. Our departure from the strict criteria of Lerdall and Dorman is in no way intended to temper the disfavor with which we view the granting of applications for interlocutory appeal. The substantial added cost and the attendant delay of up to a year or more should not be visited lightly upon the litigants or the court system. Only a small fraction of such applications are presently granted, and we predict that this opinion will not significantly change that practice.
The order from which appeal has been improvidently taken in the present case is the only issue which the appellants wish to litigate. It concerns post-decree remedies and will substantially govern the effect of the final judgment on both the parties and the mortgaged property. We accordingly grant permission to appeal from the said interlocutory order pursuant to rule 1(c).
II. The Waiver Issue.
The mortgagors urge that the district court was in error in holding that the mortgagee could only waive its right to claim a deficiency judgment in the foreclosure action and could not validly waive such right in the mortgage instrument itself. The mortgagors' contention is undoubtedly correct if the issue in the case is whether the right to a deficiency judgment may only be waived in the mortgage foreclosure action. As appellants' note, if supported by adequate consideration, an agreement by the parties prior to foreclosure that such right is waived, would be valid and enforceable. We believe, however, that this is not the issue in this case. The question which must be determined is what the parties did provide in the mortgage instrument rather than what they might have provided. When viewed in this light, we find that the district court's order is correct as of the time it was entered.
*788 Although both parties and the district court have referred to paragraph 10 of the mortgage instrument, that clause relates to shortening the period of redemption under circumstances not involving abandonment of the property by the mortgagors. As such, it has no applicability to appellants' claim in the present case which focuses upon their act of abandonment. The language of paragraph 11, however, does speak of a waiver of the mortgagee's right to claim a deficiency judgment under circumstances involving a finding of abandonment by the court.
The mortgagors urge that paragraph 11 of the mortgage should be interpreted so that their act of abandonment automatically triggered a waiver of a mortgagee's right to a deficiency judgment. We must disagree with this contention. Under that paragraph, such waiver is not triggered by the act of abandonment but rather by a finding of abandonment made by the court in connection with a shortening of the redemption period to sixty days.
We have recognized that in a commercial transaction the determination of the meaning of a written instrument should be made in light of the situation of the parties and the subject matter of the transaction. First National Bank of Creston v. Creston Implement Co., 340 N.W.2d 777, 781 (Iowa 1983); Hamilton v. Wosepka, 261 Iowa 299, 305-10, 154 N.W.2d 164, 167-69 (1967). Judged by these standards, we believe that paragraph 11 does no more than implement Iowa Code section 628.27.
Section 628.27 provides in part:
The mortgagor and the mortgagee of any tract of real property consisting of less than ten acres in size may also agree and provide in the mortgage instrument that the court in a decree of foreclosure may find affirmatively that the tract has been abandoned by the owners and those persons personally liable under the mortgage at the time of such foreclosure, and that should the court so find, and if the mortgagee shall waive any rights to a deficiency judgment against the mortgagor or his successors in interest in the foreclosure action, then the period of redemption after foreclosure shall be reduced to sixty days.
Paragraph 11 of the mortgage instrument makes the mortgagee's waiver "subject to the other provisions of the above referenced law." Section 628.27 conditions the shortening of the redemption period to sixty days upon an affirmative act of the mortgagee waiving "any rights to a deficiency judgment against the mortgagor or his successors in interest in the foreclosure action." There is nothing in the record to suggest that the mortgagee in the present case has acted in the required manner to reduce the period of redemption. The trial court's declaratory order correctly established the rights of the parties based upon the conditions shown to exist at the time such order was entered.
AFFIRMED.
All justices concur except REYNOLDSON, C.J., and HARRIS and McGIVERIN, JJ., who dissent from division II and the result.
HARRIS, Justice (dissenting).
I dissent from division II and the result. I think the mortgage instrument has plainly provided a waiver of any deficiency judgment.
This was an action brought in equity to foreclose a real estate mortgage and for in personam judgments against the mortgagors. In the same proceeding the trial court entered the declaratory judgment which is the subject of this appeal. In submitting the declaratory judgment question the parties stipulated the property had been abandoned. The trial court found, among other things, "[t]hat the defendants [mortgagors] abandoned mortgaged premises in February of 1983." The majority states that the "waiver is not triggered by the act of abandonment but rather by a finding of abandonment made by the court in connection with a shortening of the redemption period to sixty days." Whatever the borrowers' rights under the statute might be, it seems to me that the mortgage *789 instrument accords them a waiver of any deficiency upon the finding of abandonment.
A lending institution should not be permitted to escape the effect of language it places in a mortgage instrument. For this reason the law has placed a number of obstacles, in the form of rules of construction, designed to prevent just what Banco now contends. Banco's contention comes down to asserting that the statute prevents paragraph 11 from being construed in accordance with its evident meaning.
In Freese Leasing, Inc. v. Union Trust & Savings Bank, 253 N.W.2d 921, 924 (Iowa 1977), we said:
A mortgage is subject to the principles of interpretation and construction which govern contracts generally. These principles are designed to assist in identifying the intention of the parties. [Authority.] The object of interpretation is to learn the meaning of words used in the contract. The goal of construction is to determine the legal effect of those words. [Authority.]
In searching out that intent we should apply the rule that ambiguous language in a contract is strictly construed against the party which drafts or furnishes the instrument, unless the contract was prepared under scrutiny of legal counsel for both parties. Kinney v. Capitol-Strauss, Inc., 207 N.W.2d 574, 577 (Iowa 1973). Here, the mortgage agreement was furnished by Banco and the veterans administration.
The provision should be read with borrower's glasses, not banker's. In C & J Fertilizer, Inc. v. Allied Mutual Insurance Co., 227 N.W.2d 169, 172, 176 (Iowa 1975), we adopted the following rule:
Courts in construing and applying a standardized contract seek to effectuate the reasonable expectations of the average member of the public who accepts it.
The borrowers here, reading the instrument, could surely be expected to seek the adjudication of abandonment in the manner that they did. It does not seem reasonable to require that the application be brought in some other manner, or by some other party, as the majority now has in mind.
The parties argue the significance of the contrasting schemes set out in paragraph 10 and 11 of the mortgage. The trial court commented on these arguments. The majority, however, brushes aside the comparison, stating that only paragraph 11 is involved. I think the comparison of the two provisions cannot be so easily dismissed. Paragraph 10 implements Iowa Code section 628.26, which authorizes mortgage provisions in which the borrower accepts a redemption period reduced to six months and the lender waives the deficiency judgment.
Paragraph 11 was undoubtedly drawn with an eye to Iowa Code section 628.27, which authorizes further mortgage provisions to deal with situations when the property has been abandoned. The borrower accepts a redemption period reduced to sixty days and the lender waives any deficiency judgment.
I think it is most enlightening to contrast the language used in this mortgage to implement the two statutes. Paragraph 10 contemplates an intention to act within the foreclosure proceedings. It states:
It is further agreed that in the event of foreclosure . . . said mortgage foreclosure proceedings . . . shall be reduced to six months, provided the mortgagee waives in said foreclosure proceedings any rights to a deficiency judgment . . . .
(Emphasis added).
Paragraph 11 contains no similar language. It expresses an unconditional promise by which the mortgagee waives its right to a deficiency judgment in the event of a finding by the court in the foreclosure proceeding that the real estate has been abandoned. There has been that finding of abandonment. According to paragraph 11 the waiver of deficiency has already taken place.
The path taken around these construction principles is unwarranted. I would reverse.
REYNOLDSON, C.J., and McGIVERIN, J., join this dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578441/ | 351 N.W.2d 685 (1984)
Leonard G. MITTENESS, et al., Appellants,
v.
Klaren G. DAHL, et al., Respondent.
No. C5-83-2048.
Court of Appeals of Minnesota.
July 24, 1984.
*686 Roy W. Holmquist, Holmquist, Holmquist & Wilcox, Benson, for appellants.
Richard H. Hilleren, Barnard, Hilleren & Spates, Benson, for respondent.
Considered and decided by WOZNIAK, P.J., and SEDGWICK and LESLIE, JJ., with oral argument waived.
OPINION
WOZNIAK, Judge.
Mitteness appeals from a court decision that denied him specific performance on a contract for deed because he had abandoned the contract. We affirm.
FACTS
Mitteness acquired an 80-acre parcel of farmland in 1951. In 1963 he mortgaged the land to a bank for $12,000. Financial difficulties set in the next year. To stave off default, he conveyed the property to his father on December 30, 1964, for $12,500. At the same time, a contract for deed was executed between himself and his father permitting him to buy back the land. The contract for deed was for $12,500, then the fair market value of the land. It was payable in annual installments of $300, plus interest at 5½%. The contract also required him to pay real estate taxes for the land.
*687 Mitteness never made cash payments for principal and interest, and he never paid the real estate taxes as required by the contract for deed. He did not improve the land. He farmed the 80 acres through 1975, using his father's equipment and paying his father one-half the 80-acre yield. He claimed that the crop sharing satisfied the principal and interest payments; there was no independent evidence of this.
Since 1965, Mitteness' father paid the property taxes for the 80 acres. In 1965 the father included the 80 acres as security to obtain a $40,000 loan. $12,000 of the loan proceeds were used to satisfy the bank mortgage taken out by Mitteness. In 1976 the father rented the 80 acres to him for $8,000; he actually paid $4,000. In 1977 the father executed a 5-year lease for the 80 acres with a neighbor. The lease was renewed for 5 years in 1981. Mitteness was aware of the lease in 1977, but never asserted rights against the neighbor. He did, however, write a letter to his family expressing an interest to pay up the contract for deed. This offer was rejected.
There was evidence that Mitteness' father wished to deplete his estate by conveying 160 acres of farmland to each of his two sons and 80 acres to each of his two daughters. In 1977 the father deeded a 160-acre parcel, not to Mitteness but to Mitteness' son. At the time of the transfer, there was a substantial judgment outstanding against Mitteness. He and his son had been working this particular 160 acres for some time and he still resides there. In 1978 the 80-acre parcel in question was deeded to Elaine Dahl, Mitteness' sister. Mitteness was aware of this transaction at the time it occurred. The father deeded another 160-acre parcel and 80-acre parcel to Mitteness' other brother and sister respectively.
Early in 1982, Mitteness registered the December 30, 1964, contract for deed and initiated this action. Shortly thereafter, his father died. The land is now valued at $1,000 to $1,100 per acre.
Following a one-day trial without jury, the court found that the transaction between Mitteness and his father was not an equitable mortgage but a contract for deed, and that the contract for deed had been abandoned by Mitteness.
ISSUES
1. Was the December 30, 1964, transaction between Mitteness and his father a contract for deed or an equitable mortgage?
2. Did the court err in finding that Mitteness had abandoned the contract for deed?
ANALYSIS
1. Our Supreme Court has comprehensively dealt with the distinctions between contracts for deed and equitable mortgages in Ministers Life & Cas. Union v. Franklin Park Towers Corp., 307 Minn. 134, 138, 239 N.W.2d 207, 210 (1976). Transactions will be classified according to the intent of the parties. Intent may be discerned most especially by reference to documents used for the conveyance, "[t]he fact that the documents and negotiations were not in terms of `debt', `security', or `mortgage' is a strong circumstance indicating that the parties did not have a mortgage in mind." Id.
In this case, a father and son executed a standard contract for deed form on December 30, 1964. There is no reference contained in it to "debt," "security," or "mortgage." Since the date of the transaction, Mitteness' father acted as owner in fee. He pledged the 80 acres as security, paid the property taxes, leased the land to a third party, and ultimately deeded the land to his daughter. This would be inconsistent with his rights as holder of a mere security interest. Mitteness waited over seventeen years to assert ownership in the 80 acres. There is no direct evidence that the transaction was anything other than an outright conveyance. Under these circumstances, the trial court's finding that the transaction was a contract for deed was not erroneous.
*688 2. Abandonment is the "voluntary relinquishment of an interest by the owner with the intent of terminating his ownership." Berman v. Kieren, 310 Minn. 446, 452, 247 N.W.2d 405, 408 (1976). A finding of abandonment depends on the intent of parties with reference to all the facts and circumstances of the matter. Salient factors include failure to make payments under the contract for a long period of time, failure to pay real estate taxes on the property, failure to retain possession of the property, and failure to assert rights to the property. Id. In this case, Mitteness could offer no evidence of cash payments for principal and interest since 1964. The court rejected Mitteness' contention that crop sharing was a substitute for principal and interest payments because there was no independent evidence that this was intended by the parties. Even so, crop sharing stopped in 1975, which would indicate that he made no payments for seven years before trial. In Berman, the Supreme Court found abandonment where payments were two years in arrears. In Ahlstrand v. McPherson, 285 Minn. 398, 173 N.W.2d 330 (1969), the vendee's interest in a contract for deed was abandoned by failure to make payments for thirty-three months and failure to pay real estate taxes on the property.
In the present case, Mitteness has not paid property taxes on the land since 1964. Between 1978 and 1982, he asserted no interest against either the lessee of the 80 acres or against his sister Dahl. This is ample evidence to sustain the court's determination that Mitteness abandoned the contract for deed.
DECISION
The trial court's findings and conclusions that the transaction between Mitteness and his father was a contract for deed and that Mitteness abandoned his interest in the contract for deed are supported by the record.
We affirm. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578464/ | 351 N.W.2d 530 (1984)
COMMITTEE ON PROFESSIONAL ETHICS AND CONDUCT OF the IOWA STATE BAR ASSOCIATION, Appellant,
v.
Gerald W. CRAWFORD, Appellee.
No. 84-342.
Supreme Court of Iowa.
July 18, 1984.
Frank A. Comito, Des Moines, and Hedo M. Zacherle, Des Moines, for appellant.
Brent B. Green, Des Moines, for appellee.
Considered en banc.
UHLENHOPP, Justice.
This appeal involves the late filing of income tax returns by an attorney.
Respondent Gerald W. Crawford practices law in Des Moines, Iowa. In 1979 he had adjusted gross income of $14,366, which required him to file federal and state income tax returns by April 15 and 30, 1980, respectively. He did not file returns by those dates, but he did file requests for extensions of time to file the returns. His untimely federal request was received by the Internal Revenue Service on May 11, 1980. If that request had been valid it would have expired on June 15, 1980. His state request was dated April 30, 1980. That request expired June 30, 1980. He did not file 1979 returns within those extended periods.
In 1980 respondent had adjusted gross income of $33,532. He did not file federal and state tax returns by April 15 and 30, 1981, respectively. His request for a federal extension was received by the Internal Revenue Service on April 16, 1981. This request, however, was on a form which, if granted, would have allowed an extension to a specified date. Respondent's request for an extension of time on his state return for 1980 was filed on April 30, 1981, and expired June 30, 1981. Respondent did not file 1980 federal and state returns within extended periods under any view of the record.
On May 7, 1981, respondent untimely filed his 1981 combined statement and questionnaire with the Iowa Client Security Commission. To the questions whether he had filed his 1979 federal and state income tax returns he answered, "Extension Applied For". On June 25, 1982, he untimely filed his 1982 statement and questionnaire and made the same answers as to his 1980 tax returns.
Upon review of respondent's statements and questionnaires, the Assistant Court Administrator for the Client Security Commission assigned a representative in September 1982 to interview respondent as to *531 the status of his 1979 and 1980 income tax returns. The representative conducted the interview on September 20, 1982. He subsequently testified in pertinent part:
I went over his answers to the questionnaire forms, which were that extensions had been applied for, and requested information if he had filed or not. And he indicated he had not filed. That would be for the years 1979 and 1980. I also requested if he could show us copies of these requests for extensions or estimated payments on the years concerned.
. . . .
He indicated [the returns] were being prepared by a CPA in Western Nebraska and that this CPA would bring the returns in around September 25 of 1982 and that Mr. Crawford said he would then give me copies of the returns. He also volunteered to speed it up by maybe two or three days if we thought that necessary, and I said I didn't think that would be necessary.
On September 30, 1982, respondent filed his federal and state 1979 and 1980 returns and made payment.
Subsequently the Criminal Investigation Division of the Internal Revenue Service investigated the case. On July 21, 1983, the division wrote respondent in pertinent part:
You are no longer the subject of an investigation by the Criminal Investigation Division regarding your federal tax liabilities for 1979, 1980, and 1981. However, this does not preclude re-entry by the Criminal Investigation Division into the investigation.
Complainant Committee on Professional Ethics and Conduct filed a complaint before the Grievance Commission based on respondent's failure to file the 1979 and 1980 returns until September 30, 1982, a considerable time after they were due. A division of the commission held a hearing. At the hearing complainant established the facts we have recited. Respondent's defense was that a number of circumstances caused the late filing of the returns, growing out of his own problems and the problems of Keith Lindvall, a certified public accountant who prepared the returns.
Respondent showed that he and Lindvall began some preparatory work on the 1979 returns in the spring of 1980. From time to time thereafter respondent obtained additional figures and Lindvall did additional work. Respondent had the complications of having been in two prior associations with lawyers; this involved problems of ascertaining his shares of office expenses. Respondent himself is not a tax attorney and relied on his accountant. His accountant, in turn, lost his position with an accounting firm in Iowa, and moved to Nebraska. This made communication between the two men more difficult. In addition, the accountant went through divorce proceedings. Respondent did not wish to start over with a new accountant.
Respondent also showed that he himself carried a heavy load of trial work. In 1982 respondent's wife required medical care and respondent spent considerable time with her. Respondent asserts that because of all these factors he did not timely file his returns.
Three members of the Grievance Commission division found that respondent's failure to file his returns on time was negligent and not willful or fraudulent. It reprimanded respondent for his conduct. The fourth member of the division dissented and recommended that respondent's license be suspended for a period of time.
Complainant appealed to this court.
I. The burden of proof is on complainant to establish its charge by a convincing preponderance of the evidence. Committee on Professional Ethics and Conduct v. Wright, 178 N.W.2d 749 (Iowa 1970). We need not repeat the principles which apply in disciplinary cases based on failure to file income tax returns on time, as we have addressed them on a number of occasions and have imposed license suspensions from three months to three years in the following cases. Committee on Professional Ethics and Conduct v. McKey, 343 N.W.2d 489 (Iowa 1984); Committee *532 on Professional Ethics and Conduct v. Wollenzien, 342 N.W.2d 490 (Iowa 1984); Committee on Professional Ethics and Conduct v. Shifley, 312 N.W.2d 558 (Iowa 1981); Committee on Professional Ethics and Conduct v. Glenn, 259 N.W.2d 867 (Iowa 1977); Committee on Professional Ethics and Conduct v. Wagener, 251 N.W.2d 482 (Iowa 1977); Committee on Professional Ethics and Conduct v. Kelly, 250 N.W.2d 388 (Iowa 1976); Committee on Professional Ethics and Conduct v. Toomey, 236 N.W.2d 39 (Iowa 1975); Committee on Professional Ethics and Conduct v. Strack, 225 N.W.2d 905 (Iowa 1975); Committee on Professional Ethics and Conduct v. Galvin, 223 N.W.2d 162 (Iowa 1974); Committee on Professional Ethics and Conduct v. Sylvester, 221 N.W.2d 803 (Iowa 1974); Committee on Professional Ethics and Conduct v. Bromwell, 221 N.W.2d 777 (Iowa 1974); Committee on Professional Ethics and Conduct v. Louden, 209 N.W.2d 359 (Iowa 1973); Iowa State Bar Ass'n v. Kraschel, 260 Iowa 187, 148 N.W.2d 621 (1967).
II. Under the record before us and the cited decisions, we find that respondent's failure to file returns until considerable periods after they were due was intentional and therefore willful. Respondent knew the dates the returns were due. He must have known the extensionsassuming the extensions were validhad run out. He did not obtain further extensions. The excuses he tendered for late filing did not pose insurmountable obstacles to filing on time. We find from the evidence that the proffered excuses are not the real reasons. Probably respondent was having money problems and did not put some of his income aside for estimated tax payments, as is not uncommon in these cases. After he went on tax withholding with a law firm, he had no difficulty timely filing his returns. Moreover, his prompt filing of the 1979 and 1980 returns after the visit by the representative of the Client Security Commission, and his failure to file prior to that point, undermine his tendered excuses.
Whether respondent is or is not guilty of the crime of tax evasion does not determine whether he did or did not violate the Code of Professional Responsibility for lawyers; those are two different questions. See Committee on Professional Ethics and Conduct v. Shifley, 312 N.W.2d 558 (Iowa 1981); Committee on Professional Ethics and Conduct v. Bromwell, 221 N.W.2d 777 (Iowa 1974); Iowa State Bar Ass'n v. Kraschel, 260 Iowa 187, 148 N.W.2d 621, 628 (1967) ("We hold willful failure by a member of the legal profession to file income tax returns as required by law warrants professional disciplinary action. We do not deem it necessary to determine whether moral turpitude is involved here.").
We regard this case as one of willful failure to file timely income tax returns, and suspend respondent's license to practice law for an indefinite time. We will not entertain an application for reinstatement for a period of six months from the filing date of this opinion. Iowa Court Rule 118.12. On application for reinstatement, respondent will have to establish that he did not perform any facets of the practice of law during the suspension and he must also show that he has filed all of his required income tax returns to the date of the application. Any application must also comply with Iowa Court Rule 118.13.
LICENSE SUSPENDED.
All Justices concur except REYNOLDSON, C.J., who takes no part. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2867241/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-02-00608-CV
Sabrina Nigreville, Appellant
v.
Tranum Buick Inc. d/b/a Tranum Auto Group and d/b/a Tranum Buick, Pontiac,
GMC; Kliewer Bingham, Incorporated d/b/a Patriot Pontiac
GMC Buick Oldsmobile, Appellees
FROM THE DISTRICT COURT OF BELL COUNTY, 146TH JUDICIAL DISTRICT
NO. 193,855-B, HONORABLE RICK MORRIS, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N
This Court rendered a memorandum opinion on January 30, 2003, that abated this
appeal until March 7, 2003. The appeal was then reinstated. On March 12, the parties filed a joint
motion to dismiss the appeal. The motion is granted and the appeal is dismissed.
Lee Yeakel, Justice
Before Justices Kidd, Yeakel and Patterson
Dismissed on Joint Motion
Filed: March 20, 2003 | 01-03-2023 | 09-06-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1578524/ | 516 F. Supp. 643 (1981)
WHITING CORPORATION, Plaintiff,
v.
HOME INSURANCE COMPANY, Defendant.
No. 80 Civ. 2377 (GLG).
United States District Court, S. D. New York.
June 16, 1981.
*644 Debevoise, Plimpton, Lyons & Gates, New York City, for plaintiff; Robert L. King, Christopher A. Alberti, Mitchell A. Karlan, New York City, of counsel.
Townley & Updike, New York City, for defendant; Philip D. Pakula, Michael S. Belohlavek, Richard B. Kelsky, New York City, of counsel.
MEMORANDUM DECISION
GOETTEL, District Judge.
The defendant, Home Insurance Company ("Home"), seeks to dismiss the second, third, fourth, and fifth causes of action of the plaintiff's complaint.
The plaintiff, Whiting Corporation ("Whiting"), is a producer of industrial equipment. It was named as a third-party defendant in 1975 in an action brought in federal district court in Maine by a pulp and paper company against the general contractor that had built its plant in Maine. The pulp and paper company sought $22 million in damages in that action, claiming, inter alia, that a piece of equipment manufactured by Whiting failed to meet specifications and was otherwise deficient. In 1978, the pulp and paper company sued Whiting directly, seeking $16 million from it.
At the time these suits were commenced, Whiting had four layers of insurance coverage. The first layer was in the amount of $250,000 per incident, with a maximum of $500,000. This primary coverage was provided by Continental Insurance Company ("Continental"), which also had the obligation of defending claims against Whiting. The second layer of insurance, in the amount of $5 million, was provided by Home. There were two additional $5 million excess layers on top of this provided by other companies. Whiting settled the suits against it in July of 1979 for $671,000. Continental paid $250,000. Whiting seeks the remainder from Home in this action, claiming that Home's policy insured Whiting against such losses. (This is the substance of the first cause of action.)
The second, third, fourth, and fifth claims concern the actions (or, more accurately, inaction) of Home during the years the Maine suits were in litigation.
The original suit brought by the pulp and paper plant company was commenced in October of 1974, and the third-party action was commenced in January of 1975.[1] Upon being served with the third-party complaint, Whiting, through its insurance brokers, notified all four of its insurance carriers. All of these carriers, except Home, acknowledged receipt of the notification. The primary carrier, Continental, retained a Bangor, Maine law firm to defend Whiting. The second-tier excess carrier (which insured Whiting to the extent of $5 million for judgments in excess of $5,250,000) advised Whiting that it was retaining the same law firm. It also notified Whiting, as did the top-tier excess carrier, that Whiting had the right to employ its own counsel, since the indemnity sought exceeded its total umbrella coverage. At that time, Whiting notified the Bangor attorney retained by its primary carrier that it saw no need to engage independent counsel because there was only a remote possibility of exposure above its total insurance coverage.
Whiting fulfilled all of its formal notice requirements to its insurance carriers and, *645 in September of 1975, notified its insurance brokers, with copies to all four carriers, that it was looking to them for complete indemnification and protection, including the payment of all costs and attorneys' fees.[2] Nevertheless, for a period of three years, Home did not communicate directly or indirectly with Whiting. Home kept abreast of the litigation, however, by obtaining information from claims agents for the other carriers.
Apparently, as early as March of 1976, Home considered sending a reservation of rights letter to Whiting.[3] During the middle of 1976, the other two excess carriers, apparently concerned about Home's position, sent formal notification to Home of their exposure and inquired as to whether Home intended to issue a reservation of rights letter. It was not until October of 1976 that Home started to make any extensive investigation of the nature of the claim. By early 1978, it had learned of settlement overtures under which Whiting would be called upon to pay a sum in excess of that covered by the insurance of the primary carrier.
Following the filing of the direct claim against Whiting in March of 1978, and notification thereof, Home sent a reservation of rights letter to Whiting on May 19, 1978. This was forty-one months after Home was first notified of the original suit. At the time the letter was sent, one of Home's employees noted that such a letter should have gone out "quite some time ago." In the reservation of rights letter, Home relied upon a single policy provision, that of exclusion of claims involving defective products sold by the insured.
In June of 1978, the claims agent notified Home's main representative that the chances of successfully denying coverage were less than fifty-fifty, that a settlement would be in the millions, and that it was obvious that Home, as first excess carrier, had considerable prospective exposure. Similar communications were sent by trial counsel. On May 17, 1979, Home declined coverage, but based its declination on Endorsement No. 8 of the policy. Whiting's house counsel immediately wrote to Home decrying this action, pointing out that the litigation had already progressed to a critical point and that Whiting had to decide whether to proceed to trial or to contribute an amount in excess of its primary coverage in order to settle. Whiting advised Home that it intended to seek indemnification for all liabilities and expenses incurred as a result of the disclaimer.
The second and third causes of action concern Home's delay of more than three years in communicating with Whiting, as a result of which Whiting believed its interests were protected to the full extent of the excess coverage and thus surrendered control of its defense. The second cause of action labels this conduct on the part of Home as an estoppel. The third cause of action denominates it a waiver.
The fourth and fifth causes of action arise from the reservation of rights letter of May 19, 1978, which relied upon a particular exclusion and made no reference to Endorsement No. 8. In the fourth cause of action, Whiting claims that the original reliance solely on one exclusion created an estoppel with regard to any other basis for denying coverage. In the fifth cause of action, Whiting contends that this conduct amounted to a waiver.
In moving to dismiss those four causes of action, Home takes the sweeping position that an excess carrier is never obligated to declare its position with respect to coverage until the underlying lawsuit has been reduced to judgment and, consequently, can never waive or be estopped from claiming any defenses under its policy. It is unquestionably true that, as an excess carrier, under its policy terms, Home did not need to assume charge of the defense or settlement of a suit brought against Whiting. *646 Moreover, its liability did not attach until the amount covered by the primary carrier ($250,000) had been paid.
Whiting contends, on the other hand, that all insurers, primary or excess, have a duty when notified of a claim to advise the insured with reasonable promptness of their position with respect to coverage. Whiting also argues that, while the obligations of an excess carrier are clearly narrower than those of the primary carrier, who must defend the action, primary and excess carriers alike have similar duties to indemnify.
The law appears quite clear that, if a primary carrier that undertakes to defend its insured does not promptly notify the insured that the defense is undertaken pursuant to a reservation of rights (or institute a declaratory judgment action), the carrier is estopped from later denying coverage. See Textile Machinery, Inc. v. Continental Ins. Co., 87 Ill.App.3d 154, 42 Ill. Dec. 506, 409 N.E.2d 1 (1980); Apex Mutual Insurance Co. v. Christner, 99 Ill.App.2d 153, 240 N.E.2d 742, 747 (1968); Bourne v. Seal, 53 Ill.App.2d 155, 203 N.E.2d 12, 18 (1964);[4] 14 Couch on Insurance 2d § 51:77 (1965). The reason for this, as stated by the Illinois Supreme Court, is:
"[t]he claim might be of such a character as that the amount of damages recovered in a lawsuit by the injured party would exceed the indemnity and subject the insured to considerable loss and damage, and therefore the insured should have a right to know with reasonable promptness the attitude of the indemnity company, so that he might be in a position to take such action as would not only protect the indemnity company, but save himself from loss and damages."
Krutsinger v. Illinois Casualty Co., 10 Ill. 2d 518, 141 N.E.2d 16, 21 (1957) (quoting Interstate Casualty Co. v. Wallins Creek Coal Co., 164 Ky. 778, 781, 176 S.W. 217, 219 (1915)). Indeed, Home seems to concede that a primary carrier can be estopped by a failure to disclaim coverage, but it maintains that this can never occur with respect to an excess insurer. Neither party, however, has found a case squarely on point with respect to the actions of an excess insurer.
With respect to the waiver claims, Home relies heavily upon the recent decision of the New York Court of Appeals in Albert J. Schiff Associates, Inc. v. Flack, 51 N.Y.2d 692, 417 N.E.2d 84, 435 N.Y.S.2d 972 (1980). That case stands for the propositions that an extension of coverage cannot be obtained by waiver and that waiver requires proof that the insurer intended to abandon a defense. See 51 N.Y.2d at 698, 417 N.E.2d at 87, 435 N.Y.S.2d at 975. That case, however, concerned a company that promptly denied liability on certain grounds based on three policy exclusions and, ultimately, claimed that the policy simply did not cover the claim in suit. Nevertheless, this Court is inclined to agree that the inaction of Home did not amount to a waiver, which, according to Bouvier's Law Dictionary, is the "intentional relinquishment of a known right," and that the initial assertion of one policy defense does not waive the right to rely upon other portions of the policy.
Estoppel, however, is a different creature from waiver. It is true, as argued by Home, that silence, without more, cannot give rise to estoppel and that a party cannot be estopped by silence where there is no duty and opportunity to speak. See Town & Country Bank v. James M. Canfield Contracting Co., 55 Ill.App.3d 91, 12 Ill. Dec. 826, 829, 370 N.E.2d 630, 633 (1977). But the issues here are whether, under the circumstances described above, Home had an obligation to speak and whether Whiting has been prejudiced by its failure to do so.
A motion to dismiss does not lie unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." McLain v. Real Estate Board of *647 New Orleans, Inc., 444 U.S. 232, 246, 100 S. Ct. 502, 511, 62 L. Ed. 2d 441 (1980) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-102, 2 L. Ed. 2d 80 (1957)). Accord, Haines v. Kerner, 404 U.S. 519, 92 S. Ct. 594, 30 L. Ed. 2d 652 (1972) (per curiam); 2A Moore's Federal Practice ¶ 12.08, at 2274 n.6 (2d ed. 1968 & Supp. 1980). Home contends that Whiting cannot have been prejudiced unless it was under the impression that coverage was a possibility under the policy. This, however, raises a factual issue. Whiting claims that its surrender of control of the litigation to counsel selected by the insurance carriers was based on the belief that it had a solid line of coverage. It cannot be said, as a matter of law, that Whiting would not have pursued a different strategy with respect to the litigation, or that it would not have obtained separate counsel for itself at the start, had it known that Home was going to disclaim coverage for the $5 million excess about $250,000.[5]
Undoubtedly, there are many instances in which an indemnity carrier will wish to reserve its right to disclaim until the predicate litigation has been disposed of. Many different claims may be asserted against an insured and, until an action is over and the basis for liability established, the indemnity carrier will not be able to assess its coverage. This is not such a case, however. Home contends that it was crystal clear from the start that it had provided no coverage for the types of claims asserted against Whiting. The action never did result in a determination of the basis for the insured's liability but, rather, ended in a general settlement. In such a circumstance, an argument clearly can be made that prejudice to the insured resulted from the insurer's unwarranted inaction and subsequent mistaken reliance on an inapplicable portion of the policy. Whether Whiting will ultimately be able to prove reliance and prejudice is another matter, but it is surely entitled to its day in court on those issues.
Consequently, the motion to dismiss is granted as to the third and fifth causes of action (concerning waiver), but denied as to the second and fourth causes of action (concerning estoppel).
SO ORDERED.
NOTES
[1] The third-party action was brought against three subcontractors, of which Whiting was one.
[2] Home denies receiving this communication, although it acknowledges receipt of later and prior notices and also acknowledges its full awareness of the suit.
[3] The primary carrier had, at one point, made a reservation of rights claim, which was rejected by Whiting.
[4] The parties agree that Illinois law applies, but it seems that the law of Illinois does not differ markedly from New York's law.
[5] Whiting did retain counsel in 1978 when the other carriers sought to assert reservations of right with respect to the direct action brought against it. This counsel, however, did not participate in the first three years of the original suit and, we are told, necessarily deferred to insurance company counsel even after joining the defense. (Settlement negotiations were already in progress at that time, and the action settled a year later.) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578522/ | 134 Mich. App. 413 (1984)
351 N.W.2d 310
GRIFFIN
v.
MICHIGAN CIVIL SERVICE COMMISSION
Docket Nos. 70887, 72185.
Michigan Court of Appeals.
Decided May 1, 1984.
William L. Griffin, in propria persona.
Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, and Michael J. Hodge and L. Kim Hoagland, Assistants Attorney General, for defendant.
*415 Before: ALLEN, P.J., and HOOD and W.S. WHITE,[*] JJ.
PER CURIAM.
Defendant appeals as of right from two separate orders entered in the Ingham County Circuit Court in this protracted action over plaintiff's appropriate civil service classification. In Docket No. 72185 defendant appeals from an order of the circuit court belatedly entered on June 7, 1983. This order denied defendant's motion for a rehearing or to remand this case to the Michigan Civil Service Commission's Employment Relations Board (ERB) for a decision on other issues raised before, but not resolved by, the ERB which might affect plaintiff's right to be reclassified. In Docket No. 70887, defendant appeals from an order of superintending control entered on April 14, 1983, which ordered plaintiff's immediate reclassification from Administrative Law Examiner V to Administrative Law Examiner VI, back pay with interest, and prohibited the ERB from "rehearing, reopening, and reconsidering" the classification matter. By order of this Court of November 30, 1983, the appeals in Docket Nos. 70887 and 72185 were consolidated.
The following factual statement gives the background pertinent to both appeals.
In April, 1981, plaintiff sought a hearing on whether he should be reclassified to a higher civil service ranking, i.e., from Administrative Law Examiner V to Administrative Law Examiner VI. This reclassification was sought in part because plaintiff allegedly had supervisory responsibilities over two other employees, Donald Kane and Lily Gee.
A hearing was conducted in July, 1981, before a *416 civil service hearing officer. Defendant argued, inter alia, that even if plaintiff met the job specifications for reclassification to the next higher level, he could not be reclassified because this would put him at his supervisor's civil service ranking. In August, 1981, the hearing officer ruled in plaintiff's favor. The hearing officer determined that plaintiff met the specifications for reclassification to the next higher level and that the "organizational blockage" issue raised by defendant was not a valid ground on which to deny the reclassification. The hearing officer ordered retroactive reinstatement of plaintiff to the next higher level.
Defendant took an appeal to the ERB in November, 1981. The ERB reversed the hearing officer, relying on the "organizational blockage" theory rejected by the hearing officer. On March 4, 1982, a final order was entered by the Michigan Department of Civil Service in accord with the ERB decision.
On April 28, 1982, plaintiff filed a petition for review in the circuit court pursuant to GCR 1963, 706.3, citing the Administrative Procedures Act, MCL 24.201 et seq.; MSA 3.560(101) et seq., as the authority permitting such review. On November 18, 1982, the circuit court reversed the ERB ruling and ordered plaintiff's retroactive reinstatement to the classification of Administrative Law Examiner VI.
On December 3, 1982, defendant filed a motion for rehearing and to remand the matter to the ERB. This motion alleged that the ERB had not yet reviewed whether plaintiff actually supervised Gee and Kane, that other issues independent of the "organizational blockage" controversy had not been resolved, and that one of these issues might preclude plaintiff's reclassification. This motion *417 was orally denied on January 26, 1983. After the court orally denied the motion for rehearing, neither party took steps to prepare an order for execution by the circuit court judge. Defendant ultimately did prepare an order denying the motion for rehearing which was entered on June 7, 1983. The apparent reason defendant finally prepared an order was so that it could then claim an appeal from the results of the January hearing. This order is on appeal in Docket No. 72185.
Despite the fact that the circuit court had denied defendant's request to reconsider its earlier ruling or to remand the matter to the ERB, on March 17, 1983, the Assistant Attorney General representing defendant asked the ERB to reopen this reclassification matter and, specifically, to consider whether plaintiff supervised Kane and Gee. The ERB, on March 22, 1983, ordered plaintiff to reply. This letter specifically asked plaintiff to address himself to the ERB's jurisdiction to reopen the case. Apparently, plaintiff did not respond to the ERB's request but, rather, instituted the action for superintending control on April 4, 1983. On April 14, 1983, the circuit court entered plaintiff's proposed order of superintending control, and the appeal in Docket No. 70887 concerns this order.[1]
*418 At some point, defendant filed a motion to stay the order of superintending control in this Court. By order dated May 9, 1983, this Court granted the motion.
Because we reverse the circuit court's order in Docket No. 72185 and remand to the ERB for the reasons set forth below, we do not address the various issues raised by defendant in Docket No. 70887 which concern the propriety of entering, and the validity of, the order of superintending control.
At the hearing before the circuit court on the motion to reconsider its earlier judgment or for remand to the ERB, defendant argued that the circuit court's decision to reverse the ERB and the Michigan Civil Service Commission on the issue relied upon by these bodies to deny plaintiff his requested reclassification was not dispositive of the merits of the case as other issues affecting plaintiff's right to be reclassified had not yet been resolved. The court apparently took defendant's motion as a request that it (the court) review other issues not reached by the ERB and refused to grant defendant any relief. When the attorney representing defendant attempted to explain that what he was asking for was a remand to the ERB, not review by the circuit court, the court displayed some irritation and refused to entertain further arguments.
On appeal, defendant argues that, on the facts of this case, the circuit court was obligated to remand for further proceedings as this was the only appropriate disposition of the case since issues raised before the ERB remained unresolved. Plaintiff *419 responds that the lower court lost its power to remand after it entered its order of November 18, 1982, which reversed the decisions of the ERB and Civil Service Commission and ordered his reclassification, and, in any case, that the circuit court had authority to remand or not as it chose. The central issue and the attendant questions raised in this appeal have not heretofore been addressed by the Michigan appellate courts.
We first address whether, as plaintiff contends, the circuit court's initial disposition of this case, reversal of the decisions of the ERB and Civil Service Commission and reinstatement of the hearing officer's determination that plaintiff be reclassified, divested the circuit court of authority to modify that judgment upon defendant's motion. The General Court Rules contain no provision specifically providing for rehearings in cases in which the circuit court acts as a reviewing court. However, GCR 1963, 527.5 provides that a motion to alter or amend a judgment shall be served within 20 days after the entry of the judgment. This provision is broad enough to give a circuit court power to entertain rehearings of matters in which it has entered judgments as a court of review. To hold that a circuit court is completely without authority to reconsider judgments it rendered in an appellate capacity would result in cases where, in retrospect, the circuit court believed that its original judgment was wrong but that it could not rectify the situation because it possessed no authority to rehear the matter.
In the instant case, a proof of service in the lower court file shows that plaintiff was served with a motion to amend judgment, to permit remand, and for rehearing on December 4, 1983, and that this motion was filed with the circuit court on *420 December 6, 1983. Defendant clearly complied with the provisions of GCR 1963, 527.5 by filing its motion within 20 days of November 18, 1982, the date on which the circuit court originally entered its order requiring plaintiff's reclassification.
Circuit court review was invoked in this case by plaintiff pursuant to the Administrative Procedures Act of 1969, MCL 24.201 et seq.; MSA 3.560(101), et seq. Section 106(2) of this act, MCL 24.306(2); MSA 3.560(206)(2), provides: "The court, as appropriate, may affirm, reverse or modify the decision or order or remand the case for further proceedings." (Emphasis added.) We next address whether this provision imposes any limits on the discretion of the circuit court to select a disposition of an administrative matter from those mentioned in the rule. We conclude that the Legislature's use of the term "as appropriate" imposes some limits on the court's discretion to dispose of a case. Had the Legislature intended the courts to have unfettered discretion in this regard, the term "as appropriate" would be meaningless, and a statute is to be construed to give effect to all of the language used therein if this is possible. Melia v Employment Security Comm, 346 Mich. 544, 562; 78 NW2d 273 (1956); Deshler v Grigg, 90 Mich. App. 49, 53-54; 282 NW2d 237 (1979), lv den 407 Mich. 875 (1979). Our construction of the term "as appropriate" in MCL 24.306(2); MSA 3.560(206)(2) does not impose stringent restrictions on the court's discretion to dispose of a case. In many cases, different remedies may be appropriate, and, if the lower court has selected among appropriate remedies, it has properly exercised its discretion.
We finally turn to whether the circuit court's order reversing the ERB and Civil Service Commission and reinstating the hearing officer's decision *421 to reclassify plaintiff was "appropriate". We hold that it was not. A review of the administrative record reveals that defendant asserted before the ERB that several errors had been committed by the hearing officer. However, the ERB, in finding in favor of defendant on the issue of "organizational blockage", did not address the other allegations made by defendant. From a review of the administrative record, it should have been evident to the circuit court that other issues unresolved by the ERB might well have affected plaintiff's right to his requested reclassification. While it is true that defendant did not initially request a remand in the event that plaintiff prevailed on the issue of "organizational blockage", we deem this to be of no import. Standard principles of appellate review mandate that where material issues remain unresolved by the lower tribunal, the court of review, if it reverses, may remand the case for a resolution of those material issues raised in, but not resolved by, the lower tribunal.[2] Therefore, we remand this matter to the ERB to resolve any issues raised before it by defendant which were not resolved when the ERB found for defendant on the issue of "organizational blockage".
To ensure against further piecemeal resolution of this litigation, we order the ERB to require any necessary briefing by the parties, hold a hearing, and address all outstanding issues in this case *422 within 60 days of the date of this opinion's release. The Civil Service Commission shall have 30 additional days after the ERB renders its judgment to enter a final administrative order in this case. The circuit court shall have full powers to impose sanctions to ensure that the parties, the ERB, and the Civil Service Commission comply with the time limits set forth in this opinion. If, following the decision of the ERB and the Civil Service Commission, either party deems itself aggrieved, that party may proceed with a new petition for circuit court review pursuant to GCR 1963, 706.3.
The judgment in Docket No. 72185 is reversed and remanded to the ERB for proceedings consistent with this opinion. The judgment in Docket No. 70887 is vacated for the reason that our resolution of Docket No. 72185 renders the issues raised in Docket No. 70887 moot. We do not retain jurisdiction. No costs, a public question.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] We cannot condone either party's actions in respect to what happened after the circuit court orally denied defendant's motion for a remand or a rehearing. Despite the court's ruling, defendant defied the circuit court by asking the ERB to reopen the case, justifying this request on the basis that plaintiff, having prevailed in the circuit court, was obligated to prepare an order denying the rehearing. In fact, GCR 1963, 522.1, which governs the entrance of judgments and orders, does not obligate the prevailing party to prepare the judgment or order, although this is the customary practice. The rule clearly contemplates some cooperation between the parties in the preparation of the order and does mandate that it be prepared within 10 days of the judge's decision. This is a joint obligation of the parties which was ignored by both parties in this case. As a result of the parties' unwillingness to abide by the rules, what should have resulted in one simple appeal developed into a tangled procedural morass, causing an unnecessary flurry of documents directed to the ERB, the circuit court, and this Court, and the needless waste of tax monies in attempting to sort out this case.
[2] This general principle is subject to exception where, for instance, although the lower tribunal did not actually reach an issue raised before it, the record is well enough developed for the court of review to reach a conclusion on the unresolved question. This is appropriate where the unresolved issue is purely one of law or where the lower tribunal has sufficiently fulfilled its factfinding function to permit the court of review to reach a determination on the unresolved issue. In this case, the circuit court specifically declined to undertake its own review of the unresolved issues, and our review of the administrative record reveals that this would not have been an appropriate case for the circuit court to conduct such a review. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578487/ | 119 Wis. 2d 327 (1984)
351 N.W.2d 738
STATE of Wisconsin, Plaintiff-Respondent,
v.
Ricki G. KRUEGER, Defendant-Appellant.
No. 83-2074-CR.
Court of Appeals of Wisconsin.
Submitted on briefs May 3, 1984.
Decided May 10, 1984.
*328 For the defendant-appellant the cause was submitted on the briefs of James M. Jannetta and Getzin & Jannetta of Wausau.
For the plaintiff-respondent the cause was submitted on the brief of Bronson C. La Follette, attorney general, and Jerome S. Schmidt, assistant attorney general.
Before Bablitch, J., Dykman, J., and Bruce F. Beilfuss, Reserve Judge.
BEILFUSS,
Reserve judge. The defendant-appellant (hereinafter "appellant") appeals from a judgment of sentence and order denying his motion for modification of sentence. The issue is whether the trial court correctly *329 denied the appellant's motion, without holding a hearing, after concluding that the motion was untimely and without merit. We affirm.
Ricki G. Krueger was convicted of homicide by reckless conduct under sec. 940.06(1), Stats., and criminal damage to property under sec. 943.01(2) (d), Stats., after pleading guilty to both charges. The charges arose out of an incident which occurred in the early morning hours of July 30, 1982, when a fire destroyed a house and one of the occupants died as a result of burns.
A criminal complaint was issued on August 2, 1982 by the Portgage County District Attorney. An information was filed on August 20, 1982, alleging violations of secs. 943.02(1) (a) and 940.06(1), Stats. On February 9, 1983, the appellant entered guilty pleas to the charges contained in an amended information filed that day. He was convicted of those charges. A presentence investigation was ordered.
The appellant was sentenced on April 21, 1983, to forty-two months imprisonment on the homicide charge and two years imprisonment on the criminal damage charge, to run concurrently.
Transcripts were certified August 4 and filed with the court August 5, 1983. The appellant moved for modification of sentence on September 27, 1983, alleging that the sentence was unduly harsh, excessive, and not based on law, and that two factors not in existence at the time of sentencing should be considered by the court.
The trial court denied the motion without a hearing, holding that the motion was untimely and meritless. The present appeal was taken from that order.
TIMELINESS OF MOTION
The trial court determined that the motion was untimely because it had been filed more than ninety days *330 after the sentencing. The ninety-day limit was first enunciated in Hayes v. State, 46 Wis. 2d 93, 175 N.W.2d 625 (1970), where the court was asked to determine the appropriate time limit for moving to modify a sentence. The court concluded that a ninety-day limit after sentencing was appropriate by equating the ninety-day limit for filing a motion for a new trial contained in then-applicable sec. 974.02, Stats. 1969 (effective July 1, 1970). Id. at 106, 175 N.W.2d at 631.
Section (Rule) 809.30, Stats., which was promulgated by the Wisconsin Supreme Court in 1978, sets forth a procedure for filing appeals and postconviction motions in felony cases. The time limits under sec. (Rule) 809.30 were extended by the Supreme Court in 1981, effective January 1, 1982.
The procedure applicable to the present case under this Rule requires that a defendant request representation by the public defender within forty-five days of sentencing if he claims or appears to be indigent. The state public defender must determine indigency, appoint counsel, and order a transcript. Sec. (Rule) 809.30(1) (c), Stats.[1] The court reporter must file the transcript within sixty days after the ordering and may ask for an extension. Sec. (Rule) 809.30(1) (e). The defendant must file postconviction motions within sixty days after service of the transcript. Sec. (Rule) 809.30(1) (f). Theoretically, 165 days may elapse between sentencing and the filing of a motion under this section, or longer if the court reporter obtains an extension.[2]
*331 Section (Rule) 809.30(1) (a), Stats., provides that a motion for postconviction relief by a defendant in a felony case must be taken in accordance with this subsection. Further, the Judicial Council's 1978 comments indicate that the term "postconviction relief" as used in this Rule includes reduction of sentence. For issues on appeal to be considered as a matter of right, postconviction motions must be made under sec. (Rule) 809.30, except in challenges to the sufficiency of the evidence under sec. 974.02(2), Stats. State v. Monje, 109 Wis. 2d 138, 153a, 325 N.W.2d 695, 327 N.W.2d 641, 641 (1982) (on reconsideration).[3]
We conclude that the Hayes time limit for filing a motion to reduce a sentence has been superseded by sec. (Rule) 809.30, Stats.
Our conclusion is bolstered by the fact that the Hayes' ninety-day rule was based on the then-applicable time limit for moving for a new trial under sec. 974.02, Stats. 1969. This section was amended in 1978 to provide that "a motion for post-conviction relief in a felony case must be taken in the time and manner provided in ss. 809.30 and 809.40." Sec. 974.02(1).
*332 Because the ninety-day period for filing motions for new trial has been superseded by the time limits in sec. (Rule) 809.30, Stats., the underpinnings for the ninety-day limit for a sentence reduction motion have been removed. It appears that the appellant fully complied with sec. (Rule) 809.30. We therefore conclude that the trial court erred in dismissing the motion for untimeliness.[4]
The foregoing determinations are applicable only to the motion for sentence reduction based on alleged excessiveness of the sentence. It is unnecessary to use the procedure under sec. (Rule) 809.30(1) (f), Stats., to preserve a question if "new factors" are presented to the trial court. State v. Machner, 101 Wis. 2d 79, 82, 303 N.W.2d 633, 636 (1981); State v. Foellmi, 57 Wis. 2d 572, 581-82, 205 N.W.2d 144, 149-50 (1973); State v. Hegwood, 109 Wis. 2d 392, 394, 326 N.W.2d 119, 120 (Ct. App. 1982), rev'd on other grounds, 113 Wis. 2d 544, 335 N.W.2d 399 (1983).
NEW FACTORS
We now turn to examine whether the motion alleged "new factors." "[A] trial court has inherent power to modify a criminal sentence. A sentence modification may be based upon a showing of a new factor. Whether the new factor warrants a modification of sentence rests within the trial court's discretion." Hegwood, 113 Wis. 2d at 546, 335 N.W.2d at 401 (citations omitted).
*333 The appellant's motion alleges that two "new factors" not in existence at the time of sentence should be considered by the court: (1) the appellant's need for specialized treatment cannot be met in his current correctional setting; and (2) the appellant's post-sentencing conduct shows further remorse, repentance, cooperativeness and positive change.
In addition, the appellant alleges that other new, but unspecified, factors have come to light which are best presented at a hearing.
The trial court found that the grounds alleged in the motion had no merit. It denied the motion without a hearing and without further elaborating on the reasons for its decision.
The term "new factor" was defined in Rosado v. State, 70 Wis. 2d 280, 288, 234 N.W.2d 69, 73 (1975), as:
[A] fact or set of facts highly relevant to the imposition of sentence, but not known to the trial judge at the time of original sentencing, either because it was not then in existence or because, even though it was then in existence, it was unknowingly overlooked by all of the parties.
Whether a fact or set of facts satisfies this standard is a question of law. Hegwood, 113 Wis. 2d at 547, 335 N.W. 2d at 401. Accordingly, on review we need not defer to the trial court's determination whether the grounds alleged in the motion constitute a "new factor." Id. We also need not remand to allow the trial court to exercise its discretion. See State v. Pepin, 110 Wis. 2d 431, 439, 328 N.W.2d 898, 901 (Ct. App. 1982).
The trial judge was aware at the time of sentencing that the appellant's correctional setting could be inadequate for his rehabilitative needs. At the sentencing hearing, the appellant presented testimony from Mr. Jay Genrich, an employee of the Community Alcohol & Drug Abuse Center in Stevens Point. Genrich testified that he had been meeting with the appellant approximately *334 three times a month since August 1982 to treat the appellant for an alcohol and drug problem. Genrich further testified that he felt the appellant's alcohol dependency was in remission and that it would be very important for the appellant to continue in some form of counseling and AA (Alcoholics Anonymous) group. Genrich stated that based on his professional experience, if the appellant remained chemically free, this would have a substantial influence on deterring further criminal activity. While incarcerated, we presume he is in a chemically free atmosphere, at least more so than while on a probationary status.
The appellant also called Mr. Jay Cleve as a witness. Cleve, a psychologist at the Mental Health Clinic in Stevens Point, testified that he had been meeting with the appellant since August 1982. Cleve recommended continued alcohol and psychological counseling on an ongoing basis for the appellant. He testified that he was strongly opposed to a prison sentence because it would interfere with the appellant's rehabilitation as well as cause permanent detrimental psychological effects. Cleve admitted that he was not completely familiar with the various prison facilities, so he could not say whether the potential harm of a prison sentence would depend on the type of facility in which the appellant was incarcerated. Cleve felt, however, that it was important not to remove the appellant from his present support system and treatments.
In sentencing the appellant, the trial court acknowledged that the appellant had certain rehabilitative needs with which imprisonment would interfere. The court indicated that it was not imposing a longer sentence because it believed the appellant could achieve rehabilitation within the time frame of the sentence. The court said it hoped the appellant would be placed in a minimum security setting where he could continue many of the efforts *335 which he had begun. This indicates that the so-called "new factor" was, in fact, known to the trial judge at the time of sentencing.
In addition, favorable consideration of the appellant's progress in the rehabilitation system lies solely with the department of health and social services. Jones (Hollis) v. State, 70 Wis. 2d 62, 72, 233 N.W.2d 441, 447 (1975). It is not a "new factor" justifying a modification of sentence.
The contention that the appellant's conduct since sentencing is a "new factor" is also without merit. The trial court was fully aware of the appellant's remorse at the sentencing hearing, having heard the testimony of one of the appellant's witnesses and the appellant's statement to the court, as well as having the benefit of the presentence report. The court indicated that it would not impose a longer sentence because of the appellant's actions in response to the crime. In addition, the appellant's change in attitude is also a factor which should be considered by the department of health and social services, as opposed to the trial court in a motion for a reduction of sentence. State v. Wuensch, 69 Wis. 2d 467, 478, 230 N.W.2d 665, 671 (1975).
We conclude that the appellant has not alleged "new factors." As such, it was appropriate for the trial court to refuse to hold a hearing and to deny the motion. See State v. Macemon, 113 Wis. 2d 662, 669, 335 N.W.2d 402, 406 (1983).
EXCESSIVENESS OF SENTENCE
The appellant also alleged in his motion that the sentence was unduly harsh, excessive and not based on law for several reasons: improper emphasis on the need to protect the public; improper evaluation of the appellant's *336 character; failure to address the appellant's personality, character and social traits; inadequate consideration of the degree of the appellant's culpability; improper evaluation of the appellant's age, educational background and employment record; failure to consider the appellant's remorse, repentance and cooperativeness; insufficient weight to the need for specialized treatment; improper evaluation of the rights of the public; improper consideration of the criteria for granting probation and failure to take adequate account of available community resources.
A trial court may review its sentence for abuse of discretion if it concludes that the sentence was unduly harsh or unconscionable. Cresci v. State, 89 Wis. 2d 495, 504, 278 N.W.2d 850, 854 (1979). Our standard of review is whether the trial court abused its discretion. Macemon, 113 Wis. 2d at 670, 335 N.W.2d at 407. "There should be evidence in the record that discretion was in fact exercised and the basis of that exercise of discretion should be set forth." Id. at 667, 335 N.W.2d at 405. There is a strong policy against interference with the trial court's discretion in passing sentence. Id. at 670, 335 N.W.2d at 407.
In reviewing a sentence, we start with the presumption that the trial court acted reasonably, and the defendant must show some unreasonable or unjustifiable basis in the record for the sentence complained of. Elias v. State, 93 Wis. 2d 278, 281-82, 286 N.W.2d 559, 560 (1980).
The primary criteria for imposing sentence are as follows: the sentence imposed in each case should call for the minimum amount of custody or confinement which is consistent with the protection of the public, the gravity of the offense, and the rehabilitative needs of the defendant. McCleary v. State, 49 Wis. 2d 263, 276, 182 *337 N.W.2d 512, 519 (1971). The trial court may consider other factors, including:
A past record of criminal offenses; a history of undesirable behavior patterns; the defendant's personality, character and social traits; the results of a presentence investigation; the vicious or aggravated nature of the crime; the degree of the defendant's culpability; the defendant's demeanor at trial; the defendant's age, educational background and employment record; the defendant's remorse, repentance and cooperativeness; the defendant's need for close rehabilitative control; and the rights of the public. [Citations omitted.]
Macemon, 113 Wis. 2d at 667-68, 335 N.W.2d 405-06.
The criteria for granting probation are found in Bastian v. State, 54 Wis. 2d 240, 248 n. 1, 193 N.W.2d 687, 691 (1972):
"(a) The probation decision should not turn upon generalizations about types of offenses or the existence of a prior criminal record, but should be rooted in the facts and circumstances of each case. The court should consider the nature and circumstances of the crime, the history and character of the offender, and available institutional and community resources. Probation should be the sentence unless the sentencing court finds that:
"(i) confinement is necessary to protect the public from further criminal activity by the offender; or
"(ii) the offender is in need of correctional treatment which can most effectively be provided if he is confined; or
"(iii) it would unduly depreciate the seriousness of the offense if a sentence of probation were imposed.
"(b) Whether the defendant pleads guilty, pleads not guilty or intends to appeal is not relevant to the issue of whether probation is an appropriate sentence." American Bar Association Standards Relating to Probation (Approved Draft, 1970), p. 30.
An abuse of discretion might be found if the trial court failed to state on the record the material factors which influenced its decision, gave too much weight to one *338 factor in the face of other contravening considerations, or relied on irrelevant or immaterial factors. Harris v. State, 75 Wis. 2d 513, 518, 250 N.W.2d 7, 10 (1977). The weight to be given to each of the factors, however, is a determination particularly within the discretion of the trial court. Ocanas v. State, 70 Wis. 2d 179, 185, 233 N.W.2d 457, 461 (1975). Both rejection of probation and imposition of a particular sentence may be based on any or all of the three primary factors after all relevant factors have been considered. Anderson v. State, 76 Wis. 2d 361, 367, 251 N.W.2d 768, 771 (1977).
We find no indication that the trial court abused its discretion in sentencing the appellant. The court had before it the testimony of three of the appellant's witnesses, the arguments of counsel, an extensive presentence report which recommended a longer sentence than that imposed, and the presence of the appellant, as well as the facts of the crime.
In sentencing the appellant, the trial court noted that the crime had been one of the most serious in the community in recent years, involving the death of one person and potential danger to others, as well as the loss of a building. The court also remarked that the appellant had an immature attitude, a serious drug and alcohol problem, no serious criminal record, no previous strong achievement motive, and no strong, consistent record of employment, although there had been some employment. The court acknowledged that the appellant had taken some positive steps since the incident, although the court felt the steps were somewhat suspect.
The court stressed that the situation called for close supervision or control over an extended period of time based, in part, on testimony of the appellant's own witnesses. In addition, the court indicated that the need to protect the public arose through the need to rehabilitate the appellant and the recognition that the appellant had *339 shown a serious lapse in judgment in setting the fire. The court specifically stated:
And although I don't think that public protection in and of itself is a basis for placing this defendant in prison, it is certainly a factor that the Court considers when I consider the nature of this offense: How it happened and whether or not it could happen again; whether or not this offense happened again or an offense of a similar nature.
The court noted that perhaps the most important factor was the gravity of the offense. The court stated that it would depreciate the severity of the offense to place the appellant on probation. The court carefully balanced the appellant's needs against the needs of the public and the severity of the offense in arriving at the sentence, noting that a longer sentence was not imposed because the court felt that the appellant could achieve rehabilitation in the period of time of the sentence and also in recognition of the appellant's response to the situation.
The trial court properly evaluated the relevant factors and adequately explained its rationale for imposing the sentence and rejecting probation on the record. The record does not reveal that the trial court gave too much weight to one factor or relied on irrelevant or immaterial factors. We therefore conclude that the trial court did not abuse its discretion in refusing to modify the appellant's sentence because it was excessive, and agree with the trial court that the motion for sentence reduction should have been denied on its merits. In light of this holding, we do not believe that it was necessary to hold a hearing on the motion.
By the Court.Judgment and order affirmed.
NOTES
[1] Section (Rule) 809.30(1) (c), Stats., was amended effective July 1, 1983, to provide that the state public defender shall within sixty days of notification by the defendant determine the defendant's indigency and appoint counsel as provided in ch. 977, Stats., and at the same time request the court reporter to prepare a transcript.
[2] The Judicial Council is exploring rules which would require the basic decisions about appeal and postconviction motions to be made by trial counsel. The Council is also considering a draft which will reduce the time period for initiating the appellate process from forty-five days to ten days after sentence and requiring the document which initiates the process to be a notice of appeal or postconviction motion instead of a request for public defender representation. The Council notes indicate that the present rules seem to operate inefficiently. See Judicial Council Minutes, March 16, 1984.
[3] State v. Monje, 109 Wis. 2d 138, 153a, 325 N.W. 625, 327 N.W.2d 641, 641 (1982) (on reconsideration), stated that this clarification applies to all judgments entered on and after March 1, 1983. The Monje rule has been modified by sec. 1795g, 1983 Wis. Act 27, amending sec. 974.02(2), Stats., to provide: "An appellant is not required to file a postconviction motion in the trial court prior to an appeal if the grounds are sufficiency of the evidence or issues previously raised." This amendment was effective as of July 2, 1983.
[4] We note that in State v. Macemon, 113 Wis. 2d 662, 666 n. 2, 335 N.W.2d 402, 405 (1983), the court decided that a motion to modify sentence was timely under sec. (Rule) 809.30(1) (f), Stats., since it was apparently filed within sixty days of service of transcript. The defendant was sentenced November 24, 1981, and he filed his motion to modify sentence June 8, 1982. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578541/ | 351 N.W.2d 637 (1984)
Raymond S. BUGANSKI, Jr., Relator,
v.
ONAN CORPORATION and Insurance Company of North America, Respondents.
No. C6-84-89.
Supreme Court of Minnesota.
July 27, 1984.
William G. Moore, Columbia Heights, for Relator.
George R. Benton, Minneapolis, for respondents.
*638 Considered and decided by the court en banc without oral argument.
SIMONETT, Justice.
The Workers' Compensation Court of Appeals erred in vacating a prior 1978 award for disability of the left arm. We reverse the vacation but also remand to reconsider a subsequent 1982 award for disability of the back.
The 1982 award was reviewed by us in Buganski v. Onan Corp., 338 N.W.2d 586 (Minn.1983), and that opinion may be referred to for more detailed facts. Briefly, Raymond Buganski was injured in a work accident in October 1978, and he filed a claim petition against his employer, Onan Corporation, and its insurer for disability of his left arm. There were conflicting medical opinions on the extent of this disability, but in September 1980, the parties resolved their differences by stipulating to a settlement for 10% permanent partial disability of the left arm.
Thereafter, Buganski's orthopedist referred the employee to Dr. Steven Noran, a neurologist, who concluded the employee's problems were attributable to a neck injury received in the 1978 accident. Buganski then filed a second claim petition asking for temporary partial disability and 15% permanent partial disability of the back, plus a simultaneous injury award for 15% disability to the back and 10% to the left arm. On this petition, the compensation judge awarded 15% permanent partial disability of the back, stated that permanent partial disability of the left arm was not in issue, and also granted a simultaneous injury award. The Workers' Compensation Court of Appeals, on appeal, held that the employee had sustained only a 15% permanent partial disability of the back, reversed the simultaneous injury award, and ordered that compensation which had been paid for the left arm be credited against compensation due for the back. On certiorari to this court, we reversed the court of appeals. We pointed out that there was evidence of a simultaneous injury to both the left arm and the back and that, in absence of a request by the employer to vacate the left arm award, the court of appeals was without jurisdiction to vacate that award. We also observed that it was unclear if Dr. Noran's testimony of 15% permanent partial disability to the back included disability to the left arm, for which compensation had already been awarded, and we remanded the case to reconsider Dr. Noran's testimony "concerning the extent to which employee's arm symptoms were reflected in his rating." Buganski, 338 N.W.2d at 589.
On remand, the employer, instead of seeking clarification of Dr. Noran's testimony, elected to petition for vacation of the left arm award. The court of appeals, three to two, held that the 1978 left arm award was based on mistake and should be vacated. The employee appeals here.
1. We hold that the court of appeals exceeded the proper bounds of its discretion in vacating the 1978 award for disability of the left arm. While mistake may be grounds for vacating an award based on a settlement stipulation, see Krebsbach v. Lake Lillian Coop. Creamery Ass'n, 350 N.W.2d 349 (Minn.1984), our review of the record discloses no mistake was made. The 1978 stipulation recited that the two doctors agreed the employee had left arm disability, and they only disagreed on the extent of that disability. The fact Dr. Noran arrived later with a new opinion that the employee has a back disability does not mean that the prior medical opinions were mistakes. At the hearing on the second claim petition, Dr. Noran was, of course, aware of the prior left arm disability rating, but he was not questioned about it, and his testimony does not disprove left arm disability. Dr. Noran said the employee had 15% permanent partial disability "to his back," but he also said he took into account the patient's arm symptoms. An injury to the spine which causes loss of use of a limb may result in simultaneous injuries within the meaning of Minn.Stat. § 176.101, subd. 3(46) (1982). See Lerich v. Thermo Systems, Inc., 292 N.W.2d 741 (Minn.1980); Tracy v. Streater/Litton Industries, 283 N.W.2d 909 (Minn.1979). The *639 employee testified he had pain in both his neck and arm ever since the accident; he testified to inability to perform physical activities because of the pain, inability to extend the arm outward, and the arm popping in his shoulder. This evidence supports the conclusion that the employee sustained some permanent partial disability of the left arm. See Minn.Stat. § 176.021, subd. 3 (1982) (permanent partial disability is "functional loss of use or impairment of function, permanent in nature"). Clearly, at least, it cannot be said that the 1978 settlement stipulation for permanent partial disability to the arm was the result of a mistake. The order vacating the 1978 award for the left arm is, therefore, reversed.
2. We again remand for the court of appeals to reconsider the 1982 award for 15% permanent partial disability of the back. On remand, the basis for Dr. Noran's opinion should be explored to determine to what extent the rating for the back disability includes any impairment of the employee's arm. This procedure should be sufficient to protect the employer from any double compensation.
Employee is awarded attorney fees of $400.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1580573/ | 392 F. Supp. 1044 (1975)
In the Matter of the Arbitration between LOCAL 259, UNITED AUTOMOBILE WORKERS, UAW, Petitioner-Respondent,
and
KELLOGG PONTIAC SALES CORPORATION, Respondent-Petitioner.
No. 74 Civ. 535.
United States District Court, S. D. New York.
April 8, 1975.
*1045 Sipser, Weinstock, Harper & Dorn, New York City, for petitioner-respondent; Belle Harper, New York City, of counsel.
Putney, Twombly, Hall & Hirson, New York City, for respondent-petitioner; Edward F. Callan, David H. Diamond, New York City, of counsel.
NLRB, Washington, D.C., for intervenor; Abigail Cooley, Washington, D.C., of counsel.
OPINION
GRIESA, District Judge.
Local 259, United Auto Workers, petitioned the New York Supreme Court to confirm the arbitration awards of Arbitrator Nathan Cohen of June 18, 1973 and December 27, 1973, issued in an arbitration proceeding between Local 259 and Kellogg Pontiac Sales Corp. Kellogg removed the suit to this court, which has jurisdiction under Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a).
Kellogg moves to dismiss the petition to confirm the arbitration awards on the ground that it fails to state a claim on which relief may be granted, and alternatively moves for summary judgment dismissing the case.
The National Labor Relations Board has intervened, and moveslike Kellogg to dismiss the petition or in the alternative for summary judgment.
The motions of Kellogg and the NLRB to dismiss the petition to confirm the Arbitrator's awards, or in the alternative for summary judgment, are denied. The motion of Local 259 to confirm the arbitration awards is denied as to the award of June 18, 1973 and granted in part and denied in part as to the award of December 27, 1973.
Facts
Kellogg Pontiac Sales Corp. was incorporated in 1937 to operate a Pontiac dealership in New York City, and, after 1955, was owned 50% by Israel Solomon, who was sole franchisee, and 50% by Fay Solomon. Through the Automobile Dealers Industrial Relations Association of New York, Kellogg for many years had collective bargaining agreements with Local 259 with respect to its service shop employees. The most recent such agreement between Kellogg and Local 259 was for a term from July 1, 1972 to June 30, 1974.
Kellogg was located in Manhattan. In or about 1970 New York City commenced a condemnation proceeding with reference to Kellogg's properties, and in March 1971 took title to the properties. Kellogg was given final notice to vacate by the end of 1972. Because of the condemnation and other reasons, Israel Solomon decided to leave the business, and allowed the franchise to expire. However, his son, Jack Solomon, an employee of Kellogg, and his son-in-law, Alan Grossman, a vice-president of Kellogg and its general manager, secured a Pontiac franchise in their names in November 1972. This franchise was for Mt. Vernon, New York, some 15 miles away from the Manhattan location, and had been operated by Persina Pontiac, whose assets Jack Solomon and Alan Grossman proceeded to buy.
The corporate entity of Kellogg Pontiac Sales Corp. continued, and the Mt. Vernon dealership was operated by that corporation. Grossman and Jack Solomon purchased Fay Solomon's shares in the corporation. Israel Solomon continued to own his 50% share of the corporation as a result of making a loan to Grossman and Jack Solomon. However, there is an agreement whereby Grossman and Jack Solomon will purchase the shares of Israel Solomon over a period of time in repayment of the loan.
It appears that Grossman and Jack Solomon purchased no tangible assets, *1046 fixtures or inventory from Kellogg's Manhattan operation although in their advertising from the Mr. Vernon location they clearly sought to carry over the goodwill of the name Kellogg.
The Mt. Vernon operation of Grossman and Jack Solomon commenced in December of 1972.
When Local 259 was apprised of the move to Mt. Vernon, in November of 1972, it demanded that Kellogg offer the Manhattan employees continued employment at the new location, and that Kellogg continue to implement its collective bargaining agreement with the union. However, when Kellogg moved to Mt. Vernon it dismissed the Manhattan Kellogg employees and hired the non-union Persina employees instead. It appears that at this time there were nine Persina employees. Twelve Kellogg employees had been dismissed from the Manhattan location.
Local 259, as representative of the Manhattan Kellogg employees who lost their jobs, petitioned for arbitration, alleging breach of its collective bargaining agreement. On June 18, 1973 Arbitrator Cohen handed down an Opinion and Award. He noted the collective bargaining contractual provisions to the effect that Local 259 was recognized as the duly accredited collective bargaining representative of Kellogg's service shop employees, and that no employees should suffer any reduction in pay or loss of any economic benefit during the term of the agreement. Arbitrator Cohen held that the contract bound the Kellogg corporate entity, which was still in existence, and did not merely bind an individual franchisee. The Arbitrator noted that the recognition clause in the contract contained no geographic limitations. The Arbitrator concluded that Kellogg had improperly avoided the continued implementation of the contract and had denied both Local 259 and the employees the rights and benefits arising out of the contract. On the question of the remedy, the Arbitrator requested the parties to recognize the realities of the situation in which the Persina personnel were in effect employed at the new location, and requested the parties to bargain over what precisely should be done. The Arbitrator therefore issued the following direction:
"(1) The collective bargaining agreement between the Employer and the Union did not terminate with the cessation of the business operation at the New York location. The Employer is obligated to continue to recognize the Union and implement the terms of the collective bargaining agreement at its current Mount Vernon location.
"(2) The Employer and the Union are directed to meet and negotiate, the questions of the employment status of both the former New York employees and the present Mount Vernon employees, their possible monetary and benefit losses and the losses incurred by the Union as a result of the Employer's cessation of recognition of the Union and the failure to implement the collective bargaining agreement from about December 1, 1972 to the present.
"(3) In the event the parties are unable to reach full agreement with respect to the remedy directed in paragraph (2), above, either party may resubmit the unresolved portion of the remedy for determination as part of this proceeding."
Kellogg had participated in the arbitration, but when the Arbitrator decided against it, Kellogg petitioned the NLRB to determine the question of union representation at its Mt. Vernon location, on the ground that the NLRB had jurisdiction under § 9 of the Labor Management Relations Act, 29 U.S.C. § 159, to determine representation questions. The NLRB accepted jurisdiction.
On October 12, 1973 Sidney Danielson, Regional Director of NLRB Region 2, issued a Decision and Direction of Election. This decision held that the Arbitrator's ruling that the Kellogg operation at Mt. Vernon was bound to the pre-existing collective bargaining agreement *1047 with Local 259 was erroneous. The Regional Director found that the employer at the Mt. Vernon location was a "completely new business entity" not bound to adopt the collective bargaining agreement between Local 259 and Kellogg. The Regional Director placed his main reliance upon the fact that the operation of an automobile dealership depended on the franchise given to an individual, which franchise was different at the Mt. Vernon location than it had been at the Manhattan location. The Regional Director held that the accoutrements of corporate structure were essentially irrelevant for the purposes of the NLRB proceeding. The decision held that the Arbitrator's conclusion that the employer at Mt. Vernon had an obligation to employ or offer employment to the Manhattan employees was at odds with NLRB principles and policies. The Regional Director declined to defer to the Arbitrator with respect to the questions of the interpretation of the collective bargaining agreement, because the Regional Director stated that the question related not merely to interpretation but to the very existence of a contract at the Mt. Vernon location. Moreover, the Regional Director held that it would be contrary to the NLRB policies to compel the Mt. Vernon employees (the Persina employees) to accept a union which they had not elected. For these reasons, the Regional Director ordered an election at the Mt. Vernon location.
On November 8, 1973 the full NLRB denied review.
On November 29, 1973 Regional Director Danielson issued a Supplemental Decision and Certification of Results noting that an election had been held at the Mt. Vernon location on November 20, 1973. Sixteen votes were cast, 4 for Local 259 and 12 against. For this reason the Regional Director refused to certify Local 259 as the collective bargaining representative at the Mt. Vernon location.
Further proceedings were thereafter held before Arbitrator Cohen. On December 27, 1973 the Arbitrator handed down a Supplemental Opinion and Award. Arbitrator Cohen refused to accept the argument of Kellogg that there should be no further proceedings in view of the NLRB action. The Arbitrator stated:
"I have considered the Employer's arguments with respect to the propriety of awarding a remedy in the arbitration proceeding which may be inconsistent with the decision of the N. L.R.B.'s Regional Director. I note that the issue presented in the N.L.R. B. case only involved the status of the contract as a bar to the holding of an election among the present Mount Vernon employees. In this proceeding before me, the issue concerns the rights of the employees and the Union which flow from a contract, admittedly valid when it was entered into and not contested at any time by the Employer until the location of the business was changed to Mount Vernon. Further, unlike other situations where there is a rival union with a contract and there are conflicting claims, here there is neither a rival union nor a conflicting contract present to confuse the situation. It is therefore my opinion that the decision in the N.L. R.B. proceeding, whether ultimately held to be correct or incorrect, should not prejudice the rights of the New York employees and the Union which are derived from that contract and which by its own terms is still in effect until June 30, 1974."
Arbitrator Cohen recognized that Paragraph (1) of his June 18, 1973 awardto the effect that Local 259 should represent the employees at the Mt. Vernon locationwas in direct conflict with the NLRB decision, and held that no relief should be awarded under that paragraph.
However, Arbitrator Cohen proceeded to grant relief by way of reinstatement and damages, which he believed did not *1048 conflict with the NLRB decision. He directed reinstatement at Mt. Vernon of eight employees from the former Manhattan location who wished reinstatement, and granted damages to six of these employees based upon wage losses from the time of their dismissal from the Kellogg Manhattan operation until the date of the Supplemental Opinion and AwardDecember 27, 1973. The Arbitrator also awarded certain amounts to Local 259 pension and other funds based upon contractually required contributions through the end of December 1973. The specific awards on these points were:
"2(a) The Employer shall reinstate the following individuals to their jobs:
Eduardo Alejandro
Antonio DeJesus
Salvatore Licari
Donald Terkovich
Anthony Romano
Sheldon Latzen
Andre Chenet
Joseph Calise
"2(b) The Employer shall pay to the Local 259 Pension Fund $4,368.00 for contractually required contributions through the end of December 1973.
"2(c) The Employer shall pay to the Local 259 Health and Welfare Fund $6,818.90 for contractually required contributions through the end of December 1973.
"2(d) The Employer shall pay to the following individuals the sum listed adjacent to their names for earnings lost from the date of their dismissals to the date of this Award.
Salvatore Licari $1,635.60
Donald Tercovich 6,488.85
Anthony Romano 5,026.08
Sheldon Latzen 7,175.72
Andre Chenet 1,120.68
Joseph Calise 6,322.68"
In the present proceeding, petitioner Local 259 no longer seeks enforcement of Paragraph (1) of the Arbitrator's June 18, 1973 award. In other words, Local 259 does not seek to have a declaration that Local 259 is the collective bargaining representative for the Mt. Vernon location or that the wages and other terms of the collective bargaining agreement are to apply at that location. The rejection of such relief would, of course, necessarily flow from the fact that the collective bargaining agreement expired by its own terms on June 30, 1974. However, Local 259 also apparently concedes that Paragraph (1) would in any event be in conflict with the NLRB decision and is for that reason unenforceable.
As to Paragraphs 2(a), 2(b), 2(c) and 2(d) of the Arbitrator's December 27, 1973 award, Local 259 maintains that the relief granted therein by the Arbitrator does not conflict with the NLRB decision and that these paragraphs of the Arbitrator's award should be enforced.
Conclusions of Law
The National Labor Relations Act confers upon the NLRB jurisdiction over questions relating to union representation and jurisdiction. 29 U.S.C. § 159. The determination of the NLRB on such questions is reviewable in a federal court of appeals. 29 U.S.C. § 160. On the other hand, factual situations solely involving interpretation of collective bargaining contractsi. e., questions regarding wages and other terms and conditions of employmentare not within the jurisdiction of the NLRB, but are normally handled by an arbitrator appointed pursuant to the collective bargaining agreement. The federal district courts have jurisdiction over actions to enforce arbitration agreements. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960).
It may be that representation or jurisdictional questions depend at least in part on interpretation of collective bargaining *1049 agreement terms. The Supreme Court has held that in such a case it is permissible to seek arbitration of the dispute in the first instance. The Court has held that if an NLRB ruling on the dispute is sought following an arbitration award, the NLRB will rule on that portion of the dispute within the NLRB's jurisdiction, but will show "deference to the arbitral award, provided the procedure was a fair one and the results were not repugnant to" the federal labor law. Carey v. Westinghouse Corp., 375 U.S. 261, 270-71, 84 S. Ct. 401, 408, 11 L. Ed. 2d 320 (1964).
The Court of Appeals for this Circuit has dealt with the problem of resolving conflicts between an NLRB decision and an arbitrator's award, where both grow out of the same labor dispute. Luckenbach Overseas Corp. v. Curran, 398 F.2d 403 (2d Cir. 1968). There the NMU had a collective bargaining agreement covering seamen employed on Luckenbach's vessels. One of such vessels was sold to Overseas which had a collective bargaining agreement with the SIU. Overseas discharged Luckenbach's NMU crew and replaced them with members of the SIU. The NMU filed unfair labor practice charges with the NLRB, which held that the discharge of the NMU members did not violate the statute. Three days before the NLRB decision, the NMU initiated an arbitration proceeding. Luckenbach sued to obtain a stay of this arbitration. Overseas argued in the Court of Appeals that there were no remaining rights under the collective bargaining agreement susceptible of arbitration, in view of the fact that the NLRB had ruled that the NMU and its members could properly be ousted by the vessel's transferee in view of the transferee's collective bargaining agreement with a rival union. The Court of Appeals held that there was, at least potentially, an area where an arbitrator might act in a way not in conflict with the NLRB decision. The Court of Appeals stated (398 F.2d at 405-6):
"The thrust of Luckenbach's argument is that arbitration in this case is precluded by the facts found and policies expressed by the Regional Director when he decided not to issue the unfair labor practice complaint sought by NMU. But that decision and its affirmance by the Board's General Counsel, do not foreclose the possibility that NMU may have rights and remedies under the collective bargaining agreement. Different issues are presented in each instance and it is conceivable, as the district judge stated, that the arbitrator could fashion a remedy under the contract which would not conflict with Board policy or the Regional Director's decision. These questions, arising out of the collective bargaining agreement, are proper subjects for arbitration, and if the decision of the arbitrator conflicts with Board policies or decisions, it is subject to later review and correction in the courts. To make awards in damages to NMU for breaches of the contract would not subvert the Board policy that a newly acquired vessel is subject to the collective bargaining agreement of the transferee fleet. They would, of course, be allowed only when the arbitrator could properly find that they were based on rights provided for in the collective bargaining agreement." [footnote omitted]
Applying the Luckenbach ruling to the present case, the question before me is whether those phases of the Arbitrator's award which Local 259 seeks to enforcei. e., reinstatement of the Manhattan employees and damages for lost wages and benefit paymentsare or are not in conflict with the NLRB decision. I note here that, with regard to reinstatement, the expiration of the collective bargaining agreement as of June 30, 1974 would in and of itself prevent any reinstatement now, although this particular timing problem did not exist at the time the arbitrator made his award of December 27, 1973. However, in order to explore fully the legal questions involved, I am laying aside for the moment the matter of mootness in respect to the question of reinstatement, and *1050 will examine the issue of whether reinstatement would be in conflict with the NLRB ruling.
Local 259 contends that reinstatement is not in conflict with the NLRB decision. The union appears to argue that the NLRB dealt solely with the question of representation, and that its ruling that an election should be held does not determine which employees are to be the ones who vote in such election. Local 259's view is that the NLRB did not rule that the Persina employees rather than the former Manhattan Kellogg employees were required to be the ones hired at the Mt. Vernon location. Local 259 notes that there was and is no collective bargaining agreement with a rival union at the Mt. Vernon location.
I cannot agree with this argument of Local 259. It is plain that the NLRB decision held that the former Kellogg employees at the Manhattan location had no right to employment at the Mt. Vernon location; that Kellogg had a right to employ the Persina employees; and that the election was necessary to give the latter employees the franchise regarding union representation.
The NLRB has held an election in which the present Mt. Vernon employees have rejected representation by Local 259. It would be completely inconsistent with this remedy to now install the Local 259 members, who were former employees at the Manhattan location, and who would obviously bring their union with them to Mt. Vernon.
Local 259 next argues that, if the NLRB decision can be construed as barring reinstatement of the Manhattan employees, this phase of the NLRB ruling was erroneous. The short answer to this argument is that no one has sought review of the NLRB decision by the method prescribed by the statutei. e., in a proceeding in the court of appeals. Therefore the NLRB holding stands, and cannot be challenged in the present district court proceeding.
My conclusion therefore is that reinstatement of the former Manhattan employees cannot be granted, not only because the collective bargaining agreement has expired, but also because such a remedy would be in direct conflict with the remedy afforded by the NLRB.
The next question is whether the Arbitrator's award of damages in the form of lost wages and fund payments can be sustained as not in conflict with the NLRB decision. The Arbitrator found that six of the former employees of the Manhattan location had submitted adequate evidence that following their dismissal they earned lower wages than they would have earned from Kellogg at the rates under the collective bargaining agreement. The Arbitrator calculated such losses from the time of the dismissals until the time of the December 27, 1973 awardthe theory being that as of the time of such award these employees would be reinstated in their employment by Kellogg.
With respect to payments contractually due to the various union funds, the Arbitrator found that certain amounts were owing based upon an average number of union employees at the Manhattan location. Again, these amounts were calculated for a period terminating with the date of the award.
As to the question of whether these awards by the Arbitrator are in conflict with the NLRB remedy, it is clear that the NLRB did not specifically rule that such damages could not be recovered. The problem arises, however, because the NLRB's rationale for its representational ruling was in part that the collective bargaining agreement was not binding upon Kellogg in the new location, because Kellogg became a new and separate "business entity". The Arbitrator, on the other hand, based his award of damages upon the proposition that the Kellogg corporate entity continued to exist in the new location at Mt. Vernon and was bound by the collective bargaining agreement as a matter of contract *1051 and corporate law. The Arbitrator concluded from this that Local 259 and the Manhattan employees had rights both to the reinstatement of the employees and reimbursement for lost wages and benefits.
The difficulty comes, therefore, not because the Arbitrator's award of damages to the former Manhattan employees would be in and of itself inconsistent with the NLRB direction of an election to be held for the present Mt. Vernon employees, but because the theories underlying these two remedies are in conflict. In my view, the proper and practical way to resolve this matter is to focus on an accommodation of results and remedies, rather than allowing the matter to be controlled by the conflict in theories.
I hold that the portions of the Arbitrator's December 27, 1973 award granting damages should be upheld and enforced.
In this regard, I rely upon the language from the Luckenbach opinion quoted earlier, indicating that it is possible in a situation such as the present one for an arbitrator to fashion a remedy under the collective bargaining agreement "which would not conflict with [NLRB] Board policy or the Regional Director's decision". The court specifically expressed the view that an award of damages to terminated employees does not necessarily conflict with an NLRB decision denying such employees continued employment or reinstatement.
In my view, the award of damages in the present case to the former Manhattan employees and to the Local 259 funds does not in any degree subvert the NLRB policy announced in the October 12, 1973 decision, to the effect that the Persina employees are entitled to employment at the Mt. Vernon location and are also entitled to an independent franchise on the question of union representation.
If that portion of the Arbitrator's award relating to damages is not sustained, the result will be to wipe out completely the rights of the former Manhattan employees under the collective bargaining agreement as duly determined in an arbitration proceeding. This result would be at odds with what has been held regarding the respective domains of the arbitrator and the NLRB that is, that an arbitrator has primary authority to interpret collective bargaining agreements on questions of employment rights, wages, etc., and that the NLRB may tread upon this authority only as far as necessary to rule upon matters within the NLRB's jurisdiction, such as representation and unfair labor practices. See NLRB v. Strong, 393 U.S. 357, 89 S. Ct. 541, 21 L. Ed. 2d 546 (1969).
The NLRB, in the present action, does not actually argue against the award of damages. Kellogg argues against such an award. However, the minutes of the NLRB proceedings show that when Kellogg was before the NLRB, Kellogg expressly conceded that the NLRB would have no concern regarding monetary damages.
With respect to the amounts of the damage awards, as already noted, the Arbitrator calculated such damages only with respect to the period through the end of December 27, 1973. Such damages will need to be fixed for the further period of the collective bargaining agreement through June 30, 1974. In the case of payments due to union funds, this is probably a simple matter of mathematical calculation. With respect to the loss of wages to individual employees, the method used by Arbitrator Cohen in his second decision and award should be adopted and applied to the additional period from December 27, 1973 through June 30, 1974. Hopefully this can all be stipulated without the need for further hearing or remand to the Arbitrator. In this regard, the parties are directed to confer and make proposals to the court.
Conclusion
For the foregoing reasons, the motions of Kellogg and the NLRB to dismiss *1052 the petition, or in the alternative for summary judgment, are denied.
The motion of Local 259 to confirm the arbitration awards is denied as to Paragraph (1) of the award of June 18, 1973 and Paragraph 2(a) of the award of December 27, 1973. The motion to confirm is granted as to Paragraphs 2(b), 2(c) and 2(d) of the award of December 27, 1973, subject to fixing the precise amount of damages as indicated above.[1]
Settle order.
NOTES
[1] The issues as to Paragraphs (2) and (3) of the June 18, 1973 award are moot. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2440423/ | 966 N.E.2d 613 (2008)
381 Ill. App. 3d 1157
359 Ill. Dec. 292
ALBRECHT
v.
GILBERT.
No. 4-07-0462.
Appellate Court of Illinois, Fourth District.
June 13, 2008.
Vac. & rem. with directions. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/4515791/ | Order Michigan Supreme Court
Lansing, Michigan
March 11, 2020 Bridget M. McCormack,
Chief Justice
160552 David F. Viviano,
Chief Justice Pro Tem
Stephen J. Markman
Brian K. Zahra
PEOPLE OF THE STATE OF MICHIGAN, Richard H. Bernstein
Plaintiff-Appellee, Elizabeth T. Clement
Megan K. Cavanagh,
Justices
v SC: 160552
COA: 350532
Wayne CC: 18-007081-FC
JONATHAN SAMI GOGA,
Defendant-Appellant.
_____________________________________/
On order of the Court, the application for leave to appeal the September 23, 2019
order of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the questions presented should be reviewed by this Court.
I, Larry S. Royster, 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.
March 11, 2020
t0310
Clerk | 01-03-2023 | 03-13-2020 |
https://www.courtlistener.com/api/rest/v3/opinions/1578514/ | 281 S.W.3d 761 (2009)
Raymond ANDERSON, Jr., Appellant,
v.
COMMONWEALTH of Kentucky, Appellee.
Nos. 2006-SC-000563-MR, 2006-SC-000894-TG.
Supreme Court of Kentucky.
January 22, 2009.
Rehearing Denied May 21, 2009.
Shelly R. Fears, Assistant Public Advocate, Department of Public Advocacy, Frankfort, KY, Counsel for Appellant.
Jack Conway, Attorney General of Kentucky, Henry Albert Flores, Jr., Assistant Attorney General, Office of Attorney General, Office of Criminal Appeals, Frankfort, KY, Counsel for Appellee.
*762 Opinion of the Court by Chief Justice MINTON.
I. INTRODUCTION.
Nearly twelve years ago, the United States Supreme Court held in Old Chief v. United States[1] that a trial court abused its discretion when it refused to permit a criminal defendant charged with being a felon in possession of a firearm to concede to having a previous felony conviction.[2] The prosecution had refused to join in a stipulation.[3] After Old Chief was rendered, we have hinted that it may apply to cases in Kentucky state courts;[4] but, until today, we have not had occasion squarely to determine whether to adopt the rationale of Old Chief. After careful deliberation, we adopt what we perceive to be the limited holding of Old Chief: a defendant charged with being a felon in possession of a firearm may stipulate to having a prior felony conviction, even without the Commonwealth's consent.
II. FACTUAL AND PROCEDURAL HISTORY.
The facts relevant to these appeals are simple and largely uncontested. Responding to a call about a suspicious vehicle, a police officer encountered Raymond Anderson, Jr., who was sitting in a parked car. After running a records check, the officer discovered that Anderson was wanted on an outstanding warrant. So the officer arrested Anderson and, searching incident to that arrest, found a gun in a compact disc carrier located in the front floorboard. Anderson told the arresting officer that the gun was not his and that he had dropped off a friend, Robert Bucher, nearby and was merely awaiting Bucher's return.
Anderson was indicted for possession of a firearm by a convicted felon, carrying a concealed deadly weapon, possession of drug paraphernalia while in possession of a firearm, and of being a persistent felony offender in the first degree (PFO I). The possession of a firearm and PFO I charges progressed to a jury trial.[5]
Shortly after opening statements, but before the calling of witnesses, the Commonwealth sought to introduce a certified judgment showing Anderson's earlier felony convictions for receiving stolen property and escape in the second degree. In response, Anderson offered to stipulate to his status as a convicted felon, arguing that disclosing the specific nature of his *763 felony convictions to the jury would be overly prejudicial. The trial court, ultimately, refused to let Anderson concede to the convictions; and the Commonwealth was permitted to introduce the judgment containing the receiving stolen property and escape convictions.
At trial, the Commonwealth presented the arresting officer's testimony of how he had discovered the gun in the car, as well as Anderson's denial of ownership, or even knowledge, of the gun. The arresting officer also testified that Bucher had stated to him that he had seen Anderson carrying the compact disc case when he (Bucher) picked Anderson up from work. Bucher himself similarly testified that Anderson had brought the compact disc case into the car but that he (Bucher) had not seen a gun in the case when he flipped through it to see the compact discs. Bucher also testified that he had not seen the gun and does not own a gun. The Commonwealth also called another officer, who testified that the car contained numerous items of Bucher's personal property. In response, Anderson testified that he had been left in the vehicle while Bucher went to search for his girlfriend; but he denied having a gun or knowing about the gun's presence in the car.
The jury convicted Anderson of possession of a firearm by a convicted felon and of being a PFO I. The jury recommended that Anderson be sentenced to five years' imprisonment on the possession of a firearm charge, enhanced to twenty years' imprisonment by virtue of the PFO I conviction. The trial court sentenced Anderson to twenty years' imprisonment in accordance with the jury's recommendation, after which Anderson filed appeal number 2006-SC-000563-MR as a matter of right.[6] After that notice of appeal had been filed, Anderson filed a pro se motion for relief under Kentucky Rules of Civil Procedure (CR) 60.02, which the trial court denied. Anderson appealed the denial of his CR 60.02 motion to the Kentucky Court of Appeals, which recommended transfer to this Court. We granted transfer of Anderson's CR 60.02-related appeal, which is case number 2006-SC-000894-TG. We have elected to resolve both appeals in this combined opinion. However, Anderson has made no arguments to us regarding the denial of his CR 60.02 motion.
III. ANALYSIS.
The only issue raised by Anderson is the trial court's denial of his offer to stipulate to being a convicted felon. Resolution of that issue entirely depends upon whether we adopt the holding of Old Chief. After careful consideration, we join the "overwhelming majority of courts ... to have considered the matter"[7] in choosing to adopt the limited holding of Old Chief.
*764 Old Chief is a case remarkably similar to the one at hand. The defendant in Old Chief was charged with the federal offense of being a felon in possession of a firearm, an offense similar to Anderson's charge of being a felon in possession of a firearm.[8] Before trial, the defendant moved to prevent the prosecution from entering into evidence the specific nature of his previous felony conviction (assault).[9] In an argument echoed by Anderson in this case, the defendant in Old Chief argued to the trial court that the unfair prejudice from the introduction of the specific nature of his previous felony conviction would substantially outweigh its probative value, thereby making the evidence regarding the specific nature of his previous felony conviction inadmissible under Federal Rules of Evidence (FRE) 403.[10] Instead, the defendant in Old Chief offered to stipulate to the fact of the prior felony conviction, as did Anderson in the case at hand.[11] Like the case at hand, the prosecutor in Old Chief refused to join in a stipulation, "insisting on his right to prove his case his own way...."[12] And, just like in the case at hand, the trial court ruled in favor of the prosecutor and refused to let the defendant unilaterally concede to having a previous felony conviction.[13] After the defendant was convicted, he filed an appeal, arguing that the trial court erred by refusing his offer to stipulate to a prior felony conviction. That appeal eventually wound its way to the United States Supreme Court.
Although sharply divided, a majority of the Supreme Court held that the trial court abused its discretion when it rejected the defendant's proposed stipulation.[14] The Court rejected an argument that the specific evidence of the defendant's previous felony conviction was irrelevant, and, thus, inadmissible under FRE 401 and 402.[15] The Court, therefore, proceeded to *765 the core question: whether the probative value of the specific evidence of the defendant's previous felony conviction was substantially outweighed by its prejudicial effect.
In resolving that question, the Court declared that there could be "no question that evidence of the name or nature of the prior offense generally carries a risk of unfair prejudice to the defendant."[16] However, the Court also recognized the "good sense" inherent in the longstanding principle that "the prosecution is entitled to prove its case free from any defendant's option to stipulate the evidence away...."[17] But the Court held that the prosecution's usual right to present its evidence as it sees fit "has ... virtually no application when the point at issue is a defendant's legal status, dependent on some judgment rendered wholly independently of the concrete events of later criminal behavior charged against him."[18]
Ultimately, therefore, the United States Supreme Court concluded that "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."[19] Accordingly, the Court held that when the specific evidence of a defendant's prior conviction's probative value is weighed against its potential for unfair prejudice under FRE 403, "[i]n 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," meaning that "it was an abuse of discretion to admit the record when an admission was available."[20]
Old Chief is virtually factually indistinguishable from the case at hand. And the federal evidentiary rules that lie at the heart of Old Chief are virtually identical to our corresponding Kentucky evidentiary rules. But Old Chief is not grounded in any constitutional principles. So its holding is not strictly binding upon us. As noted previously, however, an overwhelming majority of our sister states have either expressly adopted Old Chief or have at least utilized its logic.[21] Thus, we would be in a small minority, indeed, if we flatly rejected the United States Supreme Court's analysis of evidentiary rules quite similar to ours. In fact, it appears as if "[t]he only courts that have declined to follow Old Chief distinguished its holding based on variations in the applicable state statutory law."[22] We have not been cited to any variations in Kentucky law that would give us sufficient reason to reject Old Chief. In fact, we have already strongly hinted our approval of the rationale of Old Chief.[23] Therefore, we conclude *766 that we shall adopt the holding of Old Chief: upon request, a criminal defendant charged with being a felon in possession of a firearm may stipulate (with the Commonwealth's agreement) or admit (if the Commonwealth does not agree) that the defendant has been previously convicted of a felony. Such a stipulation or admission would mean that the jury would simply be informed that the defendant was a convicted felon, for purposes of the felon in possession of a firearm charge, but would not be informed of the specifics of the defendant's previous felony conviction(s).
We recognize that defendants may wish to admit or stipulate to previous convictions or other matters in situations not involving felon in possession of a handgun charges, such as cases involving PFO charges.[24] But the application of Old Chief's rationale to other cases and situations has not been argued by the parties to this case and, thus, is not properly before us. And the United States Supreme Court has not expressly extended Old Chief to other scenarios. So we emphasize that our holding today is limited only to cases like the one at hand where the defendant stands charged with being a felon in possession of some type of firearm and should not be construed as a license for criminal defendants unilaterally to admit over the Commonwealth's objection any other factors or elements of the Commonwealth's case that the defendant wishes to conceal from the jury. Thus, in all other circumstances where a defendant's status as a convicted felon is relevant, such as PFO proceedings, courts should continue to rely upon our previous holding that "the prosecution is permitted to prove its case by competent evidence of its own choosing, and the defendant may not stipulate away the parts of the case that he does not want the jury to see."[25]
Adoption of Old Chief, of course, inevitably causes us to conclude that the trial court abused its discretion when it refused Anderson's proposed stipulation. Merely concluding that the trial court erred by refusing Anderson's proposed stipulation does not end our inquiry, however, because "no error or defect in any ruling ... is ground for granting a new trial or for setting aside a verdict ... unless it appears to the court that the denial of such relief would be inconsistent with substantial justice."[26] In fact, Old Chief itself left open the possibility that a court's failure to follow its dictates would be harmless error;[27] and other courts have subsequently applied a harmless error-type analysis to a lower court's failure properly to follow Old Chief.[28] After careful consideration, we have determined that, under the facts of this case, the trial court's denial of Anderson's proposed stipulation was a harmless error because "there is no reasonable possibility that it *767 contributed to the conviction."[29]
The prejudice Anderson may have suffered from the disclosure to the jury of the specific nature of his previous convictions for escape and receiving stolen property was likely minimal because those previous convictions were not for offenses involving firearms, nor were those previous offenses otherwise inherently violent in nature. Indeed, redacting the specifics of those offenses could have caused the jury to speculate that Anderson had been convicted of far more serious felonies, a point that future defendants in Anderson's position should consider before deciding to stipulate or admit to having a previous felony conviction. Furthermore, the evidence against Anderson was strong in that Bucher stated initially to the police, and reiterated at trial, that Anderson brought the compact disc case into the car on the night in question. Also damning was the fact that Anderson admitted at trial that he had illegally possessed a firearm thirteen years earlier. Thus, on balance, we cannot say that there was a reasonable possibility that the jury's knowledge of Anderson's specific prior convictions might have contributed to his conviction any more than their general knowledge of his status as a convicted felon would have. Accordingly, we deem harmless the error in refusing Anderson's proposed stipulation.
IV. CONCLUSION.
For the foregoing reasons, the judgment of the Henderson Circuit Court is affirmed.
All sitting. ABRAMSON, NOBLE, and VENTERS, JJ., concur.
CUNNINGHAM, J., concurs in result only by separate opinion in which SCOTT, J., joins. SCHRODER, J., concurs in result only by separate opinion.
Opinion by Justice CUNNINGHAM, concurring in result only.
I concur in the result of the very well-written opinion of our Chief Justice. I write separately, however, simply to make two points.
First of all, the majority opinion correctly points out that because the decision in Old Chief is not based upon any constitutional principle, we are not obligated to follow it. Old Chief was a 5-4 split of the United States Supreme Court and dealt with a federal evidentiary rule basically identical to our own, but with a criminal statute that is not identical to our own. For instance, the federal law on convicted felons does not include all felonies as does our KRS 527.040(1).[1]
I do not think we should hitch our wagon to any decision of the United States Supreme Court unless we need to. Here, we do not need to. We can simply decide this case based upon our interpretation of our own KRE 403. Unless necessary, our decisions should not rise nor fall upon the caprice of another tribunal's discretion, regardless of how august that body might be.
Secondly, I write to make certain that there is nothing in our decision here today that could be misunderstood by prosecutors and judges as far as their appropriate roles are concerned. The word "stipulate" has infested this case considerably. Stipulate is synonymous with agreement.[2] No *768 court in this state has the power to require the state to stipulate to anything. To do so would be a serious infringement upon Sections 27 and 28 of our state constitution. It is my understanding that what we are saying here today is simply this: limited to the prosecution of a convicted felon in possession of a handgun, trial courts should sustain any objection by a defense lawyer for the introduction of the nature and name of the prior felony crime.
To say more, I fear, is to invite trouble.
Thusly, I respectfully concur in result only.
SCOTT, J., joins this opinion concurring in result only.
Opinion by Justice SCHRODER, concurring in result only.
I disagree with the majority only insofar as it reasons that the holding in Old Chief is not binding on this Court because it is not grounded in constitutional principles. I view KRE 403's exclusion of relevant evidence on grounds of prejudice as being rooted in the defendant's due process right to a fair trial under the Sixth and Fourteenth Amendments to the United States Constitution. See Robey v. Commonwealth, 943 S.W.2d 616, 618 (Ky.1997).
NOTES
[1] 519 U.S. 172, 117 S. Ct. 644, 136 L. Ed. 2d 574 (1997)
[2] Id. at 174-75, 117 S. Ct. 644.
[3] Id. at 177, 117 S. Ct. 644.
[4] See Dickerson v. Commonwealth, 174 S.W.3d 451, 463 (Ky.2005) (holding in case involving charges of possession of a handgun by a convicted felon the trial court erred by not redacting from judgment of conviction of previous felonies a recitation that crimes defendant was convicted for had been amended before permitting judgment to be shown to jury because "[o]f course, Appellant could have avoided the admission of either judgment by simply stipulating to the convictions. Old Chief v. United States, 519 U.S. 172, 190-91, 117 S. Ct. 644, 136 L. Ed. 2d 574, (1997) (where prior conviction was relevant only to prove the element of defendant's status as a convicted felon and defendant offered to stipulate to that fact, trial court abused discretion by permitting government to prove the nature of the offense over defendant's objection). If Appellant could have avoided introduction of the judgment by stipulating that he was a convicted felon, clearly he was entitled to have redacted from the judgment information from which the jury could deduce that he committed far greater offenses than those of which he was convicted.") (footnote omitted).
[5] A notation in the circuit court's written record recites that the other charges were to be tried on a different date.
[6] Ky. Const. § 110(2)(b).
[7] People v. Walker, 211 Ill. 2d 317, 285 Ill. Dec. 519, 812 N.E.2d 339, 348 (2004). Indeed, our independent research has revealed that Old Chief has also either been explicitly adopted or its rationale has been utilized in numerous state court cases, including such cases as Ferguson v. State, 362 Ark. 547, 210 S.W.3d 53 (2005); Brown v. State, 719 So. 2d 882 (Fla.1998); State v. Lee, 266 Kan. 804, 977 P.2d 263 (1999); Carter v. State, 374 Md. 693, 824 A.2d 123 (2003); State v. James, 355 S.C. 25, 583 S.E.2d 745 (2003); State v. James, 81 S.W.3d 751 (Tenn.2002); State v. Alexander, 214 Wis. 2d 628, 571 N.W.2d 662 (1997); Ross v. State, 279 Ga. 365, 614 S.E.2d 31 (2005); Sams v. State, 688 N.E.2d 1323 (Ind.Ct.App. 1997); State v. Harvey, 318 N.J.Super. 167, 723 A.2d 107 (1999); State v. Henton, 121 Ohio App. 3d 501, 700 N.E.2d 371 (1997); Tamez v. State, 11 S.W.3d 198 (Tex.Crim.App.2000); State v. Johnson, 90 Wash.App. 54, 950 P.2d 981 (1998); and People v. Swint, 225 Mich.App. 353, 572 N.W.2d 666 (1997).
[8] See Kentucky Revised Statutes (KRS) 527.040.
[9] 519 U.S. at 175, 117 S. Ct. 644.
[10] Id. FRE 403 is virtually identical to Kentucky Rules of Evidence (KRE) 403. FRE 403 provides that "[a]lthough relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." KRE 403 similarly provides that "[a]lthough relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of undue prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, or needless presentation of cumulative evidence." At least for purposes of the case at hand, we perceive the minor distinctions between FRE 403 and KRE 403 to be mere distinctions without a difference.
[11] 519 U.S. at 175, 117 S. Ct. 644. Of course, a true stipulation requires agreement by both parties. See BLACK'S LAW DICTIONARY (8th ed.2004) (defining stipulation as "[a] voluntary agreement between opposing parties concerning some relevant point...."). In cases where one party does not agree to the proposed stipulation, such as in the case at hand, the erstwhile stipulation is actually an admission. Id. (defining admission as "[a]ny statement or assertion made by a party to a case and offered against that party; an acknowledgment that facts are true.").
[12] 519 U.S. at 177, 117 S. Ct. 644.
[13] Id.
[14] Id. at 191, 117 S. Ct. 644.
[15] Id. at 178-79, 117 S. Ct. 644. FRE 401 defines relevant evidence as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." FRE 402 provides that "[a]ll relevant evidence is admissible...." KRE 401 and 402 are identical to their federal counterparts in all pertinent aspects. Thus, we likewise conclude that the specific nature of Anderson's previous felony offenses had at least some probative value.
[16] 519 U.S. at 185, 117 S. Ct. 644.
[17] Id. at 189, 117 S. Ct. 644.
[18] Id. at 190, 117 S. Ct. 644.
[19] Id. at 191, 117 S. Ct. 644.
[20] Id.
[21] See n. 7.
[22] Walker, 285 Ill. Dec. 519, 812 N.E.2d at 348-49 ("See State v. Ball, 756 So. 2d 275, 278 (La. 1999) (state statute required proof of a particular felony); State v. Jackson, 139 N.C.App. 721, 535 S.E.2d 48 (2000) (state statute specifically allowed prior felony to be proven by record of conviction); State v. Jackson, No. 02AP-468, 2003 WL 1701188 (Ohio App., March 31, 2003) (to prove the offense of `possession of a weapon under disability,' the prosecutor had to prove prior drug conviction).").
[23] Dickerson, 174 S.W.3d at 463 (citing Old Chief for the proposition that "[o]f course, Appellant could have avoided the admission of either judgment by simply stipulating to the convictions.").
[24] Anderson raises no Old Chief-related argument as to the PFO proceedings in circuit court.
[25] Barnett v. Commonwealth, 979 S.W.2d 98, 103 (Ky. 1998).
[26] Kentucky Rules of Criminal Procedure (RCr) 9.24.
[27] 514 U.S. at 192 n. 11, 115 S. Ct. 1331 ("In remanding, we imply no opinion on the possibility of harmless error, am issue not passed upon below.").
[28] See, e.g., United States v. Daniel, 134 F.3d 1259 (6th Cir.1998); United States v. Taylor, 122 F.3d 685 (8th Cir.1997).
[29] Anderson v. Commonwealth, 231 S.W.3d 117, 122 (Ky.2007).
[1] 18 U.S.C. § 921(a)(20)(A) states that the term "crime punishable by imprisonment for a term exceeding one year" excludes "Federal or State offenses pertaining to antitrust violations, unfair trade practices, restraints of trade, or other similar offenses relating to the regulation of business practices."
[2] Black's Law Dictionary (8th ed.2004) defines stipulation as a "voluntary agreement between opposing parties concerning some relevant point...."
Webster's New World Dictionary (Second College Edition 1979) defines stipulation as the "point or condition agreed upon, as in a contract." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1918512/ | 764 A.2d 725 (2001)
Joanne S. OHMS
v.
STATE of Rhode Island DEPARTMENT OF TRANSPORTATION et al.
No. 99-187-Appeal.
Supreme Court of Rhode Island.
January 19, 2001.
*726 Present WEISBERGER, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.
Susan Carlin, Providence, for Plaintiff.
Ronald Langlois, Lauren D. Wilkins, George H. Rinaldi, Richard B. Woolley, Providence, for Defendant.
OPINION
PER CURIAM.
This case came before the Court for oral argument on December 5, 2000, pursuant to an order that had directed both parties to appear in order to show cause why the issues raised by this appeal should not be summarily decided. After hearing the arguments of counsel and examining the memoranda filed by the parties, we are of the opinion that cause has not been shown and that the issues raised by this appeal should be decided at this time. The facts insofar as pertinent to this appeal are as follows.
On or about August 5, 1994, plaintiff, Joanne S. Ohms (plaintiff), leased a moped from Aldo's Mopeds, Inc. (Aldo's) to tour Block Island. She signed a lease agreement that contained the following warning:
"Lessee acknowledges that operation of the leased property entails risk of accidental bodily injury to Lessee or Lessee's passengers due to the inherent danger in operation of said property due to its unique design, characteristics and the hazardous travel conditions presented [on] Block Island. Lessee agrees to comply with all State regulations, statutes and laws with the operation, use and possession of this moped, wear a helmet and eyewear [sic] at all times and remain on paved roads."
The plaintiff had driven a moped on Block Island approximately four times before leasing one this time from Aldo's.
After test driving the moped to determine whether it was properly functioning, plaintiff explored a portion of the island that she had not previously explored. During the course of her tour, she went on a road called Mohegan Trail. She had not previously been on this road, either on a moped or in a car. As she entered a turn leading to Mohegan Trail, her moped tipped and "went down" on the road. After she fell, plaintiff noticed a large amount of gravel, pebbles, and debris in the road. She contends that the moped "went down" as a result of hitting the gravel, pebbles, and debris. The plaintiff suffered a shoulder injury and a large gash, multiple abrasions, and contusions on her right leg.
The plaintiff brought an action against Aldo's for negligence, alleging that it had failed to warn her of known and/or foreseeable conditions that existed on roads on which people might drive a moped on Block Island, where the lease had taken place. The plaintiff did not contend before the Superior Court that there was any defect in the moped itself.
On March 5, 1999, a justice of the Superior Court granted Aldo's motion for summary judgment, holding that Aldo's did not have a duty to warn lessees of its vehicles about dangerous conditions that exist on public roads, upon which they might travel. The motion justice further noted that the lease agreement signed by plaintiff warned her about the dangers inherent in operating a moped, including the hazardous road conditions on Block Island.
*727 The plaintiff appealed from the entry of summary judgment in favor of Aldo's. She appealed, even though all the issues in the case had not been decided, pursuant to an order entered by the trial justice in accordance with Rule 54(b) of the Superior Court Rules of Civil Procedure, indicating that there was no reason for delay.
In reviewing the granting of summary judgment, this Court is bound by the same rules and standards as are applicable to the motion justice:
"It is well settled that this Court reviews the granting of a summary judgment motion on a de novo basis. Marr Scaffolding Co. v. Fairground Forms Inc., 682 A.2d 455, 457 (R.I.1996). In conducting such a review, * * * `we will affirm a summary judgment if, after reviewing the admissible evidence in the light most favorable to the nonmoving party, we conclude that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law.'" Woodland Manor III Associates v. Keeney, 713 A.2d 806, 810 (R.I.1998) (quoting Rotelli v. Catanzaro, 686 A.2d 91, 93 (R.I.1996)).
The question of the existence of a duty is one of law to be decided by the trial or motion justice. See Hennessey v. Pyne, 694 A.2d 691, 697 (R.I.1997); Banks v. Bowen's Landing Corp., 522 A.2d 1222, 1224 (R.I.1987). We held in Ferreira v. Strack, 636 A.2d 682, 687-89 (R.I.1994), that an abutting owner has no duty to control traffic or to provide supervision thereof on a public highway. We further held that there was no duty to warn the parishioners of a church about the lack of traffic control on the highway adjacent to the church. See id. at 689. Similarly, we conclude that there is no duty on the part of the lessor of a vehicle to warn the lessee of such vehicle of hazards that may be encountered on the various highways over which the lessee may travel. Even in a limited area such as Block Island, it is scarcely the obligation of a lessor to know the condition of all the highways, roadways, and trailways upon which a lessee may travel. We are of the opinion that the motion justice was correct in finding that the warning given to the plaintiff was adequate to apprise her of the roadway dangers that she might encounter.
Consequently, the appeal of the plaintiff is denied and dismissed, and the summary judgment entered in the Superior Court is hereby affirmed. The papers in the case are remanded to the Superior Court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919891/ | 91 B.R. 932 (1988)
In re HUDSON OIL COMPANY, INC., Hudson Refining Company, Inc., Hudson Van Oil Company of Kansas City, Inc., Hudson Realty Company, Inc., Hudson Stations, Inc., Hudson Van Oil Co. of Florida, Inc., Hudson Oil Co. of California, Inc., Hudson Van Oil Company, Debtors.
Bankruptcy Nos. 84-20002 to 84-20009.
United States Bankruptcy Court, D. Kansas.
September 30, 1988.
*933 *934 *935 *936 Mendel Small and Scott J. Goldstein, of Spencer, Fane, Britt & Browne, Kansas City, Mo., for debtors.
Walter Kellogg, Dallas, Tex., trustee, pro se.
David Snodgrass, Neil J. O'Brien, Terri A. Hunter, Roy Morris, of Gardere & Wynne, Dallas, Tex., F. Stannard Lentz, of Lentz & Clark, Overland Park, Kan., for trustee.
David R. House, Atty., Tax Div., U.S. Dept. of Justice, Washington, D.C., Janice Miller Karlin, Asst. U.S. Atty., D.Kan., Kansas City, Kan., for I.R.S.
Thomas M. Mullinix and Joanne Stutz, of Evans & Mullinix, Kansas City, Kan., for Creditors Comm.
Carol Park Wood and William Wooley, U.S. Trustee's Office, Wichita, Kan.
MEMORANDUM OPINION AND ORDER
BENJAMIN E. FRANKLIN, Chief Judge.
This matter came for hearing on November 4 & 5, 1987, upon the trustee's second amended motion to resolve the debtors' federal tax, interest, and penalty for the taxable year ending October 31, 1983. The trustee, Walter Kellogg, appeared in person and by and through counsel, Neil J. O'Brien, Terri A. Hunter, and Roy Morris, of Gardere & Wynne, Dallas, Texas. The Internal Revenue Service appeared by and through counsel, David R. House, Trial Attorney, Tax Division for the United States Department of Justice, and Janice Miller Karlin, Assistant United States Attorney for the District of Kansas. The creditors committee appeared by and through its counsel, Thomas Mullinix and Joanne Stutz of Evans & Mullinix, Kansas City, Kansas. The United States Trustee's Office appeared by and through counsel, William Wooley.
FINDINGS OF FACT
Based upon the stipulations, the testimony of witnesses, the exhibits, pleadings, and the record filed herein, the Court finds as follows:
1. Hudson Oil Company, Inc. (hereinafter referred to as "Hudson") is a Kansas corporation with its principal place of business located at 4720 Rainbow, Shawnee Mission, Kansas. Hudson's employer identification number is XXXXXXXXX. Hudson Refining Co., Inc. is a Delaware corporation with its principal place of business located at 4720 Rainbow, Shawnee Mission, Kansas. Hudson Refining's employer identification number is XXXXXXXXX. Hudson Refining is an 80% or more controlled subsidiary of Hudson. Hudson and Hudson Refining filed a consolidated federal income tax return on June 9, 1986, utilizing the accrual method of accounting for the taxable year ending October 31, 1983.
2. On January 3, 1984, debtor filed a petition in this Court for protection under Chapter 11 of Title 11, United States Code. The debtor's tax return for the 1983 tax year was due on January 15, 1984. On January 13, 1984, the debtor-in-possession filed an Application for Automatic Extension of Time to File Corporation Income Tax Return, Form 7004.
3. On March 6, 1984, Walter Kellogg was appointed as trustee to administer debtor's estate. At the time of his appointment, the trustee was unaware of the filing of the Application for Automatic Extension.
4. On March 9, 1984, the trustee selected Dan B. Lain, P.C. (later becoming Lain, Faulkner & Company) as his operations and financial manager. The trustee delegated to Lain the responsibility of filing the federal income tax returns and directed Lain to examine the books and records as soon as possible. Lain became aware of the application for extension of time to file the 1983 return sometime after March 19, 1984. The debtors received a letter from the IRS dated March 19, 1984, stating that extension would expire on March 29, 1984, unless the debtors immediately paid their estimated tax liability. Lain responded to *937 the IRS that no payments could be made toward the tax liability shown on the extension because the tax due was a pre-petition debt subject to the automatic stay.
5. Lain then retained James Yarmchuk, P.C. to prepare and file the debtors' 1983 tax return. Yarmchuk was a highly qualified and competent tax accountant, who both the trustee and Lain had used on several prior occasions. At the time he was retained, Yarmchuk believed that the 1983 return was already past due. Both Lain and Yarmchuk testified that they found that the books and records were in somewhat disarray as a result of the companies' filing of bankruptcy.
6. By April or May of 1984, Yarmchuk testified that he made a preliminary conclusion that there would be no taxable 1983 income for the debtors. Furthermore, Yarmchuk testified that he wanted to file a complete and accurate return, but because of the condition of the books and the shortcomings of the accounting system, he was concerned about the integrity of the numbers. In order to file a complete and accurate return, Yarmchuk testified that he wanted to wait at least until Price Waterhouse & Company completed its audit report of the companies' financial statement for the period January 1, 1983 to January 3, 1984, and the Department of Labor (DOL) completed its calculations. Yarmchuk advised the trustee of his concerns about the integrity of the numbers and the absence of the DOL calculations. The trustee testified that he relied on Yarmchuk's advice and judgment concerning the timing of the filing of the return; and decided not to file the return until receipt of the audit from Price Waterhouse & Co. and the completed calculations from DOL. Price Waterhouse & Co. had been in the midst of its audit of the debtors' 1983 tax year when debtors filed for reorganization, at which time Price Waterhouse ceased its audit of debtors. In April of 1984, the trustee authorized Price Waterhouse to complete the audit, which Price Waterhouse did for the period January 1, 1983 through January 3, 1984, the filing date of the petition. Price Waterhouse delivered its audit to debtors in October of 1984.
7. In addition to waiting for the Price Waterhouse audit, Yarmchuk testified that he also wanted to wait for the calculation of damages in a lawsuit between the Department of Labor (the "DOL") and Hudson. The DOL instituted suit against Hudson in 1977 asserting violations of the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act of 1938.
8. The DOL case was tried over a two-week period, from July 26, 1982 through August 2, 1982.
9. An order was entered October 14, 1983, by the Honorable Earl E. O'Connor entitled "Memorandum and Order." The order set forth findings of fact and conclusions of law wherein the court found that Hudson's actions were not in good faith nor based on reasonable grounds, but rather that the debtor had knowingly, willfully, and blatantly violated the Fair Labor Standards Act of 1938. The order further set forth a formula for calculation of damages by the DOL. In addition, the order awarded post-judgment interest on the damages at the rate of 10% per annum and awarded costs to the DOL.
10. The initial calculations were completed in November, 1984 but due to errors in calculations it was necessary to recalculate the figures which resulted in the completion date being extended to June, 1985.
11. The DOL calculated that the full amount of the liability was $12,842,472, of which $8,937,165 was Hudson's proportionate share. Sometime after June 1985 and before June 1986, the DOL and the trustee entered into a settlement agreement for payment by debtor of $5,500,000, of which $3,460,517 was Hudson's proportionate share. The settlement agreement is subject to approval by this Court.
12. At a meeting of creditors on August 1, 1984, Lain reported to the creditors, including IRS' counsel, Jan Karlin, on the status of the preparation of the 1983 return. Lain also informed the IRS that the filing of the return would be delayed because of the lack of progress in completing the DOL calculations. At subsequent creditors' *938 meetings, Lain updated creditors on the progress of preparation of the 1983 return. Lain reported that there would be no tax liability because of the DOL litigation. Lain also reported that he felt there would be a reasonable position for taking a deduction for the Department of Energy ("DOE") litigation. Lain and Karlin had discussions concerning the filing of the returns. By letter dated June 21, 1985, Karlin informed Lain that he should file any federal tax return in Wichita, Kansas. By subsequent letter dated June 25, 1985, Karlin stated that the returns should now be filed in St. Louis, Missouri instead of Wichita. This Court set the last date for filing proof of claims in the chapter 11 proceeding at January 4, 1985. On January 4, 1985, the IRS filed a proof of claim estimating federal income tax for the 1983 tax year at $1,028,902. The IRS' proof of claim did not provide for any type of penalty, late-filing or otherwise.
13. Yarmchuk completed the return on June 9, 1986. The return reflected a net loss for the 1983 tax year of $5,933,201. Among the items reflected on the return, the debtor claimed the following adjustments to income:
a. contained within salaries expense was the amount of $3,460,517 which represented the settlement amount reached with the DOL during June of 1985 through June of 1986. This portion of the salaries expense was not separated out on the return, nor was it disclosed on the return that this portion was attributable to the DOL settlement. Yarmchuk testified that he thought the damages in the DOL lawsuit were deductible in the 1983 tax year because the order entered on October 14, 1983 in that litigation met the all events test, which governs the timing of deductions for contested liabilities, and that the deduction had to be taken in the 1983 return or it would otherwise be lost; and
b. contained within cost of sales and interest expense was the amount of $7,388,360 for violations asserted by the Department of Energy (DOE) against debtor. This portion of the cost of sales and interest expense was not separated out on the return, nor was it disclosed on the return that this portion was attributable to the DOE settlements.
14. The DOE deduction arose out of the following scenario. On May 1, 1981, the DOE issued a Notice of Probable Violation ("NOPV") to Hudson Refining alleging Hudson Refining violated DOE regulations by charging excessive prices for gasoline. The DOE amended the NOPV twice through Proposed Remedial Orders ("PROs"). In its most recent PRO, filed March 17, 1983, the DOE alleged Hudson Refining violated DOE regulations and avoided its obligation under the Entitlements Program as a result of Hudson Refining's treatment in its Refinery's Monthly Reports of certain purchases and sales of crude oil during August 1980 through December 1980.
15. President Richard Nixon imposed economy wide price controls on August 15, 1971. By the Spring of 1974, coincident with the first Arab oil embargo, price controls remained only on the energy industry.
16. Beginning with the Emergency Petroleum Allocation Act in 1973, virtually all enabling legislation required protection for "small refiners," a category that included the debtor's refinery.
17. The two principal programs that the responsible agency promulgated to relieve the burden of price controls from small refiners were the "Buy/Sell" Program and the "Entitlements" Program. The Buy/Sell Program required refiners with access to imported crude oil to sell oil to small refiners, including debtor, which were without such access.
18. The Entitlements Program recognized that, with different maximum legal prices set for the same quality of crude oil, some refiners might have an unfair cost advantage over others. Thus, the program required refiners who had a greater supply of low priced crude than the national average to buy "entitlements" from refiners with high priced sources. Superimposed on *939 this was a "small refiner bias," which granted small refiners additional entitlements regardless of their crude costs. The Entitlements Program recognized different maximum legal prices in effect during that period of time for the same quality of crude oil, would result in some refiners having unfair cost advantages over others. The program required refiners who had a greater supply of low priced crude than the national average to buy "entitlements" from refiners with high priced sources.
19. In its PRO, the DOE alleged Hudson Refining had failed to report purchases of 60,336 barrels of controlled crude oil and found Hudson Refining had avoided its obligation under the Entitlements Program in the amount of $1,186,597, plus interest.
20. Hudson Refining filed a Statement of Objections to the PRO, on May 23, 1983.
21. Of the 60,336 barrels Hudson Refining allegedly failed to report, Hudson Refining admitted, in the Statement of Objection, failing to report 49,176 barrels for which Hudson Refining was obligated in the amount of $942,556, plus interest for the period August 1980 to December 1980. Hudson argued in the alternative that the entire PRO was in error for failure to set forth a prima facie case.
22. On July 27, 1983, Hudson filed a reply to the DOE's response. In the reply, Hudson argued the entire proceeding must be dismissed due to a recent U.S. Supreme Court decision which rendered the DOE regulations unconstitutional. On July 1, 1985, the Office of Hearings and Appeals issued its decision and affirmed with the modifications of the PRO.
23. As stated earlier, Yarmchuk included a deduction on the 1983 return of $7,388,360 for the DOE litigation. Of the $7,388,360 deduction, $1,388,360 reflected a liability of $942,556, plus accrued interest of $462,568, admitted by Hudson in the case. The interest was understated by $16,764, bringing to a total of $1,405,124, the admitted liability and accrued interest. As for the remaining $6,000,000, Yarmchuk testified that he understood from company personnel that Washington legal counsel representing Hudson Refining had admitted liability on other issues involving at least this amount, and that counsel had offered to settle the DOE litigation for a total of $7,400,000.
24. Yarmchuk testified that he also included a deduction for various breach of contract actions filed against it in the amount of $970,000 based on information from the Price Waterhouse financial report. The financial statement listed the liabilities as contingent, contested, and uncertain in amount. A final order had not been entered in these actions as of October 31, 1983. Furthermore, Yarmchuk testified that he included a deduction for loss of crude oil entitlements because the debtors had accrued that amount on their books as a receivable which was considered uncollectible. However, in proposing the deduction, Yarmchuk was never advised that the crude oil entitlements had never been taken into income by the debtors.
25. After Yarmchuk completed the return in June of 1986, he presented it to Lain, who signed it and filed the return with the IRS on June 9, 1986.
26. On the same date the return was filed, June 9, 1986, the trustee requested a prompt audit of the debtors' 1983 tax liability pursuant to 11 U.S.C. § 505(b). Revenue Agent Joseph Dillingham began auditing the return in June of 1986. When he first arrived at the debtors' office, he was shown the return, Yarmchuk's adjustments to the return, the companies' general ledger, and documentation supporting the deductions. The debtors' personnel fully cooperated with Dillingham. During the audit, Dillingham discussed with the debtors' personnel and the trustee the reasons for the late filing and the deductions.
27. On February 6, 1987, the IRS issued a letter (the "90-day letter") asserting that the debtors improperly deducted four items on their 1983 return, and that the debtors failed to include imputed income of $70,794 and $104,358 in the taxable years October 31, 1982 (the "1982 tax year") and the 1983 tax year, respectively. The four deductions disallowed by the IRS included a deduction for a salaries expense of $3,460,517 arising out of the Department of Labor *940 litigation, a deduction for a breach of contract liability in the amount of $970,000, a deduction for cost of sales and interest expense of $7,388,360 arising out of assertions of liability by the Department of Energy, and a deduction for lost entitlements of $566,225. As a result of the IRS' proposed disallowance of the four deductions and its assertion of the two imputed interest income items, later conceded by the IRS, the IRS determined debtors had a tax due for the 1983 tax year. The IRS eliminated the asserted tax liability by applying net operating loss carrybacks from the taxable years ended October 31, 1984 and 1985 (the "1984 and 1985 tax years", respectively), thus reducing to zero the taxable income for 1983. Although the IRS acknowledges there is no tax due for the 1983 tax year, the IRS nevertheless asserts four penalties, calculated on the alleged tax the IRS determined to be owing for 1983 before application of carrybacks. The IRS asserted four penalties in the 90-day letter: (1) a late-filing penalty, pursuant to § 6651(a)(1) of the Internal Revenue Code of 1954 ("IRC"); (2) a negligent underpayment penalty, pursuant to IRC § 6653(a)(1)(A); (3) a negligent underpayment penalty calculated as a percentage of the interest due under IRC § 6601 and dependent upon the imposition of the first negligent underpayment penalty, pursuant to IRC § 6653(a)(1)(B); and (4) a substantial understatement penalty, pursuant to IRC § 6661(a)(b)(1). The IRS asserted the late filing penalty because the trustee filed the 1983 return after the due date of the 1983 return. The IRS asserted the negligent underpayment penalties because, in the IRS' opinion, the deficiency (the difference between the tax determined by the IRS and the zero tax reflected on the debtors' 1983 return) was due to the debtors' negligence or disregard of rules in preparing their 1983 return. The IRS asserted the substantial understatement penalty because the deficiency, as calculated by the IRS, exceeded 10% of the zero tax due reflected on the debtors' 1983 return.
28. The net effect of the IRS adjustments to income was to increase taxable income to $6,480,876, before the allowance of the net operating loss carrybacks for the taxable years ending October 31, 1984, and October 31, 1985. The tax liability on the $6,480,876 was $2,752,489. After crediting investment credit carry-over of $572,963, the 1983 tax year investment credit of $126,733, and an alcohol fuel credit of $72,462, the IRS found the resulting income tax liability to be $1,980,331. The IRS computed penalties based on the tax liability of $1,980,331.
29. Dillingham testified that the normal procedure in an audit is for IRS to first send out a 30-day letter advising the taxpayer of an opportunity for an appeals conference, and, if the matter is not settled, the IRS then sends out a 90-day letter. However, Dillingham testified that due to the deadline set by the debtors' request for early determination, the normal procedure in first sending a 30-day letter would have been difficult to follow.
30. On September 16, 1987, the United States filed an amended proof of claim providing that the income tax liabilities for 1983 had been reduced to zero and listing the penalties in the total amount of $1,097,064.66.
31. Before assessing the penalties, the IRS did not take into account the fact that the debtors were entitled to a prior refund. Back on January 14, 1983, the IRS determined that the debtors were entitled to a refund of $895,601 for the taxable year 1980. More than a year ago, the Joint Committee on Taxation advised the IRS that it had no objection to the refund. Since then, the IRS has withheld the refund pending determination of the debtors' tax liability for the 1983 tax year. The IRS has asserted it will petition the Court to lift stay to offset the refund against any liability of the debtors for the 1983 tax year.
32. Before assessing the penalties, the IRS also did not offset a $49,156 refundable alcohol fuel credit claimed on the 1983 return against the 1983 tax liability. The parties stipulate that the 1983 return, as filed, properly showed a refundable fuel credit in the amount of $49,156.
*941 33. On April 16, 1987, the debtors filed a motion to resolve federal 1983 tax liability pursuant to § 505 of the Code. The debtors filed the motion (1) in objection to the IRS proof of claim, (2) in opposition to the penalties asserted in the 90-day letter, and (3) for the $895,601 refund for 1980. On June 11, 1987, the debtor filed an amended motion to resolve federal 1983 tax liability asserting over $7,000,000 of additional adjustments to reduce the debtors' net taxable income, thereby reducing the penalties. On October 28, 1987, the debtors filed a second amended motion to resolve federal 1983 tax liability. The motion asserted the following additional adjustments to income:
a. Write-off in the tax year by debtor of gasoline inventory for gasoline stations closed during year ended October 31, 1983 of $33,336;
b. Write-off in the tax year by debtor of merchandise inventory of gasoline stations closed during year ended October 31, 1983 of $185,613;
c. Write-off in the tax year by debtor of abandoned equipment for gasoline stations closed during the 1983 tax year of $85,892;
d. Addition in the tax year by debtor to workmen's compensation expense of $24,081;
e. Wire transfer in the tax year by debtor not recorded properly of $77,464;
f. Interest expense incurred by Hudson Refinery Co., Inc. of $16,764, on admitted liability to DOE;
g. Understatement of costs of goods sold by Hudson Refinery Co. of $46,510;
h. Write-off by Hudson Refinery Co., Inc. of chemical inventory of $123,983;
i. Additional health plan expense of $10,000;
j. Write-off as a deduction of all or part of the $7,498,957 tax basis of the Cushing Refinery because the refinery was permanently retired from use in debtor's business during the 1983 tax year, or, as of that date, had no remaining useful life as a refinery in debtor's business as a result of obsolescence.
k. Deduction by debtor of additional state income taxes due for the 1983 tax year of $47,500.
34. The parties entered into the following stipulations of fact just prior to trial to resolve several issues:
a. Debtors did not have imputed interest income of $70,794 and $104,538 in the 1982 and 1983 tax years, as asserted by the IRS in its 90-day letter;
b. Debtors may deduct from their taxable income, if any, in the 1983 tax year the following items:
(1) $14,059 for obsolete or abandoned gasoline inventory;
(2) $33,193 for obsolete or abandoned merchandise inventory;
(3) $77,464 for a gasoline purchase expense;
(4) $24,081 for workmen's compensation expense;
(5) $10,000 for health plan expense; and
(6) $47,500 for state income taxes.
35. In addition, in order to complete the trial without further postponement, the trustee chose not to put on evidence of the following deductions claimed in the Second Amended Motion to Resolve Debtors' Federal Tax Liability and therefore concedes three issues: (1) $19,277 of gasoline inventory; (2) $152,420 of merchandise inventory; and (3) $46,510 of supplies inventory.
36. This matter came for hearing on November 4 & 5, 1987, upon the trustee's second amended motion to resolve the debtors' federal tax, interest, and penalty for the taxable year ending October 31, 1983. Much of the hearing centered around the debtors' deduction of all or part of the $7,498,957 tax basis of the Cushing Refinery. The trustee contended that the refinery was permanently retired from use in the debtors' business during the 1983 tax year, or, as of that date, had no remaining useful life as a refinery in the debtors' business as a result of obsolescence.
*942 37. On February 1, 1977, Hudson Refining purchased the refinery at Cushing, Oklahoma (the "refinery") for approximately $12,000,000. The refinery had a capacity of 19,500 barrels per day. It had a catalytic cracker, an alkyl unit, and a coker. The refinery processed petroleum crude oil and made refined product gasoline, distillates, or diesel, heating oil, propane, and coke. The refinery was equipped to refine "sweet crude," meaning a crude with a low sulphur content, as opposed to a "sour crude." The refinery was the principal asset of the subsidiary, Hudson Refining Co. Inc.
38. The refinery operated profitably through October 31, 1980, due largely to the receipt of income from the Entitlements Program. The refinery received $65,927,979 from the Entitlements Program from November of 1977 through January of 1981. For each of those years, the refinery posted a profit. After President Reagan's abolition of price controls and the Entitlements program on January 27, 1981, the refinery operated at losses in calendar years 1981 and 1982 of $10,729,069 and $13,293,876, respectively. During this time period, other oil companies were shutting down many refineries for lack of positive cash flow. During 1982, 30 to 40 refineries closed. By 1983, approximately 60 refineries had closed. By 1985, a total of 150 refineries had closed. Aside from the cutoff of entitlements, other factors were severely depressing the oil and gas refining industry during the early 1980's. Car manufacturers produced small cars that required less fuel. The demand for leaded gasoline reduced dramatically. Car manufacturers provided autos with catalytic converters which are highly sensitive to leaded gasoline. The Environmental Protection Agency was moving toward allowing the production of only lead-free gasoline, again forecasting the obsolescence of leaded gasoline [The Cushing Refinery produced mostly leaded gasoline].
39. In January of 1982, Hudson shut down their refinery in order to accomplish a turnaround. A "turnaround" is done every 2 to 2½ years in order to make necessary maintenance and repairs. In May of 1982, Hudson restarted and ran the refinery through November of 1982.
40. In October of 1982, the First National Bank of Oklahoma, the agent and lead bank in Hudson's bank credit lines, advised Hudson that it was canceling the refinery's letter of credit. Hudson shut down the refinery in December of 1982, within the 1983 tax year. At the time Hudson shut down the refinery in December of 1982, both Forest Fugua, plant manager of the refinery, and Thomas Raimo, president of Hudson, thought it would eventually reopen. After the shutdown, Hudson took steps to protect the refinery equipment.
41. Raimo testified, however, that by the end of the 1983 tax year, he considered that the refinery was closed permanently for the following reasons: (a) officers of Hudson were unable to obtain alternate financing for the refinery; (b) the loss of entitlement income; (c) the declining market for gasoline products, specifically leaded gasoline; (d) the refinery's inability to produce lead-free gasoline without significant capital expenditures; (e) the necessity for significant capital expenditures to just restart the refinery; and (f) emerging environmental problems. Other Hudson personnel including Fugua and Dan McClean, vice-president of Hudson, testified in support of Raimo's conclusion that the refinery was probably permanently shut down. However, Raimo never told Fugua that the shut-down was permanent.
42. Throughout the course of the 1983 tax year, Hudson Refining began terminating most of the refinery's employees. However, Hudson never advised the union workers that the shut-down was permanent or that severance pay would be forthcoming as of October 31, 1983.
43. Martin Sallay, of Price Waterhouse, testified that the refinery had not been written off on Hudson's books at the time of his audit in 1984. In fact, working papers prepared by Sallay contain a reference to a conversation Sallay had with Raimo concerning severance pay for the workers. Sallay noted that the severance liability had never been recorded "because it was expected *943 that the refinery would reopen, employees would be rehired, and no severance pay would be paid. Mr. Raimo stated that as a result of the bankruptcy it appears that the refinery will not open and as a result the company will have a severance pay liability." In the audit report issued by Price Waterhouse for the period from December 31, 1982 to January 4, 1984, there is no mention that the main asset of Hudson Refining Company, the refinery, was retired, abandoned, or obsolete. Further, the debtor still carries the refinery on its books in a fixed asset account and takes depreciation on it.
44. Revenue Agent Dillingham testified that he reviewed Hudson's books and records during his audit of the 1983 return. During that examination, he found no indication that the refinery was either abandoned, retired, or considered obsolete in 1983.
45. The debtor did not take a deduction for the refinery on the original 1983 tax return. In fact, the first mention, in writing, of a retirement, abandonment, or obsolescence was in the debtors' first amended motion to resolve federal 1983 tax liability filed in June of 1987.
46. The Cushing Refinery used a platinum catalyst. This type of catalyst can be removed and sent to a plant in order to reclaim the platinum. The record presents conflicting testimony concerning the time frame in which Hudson removed the catalyst from operation. Although he could not know first hand since he was not appointed until March of 1984, the trustee testified that he thought Hudson removed the catalyst in October of 1983, during the 1983 tax year. However, Fugua, the plant manager whose office is actually located at the refinery, testified that Hudson did not remove the catalyst until October of 1984 or 1985, clearly outside the 1983 tax year.
47. After the banks cut off Hudson Refinery's letter of credit, Hudson was unable to obtain further financing to purchase crude oil and operate the refinery. In the summer of 1983, Hudson attempted to sell the refinery and soon entered into negotiations with one prospective buyer for an option to purchase the refinery. After the bankruptcy, the trustee also attempted to sell the refinery. After a shutdown of over five years, the trustee is currently attempting to sell the refinery for approximately $4,000,000.
48. The parties stipulate that, at the close of the 1983 tax year, the Cushing Refinery had an unrecovered tax basis of $7,498,957.
49. Both the debtors and the government produced expert testimony as to the value of the refinery at the end of the 1983 tax year. Ben L. Malek of P.C.I. Consultants, Inc. testified on behalf of the debtors. PCI is a firm of professional engineers headquartered in Houston, Texas. The firm has over 20 years of experience in serving the refinery, gas processing, petrochemical, insurance, and banking industries. Their work has encompassed management consulting, design, construction project management, and the market appraisal of industrial properties, including numerous small to intermediate U.S. refineries. PCI was retained by Hudson Refining to prepare a "market" value appraisal of the Cushing Refinery for the fourth quarter of 1983. To arrive at the market value, PCI relied heavily on information supplied by Hudson during an on-site visit on June 18, 1987, and on file information from previous work performed for Hudson. Apparently, PCI had done an appraisal of the "replacement" value of the refinery back in 1984 for the trustee (See Government Exhibit S 1984 PCI Appraisal). Malek testified that he thought that the trustee would use the 1984 appraisal in attempting to sell the refinery back in 1984.
50. Malek of PCI testified that the fair market value of the refinery as of October 31, 1983 was merely salvage value of $462,000. Malek prepared a detailed report that the refinery could not operate profitably, and therefore, a "willing buyer" would not pay more than salvage for the refinery (See Debtors' Exhibit 11 1987 PCI Appraisal).
51. Certainly Malek's 1987 appraisal of $462,000 is somewhat suspect in light of his *944 prior 1984 appraisal of "as is" replacement value of over $12,000,000. Furthermore, in the new 1987 appraisal, Malek took into account $1,600,000 of environmental costs and that certain equipment was missing. The 1984 appraisal found that any environmental costs would be minimal and that all the equipment was present and in good condition. Certainly the 1984 appraisal is more accurate as to the condition of the refinery in 1983 than the 1987 appraisal just because it is so much nearer in time.
52. Malcolm Turner of Turner, Mason & Company, testified on behalf of the government. Turner did not prepare an appraisal. Rather, he presented a model of operations by a fictitious entity utilizing known raw materials, product prices, and projecting costs within the industry's norms. The report indicated that the refinery could have been generating a positive cash flow for the period from 1982 through 1986. Turner testified that it was his opinion that the fair market value of the refinery was in excess of $7,500,000.
53. On cross-examination, he admitted that the report did not include a complete set of numbers. Furthermore, he attempted to demonstrate how the model worked on the stand, with very little success.
54. Aside from the refinery issue, the hearing also addressed the deductibility of $85,892 worth of "wing signs." In 1981, Hudson had purchased wing signs for use in advertising at its 315 gasoline stations. During the fiscal year 1983, Hudson began closing stations. As of October 31, 1983, Hudson only had 90 to 98 stations open and had not used $85,892 worth of these signs. A special paint used to paint Hudson's logo on these signs rendered the signs useless to anyone other than Hudson. In review of Hudson's books and records, Revenue Agent Dillingham discovered that Hudson had not written off the wing signs on the books until March 29, 1984.
CONCLUSIONS OF LAW
It has been opinionized by some that the Internal Revenue Code is one of the most complicated documents ever written. From my experience, the same can be said about the Bankruptcy Code. Thus, if you can just visualize how complex matters become whenever the two Codes become intertwined, you can imagine this case; the case to determine Hudson Oil's tax, interest, and penalty liability for the tax year ending on October 31, 1983. The debtors' or trustee's [this Court will use these terms interchangeably throughout this opinion] numerous contentions are stated in the alternative and as a result breed issues within issues. As such, the Court deems it necessary to recount an overall outline of these contentions to aid in fully understanding how all the issues arise.
The debtors raise the following four contentions as a complete bar to any tax, interest, or penalty liability: (1) that the IRS failed to timely notify the trustee of the alleged penalties; (2) that the trustee did not have a duty to file the 1983 return; (3) that the trustee acted reasonably with respect to the preparation and filing of the 1983 return; and (4) that Hudson permanently retired the refinery in 1983 giving rise to a deduction of at least $6,200,000.
The debtor/trustee further alleges that if this Court finds for the IRS and against the debtors on all four contentions listed above, or finds that the refinery was permanently retired, but allows a deduction of less than $6,200,000; then in that event, the debtors raise the following additional contentions: (1) that the IRS' amended proof of claim is invalid with respect to the late-filing penalty; (2) that the IRS' claim for a negligent underpayment penalty pursuant to § 6653(c)(1)(B) is invalid because the underlying interest upon which the penalty is based does not accrue; (3) that the IRS must offset the 1980 overpayment of $895,601, plus accrued interest and the 1983 refund claim against the 1983 tax liability before computing penalties; (4) that the IRS did not meet their burden of proof; (5) that the debtors can deduct the DOL liability; (6) that the debtors can deduct the DOE liability; and (7) that the debtors can deduct the $85,892 of wing signs.
*945 A. JURISDICTION
This Court has jurisdiction to "determine the amount or legality of any tax, any fine or penalty relating to a tax, or any addition to tax, whether or not previously assessed, whether or not paid, and whether or not contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction." See 11 U.S.C. § 505(a)(1). In addition, this Court has jurisdiction over this motion and these parties pursuant to 28 U.S.C. § 157, 28 U.S.C. § 1334, and 26 U.S.C. § 6871. Venue is proper in this district.
B. BURDEN OF PROOF
Outside bankruptcy, the burden of proof with respect to a claimed deduction is normally on the taxpayer. See New Colonial Ice Co., Inc. v. Helvering, 292 U.S. 435, 440, 54 S.Ct. 788, 790, 78 L.Ed. 1348 (1934); and Welch v. Helvering, 290 U.S. 111, 115, 54 S.Ct. 8, 9, 78 L.Ed. 212 (1933).
However, in the bankruptcy context, questions of burden of proof on claims or objections to claims, including tax claims, are governed by the Bankruptcy Code and Rules. A creditor's (IRS) proper filing of a proof of claim constitutes prima facie evidence of the validity and amount of the claim pursuant to section 502(a) and Rule 3001(f). Upon filing of an objection, the trustee is then called to produce evidence and show facts tending to defeat the claim. If the trustee succeeds in overcoming the prima facie effect of the proof of claim, then the burden remains on the creditor to prove the validity of the claim. See In the Matter of Seafarer Fiber Glass Yachts, Inc., 475 F.Supp. 1097 (E.D.N.Y. 1979); In re Watson, 456 F.Supp. 432, 435 (S.D.Ga.1978); In re Avien, Inc., 390 F.Supp. 1335 (E.D.N.Y.1975), aff'd, 532 F.2d 273 (2d Cir.1976); In re Koontz Aviation, Inc., 71 B.R. 608 (Bankr.D.Kan.1987); and 3 Collier on Bankruptcy ¶ 502.01[3] (15th ed. 1988).
C. TIMELINESS OF IRS' NOTIFICATION OF PENALTIES
Pursuant to section 505(b), the trustee requested that IRS determine the 1983 tax year liability. The request was made simultaneously with the filing of the return on June 9, 1986. Section 505(b)(1)(B) states that after such a request, the trustee, the debtor, and any successor to the debtor, are discharged from any liability if the "governmental unit does not complete an examination and notify the trustee of any tax due, within 180 days after such request or within such additional time as the court, for cause, permits." On December 30, 1986, this Court issued the following agreed order granting additional time of 60 days:
Now on this 30 day of December, 1986, comes on for hearing the motion of the United States for an extension of time to comply with 11 U.S.C. § 505(b)(1)(B) to the extent said statute is applicable to the facts of this case. The Court, being advised that the debtor in possession has no objection to the Internal Revenue Service (IRS) being granted an additional 60 days to complete its examination in this matter finds, without deciding whether or not under the facts of this case the IRS was required to complete the examination and notify the trustee of a tax due within 180 days after the request of the trustee, that the IRS shall be given a 60-day extension of time to complete its examination of the debtor's 1983 tax return.
The IRS did not respond until February 6, 1987, 242 days after the trustee's request on June 9, 1986. The trustee now argues that neither he, the debtors, nor any successor of the debtors can be held liable for the penalties because the IRS failed to notify the trustee of the penalties within the time prescribed by law.
The Court finds this argument is without merit for two reasons. First, the aforementioned agreed order is vague at best. It is hard to determine from reading the order when the 60-day period begins. Does the extension begin from the end of the 180 days as the trustee argues or does it begin from the date of the order, December 30, 1986? Second and in any event, this Court is not about to bar the IRS' very substantial claim just because the notice *946 may be two days late. Such a result would be highly inequitable and possibly amount to an abuse of discretion. This Court finds that the IRS substantially complied with the time requirements prescribed by section 505(b)(1)(B).
D. TRUSTEE'S DUTY TO FILE THE 1983 RETURN
The trustee contends that, under 26 U.S.C. § 6012(b)(3) (Internal Revenue Code), he had no obligation or duty to file the 1983 return because he did not have possession of or hold title to substantially all the property or business of the debtors at any time during the 1983 tax year. The trustee contends that his only obligation with respect to the 1983 return was to first furnish "information" to IRS under 11 U.S.C. § 1106(a)(6), without personal liability, which he did. As such, the trustee contends that neither he nor the debtors are liable for any of the penalties.
However, this Court is not persuaded by this argument of the trustee. First of all, the argument misconstrues both 26 U.S.C. § 6012(b)(3) and 11 U.S.C. § 1106(a)(6). Second, the argument is irrelevant and illogical since we are addressing the debtors' liability, not the trustee's individual liability.
Section 6012(b)(3) of the Internal Revenue Code governs the duty of trustees of bankrupt corporations to file tax returns and provides:
(3) Receivers, trustees and assignees for corporations. In a case where a receiver, trustee in a case under title 11 of the United States Code, or assignee, by order of a court of competent jurisdiction, by operation of law or otherwise, has possession of or holds title to all or substantially all the property or business of a corporation, whether or not such property or business is being operated, such receiver, trustee, or assignee shall make the return of income for such corporation in the same manner and form as corporations are required to make such returns.
Nowhere in this section does it state that a trustee's duty to file return is limited to those years when he held possession or title to all or substantially all the property or business during the actual tax year. On the contrary, the section clearly provides that if the trustee has property or business of the corporation now he shall file the return in the same manner as corporations are required. As such, if the trustee has all or substantially all the property of the business of a corporation and the tax return is due, the trustee should file the return even though the taxable year may have ended prior to the filing of the petition. See Otte v. United States, 419 U.S. 43, 95 S.Ct. 247, 42 L.Ed.2d 212 (1974); and Nicholas v. United States, 384 U.S. 678, 86 S.Ct. 1674, 16 L.Ed.2d 853 (1966).
In addition, section 1106(a)(6) of the Bankruptcy Code does not bar the imposition of penalties against the debtors. Section 1106(a)(6) provides that a trustee shall
(6) for any year for which the debtor has not filed a tax return required by law, furnish, without personal liability, such information as may be required by the governmental unit with which such tax return was to be filed, in light of the condition of the debtor's books and records and the availability of such information; and
Section 1106(a)(6) merely concerns the trustee's personal liability for information provided to the Internal Revenue Service. The trustee's personal liability is not at issue in this case. Rather, this Court is concerned with the debtors' liability for the penalties. Section 1106(a)(6) does not in any way limit the debtors' liability.
E. CIVIL PENALTY FOR THE LATE FILING OF THE RETURN § 6651
The trustee presents two separate arguments pertaining to the IRS' assessments of the late-filing penalty under § 6651 of the Internal Revenue Code. First, the trustee contends that the IRS' amended proof of claim as it solely pertains to the late-filing penalty is itself out of time (after the court-ordered claims bar date). Second, the trustee presents a "reasonable cause" defense to the late-filing of the return.
*947 1. Timeliness of IRS' Amended Proof of Claim
This Court set January 4, 1985, as the last day for filing proofs of claims. The IRS originally filed a proof of claim on January 4, 1985, reflecting an "estimated" income tax liability of $1,028,902. After the trustee finally completed the 1986 return in 1986 and the IRS completed their audit of the return, the IRS filed an amended proof of claim on September 16, 1987. The amended proof of claim reflected no 1983 income tax liability because of the application of the net operating losses from later years. However, the claim asserted the various penalties including the late-filing penalty.
The trustee objects to the purported amended proof of claim as it solely relates to the late-filing penalty because it states a "new" claim, and, therefore, it was filed outside the January 4, 1985 bar date. [The trustee no longer contests the other penalties on this ground.] The IRS, on the other hand, contends that the claim is merely an "amendment" to the original proof of claim, and, therefore, relates back to the timely filing of the original claim. Thus, the issue before this Court is whether a proof of claim which asserts a late-filing-penalty on the 1983 income tax is an amendment to an original proof of claim.
Generally, courts will allow amendments to proofs of claims in order "to cure a defect in the claim as originally filed, to describe the claim with greater particularity or to plead a new theory of recovery on the facts set forth on the original claim." In re International Horizons, Inc., 751 F.2d 1213, 1216 (11th Cir.1985) (citing Szatkowski v. Meade Tool & Die Co., 164 F.2d 228, 230 (6th Cir.1947); and In re G.L. Miller & Co., 45 F.2d 115 (2d Cir.1930). Still, this Court must carefully scrutinize post bar date amendments to assure that the claimant is not attempting to file a new claim under the guise of an amendment. See In re Commonwealth Corp., 617 F.2d 415, 420 (5th Cir.1980). As such, Courts permit amendments only where the original claim provided notice to the court of the existence, notice, amount of the claim and that the creditor intends to hold the estate liable. International Horizons, 751 F.2d at 1217; Walsh v. Lockhart Associates, 339 F.2d 417, 418 (5th Cir.1964).
Applying the above-mentioned principles to the present case, this Court agrees with the trustee: The claim for a late-filing penalty is an entirely new and different claim from the original proof of claim which was for income tax due. The late-filing penalty may have been based on the income tax due, but it was an addition to the tax, not a tax in and of itself. The original claim did not provide fair notice to this Court or the trustee of the existence of the penalty, nature of the penalty, or the amount of the penalty. The original proof of claim was silent as to a late-filing penalty. This Court is compelled to find that the IRS is improperly attempting to file a new claim outside the bar date under the disguise of an amendment.
IRS argues that this Court should be more liberal in allowing the purported amendment because the IRS was forced to file its original proof of claim prior to the filing of the return or the audit. As a result, the IRS asserts that, due to no fault of their own, the original proof of claim was merely an estimate of the tax liability which should allow it to amend said claim to more accurately show the debtors' liability for income taxes and penalties.
This Court would be inclined to agree with the IRS if we were addressing the negligent understatement penalty or the substantial understatement penalty. The IRS would definitely need the return and an audit to determine the existence of these types of penalties. However, the trustee has withdrawn any argument pertaining to the timeliness of the claim for these penalties. The late-filing penalty, on the other hand, is an entirely different type of penalty. At the time of the filing of the original proof of claim, the IRS knew from its own records, its March 19, 1984 letter, and its attendance at creditors meetings, that the 1983 return was late. The IRS easily could have made a claim for the late-filing penalty when it filed its original claim.
*948 2. "Reasonable Cause" for Failure to Timely File the Return
In the alternative, the trustee also submits there was "reasonable cause" for the failure to timely file the return. As stated earlier, the original due date for Hudson's tax return for fiscal year ending 1983 was January 15, 1984. See 26 U.S.C. § 6072(b). Hudson requested an automatic extension which extended the due date to April 15, 1984. On March 6, 1984, Walter Kellogg was appointed as trustee. Sometime after March 19, 1984, the IRS notified the estate that they would cancel the debtors' extension on March 29, 1984 unless the debtors immediately paid their estimated tax shown on the extension application. On June 9, 1986, the trustee filed the 1983 return, over two years past the deadline. On February 6, 1987, the IRS issued a 90-day letter and assessed, among others, a late-filing penalty pursuant to § 6651(a)(1).
Section 6651(a)(1) reads in pertinent part:
"In case of failure . . . to file any return . . . on the date prescribed therefor . . ., unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate. . . ." (Emphasis added.)
The purpose of the civil penalty is to ensure timely filing of tax returns so that tax liability can be ascertained and paid promptly. See United States v. Boyle, 469 U.S. 241, 245, 105 S.Ct. 687, 689, 83 L.Ed.2d 622 (1985). To escape the penalty, the taxpayer bears the heavy burden of proving both (1) that the failure did not result from "willful neglect," and (2) that the failure was "due to reasonable cause." Id.
The term "willful neglect" is not defined in the Internal Revenue Code. However, courts interpret the term to generally mean a conscious, intentional failure or reckless indifference on behalf of the taxpayer. See Boyle, 469 U.S. at 245-47, 105 S.Ct. at 689-91; Hatfried, Inc. v. Commissioner, 162 F.2d 628, 634 (3d Cir.1947); and Janice Leather Imports, Ltd. v. United States, 391 F.Supp. 1235, 1237 (S.D.N.Y. 1974).
In the present case, the record is completely void of any evidence indicating that the trustee's failure to file the return was willful or reckless. On the contrary, the evidence demonstrated that the trustee did all he could under the circumstances. He took over a very large business just prior to the deadline for filing the returns; he hired very competent accountants to investigate the 1983 tax liability and prepare the required return; and he filed a very long and detailed return which reported substantially all of Hudson's income for 1983. This Court finds that the trustee's failure to timely file the return was not due to any type of "willful neglect." See, e.g., In re O'Neil, 44 A.F.T.R.2d 79-5974, 79-5977 (W.D.Va.1979) (same question arose concerning bankruptcy trustee's late filing of return.)
Like the counterpart, the term "reasonable cause" is also not defined by the Internal Revenue Code. However, a relevant Treasury Regulation requires the taxpayer to demonstrate that he "exercised ordinary business care and prudence" but nevertheless was "unable to file the return within the prescribed time." See 26 CFR § 301.6651(c)(1) (1984). The Supreme Court has recently cited the regulation with approval. Boyle, 469 U.S. at 246, 105 S.Ct. at 690 and n. 4 ("Thus, the Service's correlation of `reasonable cause' with `ordinary business care' is consistent with Congressional intent, and over 40 years of case law as well.") See also Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, and n. 14, 104 S.Ct. 2778, 2782 and n. 14, 81 L.Ed.2d 694 (1984); and Fleming v. United States, 648 F.2d 1122, 1124 (7th Cir., 1981).
In his proposed conclusions of law, the trustee persuasively contends that "reasonable cause" exists for the following reasons:
Reasonable cause for late filing exists when a taxpayer, who has filed its return *949 after the due date, has done so in reliance on advice of tax counsel that the taxpayer should not file a return until all events have occurred that affect the accuracy of the return, even if occurrence of the events fall after the due date of the return.
* * * * * *
The 1983 return was due on or before March 29, 1984, the date the IRS informed Debtors that it would cancel the extension if the Debtors did not pay the estimated tax reflected on the extension. IRC § 6081(a) and (b). Since Debtors could not pay the estimated tax and Debtors advised the IRS it could not do so, the IRS cancelled the extension as of March 29, 1984. The Trustee could not have filed the return by March 29, 1984, because there was insufficient time remaining in which to file the return after the Trustee's appointment, given the condition of Debtors' books, the unavailability of the Price Waterhouse report, the incomplete DOL calculations, and the complexity of the return. The Trustee relied on Mr. Yarmchuk's advice that the return should not be filed until it was complete and accurate, which meant waiting until the damages were calculated by the DOL and the Price Waterhouse audit was complete. The Trustee has made and filed all required tax returns for Debtors' estate and the 1983 return reported all of the taxable income, which was substantial. The Trustee's failure to file the return prior to its due date was due to reasonable cause and not to willful neglect.
The IRS, on the other hand, attacks the trustee's "reasonable cause" defense on two fronts. The IRS asserts: (1) that the real reason the trustee filed the return late was because of his reliance on the accountant's determination that Hudson had no tax liability for 1983 upon which to base a late-filing penalty rather than because of his reliance on the accountant's advice that he should not file a return until all events occurred; and (2) that, in any event, the recent Supreme Court case of Boyle overrules the trustee's reliance on an accountant as a "reasonable cause" defense.
After reviewing the testimony of Yarmchuk, the accountant, and the testimony of Kellogg, the trustee, this Court finds the IRS' argument unpersuasive, and in some factual respects, inaccurate. The evidence at trial clearly supported the factual basis for the trustee's "reasonable cause" defense of reliance on an accountant's advice to not file the 1983 return until it was complete and accurate. Yarmchuk testified that he wanted to file a complete and accurate return, but because of the condition of the books and the shortcomings of the accounting system, he was concerned about the integrity of the numbers. Yarmchuk thought he should wait at least until Price Waterhouse completed its audit report of the companies' financial statement for the period January 1, 1983 to January 3, 1984, and the DOL completed its calculations. Yarmchuk advised the trustee of his concerns. The trustee testified that he relied on Yarmchuk's advice concerning the timing of the filing of the return.
Furthermore, this Court is not persuaded by IRS' argument that Boyle overrules the trustee's reasonable cause defense. In that case, the executor of a will, Boyle, retained an attorney, Keyser, to serve as attorney for the estate. Keyser informed the executor that the estate must file a federal tax return, but failed to mention the deadline for filing the return of June 14, 1979. The executor relied on Keyser for instruction and guidance and provided Keyser with all relevant information and records to file the return. He contacted Keyser a number of times during the summer of 1979 to inquire about the progress of the proceedings and the preparation of the tax return. Keyser assured the executor that he would notify him when the return was due and that the return would be filed "in plenty of time." When the executor called Keyser on September 6, 1979, he learned for the first time that the return was by then overdue due to a clerical oversight on Keyser's part. The executor met with Keyser on September 11, 1979, and the return was filed on September 13, 1979, three months late. The IRS *950 assessed a $17,124.45 penalty against the estate under section 6651(a)(1). The issue arose over whether a taxpayer's reliance on an attorney to prepare and file a tax return constitutes "reasonable cause" under section 6651(a)(1). The Supreme Court noted a split in the circuits and determined the time had "come for a rule with as `bright' a line as can be drawn consistent with the statute and implementing regulations." Boyle, 469 U.S. at 247-48, 105 S.Ct. at 690-91. The Supreme Court then held that the failure to make a timely filing of a tax return is not excused by the taxpayer's reliance on an agent, and such reliance is not "reasonable cause" for a late filing under section 6651(a)(1). Id. at 252, 105 S.Ct. at 693.
This Court finds that the facts of Boyle are easily distinguishable from the facts of the present case; and that the IRS is mischaracterizing the trustee's "reasonable cause" defense as one of sole reliance on an agent just to invoke the Boyle brightline rule. Just because this case and the Boyle case both involve reliance on agents does not necessarily mean Boyle is controlling. Boyle involves a situation in which the taxpayer had the time to file the return to begin with, however, he argues that "reasonable cause" exists solely because he relied on a professional who drops the ball and misses the deadline. The facts of the present case are just the opposite. Certainly, the trustee relied on Yarmchuk to prepare and to file the return. However, Yarmchuk did not file the return late because he somehow mistakenly missed the deadline. Yarmchuk filed the return late because, in reality, he did not have sufficient time to prepare it. The trustee, his accountants, the estate, and the debtors were put in an impossible situation from the start when it came to filing the 1983 return on time. Hudson Oil Company and its many subsidiaries located all over the United States filed a voluntary chapter 11 petition for relief on January 3, 1984. At the time, the debtors were collectively the largest entity to ever file for bankruptcy in the District of Kansas. Hudson Oil Company alone listed: $32,845,324 of assets; $2,146,013 of priority debt; $10,045,411 of secured debt; and 1221 scheduled creditors. At this point Hudson, in its capacity of debtor-in-possession, was still in charge of all aspects of the business, including filing the 1983 tax return due on January 15, 1984. On January 13, 1984, the debtor-in-possession applied for and received an automatic extension until April 15, 1984. On February 10, 1984, several banks filed a motion for appointment of a trustee. This Court set the motion for hearing on March 5, 1984. That day the parties stipulated to the appointment of a trustee. Walter Kellogg was officially appointed trustee on March 6, 1984. At this point, the debtor-in-possession's responsibility to file the 1983 tax return shifted to the trustee, and the time to file the return was fast approaching. Only two weeks after the appointment, the trustee, through his financial manager, Dan Lain, received notice by the IRS that, unless the trustee paid over $1,000,000 of estimated pre-petition tax by March 29, 1984, the extension would expire. That notice gave the trustee only two options: (1) come up with $1,000,000 from a bankrupt entity to pay pre-petition taxes which the debtor-in-possession had estimated; or (2) meet the March 29, 1984 deadline by filing a return.
The Court finds that it was physically impossible for the trustee to have prepared the 1983 return within that three week period. The books and records of the company were in disarray. It took a team of Price Waterhouse accountants over a year to complete their audit of the financial records of the debtors, covering substantially the same period of time as the tax return. Price Waterhouse did not deliver the audit report until seven months after the trustee's appointment. Yarmchuk testified that he spent over 1,000 hours preparing the return which ended up to be over 200 pages long.
In the final analysis of the trustee's "reasonable cause" defense, this Court must sit back, look at the whole picture, and ask the question posed by the Treasury Regulation: Did the trustee exercise "ordinary business care and prudence" but nevertheless was "unable to file the return *951 within the prescribed time." The answer is clearly yes. It was physically impossible for the trustee to file the return in time. The IRS really gave him no choice but to allow the extension of time to expire. He reasonably relied on advice by the accountant that the return could not be filed until they were assured it was accurate and complete. Moreover, the trustee kept the IRS fully apprised of his reason for delay in filing the return. This Court finds that the trustee has shown that the failure to file the return was due to reasonable cause. As such, the IRS' imposition of the late-filing penalty under § 6651(a)(1) is also overturned on this ground.
F. CIVIL PENALTIES FOR NEGLIGENT UNDERPAYMENT OF TAX SECTIONS 6653(a)(1)(A) AND 6653(a)(1)(B)
The trustee also presents two alternative arguments against the IRS' assessment of two negligence penalties. First, the trustee contends that the IRS' assessment of both of the negligence penalties was erroneous because he reasonably relied on a professional's advice in completing the return. Second, the trustee contends that debtors are not liable for one of the penalties imposed pursuant to § 6653(a)(1)(B) of 50% of the interest calculated under § 6601 because interest is not payable under § 6601(a) in this case.
1. Reasonable Reliance Defense
The IRS assessed two penalties for negligent underpayment of tax pursuant to section 6653(a)(1) of the Internal Revenue Code which provides:
(a) Negligence
(1) In general. If any part of any underpayment (as defined in subsection (c) is due to negligence or disregard of rules or regulations, there shall be added to the tax an amount equal to the sum of
(A) 5 percent of the underpayment, and
(B) an amount equal to 50 percent of the interest payable under section 6601 with respect to the portion of such underpayment which is attributable to negligence for the period beginning on the last date prescribed by law for payment of such underpayment (determined without regard to any extension) and ending on the date of the assessment of the tax (or, if earlier, the date of the payment of the tax).
According to its proposed conclusions of law, the IRS assessed both the subsection A penalty of 5% of underpayment and the subsection B penalty of 25% of interest payable under section 6601 for the following reasons:
Hudson had requested an extension in January of 1984 indicating an estimated liability of $1,900,000. In January of 1985, the Internal Revenue Service filed a proof of claim which estimated Hudson's tax liability at $1,028,902. . . . In June of 1986, over two years late, the Debtor filed the tax return showing a tax liability of $669.00. The deduction taken for the DOL and DOE are in clear derogation of Treasury Regulation 1.4611(a) (26 CFR). Again, the debtor is conceding $6,000,000 of the deduction attributable to the DOE litigation, acknowledging that no reason existed to take that deduction. In addition, the Debtor attempted to take over $550,000 in deductions for entitlement receivable in which Hudson had no basis to deduct. The Debtor is not contesting that adjustment in this proceeding.
Section 6653(a)(1) permits the IRS to assess certain penalties when an underpayment "is due to negligence or intentional disregard of rules or regulations. . . ." Under section 6653(a)(3), the term "negligence" includes any failure to make a reasonable attempt to comply with the provisions of this title, and the term "disregard" includes any careless, reckless, or intentional disregard. 26 U.S.C. § 6653(a)(3). Negligence under section 6653(a)(1) is determined by the reasonable, prudent person standard. Zmuda v. Commissioner, 731 F.2d 1417, 1422 (9th Cir.1984). The taxpayer bears the burden of establishing that the IRS' assessment of the negligence penalty was erroneous. Id.; and Hanson v. Commissioner, *952 696 F.2d 1232, 1234 (9th Cir. 1983) (per curiam).
In the present case, the trustee contends that the IRS' assessment of the negligence penalties was erroneous because he reasonably relied on Yarmchuk's advice in taking the disallowed deductions that resulted in a reported loss of $5,933,201 on the 1983 return.
Courts have found that while hiring an attorney or accountant does not necessarily insulate the taxpayer from negligence penalties, good faith reliance on professional advice is a defense. See Betson v. Commissioner, 802 F.2d 365, 372 (9th Cir.1986); and Foster v. Commissioner, 756 F.2d 1430, 1439 (9th Cir.1985). The Supreme Court, in dicta, has explained the rationale behind this reliance defense as follows:
When an accountant or attorney advises a taxpayer on a matter of tax law, such as whether a liability exists, it is reasonable for the taxpayer to rely on that advice. Most taxpayers are not competent to discern error in the substantive advice of an accountant or attorney. To require the taxpayer to challenge the attorney, to seek a "second opinion," or to try to monitor counsel on the provisions of the Code himself would nullify the very purpose of seeking the advice of a presumed expert in the first place. See Haywood Lumber [v. Commissioner], supra, [178 F.2d 769 (2nd Cir.1950)] at 771. "Ordinary business care and prudence" do not demand such actions.
United States v. Boyle, 469 U.S. 241, 251, 105 S.Ct. 687, 692, 83 L.Ed.2d 622 (1985). However, in order to properly claim reliance on a professional as a defense, the taxpayer must have provided the professional with all the necessary information to prepare the return, and the taxpayer must not have been on notice that the legal position asserted on the return was erroneous at the time. See Betson, 802 F.2d at 372; and Foster, 756 F.2d at 1439.
The IRS attacks the trustee's reliance defense on several fronts. First, the IRS argues the trustee admitted liability for the penalties by failing to contest the disallowance of several deductions, namely, $6,000,000 of the DOE deduction, the $970,000 breach of contract deduction, and the $550,000 entitlements deduction. Second, the IRS asserts that the trustee was put on notice that legal positions asserted on the return were erroneous by the debtor-in-possession's prior estimate back on January 13, 1984, of 1983 tax liability of in excess of $1,000,000 and by the IRS' January 4, 1985 proof of claim reflecting a tax liability of over $1,000,000. Third, the IRS asserts that the trustee failed to provide the accountant with all the necessary information.
Although this Court agrees with the IRS that Hudson cannot take the deductions [see infra, "Subpart I. DEDUCTIBILITY OF THE DEPARTMENT OF LABOR (DOL) LITIGATION AND THE DEPARTMENT OF ENERGY (DOE) LITIGATION,"] the trustee's legal positions were, at the least, "reasonably debatable." The IRS must remember that the deductions were legitimate, i.e. valid expenses of the corporation. The trustee did not dream up the expenses. The trustee's only problem was the question of the timing of the deductions or the proper year in which to take the deductions. As to this question, the trustee presented a reasonably debatable case for taking the deductions in 1983.
Moreover, this Court finds IRS' second argument that the prior estimates by both the debtor-in-possession and the government put the trustee on notice of the erroneous legal positions is also without merit. First, the liability reflected on the debtor-in-possession's application for extension was merely an estimate based upon entries in the accounts of the companies' books and records as of January 13, 1984. At that time, the books and records were in disarray. Any estimate based on those records was not reliable. Second, the IRS filed the original proof of claim prior to even auditing the debtors' records for 1983. As such, the IRS' estimate was also unreliable and would not put the trustee on notice.
*953 However, this Court is persuaded by the IRS' third contention and finds: the trustee cannot raise the defense of reliance on an accountant if he fails to provide the accountant with all the information necessary to prepare the return. The record clearly reflects that the trustee failed to adequately advise Yarmchuk of the status of the litigation on which he based most of the disallowed deductions. Yarmchuk testified that he was not informed that the debtor intended to appeal the DOL matter, or that the debtor did not consider that order to be final. He testified he was not advised until the audit by the IRS that the DOE proceedings were being vigorously contested and appealed. He testified he was unaware that the entitlement receivables were never taken into income and that he was never informed of the active status of the breach of contract action. Simply put, the trustee failed to provide the accountant all the necessary information to prepare the return. As such, the trustee's reliance defense fails and the debtors are not relieved of liability for the negligence penalties on this ground.
2. Applicability of § 6653(a)(1)(B) penalty.
The trustee also contends that the debtors are not liable for the penalty imposed under section 6653(a)(1)(B) because that penalty is not applicable to this case. As stated earlier, section 6653(a)(1)(B) provides that if any part of an underpayment is due to negligence, there shall be added to the tax "an amount equal to 50 percent of the interest payable under section 6601 with respect to the portion of such underpayment which is attributable to negligence for the period beginning on the last date prescribed by law for payment of such underpayment." The trustee asserts that since there is no interest payable under section 6601, 50% of zero is zero.
The IRS' proposed conclusions of law wholly fail to respond to the trustee's position. The argument certainly is not something new or out-of-the-blue. The trustee raised the argument in his contentions in the pretrial order. This Court could find that the trustee's position is uncontested and overturn the section 6653(a)(1)(B) 50% negligence penalty on this basis. However, this Court finds the trustee's position is legally persuasive, in any event. The IRS asserts a penalty pursuant to section 6653(a)(1)(B) for 50% of the interest under section 6601. No interest can accrue or be payable, however, under section 6601 because the interest had not matured as of the petition date. See 11 U.S.C. § 502(b)(2). Further, the IRS never claimed any interest under section 6601. (See IRS' Proof of Claim filed January 4, 1985). As such, since there is no interest payable, the IRS is not entitled to a negligence penalty based on interest.
G. CIVIL PENALTY FOR SUBSTANTIAL UNDERSTATEMENT UNDER § 6661 SUBSTANTIAL AUTHORITY DEFENSE AND ADEQUATE DISCLOSURE DEFENSE
The next issue is whether the IRS properly assessed the substantial understatement penalty pursuant to section 6661 of the Internal Revenue Code which in relevant part, provides:
(a) Addition to tax. If there is a substantial understatement of income tax for any taxable year, there shall be added to the tax an amount equal to 25 percent of the amount of any underpayment attributable to such understatement.
(b) Definition and special rule.
(1) Substantial understatement.
(A) In general. For purposes of this section, there is a substantial understatement of income tax for any taxable year if the amount of the understatement for the taxable year exceeds the greater of
(i) 10 percent of the tax required to be shown on the return for the taxable year, or
(ii) $5,000.
(B) Special rule for corporations. In the case of a corporation other than an S corporation or a personal holding company (as defined in section *954 542), paragraph (1) shall be applied by substituting "$10,000" for "$5,000".
(2) Understatement
(A) In general. For purposes of paragraph (1), the term "understatement" means the excess of
(i) the amount of the tax required to be shown on the return for the taxable year, over
(ii) the amount of the tax imposed which is shown on the return, reduced by any rebate (within the meaning of section 6211(b)(2).
(B) Reduction for understatement due to position of taxpayer or disclosed item. The amount of the understatement under subparagraph (A) shall be reduced by that portion of the understatement which is attributable to
(i) the tax treatment of any item by the taxpayer if there is or was substantial authority for such treatment, or
(ii) any item with respect to which the relevant facts affecting the item's tax treatment are adequately disclosed in the return or in a statement attached to the return.
* * * * * *
(c) Authority to waive. The Secretary may waive all or any part of the addition to tax provided by this section on a showing by the taxpayer that there was reasonable cause for the understatement (or part thereof) and that the taxpayer acted in good faith.
In the present case, the debtors filed a return indicating a 1983 tax liability of $669.00. After the audit of the return, the IRS determined that the debtors' 1983 tax liability was $1,980,331. As such, the IRS determined that the understatement was clearly a "substantial understatement" as defined in § 6661(b), and assessed a 25 percent penalty on the amount of the underpayment attributable to the understatement.
The trustee requests this Court to overturn the substantial understatement penalty on any one of the following grounds: (1) that under section 6661(c) there was reasonable cause for the understatement and that the taxpayer acted in "good faith;" (2) that under section 6661(b)(2)(B)(i) there was substantial authority for the treatment of the deduction; or (3) that under section 6661(b)(2)(B)(ii) there was adequate disclosure of relevant facts concerning the deductions on the return.
This Court finds that the trustee's reliance on section 6661(c) as authority for a "good faith" exception is not well founded. Section 6661(c) merely grants the Secretary of the IRS the authority to waive substantial understatement penalty upon a showing of good faith. Under the wording of the statute, this power is purely within the discretion of the Secretary, and not this Court.
However, the Court finds that the trustee's reliance on section 6661(b)(2)(B) as authority to reduce the understatement is entirely proper. Understatements are reduced to the extent they are attributable to either of the following: (1) the treatment of an item by the taxpayer for which there is or was substantial authority; or (2) an item with respect to which the relevant facts affecting the item's tax treatment are adequately disclosed in the return or in a statement attached to it.
After reviewing the record, this Court further finds that the trustee has shown that there was at the least substantial authority for the deductions. Although this Court agrees with the IRS that the deductions should be disallowed [see infra, Subpart I. "DEDUCTIBILITY OF DEPARTMENT OF LABOR (DOL) LITIGATION AND THE DEPARTMENT OF ENERGY (DOE) LITIGATION"], the trustee still presented a very good argument on behalf of the deductions. This goes hand-in-hand with previous Subpart "F" in which the Court found that the trustee's position was "reasonably debatable." No one contests that the deductions are legitimate. The only question was one of timing. As to this question, this Court finds that the trustee had substantial authority for taking the deductions in 1983.
*955 Furthermore, this Court finds that the trustee adequately disclosed on the return the relevant facts concerning the deductions under all the circumstances. The trustee did not attempt to mischaracterize the four deductions on the return in any way. On the same date the trustee filed the return, June 9, 1986, the trustee requested the audit of the 1983 return. When Joseph Dillingham, the IRS agent, began auditing the return at the debtors' office, he was taken into a room where Yarmchuk had laid out the return, the companies' general ledger, and the documentation supporting the four deductions to facilitate the audit. Yarmchuk specifically identified the deductions. The debtors' personnel fully cooperated with Dillingham and made no attempt to conceal any facts.
The IRS objects to the use of the adequate disclosure exception because, in their words, the adequate disclosure was not actually "on the return, or on statements filed with the return" as required by the statute. However, this Court finds this argument unpersuasive. The statute merely says the disclosure on the return must be "adequate." This Court finds that the disclosure on the return was more than adequate under the circumstances where a taxpayer requests the audit, points out the deductions, and provides supporting documentation. The IRS was not prejudiced by the manner in which the debtors handled the filing and the subsequent auditing of the return.
H. DEDUCTION OF ALL OR PART OF THE CUSHING REFINERY BECAUSE OF ABNORMAL RETIREMENT OR OBSOLESCENCE
According to the trustee's brief in support of his proposed findings of fact and conclusions of law, the trustee relies on the theories of "obsolescence" or "abnormal retirement" to deduct on the 1983 return the excess of the tax basis of the Cushing refinery over its fair market value as of October 31, 1983 [The trustee appears to have dropped his contention that Hudson Oil "abandoned" the refinery in 1983.]
The theories of "obsolescence" and "abnormal retirement" are considered separate and independent grounds for a deduction under the Internal Revenue Code. However, after reviewing the relevant treasury regulations and applying the trustee's theories to the specific facts of this case, the theories become so hopelessly intertwined to the point that the analysis is substantially the same under either theory. The following discussion will bear this point out.
1. "Obsolescence" and "Abnormal Retirement" In General.
Under section 167(a) of the Internal Revenue Code, a taxpayer may take an annual depreciation deduction for a reasonable allowance for the exhaustion, and wear and tear (including a reasonable allowance for normal obsolescence) of business and income producing property. The depreciation deduction is intended to permit the taxpayer to recover the cost or other basis of the property over its "useful life." At the end of the property's estimated useful life, the total depreciation deductions allowed plus the salvage value should theoretically equal its cost or other basis. See Treas.Reg. § 1.167(a)-1(a).
As stated earlier, normal obsolescence is taken into account in initially determining the useful life of property. Obsolescence can be defined as a type of functional depreciation, as distinguished from physical depreciation. Real Estate-Land Title & Trust Co. v. United States, 309 U.S. 13, 60 S.Ct. 371, 84 L.Ed. 542 (1940). Obsolescence is governed by Treas.Reg. 1.167(a)-9 which provides:
The depreciation allowance includes an allowance for normal obsolescence which should be taken into account to the extent that the expected useful life of property will be shortened by reason thereof. Obsolescence may render an asset economically useless to the taxpayer regardless of its physical condition. Obsolescence is attributable to many causes, including technological improvements and reasonably foreseeable economic changes. Among these causes are normal progress of the arts and sciences, supersession or inadequacy brought *956 about by developments in the industry, products, methods, markets, sources of supply, and other like changes, and legislative or regulatory action.
However, the Code's inclusion of obsolescence as a factor in determining useful life gives rise to an inherent problem: a taxpayer cannot usually accurately foresee events causing obsolescence at the time they acquire assets and set up the depreciation schedules. Accordingly, it was early established that the useful life of an asset should be adjusted during the term of ownership to reflect developing obsolescence. Tanforan Co., Inc. v. United States, 313 F.Supp. 796, 801 (N.D.Calif.1970), aff'd, 462 F.2d 605 (9th Cir.1972). Thus, the above Treasury Regulation continues:
In any case in which the taxpayer shows that the estimated useful life previously used should be shortened by reason of obsolescence greater than had been assumed in computing such estimated useful life, a change to a new and shorter estimated useful life computed in accordance with such showing will be permitted. No such change will be permitted merely because in the unsupported opinion of the taxpayer the property may become obsolete. For rules governing the allowance of a loss when the usefulness of depreciable property is suddenly terminated, see § 1.167(a)-8. . . .
That last line is very relevant to this case: "For rules governing the allowance of a loss when the usefulness of depreciable property is suddenly terminated see § 1.167(a)-8." In this case the trustee is asserting a deduction for a loss due to the sudden retirement of the refinery because of extraordinary obsolescence. Treas.Reg. 1.167(a)-8 is the regulation governing deductions for loss due to retirement of "useful life" depreciable assets, and just so happens to govern the trustee's other theory, "abnormal retirement."
Treas.Reg. 1.167(a)-8(a)(3) provides in pertinent part that:
Where an asset is permanently retired from use in a trade or business or in the production of income but is not disposed of by the taxpayer or physically abandoned (as, for example, when the asset is transferred to a supplier or scrap account) . . . loss will be recognized measured by the excess of the adjusted basis of the asset at the time of retirement over the estimated salvage value or over the fair market value at the time of such retirement if greater, but only if (i) the retirement is an abnormal retirement.
(emphasis provided).
In determining whether a retirement is "abnormal," Treas.Reg. 1.167(a)-8(b) provides:
For purposes of this section the determination of whether a retirement is normal or abnormal shall be made in the light of all the facts and circumstances. In general, a retirement shall be considered a normal retirement unless the taxpayer can show that the withdrawal of the asset was due to a cause not contemplated in setting the applicable depreciation rate. For example, a retirement is considered normal if made within the range of years taken into consideration in fixing the depreciation rate and if the asset has reached a condition at which, in the normal course of events, the taxpayer customarily retires similar assets from use in his business. On the other hand, a retirement may be abnormal if the asset is withdrawn at an earlier time or under other circumstances, as, for example, when the asset has been damaged by casualty or has lost its usefulness suddenly as the result of extraordinary obsolescence.
(emphasis added).
From these regulations, this Court can glean the following questions that must be answered before the trustee may take a deduction on the 1983 tax return:
1. Did Hudson Oil retire the Cushing refinery on or before October 31, 1983?
2. If so, was the retirement "abnormal" due to either a cause not contemplated in setting the applicable depreciation rate or from "extraordinary obsolescence?"
3. If so, what is the amount of loss?
*957 2. Retirement of the Refinery Within the Tax Year Ending October 31, 1983.
As previously stated, under Treas.Reg. 167(a)-8(a)(3), an asset is retired for depreciation purposes when the taxpayer permanently withdraws the asset from use in the trade or business or in the production of income.
Clearly Hudson withdrew the Cushing refinery from use in its business in the 1983 tax year, starting November 1, 1982, and ending October 31, 1983. Hudson shut down the refinery in December of 1983. Hudson has never reopened the refinery. The more difficult question is whether the withdrawal was permanent as of October 31, 1983. However, after reviewing the entire record, this Court must conclude that, at least as of October 31, 1983, Hudson's withdrawal of the asset from its business was not permanent.
This Court reaches this conclusion for a number of reasons. First, there is no question that, at the time the refinery was initially closed in December of 1983, Hudson did not consider the withdrawal to be permanent. Both Forest Fugua, plant manager of the refinery, and Thomas Raimo, president of Hudson, testified that they thought the refinery would eventually reopen. After the shutdown, Hudson took the necessary steps to protect the refinery equipment for that possibility. Second, Hudson did nothing during the 1983 tax year that would suggest that the withdrawal became permanent rather than temporary. Hudson began terminating most of the refinery's employees during the course of the 1983 tax year. However, Hudson never advised the union workers that the shut-down was permanent or that severance pay would be forthcoming as of October 31, 1983. Even Fugua was never told outright that the shut-down was permanent. Hudson never notified their shareholders that the shut-down of the refinery, a very substantial asset, was permanent in nature. Finally, Hudson did not carry the asset on its books as being permanently withdrawn. In the audit report issued by Price Waterhouse for the period from December 31, 1982 to January 4, 1984, there is no mention that the main asset of Hudson Refinery Company, Inc., the refinery, was considered permanently retired. In fact, the debtor still carries the refinery on its books in a fixed asset account and takes depreciation on it.
The Court notes that the trustee presented the testimony of Raimo, the president of Hudson, in support of his position. Raimo unequivocally testified that he considered the refinery to be closed permanently by the end of the 1983 tax year. Other Hudson personnel, including Fugua and Dan McClean, vice-president of Hudson, testified in support of Raimo's conclusion. In addition, the Court notes that the trustee relies on his own testimony that Hudson removed the refinery's vital platinum catalyst during the 1983 tax year.
However, after reviewing all the circumstances, this Court is not persuaded by the trustee's evidence. Raimo's testimony is rebutted by the unbiased testimony of Martin Sallay, the Price Waterhouse auditor. He testified that Hudson had not written the refinery off its books as of the time of his audit in 1984. In fact, papers prepared by Sallay contain a reference to a conversation Sallay had with Raimo concerning severance pay for the workers. Sallay noted that the severance liability had never been recorded "because it was expected that the refinery would reopen, employees would be rehired, and no severance pay would be paid. Mr. Raimo stated that as a result of the bankruptcy [which occurred after October 31, 1983] it appears that the refinery will not open and as a result the company will have a severance pay liability."
In addition the trustee's self-serving testimony concerning the removal of the catalyst is also suspect. Fugua, the plant manager whose office is actually located at the refinery, testified that Hudson did not remove the catalyst until October of 1984 or 1985, clearly outside the 1983 tax year. This Court finds Fugua's testimony the more credible on this question.
3. Requirement that the Retirement be "Abnormal" and Calculation of Loss.
Since this Court has just found that Hudson did not retire the refinery within the *958 1983 tax year, there is no need to determine if the retirement was "abnormal," i.e. due to extraordinary obsolescence. Of course, before there can be an "abnormal" retirement there must first be a retirement. Furthermore, since this Court found that Hudson did not retire the refinery within the 1983 tax year, the question of the amount of loss is also moot.
I. DEDUCTIBILITY OF THE DEPARTMENT OF LABOR (DOL) LITIGATION AND THE DEPARTMENT OF ENERGY (DOE) LITIGATION
As stated earlier, the IRS disallowed entirely the salary expense deduction of $3,460,517 arising out of the DOL litigation, and a cost of sales and interest deduction of $7,388,360 arising out of the DOE litigation. The IRS disallowed the deductions because the trustee took the deductions in the wrong year.
The trustee still maintains that Hudson Oil is entitled to deduct the $3,460,517 DOL expense deduction in the 1983 tax year. The trustee argues that after applying the "all events test," the debtors are entitled to the DOE deduction because United States District Court's order dated October 14, 1983 fixed the debtors' liability and established in 1983 the formula by which the liability was determinable. As for the DOE deduction, the trustee is now conceding that $6,000,000 of the DOE deduction was taken in the wrong year. However, the trustee still claims a reduced DOE expense deduction of $1,405,124. The trustee argues that after applying the "all events test," the debtors are entitled to a deduction of $1,405,124 for the DOE litigation because Hudson Refinery's admission to the $945,550 of the violations fixed Hudson's liability in 1983 with accrued interest.
Although this Court has found the trustee's arguments reasonably debatable [see supra Subpart F. "CIVIL PENALTIES FOR NEGLIGENT UNDERPAYMENT OF TAX"] and supported by substantial authority [see supra Subpart G. "CIVIL PENALTY FOR SUBSTANTIAL UNDERSTATEMENT"], this Court agrees with the IRS that, under the "all events test", that the trustee cannot take the deductions in 1983.
The question of the proper year in which to take a deduction for contested matters is governed by the "all events test." See United States v. General Dynamics Corporation, 481 U.S. 239, 107 S.Ct. 1732, 95 L.Ed.2d 226 (1985). Under section 461(a) of the Internal Revenue Code, "[t]he amount of any deduction . . . shall be taken for the taxable year which is the proper taxable year under the method of accounting used in computing taxable income." Hudson is an accrual method taxpayer with a fiscal rather than calendar year. Since Hudson is an accrual method taxpayer, Treas.Reg. 1.461-1(a)(2) governs the timing of Hudson's deductions and provides:
Under the accrual method of accounting for the taxable year in which all events have occurred which determine the fact of the liability and the amount can be determined with reasonable accuracy.
As a result, an accrual method taxpayer may not deduct an expense until the expense and the amount of that expense is known or can be determined. Where the taxpayer is contesting liability for the expense, Treas.Reg. 1.461-1(a)(3)(ii) provides:
Where there is a dispute and the entire liability is contested, judgment on account of damages for patent infringement, personal injuries or other causes, or other binding adjudications, including decisions of referees and boards of review under workmen's compensation laws, are deductions from gross income when the claim is finally adjudicated or paid, depending upon the taxpayer's method of accounting. However, see subparagraph (2) [set forth above] of this paragraph.
(emphasis added).
Where the taxpayer disputes a liability in court, the taxpayer may not take a deduction until a final order is entered, no appeal taken, and/or the suit is finally settled. Courts have long held that, to deduct a liability, all the events must occur in that year which fix the amount and the fact of the taxpayer's liability for the items of *959 indebtedness deducted though not paid; and this cannot be done where the liability is contingent and is contested by the taxpayer. Dixie Pine Products Co. v. Commissioner, 320 U.S. 516, 519, 64 S.Ct. 364, 365, 88 L.Ed. 270 (1944). According to one court, "the existence of any liability is uncertain until the last bell is rung in the last court." United States v. Texas Mexican Railway Co., 263 F.2d 31, 34 (5th Cir.1959). The question of when "the last bell is rung" has been resolved by determining the final date for appeal. Commissioner v. Fifth Avenue Coach Lines, Inc., 281 F.2d 556 (2d Cir.1960), cert. den. 366 U.S. 964, 81 S.Ct. 1915, 6 L.Ed.2d 1256 (1961). In Fifth Avenue, the taxpayer attempted to deduct in 1948 interest on deficiencies determined by the Tax Court in an order entered on December 22, 1948. The court found that the time for appeal did not run until March 22, 1949. Accordingly, the order was not final and the liability not fixed until 1949. Similarly, the Ninth Circuit has held that if "appeal is taken the right is not fixed until determination of the appeal; and if no appeal is taken, . . . the right becomes fixed on termination of the appeal time." H. Liebes & Co. v. Commissioner, 90 F.2d 932, 938 (9th Cir.1937).
Applying these principles to the DOL deduction, this Court finds that Hudson cannot take the deduction for the fiscal year 1983. A final judgment had not yet been entered by the United States District Court. The Memorandum and Order entered by the District Court on October 14, 1983 was not final. No judgment amount was entered and the calculations for determining an amount had not even begun. In the Motion to Resolve Federal Tax Liability of Debtor, the debtor admits that one of the "reasons" for delay in filing the return was that the DOL liability could not be calculated. A final calculation was not made until June of 1985. Even at that time, a final judgment was not entered. In fact, the debtor has stipulated that Hudson's liability on the DOL claim would have been $8,937,165, yet Hudson's liability in the proposed settlement pending before this Court is for only $3,460,517. There has yet to be an approval by this Court even for that settlement amount. In fact, Hudson is attempting to deduct for fiscal year 1983, the settlement amount reached sometime between June of 1985 and June of 1986. The trustee has continued to list the DOL claim as contingent and disputed on the financial statements filed with this Court and states on those statements that the amount of the liability cannot be determined. Further, the trustee stated to this Court that when that order became appealable, it would be appealed.
Furthermore, even if the Memorandum and Order of October 14, 1983 could be considered to be a "final" order, the appeal time would not have run until December 13, 1983. Rule 4(a)(1), Appellate Rules of Procedure. The date of December 13, 1983 was clearly after the close of fiscal year 1983. Accordingly, Hudson may not deduct the amount attributed to the DOL litigation in 1983. Commissioner v. Fifth Avenue Coach Lines, Inc., 281 F.2d 556 (2d Cir.1960), cert. denied 366 U.S. 964, 81 S.Ct. 1915, 6 L.Ed.2d 1256 (1961).
As for the DOE deduction, this Court also finds that Hudson cannot take any of the deduction for the 1983 tax year. On February 23, 1983, the Department of Energy issued a Proposed Remedial Order citing Hudson for violations of various regulatory programs. On May 23, 1983, Hudson responded by arguing that the entire proceeding had to be dismissed. Hudson did contend that, in the alternative, they might be liable for some amount. On July 22, 1983, Hudson filed another response asserting that the entire proceedings must be dismissed because the regulatory scheme under which Hudson was being cited was unconstitutional. The Office of Hearings and Appeals did not enter a decision on the record until July 1, 1985. The decision itself states: "If Hudson's objections are sustained, the February 28, 1983 PRO would be rescinded." Record of OHA, p. 101. Thus it is clear, that, as of July 1, 1985, Hudson continued to contest the DOE litigation in its entirety. Further, on September 19, 1985, Hudson filed its appeal of the OHA decision to the Federal Energy Regulatory Commission, again contesting *960 the validity of the order in its entirety. That Hudson argued in the alternative for a lesser liability cannot change the fact that the full liability continued to be disputed through 1985.
J. DEDUCTIBILITY OF THE "WING SIGNS."
According to his proposed conclusions of law, the trustee also attempts to deduct $85,892 in "wing signs" for the following reasons:
Debtors are entitled to deduct the $85,892, the value of the wing signs, from their 1983 tax year income because the signs were unsalable by Hudson at normal prices or unusable in the normal way. Treas.Reg. § 1.47-2(c).
Unfortunately, that is all the trustee says on this contention. The trustee fails to provide this Court with any analysis or additional authority in support of this quite substantial deduction.
This Court finds that the deduction is improper for the 1983 tax year. Raimo testified that the signs were useless to Hudson by October 31, 1983. However, Hudson continued to have 90 to 98 operating gasoline stations during that time. Furthermore, Revenue Agent Dillingham testified that Hudson did not actually write the signs off their book until March 29, 1984. The 1984 tax year is the more appropriate year in which to take the deduction. Accordingly, this Court finds that the trustee may not claim a deduction for the wing signs.
K. OFFSETTING THE 1980 OVERPAYMENT, INTEREST, AND 1983 REFUND AGAINST THE 1983 TAX LIABILITY.
The issue in this section is not whether the debtors are entitled to a refund from 1980. Back on January 14, 1983, the IRS determined that Hudson Oil was entitled to a refund of $895,601 for the taxable year 1980. More than a year ago, the Joint Committee on Taxation advised the IRS that it had no objection to the refund. Since then, the IRS has withheld the refund pending determination of the debtors' tax liability for the 1983 tax year. The issue is not even whether the IRS should offset the refund. Both sides assert that the IRS should offset the refund. Rather, the issue is over the timing of the offset. The trustee asserts that the IRS should have offset the $895,601 against the amount of the 1983 income tax liability determined before the IRS assessed the penalties, thereby, lowering the amount of liability upon which the IRS based the penalties. The IRS, on the other hand, seeks to determine the tax liability, assess the penalties on that liability, and then offset the refund against the penalties.
The trustee presents two arguments in support of his position. First, the trustee asserts that sections 6651 and 6402 of the Internal Revenue Code require the IRS to credit the refund against the tax liability before calculating the late-filing penalty. Second, the trustee asserts that section 106 of the Bankruptcy Code allows the trustee to "elect" to credit the overpayment, plus interest, plus a 1983 refund claim of $49,156 against the tax liability.
As the first argument goes only toward the calculation of the late-filing penalty, this Court need not address this contention. This court has already overturned the late-filing penalty on two independent grounds. As such, a question concerning how to calculate the penalty is now moot.
However, the trustee's second contention under section 106 is not moot because it pertains to all penalties. Section 106 of the Bankruptcy Code governs the government's waiver of sovereign immunity in bankruptcy cases. Section 106(b) provides:
(b) There shall be offset against an allowed claim or interest of a governmental unit any claim against such governmental unit that is property of the estate.
The Committee Notes following this subsection further explains that:
. . . the estate may offset against the allowed claim of a governmental unit, up to the amount of the governmental unit's claim, any claim that the debtor and thus the estate, has against the governmental unit, without regard to whether the estate's claim arose out of the same transaction *961 or occurrence as the government's claim.
In this case, the trustee "invokes his right to offset the overpayment ($895,601), interest and the 1983 refund claim of $49,156 against any tax liability found to be due for the 1983 tax year before any allowed penalties are calculated."
This Court agrees with the trustee's contention up to a point. Courts have found that section 106 empowers the trustee to assert a setoff claim and thereby pierce the governmental unit's sovereign immunity whenever the governmental unit files a proof of claim. See Merritt Commercial Savings and Loan, Inc. v. Giunee, 766 F.2d 850, 854 (4th Cir.1985). However, it does not follow from section 106 that the trustee can rewrite the IRS' claim and force them to offset the refund against the tax liability before calculating the penalties. On the contrary, section 106(b) speaks in terms of offsetting against the government's "claim." In this case, the government's proof of "claim" is for the penalties. That is what the IRS filed a claim for and that is what the trustee can offset against, the penalties, not the underlying tax liability.
L. TRUSTEE'S CLAIM TO LARGER REFUND IN 1983 IF THE OVERPAYMENT IS OFFSET.
The Court notes that the trustee asserts that the estate "is entitled to a larger refund for the 1983 tax year, after effect is given to loss carrybacks, if it is necessary to use all or any part of the 1980 refund of $895,601, accrued interest and refund to reduce income for the 1983 tax year." This contention appears to be contingent on whether the Court allowed the trustee to first offset against the tax liability rather than the penalties. Since this Court did not, this contention is now moot.
ORDER
The above Memorandum Opinion constitutes my findings of fact and conclusions of law. The parties are directed to submit to this Court within 30 days an agreed order applying the memorandum opinion to determine Hudson Oil's exact tax, interest, and penalty liability for the year ending on October 31, 1983. These findings of fact and conclusions of law shall not be considered final for appeal purposes until the Court signs the agreed order. The agreed order is as to form only and shall not constitute a waiver of rights by any parties upon appeal. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578546/ | 281 S.W.3d 290 (2009)
KENTUCKY BAR ASSOCIATION, Movant,
v.
John Grant COOK, Respondent.
No. 2008-SC-000937-KB.
Supreme Court of Kentucky.
April 23, 2009.
*291 OPINION AND ORDER
The Kentucky Bar Association (KBA) moves this Court to enter an order finding John Grant Cook, whose KBA member number is 90412 and whose bar roster address is 1707B Millgate Road, Louisville, Kentucky 40223, guilty of violating SCR 3.130-1.3, SCR 3.130-1.4(a), and SCR 3.130-1.16(d), and suspending Cook from the practice of law for two years, with thirty days of that time to be served and the remainder conditionally probated for two years. After reviewing Cook's two KBA files associated with this motion, we agree that Cook is guilty of the charges brought against him and adopt the KBA's recommended discipline.
Cook was admitted to practice law in this Commonwealth on October 15, 2004. On February 10, 2006, Rickey Graf hired Cook to defend him in a civil matter in the Meade Circuit Court. Two months later, after Cook failed to submit answers to the Plaintiffs discovery requests, the circuit court entered an order on April 25, 2006, requiring the Defendant Graf to reply to the discovery. However, Cook never responded to this order, prompting the trial court to dismiss Grafs counterclaim with prejudice on July 13, 2006. Despite Grafs attempts to contact Cook during this time period, Cook never returned Grafs phone calls, resulting in Graf filing a bar complaint against Cook on September 21, 2006. Thereafter, on January 23, 2008, the Inquiry Commission charged Cook with violating SCR 3.130-1.3 for failing to act with reasonable diligence in representing his client, and SCR 3.130-1.4(a) for failing to keep his client reasonably informed about his case and failing to comply with reasonable requests for information. These two charges are contained in KBA File 14628.
In KBA File 14626, Cook agreed to represent Dannette Flaherty in a civil matter and accepted $500 for such representation on June 20, 2006. Although Cook and Flaherty planned to meet on July 11, 2006, in order to review the case, Cook failed to appear at this meeting. Flaherty eventually learned from an answering service that Cook had been admitted to the hospital but would return to his office by the end of the month. However, after attempting to contact Cook again in August 2006, Flaherty was told that Cook had suffered from a breakdown and would not be returning to the practice of law. Subsequently, Flaherty filed a bar complaint against Cook on September 26, 2006, which resulted in the Inquiry Commission issuing additional charges against Cook on January 23, 2008. The Inquiry Commission charged Cook with violating SCR 3.130-1.4(a) for failing to keep a client reasonably informed about a case and SCR 3.130-1.16(d) for failing to return the unearned portion of the fee. Following this charge, Cook refunded the $500 fee to Flaherty.
The Board of Governors considered Cook's two KBA Files on November 21, 2008. Although Cook filed answers in both cases, his submissions were untimely filed by a matter of days. Regardless, because Cook admitted in his answers all the factual allegations on which his *292 charges were based, the Board did not treat the consolidated actions as default matters, and rather, considered them under the law alone as provided in SCR 3.210(2). Subsequently, the Board voted 18 to 0 to find Cook guilty of both charges in KBA File 14646 and voted 18 to 0 to find Cook guilty of both charges in KBA File 14628. The Board also unanimously recommended that Cook be suspended from the practice of law for two years, with thirty days of that suspension to be served and the remaining time to be probated for two years on the condition that Cook sign a supervision agreement, participate in the Kentucky Lawyers Assistance Program (KLAP), and be evaluated and continue to seek treatment for depression.
As the Board acknowledges in its findings of fact and conclusions of law, Cook admitted in his answers that he violated SCR 3.130-1.3 and SCR 3.130-1.4(a) as set forth in KBA File 14628, and that he violated SCR 3.130-1.4(a) and 3.130-1.16(d) as set forth in KBA File 14626. In these answers, Cook explained that during the time of his representation of Graf and Flaherty, he was suffering from deep depression. Cook admitted that his unstable mental health affected his ability to adequately represent Graf and Flaherty. Cook also acknowledged that he does not and will not "possess the requisite fitness to practice law in the foreseeable future," but asked this Court for leniency in imposing the appropriate discipline. This Court finds that in light of Cook's ethical violations as set forth in KBA File 14628 and 14626, his candid acknowledgement of guilt as explained in his answers, and his minimal history of prior discipline[1], the Board's recommendation of a two-year suspension with the suggested probationary period appropriately sanctions Cook's misconduct. Therefore, it is hereby ORDERED that:
1. John Grant Cook is guilty of violating SCR 3.130-1.3 and SCR 3.130-1.4(a) as charged in KBA File 14628, and guilty of violating SCR 3.130-1.4(a) and SCR 3.130-1.16(d) as charged in KBA File 14626.
2. John Grant Cook is hereby suspended from the practice of law in this Commonwealth for two years, with thirty days (30) to be served and the remainder probated for two years on the condition that Cook sign a supervision agreement, participate in KLAP, and be evaluated and continue to seek treatment for depression.
3. If Cook fails to abide by any of the terms of discipline during the two-year probationary period, upon the KBA's motion, this Court may suspend Cook for the remainder of the two-year suspension.
4. Pursuant to SCR 3.450, John Grant Cook is directed to pay all costs associated with these disciplinary proceedings in the amount of $561.71.
5. Pursuant to SCR 3.390, John Grant Cook shall, within ten (10) days from the entry of this opinion and order, provide written notice to his clients of his inability to represent them; provide written notice to all courts in which he has matters pending of his suspension from the practice of law; and furnish copies of all letters of notice to the Executive Director of the Kentucky Bar Association. Furthermore, to the extent possible, Cook shall immediately cancel and cease any advertising activities in which he is engaged.
All sitting. All concur.
*293 ENTERED: April 23, 2009.
/s/ John D. Minton Jr.
Chief Justice
NOTES
[1] On April 11, 2006, Cook was fined for failing to comply with the Continuing Legal Education requirement of attending the New Lawyers Program. On February 14, 2007, Cook was suspended from the practice of law for not paying his annual KBA dues. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578557/ | 281 S.W.3d 851 (2009)
Homer LAWSON, Ralph Tyson, and Oscar Graves, Appellants,
v.
TREASURER OF the STATE of Missouri AS CUSTODIAN FOR the SECOND INJURY FUND, Respondent.
Nos. SD 28541, SD 28543, SD 28545.
Missouri Court of Appeals, Southern District, Division Two.
March 19, 2009.
*852 Paul F. Reichert, Springfield, MO, for Appellants.
Jeremiah W. (Jay) Nixon, Attorney General and Cara L. Harris, Assistant Attorney General, Jefferson City, MO, for Respondent.
DON E. BURRELL, Presiding Judge.
Helen Lawson, Deborah Tyson, and Becky Graves ("Appellants"), spouses of deceased workers' compensation disability recipients Homer Lawson, Ralph Tyson, and Oscar Graves (the "disability recipients"), appeal the Missouri Labor and Industrial Relations Commission's ("Commission") orders denying Appellants' requests for reinstatement of the permanent and total disability benefits ("disability benefits") previously awarded to the disability recipients.[1] The Commission denied relief on the ground that it lacked jurisdiction. Because the disability recipients' awards were final awards not subject to review, we affirm the Commission's orders of dismissal.
I. Facts and Procedural Background
The disability recipients were awarded their respective disability benefits on January 25, 2000 (Lawson 28541), September 6, 2000 (Tyson 28543), and April 4, 2005 (Graves 28545). At the time of the awards, no determination was made as to whether any of the disability recipients had any dependents and none of the orders were appealed. As a result, each of the awards became final 30 days after it was entered under section 287.495.[2] After the respective deaths of each of the disability recipients, the Commission entered orders terminating those disability benefits pursuant to section 287.470.[3]
Thereafter, on January 9, 2007, our Supreme Court issued its decision in Schoemehl v. Treasurer of Missouri, 217 S.W.3d 900 (Mo. banc 2007), holding that dependents of disability recipients could recover the recipient's disability benefits upon the recipient's death if the death was unrelated to the workplace injury. Id. at 902. Two days after the Court handed down its decision in Schoemehl, each Appellant filed a motion with the Commission asking it to 1) set aside its previous orders terminating disability benefits; 2) reinstate those benefits; and 3) find that the movant was a *853 dependent of the disability recipient. The Commission entered orders dismissing each Appellant's request on the grounds that no statute granted it the authority to grant the relief requested. Appellants now appeal those dismissals.
II. Standard of Review
Our review of the Commission's decision is governed by statute. Section 287.495.[4] Because the facts are not in dispute and only a question of law is at issue, our review of the Commission's decision is de novo. Cox v. Tyson Foods, Inc., 920 S.W.2d 534, 535 (Mo. banc 1996).
III. Discussion
Appellants' sole point on appeal is that the Commission erred in finding that it lacked subject matter jurisdiction to determine whether a deceased disability recipient's spouse was entitled to a continuation of a recipient's benefits under section 287.230.2. Appellants contend that, under Schoemehl, dependents of disability recipients are entitled to continue receiving the disability recipient's benefits if: 1) the recipient died from causes unrelated to his accident; and 2) was survived by a dependent.
The version of section 287.230.2 in effect at the time Schoemehl was decided provided "that when an employee is entitled to compensation, the compensation ceases when the employee dies from a cause other than the work injury `unless there are surviving dependents at the time of death.'" Id. Because section 287.020.1 defined an "employee" to include "dependents" when referring to an employee who had been injured but was dead, the Court construed the plain wording of section 287.230.2 to allow dependents of an injured employee receiving disability benefits to receive those benefits if the employee died from causes unrelated to the work-related injury. Schoemehl, 217 S.W.3d at 902.
After Schoemehl was handed down, the legislature amended several sections within the Workers' Compensation Law (sections 287.010-287.811) with the express intent "to reject and abrogate the holding in [Schoemehl] and all cases citing, interpreting, applying or following this case."[5] Section 287.230.3, RSMo Cum.Supp.2008. Section 287.200.2 now provides that "[t]he right to unaccrued compensation for permanent total disability of an injured employee terminates on the date of the injured employee's death in accordance with section 287.230, and does not survive to the injured employee's dependents. . . ." Section 287.200.2, RSMo Cum.Supp.2008. Section 287.230.2 now explicitly states that "no other compensation for the injury shall be paid to the surviving dependents at the time of death." Section 287.230.2, RSMo Cum.Supp.2008.
Shortly after these amendments were made, our Supreme Court issued its decision in Strait v. Treasurer of Mo., 257 S.W.3d 600 (Mo. banc 2008). In Strait, the Court did not overrule Schoemehl, but limited its application to cases in which the injured employee's claim was still pending at the time of his or her death. Id. at 602. Specifically, the Court stated:
*854 Courts respect the finality of judgments. The law bars the retrospective application of the laws to cases that have achieved final resolution. If [a disability recipient's] claim [is] no longer pending, and her case [has] been closed, then Schoemehl cannot be applied to allow the substitution of [the disability recipient's] dependents as beneficiaries of her permanent total disability benefits.
Id. (internal citations omitted).
Following Strait, the Western District of our court faced a situation similar to the instant cases in Bennett v. Treasurer of Missouri, 271 S.W.3d 49 (Mo.App. W.D. 2008). In Bennett, an injured employee filed a motion with the Commission seeking to add her husband as an additional party to her worker's compensation claim in which she had previously been awarded disability benefits. Id. at 51. As in the instant cases, she contended that, under Schoemehl, her husband was entitled to continued disability benefits if she: 1) died of causes unrelated to her work injury; and 2) left behind dependents. Id. at 50. In claiming the Commission had the authority to reopen her award, she argued "that the Commission's failure to accept jurisdiction [left] her spouse without legal means of determining his entitlement to benefits under the Act if he survives her." Id.
Relying on the statutory amendments mentioned above and our Supreme Court's decision in Strait, the Western District held that "recovery under Schoemehl is limited to claims for permanent total disability benefits that were pending between January 9, 2007, the date the Missouri Supreme Court issued it decision in Schoemehl, and June 26, 2008, the effective date of [the new amendments];" holding that because claimant's disability benefits became final prior to the Schoemehl decision, the Commission did not have authority to hear her claim. Id. at 53.
The situation in the instant cases is substantially similar. All of the disability recipients' claims were final prior to Schoemehl and were therefore not pending between January 7, 2007 and June 26, 2008. As a result, the Commission was correct in ruling that it had no statutory authority to reopen the disability recipients' final awards for the purpose of reinstating benefits and making them payable to Appellants, the disability recipients' alleged dependents. The Commission's orders of dismissal are affirmed.
LYNCH, C.J., and PARRISH, J., Concur.
NOTES
[1] These cases were consolidated for oral argument because the same issue was raised in each case by substantially similar briefs and all Appellants were represented by the same attorney. As the same analysis applies to each case, we have chosen to also combine them into one opinion for purposes of judicial economy. In doing so, we mean no disrespect.
[2] Unless otherwise indicated, all statutory references are to RSMo 2000. Section 287.495 provides in relevant part that "[t]he final award of the commission shall be conclusive and binding unless either party to the dispute shall, within thirty days from the date of the final award, appeal the award to the appellate court."
[3] Section 287.470 provides: "Upon its own motion . . . the commission may at any time upon a rehearing after due notice to the parties interested review any award and on such review may make an award ending, diminishing or increasing the compensation previously awarded. . . ." This section allows the Commission to modify an existing award if there is a change in the condition of the injured employee that is causally related to the work injury. Buescher v. Mo. Highway & Transp. Comm'n., 254 S.W.3d 105, 109 n. 6 (Mo.App. W.D.2008). Here, Appellants have asserted that the disability recipients' deaths were not causally related to their work injuries.
[4] "The court, on appeal, shall review only questions of law and may modify, reverse, remand for rehearing, or set aside the award upon any of the following grounds and no other: (1) That the commission acted without or in excess of its powers; (2) That the award was procured by fraud; (3) That the facts found by the commission do not support the award; (4) That there was not sufficient competent evidence in the record to warrant the making of the award."
[5] These amendments became effective June 26, 2008. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578550/ | 12 So. 3d 1065 (2009)
OFFICE FURNITURE OUTLET, INC., Plaintiff-Appellee
v.
Mark Coleman GRAU and Martin M. Grau, Defendants-Appellants.
No. 44,228-CA.
Court of Appeal of Louisiana, Second Circuit.
May 27, 2009.
*1066 W. Douglas White, for Defendant-Appellant, Martin M. Grau.
Jerald R. Harper, Shreveport, for Plaintiff Appellee, Office Furniture Outlet, Inc.
Jefferson R. Thompson, for Defendant-Appellee, Mark Coleman Grau.
Before WILLIAMS, MOORE and LOLLEY, JJ.
LOLLEY, J.
This appeal by defendant, Mark Grau, arises from a partial final judgment from the First Judicial District, Parish of Caddo, State of Louisiana in favor of plaintiff, Office Furniture Outlet. For the following reasons, we affirm.
FACTS
Office Furniture Outlet ("OFO") is a family business originally formed by defendant, Mark Grau. The business provides office furniture services to customers. Mark's son, Martin, was a salesman in the business. In 2003, Mark and his wife sold 75% of the business to Mark's brother, William Grau. William began to act as CEO while Mark continued to work as vice president. During this time, issues with *1067 commission, salary, and company policy arose. Mark was fired, Martin resigned, and together they created another business, Office Furniture Source, LLC ("OFS").
William, through OFO, brought suit against Mark and Martin, individually, for breach of fiduciary duty while at OFO and unfair trade practices and false and deceptive claims with their work at OFS. This appeal arises out of an ancillary issue on the rule for attorney fees issued by the trial court on June 23, 2008. The underlying actions against Martin and Mark Grau are still pending and are not subject to this appeal. Further, Mark Grau was not cast in the judgment for attorney fees, and, therefore, is not a party on this appeal.
The pretrial activity, including discovery, which gave rise to the hearing for attorney fees involved efforts to discover Martin Grau's activities in acquiring and seeking furniture while still employed with OFO. OFO filed numerous motions to compel and motion for sanctions and attorney fees against Martin to ascertain the information. In March 2008, OFO filed its Motion to Compel for the sixth time and Motion for Sanctions for the fourth time. Based on these motions, the trial court rendered a partial final judgment on June 23, 2008, in favor of OFO and ordered Martin to pay the plaintiff $32,370.00 in attorney fees. This appeal by Martin ensued.
LAW AND DISCUSSION
Martin argues that sanctions and attorney fees were not warranted, and in the alternative, the trial court failed to apply the correct standard in awarding the attorney fees. It is well established that trial courts in Louisiana have broad discretion when regulating pre-trial discovery, which discretion will not be disturbed on appeal absent a clear showing of abuse. Moak v. Illinois Central, XXXX-XXXX (La.01/14/94), 631 So. 2d 401.
Appealable Judgment
At the outset we confirm that the trial court's partial judgment is appealable. The trial court stated, and we agree, that it was acting upon one of the sanction provisions under La. C.C.P. art. 863 whose imposition is immediately appealable under La. C.C.P. art. 1915(A)(6).
Sanctions
The discovery articles grant the trial court the power to compel discovery and the discretion to impose various sanctions on a party or his attorney for unjustified failure to comply with the statutory scheme or to obey an order compelling discovery. The granting of relief against a recalcitrant party rests within the trial judge's discretion and will not be disturbed absent a clear abuse of that discretion. Butts v. Cummings, 360 So. 2d 534 (La. App. 2d Cir.1978). There is a distinction between the sanctions available for failure to comply with discovery and the sanctions available for disobedience of court ordered discovery. Refusal to comply with court ordered discovery is a serious matter. Horton v. McCary, 1993-2315 (La.04/11/94), 635 So. 2d 199.
Here, the record bears out an inordinate amount of time and resources were spent during the pretrial phase to enforce Martin to comply with answering various interrogatories. The trial court clearly afforded Martin every opportunity to fulfill the legitimate discovery and requests for production made by OFO. The trial court even denied OFO's fourth filing for a Motion to Compel and second filing for Motion for Sanctions giving Martin the benefit of the doubt. In fact, Martin admits in his brief that sanctions and attorney fees are in response to the Sixth Motion to *1068 Compel and Fourth Motion for Sanctions. Simply put, the same request was made over six times beginning in April 16, 2007.
While it is evident that this has been an acrimonious lawsuit to say the least, there is nothing in the record that supports Martin's unwillingness to cooperate during the discovery process. OFO complied with every request that Martin had made, including voluminous disclosures of financial documents. Allegations that Martin purposefully altered evidence, used delay tactics, and harassed the opposing party by requesting unnecessary documents are serious, and while there is nothing in the record substantiating these claims, it is not to be taken lightly. See, e.g., MTU of North America, Inc. v. Raven Marine, Inc., 475 So. 2d 1063 (La.1985). What is substantiated from the record, however, are the trial court's four direct orders compelling Martin to comply with discovery and Martin's refusal to follow these orders even under threat of incarceration. The trial court must have severe sanctions available to it to deter litigants from scoffing at its discovery orders. Horton, supra. We agree with the trial court in its decision to impose sanctions.
Attorney Fees
In light of our findings that sanctions are appropriate, we find that the trial court did not abuse its discretion in awarding attorney fees. Louisiana C.C.P. art. 1469(4), which provides for motions to compel, states in pertinent part that:
(4) If the motion is granted, the court shall, after opportunity for hearing, require the party or deponent whose conduct necessitated the motion or the party or attorney advising such conduct or both of them to pay to the moving party the reasonable expenses incurred in obtaining the order, including attorney's fees, unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust.
While the attorney fees are on the high end, we agree with the trial court that the pretrial phase was drawn out because of Martin's own conduct. OFO submitted an affidavit for the amount expended on attorneys and other expenses for over a year during the pretrial phase totaling $57,785.00. Clearly, the amount the trial court awarded, $32,370.00, is significantly less and it took into consideration only the fees incurred after the Fourth Motion to Compel and Second Motion for Sanctions were denied in October 2007. As such, we find the scope of fees to be appropriate. The trial court tried to avoid such a hefty penalty by having over a dozen hearings to allow Martin time to comply, but after several warnings it was left with no choice.
Other Issues
As an aside, Martin makes much of the need to apply the "concept" of SWAT 24 Shreveport Bossier Inc. v. Bond, 808 So. 2d 294 (La.2001) to the case at hand. In SWAT 24, a former employer sought injunctive relief in the enforcement of noncompetition agreement with former employee. We fail to see how SWAT 24 is applicable; however, we pretermit further discussion on its application since the merits of the case are not before us.
We do find, and Martin correctly identified, that the trial court erred in casting judgment on OFS, which is not a party in this lawsuit and specifically not a defendant-in-rule. As such, we amend the judgment, by way of this opinion, to strike any reference to OFS. See La. C.C.P. art. 1951.
CONCLUSION
We amend the judgment to strike any reference to Office Furniture Source, LLC *1069 as they are not a party in this case. We affirm the trial court in all other respects. Costs for this appeal are assessed against Martin Grau.
AMENDED, AND AS AMENDED, AFFIRMED.
WILLIAMS, J., concurs in part and dissents in part. The attorney fees awarded for this "Rule" are excessive and a clear abuse of discretion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578553/ | 281 S.W.3d 796 (2009)
William MATTINGLY, et al., Appellants,
v.
William E. STINSON, et al., Appellees.
Kentucky Farm Bureau Mutual Insurance Company, Appellant,
v.
William E. Stinson, et al., Appellees.
Nos. 2007-SC-000221-DG, 2007-SC-000222-DG.
Supreme Court of Kentucky.
April 23, 2009.
*797 Wayne J. Carroll, Deborah Lynne Harrod, MacKenzie & Peden, P.S.C., Louisville, KY, Counsel for Appellants/Appellees, William Mattingly, Traditional Masonry, Inc. and Traditional Masonry, LLC.
Patrick A. Ross, Hensley, Ross & Howard, Horse Cave, KY, Counsel for Appellant/Appellee, Kentucky Farm Bureau Mutual Insurance Company.
Jason B. Bell, Kerrick, Stivers, Coyle & Van Zant, P.L.C., Elizabethtown, KY, Counsel for Appellee, William E. Stinson.
William Baxter Orberson, Sara Clark Davis, Phillips, Parker, Orberson & Moore, P.L.C., Louisville, KY, Kentucky Defense Counsel.
Michael Anthony Breen, Breen and Morgan, Bowling Green, KY, Kentucky Justice Association.
Opinion of the Court by Justice CUNNINGHAM.
In this appeal, we consider whether the rule set forth in Earle v. Cobb, requiring the identification at trial of a defendant underinsured motorist carrier, applies when there has been no Coots settlement between the carrier and the alleged tortfeasor.
William Stinson and William Mattingly were driving vehicles that collided at an intersection in Hardin County. Though both drivers were injured, Stinson suffered severe and permanent injuries, including brain damage. Mattingly filed suit against Stinson, and Stinson counterclaimed. Stinson also brought third-party complaints against Mattingly's employer and his own insurer, Kentucky Farm Bureau Mutual Insurance Company (KFB), pursuant to his underinsured motorist (UIM) coverage. Mattingly's suit against Stinson was settled.
The parties went to trial on Stinson's counterclaim. Prior to trial, Mattingly successfully moved the trial court to exclude any reference to UIM coverage. KFB also moved to prohibit its identification as a party. KFB argued that identification was not required because it was not participating at trial and because there had been no settlement between it and Mattingly pursuant to Coots v. Allstate Ins. Co., 853 S.W.2d 895 (Ky.1993). The motion was granted.
The jury returned a verdict in favor of Mattingly, finding Stinson 100% liable for the accident. A judgment was entered in accordance with the verdict, dismissing Stinson's counterclaim and the third-party complaints. Stinson appealed the judgment, arguing that the trial court erred in *798 prohibiting reference to UIM coverage. The Court of Appeals reversed and remanded for a new trial, finding that the prohibition violated the rule set forth in Earle v. Cobb, 156 S.W.3d 257 (Ky.2004). This Court granted discretionary review.
In Earle v. Cobb, we considered "whether an underinsured motorist (UIM) carrier must be identified at trial when it chooses to preserve its subrogation rights by means of the procedure set forth in Coots v. Allstate Ins. Co." 156 S.W.3d at 258. When an injured party intends to settle with a tortfeasor and the tortfeasor's liability insurance carrier, the Coots procedure allows the injured party's UIM carrier to preserve its subrogation rights against the tortfeasor by paying the injured party the policy amount. We held that the "UIM carrier should be so identified as a party [at trial] because it was named as a party by virtue of its contract and because it chose to retain its subrogation rights by substitution of its payment for that of the liability insurance carrier." Id.
The Earle decision attacks the "legal fiction" that occurred when the name of the tortfeasor was substituted for the UIM carrier for trial purposes. See Coots, id. Our decision rested on the recognition that when an UIM carrier substitutes its payment for that of the liability insurance carrier through the Coots procedure, that UIM carrier "becomes the only real party with potential liability to the plaintiff." 156 S.W.3d at 261. To conceal the insurer's identity, in light of the practical effect of a Coots settlement on the parties' interests, is to engage in a legal "charade" whereby the trial is presented to the jury as a claim against the alleged tortfeasor when, in reality, the plaintiff's only remaining claim is against the UIM carrier. Id.
In this case, Stinson argues that Earle required identification of KFB at trial, and that the trial court's prohibition re-created the "legal fiction" denounced therein. We disagree because, in this case, there has been no Coots settlement between KFB and Mattingly. Thus, we decline to extend the holding in Earle to situations where the UIM carrier has not utilized the Coots settlement procedure and, therefore, has not substituted its liability for that of the defendant.
The Earle Court recognized that, when a UIM carrier has reached a Coots settlement, the tortfeasor is "released from any further liability to the injured party[.]" True v. Raines, 99 S.W.3d 439, 448 (Ky. 2003) (emphasis added). In such circumstances, to permit the UIM carrier "to either participate or sit idly by and allow the tortfeasor to defend at trial, [is to hide] the identity of a bona fide party." Earle, 156 S.W.3d at 261. When the UIM carrier has not reached a Coots settlement with the tortfeasor, the tortfeasor remains primarily liable to the plaintiff. The UIM carrier is only potentially liable, contingent upon a judgment in excess of the tortfeasor's own liability coverage. Because the tortfeasor remains a real party in interest, no legal fiction is created for the jury. The jury considers an actual case in tort between the injured party and the tortfeasor and decides liability and damages. Any liability of the UIM carrier to the tortfeasor or the injured party is ancillary to the jury's determinations in this regard, and then any such liability exists in contract.
Here, KFB did not participate at trial. It did not enter into a Coots settlement with Mattingly and, therefore, did not substitute its own liability for Mattingly's. At trial, Mattingly remained the principal party in Stinson's suit, primarily responsible for his injuries upon a finding of liability. The jury was not presented with a legal fiction and was not asked to decide a controversy between Mattingly and Stinson *799 when the only real controversy existed between Stinson and KFB. Rather, it considered the "live" issue of Mattingly's tort liability to Stinson. In accordance with our courts' long-standing policy against reference to liability insurance in tort actions, including UIM coverage, no mention was made of KFB. See Turpin v. Scrivner, 297 Ky. 365, 178 S.W.2d 971 (1944).
By its express language, Earle requires identification of an UIM carrier at trial when it has used the Coots procedure "because it was named as a party by virtue of its contract and because it chose to retain its subrogation rights by substitution of its payment for that of the liability insurance carrier." 156 S.W.3d at 258 (emphasis added). We decline to extend the holding in Earle to those trials where the UIM carrier has not availed itself of the Coots procedure to subrogate its rights.
Accordingly, the Hardin Circuit Court did not err in prohibiting mention of KFB at trial, and Mattingly's motion in this regard was properly granted. The opinion of the Court of Appeals is reversed and the judgment of the Hardin Circuit Court is hereby reinstated.
MINTON, C.J.; NOBLE, SCHRODER, VENTERS, JJ., concur.
SCOTT, J., concurs in result only.
ABRAMSON, J., not sitting.
SCOTT, J., concurs in result only:
I concur with the majority's opinion in result only as Earle v. Cobb, 156 S.W.3d 257 (Ky.2004) specifically cites two separate triggers for UM/UIM identification, (1) a "Coots" settlement, i.e., "when [the Insurance Co.,] invoked the `Coots' procedure it should have been identified." Id. at 262, and (2) participation at trial, i.e., the jury should know "who are the parties to the litigation where the [UIM] carrier elects to participate actively in the trial." Id. at 260. As Kentucky Farm Bureau did not enter into a "Coots settlements," or participate at trial, it was appropriate that it not be identified. Had it done either one, however, Cobb commands that it be properly identified as one of the parties.
As the majority opinion seems to suggest that both are required for identification, my concurrence is in result only as Kentucky Farm Bureau did neither. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578580/ | 281 S.W.3d 273 (2008)
STATE of Arkansas, Appellant,
v.
Theresa WEBB, Appellee.
No. CR 07-1214.
Supreme Court of Arkansas.
March 20, 2008.
*274 Dustin McDaniel, Att'y Gen., by: David R. Raupp, Sr. Ass't Att'y Gen., for appellant.
Wright, Lindsey & Jennings, LLP, by: Jerry J. Sallings and Gary D. Marts, Jr., Little Rock, AR, for appellee.
ANNABELLE CLINTON IMBER, Justice.
The State appeals from an order of the Pulaski County Circuit Court granting Appellee Theresa Webb's motion to expunge the record of her conviction for felony theft of property. For its sole point on appeal, the State asserts that the circuit court erred as a matter of law in granting the motion to expunge under Ark.Code Ann. § 16-93-303 (Repl.2006), because Webb pled not guilty and was found guilty by the court. As this is an appeal by the State following a felony prosecution, our jurisdiction is pursuant to Ark. R.App. P.-Crim. 3(b) (2007). Because we hold that Webb's sentence is void to the extent that it is in accordance with Ark.Code Ann. § 16-93-303, we reverse and remand for new sentencing.
After being charged with multiple counts of theft of property, forgery, and fraudulent use of a credit card, Webb was convicted of one count of felony theft of property at a bench trial on November 14, 2006. She was sentenced to thirty-six months' probation, and the judgment and disposition order stated that restitution would be determined at a later date. The order was marked with an "X" next to the statement "Defendant committed a target offense and was sentenced under the Community Punishment Act. Upon successful completion of the conditions of probation/S.I.S. Defendant shall be eligible to have his/her records sealed." "Act 346" was handwritten in next to this statement. Act 346 of 1975, known as the First Offenders Act, is codified at Ark.Code Ann. §§ 16-93-301 XX-XX-XXX (Repl.2006 & Supp.2007). An order of conditions of probation, pursuant to Act 346, set restitution *275 at $2,500. The judgment and disposition order was subsequently amended to reflect the amount and method of distribution of restitution.
The circuit court then held a hearing on Webb's motion to correct the judgment and modify the sentence.[1] Webb's counsel asked that the court modify or dismiss the sentence under Ark.Code Ann. § 5-4-306 (Repl.2006) and expunge the record under Act 346. In response, the State argued that expungement under Act 346 is not available to defendants who are found guilty at trial. The State asked that the court reconsider sentencing Webb in accordance with Act 346. However, the circuit court terminated Webb's probation and ordered her record expunged. The court entered an order to seal pursuant to Act 346 on July 12, 2007. After Webb filed a petition to seal, the court entered a second order to seal on September 5, 2007.[2] The State filed a notice of appeal on September 28, 2007, citing the September 5 order to seal as the order from which it appealed.
As a threshold matter, we must first determine whether this appeal is properly before us. Under Rule 3(c) of our Rules of Appellate Procedure Criminal, appeals by the State are permitted if the attorney general, on inspecting the trial record, is satisfied that error has been committed to the prejudice of the State, and that the correct and uniform administration of the criminal law requires review by this court. Ark. R.App. P.-Crim. 3(c) (2007). Pursuant to Rule 3(c), we have stated that we will accept appeals by the State in criminal cases only when our holding would be important to the correct and uniform administration of the criminal law. State v. Aud, 351 Ark. 531, 95 S.W.3d 786 (2003). As a matter of practice, we have only taken appeals that are narrow in scope and involve the interpretation of law. Id. Appeals by the State are not allowed merely to demonstrate the fact that the trial court erred. Id. We have held that an appeal does not involve the correct and uniform administration of the law when it does not present an issue of interpretation of the criminal law with widespread ramifications. Id.
The State asserts that it need not satisfy the requirements of Rule 3(c) because the present appeal is civil in nature, notwithstanding its criminal designation. This argument is correct pursuant to our holding in State v. Burnett, 368 Ark. 625, 249 S.W.3d 141 (2007). There, the State appealed from an order sealing the appellee's criminal record. Id. In support of its argument that it was not required to comply with Rule 3(c), the State contended that the appeal was a civil appeal arising from a collateral proceeding on a motion and order to seal a criminal record. Id. This court agreed and held that the State was not required to satisfy the rule. Id. In accordance with this holding, the State need not comply with Rule 3(c) in the instant case.
We must also consider Webb's contention that the State has failed to file a timely notice of appeal. The State's September 28 notice of appeal of the September 5 order to seal was timely, in accordance with Ark. R.App. P.-Crim. 3(b), which requires that the State file a notice of appeal within thirty days after entry of a final order by the trial judge. However, *276 Webb asserts that the State is actually appealing the sentence itself, rather than the order of expungement. Webb contends that the September 28 notice of appeal would have been untimely if the appeal were taken from any of the three orders setting forth Webb's sentence the original judgment and disposition order, filed November 20, 2006; the order of conditions of probation, filed December 19, 2006; or the amended judgment and disposition order, filed February 1, 2007. See Ark. R.App. P.-Crim. 3(b).
In light of our prior case law, we need not address Webb's timeliness argument. This court views an issue of a void or illegal sentence as being an issue of subject-matter jurisdiction, in that it cannot be waived by the parties and may be addressed for the first time on appeal. Thomas v. State, 349 Ark. 447, 79 S.W.3d 347 (2002); Bangs v. State, 310 Ark. 235, 835 S.W.2d 294 (1992). The State may raise at any time the issue of the illegality of a sentence. Renshaw v. Norris, 337 Ark. 494, 989 S.W.2d 515 (1999). Therefore, we conclude that the issue of a void or illegal sentence may be raised by the State following its timely appeal of the order of expungement.
In deciding whether the circuit court's order of expungement pursuant to Act 346 was proper, we must determine whether the court's sentencing of Webb pursuant to Act 346 was proper. We hold that it was not. Section 16-93-303 provides, in pertinent part:
Whenever an accused enters a plea of guilty or nolo contendere prior to an adjudication of guilt, the judge of the circuit or district court, in the case of a defendant who has not been previously convicted of a felony, without making a finding of guilt or entering a judgment of guilt and with the consent of the defendant may defer further proceedings and place the defendant on probation for a period of not less than one (1) year, under such terms and conditions as may be set by the court.
Ark.Code Ann. § 16-93-303(a)(1)(A)(i) (Repl.2006). Thereafter, upon violation of a term or condition, the court may enter an adjudication of guilt. Ark.Code Ann. § 16-93-303(a)(2). Otherwise, upon fulfillment of the terms and conditions of probation, or upon release by the court prior to the termination of the period of probation, the defendant is to be discharged without court adjudication of guilt. Ark.Code Ann. § 16-93-303(b). At that point, the court "shall enter an appropriate order that shall effectively dismiss the case, discharge the defendant, and expunge the record, if consistent with the procedures established in § 16-90-901 et seq." Id.
The record reveals that Webb did not plead guilty or nolo contendere prior to an adjudication of guilt, as required by the statute for eligibility under Act 346. Instead, she entered a plea of not guilty and was adjudicated guilty by the court following a bench trial. Therefore, she was ineligible for sentencing pursuant to Act 346. Our prior case law has emphasized the requirement of a plea of guilty or nolo contendere for Act 346 sentencing. See Baker v. State, 310 Ark. 485, 489, 837 S.W.2d 471, 473 (1992) (where appellant was adjudged guilty by a jury, trial court correctly determined that he was not entitled to probation under Act 346, which "applies only to an accused who `enters a plea of guilty or nolo contendere prior to an adjudication of guilt.'"). Under our de novo standard of review and plain-meaning rule for cases involving statutory interpretation, see Crawford v. State, 362 Ark. 301, 208 S.W.3d 146 (2005), the circuit court's sentencing of Webb in accordance with Act 346 was improper.
In Thomas v. State, supra, we modified part of a judgment sentencing the appellant under Act 346, holding that he *277 was not eligible for Act 346 sentencing because he was convicted of the crime of sexual solicitation of a child, a disqualifying sexual offense. See Ark.Code Ann. § 16-93-303(a)(1)(B). We cited the well-settled rule that a sentence is void or illegal when the trial court lacks authority to impose it. Thomas v. State, supra. See also Flowers v. Norris, 347 Ark. 760, 68 S.W.3d 289 (2002); Bangs v. State, supra. Because the trial court lacked the authority to sentence Thomas under Act 346, our court declared that portion of the sentence illegal.[3]Thomas v. State, supra. Similarly, the circuit court in the case at bar lacked the authority to sentence Webb pursuant to Act 346, as she did not enter a plea of guilty or nolo contendere. Her sentence, to the extent that it is pursuant to Act 346, is void.
The remedy for an illegal sentence is not dismissal of the proceedings. Bangs v. State, supra. Rather, the general rule is that if the original sentence is illegal, even though partially executed, the sentencing court may correct it. Id. See also Lambert v. State, 286 Ark. 408, 692 S.W.2d 238 (1985). Therefore, we reverse Webb's sentence to the extent that it is in accordance with Act 346 and remand for new sentencing. We also reverse the circuit court's order of expungement. Webb is not eligible for probation under Act 346 and is therefore not entitled to the expungement provisions therein.
Reversed and remanded.
NOTES
[1] This motion is not in the record.
[2] Pursuant to Ark.Code Ann. § 16-90-905(a) (Repl.2006), the uniform petition and order to seal adopted and provided by the Arkansas Crime Information Center must be used for the order to be effective. This explains the court's reason for entering a second order to seal, following the filing of the petition.
[3] In Thomas, we corrected the illegality by modifying that part of the judgment showing that Thomas was sentenced pursuant to Act 346. Thomas v. State, supra. We then affirmed the sentence as modified, pursuant to our rule that a trial court's error in sentencing may be corrected in lieu of reversing and remanding. Renshaw v. Norris, supra; Bangs v. State, supra. In the instant case, however, we decline to correct the illegality and affirm as modified, because we are unable to determine from the record whether the sentence was otherwise correct. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578583/ | 419 Mich. 253 (1984)
351 N.W.2d 831
CHARTER TOWNSHIP OF DELTA
v.
DINOLFO
Docket No. 67485, (Calendar No. 5).
Supreme Court of Michigan.
Argued October 4, 1983.
Decided July 19, 1984.
McKay, Murphy & Guerre, P.C. (by Vincent P. Spagnuolo and Thomas R. Meagher), for the plaintiff.
Foster, Meade, Magill & Rumsey (by Robert F. Magill, Jr., and Katherine E. Ward) for the defendant.
Amici Curiae:
Larry Betz for Robert Beard.
Bauckham, Reed, Lang, Schaefer & Travis (by Robert F. Travis) for Michigan Townships Association.
BRICKLEY, J.
This case requires us to consider the constitutionality of a township zoning ordinance which limits the occupation of single-family *257 residences to an individual, or a group of two or more persons related by blood, marriage, or adoption, and not more than one other unrelated person. We conclude that this ordinance, which prohibits the defendants from including in their households six unrelated persons, is unreasonable and arbitrary and, accordingly, in violation of the Due Process Clause of the Michigan Constitution.
In July and September of 1977, the Sierawski and Dinolfo "families" moved into homes in plaintiff township. The defendants' homes are located in an R 3, Moderate Density Residential District, which allows for single-family dwellings, duplexes, and quadruplexes. The defendants' homes qualify only as single-family dwellings. Each household consists of a husband and wife, that couple's several children, and six unrelated single adults. All members of these households are members of The Work of Christ Community, a nonprofit and federally tax-exempt organization chartered by the State of Michigan. Each of these households functions as a family in a single housekeeping unit and members intend to reside in their respective households permanently. All of the members of these "families" have adopted their lifestyle as a means of living out the Christian commitment that they stress is an important part of their lives.
Over a year after defendants occupied these residences with their "families", plaintiff's planning department sent violation notices citing them for having more than one unrelated individual residing in their homes in violation of the plaintiff's zoning ordinance. Plaintiff's zoning ordinance limits those groups which can live in single-family dwellings to an individual, or a group of two or more persons related by blood, adoption, or marriage, and not more than one unrelated person, *258 excluding servants.[1] It is undisputed that the space requirements of the township building ordinance were not violated by the number of persons in each of the defendant's households. Indeed, that ordinance would allow for three more persons to live in homes the size of those owned by defendants.
Defendants jointly filed an application for a variance from the family definition section of the plaintiff's zoning ordinance, which was denied by the Zoning Board of Appeals. The minutes of the meeting at which the application was considered reflect no complaints about the defendants or the members of their households by any of their neighbors who attended that meeting. To the contrary, all present found them to be good neighbors. The variance was denied by the board because the defendants did not fall under the four general outlines for the granting of variances in the zoning ordinance.
Defendant Dinolfo then petitioned the Board of Trustees of Delta Township to overrule the decision of the Zoning Board of Appeals, and also formally presented a petition, supported by the signatures of twenty-seven neighbors, for a change in the language of the family definition section of the ordinance. Both of these efforts were unsuccessful. Plaintiff set a deadline for defendants to bring their households into compliance with the ordinance definition of a family.
After that time had expired, plaintiff filed separate complaints for injunctive relief against defendants *259 in Eaton Circuit Court. The complaints were consolidated on order of the circuit court upon stipulation of counsel.
The trial court ultimately ruled in favor of the plaintiff on cross-motions for summary judgment under GCR 1963, 117.2(3). It found that plaintiff had the power under the Township Rural Zoning Act, MCL 125.271 et seq.; MSA 5.2963(1) et seq., to define the word "family", that its definition was reasonable, and that the governmental effort to promote the traditional notion of a family was a legitimate exercise of its authority. The court justified the allowance of one unrelated adult in a household as a way to allow for some flexibility. The court relied on Village of Belle Terre v Boraas, 416 U.S. 1; 94 S. Ct. 1536; 39 L. Ed. 2d 797 (1974), to state that simply because the Legislature drew the line at one unrelated adult did not mean the ordinance was arbitrary. The court also found that defendants' intended land use was not entirely excluded from the township by the ordinance in violation of MCL 125.297a; MSA 5.2963(27a), since they could still request conditional use permits. The court entered an order permanently enjoining defendants from occupying their residences in violation of the ordinance.
The Court of Appeals affirmed, 106 Mich. App. 1, 3; 308 NW2d 437 (1981), and this Court granted defendants' application for leave to appeal. 417 Mich. 887 (1983).
The defendants argue here, as below, that the plaintiff has no authority to define the word family and that the word "family", as it appears in the Township Rural Zoning Act, is intended to be interpreted as referring to a functional family rather than a traditional biological family. Defendants contend that they constitute functional families *260 within that broad definition. Defendants also argue that the net effect of plaintiff's enforcement of this ordinance is to totally exclude them from the township in violation of their constitutional rights and their rights under MCL 125.297a; MSA 5.2963(27a). Defendants further contend that the definition of family in the ordinance both prohibits and allows property uses in an unreasonable, arbitrary, and capricious manner in violation of the Due Process and Equal Protection Clauses of the United States and Michigan Constitutions. Finally, defendants argue that the ordinance, by interfering with their chosen lifestyle and religious needs, is an impairment of their fundamental rights of privacy, association, and free exercise of religion in violation of the United States and Michigan Constitutions.
I
We first consider whether plaintiff had the power to define a family at all. The Township Rural Zoning Act is, on its face, a broad grant of power,[2] providing in part:
"The township board of an organized township in this state may provide by zoning ordinance for the regulation of land development and the establishment of districts in the portions of the township outside the limits of cities and villages which regulate the use of *261 land and structures; to meet the needs of the state's citizens for food, fiber, energy, and other natural resources, places of residence, recreation, industry, trade, service, and other uses of land; to insure that use of the land shall be situated in appropriate locations and relationships; to limit the inappropriate overcrowding of land and congestion of population, transportation systems, and other public facilities * * *. Ordinances regulating land development may also be adopted designating or limiting the location, the height, number of stories, and size of dwellings, buildings, and structures that may be erected or altered, including tents and trailer coaches, and the specific uses for which dwellings, buildings, and structures, including tents and trailer coaches, may be erected or altered; the area of yards, courts, and other open spaces, and the sanitary, safety, and protective measures that shall be required for the dwellings, buildings, and structures, including tents and trailer coaches; and the maximum number of families which may be housed in buildings, dwellings, and structures, including tents and trailer coaches, erected or altered." (Emphasis added.) MCL 125.271; MSA 5.2963(1).
As stated above, the defendants urge that the word "family" in the statute should be interpreted broadly to include a group functioning as a family. They urge that the words of the statute, "to limit the inappropriate overcrowding of land and congestion of population, transportation systems, and other public facilities" and the grant of power to regulate the "maximum number of families" in structures relate to only the number of groups, not the composition of those groups. In support of this position, the defendants cite the definition of "family" which was contained in § 12202 of the Public Health Code, MCL 333.1101 et seq.; MSA 14.15(1101) et seq., and decisions of this Court interpreting "family", in the context of an insurance policy, Carmichael v Northwestern Mutual *262 Benefit Ass'n, 51 Mich. 494; 16 N.W. 871 (1883), and in a restrictive covenant, Boston-Edison Protective Ass'n v Paulist Fathers, Inc, 306 Mich. 253; 10 NW2d 847 (1943), all of which, defendants contend, support a broad reading of the word "family". Nevertheless, we find each of these examples inapposite to the meaning of the word "family" in the Township Rural Zoning Act.[3]
*263 The Township Rural Zoning Act is a broad grant of authority to townships to zone for the "public health, safety, and welfare". Included within this broad grant is the power to zone for the purpose of density control. We do not suggest that the act delegates to townships the unfettered authority to define the term family because any definition by a political subdivision must be within the intendment of the Legislature. We do find, however, that the definition of "family" in the ordinance is consistent with the enabling legislation.
At the time of the adoption of the Township Rural Zoning Act the traditional family was the most prevalent living pattern. The literal meaning of the word "family", particularly in the context of a statute dealing with living arrangements, could lead to the conclusion that the Legislature was considering only the existence of the biological family. Such an interpretation, however, would leave a void in the act, allowing townships to consider only traditional families in their zoning ordinances, legislatively precluding an individual living alone or a family from ever having an unrelated person in the household. On the other hand, to interpret "family" as being so fluid that each homeowner could define his own family would preclude townships from giving any consideration to the composition of a household. We do not think the Legislature intended either result. Nothing in the act precludes a township from considering the legal relationships between persons and nothing in the act forbids considering other kinds of relationships.
*264 The grant by the Legislature of the power to "designat[e] * * * the maximum number of families" presumes the power to consider the internal composition of a group. The word "family" presumes the power to consider the legal relationships of group members, as well as other relationships. We take notice that ordinances such as the one involved here have long existed without any adverse legislative reaction. As there is no indication of any legislative intent to preclude a township's consideration of the legal relationships of group members, we must conclude that the enactment of the present ordinance was within the power granted to plaintiff by the Legislature. We must next consider if the result of this grant of power plaintiff's ordinance is constitutional.[4]
*265 II
In Village of Euclid v Ambler Realty Co, 272 U.S. 365, 395; 47 S. Ct. 114; 71 L. Ed. 303 (1926), the landmark zoning case, the Supreme Court first upheld the constitutionality of a zoning ordinance as a valid exercise of the state's police power. The standard used was whether the regulation was "clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare". The Court recognized, however, that a zoning law may be constitutional on its face, while aspects of it could be invalid as it applies to a specific property owner.
Nearly fifty years later, in Village of Belle Terre v Boraas, 416 U.S. 1; 94 S. Ct. 1536; 39 L. Ed. 2d 797 (1974), the Supreme Court confronted the constitutionality of a local zoning ordinance that is in all significant respects identical to the ordinance in question here. The Village of Belle Terre ordinance limited residential occupancy to a biological family plus no more than two unrelated persons. The case arose when the house in question was leased to eight college students. In upholding the constitutionality of the ordinance, Justice Douglas, writing for the majority, held that there were no fundamental rights involved which would require a scrutiny higher than determining if the ordinance was arbitrary. The Court found that distinguishing between a biological family and an unrelated group was not unreasonable or arbitrary under the Due Process and Equal Protection *266 Clauses of the United States Constitution. It was argued in Belle Terre, p 8, as it is here, that "if two unmarried people can constitute a `family' there is no reason why three or four may not". To that argument the Supreme Court responded "[b]ut every line drawn by a legislature leaves some out that might well have been included. That exercise of discretion, however, is a legislative, not a judicial, function."
The defendants here argue for a distinction between their case and Belle Terre because Belle Terre dealt with the commercialization of residential property and transient students, rather than as here a permanent functional family structured around a nuclear family. While the analysis of Belle Terre is somewhat sketchy, its conclusion is not.[5] The Supreme Court stated that the ordinance was not "aimed at transients", involved "no procedural disparity inflicted on some but not on others", and implicated "no `fundamental' right guaranteed by the Constitution, such as voting". Thus, we find Belle Terre to be clear authority for the proposition that to limit residentially zoned property to a traditional family and a number of non-related persons is permissible under the United States Constitution.
Our conclusion is not altered by Moore v East Cleveland, 431 U.S. 494; 97 S. Ct. 1932; 52 L. Ed. 2d 531 (1977), notwithstanding defendants' contention that Moore modifies Belle Terre. In Moore, the Court held unconstitutional an ordinance which allowed only nuclear families to reside in single-family *267 dwellings. On the facts of the case, the ordinance prohibited a grandchild from living with his grandmother. The Supreme Court came to a quick and strong defense of the traditional extended family, stating:
"Ours is by no means a tradition limited to respect for the bonds uniting the members of the nuclear family. The tradition of uncles, aunts, cousins, and especially grandparents sharing a household along with parents and children has roots equally venerable and equally deserving of constitutional recognition. Over the years millions of our citizens have grown up in just such an environment, and most, surely, have profited from it. Even if conditions of modern society have brought about a decline in extended family households, they have not erased the accumulated wisdom of civilization, gained over the centuries and honored throughout our history, that supports a large conception of the family. Out of choice, necessity, or a sense of family responsibility, it has been common for close relatives to draw together and participate in the duties and the satisfactions of a common home." Id., pp 504-505.
We view Moore not as a limitation of Belle Terre, but, instead, as dealing with the other side of the Belle Terre coin that while the state can restrict residential occupancy to the family, it cannot dissect the family. Having so found, we, therefore, must conclude that plaintiff's ordinance is constitutional as a matter of federal law. We must then accept the defendants' challenge that we examine the Delta Township ordinance in light of Michigan's Constitution.
The constitutionality of zoning in Michigan is well established. See Austin v Older, 283 Mich. 667; 278 N.W. 727 (1938). In traditional zoning matters, where the issue is whether a certain parcel of land is zoned reasonably, as compared to *268 another possible zoning classification, the following principles are applicable:
"The important principles require that for an ordinance to be successfully challenged plaintiffs prove:
"`[F]irst, that there is no reasonable governmental interest being advanced by the present zoning classification itself * * * or
"`[S]econdly, that an ordinance may be unreasonable because of the purely arbitrary, capricious and unfounded exclusion of other types of legitimate land use from the area in question.' [Kropf v Sterling Heights,] 391 Mich. 139, 158[; 215 NW2d 179 (1974)].
"The four rules for applying these principles were also outlined in Kropf. They are:
"1. `"[T]he ordinance comes to us clothed with every presumption of validity."' 391 Mich. 139, 162, quoting from Brae Burn, Inc v Bloomfield Hills, 350 Mich. 425; 86 NW2d 166 (1957).
"2. `"[I]t is the burden of the party attacking to prove affirmatively that the ordinance is an arbitrary and unreasonable restriction upon the owner's use of his property * * *. It must appear that the clause attacked is an arbitrary fiat, a whimsical ipse dixit, and that there is no room for a legitimate difference of opinion concerning its reasonableness."' 391 Mich. 139, 162 quoting Brae Burn, Inc.
"3. `Michigan has adopted the view that to sustain an attack on a zoning ordinance, an aggrieved property owner must show that if the ordinance is enforced the consequent restrictions on his property preclude its use for any purposes to which it is reasonably adapted.' 391 Mich. 139, 162-163.
"4. `"This Court, however, is inclined to give considerable weight to the findings of the trial judge in equity cases."' 391 Mich. 139, 163, quoting Christine Building Co v City of Troy, 367 Mich. 508, 518; 116 NW2d 816 (1962)." Kirk v Tyrone Twp, 398 Mich. 429, 439-440; 247 NW2d 848 (1976).
The dispute at bar is not between contending *269 land uses, such as between single dwelling and multiple dwelling uses or between residential and commercial uses. In those kinds of disputes we are dealing with a local government's line drawing between such uses. While the decision to zone a community is a reasonable exercise of the police power, it is recognized that the actual line drawn between uses is often, by its nature, arbitrary. Hence, the above-cited test is weighted to recognize and defer to the planning expertise in the difficult task of zoning. The debate in the present case, however, while undoubtedly involving zoning, is not such a traditional zoning conflict.
The dispute here is not between contending land uses, but about who can occupy a residential dwelling. In evaluating the relative merits and effects of mixing related and non-related persons in a single-family dwelling, planning expertise becomes more questionable and human experience and values more paramount. Thus, our task here is not to evaluate the reasonableness of the township's designation of one land use as opposed to another, but, rather, to evaluate whether the existence of the distinction made is permissible.
We think the appropriate standard, which does not conflict with that described above, is that due process standard generally used to evaluate the normal use of the police power. Of course, we still presume the constitutionality of the ordinance. But, extraordinary deference given to the line drawing in traditional zoning matters is not appropriate here.
Even plaintiff urges our consideration of, and we find appropriate, the standard laid down in a non-zoning matter, Manistee Bank & Trust Co v McGowan, 394 Mich. 655, 671; 232 NW2d 636 (1975), in which, after reviewing a number of different *270 due process and equal protection standards, Justice LEVIN wrote:
"`the governing rule is one of reason: The Equal Protection Clause, like the Due Process Clause, is a guaranty that controls the reasonableness of governmental action.' The classification must be a reasonable one, and it must bear a reasonable relation to the object of the legislation."
In a case similar to the present one, the New Jersey Supreme Court used the same standard:
"It is elementary that substantive due process demands that zoning regulations, like all police power legislation, must be reasonably exercised the regulation must not be unreasonable, arbitrary or capricious, the means selected must have a real and substantial relation to the object sought to be attained, and the regulation or proscription must be reasonably calculated to meet the evil and not exceed the public need or substantially affect uses which do not partake of the offensive character of those which caused the problem sought to be ameliorated." Kirsch Holding Co v Borough of Manasquan, 59 NJ 241, 251; 281 A2d 513 (1971).
Plaintiff lists the objectives of this ordinance: preservation of traditional family values, maintenance of property values and population and density control.[6] We cannot disagree that those are *271 not only rational but laudable goals. Where the difficulty arises, however, is when plaintiff attempts to convince us that the classification at hand limiting to two the number of unrelated persons who may occupy a residential dwelling together or with a biological family is reasonably related to the achievement of those goals. It is precisely this rational relationship between the means used to achieve the legislative goals that must exist in order for this deprivation of the defendants' use of their property to pass the due process test.
Running through plaintiff's arguments is the assumption that unrelated persons will manifest a behavior pattern different from the biological family. They see
"the potential for occupancy by one `nuclear family' together with any number of unrelated and unruly individuals who view regular late night parties as a common bond and a proper function of child rearing."
If defendants succeed here, plaintiff fears that the next group taking advantage of the opportunity might not be of defendants' character. Plaintiff suggests that the "common bond of the group * * * [might be] not the Work of Christ, but the Work of Satan".
Amicus curiae, Michigan Townships Association, is even more direct in its perception of the evils *272 that will result if non-related persons are allowed to live as a functional family.
"The purpose of such regulations is to prohibit the influx of informal residential groups of people whose primary inclination is toward the enjoyment of a licentious style of living.
"While it seems apparent that defendants are not of this character, it would seem equally apparent that allowing in excess of six unrelated individuals to occupy a single-family dwelling unit would allow college fraternities, `hippie' communes, motorcycle clubs, and assorted loosely structured groups of people associating for the purpose of enjoying a purely licentious style of living to locate at will in settled, low density residential neighborhoods and, perhaps even worse in duplexes, quadruplexes, and even in high-density apartment buildings. No somber recitations of anthropologists and sociologists are required to make one visualize the problems of noise, nuisance, vehicular traffic, and general disruption of orderly and peaceful living that could be brought about by permitting such arrangements."
We agree with amicus to the extent that the residential nature of a neighborhood is a proper subject for legislative protection. As stated by the United States Supreme Court in Belle Terre, p 9:
"A quiet place where yards are wide, people few, and motor vehicles restricted are legitimate guidelines in a land-use project addressed to family needs. This goal is a permissible one within Berman v Parker [348 U.S. 26; 75 S. Ct. 98; 99 L. Ed. 27 (1954)]. The police power is not confined to elimination of filth, stench, and unhealthy places. It is ample to lay out zones where family values, youth values, and the blessings of quiet seclusion and clean air make the area a sanctuary for people."
But we fail to see how plaintiff's ordinance furthers these goals. We, therefore, must part company *273 with the United States Supreme Court. In Belle Terre, the Supreme Court made no attempt to suggest how a line drawn between the related and the unrelated advances these goals. It merely said that the line drawing was a "legislative, not a judicial, function". We agree that line drawing is a legislative function, but certainly there can be no argument against the well-understood rule of law that the task of deciding whether the line itself is reasonably related to the object of the line drawing is a judicial function.
Here, plaintiff attempts to have us accept its assumption that different and undesirable behavior can be expected from a functional family. Yet, we have been given not a single argument in support of such an assumption, only the assumption. Defendants, on the other hand, relying on decisions from other jurisdictions construing their own state constitutions, present a compelling argument that the means are not rationally related to the end sought.
Those states that have rejected Belle Terre have stressed that a line drawn near the limit of the traditional family is both over- and under-inclusive. See New Jersey v Baker, 81 NJ 99; 405 A2d 368 (1979); Santa Barbara v Adamson, 27 Cal 3d 123; 164 Cal Rptr 539; 610 P2d 436 (1980) (finding over- and under-inclusiveness in the context of a right to privacy challenge). Unrelated persons are artificially limited to as few as two, while related families may expand without limit. Under the instant ordinance, twenty male cousins could live together, motorcycles, noise, and all, while three unrelated clerics could not. A greater example of over- and under-inclusiveness we cannot imagine. The ordinance indiscriminately regulates where no regulation is needed and fails to regulate where *274 regulation is most needed. As the court said in Baker, supra, p 107:
"The fatal flaw in attempting to maintain a stable residential neighborhood through the use of criteria based upon biological or legal relationships is that such classifications operate to prohibit a plethora of uses which pose no threat to the accomplishment of the end sought to be achieved. Moreover, such a classification system legitimizes many uses which defeat that goal. Plainfield's ordinance, for example, would prohibit a group of five unrelated `widows, widowers, older spinsters or bachelors or even of judges' from residing in a single unit within the municipality. Kirsch Holding Co v Borough of Manasquan, supra, p 248. On the other hand, a group consisting of 10 distant cousins could so reside without violating the ordinance. Thus the ordinance distinguishes between acceptable and prohibited uses on grounds which may, in many cases, have no rational relationship to the problem sought to be ameliorated."
Plaintiff brings to our attention cases from those jurisdictions that have adopted the Belle Terre rationale. One in particular, Town of Durham v White Enterprises, Inc, 115 NH 645, 649; 348 A2d 706 (1975), is typical of that point of view. There the court said:
"The State has no particular interest in keeping together a certain group of unrelated persons. The State has a clear interest, however, in preserving the integrity of the biological or legal family. The promotion of this legitimate government purpose justifies the exclusion of a blood related family from the density requirements of the ordinance which applies to an unrelated household. * * * Hence this classification is not invidious or arbitrary and is constitutional."
Indeed, "the state has no particular interest in keeping together a certain group of unrelated *275 persons", but, most certainly, it has no business keeping them apart, absent a valid reason for doing so. We have found no such reason in the facts or arguments of this case. We agree with the conclusion of the Pennsylvania appellate court in Hopkins v Zoning Hearing Board of Abington Twp, 55 Pa Commw Ct 365, 370; 423 A2d 1082 (1980). In holding that three retarded children could not be excluded from living with a married couple under a zoning family definition similar to the instant case, the court found
"no rational relationship between the restrictive definition of family in the Township ordinance and the state interest to preserve the residential character of the neighborhood".
We know from common experience that, while the motorcycle gang argument is a threatening one, it is more a symbol, one that is not by any stretch of the imagination representative of the lifestyle of the countless people who seek residential living in something other than the biological family setting. As to the specter of a "Work of Satan" group that could slip in if defendants succeed here, we note that if this ordinance were upheld it would not keep out Ma Barker and her sons.
We agree that it would be easier for the plaintiff, with one broad stroke of its legislative brush, to sweep out of its residential neighborhoods a whole class of persons desiring residential accommodations than to have to legislate and enforce against the specific behavior it finds offensive and finds associated with the unrelated class. But protecting the constitutional rights of citizens comes before making life easy for government.
There has been no evidence presented nor do we *276 know of any that unrelated persons, as such, have any less a need for the advantages of residential living or that they have as a group behavior patterns that are more opprobrious than the population at large. In the absence of such demonstration to justify this kind of classification, the ordinance can only be termed arbitrary and capricious under the Due Process Clause of the Michigan Constitution. The plight of the defendants in this case who certainly defy the plaintiff's stereotype of the unrelated family represents the best evidence of the perniciousness of allowing unexamined assumptions to become the basis of regulatory classification.[7]
*277 That government can classify, draw lines around, and support the biological family is well settled, as evidenced by our tax and inheritance laws. Our decision here is not in derogation of the cultural, economic, and moral value of the traditional family and its essential and unique role in our society, but rather is based on the fact that the exclusion of groups such as defendants from a residential neighborhood is not in any way supportive of "family values". Ironically, the enforcement of this ordinance prohibits the two defendant nuclear families from adding to their numbers in a way they choose pursuant to the highest possible motives.
The plaintiff is not, as a result of anything we say here today, without authority to regulate the behavior it finds inimical to its concept of a residential neighborhood, including a rational limitation on the numbers of persons that may occupy a dwelling. Plaintiff need not open its residential borders to transients and others whose lifestyle is not the functional equivalent of "family" life.[8] Nor *278 are the plaintiffs precluded from distinguishing between the biological family and a functional family when it is rational to do so, such as in limiting the number of persons who may occupy a dwelling for such valid reasons as health, fire safety, or density control. Although we have criticized the result in Town of Durham v White Enterprises, Inc, supra, that decision does point out one factor which distinguishes families from groups of unrelated persons. As the court in Durham, supra, p 649, stated:
"If an unrelated household group exceeds the designated density requirement it is by voluntary action of the group. The blood related family by its natural growth may become in excess of the density limit."
We find that plaintiff's ordinance is capricious, arbitrary, and in violation of the Due Process Clause of the Michigan Constitution in that it limits the composition of groups in a manner that is not rationally related to the stated goals of the zoning ordinance.[9]
*279 Reversed.
KAVANAGH, LEVIN, RYAN, and CAVANAGH, JJ., concurred with BRICKLEY, J.
WILLIAMS, C.J. (dissenting).
This case brings into question the constitutionality of a township zoning ordinance which limits the occupancy of single-family residences to not more than two unrelated persons while not limiting the number of persons related by blood, marriage, or adoption. While I agree with the majority's holding that the zoning ordinance is a legitimate exercise of the township's police power under the United States Constitution, I disagree with their conclusion that it violates due process under our state constitution.
The appropriate standard for reviewing a challenge to the constitutionality of a zoning ordinance was set forth by this Court in Kirk v Tyrone Twp, 398 Mich. 429, 439-440; 247 NW2d 848 (1976):
"The important principles require that for an ordinance to be successfully challenged plaintiffs prove:
"`[F]irst, that there is no reasonable governmental interest being advanced by the present zoning classification itself * * * or
"`[S]econdly, that an ordinance may be unreasonable because of the purely arbitrary, capricious and unfounded exclusion of other types of legitimate land use from the area in question.' [Kropf v Sterling Heights,] 391 Mich. 139, 158[; 215 NW2d 179 (1974)].
"The four rules for applying these principles were also outlined in Kropf. They are:
"1. `"[T]he ordinance comes to us clothed with every presumption of validity."' 391 Mich. 139, 162, quoting from Brae Burn, Inc v Bloomfield Hills, 350 Mich. 425; 86 NW2d 166 (1957).
"2. `"[I]t is the burden of the party attacking to prove affirmatively that the ordinance is an arbitrary and unreasonable restriction upon the owner's use of his *280 property * * *. It must appear that the clause attacked is an arbitrary fiat, a whimsical ipse dixit, and that there is no room for a legitimate difference of opinion concerning its reasonableness."' 391 Mich. 139, 162, quoting Brae Burn, Inc.
"3. `Michigan has adopted the view that to sustain an attack on a zoning ordinance, an aggrieved property owner must show that if the ordinance is enforced the consequent restrictions on his property preclude its use for any purposes to which it is reasonably adapted.' 391 Mich. 139, 162-163.
"4. `"This Court, however, is inclined to give considerable weight to the findings of the trial judge in equity cases."' 391 Mich. 139, 163, quoting Christine Building Co v City of Troy, 367 Mich. 508, 518; 116 NW2d 816 (1962)."
The majority opinion, however, fails to adhere to these principles and instead applies a rational relationship standard of review which has generally been employed by this Court in non-zoning matters. The majority reasons that because the dispute here concerns occupants of land rather than competing land uses the principles applicable in traditional zoning cases are inappropriate. Regardless of whether an ordinance is viewed as a regulation of land uses or occupants of land, the principles articulated in Kirk and other well-established Michigan precedent are nonetheless applicable and should not be so hastily discarded.
Zoning ordinances have long been accorded every presumption of constitutionality. Kirk, supra, p 439. Moreover, as mandated by our constitution, this Court is required to liberally construe all constitutional provisions and laws pertaining to counties, townships, cities and villages. Const 1963, art 7, § 34.
This judicial deference to the validity of municipality zoning laws is premised on the fact that *281 zoning matters are essentially legislative and not judicial functions. In Brae Burn, Inc v Bloomfield Hills, supra, pp 430-431, this Court elaborated on this fundamental principle:
"[T]his Court does not sit as a superzoning commission. Our laws have wisely committed to the people of a community themselves the determination of their municipal destiny, the degree to which the industrial may have precedence over the residential, and the areas carved out of each to be devoted to commercial pursuits. With the wisdom or lack of wisdom of the determination we are not concerned. The people of the community, through their appropriate legislative body, and not the courts, govern its growth and its life. Let us state the proposition as clearly as may be: It is not our function to approve the ordinance before us as to wisdom or desirability. For alleged abuses involving such factors the remedy is the ballot box, not the courts. We do not substitute our judgment for that of the legislative body charged with the duty and responsibility in the premises. As Willoughby phrased it in his treatise, Constitution of the United States (2d ed, 1929), vol 1, § 21, p 32: `The constitutional power of a law-making body to legislate in the premises being granted, the wisdom or expediency of the manner in which that power is exercised is not properly subject to judicial criticism or control.' We held similarly in Tel-Craft Civic Ass'n v Detroit, 337 Mich. 326, 331 [60 NW2d 294 (1953)]:
"`Unless it can be shown that the council acted arbitrarily or unreasonably, their determination is final and conclusive and no court may alter or modify the ordinance as adopted.
"`"While it is within the province of the courts to pass upon the validity of statutes and ordinances, courts may not legislate nor undertake to compel legislative bodies to do so one way or another."'"
Thus, it is not for this Court to second-guess the wisdom of local zoning authorities absent a showing *282 that the ordinance is an arbitrary and capricious restriction and serves no governmental interest.
A companion rule to the judicial deference accorded to zoning matters is that the burden of proof rests upon the party attacking the validity of a zoning ordinance. Not only does the majority opinion bypass the extraordinary deference usually given to zoning ordinances, but it also appears to have impermissibly shifted the burden of proof onto plaintiff. The majority refers to the fact that the plaintiff has not convinced them that the classification at hand is reasonably related to the achievement of the stated goals of the ordinance. It is not, however, the plaintiff's burden to demonstrate the reasonableness of the ordinance, but rather it is defendants' burden to affirmatively prove the arbitrariness and capriciousness of the classification.
One of several reasons advanced by plaintiff in support of the ordinance is that it was designed to preserve traditional family values. It is clearly within the state's police power to zone and regulate land use in promotion and preservation of the sanctity of the traditional family lifestyle. Village of Belle Terre v Boraas, 416 U.S. 1, 9; 94 S. Ct. 1536; 39 L. Ed. 2d 797 (1974); see also Palo Alto Tenants Union v Morgan, 321 F Supp 908 (ND Cal, 1970), aff'd 487 F2d 883 (CA 9, 1973). The United States Supreme Court held in Belle Terre that the preservation of family values was a proper subject for zoning:
"A quiet place where yards are wide, people few, and motor vehicles restricted are legitimate guidelines in a land-use project addressed to family needs. This goal is a permissible one within Berman v Parker [348 U.S. 26; 75 S. Ct. 98; 99 L. Ed. 27 (1954)]. The police power is not *283 confined to elimination of filth, stench, and unhealthy places. It is ample to lay out zones where family values, youth values, and the blessings of quiet seclusion and clean air make the area a sanctuary for people." (Emphasis added.) 416 U.S. 9.
The special values the local legislative body might consider in its zoning decision might well be more expansive, but just as fundamental, as those mentioned by the United States Supreme Court. A biological family, for example, could have concerns about schools that other living units either might not share or might even actively oppose.
The importance of the family was reaffirmed in the case of Moore v East Cleveland, 431 U.S. 494; 97 S. Ct. 1932; 52 L. Ed. 2d 531 (1977), wherein the Court struck down an ordinance which prohibited extended biological or legal families to live in an area zoned for single-family dwellings. Justice Powell, writing for the plurality of the Court, distinguished Belle Terre as a case in which "family needs" and "family values" were promoted since the ordinance there barred only unrelated persons whereas the ordinance in Moore, by restricting the number of related persons who could live together, had sliced "deeply into the family itself". 431 U.S. 498. Justice Powell also noted the foundational role of the family in our society:
"Our decisions establish that the Constitution protects the sanctity of the family precisely because the institution of the family is deeply rooted in this Nation's history and tradition. It is through the family that we inculcate and pass down many of our most cherished values, moral and cultural." 431 US 503-504.
Justice Brennan, joining in the plurality opinion of Moore, wrote a separate concurrence, emphasizing the "preferred position" of the family:
*284 "Whether it be the extended family of a more leisurely age or the nuclear family of today the role of the family in raising and training successive generations of the species makes it more important, we dare say, than any other social or legal institution * * *. If any freedom not specifically mentioned in the Bill of Rights enjoys a `preferred position' in the law it is most certainly the family." (Emphasis supplied by the Court, quoting from the Village of Belle Terre's brief.) 431 U.S. 511.[1]
Decisions from other state jurisdictions which have addressed identical constitutional challenges to zoning ordinances similar to the ordinance in the instant case have upheld their respective ordinances on the ground that maintenance of a traditional family environment constitutes a reasonable basis for excluding uses that may impair the stability of that environment and erode the values associated with a traditional family style of life. See Rademan v City of Denver, 186 Colo 250; 526 P2d 1325 (1974); Town of Durham v White Enterprises, Inc, 115 NH 645; 348 A2d 706 (1975); Ass'n for Educational Development v Hayward, 533 S.W.2d 579 (Mo, 1976); Penobscot Area Housing Development Corp v City of Brewer, 434 A2d 14 (Me, 1981); see, generally, Anno: Validity of ordinance restricting number of unrelated persons who can live together in residential zone, 12 ALR4th 238.
The two out-of-state cases cited by the majority in support of the claim that an ordinance drawn too close to the traditional family model is an over- and under-inclusive classification, New Jersey *285 v Baker, 81 NJ 99; 405 A2d 368 (1979), and Santa Barbara v Adamson, 27 Cal 3d 123; 164 Cal Rptr 539; 610 P2d 436 (1980), are wholly inapplicable in the instant case because they apply a different standard of review from that of Kropf and its progeny.
The majority does not dispute the township's police power to enact ordinances supportive of the biological or legal family but does point out that the ordinance in the instant case is an unreasonable exercise of that power because less restrictive means might have been chosen to accomplish the same objective. Whether a municipality could have adopted less restrictive means to achieve the same goals is not a controlling factor in considering the constitutionality of a zoning ordinance. Rather, a reviewing court's focus should be upon whether there exists some reasonable basis for the means actually employed. In making such a determination, if any state of facts either known or which could reasonably be assumed is presented in support of the ordinance, this Court must defer to the legislative judgment. Robinson Twp v Knoll, 410 Mich. 293, 339; 302 NW2d 146 (1981) (dissent of MOODY, J.); Shavers v Attorney General, 402 Mich. 554, 613-614; 267 NW2d 72 (1978).
Zoning matters necessarily involve difficult choices between the inclusion of certain land uses and the exclusion of others in a particular area. The drawing of these lines is exclusively a legislative judgment. In Village of Belle Terre v Boraas, supra, 416 U.S. 8, the United States Supreme Court specifically addressed this restriction on the power of the judiciary in zoning cases:
"It is said, however, that if two unmarried people can constitute a `family,' there is no reason why three or four may not. But every line drawn by a legislature *286 leaves some out that might well have been included. That exercise of discretion, however, is a legislative, not a judicial, function."
In my opinion, the majority has overstepped its bounds as a judicial body and has intruded into the legislative sphere by acting as a superzoning commission contrary to the pronouncement by the United States Supreme Court in Belle Terre and this Court in Brae Burn, Inc, supra, pp 430-431. The majority goes so far as to give examples of ordinances from other states which they suggest offer innovative approaches to preserve the family character of a neighborhood in a more rational manner than the ordinance in the instant case. These references are of legitimate interest to the Legislature, but not to the judiciary. The task of line drawing is solely a legislative one, and this Court should not even attempt to interfere in this legislative function.
On the basis of the record in the instant case, defendants have not sustained their burden of proof so as to rebut the presumption favoring the ordinance's validity. It is not enough that defendants present evidence which raises a debatable question as to the reasonableness of the ordinance. The defendants must present sufficient evidence to prove that there is no room for a fair and legitimate difference of opinion that the classification drawn is an unreasonable exercise of the township's police power. This defendants have failed to do.
For the foregoing reasons, I respectfully dissent. Accordingly, I would affirm the decision of the Court of Appeals.
BOYLE, J., concurred with WILLIAMS, C.J.
NOTES
[1] Delta Township zoning ordinance, § 2.2.0(28) provides:
"Family: An individual or a group of two or more persons related by blood, marriage, or adoption, including foster children and servants, together with not more than one additional person not related by blood, marriage, or adoption, living together as a single housekeeping unit in a dwelling unit."
[2] In the absence of state enabling legislation, a political subdivision has no power to zone. People v Armstrong, 73 Mich. 288; 41 N.W. 275 (1889); Detroit Osteopathic Hospital v Southfield, 377 Mich. 128; 139 NW2d 728 (1966). Once the power has been granted to a political subdivision, however, it should not be artificially limited. Const 1963, art 7, § 34 provides:
"The provisions of this constitution and law concerning counties, townships, cities and villages shall be liberally construed in their favor. Powers granted to counties and townships by this constitution and by law shall include those fairly implied and not prohibited by this constitution."
[3] Section 12202 of the Public Health Code defined a family as "1 or more individuals living together and sharing common living, sleeping, cooking, and eating facilities". MCL 333.12202; MSA 14.15(12202), repealed by 1980 PA 431. While defendants' families certainly fall within this definition, the definition is of little use in determining the intent of the Legislature when enacting the Township Rural Zoning Act. The Public Health Code was enacted in 1978. The Township Rural Zoning Act was enacted in 1943. At the time of the enactment of the Township Rural Zoning Act provisions comparable to those found in § 12202 of the Public Health Code did not specifically define a "family". See 1939 PA 303, § 2. Also, § 2(3a) of 1939 PA 303 appears to equate the phrase "immediate family" with a "family", suggesting that, at least in 1939, the Legislature was not defining the family expansively.
In Carmichael, the plaintiff sought to recover benefits from the mutual benefit association which had insured the decedent's life. Plaintiff was named beneficiary of the decedent. The act which authorized the creation of mutual benefit associations provided "[t]hat any number of persons, not less than five, may become a body corporate and politic, for the purpose of securing to the families or heirs of any member, upon his death, a certain sum of money". 1871 CL 2829. Plaintiff, who had lived with the deceased as his daughter for many years, was denied benefits by the association on the grounds that she was neither an heir nor a family member. This Court, however, held that the plaintiff was indeed a member of the decedent's family, noting that depending on the context, the word family can mean many things. The Court refused to narrowly construe the word family when to do so "would cause injustice". Carmichael, p 496. Of course, the word family in the Township Rural Zoning Act is not in the midst of a statute which authorizes the existence of associations to provide death benefits. The policy behind the expansive definition of family in Carmichael is not present in the instant case.
In Boston-Edison Protective Ass'n v Paulist Fathers, Inc, supra, decided five months after the enactment of the Township Rural Zoning Act, the issue was not what constituted a family, but rather, whether a restrictive covenant which limited the use of a building to that of a "single dwelling house" precluded its use by a group of priests. Because the plaintiff in the case relied on a dictum in Nerrerter v Little, 258 Mich. 462; 243 N.W. 25 (1932), to the effect that a covenant limiting construction on land to a single dwelling house allowed the building of only a single dwelling designed to be used by one family, the Boston-Edison Court, also in dicta, embarked on a discussion of the meaning of family, relying heavily on Carmichael. Although Boston-Edison may stand for the meaning of "single dwelling house" as used in a restrictive covenant, it does not give us the meaning of the word "family" when used by the Legislature.
[4] Defendants also contend that plaintiff's ordinance acted to totally exclude their proposed land use from the community in violation of MCL 125.297a; MSA 5.2963(27a), which provides:
"A zoning ordinance or zoning decision shall not have the effect of totally prohibiting the establishment of a land use within a township in the presence of a demonstrated need for that land use within either the township or surrounding area within the state, unless there is no location within the township where the use may be appropriately located, or the use is unlawful".
The Court of Appeals affirmed the trial court's grant of summary judgment under GCR 1963, 117.2(3) in favor of plaintiff on this issue, holding that because defendants had failed to apply for a conditional use permit under plaintiff's ordinance, defendants had failed to show a factual prerequisite for a claim under the statute. We express no opinion on the correctness of that reasoning.
Defendants' affirmative defense under the statute is that the ordinance totally precludes non-traditional families from living in Delta Township. Therefore, defendants contend, the ordinance is void as to their land use and they are free to establish it where they choose. Although we do not decide the issue, we note that such reasoning is open to question in light of Ed Zaagman, Inc v City of Kentwood, 406 Mich. 137; 277 NW2d 475 (1979). Defendants have made no showing that there is a location in the township where their use may be appropriately located, as is required by the statute, except to argue that their present location is appropriate because the distinction between traditional families and their non-traditional families is irrational. Thus, although it is always preferable to decide a case on statutory, rather than on constitutional grounds, if possible, defendants' argument under the statute forces the constitutional issue.
If one assumes that there is a rational reason for separating families from non-families, then defendants would still have to show that there is a place in the township appropriate for their land use. Since they have not done so, their argument under the statute must fail. We must, therefore, address the assumption that there is a rational difference between such groups. That is a constitutional issue, whether addressed in terms of the statute or otherwise.
[5] The reasoning of Belle Terre has been widely criticized by commentators. See, e.g., Williams & Doughty, Studies in Legal Realism: Mount Laurel, Belle Terre & Berman, 29 Rutgers L Rev 73, 76-82 (1975); Hartman, Village of Belle Terre v Boraas: Belle Terre Is a Nice Place to Visit But Only "Families" May Live There, 8 Urban L Ann 193 (1974).
[6] We note with interest that neither the Legislature in the enabling legislation nor the township in its zoning ordinance make any mention of the goal of "preserving traditional family values". The Township Rural Zoning Act lists as the statute's goals:
"to ensure that the use of the land shall be situated in appropriate locations and relationships; to limit the inappropriate overcrowding of land and congestion of population, transportation systems, and other public facilities". MCL 125.271; MSA 5.2963(1).
The Delta Township ordinance cites as its purposes:
"1) Promoting and protecting the public health, safety, and general welfare; 2) Protecting the character and stability of the recreational, agricultural, residential, commercial, and industrial areas within the unincorporated portions of Delta Charter Township; 3) Regulating growth of Delta Charter Township to obtain orderly and beneficial development; 4) Preventing the overcrowding of land and undue concentration of buildings and structures so far as is possible and appropriate in each zoning district by regulating the use and size of buildings in relation to the land surrounding them; 5) Pursue all township responsibilities set forth in [the enabling legislation]."
[7] In Michigan v Long, ___ US ___; 103 S. Ct. 3469, 3478; 77 L. Ed. 2d 1201 (1983), the United States Supreme Court established that cases referring to both state and federal law would be presumed to be based on federal grounds absent a "plain statement that the decision below rested on an adequate and independent state ground". We have relied on no federal decisions to reach our conclusion in this case. It would be disingenuous, however, not to admit that our standards under the Michigan Constitution have been largely influenced by decisions of the United States Supreme Court. In the past, we have found it necessary to enforce the Fourteenth Amendment of the United States Constitution more often than the comparable provision in our own constitution. We have often spoken indistinguishably about the standards governing our respective constitutions and been vague as to which constitution we were interpreting. See, e.g., Robinson Twp v Knoll, 410 Mich. 293; 302 NW2d 146 (1981), O'Donnell v State Farm Mutual Automobile Ins Co, 404 Mich. 524; 273 NW2d 829 (1979), Advisory Opinion on Constitutionality of 1975 PA 227 (Questions 210), 396 Mich. 465; 242 NW2d 3 (1976), and Manistee Bank & Trust Co v McGowan, 394 Mich. 655; 232 NW2d 636 (1975).
In the present case, we have applied a standard that the means bear a reasonable relationship to the legislative end that has its roots in federal constitutional law. Over time, that standard has been adopted by this Court in applying the law of Michigan to a given fact situation. We, therefore, consider that standard applicable to our constitution.
In People v Victor, 287 Mich. 506; 28 N.W. 666 (1939), we found a statute prohibiting the giving away of drinking glasses at gas stations to be unreasonable and arbitrary and in violation of the Due Process Clause of the Michigan Constitution, despite that in Rast v Van Deman & Lewis Co, 240 U.S. 342; 36 S. Ct. 370; 60 L. Ed. 679 (1916), the United States Supreme Court had upheld a similar law which banned the giving away of trading stamps. We applied the same rationality test, but we reached a different conclusion. We did not there and we do not now hesitate to reach a conclusion different from that reached by the United States Supreme Court when it is warranted.
For the benefit of the parties to this case and for any future review, we offer the following "plain statement". As should be clear from our outright rejection of Belle Terre, our decision here is based solely on the Due Process Clause of the Michigan Constitution, art 1, § 17, notwithstanding the use of a standard originally developed in the federal system.
[8] Without judging them, we note several zoning ordinances that have come to our attention in our research that appear to offer innovative approaches to preserve the family character of a neighborhood without arbitrarily excluding those groups not inimical to that goal. In Kirsch Holding Co v Borough of Manasquan, supra, p 247, the ordinance in question described the family as:
"a. One or more persons related by blood or marriage occupying a dwelling unit and living as a single, nonprofit housekeeping unit.
"b. A collective number of individuals living together in one house under one head, whose relationship is of a permanent and distinct domestic character, and cooking as a single housekeeping unit. This definition shall not include any society, club, fraternity, sorority, association, lodge, combine, federation, group, coterie, or organization, which is not a recognized religious order, nor include a group of individuals whose association is temporary and resort-seasonal in character or nature".
In Penobscot Area Housing Development Corp v City of Brewer, 434 A2d 14, 20 (Me, 1981), the Maine Supreme Court discussed an ordinance that defined the family as
"a single individual doing his own cooking, and living upon the premises as a separate housekeeping unit, or a collective body of persons doing their own cooking and living together upon the premises as a separate housekeeping unit in a domestic relationship based upon birth, marriage or other domestic bond as distinguished from a group occupying a boarding house, lodging house, club, fraternity or hotel".
[9] In view of this conclusion, it is not necessary to consider the defendants' further constitutional arguments concerning our Equal Protection Clause or the abridgement of their religious freedom under either the United States or Michigan Constitutions.
[1] Our national recognition of family values is consonant with religious traditions, where the family is central. We express family concerns in our laws in many ways; for example, family connections are priority considerations in immigration preferences, 8 USC 1153, and in draft deferments, 50 USC Appendix 456(h). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578589/ | 281 S.W.3d 99 (2008)
NEW WAVE TECHNOLOGIES, INC., Appellant,
v.
LEGACY BANK OF TEXAS, Appellee.
No. 08-07-00046-CV.
Court of Appeals of Texas, El Paso.
June 26, 2008.
James A. Ellis, Jr., Carrington, Coleman, Sloman & Blumenthal, L.L.P., Dallas, TX, for Appellant.
Charles T. Frazier, Alexander, Dubose, Jones and Townsend, Dallas, for appellee.
Before CHEW, C.J., McCLURE, and CARR, JJ.
OPINION
DAVID WELLINGTON CHEW, Chief Justice.
New Wave Technologies, Inc. (New Wave) appeals from a summary judgment ordering it take-nothing in a suit against Legacy Bank of Texas (Legacy) for conversion of two checks issued by United *100 Services Automobile Association (USAA). New Wave raises three issues on appeal, whether the trial court erred in granting the summary judgment that Legacy did not convert the checks, under the Texas Business and Commerce Code § 3.420, (1) based upon a repealed statutory limitation of liability or affirmative defense, (2) when there was no endorsement by New Wave on either check, and (3) when neither payee signed its name exactly as drawn, as required by the instruction on the checks.
Maxim Solutions Group, Inc. (Maxim) and New Wave entered into a joint purchase agreement where New Wave would sell to Maxim, and Maxim would sell to USAA. On July 7, 2004, USAA ordered scanners and computer equipment from Maxim/New Wave. The two purchase orders were supposed to be paid directly to New Wave. However, USAA mailed the checks to Maxim.
The checks were made payable to "Maxim Solutions Group/New Wave Techn" for $134,656.16 and $52,558.73 respectively. The back of each check stated "Each Payee Must Endorse Exactly As Drawn." The checks were received by Brett Autrey, president of Maxim, after Maxim had gone out of business, and were subsequently deposited in Maxim's bank account on August 23, 2004. The checks were accepted for deposit by Laura Padilla, a teller for Legacy, using a pre-printed deposit slip of Maxim's. The bank teller checked with her supervisor, Cindy Thomas, about whether or not to place a hold on the funds due to the size of the deposit. Ms. Thomas called Maxim's account officer, Christine Jones, to determine the same. There was no hold placed on the funds. Each check had only Maxim's account number as an endorsement written on the back. The check was not endorsed by the other payee, "New Wave Techn." Ms. Autrey, on advice of counsel, used all or almost all of the funds to pay the IRS withholding taxes Maxim owed on its employees.
Legacy moved for summary judgment against New Wave asserting that (1) it did not convert the checks as a matter of law since Maxim and New Wave were alternate payees as a matter of law, and (2) Legacy acted in good faith and in accordance with commercial standards. Legacy abandoned the second ground at the hearing for summary judgment since it was not applicable. The trial court granted the summary judgment, and ordered that New Wave take nothing.
The standards for reviewing summary judgment rulings are well-established. The standard of review on appeal is whether the successful movant at the trial level carried the burden of showing that there is no genuine issue of material fact and that judgment should be granted as a matter of law. See TEX.R.CIV.P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.1991); Wyatt v. Longoria, 33 S.W.3d 26, 31 (Tex.App.-El Paso 2000, no pet.). The question on appeal is not whether the summary judgment proof raises fact issues as to required elements of the movant's cause or claim, but whether the summary judgment proof establishes, as a matter of law, that there is no genuine issue of material fact as to one or more elements of the cause or claim. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970); Wyatt, 33 S.W.3d at 31. All evidence favorable to the nonmovant must be taken as true and all reasonable inferences, including any doubts, must be resolved in the nonmovant's favor. Nixon v. Mr. Property Mgmt. Co., Inc., 690 S.W.2d 546, 548-49 (Tex.1985). We review the granting of summary judgment de novo. Blake v. Dorado, 211 S.W.3d 429, 433 (Tex.App.-El Paso 2006, no pet.).
In Issue One, it is argued that the summary judgment was granted in error based *101 upon a repealed statute. Appellee abandoned this argument at the hearing on the motion for summary judgment, and again in its brief, so we do not address this issue.
In Issue Two, New Wave contends that Legacy converted the checks, under Section 3.420 of the Texas Business and Commerce Code, by taking them by transfer from one payee, Maxim, without any endorsement by the other payee, New Wave. Appellant argues that the checks were not made payable alternatively, as a matter of law, but rather were made payable jointly. The initial determination of whom an instrument is payable to is determined by the intent of the issuer of the instrument. TEX.BUS. & COM.CODE ANN. § 3.110(a). When there are multiple payees listed, the Code provides:
If an instrument is payable to two or more persons alternatively, it is payable to any of them and may be negotiated, discharged, or enforced by any or all of them in possession of the instrument. If an instrument is payable to two or more person not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them. If an instrument payable to two or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively.
TEX.BUS. & COM.CODE ANN. § 3.110(d)(Vernon 2002).
The comments to Section 3.110 state:
An instrument payable to X or Y is governed by the first sentence of subsection (d). An instrument payable to X and Y is governed by the second sentence of subsection (d). If an instrument is payable to X or Y, either is the payee and if either is in possession that person is the holder and the person entitled to enforce the instrument. Section 3-301. If an instrument is payable to X and Y, neither X nor Y acting alone is the person to whom the instrument is payable. Neither person, acting alone, can be the holder of the instrument. The instrument is "payable to an identified person." The "identified person" is X and Y acting jointly. Section 3-109(b) and Section 1-102(5)(a). Thus, under Section 1-201(20) X or Y, acting alone cannot be the holder or the person entitled to enforce or negotiate the instrument because neither, acting alone, is the identified person stated in the instrument.
The third sentence of subsection (d) is directed to cases in which it is not clear whether an instrument is payable to multiple payees alternatively. In the case of ambiguity persons dealing with the instrument should be able to rely on the indorsement of a single payee. For example, an instrument payable to X and/or Y is treated like an instrument payable to X or Y.
TEX.BUS. & COM.CODE ANN. § 3.110(d) cmt. 2.
The checks in this case were made payable to "Maxim Solutions Group/New Wave Techn." The checks also had "Each Payee Must Endorse Exactly As Drawn" printed on the back. New Wave argues that the wording on the back of the check shows USAA's intent to make the checks jointly payable. However, the front of the check has the payees separated by a virgule, "/". While no Texas court has addressed the use of virgule in between payees on negotiable instruments, courts around the nation have been uniform in their holdings. The courts have used the common meaning of a virgule, looking at previously decided cases in other jurisdictions and dictionary definitions, and have held unanimously that it means "or," allowing for payment in the alternative. E.g., Dynalectron Corp. v. Equitable Trust Co., *102 704 F.2d 737, 739 (4th Cir.1983); J.R. Simplot, Inc. v. Knight, 139 Wash.2d 534, 988 P.2d 955, 958 n. 2 (1999); Danco, Inc. v. Commerce Bank/Shore, N.A., 290 N.J.Super. 211, 675 A.2d 663, 666 (1996); Purina Mills, Inc. v. Security Bank & Trust, 215 Mich.App. 549, 547 N.W.2d 336, 337-38 (1996). The Fifth Circuit Court of Appeals has also used the common meaning of a virgule, which the court found to be FOR separating alternatives. Heritage Bank v. Redcom Labs., Inc., 250 F.3d 319, 326 (5th Cir.2001). In Heritage, a virgule was used to separate "invoice" and "bill of lading" in a letter of credit. The court ruled Redcom Laboratories could have presented an invoice or a bill of lading for payment under the terms of the letter of credit. Id. We hold that a virgule's common usage means "or" in alignment with the previous decisions of the courts of the many states. This does not resolve the issue, however, since the checks presented to Legacy include other language as well.
The statement on the back of the checks "Each Payee Must Endorse Exactly As Drawn" unequivocally states that each payee should endorse the check. New Wave argues that this shows that the checks are payable jointly. Obviously, the front and back of the checks are conflicting in their instructions. The use of the virgule indicates either payee can endorse while the backs of the checks require all payees to endorse. The printed instructions on the back of the check only increase the ambiguity of how the check is payable. The Dallas Court of Appeals has concluded that "[b]ecause the check does not use the word `or' or `and' between the multiple payees," the check was ambiguous and payable to either of the payees, individually. Mazon Associates, Inc. v. Comerica Bank, 195 S.W.3d 800, 805 (Tex. App.-Dallas 2006, no pet.); Allied Capital Partners, L.P. v. Bank One, Texas, N.A., 68 S.W.3d 51, 53 (Tex.App.-Dallas 2001, no pet.). In both Allied and Mazon, the payees on the checks were listed vertically with no language or symbols between them. Allied, 68 S.W.3d at 52; Mazon, 195 S.W.3d at 805.
In this case, the words "or" or "and" are also not used, but the virgule and instructions printed on the back of the check point to both being applicable. We find that the check, on its face, is ambiguous as to whether it is payable to persons alternatively or jointly, and as such, the instruments are payable alternatively. TEX.BUS. & COM.CODE ANN. § 3.110(d). In the case of ambiguity, persons dealing with the instrument should be able to rely on the endorsement of a single payee. Allied, 68 S.W.3d at 53. No endorsement by New Wave was required for Legacy to deposit the checks since the checks were properly payable to either payee individually. Appellant's Issue Two is overruled.
In Issue Three, New Wave argues that the court improperly granted summary judgment that Legacy did not convert under Section 3.420 of the Texas Business and Commerce Code by taking the checks containing instructions that "Each Payee Must Endorse Exactly as Drawn" by transfer from one payee, Maxim, without either payees having signed its name as an endorsement.
Section 3.420 of the Texas Business and Commerce Code provides, in relevant part:
The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.
TEX.BUS. & COM.CODE ANN. § 3.420(a).
Having found the checks to be payable to either Maxim or New Wave, Maxim was *103 entitled to enforce the instruments. Legacy did not take the instruments from a person not entitled to enforce the instrument, nor did Legacy make payment on an instrument for a person not entitled to enforce the instrument or receive payment. Legacy did not convert the checks under Section 3.420 of the Texas Business and Commerce Code. Issue Three is overruled.
Having overruled all of Appellant's issues, we affirm the trial court's ruling. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578597/ | 281 S.W.3d 912 (2009)
STATE of Missouri, Plaintiff/Respondent,
v.
Donald PULLUM, Defendant/Appellant.
No. ED 91159.
Missouri Court of Appeals, Eastern District, Division Four.
April 14, 2009.
*913 Mary H. Moore, Assistant Attorney General, Jefferson City, MO, for respondent.
Maleaner Harvey, St. Louis, MO, for appellant.
KATHIANNE KNAUP CRANE, Presiding Judge.
Defendant, Donald Pullum, appeals from a judgment entered upon a jury verdict finding him guilty of statutory rape in the first degree, in violation of section 566.032 RSMo (2000)[1] (Count I); statutory sodomy in the first degree, in violation of section 566.062 (Count II); attempted victim tampering, in violation of section 575.270 (Count III); statutory rape in the second degree, in violation of section 566.034 (Count IV); and child molestation in the second degree, in violation of section 566.068 (Count V). The trial court found defendant to be a prior and persistent offender and sentenced him to concurrent terms of fifteen years imprisonment for statutory rape in the first degree, fifteen years for statutory sodomy in the first degree, seven years for statutory rape in the second degree, and one year jail time for child molestation in the second degree, and three years imprisonment for attempted victim tampering, to be served consecutively to the other sentences.
On appeal, defendant contends that the trial court erred in overruling his motion *914 for judgment of acquittal on attempted victim tampering because there was insufficient evidence to make a submissible case on that charge. Defendant also maintains that the trial court plainly erred in accepting the jury's verdict and in entering a judgment of conviction against him for the crime of statutory rape in the second degree on Count IV, because Count IV of the substitute information charged him with statutory sodomy in the second degree. He also asserts there was insufficient evidence to support the conviction of statutory rape in the second degree. We reverse the conviction of statutory rape in the second degree because the offense was not charged in the substitute information. We affirm the judgment entered on the remaining convictions.
FACTUAL AND PROCEDURAL BACKGROUND
Defendant does not challenge the sufficiency of the evidence or raise any allegations of error with respect to Counts I, II, and V. Defendant was the brother of the father of the two female victims, G.W., who was age 7 at the time of the offenses, and J.T., who was age 14 at the time of the offenses. Counts I and II were based on defendant's sexual misconduct with G.W., and Count V was based on defendant's molestation of J.T. Count III was based on defendant's threats to G.W. that she would get in trouble and that he would kill her if she told anyone about his sexual misconduct with her, causing her not to report his acts for a year. Count IV involves a fatal variance between the crime charged and the crime on which a conviction was entered, which is more fully explained below.
The case went to trial on a substitute information in lieu of indictment that identified Count IV in the list of charges as:
4. CNT: 4 STATUTORY RAPE-2ND DEGREE (Class C Felony) RSMo 566.034
FROM 8/21/2004 TO 8/30/2004 Place: [address deleted]
However, Count IV actually charged statutory sodomy in the second degree, in violation of section 566.064, as demonstrated by the following language:
The Circuit Attorney of the City of St. Louis, State of Missouri, upon information and belief, charges that the defendant, in violation of Section 566.064, RSMo, committed the class C felony of statutory sodomy in the second degree, punishable upon conviction under Sections 588.011 and 560.011, RSMo, in that between August 21, 2004 and August 30, 2004, in the City of St. Louis, State of Missouri, the defendant had deviate sexual intercourse with [J.T.] and at that time [J.T.] was less than seventeen years old and the defendant was twenty-one years of age or older.[2]
At the commencement of trial, defense counsel told the court that defendant was charged with statutory rape in the second degree, among the other charges. In its opening statement, the state told the jury that defendant was charged with statutory rape in the second degree and described the evidence that would prove that charge. At the jury instruction conference, defendant submitted alternative jury instructions based on different dates for the offenses, but did not otherwise object to the submission of a verdict director on Count IV based on MAI-CR3d 320.05, which submitted statutory rape in the second degree. Further, defendant submitted a *915 converse instruction based on MAI-CR3d 308.02 for statutory rape in the second degree on Count IV, which the trial court gave. In closing arguments, the state set out the evidence supporting a finding of statutory rape in the second degree on Count IV. The jury found defendant guilty of statutory rape in the second degree on Count IV, and the trial court sentenced defendant to seven years imprisonment on that offense.
DISCUSSION
I. Sufficiency of Evidence Attempted Witness Tampering
For his first point, defendant asserts that the trial court erred in denying his motion for judgment of acquittal because there was insufficient evidence from which a reasonable juror could find defendant threatened G.W. and in doing so he purposely prevented or dissuaded G.W. from making any report to any peace officer, law enforcement officer, prosecuting agency, or judge.
We review the denial of a motion for acquittal at the close of evidence to determine if the state adduced sufficient evidence to make a submissible case. State v. Johnson, 244 S.W.3d 144, 152 (Mo. banc 2008); State v. Gonzales, 253 S.W.3d 86, 89 (Mo.App.2008). Our role is to "`determine whether enough evidence was produced at trial that a reasonable person could conclude that the accused was guilty.'" State v. Martin, 211 S.W.3d 648, 651 (Mo.App. 2007) (quoting State v. Vineyard, 839 S.W.2d 686, 690 (Mo.App.1992)). In determining whether the evidence is sufficient to support a conviction, we view the evidence and all reasonable inferences therefrom in the light most favorable to the verdict, and we disregard all contradictory evidence and inferences. Johnson, 244 S.W.3d at 152. We defer to the jury's superior position to assess the credibility of witnesses and the weight and value of their testimony. Id. It is within the jury's province to believe all, some, or none of any witness's testimony in arriving at its verdict. State v. Nelson, 818 S.W.2d 285, 288 (Mo.App.1991).
Section 575.270.2 defines the crime of victim tampering:
A person commits the crime of "victim tampering" if, with purpose to do so, he prevents or dissuades or attempts to prevent or dissuade any person who has been a victim of any crime or a person who is acting on behalf of any such victim from:
(1) Making any report of such victimization to any peace officer, or state, local or federal law enforcement officer or prosecuting agency or to any judge;
(2) Causing a complaint, indictment or information to be sought and prosecuted or assisting in the prosecution thereof;
(3) Arresting or causing or seeking the arrest of any person in connection with such victimization.
Section 564.011 defines attempt:
A person is guilty of attempt to commit an offense when, with the purpose of committing the offense, he does any act which is a substantial step towards the commission of the offense. A "substantial step" is conduct which is strongly corroborative of the firmness of the actor's purpose to complete the commission of the offense.
Here, the state produced sufficient evidence to make a submissible case on the charge of attempted victim tampering in that the state showed that defendant attempted to prevent or dissuade G.W. from reporting defendant's actions to the proper authorities. In a videotaped interview conducted by an interview specialist with the Children's Advocacy Center, G.W. stated that defendant threatened to kill her if *916 she told anyone about defendant's actions. In addition, G.W. testified at trial that after the incidents occurred, which was when she was seven years old, she did not tell her mother what defendant did to her because she was afraid of defendant and because she thought she would get in trouble. G.W. did not tell anyone about the incidents with defendant for a year. At that time, G.W. was present when the other victim, J.T., told a neighbor about defendant's actions involving her. After J.T. finished talking, G.W. told the neighbor what defendant did to her. Some time thereafter, the neighbor requested that the victims' mother come over to her house while both of the victims were present. With the neighbor's encouragement, both of the victims informed their mother about what defendant had done to them. G.W. told her mother that she had not said anything earlier because defendant told her she would get in trouble if she did. G.W.'s parents then took G.W. to the hospital to be examined, at which time a hotline report was made to the authorities.
This evidence was sufficient for a reasonable juror to find that defendant attempted, by threatening G.W. if she told "anyone," to prevent or dissuade G.W. from reporting defendant's actions to the proper authorities. The trial court did not err in overruling defendant's motion for acquittal and entering judgment on the jury verdict. Point one is denied.
II. Count IV Variance
For his second point, defendant asserts that the trial court plainly erred in accepting the jury's verdict and in entering a judgment against him for statutory rape in the second degree because Count IV of the substitute information charged him with statutory sodomy in the second degree, but he was convicted of statutory rape in the second degree, resulting in a fatal variance between the information and the conviction.
This point has not been preserved for appeal. Defendant never called to the court's attention at any stage of the trial or post trial proceedings that Count IV did not charge statutory rape in the second degree; that the verdict directing instruction on Count IV instructed on an uncharged crime; or that the judgment was entered on an uncharged crime. Rather, defendant tried the case as though Count IV charged statutory rape in the second degree.
We may, however, consider plain errors affecting substantial rights when the error complained of impacts so substantially upon the rights of the defendant that manifest injustice or a miscarriage of justice will result if left uncorrected. Rule 30.20; State v. McLaughlin, 265 S.W.3d 257, 262 (Mo. banc 2008). This is such a case.
Due process requires that a defendant not be convicted of an offense not charged in an indictment. State v. Smith, 592 S.W.2d 165, 165 (Mo. banc 1979); State v. Shipley, 920 S.W.2d 120, 122 (Mo.App. 1996). See also State v. Cain, 980 S.W.2d 145, 146 (Mo.App.1998); State v. Gant, 586 S.W.2d 755, 762 (Mo.App.1979). "[A] person cannot be convicted of a crime with which the person was not charged unless it is a lesser included offense of a charged offense." State v. Parkhurst, 845 S.W.2d 31, 35 (Mo. banc 1992).
Here, defendant was convicted of an offense with which he had not been charged and which was not a lesser-included offense of the charged offense. Defendant was charged in Count IV with statutory sodomy in the second degree. A person commits the crime of statutory sodomy in the second degree if, being twenty-one years of age or older, he has *917 deviate sexual intercourse with another person who is less than seventeen years of age. Section 566.064. "Deviate sexual intercourse" is defined as
"any act involving the genitals of one person and the hand, mouth, tongue, or anus of another person or a sexual act involving the penetration, however slight, of the male or female sex organ or the anus by a finger, instrument or object done for the purpose of arousing or gratifying the sexual desire of any person or for the purpose of terrorizing the victim."
Section 566.010(1).
However, defendant was found guilty of statutory rape in the second degree on Count IV. A person commits the crime of statutory rape in the second degree if, being twenty-one years of age or older, he has sexual intercourse with another person who is less than seventeen years of age. Section 566.034. "Sexual intercourse" is defined as "any penetration, however slight, of the female sex organ by the male sex organ, whether or not an emission results." Section 566.010(4).
Although both of these offenses involve sexual misconduct, they are separate and distinct crimes in that statutory rape requires penetration of the female sex organ by the male sex organ, section 566.034, whereas, by definition, statutory sodomy excludes such penetration. Sections 566.010(1) and 566.064. Although the caption of the substitute information identifies Count IV as charging statutory rape in the second degree, the caption of an information is not a part of the charge. State v. Cunningham, 380 S.W.2d 401, 403 (Mo. 1964).
The state concedes that the variance between the substitute information and the conviction on Count IV is fatal. However, it proposes two solutions in lieu of reversal. First, it requests that we remand the case to determine whether a part of the record was omitted showing that Count IV of the substitute information was amended to charge statutory rape in the second degree. We reject this proposal. Nothing in the trial court minutes or the transcript suggests the possibility that the case went to trial on an amended substitute information. Rather, it is plain that beginning with the initial complaint and continuing with the indictment and substitute information, Count IV was misdescribed in the captions or summaries of those documents as a charge of statutory rape in the second degree, and the parties relied on this misdescription in prosecuting and defending the case.
Next, the state proposes that we remand the case to the trial court with directions to enter a verdict and sentence on Count IV for child molestation in the second degree, which is a lesser-included offense of statutory sodomy. The state asserts that defendant was put on notice of the child molestation charge because it is a lesser-included offense of statutory sodomy in the second degree. The state argues that the jury, in finding defendant guilty of second degree statutory rape, by necessity found facts that would support a conviction for the crime of child molestation in the second degree.[3] The state relies on the rule that when "a conviction of a greater offense has been overturned for insufficiency of the evidence, the reviewing court may enter a conviction for a lesser offense if the evidence was sufficient for the jury to *918 find each of the elements and the jury was required to find those elements to enter the ill-fated conviction of the greater offense." State v. O'Brien, 857 S.W.2d 212, 220 (Mo. banc 1993). However, in this case, defendant's conviction of statutory rape in the second degree is not being overturned because of insufficiency of the evidence to support the conviction. Rather, defendant's conviction is being overturned because of the fatal variance between the charging document and the conviction. Further, the state has not cited any authority that would allow this court to enter a conviction of a lesser-included offense when the greater crime was not charged.
The entry of judgment on a conviction not charged in the substitute information constitutes plain error requiring reversal. See Shipley, 920 S.W.2d at 123. The trial court plainly erred in accepting the jury's verdict and in entering a judgment of conviction and sentence against defendant for statutory rape in the second degree on Count IV. Point two is granted.
III. Sufficiency of Evidence Count IV
For his third point, defendant asserts that the trial court erred in denying his motion for judgment of acquittal because there was insufficient evidence from which a reasonable juror could find defendant guilty of statutory rape in the second degree. This point is denied as moot because the conviction on Count IV is being reversed on other grounds.
Conclusion
The judgment on Count IV is reversed. The judgment on Counts I, II, III, and V is affirmed.
MARY K. HOFF, J. and KENNETH M. ROMINES, J., concur.
NOTES
[1] All further statutory references are to RSMo (2000).
[2] The summary identification of Count IV as a statutory rape charge, when Count IV actually charged statutory sodomy, is also found in the complaint and the indictment that preceded the substitute information.
[3] A person commits the crime of child molestation in the second degree if he or she subjects another person who is less than seventeen years of age to sexual contact. Section 566.068. A person commits the crime of statutory rape in the second degree if he is twenty-one years or older and has sexual intercourse with a victim who is less than seventeen years old. Section 566.034. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578606/ | 281 S.W.3d 320 (2009)
STATE of Missouri, Respondent,
v.
Michael Allen DUFF, Appellant.
No. WD 69598.
Missouri Court of Appeals, Western District.
March 3, 2009.
Motion for Rehearing and/or Transfer to Supreme Court Denied April 28, 2009.
*323 Scott Cameron Hamilton, Lexington, MO, for appellant.
Jeremiah W. (Jay) Nixon, Atty. Gen., Shaun J. MacKelprang, Jefferson City, MO, for respondent.
Before DIV II: HARDWICK, P.J., HOWARD and DANDURAND[1], JJ.
LISA WHITE HARDWICK, Judge.
Following a bench trial, the circuit court convicted Michael Allen Duff of distribution of a controlled substance, possession of a controlled substance with intent to distribute, and possession of a controlled substance. Duff raises four points on appeal. In his first three points, he contests the sufficiency of the evidence supporting his convictions. In his last point, he alleges the court violated his right against double jeopardy by convicting him of both possession of a controlled substance with intent to distribute and possession of a controlled substance. For reasons explained herein, we affirm.
FACTUAL AND PROCEDURAL HISTORY
On May 30, 2006, Ashley Elliott, a confidential informant, contacted Chris Brown, the Director of the North Missouri Drug Task Force, about a drug transaction she had arranged. Elliott told Brown that she had arranged with Martha Reed, who was Duff's girlfriend, to buy a quarter ounce of marijuana at Duff's home in Brunswick later that day. Brown met with Elliott, concealed a tape recorder on her, and gave her money to buy the marijuana. Brown and Elliott then drove separately to Duff's home. Brown waited outside in his car while Elliott went to the door.
Duff invited Elliott inside. They talked while waiting for Reed to return home. When Reed arrived, she walked over to the recliner chair where Duff was sitting and handed him baggies of marijuana. Duff asked Reed how much marijuana Elliott "was there for," and she told him. Duff then asked Reed if Elliott had smoked any of the marijuana with her before, and Reed told him she had not. Elliott asked whether it was "good stuff," and Duff responded that it was "not bad." Elliott gave $40 to Reed, who gave the money to Duff. Duff handed Reed $10 and a baggie with marijuana in it. Reed handed the money and the baggie to Elliott. Elliott asked whether the baggie contained "a quarter," referring to a quarter of an *324 ounce of marijuana. Reed responded, "Yeah." Before she left, Elliott asked Reed and Duff whether they would have more marijuana if she needed it. Reed told her they "always have it." Elliott left Duff's house and reported back to Brown.
Brown retrieved the money, tape recorder, and marijuana from Elliott. He took the marijuana to the Missouri State Highway Patrol Laboratory, where it was analyzed and determined to be 5.79 grams of marijuana. Brown then obtained a warrant to search Duff's residence.
Upon entering the home on June 6, 2006, the officers arrested Duff and did a pat-down search. They found a plastic baggie containing marijuana in his pants pocket. They proceeded to search Duff's home. Next to the recliner in Duff's living room, they found a cigarette box that had roach cigarettes[2] and two marijuana cigarettes in it. In the pocket of the recliner, the officers found rolling papers and a cigarette roller.
One of the officers testified that he smelled a strong odor of processed marijuana emanating throughout the upstairs of the home. There were two bedrooms upstairs. The east bedroom belonged to a minor female child. The west bedroom was Duff's. The officers followed the marijuana smell to Duff's bedroom, where they found, in addition to male clothing, an ashtray that had roach cigarettes in it and a Kleenex box with a plastic bag of marijuana inside of it on the nightstand. The strongest odor was coming from the closet in Duff's bedroom. The closet, which contained male clothing, led into the attic.
In the attic, the officers found two large plastic bags that had individually-wrapped smaller plastic baggies of marijuana inside of them. One of the large plastic bags held twenty-one individually-wrapped baggies of marijuana, while the other large bag held nine. In addition to the marijuana, officers found a packet of rolling papers, a roach clip with a bullet, and two empty plastic baggies attached to finger scales. According to Susan Lett, one of the North Missouri Drug Task Force detectives who executed the search, drug dealers use finger scales to ensure they are selling a certain weight of the drug. Also in the attic, the officers found a plastic bag of marijuana seeds, a grow light, and a timer that was affixed to a piece of wood. Lett testified that people who grow marijuana often use a timer to ensure that their grow lights turn on at certain times to provide sufficient artificial sunlight for the marijuana plants.
The officers submitted all of the seized items to the highway patrol laboratory. The lab report indicated that the thirty individual baggies found in Duff's attic collectively contained 162.61 grams of marijuana. The baggie found in the pocket of Duff's pants contained less than a gram of marijuana.
The State charged Duff with distribution of a controlled substance, in violation of Section 195.211, RSMo Cum. Supp. 2008, possession of a controlled substance with intent to distribute, in violation of Section 195.211, RSMo Cum. Supp. 2008, and possession of a controlled substance, in violation of Section 195.202, RSMo 2000.[3] Duff waived his right to a jury trial. Following a bench trial, the court found Duff guilty on all counts and sentenced him to consecutive prison sentences of five years for distribution of a controlled substance and *325 ten years for possession of a controlled substance with intent to distribute. The court sentenced Duff to one year in jail for possession of a controlled substance, to be served concurrently with the other sentences. Duff appeals.
STANDARD OF REVIEW
Three of Duff's points on appeal challenge the sufficiency of the evidence supporting his convictions. In reviewing the sufficiency of the evidence in a court-tried criminal case, we apply the same standard as in a jury-tried case. State v. Sladek, 835 S.W.2d 308, 310 (Mo. banc 1992). Our role is limited to determining whether the State presented sufficient evidence from which a trier of fact could have reasonably found the defendant guilty beyond a reasonable doubt. State v. Crawford, 68 S.W.3d 406, 408 (Mo. banc 2002). We consider the evidence and inferences in the light most favorable to the verdict, disregarding all contrary evidence and inferences. Id. at 407-08.
SUFFICIENCY OF EVIDENCE OF DISTRIBUTION
In Points I and II, Duff contests the sufficiency of the evidence supporting his conviction for distribution of a controlled substance. Section 195.211.1, RSMo Cum. Supp. 2008, makes it "unlawful for any person to distribute, deliver, manufacture, [or] produce ... a controlled substance[.]" Anyone who violates this section "with respect to any controlled substance except five grams or less of marijuana is guilty of a class B felony." Section 195.211.3, RSMo Cum. Supp. 2008. In the complaint, the State charged that Duff "knowingly distributed more than 5 grams of marijuana, a controlled substance, to Ashley Elliott, knowing that it was a controlled substance."
In Point I, Duff contends the evidence was insufficient to find that he knew the baggie he distributed to Elliott contained more than five grams of marijuana. To be found guilty of unlawful distribution under Section 195.211, RSMo Cum. Supp. 2008, Duff must have acted purposely or knowingly. State v. McQuary, 173 S.W.3d 663, 667 (Mo.App.2005). "A person `acts knowingly' or with knowledge ... [w]ith respect to his conduct or to attendant circumstances when he is aware of the nature of his conduct or that those circumstances exist[.]" Section 562.016.3(1). "`Knowledge may be proven by circumstantial evidence.'" McQuary, 173 S.W.3d at 667-68 (citation omitted).
The evidence showed that Reed handed multiple baggies of marijuana to Duff when she arrived at his home on May 30, 2006. Duff then asked Reed how much marijuana Elliott "was there for." After Reed told Duff the amount of marijuana Elliott "was there for" and Reed collected Elliott's money, Duff handed the baggie, which was later found to contain 5.79 grams of marijuana, to Reed to give to Elliott. The court could reasonably infer that, because Duff selected from the multiple baggies of marijuana Reed handed to him the particular baggie to sell to Elliott after inquiring how much marijuana Elliott wanted, Duff knew the amount of marijuana he was distributing to Elliott.
Moreover, after Elliott received the baggie, she asked if the amount in the baggie was "a quarter." Reed, with Duff nearby, replied that it was. Brown testified that the phrase "a quarter," as used in drug transactions, refers to one quarter of an ounce. We have previously recognized that "`[u]nder avoirdupois weight, commonly used in this country, one ounce equals 28.349 grams.'" State v. McCleod, 186 S.W.3d 439, 446 n. 5 (Mo.App.2006) (citation omitted). Thus, one quarter of an ounce would be approximately seven grams. Although the amount of marijuana *326 contained in the baggie was not quite seven grams, the court could reasonably infer that Duff, like Reed, believed the baggie contained approximately seven grams of marijuana. The court could also conclude, from the officers' recovery of finger scales along with the stash of individually-wrapped marijuana in the attic off of Duff's bedroom, that Duff measured out quantities of marijuana before bagging them for sale. Hence, the court could infer that Duff knew the approximate weight of each baggie he sold. The evidence was sufficient to support a finding that Duff knew he distributed at least five grams of marijuana to Elliott. Point I is denied.
In Point II, Duff claims that the evidence was insufficient for the court to find that he aided or participated in distributing the marijuana to Elliott. Duff was convicted under the theory that he distributed the marijuana to Elliott in concert with Reed. With respect to accomplice liability, Missouri does not distinguish between principals and accessories. State v. Wurtzberger, 40 S.W.3d 893, 895 (Mo. banc 2001). "[A]ll persons who act in concert to commit a crime are equally guilty." Id. Pursuant to Section 562.041.1(2), a person is criminally responsible for another's conduct when "[e]ither before or during the commission of an offense with the purpose of promoting the commission of an offense, he aids or agrees to aid or attempts to aid such other person in planning, committing or attempting to commit the offense."
"`To make a submissible case of aiding and abetting, there must be some evidence that defendant associated himself with the venture or participated in the crime in some manner.'" State v. Bradshaw, 26 S.W.3d 461, 469 (Mo.App.2000) (citation omitted). The State is not required to show that the defendant personally committed every element of the crime. Id. The defendant's "mere encouragement is enough." Id. "`[A]ny evidence that shows affirmative participation in aiding the principal to commit the crime is sufficient to support a conviction.'" Wurtzberger, 40 S.W.3d at 896 (citation omitted).
The evidence in this case showed that, after Reed handed several baggies of marijuana to Duff, he inquired as to how much Elliott wanted to buy. Reed collected Elliott's $40 and gave it to Duff, who then gave Reed $10 in change to give back to Elliott. Duff selected one of the baggies of marijuana and gave it to Reed, who gave it to Elliott. In addition to handling the money, making change, and selecting the baggie of marijuana to give to Elliott, Duff also vouched for its quality, telling Elliott when she asked if it was "good stuff" that it was "not bad." The evidence was sufficient for the court to find that Duff affirmatively participated in the drug transaction. Point II is denied.
Sufficiency of Evidence of Possession With Intent to Distribute
In Point III, Duff claims that the evidence was insufficient to convict him of possession with intent to distribute. To convict Duff under Section 195.211, RSMo Cum. Supp. 2008, the State had to prove that Duff possessed the marijuana and had the intent to distribute it. Possession is established by showing: (1) conscious and intentional possession of the substance, either actual or constructive; and (2) an awareness or knowledge of the presence and nature of the substance. State v. Purlee, 839 S.W.2d 584, 587 (Mo. banc 1992). "Both possession and knowledge may be proved by circumstantial evidence." Id.
Duff did not have actual possession of the marijuana in the attic, as it was not found on his person or within his easy reach and convenient control. State *327 v. Bacon, 156 S.W.3d 372, 377 (Mo.App. 2005). Where there is no evidence of actual possession, constructive possession may be shown if the facts support an inference that the defendant had knowledge of the presence of the controlled substance. Purlee, 839 S.W.2d at 588. Thus, at a minimum, constructive possession requires a showing of the defendant's access to and control over the premises where the substance was found. Id.
The defendant's exclusive control over the premises is sufficient to raise an inference of possession and knowledge. Id. Although Duff was the sole owner of the home, he did not have exclusive control over the premises, as the evidence showed that Reed lived with him. Joint control of the premises requires evidence of additional incriminating circumstances that imply the defendant knew the drugs were present and had them under his control. Id. Additional incriminating circumstances may include a strong odor of the drug on the premises, id., "`routine access to an area where such substances are kept, the presence of large quantities of the substance at the scene where [the defendant] is arrested, admissions of the accused, ... being in close proximity to drugs or drug paraphernalia in plain view of the police, [and the] mixture of defendant's personal belongings with the drugs.'" Bacon, 156 S.W.3d at 378 (citation omitted). We consider the totality of the circumstances to determine whether the State proved sufficient additional incriminating circumstances. Id.
In this case, one of the officers who executed the warrant was able to smell a strong odor of processed marijuana as he began walking up the stairs in Duff's home. The odor of marijuana was so strong that the officers were able to follow the smell to find the marijuana in the attic. Duff had routine access to the attic, as the entrance to the attic was accessible from the closet in his bedroom. The officers discerned that the bedroom was Duff's because there was male clothing in the room and in the closet, and the only other bedroom on the second floor belonged to a minor female child. A significant amount of marijuana thirty baggies containing a total of 162.61 grams was found in the attic, along with seeds and equipment used to grow marijuana, items used to smoke marijuana, and materials used to package and sell marijuana. Additionally, drugs and drug paraphernalia were found in plain view and intermingled with Duff's belongings throughout the house. In the living room next to the recliner, the officers found a cigarette box with roach cigarettes and marijuana cigarettes in it. On the nightstand in Duff's bedroom, the officers found an ashtray containing roach cigarettes and a Kleenex box with a plastic bag of marijuana inside of it.
Duff's statements and conduct also imply his knowledge and control of the marijuana found in his attic. During the sale to Elliott just one week before the search, Duff vouched for the quality of the marijuana he and Reed had sold to her. Likewise, he did not contradict Reed when, upon Elliott's asking if she could buy more marijuana from them in the future, Reed told Elliott that they "always have it." The totality of the circumstances supports the circuit court's finding that Duff jointly and constructively possessed the marijuana found in the attic and he was fully aware of its nature and presence.
Duff next argues that the evidence was insufficient for the court to find that he intended to deliver the marijuana to anyone. In his brief, Duff relies heavily upon McCleod, 186 S.W.3d 439. In McCleod, we held that the fact that the defendant "was found in possession of approximately 7½ ounces of marijuana was *328 not sufficient, in and of itself, to establish beyond a reasonable doubt that he intended to deliver the marijuana to others." Id. at 448. We noted that, although law enforcement officers testified that the amount of marijuana found was a "`sales amount,'" they did not testify that the amount was "wholly inconsistent with personal use." Id. The officers' opinion testimony, "without more," was insufficient "to sustain a conviction based upon this small a quantity of marijuana." Id.
Duff acknowledges that, unlike in McCleod, the approximately 5.74 ounces of marijuana found in his attic was divided into smaller amounts and was individually-wrapped in thirty baggies. He admits that a reasonable inference from this evidence is that the baggies were packaged for distribution. See State v. Salyer, 884 S.W.2d 354, 357 (Mo.App.1994) (noting that "[t]he presence of uniform measured quantities is a circumstance indicating a purpose of distribution[.]"). Nevertheless, he claims that the court could have inferred that he merely purchased the baggies for his personal use, an inference that he contends is supported by other evidence of personal use, such as the rolling paper, burnt roaches, and roach clip that the officers found in his home.
In making this argument, Duff ignores our standard of review. We review the evidence and inferences in the light most favorable to the circuit court's judgment, disregarding all contrary evidence and inferences. Crawford, 68 S.W.3d at 407-08. While the court could have inferred that Duff intended to consume the baggies of marijuana found in his attic, it did not. Instead, the court inferred that Duff intended to distribute the thirty baggies of marijuana. Such an inference was not only reasonable, but was further supported by the finger scales and empty baggies found with the stash of individually-wrapped baggies of marijuana in the attic. See State v. Lloyd, 205 S.W.3d 893, 909 (Mo.App.2006), and Salyer, 884 S.W.2d at 358. Sufficient evidence supports the court's finding that Duff intended to distribute the marijuana found in his attic. Point III is denied.
DOUBLE JEOPARDY
In Point IV, Duff claims that the circuit court violated his right to be free from double jeopardy by convicting him of both possession of a controlled substance with intent to distribute and possession of a controlled substance. Duff raises this claim for the first time on appeal and, therefore, requests plain error review. We will review an unpreserved double jeopardy claim for plain error when we "`can determine from the face of the record that the court had no power to enter the conviction.'" State v. Johnson, 245 S.W.3d 288, 293 (Mo.App.2008) (citation omitted).
Protections against double jeopardy arise from the Fifth Amendment to the United States Constitution, which provides that no person shall be "subject for the same offense to be twice put in jeopardy of life or limb[.]" This provision protects defendants against (1) successive prosecutions for the same offense after either an acquittal or a conviction and (2) multiple punishments for the same offense. State v. Flenoy, 968 S.W.2d 141, 143 (Mo. banc 1998). The protection, however, applies only to multiple punishments or prosecutions for the same offense. Id. "Multiple convictions are permissible if the defendant has in law and in fact committed separate crimes." Id.
Duff argues he could not be convicted of both crimes because one was a lesser-included offense of the other. He relies on State v. Mizanskey, 901 S.W.2d 95, 98-99 (Mo.App.1995), a case in which we found *329 that (1) possession of a controlled substance was a lesser-included offense of possession of a controlled substance with intent to distribute; and (2) because the evidence supported bases for acquittal of the greater offense and conviction of the lesser offense, the court should have instructed the jury on both offenses. Duff also cites Missouri's general cumulative punishment statute, Section 556.041(1), which provides that a defendant may not be convicted of more than one offense arising from the same conduct when one offense is included in the other. An offense is a lesser-included offense when "[i]t is established by proof of the same or less than all the facts required to establish the commission of the offense charged[.]" Section 556.046.1(1), RSMo Cum. Supp. 2008.
Neither double jeopardy principles nor Section 556.041(1) are implicated in this case, however, because Duff was charged, tried, and convicted of separate crimes based upon different conduct and different evidence. The complaint charged Duff with committing the class B felony of possession of a controlled substance with intent to distribute it, in violation of Section 195.211, RSMo Cum. Supp. 2008, in that he possessed, with the intent to distribute, more than five grams of marijuana. The State's evidence on this charge concerned Duff's constructive possession and intent to distribute the 162.61 grams of marijuana found in his attic.
The possession offense for which Duff was charged was the class A misdemeanor of possession of a controlled substance. Possession of a controlled substance under Section 195.202 is generally a class C felony. Section 195.202.2. Where the person possesses "not more than thirty-five grams of marijuana," however, the offense is a class A misdemeanor. Section 195.202.3. The State's evidence on this charge concerned Duff's actual possession of a baggie, which contained less than a gram of marijuana, found in his pants pocket during a pat-down search following his arrest.
Duff's convictions for possession with intent to distribute and possession of a controlled substance were based upon different conduct, different evidence, and different legal theories. In law and in fact, Duff committed two separate crimes. From the face of the record, we find that the circuit court had the power to enter both convictions against him. Point IV is denied.
CONCLUSION
We affirm the circuit court's judgment.
All Concur.
NOTES
[1] Judge Dandurand was a member of this court at the time the case was submitted, but has since resigned.
[2] According to the trial testimony, a "roach" cigarette is "the very last part of a marijuana cigarette" that has not yet been discarded.
[3] All statutory references are to the Revised Statutes of Missouri (2000), unless otherwise indicated. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578645/ | 351 N.W.2d 526 (1984)
STATE of Iowa, Appellee,
v.
Edward Green HARRISON, Appellant.
No. 83-752.
Supreme Court of Iowa.
July 18, 1984.
*527 Charles L. Harrington, Appellate Defender, and LuAnn White, Asst. Appellate Defender, for appellant.
Thomas J. Miller, Atty. Gen., Sherie Barnett, Asst. Atty. Gen., and Gary Sissel, Asst. County Atty., for appellee.
Considered by HARRIS, P.J., and McCORMICK, McGIVERIN, LARSON and CARTER, JJ.
McCORMICK, Justice.
We must determine here whether a sentencing court has discretion to order less than full restitution for court costs and court-appointed attorney fees. The trial court believed full restitution is mandatory. Because we find that a sentencing court is required to consider the offender's ability to make the payments, we vacate the restitution order and remand for determination of the amount with consideration of defendant's reasonable ability to pay the amount ordered.
Defendant Edward Green Harrison was charged and convicted by jury in 1983 for second degree robbery. At sentencing, the trial court reviewed a plan of restitution contained in the presentence report. The court asked defense counsel if he had looked at the plan. Defense counsel said he had done so but that he did not believe defendant was in any position to pay it. The following occurred:
The Court: It's mandatory. Since he's going down, I have no choice but to do it, and it's up to the Director of Adult Corrections.
Defense counsel: Well okay. Is there no way to find inability to pay?
The Court: No. The statute is very specific on that. The Director will make those decisions.
After additional discussion in which the court reiterated its view that the plan of restitution must include the full amount for court costs and court-appointed attorney fees, the court sentenced defendant. The plan of restitution included the full amount of court costs and attorney fees, $148.24 and $872 respectively.
The only question in this appeal is whether the trial court erred in failing to exercise discretion in determining the amount of restitution for court costs and attorney fees. We find the colloquy between the trial court and defense counsel was sufficient to show no discretion was exercised. If the court had no discretion, no error appears; if the court had discretion, defendant was entitled to have it exercised. See State v. Dvorsky, 322 N.W.2d 62, 67 (Iowa 1982).
The relevant statutory provisions are in chapter 910 of the 1983 Code. The present case is not affected by 1984 amendments to these provisions. See 2 Iowa Legis.Serv. 52-53 & 70 (West 1984).
Section 910.2 outlines the duty of a sentencing court to order restitution or community service:
In all criminal cases except simple misdemeanors under chapter 321, in which there is a plea of guilty, verdict of guilty, or special verdict upon which a judgment of conviction is rendered, the sentencing court shall order that restitution be made by each offender to the victims of his or her criminal activities and, to the extent that the offender is reasonably able to do so, to the county where conviction was rendered for court costs, court-appointed attorney's fees or the expense of a public defender when applicable. However, victims shall be paid in full before restitution payments are paid to the county for court costs, court-appointed attorney's fees or for the expense of a public defender. When no victim has suffered pecuniary damages and the offender is not reasonably able to pay all or a part of the court costs, court-appointed attorney's fees or the expense of the public defender, the court may require the offender to perform a needed public service for any governmental agency or for a private, nonprofit agency which provides a service to the youth, elderly or poor of *528 the community. When community service is ordered, the court shall set a specific number of hours of service to be performed by the offender. The judicial district department of correctional services shall provide for the assignment of the offender to a public agency or private nonprofit agency to perform the required service.
This section thus unconditionally requires the sentencing court to order offenders to make restitution to their victims, and it makes full payment to the victim a condition precedent to payment to the county for court costs and attorney fees. In turn, the section authorizes an order for community service when no victim has suffered pecuniary damages and the offender cannot reasonably pay "all or part" of the court costs and attorney fees.
Procedures for obtaining information and ordering restitution are provided in section 910.3:
The court shall require the county attorney to promptly prepare a statement of pecuniary damages to victims of the defendant and shall require the clerk of court to prepare a statement of court-appointed attorney's fees, the expense of a public defender and court costs which shall be promptly provided to the presentence investigator. These statements shall become a part of the presentence report. If a defendant believes no person suffered pecuniary damages, the defendant shall so state. If the defendant has any mental or physical impairment which would limit or prohibit the performance of a public service, the defendant shall so state. The court may order a mental or physical examination, or both, of the defendant to determine a proper course of action. At the time of sentencing, the court shall set out the amount of restitution including the amount of public service to be performed as restitution and the persons to whom restitution must be paid. This shall be known as the plan of restitution.
The order therefore must include a plan of restitution setting out the amounts and kind of restitution in accordance with the priorities established in section 910.2. Restitution is accomplished when the plan of restitution is carried out.
The definition of restitution in section 910.1(4) is consistent with the other statutory provisions:
"Restitution" means payment of pecuniary damages to a victim in an amount and in the manner provided by the offender's plan of restitution. Restitution shall also include the payment of court costs, court-appointed attorney's fees or the expense of a public defender, and the performance of a public service by an offender in an amount set by the court when no victim has suffered pecuniary damages and the offender cannot reasonably pay all or part of the court costs, court-appointed attorney's fees or the expense of a public defender.
This definition repeats the statutory theme emphasizing payment to victims first, payment for court costs and attorney fees to the extent of the offender's reasonable ability to pay next, and public service when no victim has suffered pecuniary damages and the offender cannot reasonably pay all or part of the court costs and attorney fees.
After sentencing in which a plan of restitution is ordered, the next step is establishing a plan of payment. § 910.4. The plan of payment sets out the schedule for the offender to carry out the terms of the plan of restitution. When the defendant is placed on probation under supervision of the judicial district department of correctional services or committed to the county jail or an alternate facility, the department is charged with developing a plan of payment based on the plan of restitution. The original plan of payment and any subsequent modification are subject to approval or change by the sentencing court. The plan of payment must take into account "the offender's income, physical and mental health, age, education, employment, and family circumstances." Id. Changes may be made when the offender's income and circumstances change significantly. Id. *529 When the sentencing court commits the defendant to the custody of the director of the division of adult corrections and in several other situations, the plan of payment is not initially made subject to court approval or change. Authority to make changes is initially assigned to others. See § 910.5.
The court, however, retains ultimate authority to review any issue concerning either the plan of restitution or plan of payment pursuant to section 910.7:
At any time during the period of probation, parole or incarceration, the offender or the agent, agency or judicial district department of correctional services who prepared the offender's restitution plan, may petition the court and the court shall grant a hearing on any matter related to the plan of restitution or restitution plan of payment. The court at any time prior to the expiration of the offender's sentence, may modify the plan of restitution or the restitution plan of payment, or both, and may extend the period of time for the completion of restitution.
We believe that section 910.2 requires the sentencing court to order restitution in the plan of restitution "for court costs, court-appointed attorney fees or the expense of a public defender when applicable" only "to the extent that the offender is reasonably able to [make such restitution]." (emphasis supplied). This interpretation is warranted by the express language of the statute, the context in which the language appears, and the spirit of the restitution provisions.
The reference to the offender's reasonable ability to make restitution is an express condition on the determination of the amount of restitution for court costs and attorney fees as opposed to the amount of restitution to the victim. Section 910.2 establishes a priority for restitution to the victim. Moreover, it authorizes a sentence to community service as an alternative "[w]hen no victim has suffered pecuniary damages and the offender is not reasonably able to pay all or a part of the court costs, court-appointed attorney's fees or the expense of a public defender . . . ." (emphasis supplied). The sentencing court would never get to the point of exercising this authority if it were mandated to order full restitution for court costs and attorney fees without regard to the offender's ability to pay.
Finally, this interpretation is consistent with the spirit of the restitution chapter. In enacting these provisions the General Assembly was obviously sensitive to the concerns addressed by this court in State v. Rogers, 251 N.W.2d 239 (Iowa 1977). In that case the court observed that recoupment of attorney fees as a condition of probation must satisfy constitutional criteria, including:
(1) The requirement of repayment is imposed only on a convicted defendant.
(2) The court does not order payment of this expense unless the convicted person is or will be able to pay it without undue hardship to himself or dependents, considering the financial resources of the defendant and the nature of the burden payment will impose.
(3) Revocation of probation shall occur only if defendant willfully fails to make payment, having financial ability to do so.
(4) Defendant may petition sentencing court to adjust the amount of any installment payments, or the total amount due, to fit a changing financial condition.
Id. at 245. The importance of these constitutional criteria was underscored in the Supreme Court's recent decision in Bearden v. Georgia, ___ U.S. ____, 103 S. Ct. 2064, 76 L. Ed. 2d 221 (1983), and this court's decision in Greene v. District Court of Polk County, 342 N.W.2d 818 (Iowa 1983). Procedures thus exist in chapter 910 from the inception of the sentence to assure that the Rogers criteria are satisfied.
We vacate and remand the restitution order in this case to permit the trial court to exercise the requisite discretion in determining the extent of defendant's obligation, *530 if any, to reimburse the county for court costs and attorney fees.
RESTITUTION ORDER VACATED; CASE REMANDED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578639/ | 281 S.W.3d 177 (2009)
FEDERAL INSURANCE COMPANY, Appellant,
v.
Carol RUIZ, Appellee.
No. 05-08-00529-CV.
Court of Appeals of Texas, Dallas.
February 19, 2009.
Don Rynn Freiling, Irving, for appellant.
Leslie Casaubon, The Casaubon Firm, L.L.P., Lewisville, for appellee.
Before Justices BRIDGES, RICHTER, and MAZZANT.
OPINION
Opinion by Justice MAZZANT.
In this worker's compensation case, Federal Insurance Company appeals the *178 summary judgment in favor of Carol Ruiz on Federal's suit to overturn the decision of the Division of Worker's Compensation Administrative Appeals Panel in favor of Ruiz. Federal brings two issues on appeal, asserting the trial court erred in granting Ruiz's motion for summary judgment on the ground that Federal waived its right to dispute the extent of Ruiz's compensable injury by not timely urging that dispute in accordance with section 409.021(c) of the Texas Labor Code. We affirm the trial court's judgment.
BACKGROUND
Ruiz worked as a secretary for her employer, performing clerical work, typing, and some heavy lifting. On January 24, 2005, Ruiz sustained an injury in the course and scope of her employment. On January 31, 2005, Ruiz described her symptoms to her chiropractor as pain in the neck, the front of the left wrist, and the top of the right shoulder; numbness in the left palm; headaches; and loss of sleep.
Federal was the worker's compensation carrier for Ruiz's employer. On February 10, 2005, Ruiz's employer sent Federal a report of Ruiz's injury. The report stated that Ruiz "states that she has pain in left wrist, right shoulder and neck due to repetitive typing and heavy lifting." The report stated the cause of Ruiz's injury was "repetitive typing and heavy lifting." On February 17, 2005, Dr. Jose Marquez examined Ruiz and stated in a written report that "Bilateral carpal tunnel syndromes are highly indicative of this examination." On March 31, 2005, Dr. Frank Morrison examined Ruiz, including electromyographic testing, and reported, "These electromyographic findings are consistent with: 1. CARPAL TUNNEL SYNDROME, bilateral, chronic, moderate to severe (right) and severe (left)." On May 23, 2005, Federal notified Ruiz it accepted Ruiz's claim for the right shoulder strain, cervical strain, and left wrist strain but disputed other parts of Ruiz's claim, including bilateral carpal tunnel syndrome.[1]
The case proceeded to a contested case hearing on two issues: (1) whether Ruiz's January 24, 2005 compensable injury included bilateral carpal tunnel syndrome and (2) whether Federal waived the right to dispute the compensability of bilateral carpal tunnel syndrome pursuant to sections 409.021 and .022 of the Texas Labor Code.[2]
Under the Texas Worker's Compensation Act, an employee injured in the course and scope of his occupation must notify the employer within thirty days of the injury. TEX. LAB.CODE ANN. § 409.001(a)(1) (Vernon 2006). The employer must report the injury to the carrier if the injury results in the employee being absent for more than one day. Id. § 409.005. Within fifteen days of receiving notice of the claim, the carrier must begin payment of benefits or notify the employee of its refusal to pay. *179 Id. § 409.021(a).[3] The carrier has sixty days from the date of notice of the injury to contest the compensability of an injury. Id. § 409.021(c). If the carrier does not contest compensability within the sixty-day period, it waives its right to contest compensability. Id. This sixty-day waiver rule, however, does not apply to disputes of extent of injury. 28 Tex. Admin. Code § 124.3(e) (2004).[4]
*180 In this case, the hearing officer acknowledged that under Appeals Panel Decision No. 041738-s, the injury that becomes compensable by waiver is defined by "that information that could have been reasonably discovered in the carrier's investigation prior to the expiration of the waiver period." See Appeals Panel Decision No. 041738-s, 2004 WL 2347601 (Tex. Work. Comp. Comm'n Sept. 8, 2004). The hearing officer stated that Federal "could have reasonably discovered the electrodiagnostic studies done on February 17, 2005 and March 31, 2005, both of which showed bilateral [carpal tunnel syndrome] within the waiver period." However, the hearing officer also stated there was no allegation during the waiver period that the compensable injury included bilateral carpal tunnel syndrome. Under its findings of fact and conclusions of law, the hearing officer found that Federal, "through a reasonable investigation, could not have determined within 60 days following February 16, 2005 that carpal tunnel syndrome was part of the claimed injury." The hearing officer then concluded that Federal did not waive its right to contest compensability of bilateral carpal tunnel syndrome under sections 409.021, and the hearing officer concluded that the compensable injury did not include bilateral carpal tunnel syndrome on either side.
Ruiz appealed to an appeals panel the hearing officer's decision on the waiver issue but not the extent-of-injury issue. The appeals panel held that the hearing officer's finding that Federal could not have determined during the sixty-day period that carpal tunnel syndrome was part of the claimed injury was against the great weight and preponderance of the evidence. The appeals panel stated that an allegation linking the medical condition to the compensable injury is not necessary when the employee had been diagnosed previously with the condition, the employee's complaints during the waiver period were consistent with the medical condition, and the employee was diagnosed with the medical condition during the waiver period. The appeals panel observed that Ruiz had not been previously diagnosed with bilateral carpal tunnel syndrome, she consistently complained during the sixty-day period of *181 left wrist pain, pain radiating down her right arm, tingling and numbness in her fingers and hands, and there was a diagnosis of bilateral carpal tunnel syndrome during the sixty-day period. The appeals panel rendered a decision that Federal waived the right to contest compensability of bilateral carpal tunnel syndrome by failing to contest in a timely manner the compensability of the injury in accordance with sections 409.021 of the Texas Labor Code. Thus, the appeals panel ruled, the bilateral carpal tunnel syndrome became compensable as a matter of law by waiver.
Federal brought suit in district court to contest the appeals panel's decision. Federal and Ruiz filed cross motions for summary judgment. The trial court granted Ruiz's motion and denied Federal's. The court affirmed the appeals panel's decision and awarded Ruiz her costs and attorney's fees. Federal now appeals the trial court's decision.
STANDARD OF REVIEW
To prevail on a summary judgment motion brought under Texas Rule of Civil Procedure 166a(c), a movant must show that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); Little v. Tex. Dep't of Criminal Justice, 148 S.W.3d 374, 381 (Tex.2004); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). In deciding whether a material fact issue exists, we consider all the evidence in the light most favorable to the nonmovant, indulging every reasonable inference in favor of the nonmovant and resolving any doubts against the movant. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 756 (Tex.2007). If the movant establishes a right to summary judgment, the burden shifts to the nonmovant to raise a genuine issue of material fact in order to defeat summary judgment. Teter v. Comm'n for Lawyer Discipline, 261 S.W.3d 796, 798 (Tex.App.-Dallas 2008, no pet.).
WAIVER UNDER § 409.021(c)
In its two issues on appeal, Federal contends the trial court erred in determining it waived its right under section 409.021(c) to contest the compensability of Ruiz's bilateral carpal tunnel syndrome. Section 409.021(c) provides, "If an insurance carrier does not contest the compensability of an injury on or before the 60th day after the date on which the insurance carrier is notified of the injury, the insurance carrier waives its right to contest compensability." TEX. LAB.CODE ANN. § 409.021(c). Administrative rule 124.3(3) provides, "Texas Labor Code, § 409.021... [does] not apply to disputes of extent of injury." 28 Tex. Admin. Code § 124.3(e). Federal argues its dispute concerning Ruiz's claim of bilateral carpal tunnel syndrome concerned the extent of Ruiz's injury, not the compensability of her injury. Thus, Federal asserts, section 409.021(c) by its terms does not apply, and rule 124.3(e) expressly provides it does not apply.
In support of this argument, Federal relies on TIG Premier Insurance Co. v. Pemberton, 127 S.W.3d 270 (Tex.App.-Waco 2003, pet. denied). In that case, the employee fell over a railing, hurting his right shoulder and left knee. The worker's compensation carrier did not contest liability for the injury. Three months after his fall, the employee was diagnosed with deep vein thrombosis in his right leg. Id. at 271. The carrier first learned of the deep vein thrombosis two years later, and it did not challenge the compensability of the deep vein thrombosis within sixty days of learning of it. Id. In administrative proceedings, the hearing officer and appeals panel concluded the carrier waived *182 the right to contest the compensability of the deep vein thrombosis by not contesting it within sixty days of learning of it. Id. at 272. The carrier challenged the administrative decision in district court. The court of appeals ruled that section 409.021 applied only to the carrier's initial response to the notice of injury and did not preclude it from later contesting a specific part of the injury. Id. at 204 (court states it agrees with carrier's argument).
The next year, 2004, the Worker's Compensation Commission issued an opinion discussing the question in Pemberton and in this case, "What was the nature of the injury that becomes compensable by virtue of carrier waiver?" Appeals Panel Decision No. 041738-s, 2004 WL 2347601, at *2. The Commission stated, "We hold that the injury that becomes compensable is not necessarily limited by the information listed on the first written notice of injury. Rather the nature of the injury will be defined by that information that could have been reasonably discovered in the carrier's investigation prior to the expiration of the waiver period." Id.
In April 2008, the Waco Court of Appeals issued an opinion in another case involving waiver under section 409.021(c), State Office of Risk Management v. Lawton, 256 S.W.3d 436 (Tex.App.-Waco 2008, pet. granted). In that case the employee was injured on July 5 and the same day was diagnosed as suffering a knee contusion. The carrier received notice of the injury the next day. On July 25, an MRI report on the employee's knee showed she had internal knee damage to the cartilage and other structures within her knee. The carrier received this report on August 1, well within the first sixty days. Id. at 437. On November 29, the carrier received a medical report that the internal knee damage was "a disease of life, and not part of the compensable work injury." Id. at 437-38. The carrier then issued a notice that it would pay benefits for the knee contusion but not for the internal damage to the knee. Id. at 438. The hearing officer and appeals panel concluded that the carrier had waived its right to contest the compensability of the internal damage to the knee under section 409.021(c), and the carrier challenged the administrative decision in district court. Id. The carrier relied on the Waco court's 2003 opinion in Pemberton. The Waco Court of Appeals stated that, pursuant to its holding in Pemberton, the carrier's dispute fell within the scope of an extent of injury dispute. Id. at 440. The court then observed that since Pemberton, the Worker's Compensation Commission had defined in Appeals Panel Decision No. 041738-s what constitutes the injury subject to the waiver of section 409.021(c). Id. at 440-41. The court stated that rule 124.3's provision that disputes of extent of injury are not subject to section 409.021 "contemplates a situation where, after the initial injury and expiration of the sixty-day period, a new dispute arises with regard to a body part, system, injury, condition, or symptom. In such a situation, no waiver occurs under section 124.3." Id. at 441 (citations omitted). The court stated that the July 25 report put the carrier on notice that the employee sought benefits for more than a mere contusion, and it placed the carrier in a position to dispute the extent of the employee's injury. Id. The court concluded that the employee had established her entitlement to judgment as a matter of law on the issue of waiver. Id.
Although not expressly stated in Lawton, two conclusions are implicit from the Waco court's opinion. First, the court had to have concluded that, following the issuance of Appeals Panel Decision No. 041738-s, its decision in Pemberton did not apply to medical conditions that could have been reasonably discovered in the carrier's investigation prior to the expiration of the *183 sixty-day waiver period. Then, the court had to have concluded that the employee's internal knee damage was such a medical condition.
Federal filed its brief in this case on July 22, 2008. It presented arguments criticizing Appeals Panel Decision No. 041738-s as improper ad hoc rule making by the Worker's Compensation Commission that should not be allowed by the courts. It also criticized the Waco court's decision in Lawton for following Appeals Decision No. 041738-s. Federal argues that section 409.021 and rule 124.3 should be interpreted to permit it to bring a challenge to the extent of an injury even when that medical condition could reasonably have been discovered by the carrier within sixty days of its notice of the injury and it failed to dispute the compensability of that medical condition during the sixty-day period.
On August 5, 2008, two weeks after Federal filed its appellant's brief in this case, this Court issued an opinion in a similar case, Sanders v. American Protection Insurance Co., 260 S.W.3d 682 (Tex.App.-Dallas 2008, no pet.). In that case, the employee filed a notice of injury claiming she sustained a repetitive trauma injury including bilateral carpal tunnel syndrome and injuries to her shoulders and neck. Id. at 685. Before the end of the sixty-day period, a doctor diagnosed the employee as suffering from bilateral carpal tunnel syndrome and cervical spinal issues and shoulder issues. The carrier thus was on notice of the employee's neck injuries and did not contest them during the sixty-day period. Id. Over two years later, the carrier asserted that the employee's neck problems were "a disease of life" and were not related to her repetitive motion injury. Id. at 683. In the administrative proceedings, the hearing officer and appeals panel concluded that the neck injuries could have been reasonably discovered during the sixty-day period and that the carrier waived its right to contest the compensability of the neck injuries by not contesting them during that period. Id. On appeal in this Court, the carrier relied on the Waco court's Pemberton decision. Citing the Waco court's subsequent decision in Lawton and Appeals Decision No. 041738-s, we observed,
The Texas Administrative Code provides that section 409.021 does not apply to disputes about the extent of an injury. Section 124.3(e) further provides that if a carrier receives a medical bill that involves treatment or service that the carrier believes is not related to the compensable injury, the carrier must file a notice of dispute of extent of injury not later than the earlier of the date the carrier denied the medical bill or the due date for the carrier to pay or deny the medical bill. Thus, section 124.3 contemplates a situation where, after the initial injury and expiration of the sixty-day period, a new dispute arises with regard to a body part, system, injury, condition, or symptom. In such a situation, no waiver occurs under section 124.3.
However, when, as here, the carrier is on notice of an injury within the initial sixty-day period of investigation, section 124.3 does not apply and the issue of compensability may not be reopened absent newly discovered evidence. This interpretation of rule 124.3 is reasonable, does not contradict the plain language of the statute, and gives effect to the legislature's goal of providing employees with a prompt streamlined process to handle worker's compensation claims. Thus, we defer to the [Texas *184 Worker's Compensation Commission's] interpretation of this rule.
Id. at 685 (citations omitted).
Ruiz's appellee's brief asserts that Sanders is directly on point with this case. Federal did not file a reply brief.
We agree with Ruiz that Sanders is on point and controls our decision in this case. The only distinction between the two cases is that in Sanders, the insurer agreed the bilateral carpal tunnel syndrome was compensable but sought to contest the compensability of the neck injury; while in this case, the insurer agreed to the compensability of the right shoulder strain, cervical strain, and left wrist strain but sought to contest the compensability of the bilateral carpal tunnel syndrome. This is not a material distinction.
The summary judgment record shows Ruiz's bilateral carpal tunnel syndrome could have been reasonably discovered by Federal during the sixty days following notice to Federal of Ruiz's injury. Federal did not contest the compensability of Ruiz's bilateral carpal tunnel syndrome. Following Sanders, we conclude the trial court did not err in determining that under section 409.021(c), Federal waived its right to contest the compensability of Ruiz's bilateral carpal tunnel syndrome and that the trial court did not err in granting Ruiz's motion for summary judgment on this ground. We overrule Federal's first and second issues.
We affirm the trial court's judgment.
NOTES
[1] In a separate proceeding, Federal asserted Ruiz's injury did not include cervical radiculopathy, C4-C5 disc protrusion, C3-C4 disc bulge, left wrist fibrocartilage tear, and left cubital tunnel syndrome. See Fed. Ins. Co. v. Ruiz, No. 05-08-00587-CV, 2009 WL 400644 (Tex.App.-Dallas February 19, 2009, no pet. h.) (mem.op.). The issues and arguments in that case are essentially identical to this case.
[2] The statement of the issues in the hearing officer's opinion cites "Texas Labor Code Section 408.021 and Section 408.022." Neither provision is concerned with a carrier's waiver of the right to contest the compensability of an injury. See TEX. LAB.CODE ANN. §§ 408.021,.022 (Vernon 2006). In the conclusions of law, the hearing officer correctly cited to "Texas Labor Code Sections 409.021 and 409.022."
[3] Section 409.021 provides, as relevant in this case,
(a) An insurance carrier shall initiate compensation under this subtitle promptly. Not later than the 15th day after the date on which an insurance carrier receives written notice of an injury, the insurance carrier shall:
(1) begin the payment of benefits as required by this subtitle; or
(2) notify the division and the employee in writing of its refusal to pay and advise the employee of:
(A) the right to request a benefit review conference; and
(B) the means to obtain additional information from the division.
(a-1) An insurance carrier that fails to comply with Subsection (a) does not waive the carrier's right to contest the compensability of the injury as provided by Subsection (c) but commits an administrative violation subject to Subsection (e).
(a-2) An insurance carrier is not required to comply with Subsection (a) if the insurance carrier has accepted the claim as a compensable injury and income or death benefits have not yet accrued but will be paid by the insurance carrier when the benefits accrue and are due.
(b) An insurance carrier shall notify the division in writing of the initiation of income or death benefit payments in the manner prescribed by commissioner rules.
(c) If an insurance carrier does not contest the compensability of an injury on or before the 60th day after the date on which the insurance carrier is notified of the injury, the insurance carrier waives its right to contest compensability. The initiation of payments by an insurance carrier does not affect the right of the insurance carrier to continue to investigate or deny the compensability of an injury during the 60-day period.
(d) An insurance carrier may reopen the issue of the compensability of an injury if there is a finding of evidence that could not reasonably have been discovered earlier.
TEX. LAB.CODE ANN. § 409.021(a)-(d).
[4] 28 Tex. Admin. Code § 124.3 provides, as relevant in this case,
(a) Except as provided in subsection (b) of this section, upon receipt of written notice of injury as provided in § 124.1 of this title (relating to Notice of Injury) the carrier shall conduct an investigation relating to the compensability of the injury, the carrier's liability for the injury, and the accrual of benefits. If the carrier believes that it is not liable for the injury or that the injury was not compensable, the carrier shall file the notice of denial of a claim (notice of denial) in the form and manner required by § 124.2 of this title (relating to Carrier Reporting and Notification Requirements).
(1) If the carrier does not file a notice of denial by the 15th day after receipt of the written notice of injury, the carrier is liable for any benefits that accrue and shall initiate benefits in accordance with this section.
(2) If the carrier files a notice of denial after the 15th day but on or before the 60th day after receipt of written notice of the injury:
(A) The insurance carrier is liable for and shall pay all income benefits that had accrued and were payable prior to the date the carrier filed the notice of denial and only then is it permitted to suspend payment of benefits; and
(B) The insurance carrier is liable for and shall pay for all medical services, in accordance with the Act and rules, provided prior to the filing of the notice of denial.
(3) The carrier shall not file notice with the commission that benefits will be paid as and when they accrue. A carrier's failure to file a notice of denial of a claim by the 15th day after it receives written notice of an injury constitutes the carrier's acceptance of the claim as a compensable injury, subject to the carrier's ability to contest compensability on or before the 60th day after receipt of written notice of the injury.
* * *
(b) Except as provided by subsection (c), the carrier waives the right to contest compensability of or liability for the injury, if it does not contest compensability on or before the 60th day after the date on which the insurance carrier receives written notice of the injury.
(c) If the carrier wants to deny compensability of or liability for the injury after the 60th day after it received written notice of the injury:
(1) the carrier must establish that it is basing its denial on evidence that could not have reasonably been discovered earlier; and
(2) the carrier is liable for and shall pay all benefits that were payable prior to and after filing the notice of denial until the Commission has made a finding that the evidence could not have been reasonably discovered earlier.
(d) If the claim involves the death of an injured employee, investigations, denials of compensability or liability, and disputes of the eligibility of a potential beneficiary to receive death benefits are governed by § 132.17 of this title (relating to Denial, Dispute, and Payment of Death Benefits).
(e) Texas Labor Code, § 409.021 and subsection (a) of this section do not apply to disputes of extent of injury. If a carrier receives a medical bill that involves treatment(s) or service(s) that the carrier believes is not related to the compensable injury, the carrier shall file a notice of dispute of extent of injury (notice of dispute). The notice of dispute shall be filed in accordance with § 124.2 of this title (relating to Carrier Reporting and Notification Requirements) and be filed not later than the earlier of:
(1) the date the carrier denied the medical bill; or
(2) the due date for the carrier to pay or deny the medical bill as provided in Chapter 133 of this title (relating to General Medical Provisions).
28 Tex. Admin. Code § 124.3(a)-(e). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578666/ | 281 S.W.3d 510 (2008)
In re Efrain RIVERA, M.D., Relator.
No. 08-06-00184-CV.
Court of Appeals of Texas, El Paso.
August 28, 2008.
*511 Robert Dinsmoor, Ray, Valdez, McChristian & Jeans, El Paso, TX, for Relator.
Walter L. Boyaki, Miranda & Boyaki, El Paso, TX, for Real Party In Interest.
L. Cullen Moore, Rymer, Moore, Jackson & echols, P.C., Houston, TX, for Paso Del Norte Surgery Center-Interested Party.
Before CHEW, C.J., McCLURE, J., and BARAJAS, C.J. (Ret.).
OPINION
DAVID WELLINGTON CHEW, Chief Justice.
In this original proceeding, Relator Efrain Rivera, M.D. ("Dr. Rivera") seeks a writ of mandamus from the trial court's order denying his motion to dismiss pursuant to TEX.CIV.PRAC. & REM.CODE ANN. § 74.351(b) and from the trial court's order granting Real Party in Interest Anita Loweree ("Ms. Loweree") a 30-day extension under TEX.CIV.PRAC. & REM.CODE ANN. § 74.351(c).[1] For the reasons stated below, we will grant mandamus relief.
BACKGROUND
On March 1, 2005, Ms. Loweree filed suit against Paso Del Norte Surgery Center, Emmanuel Rivera, M.D., and Mario Padillo, M.D. alleging the defendants were negligent in their positioning of her body during a gynecological surgery procedure on December 20, 2002, which resulted in permanent neurologic damage in her right upper extremity. On March 30, Ms. Loweree filed her first amended petition, naming Efrain Rivera, M.D., not Emmanuel Rivera, M.D., as a defendant. She alleged that Dr. Efrain Rivera is a duly licensed *512 physician who practices medicine generally and particularly in his specialty of anesthesiology and that Dr. Rivera provided anesthesia services for the December 20 surgical procedure.
On June 16, 2005, Ms. Loweree served an expert report and curriculum vitae of John M.H. Allen, M.B., B.S., J.D., F.R.C.S. On August 24, 2005, Dr. Rivera filed his "Motion to Dismiss Defendant Efrain Rivera, MD Pursuant to CIV.PRAC. & REM.CODE § 74.351." In his motion, Dr. Rivera argued that Dr. Allen's report did not name him nor did it implicate his conduct, thus, Ms. Loweree did not serve him with a Section 74.351 expert report within 120 days of filing her claim. Dr. Rivera sought dismissal with prejudice under Section 74.351(b). Dr. Rivera also sought dismissal on the ground that Dr. Allen's report was inadequate because it failed to meet the requirements of an expert report as defined by Section 74.351(r)(6) and did not represent an objective good faith effort to comply with the statute.
Ms. Loweree responded to Dr. Rivera's motion, asserting that Dr. Rivera had waived all objections to the expert report by failing to file and serve any objections to the sufficiency of the report not later than the 21st day after the date it was served. Ms. Loweree argued that Dr. Allen's report clearly implicated the care of the anesthesiologist and that the alleged deficiencies raised by Dr. Rivera in his motion, such as failing to mention Dr. Rivera by name, were deficiencies to be considered only if objections to the report were timely filed. Ms. Loweree also asserted that Dr. Allen's report was an objective good faith effort under Section 74.351(l), and in the alternative, she requested a 30-day extension to cure any deficiencies. The trial court heard Dr. Rivera's motion on September 23, 2005 and took it under advisement. Dr. Rivera filed a supplemental brief on December 27.
On June 14, 2006, the trial court entered an order denying Dr. Rivera's motion to dismiss under Section 74.351(b). That same day, the trial court entered a separate order granting Ms. Loweree's request for a 30-day extension under Section 74.351(c). In that second order, the trial court found that Ms. Loweree's expert report was timely filed as to Dr. Rivera. The trial court also found that the expert report was an objective good faith effort, but that it had deficiencies as to Dr. Rivera. Consequently, the trial court granted Ms. Loweree the 30-day extension to cure any deficiencies in her expert report. Dr. Rivera now brings this original proceeding in mandamus.
DISCUSSION
Mandamus is an extraordinary remedy available only in limited circumstances where the trial court violates a duty imposed by law or clearly abuses its discretion and when there is no other adequate remedy of law. CSR Ltd. v. Link, 925 S.W.2d 591, 596 (Tex.1996); Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992) (orig. proceeding). With respect to resolution of factual issues or matters within the trial court's discretion, we may not substitute our judgment for that of the trial court. Walker, 827 S.W.2d at 839-40. The relator must show that the trial court could reasonably have reached only one decision. Id. at 840. We will not disturb the trial court's decision unless it is shown to be arbitrary and unreasonable. Walker, 827 S.W.2d at 840. With respect to the resolution of legal issues, our review is much less deferential. Id. A trial court has no discretion in determining what the law is or in applying the law to the facts. Id. Thus, a clear failure by the trial court *513 to analyze or apply the law correctly will constitute an abuse of discretion. Id.
Clear Abuse of Discretion
In Issues Four through Eight, Dr. Rivera contends the trial court abused its discretion by granting Ms. Loweree a 30-day extension under TEX.CIV.PRAC. & REM. CODE ANN. § 74.351(c) because: (1) Ms. Loweree did not serve a Section 74.351 expert report and curriculum vitae upon him or his attorney within 120 days of filing her claim which implicated his conduct; (2) the only report served within the 120-day deadline was Dr. Allen's report, which did not implicate his conduct; and (3) Dr. Allen's report, within its four corners, did not name him, did not implicate his conduct, did not state the applicable standard of care as to his actions or inactions, did not allege that he breached a standard of care, and did not allege that his actions or inactions caused any harm, injury, or damage to Ms. Loweree. Dr. Rivera also argues the trial court abused its discretion in finding that Dr. Allen's report was an objective good faith effort as to him and in finding that Dr. Allen's report was "timely filed as to Defendant Rivera." We must agree with Relator that the trial court abused its discretion in granting the 30-day extension for the reasons stated herein.
Interpreting the statute according to its plain meaning, Section 51.014(a)(9) expressly provides a right to appeal an interlocutory order that denies a motion to dismiss brought under Section 74.351(b). TEX.CIV.PRAC. & REM.CODE ANN. § 51.014(a)(9)(Vernon 2008). However, a Section 74.351(b) motion for dismissal with prejudice is subject to the applicability of Subsection (c). TEX.CIV.PRAC. & REM.CODE ANN. § 74.351(b)(Vernon Supp.2008). Under Section 74.351(c), the trial court may grant one 30-day extension to the claimant to cure any deficiency in a timely-served expert report. See TEX.CIV.PRAC. & REM. CODE ANN. § 74.351(c); Thoyakulathu v. Brennan, 192 S.W.3d 849, 853 (Tex.App.-Texarkana 2006, no pet.)(Subsection (c) extension is available only when timely-served expert report is found deficient, not when the report is not served by the deadline). Section 51.014(9) of the Texas Civil Practice and Remedies Code expressly prohibits a party from appealing "an order granting an extension under Section 74.351." See TEX.CIV.PRAC. & REM.CODE ANN. § 51.014(a)(9).
Thus, the question is: whether "an order granting an extension under Section 74.351" includes a trial court order which denies a motion to dismiss an expert report when the defendant fails to timely object as required by Section 74.351(a). We conclude that it does not. An extension under Section 74.351 is only allowed in two circumstances: (1) by written agreement of the affected parties; or (2) by the trial court when elements of the report are found deficient. See TEX.CIV.PRAC. & REM. CODE ANN. § 74.351(a) & (c). However, deficiencies in a report can only be raised when a defendant physician or health care provider whose conduct is implicated files and serves objections not later than the 21st day after service. See TEX.CIV.PRAC. & REM.CODE ANN. § 74.351(a). If the defendant fails to object, then all objections are waived. Id.
Accordingly, Section 74.351 gives the trial court no discretion to sua sponte determine that a report is deficient and then grant a 30-day extension to cure. Since the defendant waived his objections to the deficiencies in the report, the trial court was not authorized to grant an order to cure the report's deficiencies. Thus, when the trial court granted a 30-day extension after untimely objections were filed by the defendant, the court's order *514 was not a proper order "granting an extension under Section 74.351."[2] Because Section 74.351(c) does not allow the trial court to grant a 30-day extension to cure deficiencies when a defendant fails to timely object, we find a clear abuse of discretion by the trial court in granting Ms. Loweree a 30-day extension pursuant to Section 74.351(c).
Adequate Remedy At Law
Next, Relator does not have an adequate remedy at law. This Court has jurisdiction through interlocutory appeal regarding matters concerning medical malpractice expert reports in two ways: First, this Court has jurisdiction if the trial court denies all or part of the relief sought by a motion under Section 74.351(b); and secondly, we have jurisdiction when the trial court grants relief sought by motion under Section 74.351(l). TEX.CIV.PRAC. & REM. CODE ANN. § 51.014(a)(9) & (10). Based on the particular facts of this case, this Court lacks jurisdiction to review the trial court's erroneous granting of a 30-day extension, therefore, Relator does not have an adequate remedy at law.
The facts of this case entitle Relator to mandamus relief because, as previously articulated, the trial court did not have the authority to issue its separate order granting a 30-day extension. However, we note, this Court is not stating that all orders issued by the trial court which grant a 30-day extension are reviewable through mandamus. See In re Padilla, 242 S.W.3d 549, 552 (Tex.App.-El Paso 2007, orig. proceeding)(Relator has adequate remedy at law of seeking dismissal with prejudice following the trial court's award of 30-day extension); In re Paso Del Norte Surgery Center, 281 S.W.3d 521, No. 08-06-00260-CV, 2008 WL 3990807 (Tex.App.-El Paso, August 28, 2008, orig. proceeding)(Relator failed to show clear abuse of discretion in trial court's award in granting 30-day extension and Relator had an adequate remedy at law). Rather, we are merely stating that based on the particular facts of this case, i.e. clear abuse of discretion by the trial court for authorizing a 30-day extension to cure deficiencies in the expert report when defendant waived objections to sufficiency of the expert report, the Relator is entitled to mandamus relief.
The trial court clearly abused its discretion in granting a 30-day extension to cure deficiencies in plaintiff's expert report, since the defendant has waived all objections to the sufficiency of the report. Further, defendant does not have an adequate remedy at law. Therefore, we grant Relator's request for mandamus relief and enter judgment vacating the trial court's order that granted plaintiff's a 30-day extension to cure the deficiencies in the report.
BARAJAS, C.J. (Ret.)(Sitting by Assignment).
NOTES
[1] Dr. Rivera has also filed an accelerated interlocutory appeal of the trial court's denial of his motion to dismiss. That appeal has been consolidated with this mandamus proceeding for purposes of briefing and oral argument only. The interlocutory appeal has been decided with an opinion which issues this same date. See Efrain Rivera, M.D. v. Anita Loweree, 281 S.W.3d 515, No. 08-06-00185-CV, 2008 WL 3990806 (Tex.App.-El Paso August 28, 2008, no pet. h.).
[2] Under these circumstances, since the trial court's order granting a 30-day extension after an untimely objection is an impermissible "order granting an extension under 74.351," Section 51.014(a)(9) would not exclude an interlocutory appeal. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578649/ | 133 Mich. App. 344 (1984)
351 N.W.2d 208
PEOPLE
v.
WARD
Docket No. 60310.
Michigan Court of Appeals.
Decided March 7, 1984.
Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, William F. Delhey, Prosecuting *347 Attorney, and David A. King, Assistant Prosecuting Attorney, for the people.
State Appellate Defender (by Terrence R. Flanagan), for defendant on appeal.
Before: M.J. KELLY, P.J., and CYNAR and J.C. KINGSLEY,[*] JJ.
PER CURIAM.
On April 7, 1981, defendant Michael Ward, also known as Kenneth Dean Watson, was found guilty by a Washtenaw County jury of possession of a controlled substance with intent to deliver 650 or more grams, contrary to MCL 333.7401, subds (1) and (2)(a)(i); MSA 14.15(7401), subds (1) and (2)(a)(i). Defendant was sentenced to a statutorily mandated life sentence and appeals as of right.
The facts set forth below resulted in two criminal prosecutions: the one which comprises the instant case, and an Ingham County prosecution for conspiracy to deliver cocaine. A lower court order dismissing the Ingham County charge was reversed by this Court, People v Ward, 107 Mich. App. 38; 308 NW2d 664 (1981), lv den 417 Mich. 938 (1983).
In March, 1979, the Tri-County Metro Narcotic Squad was investigating cocaine trafficking in the Michigan State University campus area. Information had been received that one Randall Seaver was a large-scale cocaine dealer in the Lansing area. The house that Seaver lived in on West Lake Lansing Road in Ingham County was placed under periodic surveillance beginning in late 1978 or early 1979. Tri-County Metro Officer Rick Boyd testified that on two separate occasions information *348 was received from two reliable confidential informants to the effect that Seaver was distributing "large loads" of cocaine. On or about March 17, 1979, Officer Boyd was told by a confidential informant that Seaver was expecting "a load" of cocaine to come in during that particular week. Tri-County Metro officers began a continuous surveillance of Seaver's house, starting on March 20, 1979. The house next door to Mr. Seaver's residence was for sale at the time and was unoccupied. The realtor allowed the Tri-County Metro officers to use the house for their surveillance.
On the afternoon of March 20, 1979, defendant was observed for the first time by the Tri-County Metro surveillance team. He arrived at Seaver's house on West Lake Lansing Road, driving a white 1979 Pontiac Bonneville. He removed a briefcase from the trunk of his car and carried it into Seaver's house. A short time later, defendant was observed leaving the house carrying the briefcase. He placed the briefcase in the trunk of the car and drove away. Defendant reappeared at the Seaver residence, stayed for a short period of time, and left again. The police officer on surveillance followed him south on US 127, east on I-96 to US 23 and then north to the M-59 exit. At this time, the surveillance officers saw a Michigan state police patrol car. Officer Stanley Granger spoke to the state trooper and requested that he stop defendant in order to ascertain his identity. As a result of the contact between defendant and the state trooper, it was learned that defendant had a Florida driver's license in the name of Kenneth Dean Watson with an address in Plantation, Florida. The state trooper informed the narcotics officers that he stopped defendant for an illegal turn, but no traffic citation was issued.
*349 Defendant arrived again at Randall Seaver's residence on the afternoon of March 21, 1979. Officers Szilagyi and Granger were conducting their surveillance from the house next door to Mr. Seaver's residence. The distance between the two houses was approximately 125 feet. Officer Szilagyi observed defendant as he walked out of Seaver's house on the afternoon of March 21, 1979. Defendant came out of Seaver's house and walked to his rented vehicle parked in the driveway. Defendant was wearing a ski jacket. He opened the trunk of his car and proceeded to take something out of his coat pocket. Officer Szilagyi began taking pictures, using two different camera lenses, a 200 mm and 300 mm lens. At the same time, he relayed his observations by radio to Officer Boyd, who was parked at a 7-11 party store several hundred yards from Seaver's house. Officer Szilagyi thought he saw the defendant remove a white package the size of several hot dogs from his pocket. Officer Szilagyi believed the package to be cocaine. Defendant drove in a westerly direction on West Lake Lansing Road for one and one-half blocks, then made a U-turn and drove east. As defendant drove away, Szilagyi informed Boyd that he believed that the defendant had hidden cocaine in the rear-deck area of the trunk. Officer Boyd informed Szilagyi that he was going to stop defendant, place him under arrest, and obtain a search warrant for the car. Boyd followed defendant to a gas station located at Lake Lansing and Abbott Roads, approximately one-quarter mile from Seaver's house. Officer Boyd pulled his car in front of defendant's car. Defendant was ordered out of his car and searched. Boyd informed defendant that he was under arrest for violation of the controlled substances act.
*350 Defendant had over $250 in cash in his pants pocket. Boyd informed defendant that he was going to jail and defendant requested that his jacket not be left in the car because it contained a large sum of money. Officer Boyd removed the jacket from the car. The inner pocket of the jacket contained $5,000 cash, mostly in small bills. Also found in the jacket was a large, gold-colored key, upon which was inscribed "147" in large numerals. A thorough search of the car revealed no glassine package, white substance, or cocaine. A small quantity of Quaaludes was found, as was a Florida driver's license in the name of Kenneth Dean Watson, and a slip of paper upon which was written "Ken, 157, 665-3500". Officer Boyd testified that although no cocaine was found in the car, defendant remained in custody on the basis of his being in possession of Quaaludes.
Within 15 minutes of defendant's arrest, other officers from the surveillance team made an entry without a warrant into Seaver's home. They detained Seaver and a female friend for several hours while awaiting the arrival of a search warrant. During this time, Seaver was "high" and fell asleep for a couple of hours, having previously ingested cocaine and Quaaludes. Before the issuance of the search warrant, the officers found Quaaludes, cocaine, and psilocybin mushrooms in Seaver's home. Officer Boyd arrived with the search warrant for the Seaver residence. Mr. Seaver approached Boyd and requested a private conversation. The two men went into a bedroom. Seaver asked Boyd if it would be helpful to his case if he had information to give to the police. Boyd informed Seaver that the Ingham County Prosecutor would have to approve any deals.
Officer Boyd informed Seaver that defendant *351 had already been arrested. Seaver told Boyd that the defendant's real name was Michael Ward. Seaver had known defendant for a long time and stated that defendant supplied Seaver with large quantities of cocaine. Seaver further stated that defendant had told him that same day that he had a large quantity of cocaine and money hidden in a motel room. Seaver did not know where the motel was located.
The telephone number found in defendant's car proved to be that of the Wolverine Inn. Through his telephone conversation with the clerk at the Wolverine Inn, Boyd discovered that the Inn was located in Ann Arbor and that a person named Kenneth Watson was registered in room 147. The front desk put Boyd through to room 147 but no one answered the room's telephone.
Boyd and two other officers traveled to Ann Arbor to obtain a warrant to search the hotel room. After securing the warrant, officer Boyd utilized the room key seized from defendant at arrest to open the door to room 147. Defendant's suitcase and clothing bag were searched first, and no cocaine was found in either one. The officers then looked under the bed and searched the drawers in the bathroom. One of the uniformed Ann Arbor officers unscrewed the plumbing access panel in the bedroom. He informed the other officers that there were two grocery bags inside the panel. Officer Granger removed both bags, which were sealed with silver duct tape. Both bags were opened. The first bag contained $55,900 cash. The money was wrapped in several stacks and consisted of 10-, 20-, 50-, and 100-dollar bills. The second bag contained 21 clear plastic heat-sealed bags containing a white powdery substance. The two grocery bags and their contents were taken by *352 the police. Also taken were the two pieces of luggage and their contents, hotel and rental car receipts found in the room, the contents of a shaving kit, an ink pen, an empty matchbook, and the plumbing access panel. The police obtained the guest registration slips for room 147 from the front desk clerk in the morning of March 22, 1979. The slip showed that room 147 was rented to Kenneth Watson on March 20, 1979. The room was paid for in cash.
Defendant was charged by the Washtenaw County prosecutor with possession with intent to deliver 650 or more grams of cocaine and possession of 650 or more grams of cocaine. (In Ingham County, defendant was charged with conspiracy to deliver cocaine.) Before his preliminary examination, defendant filed a motion to suppress evidence. This motion was denied. Defendant was bound over to circuit court. An evidentiary hearing was held on defendant's motion to quash the search warrant and to suppress evidence before Washtenaw County Circuit Court Judge Edward D. Deake, who denied defendant's motion in an opinion issued on May 14, 1980. A similar hearing was also held before Ingham County Circuit Court Judge James R. Giddings, who granted the motion and dismissed the charge against defendant pending in that county. This case, however, went to trial and defendant was found guilty as charged.
The first four issues raised by defendant concern the propriety of various searches and seizures undertaken during the investigation of this case. These issues were previously decided, adversely to defendant, by this Court when the Ingham County Prosecutor appealed Judge Giddings' dismissal of the conspiracy case. People v Ward, 107 Mich. App. 38; 308 NW2d 664 (1981), lv den 417 Mich. 938 *353 (1983). We agree with plaintiff that these issues are subject to collateral estoppel.
The doctrine of collateral estoppel, or issue preclusion, bars the relitigation of issues previously decided where the parties to a second litigation are the same as those in the prior litigation. Rinaldi v Rinaldi, 122 Mich. App. 391; 333 NW2d 61 (1983); Topps-Toeller, Inc v Lansing, 47 Mich. App. 720; 209 NW2d 843 (1973), lv den 390 Mich. 788 (1973). The doctrine applies to criminal cases as well as civil matters. Ashe v Swenson, 397 U.S. 436; 90 S. Ct. 1189; 25 L. Ed. 2d 469 (1970); People v Gray, 393 Mich. 1; 222 NW2d 515 (1974).
The necessary elements for application of the doctrine are present. The legal and factual issues are the same. There is an identity of parties, as the Ingham and Washtenaw County prosecutors are creatures of a common sovereign, the State of Michigan. People v Grainger, 117 Mich. App. 740, 753-754; 324 NW2d 762 (1982). Also, because leave was denied by the Supreme Court in the Ingham County conspiracy case, the decision of the Court of Appeals has become the final adjudication. GCR 1963, 853.2(2). We conclude that defendant is barred from raising these same issues before this Court. See People v Ford, 19 Mich. App. 519; 173 NW2d 3 (1969).
Defendant next maintains that the trial court erred in allowing admission of items seized from the room at the Wolverine Inn which were not listed on the search warrant. In considering the propriety of seizing property not identified in a search warrant, we apply the standard used by the Supreme Court in People v Secrest, 413 Mich. 521; 321 NW2d 368 (1982), reh den 414 Mich. 1102 (1982). In that case the police had a warrant authorizing them to search for guns, ammunition, *354 and money. In executing the warrant, the police picked up two photographs of the defendant. In analyzing the legality of the search, the Court relied on Const 1963, art 1, § 11, though federal cases were examined for purposes of guidance. The Secrest Court ultimately determined: "There must be something incriminating about the evidence the police inadvertently come upon; indeed, some courts have added the incriminating nature must be `immediately apparent'." Secrest, supra, p 528. The Secrest Court itself appears to have embraced the latter requirement, as it held: "We cannot find that it was immediately apparent that the photographs of individuals unknown to the police were incriminating." Secrest, supra, p 528. Critical to the result in Secrest was that at the time of the search the police had no idea what the defendant looked like, hence they could not have reasonably believed that the pictures were incriminating.
We have different facts before us in this matter. At the time the officers entered room 147 at the Wolverine Inn, they knew defendant was in custody in Ingham County and that his real name was Michael Ward, but that he used the alias Kenneth Dean Watson. Any evidence that would connect defendant with the hotel room was incriminating.
Defense counsel, in his brief, has questioned the admissibility only of people's exhibits 17-20 and 23, so those are the ones that will be addressed. People's exhibit 20 was an Avis car rental receipt made out to Kenneth D. Watson and 23 was a receipt from the Ann Arbor Holiday Inn, dated March 20, 1979, made out to K. Watson. The incriminating value of both these items was immediately apparent, as they served to link defendant to his alias and also to control of the hotel room.
*355 People's exhibits 17 and 18 consisted of luggage and clothing. Some of the shirts contained on their collars the letters "WAT"; these were apparently laundry marks. It was reasonable to suspect that "WAT" could have been short for Watson, thus linking the items to defendant.
People's exhibits 19 was a shaving kit. Because it contained nothing bearing defendant's name or alias, and was not otherwise incriminating, its admission was erroneous. At trial, however, defense counsel elicited the fact that certain items found in the shaving kit contained surfaces which were conducive to fingerprints, but that no attempt was made to lift prints from these items. Defense counsel also mentioned his in this closing argument, claiming it raised a reasonable doubt. Thus, any error was negated by defense counsel's attempts to use the evidence to defendant's advantage. See People v Baines, 68 Mich. App. 385; 242 NW2d 784 (1976). For the foregoing reasons we find no reversible error under the Secrest standard.
Defendant's next claim of error relates to his motion to suppress his prior conviction record for impeachment purposes. MRE 609(a)(2). Although defendant had several such convictions, the trial court determined that evidence of only one prior conviction could be used for impeachment a 1979 federal conviction for possession and distribution of cocaine. We find no error. While similarity of the prior conviction to the charged offense weighs against admission, the admission of evidence of a defendant's prior conviction for a crime similar or identical to the crime charged does not per se result in reversible error. People v Carpenter, 120 Mich. App. 574, 581; 327 NW2d 523 (1982); People v Monasterski, 105 Mich. App. 645, 655; 307 NW2d *356 394 (1981), lv den 411 Mich. 1017 (1981). The trial judge properly exercised his discretion and did not, in our view, abuse it. People v Jackson, 391 Mich. 323; 217 NW2d 22 (1974).
Defendant next claims that the court erred in admitting testimony concerning the street value of the cocaine, arguing that the prejudicial potential of such testimony overshadowed its probative value. MRE 403. This Court has previously held that admission of such testimony does not constitute an abuse of discretion. People v Wimbley, 108 Mich. App. 527; 310 NW2d 449 (1981); People v Gould, 61 Mich. App. 614; 233 NW2d 109 (1975). Testimony regarding the street value of a drug has been held relevant to intent to deliver. Gould, supra, p 624.
Defendant also argues that error was committed because officer Granger was under the impression that the average street cocaine is 15 percent pure, while the chemist testified that it is 25 percent pure, a factor which could have affected Granger's calculations. Defense counsel's own arithmetic, using an average purity of 25 percent, still puts the street value of the cocaine at over $1,000,000. In addition, this Court has taken notice that 1,000 grams of cocaine has a street value of over $1,000,000. People v McCarty, 113 Mich. App. 464; 317 NW2d 659 (1982), lv den 414 Mich. 958 (1982). Using that formula, the cocaine seized in the instant case would have a street value of $2.5 million dollars, much higher than the figure to which defendant objects.
Defendant's remaining arguments have previously been made to this Court without success. We have determined that the classification of cocaine on the same level with narcotic drugs for penalty purposes does not violate the rights of due process *357 or equal protection. People v Harman, 124 Mich. App. 93; 333 NW2d 591 (1983), lv den 417 Mich 1100.45 (1983); People v Kirchoff, 120 Mich. App. 617; 327 NW2d 535 (1982). Finally, this Court is not convinced that the mandatory life imprisonment for possession with intent to deliver 650 or more grams of cocaine amounts to cruel and unusual punishment. People v Campbell, 115 Mich. App. 369; 320 NW2d 381 (1982), lv den 417 Mich. 879 (1983); McCarty, supra. See also People v Puertas, 122 Mich. App. 626, 630; 332 NW2d 399 (1983), lv den 417 Mich. 1056 (1983).
Defendant's conviction and sentence are affirmed.
M.J. KELLY, P.J. (concurring).
In People v Harman, 124 Mich. App. 93, 101; 333 NW2d 591 (1983), lv den 417 Mich 1100.45 (1983), I expressed the opinion that the mandatory life sentence provided for conviction of possession of 650 grams or more of a mixture containing cocaine constitutes cruel and/or unusual punishment in violation of the United States and Michigan Constitutions (US Const, Am VIII; Const 1963, art 1, § 16). I have not changed my mind, but the Supreme Court has denied leave in that case, so the lone voice crying in the wilderness has been silenced.
Although the Supreme Court is not completely clear on the effect of its denial of an application to appeal a Court of Appeals decision, cf. Tebo v Havlik, 418 Mich. 350; 343 NW2d 181 (1984). I conclude there is little sentiment for my view.
I therefore concur in the result.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578644/ | 516 F. Supp. 39 (1978)
Howell H. SHERROD, Jr., Plaintiff,
v.
PIEDMONT AVIATION, INC., Defendant.
No. CIV-2-77-179.
United States District Court, E. D. Tennessee, Northeastern Division.
May 25, 1978.
On Motion to Reconsider June 26, 1978.
On Motion to Dismiss Appeal July 24, 1978.
*40 *41 Dick L. Johnson, Johnson City, Tenn., for plaintiff.
David W. Blankenship, Kingsport, Tenn., for defendant.
MEMORANDUM OPINION AND ORDER
NEESE, District Judge.
This is a civil action for compensatory and punitive damages for the defendant's removal of the plaintiff from a commercial aircraft. 28 U.S.C. §§ 1332(a)(1), (c). The defendant Piedmont Aviation, Inc. (Piedmont) moved the Court for a summary judgment as to the plaintiff Mr. Sherrod's claims herein of false arrest and imprisonment, malicious prosecution, and abuse of process, supporting such motion with an affidavit. Rule 56(b), (e), Federal Rules of Civil Procedure. The plaintiff failed to make a timely response to such motion, local Rule 12(b), and is thus deemed to have waived any opposition thereto, local Rule 11(f).[1]
Jurisdiction having been invoked herein on the basis of the diversity of citizenship of the parties and the requisite amount in controversy, 28 U.S.C. §§ 1332(a)(1), (c), this Court must look to the law of Tennessee including such jurisdiction's conflict of law rules. Boatland, Inc. v. Brunswick Corp., C.A.6th (1977), 558 F.2d 818, 821[1]. It being undisputed that all events surrounding the incident which is the basis herein of this action occurred in Illinois, under the conflict of law rules of Tennessee, this Court is required to apply the substantive law of Illinois. Telecommunications, E. S. & S. Co. v. Southern T. S. Co., C.A.6th (1975), 518 F.2d 392, 394[4]; Winters v. Maxey (Tenn., 1972), 481 S.W.2d 755, 756[1].
The thrust of the plaintiff's claim is that, while he was seated in the defendant's commercial aircraft at O'Hare Field in Chicago awaiting its "take off," Piedmont's personnel ordered him to remove himself from the plane; that, when he refused to do so, they, without just cause, swore out an arrest warrant with the appropriate authorities charging him with the offense of disorderly conduct; that he was arrested and taken from the plane by the Chicago police pursuant to such warrant; and that he was thereafter imprisoned for some 2 hours in a Chicago police precinct station prior to posting bond.
The uncontroverted affidavit of Mr. Larry Brook, an employee of Piedmont, establishes *42 that, on November 14, 1977 in a Chicago court, Mr. Sherrod was found guilty of disorderly conduct in connection with this incident and was ordered to forfeit his bond. Piedmont contends that such conviction bars the plaintiff's claim herein of false arrest and imprisonment, malicious prosecution, and abuse of process.
"* * * [I]t is settled Illinois law that a complaint for malicious prosecution `must allege facts showing that the prior litigation * * * had terminated favorably to the plaintiff.' * * *" LaSalle National Bank v. 222 East Chestnut Street Corp., C.A.7th (1959), 267 F.2d 247, 252[5], certiorari denied (1959), 361 U.S. 836, 80 S. Ct. 88, 4 L. Ed. 2d 77. Unless the underlying proceeding terminated in the plaintiff's favor, he cannot maintain an action for malicious prosecution. Barrett v. Baylor, C.A.7th (1972), 457 F.2d 119, 122[3]; Alberto-Culver Co. v. Andrea Dumon, Inc., D.C.Ill. (1969), 295 F. Supp. 1155, 1160[7]; Schwartz v. Schwartz (1937), 366 Ill. 247, 250(1), 8 N.E.2d 668; Bonney v. King (1903), 201 Ill. 47, 50(2), 66 N.E. 377; McBean v. Ritchie (1856), 18 Ill. 114; Kay v. Boehm, C.A.Ill. (1975), 32 Ill.App.3d 853, 856(2), 336 N.E.2d 781; Elfgen v. Noll's Ice Cream & Frozen Food Co., C.A.Ill. (1971), 131 Ill.App.2d 1006, 1068(1), 267 N.E.2d 731; Neumann v. Ellars, C.A.Ill. (1966), 75 Ill.App.2d 394, 221 N.E.2d 85; Ammons v. Jet Credit Sales, Inc., C.A.Ill. (1962), 34 Ill.App.2d 456, 461-462[4], 181 N.E.2d 601; Hargadine v. Sharkey, C.A.Ill. (1956), 8 Ill.App.2d 209, 226[6], 131 N.E.2d 134; Breytspraak v. Gordon, C.A.Ill. (1948), 333 Ill.App. 650, 77 N.E.2d 860; Ligitos v. Finerman, C.A.Ill. (1946), 329 Ill.App. 241, 67 N.E.2d 610. A conviction in an underlying criminal prosecution is a complete defense and a bar to a malicious prosecution suit. DeCorrevant v. Lohman, C.A.Ill.[2] (1967), 84 Ill.App.2d 221, 228[7], 228 N.E.2d 592; Galarza v. Sprague, C.A.Ill. (1936), 284 Ill.App. 254, 260(2), 1 N.E.2d 275; Dahlberg v. Grace, C.A.Ill. (1913), 178 Ill.App. 97, 101(1).
Mr. Sherrod makes no claim herein that the aforementioned criminal proceeding terminated in his favor, and the contrary is shown by an uncontroverted affidavit. Accordingly, he cannot maintain an action for malicious prosecution as to this proceeding.
By amendment to his complaint, the plaintiff avers that the defendant also filed charges against him with the Federal Aviation Administration, and that such charges "* * * were dismissed or dropped. * * *" This is still not sufficient for a malicious prosecution action. Under Illinois law, malicious prosecution involves "* * * [t]he institution or continuation of an original judicial [emphasis provided] proceeding, either civil or criminal. * * *" 25 Ill.Law & Practice 571-572, Malicious Prosecution § 12. The plaintiff makes no claim herein that proceedings before the aforementioned federal administrative agency were judicial in nature, nor does he cite any authority indicating that the Illinois courts have extended the scope of malicious prosecution to cover such proceedings. This Court's research discloses none.
For the aforementioned reasons, Piedmont is entitled to a summary judgment as to the plaintiff's claim of malicious prosecution.
As to the plaintiff's claims of false arrest and imprisonment[3] and abuse of process, however, it is not required that the underlying proceedings have terminated in favor of Mr. Sherrod. Prosser, Laws of Torts (4th ed., 1971) 49 n. 24, § 11 and 856, § 121. Therefore, Piedmont is not entitled to a summary judgment as to these claims. Nevertheless, as to these claims, the Court hereby EXCLUDES from its consideration the affidavit submitted in support of such *43 motion and TREATS the motion as seeking a dismissal of these claims for the plaintiff's failure to state a claim upon which relief can be granted. Rule 12(b)(6), Federal Rules of Civil Procedure.[4] See and cf. Marvasi v. Shorty, D.C.Pa. (1976), 70 F.R.D. 14, 17[1-5] and In re Penn Central Securities Litigation, D.C.Pa. (1972), 347 F. Supp. 1327, 1342[21], modified in part on other grounds D.C.Pa. (1973), 357 F. Supp. 869, affirmed C.A.3d (1974), 494 F.2d 528.
Mr. Sherrod was required to have included in his complaint herein "* * * a short and plain statement of the claim showing that [he] is entitled to relief. * * *" Rule 8(a)(2), Federal Rules of Civil Procedure. While it was not necessary for the plaintiff to have set out a detailed accounting of all the facts upon which his claims were based, it was required that the complaint "* * * contain either direct allegations on every material point necessary to sustain a recovery on any legal theory, * * * or contain allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial. * * " 5 Wright & Miller, Federal Practice and Procedure: Civil 121-123, § 1216.
In ruling on a motion for a dismissal for the failure of a plaintiff to state a claim upon which relief can be granted, the Court is required to treat all well-pleaded allegations of the complaint as true, Miree v. DeKalb County (1977), 433 U.S. 25, 27, 97 S. Ct. 2490, 2492, 53 L. Ed. 2d 557, 561 n. 2[2b], and to construe liberally such allegations in favor of the plaintiff, Ott v. Midland-Ross Corporation, C.A.6th (1975), 523 F.2d 1367, 1369[4]. However, legal conclusions that may be alleged are not required to be accepted in ruling on such a motion, Blackburn v. Fisk University, C.A.6th (1971), 443 F.2d 121, 124[5]; nor is there any duty on the part of the Court to create a claim which the plaintiff has not spelledout in his complaint, Clark v. National Travelers Life Insurance Co., C.A.6th (1975), 518 F.2d 1167, 1169[2]. Applying these criteria, Mr. Sherrod failed to state a claim for false arrest and imprisonment or abuse of process upon which relief can be granted under the substantive Illinois law, and it further appears beyond doubt that Mr. Sherrod can prove no set of facts in support of either of these claims which would entitle him to relief.
If one is arrested, or taken into the custody of the law, "* * * without proper legal authority, it is a false arrest, and so false imprisonment. * * *" Prosser, supra at 45-46, § 11. However, an action for false arrest or imprisonment does not lie for an arrest or determination made by virtue of duly issued legal process. Feld v. Loftis (1909), 240 Ill. 105, 107(1), 88 N.E. 281; Kay v. Boehm, supra, 32 Ill.App.3d at 856(2), 336 N.E.2d 781; Shemaitis v. Froemke, C.A.Ill. (1957), 12 Ill.App.2d 231, 138 N.E.2d 839; Shemaitis v. Froemke, C.A.Ill. (1955), 6 Ill. App. 2d 323, 127 N.E.2d 648; Love v. Goldenberg Furniture Co., C.A.Ill. (1943), 317 Ill.App. 381, 46 N.E.2d 111; Green v. Ross, C.A.Ill. (1930), 257 Ill.App. 344, 348(2); Liogas v. Lowenguth, C.A.Ill. (1919), 215 Ill. App. 216, 218(3). In this connection, Professor Prosser has stated that:
* * * If the defendant complies with the formal requirements of the law, as by swearing out a valid warrant, so that the arrest of the plaintiff is legally authorized, the court and its officers are not his [the defendant's] agents to make the arrest, and their acts are those of the law and the state, and not to be imputed to him. He is therefore liable, if at all, only for a misuse of legal process to effect a valid arrest for an improper purpose. The action must be for malicious prosecution, upon proof of malice and want of probable cause, as well as termination of the proceeding in favor of the plaintiff. The weight of modern authority is that where the defendant has attempted to comply with legal requirements, and has failed to do so through no fault of his own, false imprisonment will not lie, and *44 the remedy is malicious prosecution. The policy is to give the defendant the privilege of making reasonable efforts to bring his case properly before the court, without liability unless his ultimate purpose is an improper one. [Footnote reference omitted.]
* * * * * *
Prosser, supra at 49 § 11, quoted in part with approval in Kay v. Boehm, supra, 32 Ill.App.3d at 856(2), 336 N.E.2d 781.
The complaint herein alleges that Mr. Sherrod's arrest and subsequent incarceration by the Chicago police was made pursuant to a warrant taken out by Piedmont's personnel. The plaintiff makes no claim, however, that such legal process was invalid or that it was secured without probable cause to believe that he had committed the offense of disorderly conduct. The allegation that Piedmont lacked "* * * just cause * * *" is not sufficient. False arrest and imprisonment do not occur merely because there was a lack of just or actual cause for the arrest. Director General of Railroads v. Kasterbaum (1923), 263 U.S. 25, 27-28, 44 S. Ct. 52, 53, 68 L. Ed. 146, 147-148.
An abuse of process, sometimes referred to as malicious abuse of process, is the misuse of legal process to accomplish some purpose outside the proper scope of the process. Barrett v. Baylor, supra, 457 F.2d at 122[4]; Alberto-Culver Company v. Andrea Dumon, Inc., supra, 295 F.Supp. at 1159[5]; Caspers v. Chicago Real Estate Board, C.A.Ill. (1965), 58 Ill.App.2d 113, 120[7], 206 N.E.2d 787; March v. Cacioppo, C.A.Ill. (1962), 37 Ill.App.2d 235, 243[5], 185 N.E.2d 397. "* * * The elements necessary to establish a cause of action for abuse of process in Illinois are well settled. In order to effectively state such a claim the pleadings must allege (1) the existence of an ulterior purpose or motive; and (2) some act in the use of the legal process not proper in the regular prosecution of the proceedings. * * *" Ewert v. Wieboldt Stores, Inc., C.A.Ill. (1976), 38 Ill.App.3d 42, 43(1), 347 N.E.2d 242.
The mere institution of a suit or proceeding, even with a malicious intent or motive, does not itself constitute an abuse of process. Ibid., 38 Ill.App.3d at 44, 347 N.E.2d 242; Holiday Magic, Inc. v. Scott, C.A.Ill. (1972), 4 Ill.App.3d 962, 967, 282 N.E.2d 452. An action for abuse of process " * * * lies for the improper use of process after it has been issued, but not for maliciously causing process to be issued. * * " Ruehl Bros. Brewing Co. v. Atlas Brewing Co., C.A.Ill. (1914), 187 Ill.App. 392, 397. "* * * The test in such cases is whether process has been used to accomplish some end which is beyond the purview of the process, or which compels the party against whom it is used to do some collateral thing which he could not legally and regularly be compelled to do. * * *" Ewert v. Wieboldt Stores, Inc., supra, 38 Ill.App.3d at 44, 347 N.E.2d 242.
The plaintiff makes no claim herein that Piedmont's personnel used any legal process with an ulterior purpose or that they acted in the use of such process in a manner not proper in the regular prosecution of the proceedings against him. Neither is there the slightest intimation in the complaint that Piedmont employed legal process to obtain an end that the process was not intended to effect. Mr. Sherrod, thus, has not stated a claim for abuse of process upon which relief can be granted.
It results that, as to the plaintiff's claim of malicious prosecution, the defendant's motion for a summary judgment hereby is GRANTED, and, as to such claim, summary judgment will enter that the plaintiff take nothing from the defendant. Rules 56(c), 58(1), Federal Rules of Civil Procedure. The plaintiff's claim of false arrest and imprisonment and his claim of abuse of process, each, hereby is DISMISSED for failure to state a claim upon which relief can be granted herein.
On Motion To Reconsider
The defendants moved herein on April 19, 1978 for a summary judgment as to the plaintiff's claim herein of false arrest and imprisonment, malicious prosecution, and abuse of process supporting such motion by *45 affidavit. Rule 56(b), (e), Federal Rules of Civil Procedure. The plaintiff failed to make a timely response to such motion, local Rule 12(b), and was deemed by the Court to have waived any opposition thereto, local Rule 11(f). Memorandum opinion and order herein of May 25, 1978. Judgment was entered herein on May 25, 1978 granting the defendant's aforementioned motion as to the plaintiff's claim of malicious prosecution, and further dismissing his claims of false arrest and imprisonment and abuse of process. The plaintiff now moves the Court "* * * to reconsider and set aside the [p]artial [s]ummary [j]udgment entered in this cause under Federal Rules of Civil Procedure 59(e). * * *"
It has always been perilous for the party against whom summary judgment is sought neither to come forward to offer some opposition thereto nor to file an affidavit under Rule 56(f). Federal Rules of Civil Procedure. Adickes v. Kress Co. (1970), 398 U.S. 144, 161, 90 S. Ct. 1598, 1610, 26 L. Ed. 2d 142, 156. Nevertheless, the plaintiff elected apparently neither to oppose such motion by way of response thereto nor to demonstrate the existence of any material fact extant between himself and the defendant sufficient to warrant a trial on any of his claims to which the defendant's motion was addressed. He had ample time within which to do so but, instead, rested upon his pleadings.
It is well settled that a defeated litigant cannot have a judgment set aside because he failed to come forward and defend against a motion for summary judgment. Williams v. Five Platters, Inc., Cust. & Pat.App. (1975), 510 F.2d 963, 964[2]; Universal Film Exchanges, Inc. v. Lust, C.A.4th (1973), 479 F.2d 573, 576-577[3]; Smith v. Stone, C.A.9th (1962), 308 F.2d 15, 18[4]; Bryan v. Groff, C.A.D.C. (1958), 259 F.2d 162, 163; Sears, Sucsy & Co. v. Insurance Company of No. Amer., D.C.Ill. (1975), 392 F. Supp. 398, 412[20]. The failure of the plaintiff to act in this instance was at his own peril, and he can hardly be heard to complain at this late date. Therefore, his motion hereby is
DENIED.
The plaintiff also excepted to the pre-trial order and moved the Court for leave to amend his complaint herein, so to allege matters relating to the claims on which judgment was entered against him herein on May 25, 1978. The Court, not having set aside or vacated such judgment in accordance with his motion filed under Rule 59(e), supra, any amendment to these former claims is not proper. Ginsburg v. Stern, C.A.3d (1957), 242 F.2d 379, 381[1]; Cassell v. Michaux, C.A.D.C. (1956), 240 F.2d 406, 408[1]; Feddersen Motors v. Ward, C.A.10th (1950), 180 F.2d 519, 523[8]; Market v. Swift & Co., C.A.2d (1949), 173 F.2d 517, 519[3]; Keene Lumber Co. v. Leventhal, C.A.1st (1948), 165 F.2d 815, 823[16, 17]. Furthermore, the amendment of a party's claims is not appropriate where, as here, that party has had ample opportunity to assert the matters proposed thereby but failed to do so until after judgment was entered against him. Ondis v. Barrows, C.A.1st (1976), 538 F.2d 904, 909[9]; Jackson v. American Bar Ass'n, C.A.9th (1976), 538 F.2d 829, 833[4]. The plaintiff's exception and motion to amend hereby are
DENIED.
For good cause shown, the motion of the defendant for an extension of time for completion of discovery herein through August 31, 1978, hereby is
GRANTED.
On Motion To Dismiss Appeal
The defendant moved the Court to dismiss the appeal of the plaintiff from certain pretrial interlocutory orders herein. This Court has no power to consider such motion.
The filing of a notice of appeal herein by the plaintiff operated to transfer immediately jurisdiction of this action from this Court to the court of appeals of this circuit with respect to the matters involved in such appeal. First Nat. Bank of Salem, Ohio v. Hirsh, C.A.6th (1976), 535 F.2d 343, 345 n. 1; 9 Moore's Federal Practice (2d ed.) 734-735, *46 ¶ 203.11. "* * * Any objection as to the authorization for filing of the notice of appeal raises a question addressed to * * * [the Court of Appeals'] appellate jurisdiction and is not within the jurisdiction of the District Court. * * *" Hogg v. United States, C.A.6th (1969), 411 F.2d 578, 580.
NOTES
[1] One month after the defendant filed its aforementioned motion, and subsequent to the preparation of this opinion, the plaintiff moved the Court to allow him through June 6, 1978 within which "* * * to answer * * *" such motion. Rule 6(b), Federal Rules of Civil Procedure. The plaintiff was required to have submitted any response to the defendant's motion within 5 days after the service thereof. Local Rule 12(b). He could have obtained readily an enlargement of this period had he sought the same within the 5-day period, Rule 6(b)(1), Federal Rules of Civil Procedure; however, because of his failure to so do, this Court can only grant an extension of time within which to respond to the defendant's motion upon a showing of excusable neglect. Rule 6(b)(2), Federal Rules of Civil Procedure. Reliance by counsel for the plaintiff upon Rule 56.03 of the Tennessee Rules of Civil Procedure, does not constitute such excusable neglect in the opinion of the Court. "* * * [C]ounsel should not expect an application under Rule 6(b)(2) to be granted when failure to act was due to simple inadvertence or a mistake regarding the content of the rules or unfamiliarity with them. * * *" 4 Wright & Miller, Federal Practice and Procedure 622, § 1165. The motion hereby is DENIED.
[2] This Court is obligated to follow the decisions of the Illinois intermediate appellate courts unless it is convinced that the Illinois Supreme Court would decide differently. Ruth v. Bituminous Casualty Corporation, C.A.6th (1970), 427 F.2d 290, 292[1-3].
[3] False arrest and false imprisonment are one and the same tort. Prosser, supra, at 42, § 11; 32 Am.Jur. (2d) 74, False Imprisonment § 2.
[4] Alternatively, the Court could raise sua sponte the issue of whether the complaint states a claim upon which relief can be granted. See Gilland v. Hyder, D.C.Tenn. (1967), 278 F. Supp. 189, 190[4]. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578673/ | 281 S.W.3d 482 (2009)
Mary Jean WHIPPLE, Appellant,
v.
The STATE of Texas, Appellee.
No. 08-06-00202-CR.
Court of Appeals of Texas, El Paso.
August 21, 2008.
Rehearing Overruled December 3, 2008.
Discretionary Review Refused April 22, 2009.
*487 Joe Spencer, Jr., Patrick A. Lara, El Paso, for Appellant.
Jaime E. Esparaza, Dist. Atty., El Paso, for State.
Before CHEW, C.J., McCLURE, and CARR, JJ.
OPINION
ANN CRAWFORD McCLURE, Justice.
Mary Jean Whipple appeals her conviction of murder. A jury found Appellant guilty and assessed her punishment at imprisonment for ninety-nine years. Finding no error, we affirm.
FACTUAL SUMMARY
Appellant was convicted of murdering her seventy-one-year-old business partner, Art Loustaunau, by shooting him in the chest with a firearm on August 7, 2003. In finding Appellant guilty, the jury impliedly rejected Appellant's claim of self-defense. Because Appellant challenges the legal and factual sufficiency of the evidence supporting the jury's rejection of her defensive theory, we will set forth the evidence in considerable detail.
The Prior Relationship Between Appellant and Loustaunau
Loustaunau had been married to Pauline Loustaunau for forty-seven years at the time of his death. He and Appellant had operated a bingo hall together since 1994 or 1995. Appellant often complained that he was short-changing her financially and owed her money. In addition to the business relationship, Loustaunau had an affair with Appellant, who was about twenty years younger than he and also married. In 2001, Appellant divorced her husband, James "Buck" Whipple. She expected Loustaunau to divorce his wife so they *488 could marry, but he did not do so. Appellant told others before the shooting that she and Loustaunau were no longer romantically involved, but it is not clear from the record when that aspect of their relationship ended.
In addition to her complaints about the business, Appellant accused Loustaunau of being physically, emotionally, and sexually abusive. She claimed he used the knowledge that she had been sexually abused by her father to manipulate her. Defense witness Mike Olivares, one of Loustaunau's business partners, testified that Loustaunau was dominant, manipulative, and verbally abusive towards Appellant. The defense introduced into evidence a police report dated October 14, 2000 in which both Appellant and Loustaunau complained of being assaulted by the other.
But the State introduced evidence that Appellant had threatened to kill Loustaunau on more than one occasion and had committed acts of violence against him. Albert Guerra recalled that Appellant and Loustaunau argued most of the time they were together and Appellant often screamed at Loustaunau. During one argument, he saw Appellant shove Loustaunau and kick the side of his car. Guerra had also heard Appellant threaten to kill Loustaunau as well as herself.
Loustaunau's son, Raymond "Bo" Loustaunau, testified that in 1998 or 1999, he was in El Paso visiting his parents. His father received a telephone call indicating a problem at the office and Bo accompanied him to check it out. Bo did not want to meddle in his father's business so he remained just outside the door in the hallway, but he could smell a strong odor of gasoline. When Loustaunau entered the office, Appellant yelled that he had ruined her life and she called him vulgar names. When Bo heard his father grunt loudly as though he had been hit in the stomach, he entered the room and found him down on the floor. Appellant was kicking him in the stomach and groin while trying to strike a match to light the gasoline that she had poured throughout the office. Loustaunau was terrified and unable to defend himself. Bo placed Appellant in a bear hug to prevent her from setting his father and the office on fire. He picked her up and carried her to the couch and held her down. Appellant continued to struggle and say "horrible things" to Loustaunau. To this point, Bo did not know that Appellant and his father had been having an affair but Appellant's comments revealed this to be true. Bo said that it took all of his might to hold Appellant. His father tried but was not successful in his efforts to calm Appellant. She did not calm down until her husband arrived several minutes later.
Rene Gonzalez, another of Loustaunau's business partners, testified that Appellant often complained about Loustaunau. On one occasion, Appellant arrived at Loustaunau's office with a gun and threatened to kill both Gonzalez and Loustaunau before killing herself. It took Loustaunau 35 to 40 minutes to convince Appellant to put the gun away. Afterward, Loustaunau asked Gonzalez to not call the police. On another occasion, Loustaunau learned that someone had crashed into his car in the parking lot. He found Appellant sitting in her pickup a short distance away from his own damaged car. Loustaunau confronted Appellant and they argued for a while before leaving together.
The Disappearance
The day before the shooting, Loustaunau had dinner with his cousin, Rafael Loustaunau. Over a one and a half hour period, Appellant called Loustaunau's cell phone eight to ten times. Loustaunau did *489 not answer any of the calls but his facial expressions indicated to Rafael that he was worried. Concerned about an argument he was having with Appellant, Loustaunau asked Rafael to follow him home. Rafael did so and he waited outside until Loustaunau was safely inside.
The following day, Loustaunau, dressed in a sweat suit, left his house for the bingo hall at 6 a.m. as he typically did. Cell phone records showed that Appellant called Loustaunau's cell phone several times that morning between 7 and 8 a.m. He returned home shortly after 8 a.m. and told his wife, Pauline, that he was going to the gym but he wanted to get a change of clothes in the event he went straight to the office after his workout. Before he left, he asked Pauline to retrieve a manila envelope containing money from their bedroom dresser drawer. Pauline got the envelope, which she described as "bulky," and gave it to him. Loustaunau left at around 8:45 a.m., and Pauline never saw him again.
Albert Guerra, a bingo hall employee, spoke with Loustaunau on the phone sometime between 9 and 9:30 that same morning. Loustaunau asked him to get some deposit books and checks from his desk and meet him at Loustaunau's house at 1 p.m. Guerra went to the house at 1, but Loustaunau never showed up. Guerra talked with Pauline and left the deposit books and checks with her. During the remainder of the day, Guerra tried to contact Loustaunau both in person and by phone but he could not locate him. Pauline was not overly concerned when her husband did not come home for dinner because he often worked late, but she became concerned when one of his employees called that evening looking for him. She did not sleep at all that night and she began looking for her husband early the following day.
Upset and worried, Pauline called Guerra at 7 a.m. the next morning and told him that Loustaunau had not come home. Guerra told her he would make some calls and try to find him. He immediately got in his truck and drove to Appellant's house to look for Loustaunau. When Guerra pulled up in front of the house, he saw Appellant standing in the front yard watering her lawn. As soon as she saw him and their eyes met, she dropped the hose and ran inside. He waited to see if she would come back out, but she did not and he left. Guerra returned to the bingo hall and waited with another of Loustaunau's business associates, Hector Mena, to see if Loustaunau would show up. At 1 p.m., they called Bo in Fort Worth and told him that his father was missing. Bo caught the next flight to El Paso and arrived at 6:30 that same evening. In the meantime, Guerra continued calling Loustaunau's cell phone. Before Bo arrived, Guerra drove to Appellant's house again and noticed that some of the vehicles had been moved around since that morning and a that motorcycle was in the back of Appellant's pickup. He did not see Appellant.
Upon hearing the news that his father was missing, Bo immediately suspected that Appellant had killed his father based on her prior history of threats and violence. Shortly after arriving in El Paso, Bo called the police department and reported his father as missing. A police officer went to Appellant's house but was unable to make contact with her. In the meantime, Bo met with Guerra, Mena, and Rafael and put a plan together to look for Loustaunau. They looked at the phone records and saw, based on the timing of the calls, that "everything pointed to [Appellant]." Bo called Appellant several times but she did not answer. Consequently, he left messages telling her that his father was missing and he was looking for him, but she did not return his calls. *490 They also went to Appellant's house but she either was not at home or would not answer the door. Bo noticed that a light had been turned on which led him to believe Appellant was in the house. Bo took Guerra, Mena, and Rafael home at around 10:30 p.m., and then returned to Appellant's house. He parked two houses down where he was partially concealed by some bushes but still had a clear view of her house. Bo remained there most of the night and left only for about an hour and a half to drive around looking for his father's Lexus. He did not see any activity around the house the entire night. After the sun came up, Bo drove to the gym where his father worked out but they had not seen him. He also went to the Pebble Hills police substation to see if he could get some assistance. He informed the police of his suspicions about Appellant but the sergeant he spoke with told him that they did not have enough evidence to get a search warrant for her house. Bo then decided he would drill some holes in Appellant's garage door and look inside for his father's Lexus. By the time he returned to Appellant's house with the drill, the police were there and they eventually made entry into the house. Bo waited outside for a long while before he saw the detectives exit to get cameras and put crime scene tape around the area. At that point he knew that his father's body had been found and one of the detectives confirmed that they had found a body.
Appellant's Activities
While Guerra and others were looking for Loustaunau on Friday, August 8, Appellant spent time with her friends, Brian and Stella Phelps. The couple was moving to Oregon and Appellant agreed to help them move their motorcycle in her pickup. The Phelpses planned to leave Friday afternoon and stop in Colorado Springs to visit with Stella's parents. Appellant intended to leave on Saturday and meet them in Colorado Springs before they traveled on to Oregon together. Appellant arrived at the Phelpses' house at around 2 on Friday afternoon and helped Stella clean. She initially seemed fine but Stella noticed that Appellant was upset and agitated. Appellant began to cry because she was worried that Loustaunau would see the motorcycle on her pickup. Stella told Appellant not to worry about it. The Phelpses left the house sometime between 4 and 6 that same evening.
Appellant's Statements to Teresa Gutierrez
On Saturday morning, August 9, Appellant's friend, Teresa Gutierrez, was getting ready for work. She was listening to her phone messages at 7:15 a.m. when she heard a message from Appellant. Concerned that Appellant had called her so early, Gutierrez immediately returned the call. Appellant sounded disoriented and asked if she could come over. Gutierrez said she was on the way to her office and asked Appellant to meet her there. But Appellant was on foot so Gutierrez picked her up. It was obvious to Gutierrez that Appellant had been crying and had not slept. When Gutierrez asked what was wrong, Appellant began crying so hard that she could hardly speak. She finally said that "a horrible accident had happened and that she had accidentally shot [Loustaunau]." Gutierrez knew about Appellant's relationship with Loustaunau. Gutierrez believed the shooting had just happened and she said they should call the police and an ambulance. Appellant continued to cry and finally said that they could not call an ambulance because he was dead. Appellant told Gutierrez that she did not mean for it to happen, it was an accident, and she did not want to go to hell for it. She also said she wanted to do *491 the right thing. Gutierrez replied that they had to call the authorities and tell them what happened. Appellant then explained to Gutierrez that she had mutilated Loustaunau's body and didn't know why since she couldn't stand the sight of her own blood. At that point, Gutierrez suggested that Appellant speak with a pastor or someone who could help her, and she thought of a psychologist she had seen on a professional basis, Dr. Karen Gold. With Appellant's permission, Gutierrez called Dr. Gold and made an appointment for 1:00 that afternoon.
Gutierrez waited with Appellant and continued to talk with her before going to Dr. Gold's office. During this time, Appellant told Gutierrez that Loustaunau had come over to her house to mow the lawn but she did not want him to do it. Gutierrez did not know whether Loustaunau had actually mowed the lawn, but at some point he went to the store and returned with some beer which they drank. They began arguing because he did not want her to leave El Paso. Appellant had told him she was traveling to Oregon with friends who were moving and she was going to look for work while she was there. They also argued because he wanted to have sex with her before she left. As they argued, Appellant walked down the hallway and retrieved a gun that she had on a shelf. She told Gutierrez, "I did what I always do, Teri, I went and got my gun." Gutierrez knew that Appellant customarily threatened to kill herself when they fought, Loustaunau would calm her down and take the weapon away, and they would come to terms with the issue causing the argument. Thus, Gutierrez understood Appellant's comment to mean that she got the gun intending to threaten to kill herself. Appellant told Gutierrez that Loustaunau was standing close to her and the gun accidentally fired. Appellant denied pulling the trigger and thought Loustaunau might have bumped into her causing the gun to accidentally fire. She did not know whether the bullet had struck Loustaunau. The gun shot startled both of them and they stood there staring at each other. Appellant took a step back from Loustaunau and then he suddenly charged at her. She put her arm up over her face because she believed Loustaunau was going to hit her but he suddenly fell to the floor. Gutierrez asked Appellant whether she remembered pulling the trigger, and she said, "Well, I guess I did. She said, Yes, III shot [Loustaunau] and he fell to the floor." Appellant recalled Loustaunau telling her it was not her fault and he knew it was an accident. Appellant did not know how many times she shot him but thought it was once.
Appellant's Statements to Dr. Karen Gold
Dr. Karen Gold is a clinical and forensic psychologist and a forensic consultant. On August 9, she received a telephone call from a patient, Teresa Gutierrez, around 7:30 a.m., advising her that a friend wanted a consultation for crisis intervention. Dr. Gold scheduled the appointment for 1:00 that afternoon. Upon their arrival, Dr. Gold took Appellant and Gutierrez into the therapy area. Gutierrez stayed in the room at first to "break the ice" but she soon left and waited in the kitchen. Dr. Gold asked Gutierrez to come back in the room and sit with Appellant on a few occasions. Dr. Gold met with Appellant from 1 p.m. until about 7:40 p.m. that evening.
Appellant told Dr. Gold that she had done a terrible thing and wanted to make it right. She had shot Art Loustaunau and wanted to know if Dr. Gold could help her. Loustaunau was dead and his body was in her home. They were arguing about the proceeds of a business they operated jointly. *492 Dr. Gold told Appellant that she should get legal advice and she asked for Appellant's permission to try to contact a lawyer. Appellant agreed. Dr. Gold called several attorneys but only one, William Ellis, was willing to come. While waiting for Ellis, Dr. Gold continued to talk with Appellant. Appellant explained that she had been in a long-term relationship with Loustaunau and that he had called her that morning wanting to come over to do some yard work. She resisted at first, but eventually they worked in her yard together. After they finished, Loustaunau wanted to take her to dinner, but Appellant didn't feel like it. Loustaunau left to buy beer and steaks. When he returned, they drank a significant amount of beer and began to argue about the money he owed her from their business. Appellant told Dr. Gold that he owed her more than $20,000 and said she had been upset about this for a long time. They also argued because she was leaving for Oregon and he wanted to have sex with her before she left. Appellant told Loustaunau that part of their relationship was over but he persisted. She said no and walked into a hallway near the kitchen. She looked down and saw a gun in her right hand. As she was looking at the gun, it suddenly fired. When the gun discharged, Loustaunau was in the hallway near the kitchen. Appellant was surprised that Loustaunau continued to approach her, but he did. She warned him not to come any closer or she would shoot him, but he lunged at her and the gun fired twice more. After he fell to the floor, Appellant cried and asked for his forgiveness. Loustaunau said, "I love you, Babe. Call 911." After realizing that Loustaunau was dead, Appellant became frightened and decided to get rid of the body. She told Dr. Gold that she consulted a book on butchering and then cut up the body with a meat cleaver.[1] Appellant said that it took a long time to dismember the body because Loustaunau was a big man. She started dismembering the body at dusk on Thursday and did not finish until the early hours of the following morning. Appellant put the body parts in plastic bags and stored them in her freezer. Appellant also explained to Dr. Gold that it was hard work but she had cleaned up all the blood. She then wandered around aimlessly "catching catnaps in yards" until she phoned Gutierrez that morning. Appellant was startled when she learned it was Saturday because she thought only twenty-four hours had elapsed since the shooting. At some point, Appellant told Dr. Gold that there was a duffel bag in her home containing $20,000 and she expressed concern about getting someone she trusted into the house to retrieve it. She told Gutierrez that she wanted the money to be given to her mother.
William Ellis arrived at about 2:30 p.m. and met privately with Appellant. After Appellant retained him, Ellis drafted a consent-to-search form which Appellant signed and Dr. Gold witnessed. The consent-to-search was limited to the freezer in Appellant's garage. Appellant told Ellis about the bag of money in her house which was to be used as a retainer for his legal services. At approximately 6 or 7 p.m., Ellis went to Appellant's house and entered with some detectives. Ellis and the detectives retrieved the duffel bag and counted the money in the kitchen. They determined that the bag contained $21,041 and the money was turned over to Ellis. The detectives, in Ellis' presence, then entered the garage and opened the freezer. Detective Arturo Ruiz saw several black *493 plastic bags and opened one. Upon seeing a human head, he replaced the bag in the freezer, declared the house a crime scene, and ordered everyone out. He subsequently obtained a search warrant for the premises and a warrant for Appellant's arrest.
Appellant's Statements to the Phelpses
Appellant called the Phelpses on Saturday, August 9, at 5 or 6 p.m. and told them she had killed Loustaunau because he had tried to rape her. She was sorry that she could not bring them the motorcycle. Stella knew that Appellant and Loustaunau had an affair in the past and that Appellant was no longer romantically involved with him.
Examination of the Body
Dr. Corinne Stern, a forensic pathologist and the medical examiner, was called to Appellant's house on the morning of August 10 to remove body parts found in the freezer. She removed six black plastic bags and one clear Zip-Lock bag containing a total of 110 body parts. At the morgue on August 12, Dr. Stern reassembled the parts and determined that the torso and its internal organs were missing. Detective Ruiz notified Appellant's attorney, William Ellis, that the torso was missing. The following day, Ellis accompanied the detectives to an area in the desert where Appellant had told him the torso could be found. But the officers were unable to find it despite looking for several hours. Appellant accompanied Ellis and the detectives the following day and she showed them exactly where the torso was buried. The excavation process took several hours. Dr. Stern subsequently examined the torso and determined that the cause of death was multiple gunshot wounds, two in the chest and one in the axilla or armpit. She also determined that one of the gunshot wounds in the chest had a downward path indicating that Loustaunau had been shot while bending over, lying on the ground, or kneeling. Due to the condition of the remains, Dr. Stern could not determine the path of the second shot to the chest or the armpit, but the arm had to have been raised when Loustaunau was shot in the armpit. Because there was no gunpowder stippling around any of the wounds, Dr. Stern concluded that the gun was more than eighteen inches from the body when fired.
Dr. Stern's examination of the body revealed several antemortem injuries including bruises on the arms and wrists and a laceration on one of the arms caused by blunt force trauma. She also found a through-and-through puncture wound to the right forearm which had been caused by a sharp instrument such as an ice pick or a screwdriver. She concluded that this wound had also been caused while Loustaunau was still alive. Additionally, Dr. Stern noted postmortem lacerations on the shoulders caused by a sharp instrument such as a knife, scalpel, or a cleaver. Dr. Stern recovered enough liver tissue to run a complete drug and alcohol screen. Contrary to Appellant's statements that they had consumed a lot of beer, there was no alcohol in Loustaunau's system.
Dr. Stern sent some of the bones to Dr. Harold Gill-King, a forensic anthropologist, for examination. He determined that the long bone fragments and vertebrae fragments had been cut with some type of manual saw with a straight blade approximately one millimeter wide. In his opinion, a hacksaw found in Appellant's garage was consistent with the class of saws that could have been used to cut the bones.
The Defensive Evidence
Curtis Flynn, an accident reconstruction expert, was hired in 2005 to investigate a *494 bullet hole in a cabinet door in Appellant's kitchen that had been missed by the police in their investigation. Flynn performed a trajectory analysis and determined that the shooter was standing in the hallway and the gun was pointed downward. This evidence tended to support Appellant's claim that the gun accidentally discharged when she was in the hallway and holding the gun out to her side.
The defense also offered evidence that Appellant had suffered a brief reactive psychosis after the shooting. Dr. Angel Rodriguez-Chevres, a psychiatrist, examined Appellant for competency and sanity purposes. He concluded, based on his interview of Appellant and the records he reviewed, that Appellant was so traumatized by the shooting that she disassociated from reality. In his opinion, Appellant knew right from wrong at the time she shot and killed Loustaunau, but she was in a psychotic state at the time of the dismemberment. The brief reactive psychosis could have ended before she went to the Phelpses house the next day.
Another psychiatrist, Dr. Arthur Ramirez, offered his opinion that Appellant suffered from Battered Woman Syndrome. Like Dr. Rodriguez-Chevres, he also opined that Appellant experienced a break from reality during the dismemberment. During cross-examination, Dr. Ramirez said he was surprised to learn that Appellant had been able to tell both Gutierrez and Dr. Gold about the dismemberment as this would be inconsistent with a finding of brief psychotic episode.
LEGAL AND FACTUAL SUFFICIENCY
In Point of Error One, Appellant contends that the evidence is legally and factually insufficient to support the jury's rejection of her self-defense claim. Self-defense is a justification for otherwise unlawful conduct. Giesberg v. State, 984 S.W.2d 245, 249 (Tex.Crim.App.1998). A person is justified in using force against another when and to the degree that she reasonably believes the force is immediately necessary to protect herself against the other's use or attempted use of unlawful force. Tex.Penal Code Ann. § 9.31(a)(Vernon Supp.2007). A person is justified in using deadly force against another (1) if she would be justified in using force against the other under Section 9.31; (2) if a reasonable person in the actor's situation would not have retreated; and (3) when, and to the degree that she reasonably believes the deadly force is immediately necessary either to protect herself against the other's use or attempted use of unlawful deadly force or to prevent the other's imminent commission of aggravated kidnapping, murder, sexual assault, aggravated sexual assault, robbery, or aggravated robbery. Tex.Penal Code Ann. § 9.32(a)(Vernon 2003). The Penal Code defines "deadly force" as "force that is intended or known by the actor to cause, or in the manner of its use or intended use is capable of causing, death or serious bodily injury." Id. at § 9.01(3).
An accused bears the burden of production with respect to defenses, requiring her to raise evidence that supports the defense. Zuliani v. State, 97 S.W.3d 589, 594 (Tex.Crim.App.2003); Saxton v. State, 804 S.W.2d 910, 914 (Tex.Crim.App. 1991). Once the defendant has met this burden, the State then shoulders the burden of persuasion to disprove the defense. Zuliani, 97 S.W.3d at 594. The burden of persuasion is not one that requires the production of evidence, rather it requires only that the State prove its case beyond a reasonable doubt. Id. When a jury finds the defendant guilty, there is an implicit finding against the defensive theory. Id.
*495 Sufficiency Standards of Review
In reviewing the legal sufficiency of the evidence to support a criminal conviction, we must review all the evidence, both State and defense, in the light most favorable to the verdict to determine whether any rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 560 (1979); Lane v. State, 151 S.W.3d 188, 191-92 (Tex.Crim.App.2004). We do not resolve any conflict of fact or assign credibility to the witnesses, as it was the function of the trier of fact to do so. See Adelman v. State, 828 S.W.2d 418, 421 (Tex.Crim.App. 1992); Matson v. State, 819 S.W.2d 839, 843 (Tex.Crim.App.1991). Instead, our duty is only to determine if both the explicit and implicit findings of the trier of fact are rational by viewing all of the evidence admitted at trial in a light most favorable to the verdict. Adelman, 828 S.W.2d at 422. In so doing, any inconsistencies in the evidence are resolved in favor of the verdict. Matson, 819 S.W.2d at 843. When an appellant challenges the legal sufficiency of the evidence supporting a fact finder's rejection of a non-affirmative defense, we look not to whether the State presented evidence that refuted the appellant's defense, but rather we determine whether after viewing all the evidence in the light most favorable to the prosecution, any rational trier of fact would have found the essential elements of the offense beyond a reasonable doubt and also could have found against the appellant on the defensive issue beyond a reasonable doubt. Saxton, 804 S.W.2d at 914; Davidson v. State, No. 08-04-00117-CR, 2006 WL 1036736, at *4 (Tex.App.-El Paso, April 20, 2006, no pet.)(not designated for publication); Dotson v. State, 146 S.W.3d 285, 291 (Tex.App.-Fort Worth 2004, pet. ref'd).
In reviewing the factual sufficiency of the evidence to support a conviction, we are to view all the evidence in a neutral light, favoring neither party. See Zuniga v. State, 144 S.W.3d 477, 481 (Tex. Crim.App.2004). The only question to be answered in a factual sufficiency review is whether, considering the evidence in a neutral light, the fact finder was rationally justified in finding guilt beyond a reasonable doubt. Id. at 484. There are two ways evidence may be factually insufficient: (1) the evidence supporting the verdict or judgment, considered by itself, is too weak to support the finding of guilt beyond a reasonable doubt; or (2) when there is evidence both supporting and contradicting the verdict or judgment, weighing all of the evidence, the contrary evidence is so strong that guilt cannot be proven beyond a reasonable doubt. Id. This standard acknowledges that evidence of guilt can "preponderate" in favor of conviction but still be insufficient to prove the elements of the crime beyond a reasonable doubt. Id. at 485. In other words, evidence supporting a guilty finding can outweigh the contrary proof but still be insufficient to prove the elements of an offense beyond a reasonable doubt. Id. In performing a factual sufficiency review, we are to give deference to the fact finder's determinations, including determinations involving the credibility and demeanor of witnesses. Id. at 481. We may not substitute our judgment for that of the fact finder. Id. at 482. When reviewing the factual sufficiency of the evidence in the context of the jury's rejection of a non-affirmative defense, we employ the Zuniga standard of review because once the defendant has met her burden of production of evidence as to a defense, the State bears the burden to prove the defendant's guilt of the charged offense beyond a reasonable doubt. Roy v. State, 161 S.W.3d 30, *496 37 (Tex.App.-Houston [14th Dist.] 2004, no pet.); Dotson, 146 S.W.3d at 291. Thus, we review all of the evidence in a neutral light and ask whether the State's evidence taken alone is too weak to support the finding of guilt beyond a reasonable doubt and weighing all of the evidence, the evidence supporting the defense is strong enough that the fact finder's rejection of the defense does not meet the beyond-a-reasonable-doubt standard. Davidson, 2006 WL 1036736, at *4.
The legal and factual sufficiency standards of review are the same for cases based on direct and circumstantial evidence. King v. State, 29 S.W.3d 556, 565 (Tex.Crim.App.2000). In a sufficiency review, however, the jury's inference of intent is afforded more deference than the evidence supporting proof of conduct, and circumstantial evidence of a defendant's guilty knowledge is not "required to meet the same rigorous criteria for sufficiency as circumstantial proof of other offensive elements." Margraves v. State, 34 S.W.3d 912, 919 (Tex.Crim.App.2000). The jury is the exclusive judge of the credibility of the evidence on the self-defense issue and is free to believe or disbelieve any or all of the defendant's self-defense evidence. See Saxton, 804 S.W.2d at 914.
Appellant's Argument
In this point of error, Appellant contends that she proved her self-defense claim by overwhelming evidence and the State failed to refute it by producing evidence of premeditation. But the State was not required to offer evidence of planning or premeditation either to prove that Appellant murdered Loustaunau or to disprove her self-defense claim. Crane v. State, 786 S.W.2d 338, 349-50 (Tex.Crim. App.1990). Appellant does not argue that the evidence is legally or factually insufficient to prove that she intentionally caused Loustaunau's death by shooting him with a firearm. She argues only that the State failed to disprove her theory of self-defense. Thus, we will restrict our review to that issue. For the jury to find Appellant acted in self-defense, it had to find that (1) Appellant was justified in using deadly force against Loustaunau under Section 9.31; (2) a reasonable person in Appellant's situation would not have retreated; and (3) she reasonably believed the deadly force was immediately necessary to prevent Loustaunau's imminent commission of sexual assault. See Tex.Penal Code Ann. at § 9.32(a).
Duty to Retreat
We begin with the second element because Appellant erroneously argues in her brief that she had no duty to retreat. The Penal Code provides that a person using deadly force in self-defense is relieved of the duty to retreat if the other person is committing an offense of unlawful entry in the actor's habitation. See Tex.Penal Code Ann. § 9.32(b)(Vernon Supp.2007). Appellant presented no evidence that Loustaunau had entered Appellant's home unlawfully. To the contrary, the evidence established that he was a guest in her home at the time of the shooting. Consequently, Appellant had a duty to retreat from Loustaunau and she had the burden at trial to offer evidence showing that a reasonable person in her situation would not have retreated. Appellant failed to present any evidence in support of this element of self-defense. For this reason alone, the jury's rejection of Appellant's self-defense claim is reasonable under both the legal and factual sufficiency standards.
Reasonableness of Appellant's Belief
The jury could also have found that Appellant did not reasonably believe deadly *497 force was immediately necessary to prevent Loustaunau's imminent commission of sexual assault. The State argues that the jury could have based its rejection of Appellant's self-defense claim on the evidence showing: (1) Appellant's prior threats and violence against Loustaunau; (2) Appellant had a motive other than self-defense for killing Loustaunau; (3) Appellant armed herself prior to the confrontation for a purpose other than self-protection; (4) there were inconsistencies between Appellant's version of the events and the physical and medical evidence, and the testimony of other witnesses; (5) Appellant's flight and attempts to conceal the body and other evidence; and (6) Appellant's failure to call the police or summon medical assistance.
There is evidence demonstrating that Appellant had threatened to kill Loustaunau on more than one occasion and had committed violent acts against him in the past. Her animosity appeared to have been rooted in belief that their affair had ruined her life, he owed her money, and he was not fairly distributing the proceeds from the business. Appellant and Loustaunau were arguing about these same issues at the time of the shooting. The jury could have reasonably found, based on this evidence, that the shooting occurred as the result of Appellant's perpetual anger and bitterness toward Loustaunau over their personal and business dealings and she carried out her prior threats to kill him.
The jury also heard evidence that Appellant retrieved the gun from the shelf, not for self-protection, but because she often picked up a gun and threatened to kill herself in order to make Loustaunau listen to her. This is precisely what she told Gutierrez. Based on this evidence, the jury could have determined that Appellant had retrieved the gun to make Loustaunau do what she wanted and not because she was afraid of him.
Several portions of Appellant's story were inconsistent with other evidence presented in the case. First, Appellant told Gutierrez and Dr. Gold that she and Loustaunau had been drinking at the time of the shooting. Dr. Stern determined that Loustaunau had no alcohol in his system. Second, Appellant's version of the events did not include an explanation for the bruises, laceration, and puncture wound which Dr. Stern found on Loustaunau's arms. Third, Appellant told Gutierrez and Dr. Gold that she and Loustaunau were startled when the gun accidentally discharged and they stared at each other for a period of time before he charged at her and she fired two more shots. This conflicted with the testimony of Appellant's neighbor, Ramon Gaxiola, who heard what sounded like three gunshots in rapid succession. Fourth, Appellant told Dr. Gold that Loustaunau stuck a bottle of Viagra in her face when he was insisting on having sex with her, but the bottle of Viagra was found inside the victim's briefcase. Given these inconsistencies, the jury could have found that Appellant's claim of self-defense was not credible.
In addition to the foregoing evidence, we note that Appellant made contradictory statements about her intent. She initially stated that the weapon accidentally discharged but later added that she shot Loustaunau because she believed he intended to sexually assault her. While a defendant is certainly entitled to present inconsistent defenses, Appellant's assertion that she accidentally shot Loustaunau is inconsistent with her self-defense claim. See Saxton, 804 S.W.2d at 914. Given Appellant's contradictory statements about the shooting, the jury could have found that the self-defense claim was simply not believable.
*498 After allegedly shooting Loustaunau in self-defense, Appellant did not call 911 to summon the police or EMS. Instead, she stayed up all night dismembering the body, and she cleaned nearly all of the blood from the scene. Appellant buried the torso in the desert at some point before she called Gutierrez early Saturday morning. Based on this evidence, the prosecutor argued to the jury that Appellant intended to dispose of the rest of the body parts and join the Phelpses in Colorado, but her plans were disrupted by Bo's arrival on the scene and his surveillance of the house. The jury could have reasonably inferred from the dismemberment of the body, the cleaning of the crime scene, and Appellant's disposal of the torso-which revealed the cause of death-that Appellant murdered Loustaunau and did not kill him in self-defense. See Miller v. State, 177 S.W.3d 177, 184 (Tex.App.-Houston [1st Dist.] 2005, pet. ref'd)(defendant's acts of burying gun and burning clothes he was wearing supported jury's rejection of self-defense); Valdez v. State, 841 S.W.2d 41, 43 (Tex.App.-Houston [14th Dist.] 1992, pet. ref'd)(defendant's acts of changing clothes, hiding gun, and disposing of the bullets supported jury's rejection of self-defense); see also Bradley v. State, 960 S.W.2d 791, 803 (Tex.App.-El Paso 1997, pet. ref'd)(defendant's mutilation of wife's body showed consciousness of guilt); Lee v. State, 866 S.W.2d 298, 302 (Tex.App.-Fort Worth 1993, pet. ref'd)(defendant's efforts to conceal decomposing body in his rent-house by pouring Pine Sol and ammonia on the body three times a day showed a consciousness of guilt).
When the evidence at trial is taken in the light most favorable to the verdict, it is legally sufficient to support the jury's determination that Appellant intentionally caused Loustaunau's death by shooting him with a firearm. Further, the evidence is legally sufficient to support the jury's rejection of Appellant's self-defense claim.
Factual Sufficiency
When the evidence is viewed in a neutral light, there is some evidence that Appellant shot Loustaunau because she believed he intended to sexually assault her. But the State's evidence, when taken alone, is not so weak that it does not support the jury's finding of guilt beyond a reasonable doubt. Further, the evidence supporting the claim of self-defense is not so strong that the jury's rejection of the defense does not meet the beyond-a-reasonable-doubt standard. Having found the evidence both legally and factually sufficient, we overrule Point of Error One.
RULE OF OPTIONAL COMPLETENESS
In Point of Error Two, Appellant contends that the trial court abused its discretion by refusing to admit the entirety of Dr. Gold's memo into evidence. During direct examination by the prosecutor, Dr. Gold testified at length about her first meeting with Appellant. During cross-examination, the defense established that Dr. Gold had prepared a six-page memorandum summarizing the session. Defense counsel offered the memo into evidence and the prosecutor raised a hearsay objection. The trial court did not rule immediately and took the issue under advisement. The defense continued the cross-examination:
[Defense counsel]: And, actually, I think you told the jury when Mr. Loustaunau was walking towards her he actually lunged towards her, didn't he?
[Dr. Gold]: That's the word she used, and it's in my memo in quotation marks. Yes, that is the word she used.
*499 [Defense counsel]: Right. Well, that's the information she provided to you, correct?
[Dr. Gold]: That's correct.
[Defense counsel]: And then even after the first shot when she said it accidentally went off, that he continued to lunge at her, didn't he? That's what she said?
[Dr. Gold]: I believe so. II would have to look at my notes to see exactly how that was worded.
[Defense counsel approached the witness].
[Defense counsel]: Is that correct?
[Dr. Gold]: It reads, She stated that she believed she told him not to come any closer or she would shoot him, and he lunged. She stated that she was looking down at the gun in her hand and not at [Loustaunau] when the gun fired. She recalls that [Loustaunau] continued to lunge.
On re-direct, the State questioned whether Appellant had also stated that she retrieved the weapon before Loustaunau lunged. The prosecutor directed Dr. Gold's attention to the second paragraph on the third page of the memo and asked her to read the portion of the memo discussing when Appellant got the gun:
[Dr. Gold]: She had mentioned to him that she had been planning to visit Oregon, which she had always longed to do, in the company of some friends. He told her that she was not going to go to Oregon without send-off sex. He produced a bottle of Viagra and stuck it in her face and told her that he was ready. She asked him to leave her alone, but he advanced upon her. She admitted that by this time they both had had far too much to drink. She told him to leave her alone, but he continued to push close to her. She indicated that she lost focus and flashed back to being 12 years old and assaulted by her father. She stated that she grabbed one of the weapons in her home and became aware that she had it in her right hand. She stated that she believes that she told [Loustaunau] not to come any closer or she would shoot him, and he lunged.
Citing the rule of optional completeness, defense counsel then asked that Dr. Gold be permitted to read the next "sentence." Dr. Gold read the rest of the paragraph:
She stated that she was looking down at the gun in her hand and not at [Loustaunau] when the gun fired. She recalls that [Loustaunau] continued to `lunge' at her, and she continued to fire. She stated that he had reached the place where she was standing and still upright when he said, Love you, babe, and then fell to the floor.
Later in the trial and immediately before defense witness Dr. Rodriguez-Chevres took the stand, defense counsel offered Dr. Gold's memo pursuant to Rule of Evidence 803(5). The State objected that the memo was not admissible. The trial court took the issue under advisement and Dr. Rodriguez-Chevres testified. His evaluation of Appellant included a review of Dr. Gold's memo. Similarly, Dr. Ramirez testified that he had reviewed Dr. Gold's memo. During Dr. Ramirez's testimony, Appellant again offered the memo without articulating the basis of the offer. This time, the trial court excluded the evidence. Prior to resting, the defense re-offered the memo and for the first time cited the rule of optional completeness as a basis for the proffer. The trial court refused to admit the memo.
We review a trial court's decision to admit or exclude evidence under an abuse of discretion standard. Apolinar v. State, 155 S.W.3d 184, 186 (Tex.Crim.App. 2005); Sauceda v. State, 129 S.W.3d 116, 120 (Tex.Crim.App.2004). The trial court *500 abuses its discretion only when the decision lies "outside the zone of reasonable disagreement." Apolinar, 155 S.W.3d at 186. Hearsay statements are generally not admissible unless the statement falls within a recognized exception to the hearsay rule. Walters v. State, 247 S.W.3d 204, 217 (Tex.Crim.App.2007). Rule 107 of the Texas Rules of Evidence, also known as the rule of optional completeness, is one such rule. Id. Rule 107 provides:
When part of an act, declaration, conversation, writing or recorded statement is given in evidence by one party, the whole on the same subject may be inquired into by the other, and any other act, declaration, writing or recorded statement which is necessary to make it fully understood or to explain the same may also be given in evidence, as when a letter is read, all letters on the same subject between the same parties may be given. `Writing or recorded statement' includes depositions.
Tex.R.Evid. 107.
This rule is one of admissibility and permits the introduction of otherwise inadmissible evidence when that evidence is necessary to fully and fairly explain a matter "opened up" by the adverse party. Walters, 247 S.W.3d at 218. It is designed to reduce the possibility of the jury receiving a false impression from hearing only a part of some act, conversation, or writing. Id. Rule 107 does not permit the introduction of other similar, but inadmissible, evidence unless it is necessary to explain properly admitted evidence. Id. Further, the rule is not invoked by the mere reference to a document, statement, or act. Id. The rule's application is limited by the requirement that the omitted portion must (1) be on the same subject and (2) be necessary to make it fully understood. Sauceda, 129 S.W.3d at 123. And it is limited by Rule 403, which permits a trial judge to exclude otherwise relevant evidence if its unfair prejudicial effect or its likelihood of confusing the issues substantially outweighs its probative value. Walters, 247 S.W.3d at 219; see Tex.R.Evid. 403.
The State argues that the trial court properly excluded Dr. Gold's memo because the entirety of it was not on the same subject as the portion read aloud by Dr. Gold during direct examination. Dr. Gold's memo covered her entire conversation with Appellant which took place over more than six hours. At the prosecutor's request, Dr. Gold read only a small portion of the memo which pertained to the moment of the shooting when Appellant retrieved the weapon and fired it as Loustaunau lunged at her. The rest of the memo covers topics including how the appointment was made through Gutierrez, Appellant's history (personal, marital, work, financial, and mental-health history), Appellant's relationship with Loustaunau, the events on the day of the shooting, Appellant's actions after the shooting, including the dismemberment, the involvement of attorney William Ellis and the police, Dr. Gold's decision to allow Gutierrez to take Appellant to her sister's home, and the admission of Appellant to a psychiatric hospital. Much of the memo was not on the same subject as the portion read into evidence by the prosecutor. Therefore, it was not admissible under Rule 107. Finding no abuse of discretion, we overrule Point of Error Two.
ADMISSION OF PHYSICAL EVIDENCE
In her third point of error, Appellant challenges the admission of numerous items and general categories of evidence. She argues that all of the evidence was admitted in violation of Rules 401 and 403 of the Texas Rules of Evidence.
*501 Appellant first complains about the admission of a video showing a news report about the trial (Defense Exhibit 1A). This video, which was admitted only for appellate purposes, depicted the "Basic Butchering" book which had not been admitted into evidence at the time of the news story. Appellant's request for a mistrial due to the news coverage was denied because none of the jurors had actually viewed the news report. Because the video was not admitted into evidence, Appellant's argument is without merit.
Appellant also contends that the trial court erred in admitting "numerous photos of the dismembered body parts" and "a gruesome videotape containing the head and the body parts removed from the freezer." Regarding the crime scene videos, Appellant stated that she had no objection to their admission. Therefore, she has not preserved error for review. See Tex.R.App.P. 33.1. As for the photographs, Appellant does not identify any of them by exhibit number, except for something she refers to as Exhibit 147. The trial court did not admit an exhibit 147. Appellant has not provided any record references where the "numerous photos of the dismembered body parts" were offered and admitted over her objection. Rule 38.1(h) of the Rules of Appellate Procedure requires the appellant to include appropriate citations to authorities and the record. The record in this case is voluminous and many exhibits were admitted during the course of the trial. We decline to scour the record in an effort to identify which exhibits might be referenced in this point of error. We overrule the argument regarding the "numerous photos of the dismembered body parts" as improperly briefed. See Tex.R.App.P. 38.1(h).
Appellant next asserts that numerous weapons, including firearms, a machete, and a hacksaw were seized from her home and introduced into evidence even though the State did not connect them to the offense. She provides exhibit numbers of these weapons, but again, she does not provide any record references where the exhibits were offered into evidence and admitted over her objection. We overrule this portion of Appellant's argument as improperly briefed. See Tex.R.App.P. 38.1(h). Even if Appellant had adequately briefed these issues, our review of the record reflects that defense counsel affirmatively stated that he had no objection to the admission of the firearms, the machete, and the hacksaw. See Tex.R.App.P. 33.1.
Finally, Appellant argues the trial court erred by admitting "[p]hotographs from the desert area where the head and other body parts were discovered.... See Exhibits No. 117-136." First, we note that the torso was found buried in the desert and the head and other body parts were found in Appellant's freezer. The exhibits Appellant references in her brief are not photos of the desert area where the torso was discovered. Defense counsel affirmatively stated that he had "no objection" to all but one of the photographs from the desert area where the torso was found. Counsel objected that one of these photographs was cumulative. The alleged error pertaining to that photograph is waived because the objection made at trial does not comport with the argument raised on appeal. For all of these reasons, we overrule Point of Error Three.
CHARGE ERROR
In Point of Error Four, Appellant raises several complaints regarding the court's charge. She first contends the evidence did not support the inclusion of an instruction on voluntary intoxication. Appellate review of alleged error in a jury charge involves a two-step process. Abdnor *502 v. State, 871 S.W.2d 726, 731 (Tex. Crim.App.1994). Initially, we determine whether error occurred. Id. If so, we then evaluate whether sufficient harm resulted from the error to require reversal. Id. at 731-32. A trial court must charge the jury on the law applicable to every issue raised by the evidence. See Tex.Code Crim.Proc.Ann. art. 36.14 (Vernon 2007)(jury charge of trial judge shall "distinctly set[ ] forth the law applicable to the case"); Taylor v. State, 885 S.W.2d 154, 157 (Tex.Crim.App.1994). Section 8.04(a) of the Penal Code provides that voluntary intoxication does not constitute a defense to the commission of crime. Tex.Penal Code Ann. § 8.04(a). If there is evidence from any source that might lead a jury to conclude that the defendant's intoxication somehow excused his actions, a voluntary intoxication instruction is proper. See Taylor, 885 S.W.2d at 158. Here, Appellant told Gutierrez and Dr. Gold that she and Loustaunau had drunk "too much" just prior to the shooting. She also made statements that the shooting was accidental. Because the jury might have drawn an inference that Appellant mishandled the weapon due to her intoxication causing it to accidentally discharge or that her intoxication otherwise excused her conduct, the trial court did not err in giving this instruction.
Appellant also contends that the trial court erred by refusing to instruct the jury on the lesser-included offense of criminally negligent homicide. In deciding whether a lesser-included offense should have been given, we apply a two pronged test. First, the offense must be a lesser-included offense of the charged offense. Mathis v. State, 67 S.W.3d 918, 925 (Tex. Crim.App.2002). Second, we must evaluate the evidence to determine whether a rational jury could find that if the defendant is guilty, she is guilty of only the lesser offense. Id. The evidence must establish the lesser-included offense as a valid rational alternative to the charged offense. Id.; Wesbrook v. State, 29 S.W.3d 103, 113-14 (Tex.Crim.App.2000). The credibility of the evidence and whether it conflicts with other evidence or is controverted may not be considered in determining whether an instruction on a lesser-included offense should be given. Banda v. State, 890 S.W.2d 42, 60 (Tex.Crim.App. 1994). Regardless of its strength or weakness, if any evidence raises the issue that the defendant was guilty only of the lesser offense, then the charge must be given. Saunders v. State, 840 S.W.2d 390, 391 (Tex.Crim.App.1992). An accused is guilty only of a lesser-included offense if there is evidence that affirmatively rebuts or negates an element of the greater offense, or if the evidence is subject to different interpretations, one of which rebuts or negates the crucial element. See Ramirez v. State, 976 S.W.2d 219, 227 (Tex.App.-El Paso 1998, pet. ref'd). That the jury may disbelieve crucial evidence pertaining to the greater offense is not sufficient to warrant the submission of the lesser-included offense submission to the jury; there must be some evidence directly germane to the lesser-included offense to warrant such submission. See Skinner v. State, 956 S.W.2d 532, 543 (Tex.Crim.App.1997).
The first prong is met because, as the State concedes, criminally negligent homicide is a lesser included offense of murder. See Licon v. State, 99 S.W.3d 918, 928 (Tex.App.-El Paso 2003, no pet.); Cardona v. State, 973 S.W.2d 412, 415 (Tex.App.-Austin 1998, no pet.). Turning to the second prong, there must be evidence which would permit the jury to rationally find that if Appellant is guilty, she is guilty only of the lesser offense. A person commits criminally negligent homicide by causing the death of another *503 through criminal negligence. Tex.Penal Code Ann. § 19.05 (Vernon 2003). A person acts with criminal negligence, or is criminally negligent, with respect to circumstances surrounding his conduct or the result of his conduct when he ought to be aware of a substantial and unjustifiable risk that the circumstances exist or the result will occur. Tex.Penal Code Ann. § 6.03(d). The risk must be of such a nature and degree that the failure to perceive it constitutes a gross deviation from the standard of care that an ordinary person would exercise under all the circumstances as viewed from the actor's standpoint. Id. Thus, criminally negligent homicide requires a finding that the defendant ought to have been aware of the risk but failed to perceive it. Before a charge on criminally negligent homicide is required, the record must contain evidence showing an unawareness of the risk. Licon, 99 S.W.3d at 928, citing Mendieta v. State, 706 S.W.2d 651, 653 (Tex.Crim.App. 1986).
The evidence showed that Appellant was quite familiar with firearms as she possessed approximately twenty firearms in her home and held a concealed handgun license. There is no evidence that Appellant was unaware of the risk in arming herself with a loaded firearm during an argument and pointing it in the direction of another person. In support of her argument that she was entitled to an instruction on criminally negligent homicide, Appellant points to her statements indicating that the weapon accidentally fired. Evidence of accidental discharge of a weapon does not necessarily raise the issue of criminal negligence. See Thomas v. State, 699 S.W.2d 845, 850 (Tex.Crim. App.1985); Gadsden v. State, 915 S.W.2d 620, 622-23 (Tex.App.-El Paso 1996, no pet.). The evidence still must show that the defendant was unaware of the risk created by her conduct under the facts of the case. Because there is no such evidence, the trial court acted properly by denying the requested instruction.
Appellant next argues that the trial court erred by denying her requested instruction on self-defense. The instruction Appellant requested is not a self-defense instruction but rather is an instruction on the justification of necessity under Section 9.22 of the Penal Code. This section provides that conduct is justified if:
(1) the actor reasonably believes the conduct is immediately necessary to avoid imminent harm;
(2) the desirability and urgency of avoiding the harm clearly outweigh, according to ordinary standards of reasonableness, the harm sought to be prevented by the law proscribing the conduct; and
(3) a legislative purpose to exclude the justification claimed for the conduct does not otherwise plainly appear.
Tex.Penal Code Ann. § 9.22. When deadly force in self-defense is the conduct that is allegedly "immediately necessary" under the first element of the necessity defense, the defense of necessity does not apply. See Butler v. State, 663 S.W.2d 492, 496 (Tex.App.-Dallas 1983), aff'd, 736 S.W.2d 668 (Tex.Crim.App.1987). Consequently, Appellant was not entitled to an instruction on the defense of necessity.
Appellant also contends that the trial court erred by refusing her instructions on "right to arm and seek an explanation," "right to possess arms" and "right to continue shooting." We have previously held that a defendant is not entitled to such self-defense embellishments because they are not recognized by or labeled as defenses by the Legislature. Castaneda v. State, 28 S.W.3d 216, 226 (Tex.App.-El Paso 2000, pet. ref'd)("right to arms," *504 "right to shoot to scare," and "right to pursue," are not recognized by the Penal Code as defenses; consequently, defendant is not entitled to these additional self-defense instructions). Other courts have also held that the defendant is not entitled to these additional self-defense instructions because they are not recognized by the Legislature and the self-defense instructions authorized by the Penal Code are sufficient to explain the defendant's right to use force and deadly force in self-defense. See Philen v. State, 683 S.W.2d 440, 444-45 (Tex.Crim.App.1984)(defendant not entitled to "right to continue shooting" instruction); McGowan v. State, 188 S.W.3d 239, 241-42 (Tex.App.-Waco 2006, pet. ref'd)(defendant not entitled to "right to arm and seek explanation" instruction). The trial court did not abuse its discretion by refusing to submit these additional self-defense instructions. Finding no error in the jury charge, we overrule Appellant's fourth and final point of error and affirm the judgment of the trial court.
NOTES
[1] When searching Appellant's home pursuant to a search warrant, the police recovered a meat cleaver and a book entitled, "Basic Butchering." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578700/ | 351 N.W.2d 707 (1984)
217 Neb. 877
David S. BLANCHARD, Appellant,
v.
Constance B. WHITE, Personal Representative of the Estate of Mildred G. Blanchard, deceased, Appellee.
No. 83-805.
Supreme Court of Nebraska.
July 13, 1984.
*708 Michael R. Snyder of Tvrdik, Brandt & Snyder, and Stephen G. Lowe of McMullen & Lowe, Kearney, for appellant.
C. Russell Mattson of Mattson, Ricketts, Davies, Stewart, Calkins & Duxbury, Lincoln, for appellee.
KRIVOSHA, C.J., BOSLAUGH, WHITE, HASTINGS, and SHANAHAN, JJ., and COLWELL, District Judge, Retired.
HASTINGS, Justice.
This was an action brought by David S. Blanchard, as a third-party beneficiary, seeking an injunction, a constructive trust, *709 and specific performance for breach of a written contract to make a will. The action, filed against the personal representative of the estate of the plaintiff's stepmother, sought to enforce a memorandum executed by the plaintiff's father, Charles A. Blanchard, and his stepmother, Mildred G. Blanchard, in which Mildred agreed to make a codicil to her will leaving to the plaintiff the residue remaining at her death of property devised to her by Charles, her husband, under a will executed the same day, February 25, 1972.
After the trial court sustained a motion to strike portions of the plaintiff's petition, an amended petition was filed, to which the defendant demurred. The district court sustained the defendant's demurrer and found the memorandum identified in the pleadings to be a void postnuptial contract due to noncompliance with the acknowledgment provision of Neb.Rev.Stat. § 30-106 (Cum.Supp.1969), rather than a contract to make a will.
The district court further found that the petition did not allege that mutual or reciprocal wills existed and that since Charles A. Blanchard's will gave to Mildred what would have been hers legally upon his death, there was no consideration for Mildred's promise to make a codicil. Upon the plaintiff's refusal to plead further, plaintiff's amended petition was dismissed and this appeal followed.
In his appeal to this court the plaintiff assigns as error: (1) The sustaining of the motion to strike the allegations of the petition relating to joint tenancy property received by defendant's decedent; and (2) The sustaining of the defendant's demurrer to the amended petition, because the court erred in finding § 30-106, the postnuptial statute, to be applicable and that the contract to make a will was not supported by consideration.
Charles A. Blanchard executed his will on February 25, 1972, giving one-fourth of his entire estate to his wife, Mildred G. Blanchard. On the same day his will was executed, Charles and Mildred executed the memorandum agreement which provided in part:
Whereas, Charles A. Blanchard has on this day made a last will and testament in which he gives to Mildred Blanchard one-fourth of his estate; and,
Whereas, Mildred Blanchard desires that she retain the use of said one-fourth of the estate of Charles Blanchard only during the remainder of her natural life and that any residue thereof remaining shall go to David Blanchard, a son of Charles A. Blanchard, or his heirs, upon the death of Mildred Blanchard:
Now, therefore, it is stipulated that in the event of the death of Charles A. Blanchard, Mildred Blanchard will make a codicil to her last will and testament providing that upon her death any residue remaining of the property willed to her by Charles A. Blanchard shall go to David Blanchard, his son, or to the heirs of David Blanchard.
The memorandum agreement was signed by Charles and Mildred Blanchard and one witness. Charles died June 29, 1972, and his will was admitted to probate. Mildred received $7,500 in cash and 11,250.0225 shares of Affiliated Fund Investment Trust. On March 18, 1980, Mildred died testate, leaving a will with two codicils, but no provision was made for the plaintiff.
It is the rule of law that an agreement to devise and bequeath property is, where supported by consideration, valid and enforceable. In such a case equity will impress a trust upon the property, which trust will follow it into the hands of the personal representative of the promisor or into the hands of a grantee who has not given consideration for the conveyance. Allen v. Mayo, 203 Neb. 602, 279 N.W.2d 617 (1979).
A general demurrer tests the substantive legal rights of the parties upon admitted facts, including proper and reasonable inferences of law and fact which may be drawn from facts which are well pleaded. On reviewing the sustaining of a demurrer, this court must treat as undisputed *710 the facts as alleged in the petition. Philp v. First Nat. Bank & Trust Co., 212 Neb. 791, 326 N.W.2d 48 (1982).
In the present case the trial court concluded that if the memorandum agreement was a postnuptial agreement, it was void because not acknowledged as required by § 30-106. That section provides in part:
A man or woman may also bar his or her right to inherit part or all of the lands of his or her husband or wife by a contract ... [which] shall be in writing signed by both of the parties to such marriage and acknowledged in the manner required by law for the conveyance of real estate.....
(Emphasis supplied.)
This statute, which was repealed in 1974, refers to lands. The property here in dispute is all personal property. Therefore, although we do not believe that it was a postnuptial agreement, we are convinced that the postnuptial statute does not in any event apply in this instance.
It was the finding of the trial court that the memorandum failed as a contract to make a will because of an absence of consideration. On review of the pleadings the amended petition alleged the execution of the last will and testament by Charles A. Blanchard was consideration for the execution of the contract by Mildred G. Blanchard. It is the rule that contracts for testamentary or similar disposition of property must, like other contracts, be supported by a sufficient valid consideration. Allen v. Mayo, supra; In re Estate of Nelson, 127 Neb. 563, 256 N.W. 27 (1934).
Also, if a petition states facts which entitle the plaintiff to relief, whether legal or equitable, it is not demurrable upon the ground that it does not state facts sufficient to constitute a cause of action. Philp v. First Nat. Bank & Trust Co., supra.
In the present case the trial court was correct to note that this was not a situation where mutual wills existed with mutual promises by the husband and wife, amounting to sufficient consideration. But, just because the wills were not mutual and did not contain mutual promises, that does not eliminate the possibility that consideration may have been present to support a valid contract.
There is a sufficient consideration for a promise if there is any benefit to the promisor or any detriment to the promisee. A benefit need not necessarily accrue to the promisor if a detriment to the promisee is present, and there is a consideration if the promisee does anything legal which he is not bound to do or refrains from doing anything which he has a right to do, whether or not there is any actual loss or detriment to him or actual benefit to the promisor. Omaha Nat. Bank v. Goddard Realty, Inc., 210 Neb. 604, 316 N.W.2d 306 (1982); Phelps v. Blome, 150 Neb. 547, 35 N.W.2d 93 (1948).
The amended petition simply alleged the execution of the last will and testament by Charles A. Blanchard was consideration for the execution of the contract. The defendant insists that her decedent got nothing more from the estate than she would have been entitled to had she renounced the will and elected to take her statutory share. The fact remains, however, that she did not choose to do so.
As the plaintiff argues in his brief, his father executed the will in favor of Mildred, appointing her as executrix, for which services she was entitled to and did receive a fee, and that the father preserved his estate intact and left his will unchanged and unrevoked until his death, even though he was not legally bound to do so. The general demurrer admits all facts and reasonable inferences to be drawn from facts properly pleaded.
Also, in an action on contract, the absence of consideration is an affirmative defense to be set out in the answer, see Erftmier v. Eickhoff, 210 Neb. 726, 316 N.W.2d 754 (1982), and the issue of consideration should not be the subject of a demurrer.
In reviewing the motion to strike certain language within the initial petition, Neb. *711 Rev.Stat. § 25-833 (Reissue 1979) provides in part: "If redundant, scandalous or irrelevant matter be inserted in any pleading, it may be stricken out on motion of the party prejudiced thereby...."
In State ex rel. Beck v. Associates Discount Corp., 162 Neb. 683, 696, 77 N.W.2d 215, 224 (1956), this court stated: "`Matter is irrelevant in a pleading which has no bearing upon the subject matter of the controversy, and cannot affect the decision of the court....'"
The stricken allegations of the plaintiff's petition relate to two joint tenancy accounts owned by Charles and Mildred Blanchard. We believe the trial court was correct to sustain the motion to strike, because the joint accounts are separate from the probate property received by Mildred, and separate from the property referred to in the memorandum which the plaintiff seeks to enforce. Also, the joint accounts are not referred to as consideration in the pleadings, although the plaintiff now contends the accounts might be considered sufficient consideration.
The action of the district court in sustaining the general demurrer of the defendant and dismissing the plaintiff's amended petition was erroneous. The judgment of the district court is reversed, and the cause is remanded for further proceedings.
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.
GRANT, J., disqualified. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578831/ | 267 Wis.2d 121 (2003)
2003 WI 148
671 N.W.2d 651
Mark ANDERSON and Janet Anderson, his wife, Plaintiffs-Appellants,
v.
AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant-Respondent,
Mary Anne BRASURE, Defendant-Respondent-Petitioner,
Gregory L. BRASURE, Defendant-Respondent.
No. 02-0980.
Supreme Court of Wisconsin.
Oral argument September 16, 2003.
Decided November 25, 2003.
*125 For the defendant-respondent-petitioner there were briefs by Mark A. Pennow, Tina M. Dahle and Denissen, Kranzush, Mahoney & Ewald, S.C., Green Bay, and oral argument by Mark A. Pennow.
For the plaintiffs-appellants there was a brief by Frank W. Kowalkowski and Hanaway, Weidner, Bachhuber, Woodward & Maloney, S.C., Green Bay, and oral argument by Frank W. Kowalkowski.
An amicus curiae brief was filed by Edward E. Robinson and Cannon & Dunphy, S.C., Brookfield, on behalf of The Wisconsin Academy of Trial Lawyers.
¶ 1. DIANE S. SYKES, J.
In Wisconsin, persons who furnish alcohol beverages to others are statutorily immune from civil liability arising out of the act of furnishing the alcohol. See Wis. Stat. § 125.035(2) *126 (1999-2000).[1] This immunity is subject to an exception: if the provider knew or should have known that the person to whom he was providing the alcohol was under the legal drinking age and the alcohol provided to the underage person is a substantial factor in causing injury to a third party, there is no immunity. Wis. Stat. § 125.035(4).
¶ 2. The issue in this case is whether an underage drinker who is injured as a result of the consumption of alcohol that was provided to a companion underage drinker is an injured "third party" under the exception to immunity. We hold that he is.
¶ 3. The defendant, Mary Anne Brasure, provided a bottle of vodka to her 19-year-old son, Gregory, who took the vodka to the family's vacation home where he and two friends drank it. One of the friends, Craig Anderson, died of acute alcohol intoxication. Craig's parents sued Mary Anne Brasure.
¶ 4. The circuit court applied the statutory immunity and dismissed the case on summary judgment. The court of appeals reversed, concluding that Craig was an injured third party within the meaning of the exception to immunity for injuries to third parties arising out of the provision of alcohol to underage persons. Anderson v. Am. Family Mut. Ins. Co., 2002 WI App 315, ¶ 1, 259 Wis. 2d 413, 655 N.W.2d 531.
¶ 5. We affirm. Craig Anderson was a third party to the illegal provision of alcohol by Mary Anne Brasure to her underage son, Gregory. While Craig Anderson's consumption of the alcohol may well affect the factfinder's evaluation of his contributory negligence, it does not alter his status as a third party to the original *127 illegal transaction between Mary Anne Brasure and her son for purposes of the statutory exception to immunity.
I. FACTS AND PROCEDURAL HISTORY
¶ 6. This is an appeal from an order of summary judgment. Therefore, we take the following facts from the pleadings and materials submitted on the motion in the circuit court. On or about March 19, 1999, Mary Anne Brasure ("Mary Anne") purchased a 1.75 liter bottle of vodka for her son Gregory, who was then 19 years old, and left it on her kitchen table with a note that said, "Greg, you owe me $12.00." Gregory took the vodka to the family's vacation property in rural Marinette County, where he and two friends, Craig Anderson and Robert Tripp, drank it. Late that night or early the next morning, Craig died of acute alcohol intoxication, having consumed enough alcohol to put his blood alcohol concentration at between .357 percent and .402 percent.
¶ 7. Craig's parents, Mark and Janet Anderson, brought a claim in Marinette County Circuit Court for Craig's wrongful death, naming Mary Anne, Gregory, and the Brasures' insurer, American Family Mutual Insurance Company ("American Family") as defendants. Mary Anne and Gregory moved for summary judgment on the basis of the immunity statute, Wis. Stat. § 125.035(2). American Family moved for summary judgment on the basis of exclusions in its homeowner's policy. The Honorable Tim A. Duket granted summary judgment in favor of Mary Anne and Gregory, concluding that they were immune under the statute, and also granted American Family's motion in part, finding no coverage under the insurance policy for *128 the claim against Gregory but concluding that material issues of fact existed as to coverage for the claim against Mary Anne.[2]
¶ 8. The court of appeals affirmed the circuit court as to the insurance coverage issue and Gregory's immunity, but reversed as to Mary Anne's immunity. Anderson, 259 Wis. 2d 413, ¶ 1. The court held that because Craig was a third party to the transaction whereby Mary Anne provided alcohol to Gregory, and because the alcohol Mary Anne provided to Gregory was a substantial factor in causing Craig's death, Mary Anne is subject to suit under the exception to immunity contained in Wis. Stat. § 125.035(4)(b). Anderson, 259 Wis. 2d 413, ¶ 12. We granted review, and now affirm.
II. STANDARDS OF REVIEW
[1, 2]
¶ 9. In reviewing a grant of summary judgment, we employ the same methodology used by the circuit court. Stelpflug v. Town of Waukesha, 2000 WI 81, ¶ 17, 236 Wis. 2d 275, 612 N.W.2d 700. Summary judgment is appropriate when there is no genuine issue of material fact in dispute and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2). The resolution of this case also requires the interpretation of Wis. Stat. § 125.035 in the context of undisputed facts. A question of statutory interpretation is a question of law that we review de novo. Czapinski v. St. Francis Hosp., Inc., 2000 WI 80, ¶ 12, 236 Wis. 2d 316, 613 N.W.2d 120.
*129 III. DISCUSSION
¶ 10. The Andersons' suit against Mary Anne is predicated on Craig being an injured third party under the exception to immunity contained in Wis. Stat. § 125.035(4)(b). The immunity statute states the general rule of immunity as follows: "A person is immune from civil liability arising out of the act of procuring alcohol beverages for or selling, dispensing or giving away alcohol beverages to another person." Wis. Stat. § 125.035(2). The note that Mary Anne affixed to the bottle of vodka establishes that she procured alcohol for Gregory. This fact, which is undisputed, is sufficient to trigger the general grant of immunity from civil liability under Wis. Stat. § 125.035(2).
¶ 11. Mary Anne loses this immunity, however, if the exception contained in Wis. Stat. § 125.035(4) applies. The exception is comprised of two subsections. The first sets limits on who may be covered by the exception; the second sets forth the substantive conditions necessary for satisfying the exception. The first subsection states:
In this subsection, "provider" means a person, including a licensee or permittee, who procures alcohol beverages for or sells, dispenses or gives away alcohol beverages to an underage person in violation of s. 125.07(1)(a).
Wis. Stat. § 125.035(4)(a).
[3]
¶ 12. Mary Anne's status as a "provider" under this definition depends upon whether her provision of alcohol to Gregory was in violation of Wis. Stat. § 125.07(1)(a). That statute states that "[n]o person may procure for, sell, dispense or give away any alcohol beverages to any underage person not accompanied by *130 his or her parent, guardian or spouse who has attained the legal drinking age." Wis. Stat. § 125.07(1)(a). Applying this statute to the undisputed facts here, it is clear that Mary Anne is a "provider" for purposes of the exception to immunity under Wis. Stat. § 125.035(4)(a), because she gave her underage son Gregory a bottle of vodka while he was unaccompanied by a parent, in violation of Wis. Stat. § 125.07(1)(a).
¶ 13. The substantive subsection of the immunity exception provides, in relevant part:
Subsection (2) [the grant of immunity] does not apply if the provider knew or should have known that the underage person was under the legal drinking age and if the alcohol beverages provided to the underage person were a substantial factor in causing injury to a 3rd party.
Wis. Stat. § 125.035(4)(b). Mary Anne knew her son Gregory was under the legal drinking age. She argues that Craig is not a third party under Wis. Stat. § 125.035(4)(b).
[4]
¶ 14. Mary Anne contends that because Craig consumed the vodka that ultimately killed him, he himself is a "provider" under the terms of the statute and therefore cannot also be a third party. Mary Anne reasons that Craig is a "provider" because he "procured" the vodka from Gregory before drinking it; in other words, he "provided" the vodka to himself by drinking it with Gregory. This use of the term "provider" is illogical and runs contrary to the use of the term in the statute.
[5]
¶ 15. The general focus of the statuteboth the immunity grant and the exceptionis on the provision of alcohol beverages by one person to another, and *131 whether the one who does the providing can be held liable for any injuries that may flow from that act. Meier v. Champ's Sport Bar & Grill, Inc., 2001 WI 20, ¶ 24 n.10, 241 Wis. 2d 605, 623 N.W.2d 94. The statute itself is not concerned with a person's own contributory liability for providing alcohol to himself, although the injured person's contributory fault may bear upon a defendant's ultimate liability.
[6]
¶ 16. The status of the injured person as a third party to the provider's act of furnishing the alcohol comes into play in determining the applicability of the exception to immunity. The exception defines "provider" as one who "procures alcohol beverages for . . . an underage person in violation of s. 125.07(1)(a)," and proceeds to eliminate the provider's immunity where the provision of alcohol to the underage person causes injury to a third party. Wis. Stat. § 125.035(4)(a), (b). If the injured claimant is a third party to the transaction by which the defendant provided alcohol to an underage person, and the alcohol was a substantial factor in causing the third-party claimant's injury, then the exception to immunity applies and the defendant may be liable to the claimant.
¶ 17. Therefore, the applicability of the immunity exception to Mary Anne's potential liability to the Andersons for Craig's wrongful death depends upon whether Craig was a third party to the transaction by which Mary Anne provided alcohol to Gregory. Whether Gregory was secondarily a "provider" to Craig or Craig "provided" to himself by drinking with Gregory is not relevant. That Craig may be considered a first party to a subsidiary transaction between himself and Gregory (because they consumed the alcohol together) does not *132 make him a party to the transaction by which Mary Anne provided the alcohol to Gregory.
¶ 18. By its terms, then, the exception to immunity under Wis. Stat. § 125.035(4)(b) applies when: 1) the injured person is a third party to the provider's act of furnishing alcohol to an underage person when the provider knew or should have known the person was underage; and 2) the alcohol was a substantial factor in causing the third party's injury.
¶ 19. Here, it is undisputed that Mary Anne provided the vodka to Gregory and that Gregory later shared it with Craig. No one has identified any fact tending to show that Craig was present at the time of Mary Anne's provision of alcohol to Gregory. No one has asserted that Craig contributed money to the purchase of the vodka. See Miller v. Thomack, 210 Wis. 2d 650, 656-57, 563 N.W.2d 891 (1997) (holding that one who contributes money toward purchase of alcohol beverages for consumption by a person known to be underage, "procures" within the meaning of Wis. Stat. § 125.035(4)).[3] No one has pointed to facts suggesting that Craig asked his friend Gregory to get vodka from his mother or otherwise participated in any way in Mary Anne's provision of the alcohol to Gregory. In *133 short, nothing in the record suggests that Craig had any role whatsoever in Mary Anne's provision of alcohol to Gregory.[4] We conclude that Craig is a third party with respect to that transaction.
¶ 20. It is also undisputed that the alcohol was a substantial factor in causing Craig's death. Therefore, the exception to immunity under Wis. Stat. § 125.035(4)(b) applies.
¶ 21. This interpretation of Wis. Stat. § 125.035(4) is consistent with our prior cases applying the exception to immunity. In Meier, 241 Wis. 2d 605, ¶ 2, we held that a person who provides alcohol to an underage drinker cannot claim third-party status for purposes of the exception to immunity when he himself is injured by the actions of the intoxicated underage drinker. Id. Meier, 19, spent an evening drinking beer at a bar with two companions, one of whom was also 19. Meier ordered and paid for a number of the drinks shared by the trio of drinkers. After leaving the bar in a car driven by the other 19-year-old, the group was involved in a car accident in which Meier was seriously injured. Id., ¶¶ 3-8.
¶ 22. Meier sued the bar and the driver. We held that since Meier had paid for and otherwise procured alcohol for his companion, the underage drinker/driver, which was a substantial factor in causing his own injury, he was a party to the transaction that provided *134 the alcohol to the underage person and thus did not qualify as a third party under the statute. Id., ¶ 13. We held in Meier: "It is difficult to imagine a class of individuals that the legislature would have more likely intended to exclude from qualifying as a `third party' than those persons involved in procuring alcohol for the underage drinker who ultimately injures another party." Id.
¶ 23. The only similarity between Craig and the injured plaintiff in Meier is that both young men consumed alcohol prior to their injuries. But there is a key difference: Meier procured alcohol for the underage drinker who later caused his (Meier's) injury; in contrast, here, Craig did not procure alcohol for Gregory. As we stated in Meier, "[t]he transactional focus of § 125.035(4)(b) is the provision of alcohol to underage persons." Id., ¶ 24. It was because Meier was involved in the illegal transaction by which alcohol was provided to his underage friend, not because they consumed alcohol together, that he was precluded from suing under the exception as an injured third party.
[7]
¶ 24. Alcohol immunity issues may well arise most often in cases of accidents caused by intoxication, but neither intoxication nor a resultant accident is statutorily necessary for the exception to immunity to apply. The statute requires only the knowing provision of alcohol to an underage person, and an injury to a third party caused by the alcohol. The statutory language does not limit the exception to certain types of injuries. The fact that Craig died as a result of alcohol consumption does not itself take this case outside of the exception to immunity.
*135 [8, 9]
¶ 25. In addition, Craig's status as a companion underage drinker does not dictate whether he qualifies as an injured third party under Wis. Stat. § 125.035(4)(b). The statute does not limit third-party status by age, condition of sobriety, or separation of circumstance from the alcohol consumption.[5] It requires only that the injured person be a third party to the defendant/provider's provision of alcohol to an underage person, and that the alcohol so provided is a substantial factor in causing the injury. Craig's age and complicity in his own intoxication are factors for the comparison of negligence, but they do not determine the applicability of the exception to immunity under Wis. Stat. § 125.035(4)(b).
¶ 26. Mary Anne argues that Kwiatkowski v. Capitol Indemnity Corp., 157 Wis. 2d 768, 461 N.W.2d 150 (Ct. App. 1990), unequivocally rules out those who consume alcohol from third-party status. In Kwiatkowski, the court of appeals affirmed the circuit court's dismissal of a lawsuit alleging negligence in providing alcohol to an underage person. Kwiatkowski, 157 Wis. 2d at 771. Raymond Kwiatkowski, an "obviously intoxicated *136 underage drinker," was served alcohol by the Red Lion Entertainment Center in Okauchee, Wisconsin. His companion, Amy Pederson, also bought him alcohol while they were at the tavern. Kwiatkowski and Pederson left the Red Lion in an automobile with Kwiatkowski at the wheel; an accident took place in which Kwiatkowski and Pederson were injured. Id.
¶ 27. Kwiatkowski sued the Red Lion, its owner, and Pederson. The court of appeals framed the issue as "whether the statute contemplates a cause of action to a minor consumer of alcohol beverages where a third party [there, Pederson] is injured or whether the cause of action is limited to only the injured third party." Id. at 775. The court examined the statute and concluded that it was ambiguous because it "does not expressly grant a cause of action to either category of claimants," but merely "set[s] out when the immunity applies and when it does not." Id.
¶ 28. The court in Kwiatkowski then turned to the history of the statute and concluded that the statute was in derogation of the common law because it was enacted after two decisions of this court[6] that altered the common law of immunity by permitting a cause of action against providers of alcohol who serve alcohol to minors where the minor's consumption was a cause of injury to a third party. Id. at 776-77. The court of appeals held:
The legislature in sec. 125.035(4)(b), Stats., has not sanctioned by clear, unambiguous and peremptory language a cause of action against a provider by a minor plaintiff whose injuries, at least in part, result from his own consumption of alcohol beverages. Absent such an *137 unequivocal statement from the legislature or a further limitation of common law immunity by the supreme court, the present common law rule of nonliability still applies in such a case.
Id. at 777.
¶ 29. Mary Anne asserts that Kwiatkowski is clear and controlling precedent, and therefore Craig, a consumer of alcohol, cannot be a third party for purposes of the exception to immunity. Mary Anne's reliance on Kwiatkowski is misplaced. The premise upon which it reliedthat the statute is in derogation of the common lawwas subsequently rejected by our decision in Meier.
¶ 30. In Meier, we recapitulated the history of the enactment of Wis. Stat. § 125.035, and, in particular, the statute's relationship to this court's decisions in Sorensen v. Jarvis, 119 Wis. 2d 627, 350 N.W.2d 108 (1984), and Koback v. Crook, 123 Wis. 2d 259, 366 N.W.2d 857 (1985). Meier, 241 Wis. 2d 605, ¶¶ 30-35. For decades, Wisconsin common law recognized no liability on the part of sellers of alcohol for damages arising from the acts of an intoxicated person. See, e.g., Farmers Mut. Auto. Ins. Co. v. Gast, 17 Wis. 2d 344, 117 N.W.2d 347 (1962). In Sorensen, 119 Wis. 2d at 629, however, we held that a third party injured by an intoxicated minor could sue a provider who negligently sold intoxicating beverages to a person the seller knew or should have known was underage when the consumption of alcohol was a cause of the accident. In the following term we extended the Sorensen rule to social hosts who serve alcohol to minors where the minor's consumption was a cause of injury to a third party. See Koback, 123 Wis. 2d at 275.
*138 [10]
¶ 31. The legislature responded to Sorensen and Koback by enacting statutory immunity from liability arising from the provision of alcohol beverages, Wis. Stat. § 125.035(2), effectively codifying the old common-law rule. Meier, 241 Wis. 2d 605, ¶ 33. At the same time, the legislature adopted the exception to immunity contained in subsection (4)(b), which permits a cause of action in situations like those present in Sorensen and Koback. Id., ¶ 34. Thus, we said in Meier:
[b]ecause the legislature drafted § 125.035 with Sorensen and Koback in mind and because the statute tracks the language of the case law, we conclude that the statute is not one in derogation of the common law, but indeed is one that attempted to codify the common law as it existed in 1985.
Id.
¶ 32. Although this passage from Meier is enough to rebut Mary Anne's reliance on Kwiatkowski, a footnote to our decision in Meier forecloses her argument definitively. We recognized in Meier that our interpretation ran contrary to conflicting court of appeals' discussions, in Kwiatkowksi, 157 Wis. 2d at 776-77, and Miller, 204 Wis. 2d at 263, regarding the immunity statute's relationship to the common law. Meier, 241 Wis. 2d 605, ¶ 34 n.16. Therefore, to avoid any possible confusion on the issue, we specifically held: "To the extent that the court of appeals discussions [regarding statutes in derogation of the common law] in Miller and Kwiatkowski are inconsistent with this opinion, such discussions are no longer valid precedent." Id.
¶ 33. Although Kwiatkowski's interpretation of the immunity statute's relationship to the common law was erroneous, the result in the case would have been *139 the same under our interpretation of the statute in Meier and here. The facts in Kwiatkowski were significantly different from the facts in this case. Craig, like Kwiatkowski, consumed the alcohol that was a substantial factor in causing his injury. Kwiatkowski, however, could not claim third-party status to the transaction by which the alcohol was provided, because his suit was against the tavern which had provided alcohol directly to him and his companion, Pederson. Kwiatkowski, 157 Wis. 2d at 771. Here, the Andersons are suing Mary Anne, who provided alcohol directly to her son Gregory, but not to Craig; the Andersons' son Craig was a third party to Mary Anne's provision of alcohol to Gregory.
[11]
¶ 34. We have previously observed that the exception to immunity is intended to discourage the knowing provision of alcohol to underage persons by making providers liable for third-party injuries. Meier, 241 Wis. 2d 605, ¶ 27; Miller, 210 Wis. 2d at 668-69. A provider has a defense to the applicability of the exception if he or she was actively misled about the recipient's age. The statute restores immunity if the facts establish all of the following:
1. The underage person falsely represents that he or she has attained the legal drinking age.
2. The underage person supports the representation with documentation that he or she has attained the legal drinking age.
3. The alcohol beverages are provided in good faith reliance on the underage person's representation that he or she has attained the legal drinking age.
4. The appearance of the underage person is such that an ordinary and prudent person would believe that he or she had attained the legal drinking age.
*140 Wis. Stat. § 125.035(4)(b)1.-4.
¶ 35. This defense to the immunity exception further demonstrates that the focus of the statute is on the transaction between the provider and the underage person. By restoring the provider's statutory immunity where the facts establish deception by the underage person, the legislature has opted to permit civil liability to injured third parties only where the provider knew or should have known that he or she was directly violating the state drinking law. Such is the case here.
[12]
¶ 36. Accordingly, we conclude that an underage drinker who is injured or dies as a result of the consumption of alcohol that was illegally provided to a companion underage drinker is an injured third party for purposes of the exception to immunity under Wis. Stat. § 125.035(4)(b). The exception applies under these circumstances, and the Andersons may proceed with their suit against Mary Anne for the death of their son, Craig, arising out of Mary Anne's provision of alcohol to her underage son, Gregory. While Craig's own consumption will bear upon his contributory negligence, it does not affect his status as a third party to Mary Anne's provision of alcohol to Gregory for purposes of the statutory exception to immunity.
By the Court.The decision of the court of appeals is affirmed.
NOTES
[1] All references to the Wisconsin Statutes are to the 1999-2000 version unless otherwise noted.
[2] The circuit court's summary judgment orders in favor of Gregory and American Family are not before this court.
[3] In Miller v. Thomack, 210 Wis. 2d 650, 660 n.11, 563 N.W.2d 891 (1997), we specifically declined to address the issue presented herewhether an underage consumer of alcohol can be a third party for purposes of the immunity exception in Wis. Stat. § 125.035(4)(b)as it was not fully argued by the parties. In Miller we held only that one "who contributes money with the intent of bringing about the purchase of alcohol beverages for consumption by an underage person whom the person knows, or should know, is under the legal drinking age, procures alcohol beverages for the underage person within the meaning of Wis. Stat. §§ 125.07(1)(a)1. and 125.035(4)." Id. at 656.
[4] Although the Andersons' complaint alleged that Mary Anne Brasure purchased the alcohol and provided it "to Gregory Brasure and/or Craig P. Anderson," the parties have not asserted that material factual disputes exist on the issue of Craig's involvement in Mary Anne's provision of alcohol to her son Greg, thus conceding Craig's nonparticipation in that act. See Anderson v. Am. Family Mut. Ins. Co., 2002 WI App 31, ¶ 12 n.8, 259 Wis. 2d 413, 422, 655 N.W.2d 531.
[5] Mary Anne cites Doering v. WEA Insurance Group, 193 Wis. 2d 118, 142-43, 532 N.W.2d 432 (1995), for the proposition that Wis. Stat. § 125.035 disallows a suit by an underage drinker. Doering is not applicable here. The case involved a claim against a tavern by a motorist who was injured by an adult intoxicated driver who had been drinking at the tavern. The injured motorist lodged an unsuccessful equal protection challenge to the immunity statute. Doering specifically addressed the "single issue" of "whether sec. 125.035, Stats. 1991-92, violates the equal protection clause. . . ." Id. at 124. The case did not address the issue of whether an underage drinker can be a third party for purposes of the exception to immunity under Wis. Stat. § 125.035(4)(b).
[6] Koback v. Crook, 123 Wis. 2d 259, 366 N.W.2d 857 (1985); Sorensen v. Jarvis, 119 Wis. 2d 627, 350 N.W.2d 108 (1984). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1581017/ | 5 Mich. App. 597 (1967)
147 N.W.2d 433
CONSTANTINI
v.
HOFER.
Docket No. 1,368.
Michigan Court of Appeals.
Decided January 10, 1967.
William B. Cope, for plaintiff.
Davidson, Gotshall, Kelly, Halsey & Kohl (John R. Secrest, of counsel), for defendants.
LESINSKI, C.J.
Plaintiff appeals an accelerated judgment for defendants below, dismissing the cause of action.
Plaintiff brought a tort action seeking damages for personal injuries which allegedly resulted from defendants' negligence. The automobile accident from which the cause of action arose occurred on June 26, 1962; the applicable statute of limitations would have run by June 26, 1965.[1] On June 8, 1965, suit was filed in Wayne county circuit court; the summons was delivered to another attorney for service; and service was attempted by mailing. On August 13, 1965, summons and complaint were put in the hands of the sheriff of Wayne county and served within the 90-day period. On these facts, defendants moved for an accelerated judgment.
The motion as filed stated that it was a "special appearance with motion to quash" based on the *599 failure to serve defendants properly under the statute prior to the running of the statute of limitations.
The settled record below reveals that it was plaintiff's contention on argument that an attorney is an "officer" within the contemplation of the tolling statute, revised judicature act, PA 1961, No 236, CLS 1961, § 600.5856 (Stat Ann 1962 Rev § 27A.5856),[2] and that the complaint was placed in the hands of an officer in good faith for immediate service on two occasions: first, in delivery to the attorney, and second, in delivery to the sheriff. Defendants refuted plaintiff's contention of compliance with the applicable statutory provision.
The controlling question here presented consists of determining whether an attorney is an "officer" within the contemplation of CLS 1961, § 600.5856, supra, so as to toll the statute for the 90-day period.
The defendants relied below, and on appeal, on State Accident Fund v. Catsman Company, Incorporated (1965), 376 Mich 194, which held that where plaintiff's counsel took the complaint and summons to the sheriff's office in one county on the last day before the statute had expired, and was informed there that the defendant was in another county, and said counsel then took the papers with him and waited three weeks before filing them with an officer in the second county, he could not claim the benefit of the tolling under the statutory provision relied upon in the instant case. The Court held that the motion for accelerated judgment should have been granted below. Although we must agree with plaintiff *600 that State Accident Fund, supra, did not specifically rule on the question of whether an attorney was an "officer" within the meaning of the statute, it must be noted that if the Court considered that an attorney came within the classification of "officer" the Court might not have found it necessary for plaintiff's counsel to deliver the papers to the sheriff in the county where the defendant was situated.
In Sylvester v. Messler (ED Mich 1964), 246 F Supp 1, the Federal court had before it both a comparable fact situation and the same statute as are before this Court. The Federal court, applying this Michigan statute in a diversity action, held that there was no tolling of the statute. In Sylvester, supra, the cause of action for personal injuries resulting from an automobile accident arose on February 17, 1961, and the complaint was filed on February 14, 1964; however, summons and complaint were not put in the hands of the United States marshal for service until March 12, 1964. The plaintiff's attorney attempted to serve the summons and complaint himself without having first obtained a special appointment for that purpose. The Sylvester court distinguished Federal cases wherein Federal rights were sought to be enforced. Sylvester was affirmed, per curiam, on appeal. Sylvester v. Messler (CA 6, 1965), 351 F2d 472. In neither Federal court opinion was the question of whether an attorney was an "officer" within the contemplation of the statute discussed.
Plaintiff premises his contention upon the language of CLS 1961, § 600.901 (Stat Ann 1962 Rev § 27A.901), which reads in part: "The members of the state bar of Michigan are officers of the courts of this state." Case law cited in the annotations to this statement has held that it is permissible for an attorney to fill out a summons after it is signed *601 and sealed by the clerk, Potter v. John Hutchison Manufacturing Company (1891), 87 Mich 59; that it is permissible for attorneys to inform the court of its error in improvidently appointing a receiver, Brandimore v. Dickens (1931), 256 Mich 128; and that as attorneys are officers of the court, courts have the inherent power to admit them to legal practice, Johnson v. DiGiovanni (1956), 347 Mich 118. In none of these cases has an attorney been held to be an "officer" for the purpose asserted here. It is relevant, in this context, to note that the tolling statute does not say "officer of the court", and the inference may be drawn that the absence of this prepositional phrase is "corroborative evidence" of a lack of intent to consider attorneys as members of this statutory class.
Defendants' brief suggests, and plaintiff's brief refutes, an argument to the point that sheriffs and their deputies are the exclusive officers of the court impliedly designated by the tolling statute. The facts of the instant case do not require us to enumerate those who would be within the statutory classification, but merely to determine whether attorneys belong in the class. Therefore, any such listing must await either legislation or a case which requires such denomination for proper adjudication.
We find insufficient merit in the other issues presented by plaintiff on appeal to warrant their discussion here.
Affirmed, costs to appellees.
J.H. GILLIS and HOLBROOK, JJ., concurred.
NOTES
[1] CLS 1956, § 609.13 (Stat Ann 1959 Cum Supp § 27.605). See, currently, PA 1961, No 236 (CLS 1961, § 600.5805[7], Stat Ann 1962 Rev § 27A.5805[7]).
[2] "The statutes of limitations are tolled when
(1) the complaint is filed and a copy of the summons and complaint are served on the defendant, or when
(2) jurisdiction over the defendant is otherwise acquired, or when,
(3) the complaint is filed and a copy of the summons and complaint in good faith, are placed in the hands of an officer for immediate service, but in this case the statute shall not be tolled longer than 90 days thereafter." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1918468/ | 764 A.2d 503 (2001)
336 N.J. Super. 270
In the Matter of the GUARDIANSHIP OF Nadia JORDAN and Joan Jordan.
Superior Court of New Jersey, Appellate Division.
Argued December 20, 2000.
Decided January 17, 2001.
*504 Lisa B. Landsman, Deputy Attorney General, argued the cause for appellant, Division of Youth and Family Services, (John J. Farmer, Jr., Attorney General of New Jersey, attorney; Mary C. Jacobson, Assistant Attorney General, of counsel, Ms. Landsman, on the brief).
S. Daniel Hutchison argued the cause for respondent Robert Jordan.
John P. Kopesky, Philadelphia, PA, argued the cause as guardian for Nadia and Joan Jordan, (Sheller, Ludwig & Badey, attorneys; Mr. Kopesky, on the brief).
Before Judges KING, COBURN and AXELRAD.
The opinion of the court was delivered by KING, P.J.A.D.
I
In this caption and opinion, we use fictitious names. The Division of Youth and Family Services (DYFS) appeals the trial judge's decision which ordered the return of the minor child, Joan, to her birth father's custody (defendant). Joan, now age nine, and her sister Nadia, now age thirteen, were removed from their father's custody following alleged abuse of Nadia by her father. These allegations included hitting Nadia with a belt, kicking her, and making her do pushups. The two sisters were removed from the household and placed in foster care together.
At the conclusion of two years of foster care, DYFS decided to pursue termination of the father's parental rights and seek adoption of the girls by their foster mother. Subsequent to DYFS's decision, the defendant birth father surrendered his parental rights to Nadia, but continued to maintain visits with Joan and seeks the return of Joan to the parental household. Counseling and psychological evaluations ensued, and eventually a trial.
*505 The trial judge ruled that defendant's surrender of his parental rights to Nadia's custody was knowing, voluntary, and binding. However, the trial judge denied DYFS's application for termination of parental rights as to Joan, and ordered her return to her father. DYFS moved for a stay which we granted pending accelerated argument on December 20, 2000. The father does not cross-appeal from the termination decision as to Nadia.
DYFS asserts that the judge's decision as to Joan was against the weight of the evidence, even recognizing its clear and convincing burden of proof in termination of parental rights cases. We disagree and affirm the denial of termination of the birth-father's parental rights for the reasons given by Judge Thomas S. Smith, Jr., in his comprehensive 35-page written opinion. We find that the record amply supports his decision, given DYFS's heavy constitutional burden of proof in the matter. See Santosky v. Kramer, 455 U.S. 745, 748-49, 753-70, 102 S.Ct. 1388, 1391-93, 1394-1403, 71 L.Ed.2d 599, 603, 606-17 (1982). This substantial burden of proof, plus our historic appellate respect for the fact-finder, compels our affirmance in this very troublesome case. Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 483-84, 323 A.2d 495 (1974); see State v. Locurto, 157 N.J. 463, 470-71, 724 A.2d 234 (1999); In re Taylor, 158 N.J. 644, 731 A.2d 35 (1999); State v. Johnson, 42 N.J. 146, 157, 199 A.2d 809 (1964).
On the issue of termination of parental rights as to Joan, the judge referred to N.J.S.A. 30:4C-15 and 15.1(a) and New Jersey Div. of Youth and Family Serv. v. A.W., 103 N.J. 591, 512 A.2d 438 (1986). Both the case law and the statute require satisfaction of the "best interests of the child" test, by clear and convincing evidence, before termination of parental rights can occur. The four-prong test requires DYFS to prove:
(1) The child's safety, health or development has been or will continue to be endangered by the parental relationship;
(2) The parent is unwilling or unable to eliminate the harm facing the child or is unable or unwilling to provide a safe and stable home for the child and the delay of permanent placement will add to the harm. Such harm may include evidence that separating the child from his foster parents would cause serious and enduring emotional or psychological harm to the child;
(3) The division has made reasonable efforts to provide services to help the parent correct the circumstances which led to the child's placement outside the home and the court has considered alternatives to termination of parental rights; and
(4) Termination of parental rights will not do more harm than good.
[N.J.S.A. 30:4C-15.1.]
The judge determined that testimony failed to reveal allegations of abuse involving Joan. "In fact Mr. Jordan has continued visitation with Joan without any incident." In analyzing the testimony offered by Dr. Gruen, Dr. Musetto, and witnesses on behalf of DYFS, the judge decided that DYFS failed to meet its burden.
While there is clear proof as to harm to Nadia, the evidence presented as to actual or future harm to Joan is speculative at best. The testimony indicates that Mr. Jordan has maintained a constructive and safe relationship with Joan except for the time he was in Texas and shortly thereafter. He continues to exercise unsupervised visitation with Joan on a regular basis without incident that would lead this court to believe that he has harmed Joan or would do so in the future.
The court is well aware of the testimony of Dr. Gruen as to what may happen in the future. DYFS has not proven however, both current and future harm to Joan's health and development resulting from the parental relationship as specified *506 in K.H.O., [161 N.J. 337, 736 A.2d 1246 (1999)].
As to the second prong of the test, the judge stated that DYFS failed to prove "by clear and convincing evidence any harm to Joan on the part of Mr. Jordan." The judge also determined that the defendant and his second wife offered safe housing on the return of Joan to her father and the blending of their families. Judge Smith found DYFS had met the third prong of the test by diligently referring defendant for evaluations, counseling and facilitating visitation between Joan and her father.
The fourth prong proved the most troublesome for the judge to decide: "That prong requires the court to address the issue of whether termination will do more harm than good. The court must also consider the permanency plan presented in its analysis of this prong." Here Nadia and Joan's close sibling relationship created the dilemma. Joan depends considerably upon Nadia; both experts testified concerning the harm Joan would suffer should she be separated from Nadia. Bonding had also been established with the girls' foster mother, Ms. Franks; however, she was no longer part of the equation due to serious illness. No evidence suggested a bond between the girls and Franks's nephew, Brent, the newly-proposed adopting parent. Both experts did acknowledge the bond between Joan and her father. Hence, the judge concluded the evidence clearly demonstrated that bond "outweighs any relationship with the [Franks] nephew."
The two experts disagreed as to whether defendant would or could nurture a relationship between the sisters, if Joan returned to defendant's custody. Gruen doubted defendant would encourage the siblings' relationship. Musetto believed defendant would foster the bond between the sisters. The latter was consistent with defendant's assertion: he resented DYFS but said "he would never break up the relationship between Joan and Nadia."
Based upon the totality of the circumstances, the judge ruled that terminating defendant's parental rights would subject Joan to the greater harm.
Both of the experts testified as to the bond between Joan and her father. The foster mother is no longer a potential adoptive parent and Joan is no longer being cared by her due to her illness. There was no evidence of bonding between Joan and Ms. Franks's nephew. The permanency plan for Joan cannot outweigh the existence of her bonding to her father. Concerns as to the bonding between the two siblings can be addressed through extensive visitation between the two that can be arranged through Mr. Jordan and DYFS or the adoptive parent. The court is taking Mr. Jordan at his word that he would not break up the relationship between Joan and her sister.
Although the judge regretted having to separate the two sisters, understandably he found that DYFS failed to meet its burden to satisfy the four prongs by clear and convincing evidence and ordered Joan's return to her father's custody. These findings and conclusions are amply supported by the record, especially under the enhanced burden on the agency to carry the case by "clear and convincing evidence," which standard "strikes a fair balance between the rights of the natural parents and the State's legitimate concerns." Santosky v. Kramer, 455 U.S. at 769, 102 S.Ct. at 1403, 71 L.Ed.2d at 617.
II
The judge made no provision in his final order of October 5, 2000 to insure the continuing relationship of the two sisters. We remand the case to Judge Smith and ask him to conduct a prompt hearing and do whatever he can by way of judicial supervision and order to nurture this relationship, and to continue to follow the case, even though he has been transferred to the Law Division. This could include counseling, therapy or other measures. See generally Matter of Baby M., 109 N.J. *507 396, 463-67, 537 A.2d 1227 (1988), for the principles which should guide the judge "in this unique situation." Id. at 467, 537 A.2d 1227.
DYFS claims this solution is impractical because Nadia's prospective adopting parent may not cooperate. If this is so, perhaps nothing can be done to foster the sibling relationship. But the possible non-cooperation of Nadia's potential adopting parent is no reason to tip the scales in favor of terminating the father's parental rights.
DYFS also claims that the father may refuse to cooperate in fostering visitation and a continuing relationship between Nadia and Joan. If this occurs, and DYFS can document such intransigence on the father's part, DYFS should seek leave to reopen this termination case, and seek immediate custody of Joan. If such an application is made in good faith, the judge should entertain the termination application anew, rely on the existing record, and hear further evidence bearing on the four-part test for termination, including the father's lack of cooperation in fostering the sibling relationship, which is clearly in Joan's best interest.
Finally, we wish to thank Mr. Hutchison and Mr. Kopesky for their to-date uncompensated service in this case, which service is greatly appreciated by the court and is rendered in the best traditions of the Bar of this State. We hope that the fairly recent amendments to N.J.S.A. 30:4C-15.4; L. 1999, c. 53, § 54 and L. 1999, c. 213, § 1 will permit compensation to them for their excellent service to the court and to the interests of justice.
The stay is dissolved and the judgment is affirmed, as modified, and the case is remanded to Judge Smith to proceed with implementing appropriate visitation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578723/ | 135 Mich. App. 200 (1984)
351 N.W.2d 914
FARM BUREAU MUTUAL INSURANCE COMPANY
v.
RADEMACHER
Docket No. 70192.
Michigan Court of Appeals.
Decided June 5, 1984.
Edward B. Davison, for Farm Bureau Mutual Insurance Company.
Richard R. Rashid, for Christopher Eberhart.
*201 Before: D.E. HOLBROOK, JR., and CYNAR and T. GILLESPIE,[*] JJ.
PER CURIAM.
Defendant Christopher Eberhart appeals as of right from a declaratory judgment entered in favor of Farm Bureau Mutual Insurance Company.
In a separate circuit court action, Christopher Eberhart filed a complaint in the case of Eberhart v Rademacher alleging that defendant David Rademacher intentionally assaulted and battered Christopher Eberhart, which intentional assault and battery resulted in a broken jaw. Thereafter, the instant declaratory judgment action was commenced to determine whether Farm Bureau Mutual Insurance Company had a duty to defend Rademacher or pay any judgment that might be rendered against him in the principal action. On the date of the alleged assault, David and Julie Rademacher were named insureds under a homeowner's insurance policy issued by Farm Bureau. The policy of insurance contained a provision excluding coverage for injuries caused intentionally by the insured. That exclusion, and the liability provisions to which it refers, are as follows:
"Section II
"Comprehensive Personal Liability Insuring Agreements
"Coverage A personal liability.
"This Company agrees to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury * * * to which this insurance applies, caused by an occurrence."
"III. Definitions Section II
* * *
"e. Occurrence: Means an accident, including injurious *202 exposure to conditions, which results, during the policy term, in bodily injury or property damage."
"EXCLUSIONS II
"This policy does not apply:
* * *
"(c) Under Coverages A, B and C, to injury, sickness, disease, death or destruction caused intentionally by or at the direction of the insured."
The only evidence introduced at the hearing on the complaint for declaratory judgment consisted of the discovery depositions of defendants Rademacher and Eberhart. On the evening of the complained-of assault, the Rademachers and their daughter were returning home in their van after attending a movie. As the van was being driven, it was struck by one or more snowballs. Rademacher turned his van around and entered a parking lot, approching three persons. One of them ran away. Rademacher threw Eberhart to the ground and hit the other person with his fist.
What followed, according to Rademacher, was that, as Eberhart attempted to stand up, Rademacher struck him with a downward punch to the jaw. According to Eberhart, Rademacher pulled him up and then hit him in the jaw.
The trial judge observed that, under either scenario, when one suffers a broken jaw from being hit on the jaw, the injury is a natural, probable, foreseeable, and expected result.
After considering the evidence and applicable case law, the trial court found the exclusionary policy language applicable, and entered an order declaring that Farm Bureau had no duty to defend or pay any judgment rendered against Rademacher in the principal action.
Since the trial court sat as trier of fact, this Court must review the record to determine *203 whether it supports the trial court's findings. GCR 1963, 517.1.
We have reviewed the cases cited by the trial court and the parties: Morrill v Gallagher, 370 Mich. 578; 122 NW2d 687 (1963), Putman v Zeluff, 372 Mich. 553; 127 NW2d 374 (1964), Vermont Mutual Ins Co v Dalzell, 52 Mich. App. 686; 218 NW2d 52 (1974), Kermans v Pendleton, 62 Mich. App. 576; 233 NW2d 658 (1975), and Group Ins Co of Michigan v Morelli, 111 Mich. App. 510; 314 NW2d 672 (1981).
The findings in Morrill and Vermont Mutual were that the injury was not intended. In Morrill, the defendants attempted to frighten the plaintiff by throwing a lit firecracker into a room occupied by the plaintiff. As a result of the firecracker exploding, plaintiff suffered a serious injury. Our Supreme Court, in holding the insurer liable, stated:
"Some emphasis is placed on exclusion (c) on the ground that in the instant case the firecracker was thrown intentionally. Unquestionably such was the case, but it will be noted that under the language of the excluding clause, the injury must be caused `intentionally'. There is nothing in this case to justify a conclusion that either Gallagher or Canfield intended to cause any physical harm to plaintiff. The language of the policy is binding on appellant [insurer], and if ambiguous it must be construed against appellant's claims in the instant controversy. It may not be interpreted as barring liability under the policy." Morril, supra, p 588. (Emphasis in original.)
In Vermont Mutual, a 17-year-old boy threw a pumpkin from an overpass. It struck a vehicle, shattering the windshield and seriously injuring the driver. The Court of Appeals said:
*204 "The trial court found that the youth's act of throwing the pumpkin was intentional and there was abundant evidence presented to support this finding. In addition, however, the trial court found that the youth intended to injure the motorist, defendant Dalzell. This was error since there was no evidence presented to support the conclusion that the youth intended to injure Dalzell. Throughout the criminal and civil proceedings, the youth maintained that the pumpkin was thrown to strike in front of or alongside of defendant Dalzell's vehicle in order to frighten him. This testimony stood uncontradicted. Therefore, the finding of the trial court that there was an intent to injure was clearly erroneous and cannot be allowed to stand. GCR 1963, 517.1." Vermont Mutual, supra, pp 692-693.
The trier of fact in Putman found intent to fire a gun to stop the onrush of a dog by shooting in the direction of the animal, but found no intent to destroy the dog.
Our Court ruled in Kermans that the trial court correctly held the exclusion applicable, quoting the trial court:
"`There was no allegation of self-defense or accident on behalf of the principal defendant, and this court has no difficulty in determining that where there is no allegation of provocation, negligence or accident, that the pointing of a firearm at another human being and discharging same is of itself an intentional act, and one whereby the actual result could be anticipated, and thus outside the scope of the instant policy.'" Kermans, supra, p 580.
In another declaratory judgment action, Group Ins Co of Michigan v Morelli, supra, James Nesbitt was visiting at the home of his girlfriend, Ellen. Ellen had previously dated Daniel Morelli. While Nesbitt was visiting, Morelli entered Ellen's home *205 and kicked Nesbitt in the face, breaking his nose. The Court stated:
"The above rationale and cited authorities are equally applicable to the instant case. The injury sustained by Nesbitt was the natural, foreseeable, expected and anticipatory result of the intentional act of Morelli. As such, we find that both the act and injury were intentional and, thus, within the exclusion provision of the policy coverage. Hence, plaintiff had no duty to defend or indemnify defendant." 111 Mich. App. 516.
Consistent with our prior decisions in Kermans and Group Ins Co of Michigan, we hold that the trial court's inferential finding that the injury to Eberhart was intentionally caused was not clearly erroneous.
Affirmed.
NOTES
[*] Circuit court judge, sitting on the Court of Appeals by assignment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578759/ | 281 S.W.3d 728 (2008)
R.J. CHIODINI, Appellant,
v.
David LOCK, Appellee.
No. 07-969.
Supreme Court of Arkansas.
April 3, 2008.
*729 R.J. Chiodini, pro se appellant.
No response.
TOM GLAZE, Justice.
The court of appeals certified this appeal to our court in order to address the writ of certiorari that is sought by appellant Rodrick Chiodini. See Ark. Sup Ct. R. 1-2(a)(3).
The underlying lawsuit in this case began when Chiodini filed a pro se complaint in the Stone County Circuit Court against appellee David Lock, alleging that Lock had trespassed on Chiodini's property by building a fence that encroached on Chiodini's land. Chiodini's complaint was accompanied by a request for admissions and a set of interrogatories. Lock filed a timely answer on January 20, 2006. Lock also later provided his responses to Chiodini's requests for admissions and interrogatories, but the responses were unsigned by *730 either Lock or his attorney. Dissatisfied with Lock's responses, Chiodini began to file repeated motions seeking "more responsive answers" to his discovery requests. Eventually, he asked the trial court to deem admitted his requests for admission; however, the circuit court denied his request.
Chiodini kept up his demands for answers to his discovery requests throughout 2006, complaining, among other things, that Lock's responses were disorganized, unsigned, and untimely. In June of 2006, the circuit court held a hearing on Chiodini's many motions and ultimately denied Chiodini's request to have his requests for admission deemed admitted. In July 2006, the court rejected Chiodini's motion for reconsideration of that ruling; the court further entered an order granting Lock's request to prohibit Chiodini from seeking further discovery.
On August 2, 2006, Chiodini filed a "motion for an order prohibiting defendant's entry on disputed land." In this motion, Chiodini alleged that Lock had been entering the disputed property, and he asked the court to "issue an order (pendente-lite) [p]rohibiting [Lock] ... from entering upon or performing any activity south of the fence line ... that exists between defendant's and plaintiff's property, without written consent from the plaintiff." Lock responded on August 10, 2006, generally denying the allegations in Chiodini's motion and denying that Chiodini was entitled to relief.
In September of 2006, Judge Tim Weaver, who had originally been assigned the case, recused, and Judge Stephen Choate subsequently acquired the case. On October 12, 2006, Chiodini filed a motion for rehearing of Judge Weaver's decisions. After a hearing in May 2007, the court sent a letter opinion to the parties. In that letter, the court found that Judge Weaver had found that Lock's answers to Chiodini's requests for admission were not deficient, and that there was nothing there for the court to rule on. The court also found that Judge Weaver had "effectively dismiss[ed]" Chiodini's complaints concerning Lock's answers to interrogatories. The court further noted that Judge Weaver had granted Lock's motion for a protective order and prohibited any additional discovery. Next, the court stated that it "did not see the necessity to have hearings on the motions to prohibit [Lock's] entry on the disputed land or for appointment of a neutral master. I believe a trial will cure these two motions. Therefore, both motions filed on August 2, 2006, are denied."
On August 20, 2007, the trial court entered a series of orders reiterating the findings made in its letter. In the first, it specifically adopted Judge Weaver's oral decisions from the bench regarding Chiodini's June 20, 2006, and July 12, 2006, motions. The court noted that Judge Weaver had ruled on these motions from the bench, but had not reduced his findings to written orders because he recused from the case prior to doing so. The court also entered orders specifically denying Chiodini's requests regarding Lock's discovery responses, finding the responses were adequate and Chiodini's motion to deem admitted would be denied. In addition, the court denied Chiodini's motion for a hearing on his "motion for order prohibiting defendant's entry on disputed lands." Finally, the court rejected Chiodini's request for a certification pursuant to Ark. R. Civ. P. 54(b), finding that such certification would be inappropriate.
Chiodini filed a notice of appeal on August 20, 2007. His notice declared his intent not only to appeal from the court's refusal to hear his motion for a restraining order pendente-lite, but also to seek a writ *731 of certiorari or prohibition due to the "abuse of discretion wherein the circuit court has exceeded its authority in law, thereby creating proceedings that are illegal."
In his first point on appeal, Chiodini takes issue with the trial court's denial of his request to hold a hearing on his August 2, 2006, "motion for an order prohibiting defendant's entry on disputed land." In his brief, he calls this motion a "motion for restraining order pendente-lite." On appeal, he argues that it was "a clear error of law for the circuit court to refuse to even consider Chiodini's motion and give him an opportunity to produce evidence to meet the required burden of proof for a preliminary injunction." He goes on to assert that, if he were to prevail at trial, the court's "affirmative act of refusing to grant [him] a hearing would be a denial of [his] present right to ask that the status quo be preserved, pending a judgment that would eventually be entered in his favor." He asks this court to "reverse the circuit court's ruling and authorize Chiodini to pursue his motion for injunctive relief."
To the extent that Chiodini appeals from the trial court's ruling that denied a hearing on his motion for injunctive relief, such an order is not appealable under Ark. R.App. P.-Civ. 2(a). Under Rule 2(a)(6), an appeal may only be taken from "[a]n interlocutory order by which an injunction is granted, continued, modified, refused, or dissolved, or by which an application to dissolve or modify an injunction is refused." (Emphasis added.) An order denying a hearing, even on a motion for injunctive relief, is not appealable.
Moreover, even if we should consider Chiodini's appeal to be from the denial of his request for injunctive relief, there is no merit to his claims. The issuance of a preliminary injunction is a matter addressed to the sound discretion of the trial court, and we will not reverse absent an abuse of that discretion. See Manila Sch. Dist. No. 15 v. Wagner, 356 Ark. 149, 148 S.W.3d 244 (2004); Custom Microsystems, Inc. v. Blake, 344 Ark. 536, 42 S.W.3d 453 (2001). In determining whether to issue a preliminary injunction, two factors must be considered: (1) whether irreparable harm will result in the absence of an injunction, and (2) whether the moving party has demonstrated a likelihood of success on the merits. Wagner, supra.
Nowhere in his motion before the trial court did Chiodini address either of these two prerequisites to obtaining injunctive relief. In addition, Chiodini's brief before this court makes no mention of either factor, nor does he cite any authority in support of his argument that the trial court should have granted his request for a restraining order.[1] This court has repeatedly held that it will not consider assertions of error that are unsupported by convincing legal authority or argument, unless it is apparent without further research that the argument is well taken. See Hanks v. Sneed, 366 Ark. 371, 235 S.W.3d 883 (2006); Pilcher v. Suttle Equip. Co., 365 Ark. 1, 223 S.W.3d 789 (2006).
Moreover, this court has never wavered in its requirement that the movant for a preliminary injunction prove that there is a likelihood that the movant will succeed on the merits. See Custom Microsystems v. Blake, supra. Because Chiodini has not even so much as suggestedeither below or in this courtthat he will likely prevail *732 upon the merits, it simply cannot be said that the circuit court abused its discretion in denying his request for injunctive relief.
In his second point, Chiodini "claims by writ of certiorari that the trial court substantially misapplied law and rule" when it interpreted Ark. R. Civ. P. 36 in ruling on his discovery requests. A writ of certiorari is appropriate when, on the face of the record, it is apparent that no other remedy is available to correct a plain, manifest, and gross abuse of discretion by the trial judge. See, e.g., Arkansas Dep't of Human Servs. v. Circuit Court of Sebastian Co., 363 Ark. 389, 214 S.W.3d 856 (2005); Lackey v. Bramblett, 355 Ark. 414, 139 S.W.3d 467 (2003). This court has specifically stated that "a writ of certiorari is extraordinary relief, and we will grant it only when there is a lack of jurisdiction, an act in excess of jurisdiction on the face of the record, or the proceedings are erroneous on the face of the record." Arkansas Dep't of Human Servs. v. Collier, 351 Ark. 506, 516, 95 S.W.3d 772, 777 (2003).
In addition, this court has recognized that certiorari is not an appropriate remedy to use to reverse a trial court's discretionary authority. Collier, supra; see also Juvenile H. v. Crabtree, 310 Ark. 208, 833 S.W.2d 766 (1992). Certiorari is appropriate where a party claims that a lower court did not have jurisdiction to hear a claim. Kraemer v. Patterson, 342 Ark. 481, 29 S.W.3d 684 (2000) (emphasis added).
Our court has clearly held that a discovery order is not the proper subject for an extraordinary writ because the trial court's jurisdiction allows it to decide such discovery issues. See Ford Motor Co. v. Harper, 353 Ark. 328, 107 S.W.3d 168 (2003) (Glaze, J., concurring) (citing Lupo v. Lineberger, 313 Ark. 315, 855 S.W.2d 293 (1993)). In Ballard v. Martin, 349 Ark. 564, 79 S.W.3d 838 (2002), this court noted that a trial court has broad discretion in matters pertaining to discovery, and the exercise of that discretion will not be reversed by this court absent an abuse of discretion that is prejudicial to the appealing party.
A writ of certiorari is extraordinary relief. In determining its application we will not look beyond the face of the record to ascertain the actual merits of a controversy, or to control discretion, or to review a finding of fact, or to reverse a trial court's discretionary authority. Jordan v. Circuit Court of Lee County, 366 Ark. 326, 235 S.W.3d 487 (2006) (emphasis added). Because a trial court's discovery ruling is a matter well within the court's jurisdiction and discretion, a writ of certiorari will not lie to correct any perceived error in the court's ruling.
The cases cited by Chiodini deal only with this court's interpretation of the discovery rules. He offers no authority that would support his claim that a writ of certiorari is in any way the appropriate remedy for the trial court's alleged errors. This court has further held that discovery matters are not amenable to interlocutory review. See Arkansas Democrat-Gazette, Inc. v. Brantley, 359 Ark. 75, 194 S.W.3d 748 (2004); Ford Motor Co. v. Harper, supra; Farm Service Co-Op of Fayetteville v. Cummings, 262 Ark. 810, 561 S.W.2d 317 (1978). Although Chiodini concedes that discovery issues are not subject to appeal, he nonetheless suggests that this is "not a typical interlocutory discovery issue." Instead, he argues, the trial court's "clear misapplication of law and rule appear to be a consistent, broad-based, systemic threshold policy of the Sixteenth Judicial Circuit when considering application of Rule 36 to all cases within that Circuit." However, he still cites no authority that would compel a conclusion that a writ of certiorari would be an appropriate *733 remedy in these circumstances. Accordingly, we reject his contentions.
In his final point, Chiodini asks this court to "correct a wholesale catalogue of gross abuses of discretion and legal error... that, if not now addressed, will inevitably require an appeal," and he contends that certiorari should be granted to address a litany of complaints. For example, he contends that it was "error and an abuse of discretion" for the trial court to: 1) rule that Lock's non-compliance with Rule 34 was moot; 2) refuse to deem admitted Lock's response to Chiodini's first request for admissions; 3) rule that an unsigned, and undated, response to Chiodini's first request for admissions was timely, or that there existed excusable neglect for filing a late response; 4) rely on a non-existent prior bench decision as sole authority for his decision; 5) rule that Lock was not required to verify his answers to interrogatories; 6) rule that Lock's responses to Chiodini's second interrogatories were complete, and in compliance with the rule; 7) adopt a previous court's bench decisions and enter those decisions as orders; and 8) sanction Chiodini by prohibiting further discovery.
Again, certiorari is clearly not the appropriate remedy to address these concerns. As Chiodini recognizes, each of these issues could be appealed. Certiorari will only lie when there is no other adequate remedy, such as an appeal, available. See, e.g., Arkansas Game & Fish Comm'n v. Herndon, 365 Ark. 180, 226 S.W.3d 776 (2006). In addition, as discussed above, discovery issues are matters in which the trial court is vested with discretion, and certiorari will not lie to control a trial court's discretion. See Jordan v. Circuit Court of Lee County, supra. Accordingly, we conclude that Chiodini's petition for writ of certiorari is without merit, and the writ is therefore denied.
NOTES
[1] Chiodini does cite Comer v. Woods, 210 Ark. 351, 195 S.W.2d 542 (1946), but he does so only for the proposition that the purpose of an injunction is to afford preventive relief and to maintain the status quo. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578773/ | 281 S.W.3d 286 (2009)
KENTUCKY BAR ASSOCIATION, Movant,
v.
R. Allen McCARTNEY, Respondent.
No. 2009-SC-000016-KB.
Supreme Court of Kentucky.
April 23, 2009.
*287 OPINION AND ORDER
I. Introduction
The Board of Governors of the Kentucky Bar Association (KBA) recommends that Respondent, R. Allen McCartney, KBA Member No. 81530, be permanently disbarred from the practice of law in the Commonwealth of Kentucky. This recommendation stems from the Board of Governors' review of three (3) Charges against McCartney: KBA file numbers 14953, 15694, and 16034. McCartney, who was licensed to practice law in 1986, maintains his Bar Roster Address at 8700 Westport Road, Suite 209, Louisville, Kentucky XXXXX-XXXX. The recommendation also takes into account McCartney's history of discipline, which includes a suspension for non-payment of bar dues entered December 1, 2005; and a one (1) year suspension with conditions entered September 20, 2007. Having reviewed the record and finding that the Board of Governors' findings of fact and conclusions of law are well-taken, we adopt the Board of Governors' recommendations.
II. Background
In each case, the initial complaints sent by certified mail to McCartney's Bar Roster Address were returned as unclaimed. Personal service was then attempted through the Jefferson County Sheriffs Department. Finally, the complaints were served on McCartney via the Executive Director of the KBA pursuant to SCR 3.175(2). When McCartney failed to respond to any of the complaints, the Inquiry Commission issued a Charge in each of the three (3) cases. Following the pattern set out above, repeated attempts to serve McCartney directly with the Charges proved unsuccessful. As a result, the Charges were served on the Executive Director of the KBA. See SCR 3.175(2). McCartney made no answer to any of the Charges.
The history of each of the three (3) Charges is set out below:
KBA File Number 14953
On August 19, 2008, the Inquiry Commission charged McCartney with seven (7) counts of violations of the Kentucky Supreme Court Rules as follows: SCR 3.130-1.3 (lack of diligence); SCR 3.130-1.4(a) (lack of adequate communication with a client); SCR 3.130-1.15(a) (failure to safeguard client funds); SCR 3.130-1.15(b) (failure to provide an accounting of client funds); SCR 3.130-1.16(d) (failure to protect a client's interests upon termination); SCR 3.175(l)(d) (failure to keep a current Bar Roster Address); and SCR 3.130-8.1(b) (failure to respond to an inquiry from a disciplinary authority).
The violations set out in KBA File Number 14953 arose from McCartney's representation of Jennifer Lantz and her husband. McCartney was retained to handle a real estate transaction. McCartney filed suit on behalf of the sellers against the real estate agent and the buyers. In late 2004, mediation led to a settlement with the real estate agent. The settlement *288 check in the amount of $5,000.00 was made payable to the clients and to McCartney. Once the clients negotiated the check, McCartney told them he would place the funds in his escrow account.[1] At that time, McCartney led the clients to believe he would prepare a deed and get it signed so as to transfer the property in question back into their names. There is no indication McCartney ever pursued the claim against the buyers. What is known is that McCartney failed to prepare the deed and he failed to get the property transferred to his clients. However, McCartney did provide Jennifer Lantz and her husband with a bill for $6,025.00.
When no further action took place in the case, the clients requested a refund of the unearned fee and a full accounting. McCartney failed to respond to the request. In September of 2005, the clients sent several e-mails to McCartney requesting that he withdraw from the case, provide a refund of the unearned advance, and provide an accounting. Again, McCartney made no response. On October 4, 2005, the clients sent a certified letter to McCartney's office. However, McCartney never signed for the letter. Finally, on November 15, 2005, the clients went to McCartney's office. Upon arrival, they found the office vacant. The clients were informed by another tenant that McCartney had been gone for four weeks or more.
All totaled, Jennifer Lantz and her husband paid McCartney $10,320.00. They acknowledge receiving a bill for $6,025.00. Further, they admit services may have been provided after the date of the original bill. Yet, McCartney never submitted a bill for the additional funds. To date, McCartney has failed to: (1) refund any unearned portion of the advance; (2) assert any claim to the additional funds; (3) provide an accounting as requested; or (4) communicate with his clients despite repeated attempts on their part to contact him. Further, having abandoned his office (his original Bar Roster Address), McCartney has failed to provide the KBA with a current Bar Roster Address.
KBA Pile Number 15694
On July 11, 2008, the Inquiry Commission charged McCartney with four (4) counts of violations of the Kentucky Supreme Court Rules as follows: SCR 3.130-1.3 (lack of diligence); SCR 3.130-1.4(a) (lack of adequate communication with a client); SCR 3.130-1.16(d) (failure to protect a client's interests upon termination); and SCR 3.130-8.1(b) (failure to respond to an inquiry from a disciplinary authority).
The violations set out in KBA File Number 15694 arose from McCartney's representation of Carl Weiss in defense of a claim of back rent. Weiss retained McCartney on or about May 12, 2005. Weiss paid an advance of $1,000.00. McCartney entered an appearance in the case and filed an Answer on Weiss' behalf. After a long period in which Weiss failed to hear from McCartney, Weiss made several unsuccessful attempts to contact McCartney.
In May of 2006, Weiss was contacted by plaintiffs attorney. The attorney informed Weiss that McCartney had failed to respond to his attempts to communicate with him concerning the case. Further, the attorney informed Weiss that judgment had been entered against him in the amount of $22,000.00. Since filing the Answer, McCartney has failed to provide Weiss with any information concerning the case. In fact, McCartney has made no further contact with Weiss.
*289 Facts later established that McCartney abandoned his office in November of 2005. McCartney took this action without ever informing Weiss of his intent to cease practicing law.
KBA File Number 16034
On July 11, 2008, the Inquiry Commission charged McCartney with five (5) counts of violations of the Kentucky Supreme Court Rules as follows: SCR 3.130-1.3 (lack of diligence); SCR 3.130-1.4(a) (lack of adequate communication with a client); SCR 3.130-1.5 (unreasonable fee); SCR 3.130-1.16(d) (failure to protect a client's interests upon termination); and SCR 3.130-8.1(b) (failure to respond to an inquiry from a disciplinary authority).
The violations set out in KBA File Number 16034 arose from McCartney's representation of Michael Semke in a real estate matter. While the parties agreed Semke would be billed at an hourly rate of $250.00, Semke also made advance payments totaling $3,000.00 in the first three months. After further discussions, Semke agreed to make one payment of $10,000.00 in order to make up the advance required by McCartney. As part of the agreement, McCartney indicated that the $13,000.00 then in his control would be sufficient, with a final balance due at the conclusion of the case. In August of 2005, McCartney contacted Semke and informed him that an additional $10,000.00 advance would be required. When McCartney threatened to leave the case if the payment was not made, Semke agreed to pay an additional advance of $8,500.00.
During this time, a McCartney filed a lawsuit on Semke's behalf. In May of 2005, McCartney informed Semke that one of the defendants had filed for bankruptcy which would cause the case to be delayed. McCartney indicated he would inform Semke when the bankruptcy case was resolved. From that point forward, Semke had only sporadic contact with McCartney. Finally, in September of 2005, Semke met with McCartney. McCartney assured him he would resume work on the case once the bankruptcy was resolved. That proved to be the last contact McCartney had with Semke.
In December of 2005, Semke received notice from the Bankruptcy Court that the action had been dismissed. Semke made attempts to contact McCartney. He received no response to repeated calls to McCartney's cell phone. Further, his e-mails went unanswered and the office phone was disconnected. When Semke failed to hear from McCartney by January of 2006, he went to McCartney's office. Upon arrival, he found the office had been vacated. He was also informed by another tenant that McCartney had left in November of 2005.
Board Action
As McCartney has failed to respond to any of the three Charges brought against him, the Board of Governors heard the case on November 21, 2008, as default cases pursuant to SCR 3.210. With a unanimous vote of 18-0, the Board of Governors found sufficient evidence to find McCartney had committed each of the violations set out in KBA File Numbers 14953, 15694, and 16034. In considering the appropriate penalty, the Board of Governors reviewed McCartney's past discipline. In light of the totality of the circumstances, a motion was made and seconded to recommend permanent disbarment. The Board of Governors adopted the motion by a vote of 18-0.
III. Conclusion
Given McCartney's actions in the three Charges making up this case, as well as his past disciplinary history for improper conduct, *290 we believe the Board of Governors' recommendation of permanent disbarment is fully justified. McCartney has not sought review under SCR 3.370(8), nor do we elect to review the decision of the Board of Governors under SCR 3.370(9). Therefore, the decision of the Board of Governors is adopted in accordance with SCR 3.370(10).
ACCORDINGLY, IT IS HEREBY ORDERED THAT:
(1) R. Allen McCartney, KBA Member No. 81530, is permanently disbarred from the practice of law in the Commonwealth of Kentucky.
(2) McCartney, in accordance with SCR 3.390, shall, within ten (10) days from the entry of this Opinion and Order: notify all clients, in writing, of his inability to represent them; notify all courts, in writing, in which he has matters pending, of his disbarment from the practice of law; and furnish copies of said letters of notice to the Executive Director of the KBA. Further, to the extent possible, McCartney shall immediately cancel and cease any advertising activities in which he is engaged.
(3) In accordance with SCR 3.450, McCartney is directed to pay all costs associated with these disciplinary proceedings in the amount of $1,062.36, for which execution may issue from this Court upon finality of this Opinion and Order.
All sitting. All concur.
ENTERED: April 23, 2009.
/s/ John D. Minton Jr.
Chief Justice
NOTES
[1] This $5,000.00 was added to an advance of $5,320.00 already paid to McCartney. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578777/ | 281 S.W.3d 103 (2008)
F-STAR SOCORRO, L.P., F-Star Property Management, Inc., JNY, L.P., JNY II, L.P., and F-Star Management, L.L.C., Appellants,
v.
The CITY OF EL PASO, Appellee.
No. 08-06-00009-CV.
Court of Appeals of Texas, El Paso.
July 3, 2008.
*104 Randy Lee, Midland, for appellants.
Carmen I. Perez, Delgado, Acosta, Spencer, Linebarger & Perez, LLP, El Paso, for appellee.
Before CHEW, C.J., McCLURE, and CARR, JJ.
OPINION
DAVID WELLINGTON CHEW, Chief Justice.
The City of El Paso ("the City") brought suit to recover unpaid property taxes from *105 Appellants F-Star Socorro, L.P., F-Star Property Management, Inc., JNY, L.P., JNY II, L.P., and F-Star Management, L.L.C.[1] The City introduced into evidence a certified tax statement showing the amount owed by F-Star for the year 2002. The trial court decided the case in favor of the City, using the amount of delinquent taxes and the amount of abstractor's fees listed in the certified tax statement. F-Star appealed the trial court's ruling, raising six issues on review. We affirm the trial court's judgment.
The City alleged that over $700,000 in taxes were delinquent on 145 acres of land owned by F-Star for the years 1994-1997 and 2001-2002. F-Star filed a general denial. A bench trial was held on August 19, 2005.
The City introduced into evidence a certified tax statement showing the amount due for 2002 taxes assessed against a portion of F-Star's property. According to the statement, F-Star owed the City $516,543.90 on the property as of October 2002. The statement was prepared on August 19, 2005, the date of trial. The statement was signed by Juan Sandoval, the tax assessor-collector of the City of El Paso, and both pages of the statement bear his office's seal. F-Star objected to the statement's admission, arguing that the statement was not properly authenticated and that it was prepared for litigation. The trial court admitted the statement over F-Star's objection.
The trial court found in favor of the City, ordering F-Star to pay the City $552,617.24 in delinquent taxes. According to the trial court's findings of fact, $506,796.86 of those taxes came from the year 2002, while the rest came from the years 1994-1997. The trial court also ordered F-Star to pay the City $1,667 in abstractor's fees.
F-Star raises six issues on appeal. In Issue One, F-Star argues that the trial court erred in granting judgment for the City because there was no competent evidence indicating that F-Star owed $506,796.86 in property taxes for the year 2002. In Issue Two, F-Star argues that the trial court erred in admitting the certified tax statement into evidence because the statement was inadmissible hearsay. In Issues Three and Four, F-Star argues that the trial court failed to consider evidence that F-Star paid its taxes in full in November 2003, as well as evidence of tax abatements that should have reduced the amount of property tax owed. In Issues Five and Six, F-Star argues that the trial court erred in granting judgment for the City for additional collection expenses, because there was no evidence that the City was entitled to these expenses.
Certified Tax Statement
In its first two issues, F-Star argues that the certified tax statement was inadmissible hearsay, and that there was no evidence supporting the trial court's judgment for property taxes from 2002.
If an appellant challenges the legal sufficiency of the evidence to support a finding on which it did not have the burden of proof at trial, the appellant must demonstrate that no evidence exists to support the trial court's finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983). In conducting a no-evidence review, the appellate court should view the evidence in a light that tends to support the finding of the disputed fact and disregard all evidence and inferences to the contrary. Bradford v. Vento, 48 S.W.3d 749, 754 (Tex.2001). An appellate court will sustain *106 a legal-sufficiency on "no-evidence" challenge if the record shows: (1) the complete absence of a vital fact; (2) the court is barred by rules of law on evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a scintilla; or (4) the evidence establishes conclusively the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex.2005).
We review a trial court's evidentiary rulings under an abuse-of-discretion standard. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). The test for abuse of discretion is whether the trial court acted without reference to any guiding principles, i.e. whether it acted in an arbitrary and unreasonable manner. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex. 1985). An appellate court must uphold the trial court's evidentiary ruling if there is any legitimate basis for the ruling. Owens-Corning, 972 S.W.2d at 43. Moreover, an appellate court should not reverse a trial court's evidentiary ruling unless the error probably caused the rendition of an improper judgment. See Tex.R.App.P. 44.1(a)(1).
Rule 803(8) of the Texas Rules of Evidence permits public records to be admitted into evidence, even though they are hearsay. Tex.R.Evid. 803(8). Rule 803(8)(C) permits admission of public records that set forth "factual findings resulting from an investigation made pursuant to authority granted by law." Tex.R.Evid. 803(8)(C). Normally, even admissible evidence must be independently authenticated or identified. Tex.R.Evid. 901. However, there are exceptions for documents that are considered self-authenticating, including public records bearing a signature and the seal of any department or subdivision of the United States. Tex.R.Evid. 902(1), 902(4).
F-Star argues that the certified tax statement is not a public record under Rule 803(8) of the Texas Rules of Evidence. F-Star does not explain why the statement is not one of the three types of admissible public documents listed in Rule 803(8). Instead, F-Star argues that the statement "was prepared for the sole purpose of litigation. . . ." But delinquent-tax records may be admitted even if they are prepared solely for the purpose of litigation, as long as they are properly authenticated. Flowers v. Lavaca County Appraisal Dist., 766 S.W.2d 825, 829 (Tex. App.-Corpus Christi 1989, writ denied). The findings in the certified tax statement appear to result from the tax assessor-collector's investigation of F-Star, as outlined in Rule 803(8)(C). Therefore, we find that the certified tax statement is a public record under the terms of Rule 803(8).
F-Star also argues that the certified tax statement does not meet the self-authentication requirements of Rule 902. In its brief, F-Star states that "[t]here is no seal on" the statement. In fact, the seal of the Office of the assessor-collector of the City of El Paso appears on both pages of the statement. Granted, the seal is somewhat faint, so it does not appear on photocopies of the statement. But on the original statement supplied by the City, the seal is quite visible and tactile. Moreover, the first page of the statement bears the signature of Juan Sandoval, the tax assessor-collector of the City of El Paso. The statement also certifies that Mr. Sandoval is the custodian of the City's tax records. We find that the certified tax statement meets the self-authentication requirements of Rule 902, and that the trial court did not abuse its discretion by admitting it.
*107 The proper admission of the certified tax statement refutes F-Star's argument that there was no evidence supporting the trial court's finding of delinquent property taxes from 2002. A delinquent-tax roll or a certified copy of a delinquent-tax roll constitutes prima facie evidence that the amount of tax alleged to be delinquent is the correct amount. Tex.Tax Code Ann. § 33.47 (Vernon 2008). The certified tax statement in this case is a record of delinquent taxes, constituting prima facie evidence that F-Star owed property taxes for 2002. Therefore, we find that there was some evidence to support the trial court's judgment on those taxes. Accordingly, Issues One and Two are overruled.
Collection Expenses
In Issues Five and Six, F-Star argues that there is no admissible evidence that the City is entitled to additional collection penalties under Section 33.07(a) of the Tax Code.
Section 33.07(a) permits a taxing authority to collect an additional penalty for delinquent taxes when the authority contracts with an attorney in order to collect the taxes. Tex.Tax Code Ann. § 33.07(a). The amount is limited to the amount of compensation specified in the contract between the attorney and the taxing authority. Id.
Under Section 33.47(a), a copy of a delinquent-tax record constitutes prima facie evidence that: (1) the taxing authority "has complied with all requirements of law;" (2) the listed amount of delinquent taxes is correct; and (3) the listed amount of penalties and interest due on the tax is correct. Id. at § 33.47(a). In other words, when a taxing authority introduces a copy of its delinquent-tax record, it establishes its prima facie case as to every material fact necessary to establish its cause of action. Davis v. City of Austin, 632 S.W.2d 331, 333(Tex.1982).
We assume that, in Issues Five and Six, F-Star is referring to the $1,667 in abstractor's fees that the trial court assessed in addition to the $506,796.86 in property taxes from 2002. $1,667 is the amount listed in the "Abstract Fees" row of the certified tax statement, discussed above. F-Star seems to proceed from the assumption that the statement was inadmissible, as they do not mention the statement in this section of their brief.
As discussed above, we find that the trial court properly admitted the certified tax statement into evidence. We also find that the certified tax statement constituted prima facie evidence that the City complied with the statutory requirements of Section 33.07(a). Likewise, the statement constituted prima facie evidence that $1,667 was the correct amount of abstractor's fees to be assessed against F-Star. Therefore, there was some evidence that the City was entitled to $1,667 in abstractor's fees. Accordingly, Issues Five and Six are overruled.
Payment and Offset Defenses
In Issue Three, F-Star argues that the trial court erred in its ruling because F-Star paid its 2002 property taxes in full in November 2003. In Issue Four, F-Star argues that the trial court erred in its ruling because the City, in its calculations, failed to consider abatement agreements between F-Star and various taxing authorities.
Payment is an affirmative defense under the Texas Rules of Civil Procedure. Tex.R.Civ.P. 94. The right to an offset of payment is also an affirmative defense. Brown v. American Transfer & Storage Co., 601 S.W.2d 931, 936 (Tex. 1980); Columbia Medical Center of Las *108 Colinas v. Bush ex rel. Bush, 122 S.W.3d 835, 862 (Tex.App.-Fort Worth 2003, pet. denied). An affirmative defense must be pled in a responsive pleading, or the defense will be waived. First Nat'l Bank in Dallas v. Zimmerman, 442 S.W.2d 674, 675-76 (Tex.1969). Moreover, if a defendant wishes to allege payment as an affirmative defense, Rule 95 requires him to "file with his plea an account stating distinctly the nature of such payment, and the several items thereof; failing to do so, he shall not be allowed to prove the same. . . ." Tex.R.Civ.P. 95.
In this case, F-Star filed only a general denial; it did not allege payment or offset in any responsive pleading. Therefore, we find that F-Star waived its payment and offset defenses. Accordingly, Issues Three and Four are overruled.
Having overruled each of Appellants' issues for review, we affirm the trial court's judgment.
NOTES
[1] We will refer to Appellants collectively as "F-Star." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3767992/ | This Court, sua sponte, dismisses the above-captioned appeal for failure to prosecute. See Judgment Entry. | 01-03-2023 | 07-06-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/1578680/ | 281 S.W.3d 268 (2008)
Talideen Tramal DAVENPORT, Appellant,
v.
STATE of Arkansas, Appellee.
No. CR 07-1086.
Supreme Court of Arkansas.
March 20, 2008.
*269 James Law Firm, by: William O. "Bill" James, Jr., Little Rock, AR, for appellant.
Dustin McDaniel, Att'y Gen., by: Laura Shue, Ass't Att'y Gen., for appellee.
PAUL E. DANIELSON, Justice.
Appellant Talideen Tramal Davenport appeals from his convictions for capital murder and three counts of unlawful discharge of a firearm from a vehicle and his sentence to life imprisonment without parole plus fifteen years. His sole point on appeal is that the circuit court erred in denying his motions for directed verdict. We affirm Davenport's convictions and sentence.
A review of the record reveals that on October 2, 2005, four teenagers, T.N., L.R., J.R., and J.S., stopped for gas at a gas station in Little Rock. While the driver, T.N., was pumping gas, a blue Jeep Cherokee pulled next to the teens' car. Comments were exchanged between the occupants of the two vehicles, and a gun was fired, killing L.R. Davenport was arrested and, ultimately, was convicted of capital murder and three counts of unlawful discharge of a firearm from a vehicle and was sentenced as already set forth.
Davenport argues that the circuit court erred in denying his motions for directed verdict because the State did not provide substantial evidence that Davenport himself discharged a firearm from a vehicle and committed murder. He asserts that the only evidence presented at trial that he was the shooter was the testimony of T.N., J.R., and J.S. He contends that their in-court identifications of him were so unreliable and clearly unbelievable that this court should ignore them and overturn his conviction.
The State responds that substantial evidence supported Davenport's identity as the shooter. It contends that viewing the evidence in the light most favorable to it, the facts were of sufficient force and character to compel a conclusion beyond suspicion or conjecture that Davenport was the shooter. It further submits that to the extent that Davenport challenges the reliability of the identifications, that was for the jury to decide, as Davenport did not argue to the circuit court that the in-court identifications were constitutionally infirm, nor did he object or move to suppress the identifications, waiving any issue relating to any alleged defects.
We treat a motion for directed verdict as a challenge to the sufficiency of the evidence. See Tryon v. State, 371 Ark. 25, 263 S.W.3d 475 (2007). When reviewing the sufficiency of the evidence, we determine whether there is substantial evidence to support the verdict, viewing the *270 evidence in a light most favorable to the State. See id. Substantial evidence is that which is of sufficient force and character that it will, with reasonable certainty, compel a conclusion one way or the other, without resorting to speculation or conjecture. See id.
Here, Davenport does not challenge the State's proof on any of the elements of the offenses charged against him, but instead urges that his motions for directed verdict should have been granted due to the fact that the witnesses' in-court identifications of him were so unreliable and unbelievable. We have held that the credibility of witnesses is a matter for the jury's consideration. See Boyd v. State, 369 Ark. 259, 253 S.W.3d 456 (2007). Where the testimony is conflicting, we do not pass upon the credibility of the witnesses and have no right to disregard the testimony of any witness after the jury has given it full credence, where it cannot be said with assurance that it was inherently improbable, physically impossible, or so clearly unbelievable that reasonable minds could not differ thereon. See Barnes v. State, 258 Ark. 565, 528 S.W.2d 370 (1975).
Here, T.N. identified Davenport, at trial, as being the one that he saw with the gun on the evening in question. He stated that he was positive that Davenport was the one and that, at the time, Davenport was partially in the Jeep Cherokee:
PROSECUTOR: How certain are you of that?
T.N.: Positive, because I seen him, he opened the door, he stepped on-he was inside the door [of the Jeep Cherokee], he stepped on a little ledge right there. He was pointing the gun over on the Jeep.
PROSECUTOR: Let me ask you this, was he was his body all still in the car?
T.N.: Like half. His legs his leg was in the car.
PROSECUTOR: His legs were in the car?
T.N.: Upper body was above.
PROSECUTOR: How did he get out and shoot?
T.N.: He got up, stepped up over there, leaned over the car like this and shot.
T.N. testified that as he drove off, J.S. jumped out of the car and ran the other way. T.N. testified that the other vehicle chased after J.S., shooting at him. He testified that L.R. had fallen into his lap and that he thought she had been shot.
T.N. testified that while he made an identification from a photo spread shown to him by police, he "wasn't sure it was the person." He then confirmed that, when he saw Davenport in the courtroom that day, he knew Davenport was "the guy" "because I felt and I seen his face and I remember his face because I had when she told me it was a gun, he had a gun, I had looked up and looked him dead in his eyes and I seen him." T.N. further stated that Davenport looked as if he had lost a "little weight" since the night in question, that his face was "still the same," and that he had a "lot more hair on his head." On cross-examination, T.N. testified that he recognized Davenport "when I walked in the door [of the courtroom]" and that he was "positive" that it was him. On redirect, he testified that it was not possible that he could be mistaken as to Davenport being the shooter because he remembered his face and was never going to forget it.
J.R. also testified that the shooter stood on a "little rail or something" of the Jeep Cherokee "up in the truck" and pointed his gun. She testified that when he started shooting, they "all held our head down." She admitted that two weeks after going to the police station, she could not pick anyone out of a photo spread presented to her by the police. She then stated that *271 she recognized the shooter when she came to court on that day:
PROSECUTOR: You thought you were justlet me back up. You thought you were going to introduce yourself to the ladies and gentlemen of the jury. You didn't think anyone was going to be in here at that time?
J.R.: No, ma'am, I didn't think so.
PROSECUTOR: Okay. All right.
J.R.: And so when I came in, and then I and then I looked that way and I saw when he bit his lip and that made me think about when he was shooting the gun, he was biting his lip.
PROSECUTOR: Okay.
J.R.: And so that made me think about it and it flashed back.
PROSECUTOR: Who are you talking about?
J.R.: The shooter.
PROSECUTOR: Who is that? Who is it?
J.R.: Him right there.
PROSECUTOR: Where is he sitting?
J.R.: (Witness pointing.)
PROSECUTOR: Okay. All right. Let me ask you something. Are you pointing to him just because he's black?
J.R.: No.
PROSECUTOR: Are you sure?
J.R.: Yes. Yes, ma'am.
PROSECUTOR: Are you pointing to him because you feel like you're under pressure? And I want you to be honest with these people.
J.R.: No. I actually, I just I remember [sic] this part right here. I remember like his nose and from him biting his lip. And when he bit his lip as I walked in[to the courtroom], that made me think about it.
PROSECUTOR: And you say he was biting his lip as he was shooting?
J.R.: And it flashed back. Yes, ma'am.
PROSECUTOR: You remember?
J.R.: Yes, ma'am, he was biting his lip when he was shooting.
On cross-examination, J.R. confirmed that she told police that as soon as she saw the gun, she "ducked [her] head."
Finally, J.S. testified that the shooter "hung out of the car and started shooting." He testified that he had "peeped" at the shooter's face, seen him, and took off running. He testified that a few weeks after the shooting, he returned to the police station to look at some pictures, but could not pick the shooter out of them. He testified that the next time he saw the shooter, other than the night of the shooting, was when he came for a hearing with L.R.'s mother, his godmother. He stated that a "whole bunch of inmates" were on one row with people on both sides and that when he walked in, "it just hit [him] all over again like he was right there shooting[.]" J.S. testified that after he left the courtroom that day, he did not see the shooter again. He then identified Davenport as the shooter. He stated that he was "a hundred percent" certain that Davenport was the person who shot at the teens' car. He then testified that he was never going to forget the face that was shooting at him and killed his godsister.
In addition to the three teens' testimony set forth above, further evidence was presented that pointed to Davenport as the shooter. A.H. testified that she was at the gas station at the time of the shooting, having arrived in a separate car from that of the teens' or Davenport. She testified that while walking toward the gas station to use the restroom, she overheard "words," then saw the gun, and began running back towards her car. She admitted knowing Davenport as "Fat Boy." She further admitted that in her statement to police, she acknowledged that "Fat Boy" also went by the name of "Todd." She *272 admitted that she picked him out of a photo spread presented to her by the police. At the time of trial, however, she said that she did not know if Davenport was the shooter and that she did not see his face. She did, nonetheless, admit that she told the police that he was the person shooting at the car:
PROSECUTOR: Is he the person that was shooting at that car?
A.H.: I don't I don't know.
PROSECUTOR: I don't know.
A.H.: I didn't see his face.
PROSECUTOR: Okay. Did you would you agree with me that you told the police that he was?
A.H.: Yes.
PROSECUTOR: You did tell the police
A.H.: Yes, I did.
PROSECUTOR: that he was the person?
A.H.: I told them that, yes, that day.
A.H. then testified that she lied to police because she felt pressured to do so.
Joseph Ramey also testified. He testified that he was currently incarcerated in the Arkansas Department of Correction (ADC) for a sentence of sixty years. He acknowledged that he approached the prosecutor about Davenport and that, in exchange for Ramey's testimony, the prosecutor would send a letter to the parole board or the judge informing them about his cooperation in the case and would send a letter to ADC asking it to keep him housed at a certain unit. He testified that, while housed with Davenport at the county jail, Davenport told Ramey that he needed to lose weight so he would not "look like Fat Boy." He further testified that Davenport gave his food away every day and that Davenport showed him the police files in his case, which Davenport had acquired through discovery.
Ramey testified that Davenport showed him in the police files where A.H. initially told police that she thought Davenport was the shooter and where she later stated that "it was definitely him." He stated that Davenport told him that "[h]e was trying to come up with a way to get her to change her story to say that she was drunk when she made the statement." He further stated that Davenport told him that "he had sent an affidavit to his brother and for her to fill out and send back, telling her what to say on the affidavit, changing her mind." Finally, Detective Eric Knowles testified that, when he arrested Davenport in connection with L.R.'s murder, "he was heavier-set at the time that he was arrested[.]"
Based on the foregoing, we hold that there was substantial evidence to support the jury's verdicts, as the jury clearly found the witnesses and their identifications of Davenport credible. As the State points out, Davenport did not challenge or object to the witnesses' in-court identifications when they were made, but instead attempted to discredit their testimony on cross-examination, as he was permitted to do by the circuit court.[1] Moreover, he merely challenges the witnesses' in-court identifications in the context of his challenge to the sufficiency of the evidence.[2]*273 Here, there were three eyewitnesses who testified, identifying Davenport as the shooter, as well as another eyewitness's testimony that she initially identified him as the shooter and later changed her story. We have held that the testimony of one eyewitness alone is sufficient to sustain a conviction. See Luckey v. State, 302 Ark. 116, 787 S.W.2d 244 (1990). Furthermore, the jury is free to believe all or part of any witness's testimony and may resolve questions of conflicting testimony and inconsistent evidence. See White v. State, 370 Ark. 284, 259 S.W.3d 410 (2007). For these reasons, we affirm.
In compliance with Ark. Sup.Ct. R. 4-3(h), the record has been examined for all objections, motions, and requests made by either party that were decided adversely to Davenport, and no prejudicial error has been found.
Affirmed.
NOTES
[1] Pretrial, defense counsel made a comment to the circuit court regarding the possibility of in-court identifications; however, no specific objection was made, and the circuit court stated that it would allow the defense to "take care of that on your cross-examination." A review of the record reveals that no objection was made during any of the witnesses' testimony challenging their in-court identifications.
[2] In his brief, Davenport cites to factors he asserts are used by this court to determine the reliability of an in-court identification. However, that analysis is used where a challenge has been made to the admissibility of a pretrial identification as unduly suggestive. See, e.g., Bohanan v. State, 324 Ark. 158, 919 S.W.2d 198 (1996). There was no pretrial identification challenged in the instant case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578703/ | 281 S.W.3d 736 (2008)
STATE of Arkansas, Appellant/Cross-Appellee,
v.
Gloria Jean CRAWFORD, Appellee/Cross-Appellant.
No. CR 07-919.
Supreme Court of Arkansas.
April 3, 2008.
*737 Dustin McDaniel, Att'y Gen., by: David R. Raupp, Sr. Ass't Att'y Gen., for appellant.
Rieves, Rubens & Mayton, by: Kent J. Rubens; and Dudley & Compton, by: Cathleen V. Compton, Little Rock, for appellee.
DONALD L. CORBIN, Justice.
A felony charge against Appellee Gloria Jean Crawford was dismissed by the Van Buren County Circuit Court because the State had previously nol-prossed a charge for the same offense pursuant to a plea agreement. The State appeals this dismissal. Crawford cross-appeals that the refiling of the felony charge violated her right to a speedy trial. This appeal by the *738 State involves a perceived inconsistency in the decisions of this court. Thus, our jurisdiction is pursuant to Ark. Sup.Ct. R. 1-2(b)(2) and Ark. R.App. P.-Crim. 3.
On March 18, 2005,[1] Crawford was charged with one felony count of possession of a controlled substance with intent to deliver in violation of Ark.Code Ann. § 5-64-401 (Repl.2005) and 163 misdemeanor counts of cruelty to animals in violation of Ark.Code Ann. § 5-62-101 (Repl.2005). On August 25, 2005, the circuit court accepted a negotiated plea agreement where Crawford pled guilty to the misdemeanor charges, and the State nol-prossed the felony charge. Crawford received a twelve-month suspended sentence upon the condition that she (1) pay a fine, court costs, and warrant service fee; (2) allow the Van Buren Animal Control Officer to inspect her property up to twice monthly; (3) submit to psychiatric testing and treatment, and provide a report of such to the prosecuting attorney's office within six months; and (4) serve 300 hours of community service, remain on good behavior, and commit no criminal acts for twelve months. She was also ordered to forfeit the animals seized from her property to Van Buren County.
On April 3, 2007, because Crawford had failed to comply with the terms of her suspended sentence, the State refiled the felony information charging Crawford with possession of a controlled substance with intent to deliver. On April 23, 2007, Crawford filed a motion to dismiss, arguing that the State was barred from refiling this charge because it had previously been nol-prossed as part of a plea bargain. Crawford additionally argued that the refiling of this charge violated her right to a speedy trial, constituted prosecutorial bad faith and vindictiveness, and violated due process.
The circuit court granted Crawford's motion to dismiss, concluding that pursuant to State v. Gaddy, 313 Ark. 677, 858 S.W.2d 81 (1993), when a charge is nol-prossed pursuant to a plea agreement, the State cannot later refile the charge. Additionally, the circuit court found that Crawford's speedy-trial right had not been violated as the State had good cause to nolle prosequi the 2005 felony charge. Thus the time between dismissal and refiling of the 2005 felony charge was tolled pursuant to Ark. R.Crim. P. 28.3(f). The due process and prosecutorial vindictiveness claims were rendered moot. The State appealed dismissal of the felony charge, and Crawford cross-appealed the speedy-trial ruling. On direct appeal, we reverse. On cross-appeal, we affirm.
The State's ability to appeal is not a matter of right; rather it is limited to those cases described under Ark. R.App. P.-Crim. 3. Thomas v. State, 349 Ark. 447, 79 S.W.3d 347 (2002); State v. Guthrie, 341 Ark. 624, 19 S.W.3d 10 (2000). Under Rule 3, we accept appeals by the State when our holding would establish important precedent or would be important to the correct and uniform administration of the criminal law. Id. The issue raised by the State in this case concerns the State's ability to refile a criminal charge that had been previously nol-prossed pursuant to a plea agreement. Resolution of this issue involves the correct interpretation of our criminal rules with widespread ramifications. Accordingly, we accept jurisdiction of the State's appeal.
*739 In this case, the State contends that it was error for the circuit court to dismiss the previously nol-prossed felony charge against Crawford based on its interpretation of Gaddy that where a charge is nol-prossed pursuant to a plea agreement it cannot later be refiled. We agree with the State.
It is well settled that dismissal of a charge by nolle prosequi does not bar a subsequent prosecution for the same offense. See Ark.Code Ann. 16-89-122 (Repl.2005); Branning v. State, 371 Ark. 433, 267 S.W.3d 599 (2007); Halton v. State, 224 Ark. 28, 271 S.W.2d 616 (1954); McKinney v. State, 215 Ark. 712, 223 S.W.2d 185 (1949).
Crawford argues that she pled guilty to the 163 misdemeanor counts of animal cruelty in exchange for the State agreeing to dismiss the felony charge of possession of a controlled substance with intent to deliver. She contends that the State is barred from refiling the felony charge because to do so would result in a breach of the plea agreement. Crawford relies on Gaddy, 313 Ark. 677, 858 S.W.2d 81, and Halton, 224 Ark. 28, 271 S.W.2d 616, in support of this contention. Both cases are distinguishable.
In Gaddy, 313 Ark. 677, 858 S.W.2d 81, this court held that the State could not refile a charge following a nolle prosequi because the nolle prosequi was intended to be an unconditional dismissal of the charge. There, the record reflected that the plea agreement was intended to be an unconditional dismissal. The plea agreement was contingent upon the State nol-prossing one of the charges. The deputy prosecutor testified that she did not anticipate the charges ever being refiled; otherwise she would have asked for an outright dismissal of the case instead of the more customary nolle prosequi. Consequently, because the nolle prosequi was a final resolution of the case, the State could not later refile the charge.
Similarly in Halton, 224 Ark. at 30, 271 S.W.2d at 617, a nolle prosequi order was entered that discharged the defendant from "`all further liability hereunder.'" The circuit court later tried to set aside the nolle prosequi order and schedule the case for trial. On appeal, this court held that where an information or indictment is unconditionally dismissed, it terminates the proceeding and the same cannot be reinstated and prosecution resumed. Id.
In the instant case, however, the matter can be decided as one of law. The record does not reflect that the nolle prosequi was an unconditional dismissal of the felony information against Crawford. Neither does the record reflect that the nolle prosequi was a final disposition of the case. Therefore, Gaddy and Halton are inapplicable, and the State was free to bring a subsequent prosecution on the felony charge.
On cross-appeal, Crawford contends that her right to a speedy trial has been violated because the State refiled the felony charge more than one year after it was originally filed. We do not agree.
Arkansas Rule of Criminal Procedure 28 governs speedy-trial determinations. A defendant must be brought to trial within twelve months of the date of arrest unless there are periods of delay that are excludable under Ark. R.Crim. P. 28.3. See Ark. R.Crim. P. 28.1. If the defendant is not brought to trial within the requisite time, the defendant is entitled to have the charges dismissed with an absolute bar to prosecution. See Ark. R.Crim. P. 30.1.
Where a defendant makes a prima facie showing of a speedy-trial violation, the burden shifts to the State to show that the delay was the result of the defendant's conduct or was otherwise justified. *740 Gamble v. State, 350 Ark. 168, 85 S.W.3d 520 (2002). A prima facie case for a speedy-trial violation is made where there is a period of delay beyond twelve months from the date of the charge. On appeal, we conduct a de novo review to determine whether specific periods of time are excludable under speedy-trial rules. Yarbrough v. State, 370 Ark. 31, 257 S.W.3d 50 (2007).
The filing of a speedy-trial motion tolls the running of the time for a speedy trial under our rules. Id. The time period between the nol-prossing of a charge and its subsequent refiling is also excluded from computing the time for a speedy trial where the charge was nol-prossed for good cause. See Ark. R.Crim. P. 28.3(f); Carter v. State, 280 Ark. 34, 655 S.W.2d 379 (1983). Good cause is demonstrated where the State has good reason to seek the nolle prosequi and there is no indication the State is simply trying to evade the speedy-trial requirement. Carter, 280 Ark. 34, 655 S.W.2d 379.
In the present case, the State had good cause to seek the nolle prosequi pursuant to a plea negotiation, and there is no indication that the State was merely trying to evade the speedy-trial requirement. The time period between the filing of the original felony information[2] and Crawford's motion to dismiss (March 15 or 18, 2005 to April 23, 2007) is at most 770 days. The time period between the nolle prosequi and the refiling of the felony charge (August 25, 2005 to April 3, 2007) is 587 days. Subtracting the nolle prosequi time period from the overall time period, leaves 183 days, which is well within the one-year period of the speedy-trial rule. Because the time period during which the felony charge was nol-prossed was permissibly excluded from the speedy-trial computation, the circuit court did not err in denying Crawford's motion to dismiss on speedy-trial grounds.
Reversed on direct appeal; affirmed on cross-appeal.
NOTES
[1] The original felony information was signed on March 18, 2005. In the circuit court's order granting Crawford's motion to dismiss, the court notes the date of the original felony information to be March 15, 2005. The actual filing date in the record is illegible.
[2] At the time the charge in this case was filed, Arkansas Rule of Criminal Procedure 28.2 provided that the time for speedy-trial calculation began to run on the date the charge was filed, unless the defendant was in custody or on bail prior to the filing of the charge, in which case the time for trial began to run on the date of the arrest. See Ark. R.Crim. P. 28.2. The 2007 amendment to Rule 28.2, effective April 26, 2007, changed the speedy trial start date to the date of arrest, whether the charge is filed before or after that date. See In re Rules of Criminal Procedure, Rule 28.2(a), 369 Ark. Appx. ___ (Apr. 26, 2007). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578721/ | 12 So. 3d 392 (2009)
Stephanie PRESS
v.
LOUISIANA CITIZENS FAIR PLAN PROPERTY INSURANCE CORPORATION.
Brian Nguyen, Individually, and on Behalf of all others Similarly Situated
v.
Louisiana Citizens Property Insurance Corporation a/k/a Louisiana Citizens Coastal Plan a/k/a Louisiana Citizens Fair Plan.
Nos. 2008-CA-1313, 2008-CA-1314.
Court of Appeal of Louisiana, Fourth Circuit.
April 22, 2009.
*393 Mark W. Smith, Mark W. Smith & Associates, PLC, Metairie, Louisiana, for Stephanie Press, Cathy Smith and Gasper Giglio.
John E. Unsworth, Jr., John T. Culotta, Darren A. Patin, Lauren E. Brisbi, Hailey McNamara Hall Larmann & Papale, L.L.P., Metairie, Louisiana, for Louisiana Citizens Property Insurance Corporation.
(Court composed of Judge JAMES F. McKAY III, Judge DENNIS R. BAGNERIS, Sr., Judge ROLAND L. BELSOME).
JAMES F. MCKAY III, Judge.
The defendant, Louisiana Citizens Fair Plan Property Insurance Corporation (Citizens) appeals the trial court's certification of a class action in favor of the plaintiffs, Stephanie Press and other similarly situated policyholders to whom Citizens failed to pay General Contractor Overhead and Profit (GCOP). We affirm.
FACTS AND PROCEDURAL HISTORY
In the wake of Hurricanes Katrina and Rita, Citizens allegedly failed to pay GCOP to a number of its insured policyholders. GCOP is part of the actual cash value payment owed by an insurer to its insured as part of the cost to repair or replace the insured's damaged real property. Historically, it is paid for anticipated coordination and supervision of the various sub-trades at a flat rate of 20% of the total claim.
On June 27, 2006, Stephanie Press filed suit against Citizens on behalf of herself and other similarly situated persons alleging breach of contract and bad faith due to the failure of Citizens to pay them GCOP.[1] The plaintiffs filed a motion for certification of class action which the trial court granted on August 4, 2008. The trial court defined the class as: persons who had a Louisiana Citizens Property Insurance Property Corporation homeowners' insurance policy at the time of Hurricane Katrina and/or Rita; suffered covered damage to structures insured by Citizens homeowners' insurance policy as a result of Hurricane Katrina and/or Rita; Citizens's adjustment identified three or more trades involved in the repairs and payment *394 was based on Citizens's adjustment of damages; and the payment did not include 20% GCOP. Citizens now appeals the trial court's class certification.
DISCUSSION
On appeal, Citizens raises the following assignments of error: 1) the district court erred in granting class certification because the putative class does not meet the "predominance" requirement of La. C.C.P. art. 591(B)(3) and/or FRCP 23(b)(3); and 2) the district court improperly concluded that the purported class could be defined by objective, ascertainable criteria.
The standard of review for class action certifications is bifurcated. The factual findings of the lower court are reviewed under the manifest error/clearly wrong standard, but the trial court's judgment on whether or not to certify the class is reviewed by the abuse of discretion standard. Etter v. Hibernia Corp., XXXX-XXXX (La.App. 4 Cir. 2/14/07), 952 So. 2d 782. When reviewing the trial court's ruling regarding class certification, the appellate court need not consider whether plaintiffs' claims state a cause of action or have substantive merit, or whether plaintiffs will ultimately prevail on the merits. Munsey v. Cox Communications of New Orleans, Inc., XXXX-XXXX (La.App. 4 Cir. 3/20/02), 841 So. 2d 633, 636. Rather, it is the task of the appellate court to examine plaintiffs' legal claims and to determine whether a class action is the appropriate procedural device in light of established Louisiana criteria. Id.
The class action certification procedure is governed by Louisiana Code of Civil Procedure Article 591. La. C.C.P. art. 591 states:
A. One or more members of a class may sue or be sued as representative parties on behalf of all, only if:
(1) The class is so numerous that joinder of all members is impracticable.
(2) There are questions of law or fact common to the class.
(3) The claims or defenses of the representative parties are typical of the claims or defenses of the class.
(4) The representative parties will fairly and adequately protect the interests of the class.
(5) The class is or may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case.
B. An action may be maintained as a class action only if all of the prerequisites of Paragraph A of this Article are satisfied, and in addition:
(1) The prosecution of separate actions by or against individual members of the class would create a risk of:
(a) In consistent 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 other members not parties to the adjudications or substantially impair or impede their ability to protect their individual 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 *395 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 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 the undesirability of concentrating the 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.
In the instant case, the trial court found that the plaintiffs' claims met all of the criteria set forth in La. C.C.P. art. 591(A), i.e., numerosity, commonality, typicality, adequacy of representation, and an objectively definable class. The trial court also found that the elements of predominance and superiority set forth in La. C.C.P. art. 591(B)(3) were satisfied. We agree with the trial court's assessment of these criteria.
Gregory Achee, a supervisor with Central Claims, testified that he supervised 6,000 to 7,000 claims that did not include GCOP. Ellen Legier, another claims supervisor, testified that she estimated about 600 to 1,000 of her adjustments did not include GCOP. Based on this testimony, the class appears to be numerous enough that joinder is not a practical alternative and as such the numerosity requirement for class certification is satisfied.
Common questions of law and fact also exist among class members. The plaintiffs all argue (1) that Citizens was required to pay GCOP to certain insureds, (2) that Citizens did not pay GCOP and (3) that those insureds should be compensated for the damages that resulted from Citizens's failure to pay. Accordingly, the commonality requirement is met.
The requirement of typicality and adequacy of representation are met when the proposed class representatives prove that their claims are a cross-section of the claims of all class members. Cathy Smith testified that she spent $80,000.00 to repair her home but was only paid $55,088.00 by Citizens. These claims are typical of the members of the entire class because they all arise out of Citizens's alleged failure to pay GCOP. Accordingly, the typicality and adequate representation requirements are satisfied.
Although Citizens argues that an insured would not be able to readily determine whether he or she is a member of the class because some estimates do not list GCOP as a line item but include it in the *396 overall cost, that argument is without merit. In the instances where GCOP is not a line item, it can be determined whether GCOP was included by comparing the value at the time of the adjustment with what the insured was actually paid. If the insured was paid 20% above cost, then GCOP was included; if the insured was paid an amount less than cost plus 20%, then GCOP was not included. Accordingly, the class can be defined by objective criteria. Therefore, all the requirements of La. C.C.P. art. 591(A) are met.
The common issue that predominates is whether an insured is entitled to GCOP when the adjustment identifies three or more trades involved in the repairs to the damaged property. The named plaintiffs' and each of the class members' right to recover GCOP derives from the defendant's systematic failure to follow its own policies and guidelines which set forth the requirement to pay GCOP at a flat rate of 20% when the insured's adjustment identified three or more trades involved in the repairs. Accordingly, the "predominance" requirement of La. C.C.P. art. 591(B)(3) is met.
CONCLUSION
For the foregoing reasons, the judgment of the trial court is affirmed. We find no manifest error in the trial court's factual findings and no abuse of discretion in the trial court's determination that this case meets all of the requirements of La. C.C.P. art. 591 for certification of this matter as a class action.
AFFIRMED.
NOTES
[1] The original petition was subsequently amended to add Gaspar Giglio and Cathy Smith, who were also named as class representatives by the district court after hearings and cross-examination by Citizens to evaluate their adequacy as class representatives. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578689/ | 281 S.W.3d 163 (2009)
Merlyn KNAPP, Appellant,
v.
The WILSON N. JONES MEMORIAL HOSPITAL d/b/a Wilson N. Jones Regional Health System, Appellee.
No. 05-07-00507-CV.
Court of Appeals of Texas, Dallas.
February 17, 2009.
Rehearing Overruled May 8, 2009.
*165 David Rankin, Nacogdoches, TX, Kirk L. Pittard, Durham & Pitard, LLP, Dallas, TX, for Appellant.
John B. Kyle, Kim A. Lucas, Kyle, Campbell, Mathis & Lucas, LLP, Dallas, TX, Bruce W. Bowman, Jr., Godwin, Pappas, Langley & Ronquillo, L.L.P., Dallas, TX, for Appellee.
Before Justices MORRIS, FITZGERALD, and LANG.
OPINION ON REHEARING
Opinion by Justice LANG.
After issuing our opinion of August 26, 2008, Merlyn Knapp filed a motion for rehearing. For the reasons stated in this opinion on rehearing, Knapp's motion for rehearing is denied. Also, on the Court's own motion, we withdraw our original opinion of August 26, 2008 and vacate our judgment. This opinion on rehearing is now the opinion of the Court.
Knapp appeals the trial court's final judgment. After a trial, the jury found against Knapp on his claim for breach of contract and in favor of the Wilson N. Jones Memorial Hospital d/b/a Wilson N. Jones Regional Health System (WNJ) on its counterclaims for breach of contract, *166 breach of fiduciary duty, fraud, and negligence. WNJ was awarded $101,569 in damages, $939,000 in attorneys' fees, and $30,074.72 in prejudgment interest.
In six issues,[1] in his brief on appeal, Knapp argues: (1) the evidence is legally and factually insufficient to support the jury finding against him for breach of contract; (2) the trial court erred when it ruled not discoverable (a) the WNJ board meeting minutes and financial documents because they were privileged and (b) the documents and depositions relating to WNJ's arbitration proceedings against Ernst & Young, L.L.P., because they were confidential; (3) the trial court erred when it ruled the following were not admissible at trial (a) the WNJ board meeting minutes and (b) the arbitration statement and award; (4) the trial court erred when it instructed the jury it could consider post-termination, after-acquired evidence when determining whether Knapp was terminated for cause; (5) the trial court erred when it denied Knapp's request for the damages against him to be offset by the amount awarded to WNJ in the arbitration proceeding; and (6) the trial court erred when it denied Knapp's post-verdict motion for leave to file an amended pleading because the parties had agreed to submit the issue of offset to the trial court.
The portion of the trial court's final judgment ordering that Knapp take nothing as to his breach of contract claim against WNJ is affirmed. The portion of the trial court's final judgment awarding judgment to WNJ on its counterclaims against Knapp is reversed. The cause is remanded for further proceedings consistent with this opinion.
I. FACTUAL AND PROCEDURAL BACKGROUND
WNJ terminated the employment of Knapp, its chief financial officer. According to Knapp's employment agreement he was entitled to severance benefits, unless he was terminated for cause. After Knapp was first notified of his termination, he demanded severance benefits. Then, WNJ claimed it discovered evidence of unauthorized bonuses to hospital employees, a loan made by Knapp on WNJ's behalf to a supplier, which was not disclosed to the board, and the write-off of that loan. The board of directors informed Knapp his termination was for cause. Based on the evidence of unauthorized bonuses, and the undisclosed loan and write-off, the board of directors pursued claims against Ernst & Young, its auditors, through arbitration and obtained an arbitration award.
Knapp sued WNJ for breach of contract, theft and conversion, and fraud, alleging WNJ failed to pay his contractual severance benefits. WNJ asserted, as a defense, it was not liable because it had cause to terminate Knapp and the after-acquired evidence doctrine permitted WNJ to use the evidence acquired after Knapp's termination to establish it had cause to terminate him. WNJ moved for partial summary judgment on Knapp's claims for theft and conversion, and fraud, which the trial court granted.
After partial summary judgment was granted, WNJ filed counterclaims for breach of contract, breach of fiduciary duties, negligent misrepresentation, conversion, gross negligence, and fraud. WNJ alleged Knapp participated in funding a loan without the board's approval, participated *167 in a fraudulent scheme to pay bonuses to himself and other employees in excess of the bonuses authorized by the board, and mismanaged the financial affairs of WNJ by authoring monthly and annual financial reports that misstated the financial condition of WNJ.
Before trial, there were several discovery disputes as to whether certain documents were protected by the attorney-client privilege and the documents respecting the arbitration with Ernst & Young were confidential. Knapp was denied discovery of these documents, with the exception that he was permitted to discover the arbitration award and arbitration statement of claims filed by WNJ in the arbitration. After the trial, the jury found against Knapp on his claim for breach of contract and in favor of WNJ on its counterclaims.
II. KNAPP'S CLAIM FOR BREACH OF CONTRACT
Knapp does not specify which issues relate to his claim for breach of contract against WNJ. However, we construe the first part of issue two, the first part of issue three, and issue four in Knapp's brief on appeal as pertaining to the portion of the trial court's take-nothing judgment on Knapp's claim against WNJ for breach of contract.[2]
A. Discovery of the Privileged Documents
In the first part of issue two in his brief on appeal, Knapp argues the trial court erred when it ruled the WNJ board meeting minutes and financial documents were privileged. In the first part of issue three in his brief, Knapp argues the trial court erred when it ruled the WNJ board meeting minutes were not admissible at trial.
During the course of discovery, WNJ withheld certain documents and redacted portions of documents based on the attorney-client privilege. On January 21, 2005, Knapp filed a motion to compel, requesting the trial court to order WNJ to produce unredacted copies of the documents. WNJ submitted these documents to the trial court for an in camera inspection. The trial court denied Knapp's motion to compel, concluding the documents were protected by the attorney-client privilege and the privilege had not been waived by offensive use.[3]
*168 On April 25, 2005, Knapp filed a motion for reconsideration of the order denying his motion to compel unredacted copies of the board of director and audit/finance committee meeting minutes. On August 28, 2005, Knapp filed a motion to compel the meeting minutes for reasons of crime fraud. On September 21, 2005, WNJ filed a motion for the return of privileged documents belonging to WJN and for sanctions, arguing the privileged documents were also submitted for in camera review in a separate suit WNJ filed against its chief executive officer, but the clerk failed to segregate the privileged documents and placed them in the main file. WNJ claimed it learned of the clerk's error when Knapp's counsel attached copies of the privileged documents to Knapp's motions.
On November 2, 2005, the trial court held a hearing on Knapp's motion for reconsideration and motion to compel for reasons of crime fraud, and WNJ's motion to return privileged documents belonging to WJN. After the hearing, the trial court denied Knapp's motions and granted WNJ's motion to enforce, requiring Knapp to return the privileged documents to the trial court in a sealed envelope within seven days.
On February 15, 2006, Knapp filed a petition for a writ of mandamus challenging the trial court's orders. While Knapp's petition for a writ of mandamus was pending, WNJ filed, in the trial court, a motion to enforce the trial court's November 2, 2005 order, which required Knapp to return the privileged documents to WNJ. On March 6, 2006, this Court denied Knapp's petition for a writ of mandamus. See In re Knapp, No. 05-06-00202-CV, 2006 WL 531287 (Tex.App.-Dallas Mar. 6, 2006, orig. proceeding [mand. denied]) (mem. op.).[4]
*169 On April 27, 2006, after a hearing, the trial court granted WNJ's motion to enforce and for sanctions.[5] The trial court imposed the following sanctions: (1) fined Knapp's counsel $12,500; (2) sealed all documents the trial court previously found to be privileged; (3) prohibited Knapp from using or attaching any of the privileged documents in any manner during the pendency of the case; (4) prohibited Knapp from using any of the privileged documents, even if the documents were determined not to be privileged on appeal; and (5) prohibited Knapp and his counsel from disclosing the privileged documents or their content. Knapp filed a second petition for a writ of mandamus challenging the trial court's April 27, 2006 order imposing sanctions. On June 13, 2006, this Court denied Knapp's second petition for a writ of mandamus. See In re Knapp, No. 05-06-00741-CV, 2006 WL 1624490 (Tex. App.-Dallas Jun.13, 2006, orig. proceeding).
On appeal, Knapp argues the trial court erred when it denied his motions to compel and motion to reconsider, which concluded the documents were privileged and when it ruled the board meeting minutes were not admissible. However, one of the sanctions imposed against Knapp by the trial court in its April 27, 2006 order prohibits him from using any of the privileged documents, even if the documents were determined not to be protected from discovery by the attorney-client privilege on appeal. Knapp has not appealed the trial court's order imposing these sanctions and any complaint he may have had about that order is waived.[6] As a result, even if we *170 were to conclude the documents were not privileged, WNJ waived the privilege, or the trial court erred when it ruled the documents were not admissible, Knapp is prohibited from using these documents. Accordingly, we need not decide the merits of the first part of issue two or the first part of issue three in Knapp's brief on appeal.
B. Jury Charge Error
In issue four in his brief on appeal, Knapp argues the trial court erred when it instructed the jury it could consider post-termination, after-acquired evidence when determining whether Knapp was terminated for cause. WNJ responds that the jury found it had cause for terminating Knapp and, as a result, it did not breach the contract.
Texas Rule of Appellate Procedure 33.1 establishes the prerequisites for preserving an appellate complaint. To preserve a point for appellate review, a party must make a timely, specific objection or motion to the trial court that states the grounds for the ruling sought with sufficient specificity, unless the grounds are apparent from the context, obtain a ruling on the complaint, and comply with the rules of evidence or procedure. TEX. R.APP. P. 33.1. Complaints and arguments on appeal must correspond with the complaint made at the trial court level. See Century 21 Real Estate Corp. v. Hometown Real Estate Co., 890 S.W.2d 118, 124 (Tex.App.-Texarkana 1994, writ denied). To preserve an error for appeal, a party's argument on appeal must comport with its argument in the trial court. See Wohlfahrt v. Holloway, 172 S.W.3d 630, 640 (Tex.App.-Houston [14th Dist.] 2005, no *171 pet.), cert. denied, 549 U.S. 1052, 127 S. Ct. 666, 166 L. Ed. 2d 514 (2006).
Knapp objected to question one of the jury charge as follows:
Regarding question number one, Your Honor, [Knapp] objects to question number one because it is defective in that it co-mingles the law regarding employment contracts with that of at-will employment in submitting the instruction concerning the employee's misconduct.
Specifically, the instruction regarding an employee's misconduct is only applicable to contract actions where the employer's right to terminate the employee is limited in some meaningful way which is taking the contract out of the at-will context. Such is not the case here.
[Knapp] further objects to the submission of the instruction concerning an employee's misconduct because the instruction is, in fact, a defense to the contract action by the employee which should be submitted as a defense and not combined with the compliance question on the contract.
[Knapp] suggests that the question be split such that a compliance question is asked separately for Merlyn Knapp, and that the compliance question with regard to [WNJ] not be submitted because it is improper in that the contract does not provide a provision or method by which [WNJ] can sue Mr. Knapp to recover damages under the [sic] at-will employment.
That concludes our objections to question number one.
The trial court overruled Knapp's objections.
However, on appeal, Knapp argues the employment agreement shows the objective intent of the parties was that he should receive severance benefits unless, immediately at the time of termination, WNJ determined he had engaged in misconduct as defined in the agreement. Also, he argues the trial court's instruction that when interpreting the employment agreement, a "cause" determination could be made by WNJ at any time after it terminated Knapp's employment, was inconsistent with the express terms of the employment agreement and the law regarding after-acquired evidence.
Knapp's objection in the trial court did not apprize the trial court of the alleged error he now complains of on appeal. We conclude Knapp failed to preserve the issue for review because his issue on appeal does not comport with his objections made at trial. TEX.R.APP. P. 33.1.
Issue four in Knapp's brief on appeal has not been preserved for appellate review.
III. WNJ'S COUNTERCLAIMS AGAINST KNAPP
Knapp does not specify which issues relate to WNJ's counterclaims for breach of contract, breach of fiduciary duty, fraud, and negligence. However, we construe issue one, the second part of issue two, the second part of issue three, and issues five through six in Knapp's brief on appeal as pertaining to WNJ's counterclaims.[7]
*172 B. Confidentiality of Arbitration Documents
In the second part of issue two in his brief on appeal, Knapp argues the trial court erred when it ruled the documents and depositions relating to WNJ's arbitration proceedings against Ernst & Young were confidential. Knapp contends the testimony of WNJ's witnesses at trial may have been inconsistent with their testimony before the arbitrator, but he was prohibited from ascertaining this information and impeaching WNJ's witnesses because the trial court denied his motion to compel discovery relating to the arbitration proceedings. We construe Knapp's contentions as a claim that the trial court erred when it denied, in part, Knapp's motion to compel the production of documents and to compel witnesses Gail Utter and Bill Benton to answer deposition questions. WNJ responds that any information relating to the arbitration is confidential pursuant to section 154.073 of the Texas Civil Practice and Remedies Code, rule 10 of the Rules of the American Arbitration Association, the confidentiality agreement between WNJ and Ernst & Young, and the letter of engagement between WNJ and Ernst & Young.
1. Standard of Review
An appellate court reviews a trial court's ruling on a motion to compel discovery under an abuse-of-discretion standard. See Johnson v. Davis, 178 S.W.3d 230, 242 (Tex.App.-Houston [14th Dist.] 2005, pet. denied) (citing Cire v. Cummings, 134 S.W.3d 835, 838 (Tex.2004) (discussing discovery sanctions)). Trial courts have broad discretion in matters of discovery. See Johnson, 178 S.W.3d at 242. An appellate court should reverse a trial court's ruling on a motion to compel only when the court acts in an arbitrary and unreasonable manner, without reference to any guiding principles. See Barnett v. County of Dallas, 175 S.W.3d 919, 924 (Tex.App.-Dallas 2005, no pet.).
2. Applicable Law
A communication relating to the subject matter of any civil dispute made by a participant in an arbitration is confidential, is not subject to disclosure, and may not be used as evidence against the participant in any judicial proceeding. See TEX.CIV. PRAC. & REM.CODE ANN. § 154.073(a) (Vernon 2005). Also, any record made at an arbitration is confidential, and the participants or the arbitrators may not be required to testify in any proceedings relating to or arising out of the matter in dispute or be subject to disclosure of confidential information or data relating to or arising out of the matter in dispute. See id. § 154.073(b).
However, section 154.073 does not create a blanket of confidentiality nor is it so broad as to bar all evidence regarding everything that occurs at arbitration from being presented in the trial court. See In *173 re Learjet, Inc., 59 S.W.3d 842, 847 (Tex. App.-Texarkana 2001, orig. proceeding); In re Daley, 29 S.W.3d 915, 918 (Tex.App.-Beaumont 2000, orig. proceeding). The confidentiality statutes relating to arbitration have not been afforded the status of privileges by case law, although it is helpful to analogize the confidentiality statute to situations where privileges have been held not to be absolute. See Alford v. Bryant, 137 S.W.3d 916, 921 (Tex.App.-Dallas 2004, pet. denied). These are exceptions to the general rule of confidentiality of oral communications and written materials relating to arbitration proceedings. See TEX. CIV. PRAC. & REM.CODE ANN. § 154.073(c), (d), (e), (f); Alford, 137 S.W.3d at 922; Avary v. Bank of Am., N.A., 72 S.W.3d 779, 794-95 (Tex.App.-Dallas 2002, pet. denied); In re Acceptance Ins. Co., 33 S.W.3d 443, 453 (Tex.App.-Fort Worth 2000, orig. proceeding).
If the communication or written material does not relate to the subject matter of the dispute, or does not relate to or arise out of the matter in dispute, it may not be confidential under section 154.073(a) and (b) of the Texas Civil Practice and Remedies Code. See Avary, 72 S.W.3d at 794. Disclosure may be warranted when a party does not seek discovery of arbitration evidence to obtain additional funds from the defendant in the arbitration or to establish any liability on the arbitration defendant's part after the dispute has been peaceably resolved, but proposes to offer the arbitration evidence in a separate case against a separate party to prove a claim that is factually and legally unrelated to the arbitration claims. See Alford, 137 S.W.3d at 922; Avary, 72 S.W.3d at 798-800. Also, disclosure may be warranted in a case alleging a new and independent cause of action when disclosure of the confidential communications or written materials will not disturb the settlement in the underlying arbitration. See Alford, 137 S.W.3d at 922.
It is the policy of this State to encourage the peaceable resolution of disputes and the early settlement of pending litigation through voluntary settlement procedures. See TEX. CIV. PRAC. & REM. CODE ANN. § 154.002 (Vernon 2005). Proponents of alternative dispute resolution stress that confidentiality is critical to the success of the process. Avary, 72 S.W.3d at 797. Without a guarantee of confidentiality, parties may be reluctant to speak freely or address the heart of their dispute. Id. Despite the public policy supporting arbitration and the peaceable resolution of disputes, there is an equally important public policy to preserve significant and well-established procedural and substantive rights. Id. at 799.
C. Application of the Law to the Facts
On October 25, 2005, Knapp filed a motion to compel the production of documents relating to WNJ's arbitration with Ernst & Young and to compel witnesses Gail Utter and Bill Benton to answer deposition questions. Although the motion is not in the clerk's record, it is referenced in the record of the hearing and in the trial court's order. During the hearing, Knapp stated he was seeking discovery relating to the arbitration as follows: (1) witness statements; (2) deposition testimony; (3) identification of expert witnesses; (4) identification of witnesses that testified; (5) the pleadings; and (6) the award. Knapp's counsel argued the requested discovery related to the issue of offset and he anticipated it was impeachment material. The trial court did not permit oral argument on the motion and instead, required the parties to send briefing to an address provided by the trial judge. The briefing is not in the clerk's record. On November 11, 2005, the trial court signed an order granting *174 Knapp's motion to compel with respect to his requests for WNJ's: (1) statement of claims in the arbitration; (2) arbitration award; and (3) to ask the WNJ corporate representative, during the deposition, about the date and time of the arbitration, who was present at the arbitration, and whether the arbitration proceeding was recorded. The trial court denied the remainder of Knapp's motion to compel discovery relating to the arbitration.
Four points are pivotal in reaching our conclusion. First, although WNJ argues we should look to the Rules of the American Arbitration Association and the letter of engagement, these documents are not in the record and there is nothing showing they were presented to the trial court. Nevertheless, the arbitration award states that jurisdiction under this dispute arises under both the AAA Rules for the Professional Accounting and Related Services Disputes and the Rules for Non-Administered Arbitration of the CPR Institute for Dispute Resolution. Rule 10 of the Professional Accounting and Related Services Dispute Resolution Rules states, in part, "Any information or material exchanged during the course of discovery, or the arbitration, shall be confidential unless the parties specifically agree otherwise." However, Knapp was not a party to the separate arbitration proceeding or the agreements between WNJ and Ernst & Young.
Second, the arbitration award indicates there was live or deposition testimony made under oath at the arbitration. In the "Award" section of the arbitrator's award, which was "admitted for record purposes," it states, in part:
WNJ also claims damages [against Ernst & Young] on account of bonuses the Board voted to certain employees during the years 2000 and 2001, totaling $1,643,352, and a loss of $7,252,931.18 spent on the aborted installation of a new information system for the hospital. The testimony of several WNJ Board members established that it was more likely than not that had the Board known the true situation with respect to the hospital's accounts receivable, they would not have voted to pay the bonuses or to enter into the contract for the new information system at the times they did.
(emphasis added).
Third, Knapp sought the depositions or testimony from the arbitration to determine whether WNJ took a position at the arbitration as to the authorization of bonuses that was different from the position it took at trial. The "Damages" section of WNJ's statement of claims in the arbitration was "admitted for record purposes" and states, in part:
In addition to these capital expenses, WNJ also incurred operational costs it would not have incurred had its financial conditions been properly reported. Specifically, the hospital's illusion of profitability in 2000 and 2001 led the board to approve and pay approximately $1.6 million in discretionary employee bonuses. Those bonuses were primarily based on the hospital's financial performance, and would not have been awarded if [Ernst & Young] had notified WNJ of its true financial condition.
(emphasis added). Similarly, the arbitration award states the board voted to approve bonuses in the amount of $1.64 million and the board members testified they voted to approve those bonuses.
However, during the trial, Gail Utter, the chair of the WNJ board and who, during the relevant time, was the chair of the audit/finance committee and served on the compensation committee, testified the board did not approve $1.6 million in bonuses. Knapp attempted to refresh her *175 memory with WNJ's statement of claims from the arbitration, but WNJ objected and the trial court sustained the objection. Steve Jones, a former member of the board and, during the relevant time, the chairman of the finance committee and a member of the compensation committee, testified bonuses were paid in excess of the amount approved by the board. Jim Braley, a project leader for Cambrio, a national consulting firm that assessed WNJ's operations, testified in 1999, the board approved bonuses in the total amount of $580,000, but $721,037 was actually paid. Also, he stated in 2001, the board approved $580,000 in bonuses, but $922,315 was actually paid. Based on Braley's testimony, the board approved $1.16 million in bonuses, but paid approximately $1.64 million in bonuses.
Finally, the only damages the jury awarded WNJ on each of its counterclaims were the amount of bonuses paid that were in excess of the bonuses authorized by the board. Specifically, the jury found:
bonuses in excess of bonus amounts authorized by the Board of Trustees of The Wilson N. Jones Memorial Hospital d/b/a Wilson N. Jones Regional Health System
Answer: $101,569
The statement of claims and arbitration award indicate the amount of bonuses the board authorized and paid was a part of WNJ's claims against Ernst & Young. On this record, it appears the arbitration documents address the same accusations of fraud and mismanagement WNJ has alleged against Knapp in its counterclaims.
Significant substantive and procedural rights of Knapp's are implicated, including the opportunity to develop evidence to defend against WNJ's counterclaims and to submit contested fact issues to the jury. See Avary, 72 S.W.3d at 800. In pursuing his defense, Knapp will not disturb the arbitration award between WNJ and Ernst & Young. See id. Knapp does not seek discovery of arbitration evidence to obtain additional funds from Ernst & Young, the defendant in the arbitration, or to establish any liability on Ernst & Young's part after the dispute between WNJ and Ernst & Young has been peaceably resolved. Instead, Knapp, a separate party, proposes to offer the arbitration evidence in a separate lawsuit to defend against WNJ's counterclaims. See Alford, 137 S.W.3d at 922; Avary, 72 S.W.3d at 798-800. In fact, the lawsuit between Knapp and WNJ alleges new and independent causes of action and disclosure of the confidential arbitration communications or written materials will not disturb the arbitration between WNJ and Ernst & Young. See Alford, 137 S.W.3d at 922. We conclude the trial court abused its discretion because its refusal to allow discovery of the depositions, testimony, or witness statements in the arbitration probably caused the rendition of an improper judgment. See TEX.R.APP. P. 44.1(a)(1).
The portion of issue two in his brief on appeal that relates to the discovery of the witness statements and deposition testimony in the arbitration is decided in Knapp's favor. Based on our resolution of issue two, we need not address issues one, the second part of issue three, and issues five through six in Knapp's brief.
However, in his motion for rehearing, Knapp argues the Court is required to address issue one, his legal sufficiency issue, and should not address his issue relating to discovery before addressing his issue relating to legal sufficiency because doing so will result in the Court reversing the trial court's judgment and remanding the cause for further proceedings, rather than rendering a judgment in his favor. We disagree.
*176 Appellate courts have broad discretion to remand a case for a new trial in the interest of justice. See TEX.R.APP. P. 43.3(b); Scott Bader, Inc. v. Sandstone Prods., Inc., 248 S.W.3d 802, 822 (Tex. App.-Houston [1st Dist.] 2008, no pet.). Remand is appropriate when, for any reason, a case has not been fully developed. See Scott Bader, 248 S.W.3d at 822; see also In re S.E.W., 168 S.W.3d 875, 886 (Tex.App.-Dallas 2005, no pet.) (although mother failed to preserve error on issue of expert testimony, case remanded in interest of justice); Ahmed v. Ahmed, 261 S.W.3d 190, 196 (Tex.App.-Houston [14th Dist.] 2008, no pet.) (trial court award was improper but remand required because trial court's ruling did not allow parties to fully develop evidence).
We recognize Knapp's legal sufficiency challenge, if successful, would result in rendition of WNJ's breach of contract claim against him. See Scott Bader, 248 S.W.3d at 822. However, we do not address issue one because, even if we were to decide Knapp's legal sufficiency challenge in his favor, resolution of issue one will not result in greater relief for Knapp, in this case, than that afforded by our resolution of the portion of issue two, which relates to the discovery of the witness statements and deposition testimony in the arbitration. See id. We would still remand the case because the trial court's refusal to allow discovery prevented this case from being properly developed and presented at trial. See id. Here, the trial court's refusal to allow discovery affected and shaped the presentation and development of this case during trial, for both Knapp and WNJ. Had the trial court not refused the discovery requests, it seems clear, based on the parties' arguments and positions, that both parties would have presented additional evidence during trial. See id.
Also, we point out, in issue one, Knapp challenged only the legal sufficiency of the evidence to support the jury's finding against him on WNJ's counterclaim for breach of contract. WNJ brought counterclaims against Knapp for breach of contract, breach of fiduciary duty, fraud, and negligence. The jury found against Knapp and in favor of WNJ on all of WNJ's counterclaims and assessed the same amount of damages against Knapp, $101,569, for each and every counterclaim. The trial court's judgment is based on the jury's findings against Knapp on all of WNJ's counterclaims against him and it ordered that WNJ recover damages in the principal amount of $101,569 from Knapp. As a result, even if Knapp's legal sufficiency challenge were successful and judgment rendered against WNJ on its breach of contract counterclaim, WNJ's counterclaims for breach of fiduciary duty, fraud, and negligence and the damages assessed by the jury in the amount of $101,569 would be unaffected.
In light of our conclusion the trial court abused its discretion when it denied Knapp's requests for discovery of the witness statements and deposition testimony in the arbitration, we conclude the proper disposition of this case is to reverse the portion of the trial court's final judgment awarding judgment to WNJ on its counterclaims and remand the cause for further proceedings consistent with this opinion. See id.
IV. CONCLUSION
As to Knapp's breach of contract claim against WNJ: (1) we need not address the merits of the first part of issue two and the first part of issue three in Knapp's brief, which claim the trial court erred when it ruled the board meeting minutes and financial documents were privileged and that the board meeting minutes were not *177 admissible; and (2) we conclude Knapp failed to preserve for appeal issue four, which claims the trial court erred when it instructed the jury it could consider post-termination, after-acquired evidence when determining whether Knapp was terminated for cause.
As to WNJ's counterclaims against Knapp, we conclude the trial court erred when it denied, in part, Knapp's motion to compel discovery relating to WNJ's arbitration proceedings against Ernst & Young, deciding the second part of issue two in Knapp's favor. Based on our resolution of the second part of issue two, we need not address issues one, the second part of issue three, and issues five through six.
The portion of the trial court's final judgment ordering that Knapp take nothing as to his breach of contract claim against WNJ is affirmed. The portion of the trial court's final judgment awarding judgment to WNJ on its counterclaims against Knapp is reversed. The cause is remanded for further proceedings consistent with this opinion.
NOTES
[1] Although Knapp lists seven issues in the "Issue Presented" section of his brief, in the "Table of Contents" and "Argument" sections of his brief, he only argues six issues. We refer to the issues by numbers that correspond to the "Table of Contents" and "Arguments" section of the brief.
[2] Knapp alleged WNJ failed to pay his contractual severance benefits. WNJ asserted, as a defense to Knapp's breach of contract claim, it was not liable because it had cause to terminate Knapp and the after-acquired evidence doctrine permitted WNJ to use evidence acquired after Knapp's termination to establish it had cause to terminate him.
In the first part of issue two, Knapp argues the trial court erred when it ruled the WNJ board meeting minutes and financial documents were privileged. Knapp claims:
[t]he documents that the trial court ruled were privileged were outcome determinative of the allegations of willful misconduct asserted by WNJ against Knapp in this case. That is to say, if evidence demonstrated that WNJ had voted to pay Knapp his severance benefits, such evidence demonstrates that he was not terminated for cause.
In the first part of issue three, Knapp argues the trial court erred when it ruled the WNJ board meeting minutes were not admissible at trial. In issue four, Knapp argues trial court erred when it instructed the jury it could consider post-termination, after-acquired evidence when determining whether Knapp was terminated for cause.
Because these issues relate to WNJ's defense of cause based on the after-acquired evidence doctrine, we construe the first part of issue two, the first part of issue three, and issue four as pertaining to the portion of the trial court's take-nothing judgment addressing Knapp's claim against WNJ for breach of contract.
[3] On March 14, 2005, the trial court denied Knapp's motion to compel by letter, concluding the documents were protected by the attorney-client privilege. This letter is not included in the clerk's record, but is referenced in Knapp's April 25, 2005 motion to compel unredacted copies of the board of director and audit/finance committee meeting minutes. On July 18, 2005, the trial court signed an order denying Knapp's January 21, 2005 motion to compel, which was previously denied in a letter, concluding the documents were protected by the attorney-client privilege and the privilege had not been waived by offensive use.
[4] After this Court's mandamus opinion issued, WNJ filed, in this Court, a motion to strike or, in the alternative, to seal the privileged documents, which were attached to Knapp's petition for a writ of mandamus, in the record, and referred to and quoted in his petition for mandamus and reply to the response. On March 27, 2006, this Court designated the privileged documents as in camera documents, ordered the court reporter to retrieve the in camera documents, and ordered that the in camera documents were "not to be used or disseminated by the parties, the official court reporter of the 59th Judicial District Court, or anyone else who might come in contact with them, except as hereafter directed by the judge of the 59th Judicial District Court." On April 27, 2006, the trial court sealed all documents it previously had found to be privileged.
However, we note that despite this Court's March 27, 2006 order and the trial court's April 27, 2006 order, on November 13, 2007, Knapp filed his brief and appendix in this appeal. On November 21, 2007, WNJ filed a motion to withdraw documents or, in the alternative, to seal privileged documents and for sanctions because Knapp's appendix contained the privileged or in camera documents. On December 13, 2007, this Court granted WNJ's motion, striking Knapp's brief, and ordered Knapp to file an amended brief that did not include the in camera documents. This Court instructed Knapp that, if he wished to use the in camera documents as part of his appendix, he must file a separate appendix under seal. On December 17, 2007, Knapp filed his amended brief. He did not file a separate appendix under seal. Further, on October 25, 2007, the court reporter filed an unsealed supplemental reporter's record, which included some of the in camera documents. In a separate order issued with this opinion, we have again designated those documents as in camera documents.
[5] In his motion for rehearing, Knapp argues the trial court's order imposing sanctions was not included in the record on appeal and the Court is prohibited from considering a document that is not a part of the appellate record. A copy of the order imposing sanctions was attached to the motion to withdraw described in footnote 4 above. Nonetheless, in accordance with our authority to supplement the record, we ordered the Grayson County District Clerk to file a supplemental clerk's record containing the trial court's April 27, 2006 order imposing sanctions. See TEX.R.APP. P. 34.5(c)(1), (3). The district clerk certified the order was never received by the district clerk's office. See TEX.R.APP. P. 34.5(e). Accordingly, we: (1) ordered the trial court to conduct a hearing and make written findings of fact to determine what constitutes an accurate copy of the trial court's order, if any; and (2) abated the appeal. See TEX.R.APP. P. 34.5(e).
On January 20, 2009, a supplemental clerk's record was filed containing the trial court's findings of fact, which stated the parties stipulated to the trial court's April 27, 2006 "Order on Motion to Enforce and for Sanctions" and attached a copy of that order. On January 26, 2009, this Court ordered the appeal reinstated.
We have compared the trial court's April 27, 2006 "Order on Motion to Enforce and for Sanctions," which document counsel stipulated to and is contained in the supplemental clerk's record, with the order attached to WNJ's November 21, 2007 motion to withdraw. These orders are identical. Knapp has not made any contention these orders are different.
[6] In his motion for rehearing, Knapp requests that if we obtain a supplemental clerk's record containing the trial court's April 27, 2006 order imposing sanctions, "the Court set a briefing schedule so that the parties will have the opportunity to fully brief the issues related to the April 27 Order." Knapp makes several assertions in an to attempt to demonstrate his second appellate counsel, who became involved after the notice of appeal and the designation of the record, did not know of the contents of the trial court's order imposing sanctions and therefore, did not raise issues on appeal as to that order.
However, the record shows on April 30, 2007, Knapp filed his notice of appeal stating he was appealing the trial court's "Final Judgment signed on February 22, 2007." The notice of appeal was signed by Knapp's trial counsel. See TEX.R.APP. P. 6.1(a) (unless another attorney designated, lead counsel for appellant is attorney whose signature first appears on notice of appeal). On April 30, 2007, Knapp filed his docketing statement, which listed his trial counsel as lead counsel on appeal.
On May 24, 2007, Knapp's trial and first appellate counsel, filed Knapp's designation of documents for the clerk's record, which specifically requested the trial court's "Order on Motion to Enforce and for Sanctions" to be included. On July 3, 2007, the clerk's record was filed and the index to volume one states "Order on Motion to Enforce and for Sanctions-NOT FILED IN CLERK'S OFFICE."
On November 21, 2007, WNJ filed in this appeal, a motion to withdraw documents or, in the alternative, to seal privileged documents and for sanctions, and attached to that motion was a copy of the 59th Judicial District Court's April 27, 2006 order imposing sanctions. The certificate of service on WNJ's November 21, 2007 motion indicates a copy was sent to Knapp's first appellate counsel. See TEX.R.APP. P. 6.3(a) (communications must be sent to each party's lead counsel on appeal). The body of WNJ's November 21, 2007 motion to withdraw specifically stated:
Judge Ashworth, because of Appellant's discovery abuse and failure to comply with prior court orders, sanctioned Appellant's counsel in the amount of $12,500 and ordered that the documents not be used in any proceeding. (See Judge Ashworth's Order attached hereto as Exhibit "C").
(emphasis added.). Knapp's response to WNJ's motion to withdraw was signed by Knapp's second appellate counsel. Knapp's amended brief was filed on December 17, 2007 and listed his second appellate counsel as well as trial counsel and was signed by his second appellate counsel.
Although the clerk's record shows the trial court's order imposing sanctions was omitted, there is nothing in the record showing Knapp took any steps to supplement the clerk's record with the missing order, such as directing the trial court clerk to supplement the record with the omitted order, attempting to agree with WNJ to stipulate to the missing order, or filing a motion requesting the trial court to determine what constituted an accurate copy of the missing order. See TEX.R.APP. P. 34.5(c)(1), (e). WNJ's motion to withdraw was sent to the appropriate lead appellate counsel at the time the motion was filed. WNJ's motion clearly referred to the specific, operative terms of the April 27, 2006 order imposing sanctions. We cannot agree with Knapp that he should be allowed to reopen this case and assert new issues as to the April 27, 2006 order imposing sanctions.
[7] WNJ brought counterclaims against Knapp for breach of contract, breach of fiduciary duties, negligent misrepresentation, conversion, gross negligence, and fraud. WNJ alleged Knapp participated in funding a loan without the board's approval, participated in a fraudulent scheme to pay bonuses to himself and other employees in excess of the bonuses authorized by the board, and mismanaged the financial affairs of WNJ by authoring monthly and annual financial reports that misstated the financial condition of WNJ.
In issue one, Knapp argues the evidence is legally and factually insufficient to support the jury's finding that he breached the contract. In the second part of issue two, Knapp argues the trial court erred when it ruled the documents and depositions relating to WNJ's arbitration proceeding against Ernst & Young were confidential. He claimed the arbitration documents related to the issue of any offset he was entitled to if he was found liable on WNJ's counterclaims and he anticipated it was impeachment material pertaining to the bonuses approved by the board. In the second part of issue three, Knapp argues the trial court erred when it ruled the documents relating to the arbitration were not admissible at trial. In issues five and six, Knapp argues the trial court erred when it denied his request for the damages against him to be offset and his post-verdict motion for leave to amend so he could submit the issue of offset.
Because these issues relate to Knapp's liability, we construe them as pertaining to the portion of the trial court's judgment relating to WNJ's counterclaims. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578719/ | 281 S.W.3d 108 (2008)
Curtis R. SELLERS, Harvey Development Co., Inc., and Tony Aguilar, Appellants,
v.
Marcelo GOMEZ, Individually and as Purported Trustee, Michael Ainsa, and Ainsa Hutson L.L.P., Appellees.
No. 08-05-00308-CV.
Court of Appeals of Texas, El Paso.
July 31, 2008.
Rehearing Overruled September 3, 2008.
*109 Anthony C. Aguilar, El Paso, TX, for Appellants.
Francis S. Ainsa, Jr., Ainsa Hutson LLP, El Paso, TX, for Appellees.
Before CHEW, C.J., McCLURE, J., and BARAJAS, C.J. (Ret.).
OPINION
DAVID WELLINGTON CHEW, Chief Justice.
Curtis Sellers and Harvey Development Co., both licensed real estate brokers, demanded compensation from Marcelo Gomez for their services in the sale of the Park Cinema Theater in El Paso. Mr. Gomez refused because there was no signed commission agreement. Mr. Sellers and Harvey Development sued Mr. Gomez and his attorney, Michael Ainsa, for theft of services, fraud, breach of fiduciary duty, and conspiracy. The trial court granted summary judgment in favor of Mr. Gomez and Mr. Ainsa. The trial court also ordered Mr. Sellers, Harvey Development, and their attorney, Tony Aguilar, to pay $80,000 in sanctions to Mr. Gomez and Mr. Ainsa. Mr. Aguilar, Mr. Sellers, and Harvey Development present seven issues for review. In Issues One through Five, they challenge the trial court's grant of summary judgment. In Issues Six and Seven, they challenge the trial court's award of sanctions. We affirm the trial court's judgment.
Appellants Mr. Sellers and Harvey Development are both licensed real estate brokers. Appellee Mr. Gomez owned the Park Cinema in El Paso. In the mid-2002, *110 Mr. Sellers and Harvey Development submitted an unsolicited offer to Mr. Gomez on behalf of Currey Adkins, an IT supply company, to purchase the Park Cinema for $1,200,000. The written offer listed Harvey Development as the principal broker and Mr. Sellers as the cooperating broker. Under the terms of the offer, Mr. Sellers and Harvey Development would each receive a three-percent real estate commission. Mr. Gomez did not accept the offer.
In December 2002, Mr. Sellers and Harvey Development sent Mr. Gomez another unsolicited offer on behalf of Currey Adkins, this time to purchase the Park Cinema for $1,650,000. Mr. Gomez did not accept the second offer.
In April 2003, Mr. Gomez asked Miriam Lawrence, his cousin and an employee of Harvey Development, to find out whether Currey Adkins would increase its second offer. Ms. Lawrence contacted Currey Adkins and learned that it was unwilling to go higher than $1,650,000 at that time. On April 9, 2003, Will Harvey, the president of Harvey Development, sent Ms. Lawrence a memo saying that $1,650,000 was Currey Adkins's top offer, and that April 16, 2003 was the deadline for a response. According to Mr. Sellers's deposition, Ms. Lawrence indicated that Mr. Sellers and Harvey Development would be compensated for their services. However, when asked whether Ms. Lawrence had verbally promised to pay them, Mr. Sellers testified that he could not remember. Mr. Gomez did not accept the third offer.
On July 8, 2003, at Currey Adkins's request, Mr. Harvey sent a memo to Mr. Gomez. The memo stated that Currey Adkins was still interested in purchasing the Park Cinema, and that Mr. Gomez should contact Mr. Harvey no later than July 21, 2003. Mr. Gomez did not respond to this memo.
On July 11, 2003, Mr. Gomez engaged Michael Ainsa, a partner at the law firm of Ainsa Hutson, L.L.P., to represent him in connection with the possible sale of the Park Cinema. Prior to that date, Mr. Ainsa had not been involved in the sale of the Park Cinema, and he had not spoken to Mr. Sellers or Harvey Development about the sale. Mr. Ainsa testified that he had not done any active legal work for Harvey Development since 2001, although his firm handled some document-preparation work for the company on a case-by-case basis between February 2001 and February 2004. Mr. Ainsa never did any legal work for Mr. Sellers.
On July 14, 2003, Mr. Harvey called Mr. Ainsa. Mr. Ainsa explained that he was representing Mr. Gomez and would negotiate a contract with Currey Adkins for the sale of the Park Cinema. Mr. Ainsa also told Mr. Harvey that Mr. Gomez did not intend to pay a real estate commission to Mr. Sellers or Harvey Development. Mr. Ainsa explained that absent a written agreement signed by Mr. Gomez, Mr. Gomez was not obligated to pay the commission. During the conversation, Mr. Ainsa indicated that he was not representing Harvey Development in the matter. However, Mr. Sellers testified that at some point, Mr. Ainsa indicated to him that Mr. Sellers and Harvey Development would be compensated for their services.
Mr. Gomez sold the Park Cinema to Currey Adkins in October 2003 for approximately $1,900,000. No real estate commission was paid to any broker. On February 19, 2004, Harvey Development's attorney, Tony Aguilar, sent a letter to Mr. Gomez concerning the sale of the Park Cinema. Mr. Aguilar wrote that funds were still owed to Harvey Development and that he had "found a way to file a lawsuit if necessary." At Mr. Gomez's request, Mr. Ainsa contacted Mr. Aguilar *111 and asked how he intended to file a lawsuit, since the Real Estate License Act requires a signed written agreement for a real estate commission. See TEX.OCC.CODE ANN. § 1101.806(c)(Vernon 2004). Mr. Aguilar replied that he had "found a way to get around the Real Estate License Act."
On March 26, 2004, Mr. Sellers and Harvey Development filed suit against Mr. Gomez and Mr. Ainsa, alleging theft of services and fraud.[1] On December 14, 2004, Harvey Development filed its first amended petition, adding Ainsa Hutson as a defendant and alleging theft of services, fraud, conspiracy, breach of fiduciary duty, and failure to inform. Harvey Development sought actual damages of $120,000, statutory damages of $1,000 each, exemplary damages, and attorney's fees.
In their answer, Mr. Gomez and Mr. Ainsa generally denied these claims, raised special exceptions, and asserted an affirmative defense under the Texas Real Estate License Act. They also raised a counterclaim alleging that the lawsuit was frivolous.
On July 11, 2005, Mr. Gomez and Mr. Ainsa filed a motion for partial summary judgment, requesting that the Court dispose of all of Harvey Development's claims, but not their own counterclaims. In the motion, Mr. Gomez and Mr. Ainsa characterized the case as an action to recover a real estate commission, disguised as an action for civil theft. They argued that the Texas Real Estate License Act precluded Mr. Sellers from recovering a commission, regardless of how the damages were characterized. Mr. Gomez and Mr. Ainsa argued that Mr. Sellers could not recover under the Theft Liability Act, because Mr. Sellers could not establish that Mr. Gomez agreed to pay for the services. Mr. Gomez and Mr. Ainsa also argued that Mr. Ainsa and Ainsa Hutson could not be liable for breach of fiduciary duty or failure to inform because Mr. Ainsa never represented Harvey Development in the Park Cinema sale.
In its response to the motion, Harvey Development argued that Mr. Gomez could not use the Real Estate License Act as a defense, because the Act's requirement of a writing applies only to real estate commission, not all compensation. Compare TEX.OCC.CODE ANN. § 1101.806(b) (prohibiting a person from collecting "compensation for an act as a broker or salesperson" unless the person holds a license or is an attorney) with TEX.OCC.CODE ANN. § 1101.806(c)(prohibiting the recovery of "a commission for the sale or purchase of real estate" in the absence of a signed commission agreement). Harvey Development also argued that a written document is not required under the Theft Liability Act, and that a jury could infer intent to avoid payment based on Mr. Gomez's and Mr. Ainsa's actions. Finally, Harvey Development argued that Mr. Ainsa and Ainsa Hutson owed a fiduciary duty to Harvey Development because Ainsa Hutson was representing Harvey Development at the time of the sale. The trial court granted Mr. Gomez and Mr. Ainsa's summary judgment motion.
In August 2005, Mr. Gomez and Mr. Ainsa filed motions for sanctions against Harvey Development, seeking attorney's fees for Harvey Development's frivolous lawsuit. Mr. Gomez and Mr. Ainsa voluntarily dismissed their counterclaims without prejudice. At some point, Harvey Development's attorney, Mr. Aguilar, was *112 added to the motion for sanctions. Then Harvey Development and Mr. Aguilar filed their own motion for sanctions, arguing that Mr. Gomez and Mr. Ainsa's motions for sanctions were frivolous and seeking their own attorney's fees. After a hearing on the motions, the trial court awarded sanctions to Mr. Gomez and Mr. Ainsa in the amount of $80,000.
In the order granting the motion for sanctions, the trial court limited its conclusions of law to the actions for fraud and theft of services, and did not address Harvey Development's other claims. In a nine-page order, the trial court made twenty-eight findings of fact and ten conclusions of law. One findings of fact was that neither Mr. Gomez nor Mr. Ainsa made any representations regarding compensation for the services provided by the plaintiffs. The trial court also made findings of fact indicating that the plaintiffs knew prior to filing the lawsuit that there were no actions by Mr. Gomez or Mr. Ainsa to intentionally and knowingly secure performance of the brokerage services by deception, threat, or false token. In its conclusions of law, the trial court concluded that none of the defendants violated the Theft Liability Act, and that the plaintiffs had no basis in law or in fact to file a theft-of-services or fraud claim against any of the defendants. The trial court found that Mr. Aguilar and Harvey Development violated Chapter 10.001(3) of the Civil Practice & Remedies Code, because the theft and fraud claims in the plaintiffs' petition lacked any evidentiary support.
Summary Judgment Motion
In its first five issues, Harvey Development challenges the trial court's grant of summary judgment.
We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). In this case, Mr. Gomez and Mr. Ainsa filed a "traditional" motion for summary judgment under Rule 166a(c) of the Texas Rules of Civil Procedure. When reviewing a traditional summary judgment, we view the evidence in the light most favorable to the nonmovant and resolve any doubts against the motion. Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568 (Tex.2006). We must consider whether reasonable and fair-minded jurors could come to different conclusions considering all the evidence presented. See id. When, as in this case, the trial court's order does not specify the ground upon which it relied for its ruling, we must affirm the judgment if any of the theories asserted in the motion is meritorious. Garcia v. El Paso Ltd. P'ship, 203 S.W.3d 432, 435 (Tex.App.-El Paso 2006, no pet.).
In Issue One, Harvey Development argues that the trial court erred in holding that the Texas Real Estate License Act is an affirmative defense to a theft-of-services action under the Theft Liability Act.
The Real Estate License Act provides: "A person may not maintain an action in this state to recover a commission for the sale or purchase of real estate unless the promise or agreement on which the action is based, or a memorandum, is in writing and signed by the party against whom the action is brought or by a person authorized by that party to sign the document." TEX. OCC.CODE ANN. § 1101.806(c).
In Trammell Crow Co. No. 60 v. Harkinson, 944 S.W.2d 631, 635 (Tex.1997), the Texas Supreme Court held that this section of the Real Estate License Act precluded a real estate broker's action for tortious interference to recover a commission. In that case, Hunt Products, a prospective tenant, hired Patterson/McLaine Group, Inc. to locate rental space. Id. at *113 632. In turn, Patterson/McLaine authorized William Harkinson, a real estate broker, to act as its exclusive representative in locating the space. Id. Under his agreement with Patterson/McLaine, Mr. Harkinson was supposed to obtain his commission from the owner of the rental space. Trammell Crow, 944 S.W.2d at 632. Mr. Harkinson negotiated a lease under which Hunt Products would lease property owned by Trammell Crow. Id. Trammell Crow sent Mr. Harkinson an unsigned commission agreement. Id. Mr. Harkinson redrafted the agreement, signed it, and returned it to Trammell Crow. Id. A Trammell Crow employee told Mr. Harkinson that a supervisor would sign the agreement, but no one signed it. Id. Meanwhile, without Mr. Harkinson's knowledge, Patterson/McLaine entered into an agreement with Trammell Crow, whereby Patterson/McLaine would pay Mr. Harkinson a vastly reduced commission, and Trammell Crow would pay him nothing. Id. at 632-33. Harkinson sued Trammell Crow and Patterson/McLaine for tortious interference with his oral commission agreement, tortious interference with his exclusive-representation agreement, and civil conspiracy. Id. at 633.
The Texas Supreme Court noted that Mr. Harkinson did not have a signed commission agreement as required by the Real Estate License Act. Id. The Court held that this barred his action for tortious interference with the oral commission agreement. Id. at 635. The Court noted that "Harkinson's claims, though couched in terms of a tort, are for the recovery of a real estate commission." Id. at 633. Significantly, the Court barred Mr. Harkinson's tortious-interference claim against Patterson/McLaine, a third party that never entered into any commission agreement with Mr. Harkinson. Id. at 634. The Court also examined Mr. Harkinson's use of promissory estoppel to attempt to recover the commission and stated, "As a licensed real estate broker, Harkinson cannot act or forbear from acting in reliance on anything less than a signed written commission agreement. When a broker does so and relies on a promise to sign a written agreement that would satisfy section [1101.806(c)],[2] the broker inevitably does so at his or her own peril." Trammell Crow, 944 S.W.2d at 636-37.
The Supreme Court applied the same reasoning to Mr. Harkinson's claim of tortious interference with his exclusive-representation agreement, and held that this claim was barred as well. The Court noted: "As we read Harkinson's claim, he asserts that had [Trammell Crow] not interfered with his exclusive representation agreement, he would have been paid his commission as the exclusive representative negotiating a lease for Hunt Products. . . . The loss of the opportunity to negotiate exclusively on behalf of Hunt Products in this instance translates only into the loss of the expectancy of receiving a commission at the end of the lease negotiations." Id. at 634. In other words, because Mr. Harkinson could not prove up damages apart from the lost commission, he was barred from any cause of action that sought the commission as damages. Even if Mr. Harkinson had proven a breach of his exclusive-representation agreement, his claim would still have been barred as "illusory and wholly derivative of his unenforceable *114 oral commission agreement." Id.
In this case, Harvey Development argues that the holding in Trammell Crow applies only to common law causes of action, rather than statutory causes of action. Harvey Development points to language in the opinion stating that Mr. Harkinson's claims "are barred by section [1101.806(c)] unless saved by some other law." Trammell Crow, 944 S.W.2d at 634. However, following this statement, the Court goes on to discuss the "other law" that, according to Mr. Harkinson, preserves his claim. Trammell Crow, 944 S.W.2d at 634-35. In particular, the Court discusses Clements v. Withers, 437 S.W.2d 818 (Tex.1969), a case that interpreted the same section of the Real Estate License Act at issue in Trammell Crow, 944 S.W.2d at 634-35. This indicates that the "other law" that can save this kind of action is case law interpreting the Real Estate License Act itself. Nowhere in the Trammell Crow opinion does the Court distinguish between statutory and common law causes of action. What is clear from the opinion, however, is that "a broker may not recover a commission unless the commission agreement is in writing and signed by the party to be charged." Id. at 635.
Much like Mr. Harkinson, Harvey Development has attempted to couch a claim for recovery of a commission in terms of tort law. The $120,000 that Harvey Development seeks is nearly equal to the $114,000 it would have received if the property had been sold at $1,900,000 and Harvey Development had received a six-percent commission. The following excerpt from Mr. Harvey's deposition reveals how Harvey Development calculated this figure:
Q: Well, what basis do you have for picking 120, then?
A: We felt it was a reasonable figure.
Q: So it was pulled out of the air?
A: It approximates a real estate commission, or what a real estate commission would have been, had one been charged.
Q: So, in fact, that is basically what you're using as a frame of reference, a real estate commission?
A: You've got to start someplace.
Q: Well, is that what you're using? I'm asking you the question.
A: Yes.
Although Harvey Development tries to frame its action as one for compensation rather than commission, it does not define the scope of the term "compensation" or explain how it was calculated, apart from substituting what the commission would have been. Nor does Harvey Development explain how its actions against Mr. Ainsa and Ainsa Hutson for breach of fiduciary duty, failure to inform, fraud, and conspiracy relate to any damages other than the lost commission.
This Court has noted that the purpose underlying the Real Estate License Act's requirement of a signed commission agreement is "to prevent fraud arising from parol testimony as to the terms and conditions of such contracts." American Garment Props., Inc. v. CB Richard Ellis-El Paso, L.L.C., 155 S.W.3d 431, 436 (Tex. App.-El Paso 2004, no pet.), quoting Denman v. Hall, 144 Tex. 633, 636, 193 S.W.2d 515, 516 (1946). In the instant case, Harvey Development relies strictly on the alleged statements of Ms. Lawrence and Mr. Ainsa indicating that Appellants would be compensated for their services. Significantly, they do not rely on the unsigned commission agreements from 2002, as this would undermine their argument that they are seeking compensation other than commission. Allowing them to proceed would essentially allow them to construct an enforceable *115 commission agreement out of an alleged oral agreement, directly contrary to the purpose underlying the requirement of a signed commission agreement.
Under the facts of this case, where Harvey Development has admitted that the damages it seeks approximate a real estate commission, we hold that Harvey Development's actions are barred by the Real Estate License Act's requirement of a signed commission agreement. This includes not only the actions seeking compensation for services performed, but also the claims of breach of fiduciary duty, failure to inform, fraud, and conspiracy. Issue One is overruled, and we decline to address Issues Two through Five.
Sanctions
In their final two issues, Mr. Aguilar and Harvey Development challenge the trial court's award of sanctions, arguing that the sanctions are excessive and that there was insufficient evidence to support the award.
We review a trial court's award of sanctions under an abuse-of-discretion standard. Finlay v. Olive, 77 S.W.3d 520, 524 (Tex.App.-Houston [1st Dist.] 2002, no pet.). A trial court abuses its discretion in imposing sanctions if the order is based on an erroneous view of the law or a clearly erroneous view of the evidence. Monroe v. Grider, 884 S.W.2d 811, 816 (Tex.App.-Dallas 1994, writ denied). As such, an appellate court will view the conflicting evidence in the light most favorable to the trial court's ruling and will draw all reasonable inferences in favor of the trial court's judgment. Herring v. Welborn, 27 S.W.3d 132, 143 (Tex.App.-San Antonio 2000, pet. denied).
The Civil Practice and Remedies Code permits a trial court to grant sanctions against an attorney and the attorney's client if the attorney signs a pleading that makes allegations without evidentiary support. TEX.CIV.PRAC. & REM.CODE ANN. §§ 10.001(3), 10.004(a)(Vernon 2002). The sanctions "must be limited to what is sufficient to deter repetition of the conduct or comparable conduct by others similarly situated." TEX.CIV.PRAC. & REM.CODE ANN. § 10.004(b).
In this case, the trial court offered five pages of findings of fact, indicating that Mr. Gomez did not intentionally or knowingly secure Harvey Development's services by deceit, and that Mr. Aguilar filed suit knowing that there was no evidence of this necessary element of theft of services and fraud. The trial court correctly applied the Theft Liability Act, which incorporates the definition of "theft" from the Texas Penal Code. See TEX.CIV. PRAC. & REM.CODE ANN. § 134.002(2)(Vernon 2005). A person commits theft of service under Section 31.04 of the Penal Code if, with intent to avoid payment for service he knows is provided only for compensation, he intentionally and knowingly secures performance of the service by deception, threat, or false token; or he intentionally and knowingly secures the performance of the service by agreeing to provide compensation and, after the service is rendered, fails to make payment after receiving notice demanding payment. TEX.PENAL CODE ANN. § 31.04(a)(1), (4)(Vernon Supp.2007). The trial court correctly applied this definition in concluding that Harvey Development had no basis in law or fact for filing suit against Mr. Gomez and Mr. Ainsa for theft or fraud. Therefore, we hold that the trial court did not abuse its discretion in awarding sanctions to Mr. Gomez and Mr. Ainsa.
Mr. Aguilar and Harvey Development also argue that the sanctions were excessive and that the trial court failed to consider lesser sanctions. However, the *116 three cases that Harvey Development cites for the proposition that lesser sanctions must be considered deal with discovery sanctions, unlike the instant case. See Cire v. Cummings, 134 S.W.3d 835, 839 (Tex.2004); Spohn Hosp. v. Mayer, 104 S.W.3d 878, 882 (Tex.2003); TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex.1991). Mr. Ainsa testified that he and Mr. Gomez were charged approximately $92,000 in attorney's fees for the case, but he stipulated that $10,000 to $11,000 could be deducted from that amount, since Appellees dropped the part of their motion for sanctions that applied to Appellants' claim for breach of fiduciary duty. Because there were no lesser sanctions the trial court could have considered, we hold that the trial court did not abuse its discretion by awarding sanctions in the amount of $80,000.
In their final issue, Mr. Aguilar and Harvey Development argue that the trial court's award of sanctions was not supported by evidence, because there was no proof that the attorney's fees were reasonable and necessary. But proof of the necessity or reasonableness or attorney's fees is not required when the fees are assessed as sanctions. Gorman v. Gorman, 966 S.W.2d 858, 868-69 (Tex.App.-Houston [1st Dist.] 1998, pet. denied). Rather, the amount of attorney's fees awarded as sanctions is within the sound discretion of the trial court. Id. at 869. Issues Six and Seven are overruled.
We affirm the trial court's judgment.
BARAJAS, C.J. (Ret.)(Sitting by Assignment).
NOTES
[1] Appellants Mr. Sellers and Harvey Development Co. will subsequently be referred to as "Harvey Development."
[2] The Court in Trammell Crow cites the old version of the Real Estate License Act, before the Act's repeal and recodification in the Occupations Code. Although the current section has undergone cosmetic changes, it is materially identical to the old version. See TEX.REV. CIV.STAT.ANN. art. 6573a, § 20(b)(Vernon Supp. 1997)(repealed 2003)(current version at TEX.OCC.CODE ANN. § 1101.806(c)(Vernon 2004)). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578726/ | 119 Wis. 2d 451 (1984)
351 N.W.2d 503
STATE of Wisconsin, Plaintiff-Appellant,
v.
Raymond R. EHLEN, Defendant-Respondent-Petitioner.
No. 82-217-CR.
Supreme Court of Wisconsin.
Argued September 9, 1983.
Decided June 27, 1984.
For the defendant-respondent-petitioner there were briefs and oral argument by Steven P. Weiss, assistant state public defender.
For the plaintiff-appellant the cause was argued by Jerome S. Schmidt, assistant attorney general, with whom on the brief was Bronson C. La Follette, attorney general.
*452 HEFFERNAN, C.J.
This is a review[1] of an unpublished decision of the court of appeals, dated December 27, 1982, which reversed a suppression order of the circuit court for Kenosha county, William U. Zievers, Judge. The issue in this case is whether the destruction of Raymond R. Ehlen's blood sample necessitates suppression of the blood test results.[2] The court of appeals held that, because the defendant failed to show the materiality of the blood sample at the point of its destruction, under State v. Booth, 98 Wis. 2d 20, 295 N.W.2d 194 (Ct. App. 1980), suppression of the blood test results was not appropriate.
The defendant challenges the court of appeals decision, which reversed the trial court's suppression order, on three grounds: (1) That the court failed to consider the statutory basis upon which the trial court could have suppressed the test results for failure of the state to comply with secs. 971.23 (4) and (5), Stats.; (2) that the court of appeals also failed to consider the discretionary basis for suppression; and (3) that the court's analysis of the destruction in terms of the "materiality" of the blood sample was incorrect. We affirm the court of appeals.
We affirm because the blood sample is not evidence intended, required, or even susceptible of being produced by the state under the provisions of sec. 971.23(4) and (5), Stats. Only the results of the tests will be offered in evidence, and these are mandatorily admissible. Sec. 343.305(7), Stats. Hence, the provisions of that statute do not apply to a blood sample, because due process is afforded, not only by the statutory right to have access to test reports prior to trial, but, more important, the statutes afford a defendant the right to an additional blood *453 test at the time of arrest. Most important, however, the defendant is afforded the whole panoply of due-process protections at trial: The right to cross-examine witnesses and experts for the state, the right to impeach by use of the separate blood or breath analysis results, and the right to attack the credibility of the state's witnesses.
The importance of the production of the original breath ampoule or a portion of the blood sample as the sine qua non of due process is a myth that should not be perpetuated. The result of the test of the blood sample taken of Raymond R. Ehlen is admissible under the statutes. The production, or nonproduction, of the residue of the blood sample taken from his person at the time of his arrest is irrelevant to whether the results of the test administered by the state are to be admitted in evidence.
On June 27, 1981, the defendant, Raymond R. Ehlen, was involved in an accident which occurred in Kenosha county. Ehlen was operating a station wagon, which he apparently drove into the path of Mark A. Fliess, who was operating a motorcycle. Fliess was killed in the collision. The Kenosha county deputy who assisted the defendant from his car testified that he smelled a strong odor of intoxicants on Ehlen's breath, observed that his eyes were bloodshot, and that he appeared to be disoriented. After Ehlen was transported to St. Catherine's Hospital in Kenosha, the deputy requested that a blood sample be taken. Dr. John Sanson performed the analysis of the defendant's blood sample two days after it had been withdrawn, and the analysis revealed a .233 percent alcohol concentration in the defendant's blood. A criminal complaint was filed on July 14, 1981, charging the defendant with causing the death of Mark A. Fliess by negligent operation of a vehicle while under the influence of an intoxicant, contrary to sec. 940.09, Stats. At the August 25 continuation of the preliminary hearing, Dr. Sanson testified that the sample had been destroyed, according *454 to standard hospital procedures, two to seven days following the analysis. On August 27, 1981, an information was filed. The defendant filed a motion for discovery of the blood sample on September 4, 1981, or, alternatively, if the state were unable to comply, a motion for suppression of the blood test results.
A suppression hearing was not conducted. Therefore, the only record before us consists of the preliminary hearing. A review of the testimony offered at the July 29, 1981, preliminary hearing reveals the following information. The state elicited testimony from the medical technician who drew the blood that, after she had completed drawing the sample and labeling the tube containing the sample with the defendant's name, his patient number, and the date, she dipped the top portion of the tube into hot paraffin. She then placed the tube containing the sample into a refrigerator. At the August 25 continuation, the state elicited testimony from the pathologist who tested the blood that he received the sealed tube bearing the defendant's name two days after it had been drawn. The doctor stated that he removed the plasma from the sample and transferred the plasma into a shielded plastic capsule containing a reagent, which was placed into a machine that tests for blood alcohol. Dr. Sanson further testified that he also used water as a control, in addition to two other controls, one which routinely gives a reading equivalent to one hundred milligram percent plus or minus two percent, or .10 percent blood alcohol, and one which gives a reading of two hundred milligram percent plus or minus two percent, or .20 percent blood alcohol. As a result of these readings, the doctor testified that he was able to conclude that the machine that he used for the analysis was in proper working order. He further indicated that the defendant's sample yielded a reading of .233 percent blood alcohol.[3] The doctor stated that, because *455 the tube containing the defendant's blood was sealed with paraffin, the delay of two days between the time of withdrawal and the time of testing should "hardly have any effect" upon the resulting blood alcohol reading. If the delay did have any significant effect, he stated that it would lower the blood alcohol reading.
The defendant, during cross-examination, produced testimony from the doctor that the vial containing the defendant's blood had been discarded, according to routine hospital procedure, two to seven days after the test was performed. The pathologist also testified that the machine which he utilized for the testing had been approved by both the State of Wisconsin and the American College of Pathologists following review of routine readings with standardized controls.
The defendant was bound over for trial at the conclusion of the preliminary hearing. The trial court granted the defendant's motion to suppress the blood test results, relying upon the case of State v. Amundson, 69 Wis. 2d 554, 230 N.W.2d 775 (1975). The trial judge stated that, because intoxication is an element of the offense for which the defendant was charged, the blood sample was unquestionably material to the guilt or innocence of the defendant.
The court of appeals reversed the suppression order, stating that the sole issue raised by the appeal is whether the destruction of the blood sample deprived the defendant of his due process rights. The court referred to State v. Booth, 98 Wis. 2d 20, 295 N.W.2d 194 (Ct. App. 1980). The court of appeals correctly identified the crucial issue, and that point is whether the defendant was denied his due process rights. Booth correctly stands for this proposition. Where Booth erredas we pointed out *456 in State v. Walstad, 119 Wis. 2d 483, 381 N.W.2d 469 (1984), and State v. Disch, 119 Wis. 2d 461, 351 N.W.2d 492 (1984), of even date herewithis in its belief that the retention of an ampoule or a blood sample was relevant to due process or, to state the question alternatively, whether a fair trial could not be had if the blood test results were introduced unless the ampoule or blood sample was produced for retesting. We held, on the basis of the records in Walstad and Disch, that the retention of a breath ampoule or of a blood sample was of miniscule importance in the assurance of a fair trial when weighed in the balance against the traditional rights of defendants in criminal or quasi-criminal proceedings. Due processthe sine qua non of a fair trialmay be assured and, by our constitution and statutes, is assured quite apart from any questions about the materiality of the blood test sample or of a breathalyzer ampoule.
The court of appeals found that the blood sample, even if produced, would not have been material. It accordingly reversed the trial court's suppression order. In that ultimate conclusion, it was correct. The blood test results, for the reasons stated in Walstad and Disch, are admissible in evidence. Due process safeguards are available, as we set forth in those cases, to attack the authenticity of the tests and the credibility of expert witnesses.
The proceedings at the preliminary hearing recounted above exemplify the factual basis which must be established by the prosecution if due process is to be assured. The preliminary examination, prima facie at least, revealed the circumstances of the arrest and the facts that established probable cause for the arrest. There was extensive testimony in respect to the taking of the blood sample and the procedures used for testing, including the procedures utilized by the pathologist who performed the tests to assure that false readings were not obtained.
*457 All of these assertions of the state's witnesses may be again subject to scrutiny at trial. All the mechanisms of due process or fair trial, cross-examination, production and confrontation of witnesses, credibility, and the offer of counter-evidence can then come into play. It is error to so minimize these great tools of the common law as to conclude due process will be violated if a blood test is not suppressed merely because a portion of the sampleeven if it were retestablecould not be produced for further tests.
Again, it must be emphasized, the blood test statutes and the implied consent law have their internal safeguards of due processthe right to demand and to receive an additional or alternate type of an alcohol test. The duties of law enforcement officers in respect to guaranteeing the statutory safeguards is set forth in State v. Walstad. We are not obliged in this case to determine sanctions that may be applied in the event that, in the future, proper admonitions are not given to a suspected intoxicated driver.
We conclude the court of appeals was correct in its holding, though not in its rationale, that the trial court erred when it suppressed the blood test results. We accordingly affirm its decision, and the order suppressing the blood test results is reversed. The cause is remanded for trial or other proceedings that are now appropriate.
By the Court.Decision affirmed, and cause remanded to the circuit court for further proceedings.
SHIRLEY S. ABRAHAMSON, J. (concurring).
I concur for the reasons set forth in my concurring opinion in State v. Disch, 119 Wis. 2d 461, 351 N.W.2d 492 (1984), also decided today.
WILLIAM A. BABLITCH, J. (concurring).
I agree with the majority that the test results should not be suppressed *458 in this case. However, I write because I would impose an affirmative duty on the state, in the future, to preserve blood samples that are material to the defendant's innocence or guilt. I believe that such a duty is consistent with due process requirements, and is necessary for the sound administration of the criminal justice system.
This court has recognized that evidence destroyed by the prosecution could deny a defendant due process, "... given the showing that the evidence was clearly material to the issue of guilt or innocence." State v. Amundson, 69 Wis. 2d 554, 578, 230 N.W.2d 775 (1975). In State v. Walstad, 119 Wis. 2d 483, 351 N.W.2d 469 (1984), decided today, the majority opinion, which I joined, held that the destruction of a breathalyzer test ampoule did not deny the defendant due process. Slip op. at 486, infra. The record below clearly showed that the used test ampoule could not be retested so as to provide material evidence. The majority noted that the test ampoule "... was not material evidence of the defendant's guilt or innocence, because the ampoule, had it been preserved, could not have been retested or reexamined in a manner that would provide relevant evidence either in respect to the accuracy of the original test or to the guilt or innocence of the defendant." Slip op. at 486, infra.
A far different situation is presented, however, when the state or its agents has taken a blood sample from a defendant for testing purposes, and all or part of the sample remains after the tests have been completed, and then all or part of the sample is destroyed, thereby precluding the defendant from conducting any type of scientific tests on the sample. Scientific literature indicates that a blood sample, unlike a breath ampoule, remains testable for many purposes for several months after it is taken if the sample has been properly stored. See, e.g., Stewart and Stolman, Toxicology Mechanisms and Analytical Methods, *459 Vol. II at 116-17 (1961); Alcohol and the Impaired Driver, American Medical Association, at 68-72 (1968). Thus, unlike a breathalyzer test ampoule, if all or part of a blood sample remains after it is tested by the state, and that remaining portion is properly stored, it is possible that the remainder could be tested for blood alcohol content months after the sample was taken, and could yield results that are material to the defendant's innocence or guilt with respect to a charge relating to intoxication.
Additionally, it is possible that a properly stored blood sample, unlike a breathalyzer test ampoule, could be tested several months after it was taken for purposes in addition to determining blood alcohol content, such as determining blood type and the presence or absence of foreign matter. In a given case, a determination of blood type could be material to a defendant's guilt or innocence. For example, suppose a defendant has reason to believe that the sample upon which the state is relying is not his or her blood, and that the chain of custody is faulty. If the state or its agents has destroyed the blood sample, and the defendant is therefore unable to conduct a test on the sample to determine blood type, the defendant might be foreclosed from conclusively proving his or her innocence.
In addition, suppose a defendant is arrested for homicide or injury by intoxicated use of a vehicle, and the state or its agents destroys that part of the defendant's blood sample remaining after the state has tested for blood alcohol content. Suppose further that the defendant's defense is that the cause of the faulty driving was not the level of intoxication at the time of arrest, but was due to some other factor which could be established by showing the presence of foreign matter in the blood. Presumably, the presence or absence of foreign matter in the blood sample would be material to the defendant's guilt or innocence, yet the defendant would be precluded by the state's destruction of the sample from conducting a test *460 to show the presence or absence of such foreign matter. This in turn could prevent the defendant from conclusively establishing his or her innocence. The destruction of the blood sample under circumstances described in these examples might well deny a defendant due process.
I would therefore hold that: 1) if the state has taken a blood sample and in good faith subjected it to scientific tests; and 2) if an amount sufficient for further testing remains but is then non-maliciously destroyed before the defendant can test it; and 3) if the defendant establishes the materiality of the blood sample, then the test results are inadmissible in evidence unless the state can show that it had established, enforced, and attempted in good faith to adhere to rigorous and systematic procedures designed to preserve the evidence. This holding would not apply if the state, in good faith, had subjected the sample to scientific testing and the sample was destroyed because of the nature of the testing process. Given the minimal burden that would be imposed on the state by requiring preservation of blood samples as long as they remain material, I believe such a holding is necessary both to fully safeguard the due process rights of defendants, and to promote the sound administration of the criminal justice system.
I would apply the above holding prospectively only. In this case and in all prior cases dealing with the non-malicious destruction of blood samples by the state, I would hold that in order for the results of a blood test to be admitted into evidence, if the defendant establishes materiality, the state must show beyond a reasonable doubt that the non-malicious destruction of the evidence was accidental or was pursuant to routine practice or procedure established by the state or its agents.
In this case, it is undisputed that the blood sample was destroyed pursuant to routine practice. In addition, there *461 is no evidence that the sample was destroyed in bad faith. Therefore, I agree with the majority that the test results should not be suppressed.
I am authorized to state that JUSTICE WILLIAM G. CALLOW joins in this concurring opinion.
NOTES
[1] This opinion is of even date with State v. Walstad and State v. Disch and is governed by those cases.
[2] The blood sample was destroyed by the hospital which conducted the tests, following the testing procedure, and according to routine hospital practice. There is no evidence that the state directed the hospital to destroy the sample.
[3] Section 940.09, Stats., refers to operation while under the influence of an intoxicant. Section 346.63(4), 1979-80, defines operating under the influence of an intoxicant as, "A person whose blood contains 0.1% or more by weight of alcohol ..." This is the statute which was in effect at the time that the defendant was charged under sec. 940.09. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578727/ | 281 S.W.3d 93 (2008)
In re CELADON TRUCKING SERVICES, INC., Relator.
No. 08-07-00076-CV.
Court of Appeals of Texas, El Paso.
June 19, 2008.
*95 Steven L. Hughes, Mounce, Green, Myers, Safi & Galatzan, El Paso, TX, for Relator.
Patrick M. Garcia, El Paso, TX, for Respondent.
John P. Mobbs, El Paso, TX, for Real Parties in Interest.
Before CHEW, C.J., McCLURE, and CARR, JJ.
OPINION
DAVID WELLINGTON CHEW, Chief Justice.
Relator, Celadon Trucking Services, Inc. (Celadon) seeks mandamus relief from an order entered by the Honorable Patrick M. Garcia, Judge of the 384th District Court of El Paso County, denying a motion to quash the notice of deposition of its Chief Executive Officer Stephen Russell. We find that the real parties in interest did not establish that Mr. Russell has any unique or superior knowledge of facts in the underlying case; therefore, we will conditionally grant the relief requested.
This mandamus proceeding arises out of an employment dispute filed by former Celadon Trucking employees, Mario Martinez and Manuel Luna. Mr. Martinez and Mr. Luna, both El Paso residents, were employed by Celadon as truck drivers. The two men suffered serious injuries when a tire on the Celadon tractor trailer they were driving failed and caused a collision. Both men were initially treated for their injuries in El Paso. Celadon later moved both men to a company-owned location in Indiana where they received further treatment, and where their employment was ultimately terminated.
According to the petitions, Celadon contacted Mr. Martinez and Mr. Luna's medical providers in El Paso without authorization and obtained medical releases for the men to travel. Once they arrived in Indiana, the men allege they were forced to live in substandard company housing, where their complaints regarding the living conditions were ignored. Mr. Martinez and Mr. Luna also claim their Indiana physicians ignored their medical complaints, and ultimately the company discontinued their medical benefits. Both claim Celadon coerced them into signing *96 legal documents, which they could not read, and did not understand. Celadon then paid each man what the company referred to as a "settlement" under Indiana law, and terminated their employment.
Mr. Martinez and Mr. Luna brought suit against Celadon under a variety of theories of liability including: fraud; negligence; intentional infliction of emotional distress; false imprisonment; invasion of privacy; conspiracy; and wrongful termination.[1] During discovery, they served a notice of intention to take the deposition of Mr. Stephen Russell, Celadon's chief executive officer. Celadon responded by filing a motion to quash the notice, arguing that Mr. Russell was entitled to protection under the guidelines of Crown Central Petroleum Corp. v. Garcia, 904 S.W.2d 125 (Tex. 1995). In an affidavit filed in support of the motion, Mr. Russell stated that he has no personal knowledge of facts relevant to the lawsuit.
In response to Mr. Russell's affidavit, Mr. Martinez and Mr. Luna submitted deposition testimony from the chairman of the Indiana Worker's Compensation Commission, G. Terrence Coriden. According to Mr. Coriden's testimony, Celadon's top executive attended a meeting with members of the commission sometime in the late 1990's to discuss Celadon's application to become self-insured within the Indiana worker's compensation system. The Celadon executive, was accompanied by several company attorneys at the meeting. In support of the company's application for self-insurance, the Celadon official explained the organization's practice of treating employee injuries in company dormitories. During the meeting, Mr. Coriden explained that only Indiana's top employers were approved for self-insurance by the commission, and he expressed concerns regarding Celadon's dormitory system and its ability to provide adequate treatment for employees who were not residents of Indiana. Celadon's application for self-insurance was later approved, in part based on assurances made by the Celadon executive who attended the meeting. Mr. Martinez and Mr. Luna maintain Mr. Coriden's testimony rebutted Mr. Russell's statement that he has no unique or superior knowledge of facts related to their claims. They argue, Mr. Coriden's testimony established that Mr. Russell has knowledge of statements made to the Commission which are relevant to their claims against Celadon. The trial court agreed, and denied Celadon's motion to quash. Celadon argues the trial court's order violates the apex depositions guidelines, and is subject to mandamus relief pursuant to Crown Central.
Relief by writ of mandamus is only appropriate to correct a clear abuse of discretion. See Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex.1992)(orig. proceeding); In re El Paso Healthcare Sys., 969 S.W.2d 68, 72 (Tex.App.-El Paso 1998, orig. proceeding). In addition, there must be no other adequate remedy at law. Walker, 827 S.W.2d at 840.
A clear abuse of discretion, warranting correction by mandamus, occurs when a court issues a decision which is without a legal basis, or support in guiding principles of law. See Johnson v. Fourth *97 Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985)(orig. proceeding). With respect to the resolution of fact issues or matters committed to the trial court's discretion, a reviewing court may not substitute its judgment for that of the trial court. Walker, 827 S.W.2d at 839-40. The realtor must therefore establish that the trial court could reasonably have reached only one decision. Id. Even if the reviewing court would have decided the issue differently, it cannot disturb the trial court's decision unless it is shown to be arbitrary and unreasonable. Id. On the other hand, a trial court has no "discretion" in determining what the law is or in applying the law to the facts. Braden v. Marquez, 950 S.W.2d 191, 193 (Tex.App.-El Paso 1997, orig. proceeding). Thus, a clear failure to analyze or apply the law correctly will constitute an abuse of discretion, and may result in appellate reversal by extraordinary writ. In re: El Paso Heathcare Sys., 969 S.W.2d at 72. A writ of mandamus is the proper vehicle to attack an order granting discovery. Id.
Generally, a party is entitled to discovery that is relevant to the subject matter of the claim, and which appears reasonably calculated to lead to the discovery of admissible evidence. See TEX. R.CIV.P. 192.3(a); Crown Central Petroleum Corp., 904 S.W.2d at 127. Parties are generally permitted to take the deposition of, "any person." Id. The person noticed for deposition, however, has the right to protection from, "undue burden, unnecessary expense, harassment or annoyance, or investigation of personal, constitutional, or property rights." See In re: El Paso Healthcare Sys., 969 S.W.2d at 72-3.
When the discovering party seeks to depose a high level corporate official, the official (or the corporation on the official's behalf), may file a motion for protective order to prohibit the deposition under the Crown Central guidelines. See In re: Alcatel USA Inc., 11 S.W.3d 173, 175 (Tex.2000)(orig. proceeding). A party initiates the protections of the apex deposition doctrine by moving for a protective order to prevent the apex official's deposition. Id. The motion should be supported by the official's affidavit denying any knowledge of relevant facts. Id. The burden then shifts to the discovery proponent to arguably show that the official has any, "unique or superior personal knowledge of discoverable information." Id. at 175-76. If the discovering party is unable to make such a showing, the trial court should grant the motion. Id. at 176. Thereafter, the deposition should not go forward absent a demonstration by the discovering party that: (1) there is a reasonable indication that the official's deposition is calculated to lead to the discovery of admissible evidence; and (2) that less intrusive means of discovery are unsatisfactory, insufficient, or inadequate. Id.
In its sole issue presented for review, Celadon argues the trial court clearly abused its discretion by denying the motion for protective order filed to prevent Mr. Russell's deposition. According to the affidavit attached to Celadon's motion, as C.E.O. of Celadon Trucking, Mr. Russell was not involved with the day-to-day management of individual truckers. Mr. Russell further stated that he had no personal knowledge of facts related to the lawsuit as he did not directly supervise or control the activities of Mr. Luna or Mr. Martinez. He was not aware of the worker's compensation claims filed by Mr. Luna and Mr. Martinez until the lawsuits were filed, and did not participate in any decision making regarding how those claims would be handled by the company. He concludes by stating that he has no unique or personal *98 knowledge of discoverable information related to the lawsuit.
The real parties in interest do not dispute that this deposition was sufficient to support Celadon's motion. The primary dispute is whether excerpts from Mr. Coriden's deposition arguably shows that Mr. Russell has any unique or superior personal knowledge of discoverable information. An individual has unique or superior knowledge when he or she is the only person with personal knowledge of the information sought or that arguably possesses relevant knowledge greater in quality or quantity than other available sources. In re: Alcatel USA Inc., 11 S.W.3d at 179.
Mr. Martinez and Mr. Luna do not dispute that other people, including other Celadon representatives, attended the meeting described by Mr. Coriden. Instead they argue the evidence indicates Mr. Russell personally made statements concerning Celadon's dormitory system and the hardships it posed for out-of-state employees and therefore has unique or superior knowledge of the corporation's policies, the actions taken based on those policies, the purpose behind them, and the company's knowledge and intentions.
This argument amounts to little more than an allegation that as the chief executive, Mr. Russell has specialized insight into Celadon's corporate decision making. An apex deposition will not be permitted based on a claim that the official has knowledge of corporate policy, or ultimate responsibility for corporate decisions. See In re: El Paso Heathcare Sys., 969 S.W.2d at 74.
At most, Mr. Russell's presence at the meeting establishes that he has some knowledge of discoverable information. The first step in the Crown Central guidelines requires more than "some knowledge" of discoverable information. In re: Alcatel USA, Inc., 11 S.W.3d at 179. The discovering party must make some showing beyond mere relevance, "such as evidence that a high-level executive is the only person with personal knowledge of the information sought or that the executive arguably possesses relevant knowledge greater in quality or quantity than other available sources." Id. There is nothing in the record at this stage in the proceeding to indicate that Mr. Russell's knowledge of Celadon's discussion with the Commission is superior to the knowledge of the others who attended the meeting. Without such evidence, and absent a showing that Mr. Martinez and Mr. Luna have attempted to obtain the information through less intrusive means, the trial court had no discretion to allow the deposition to proceed.[2]See id. at 181.
Because the trial court abused its discretion in denying Celadon's motion to quash Mr. Russell's deposition, we conditionally grant the company's petition for writ of mandamus. We are confident the trial court will vacate its order in accordance with this opinion. The writ will issue only if the trial court fails to comply with this opinion.
NOTES
[1] The trial court granted Celadon's motion for summary judgment on many of Mr. Martinez's claims. The remaining causes have been expressly limited to wrongful termination, fraud, fraudulent inducement, and negligent misrepresentation. The fraud and misrepresentation claims have been further limited to Mr. Martinez's allegation that a Celadon representative made misstatements related to obtaining his release for light duty work.
[2] Should good faith efforts to obtain the information through less intrusive means prove inadequate, Mr. Martinez and Mr. Luna may return to the trial court and request that the protective order be vacated or modified. See Crown Central Petroleum Corp., 904 S.W.2d at 128. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578722/ | 281 S.W.3d 675 (2009)
Ex Parte Albert V. JESSEP.
Nos. 07-07-0332-CR, 07-07-0333-CR.
Court of Appeals of Texas, Amarillo.
March 17, 2009.
*677 John L. Owen, Assistant District Attorney, Amarillo, TX, for State.
Albert V. Jessep, Amarillo, TX, pro se.
Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
OPINION
JAMES T. CAMPBELL, Justice.
Appellant Albert V. Jessep, proceeding pro se, appeals the denial of his requests for habeas corpus relief, made pursuant to article 11.072 of the Code of Criminal Procedure.[1] We affirm.
Background
Appellant's computer was seized by peace officers while it was being repaired at an Amarillo computer shop. The computer's hard drive contained pornographic images involving children. By two July 2005 indictments, appellant was charged with two possession of child pornography offenses.[2] The language of the indictments was identical with the exception of the description of the computer file paths in which the pornographic images were located. In April 2006, appellant, represented by retained counsel, plead guilty to each offense pursuant to a plea agreement. The trial court deferred adjudication of appellant's guilt and placed him on community supervision for a period of five years.
Appellant filed notice of appeal in both cases. We dismissed his appeals because the trial court's certifications under Rule of Appellate Procedure 25.2 stated he had no right of appeal and the record supported the certifications. Jessup v. State, *678 No. 07-06-0242-CR, 07-06-0243-CR, 2006 WL 2660776 (Tex.App.-Amarillo Sept.15, 2006, pet. ref'd) (mem. op., not designated for publication).[3] Appellant then filed applications for writs of habeas corpus alleging deficiencies in the indictments and alleging ineffective assistance of counsel.[4] The trial court entered findings of fact stating that appellant's grounds for relief lacked merit, and denied appellant's applications.[5] These appeals followed.
Analysis
Standard of Review
In general, a trial court's ruling in a habeas proceeding should not be overturned absent a clear abuse of discretion. Ex parte Mann, 34 S.W.3d 716, 718 (Tex. App.-Fort Worth 2000, no pet.). We are to evaluate whether the court abused its discretion by determining whether the court acted without reference to any guiding rules or principles. Montgomery v. State, 810 S.W.2d 372, 380 (Tex.Crim.App. 1990) (op. on reh'g); Mann, 34 S.W.3d at 718.
Application
Appellant presents four issues on appeal, all of which are based on the same premise concerning the language of the indictments. The indictments alleged that on December 31, 2004, appellant "did then and there intentionally and knowingly possess material containing a film image, to wit: a photograph located on a computer in file path [describes path], which visually depicted, and which the defendant knew visually depicted a child who was younger than 18 years of age at the time the film image of the child was made, engaging in sexual conduct, to-wit: actual lewd exhibition of the genitals." (Italics ours). Appellant's arguments focus on the words "film image." He contends his computer's hard drive contained digital information, but nothing that properly could be called a "film image."
Appellant relies primarily on Porter v. State, 996 S.W.2d 317 (Tex.App.-Austin 1999, no pet.), in which the court reversed Porter's child pornography possession conviction. Like appellant, Porter's computer was found to contain pornographic images stored in a file on the computer's hard drive. The version of Penal Code § 43.26 in effect at the time Porter's computer was searched defined the offense in terms of possession of "material containing a film image." Porter, 996 S.W.2d at 319. The Austin court concluded that the definition of "film image" then contained in the statute did not include computer data and computer programs stored on a hard drive. Id. at 321. Finding that Porter's conduct thus was not criminalized by the statute then in effect, the court rendered a judgment of acquittal. Id. at 322.
As the Porter opinion makes clear, the legislature amended Penal Code § 43.26 in 1997, and it is that amended version that governs appellant's prosecution.[6] Appellant does not dispute that the *679 current statute proscribes possession of child pornography stored digitally on a computer's hard drive. He contends, however, that the use of the phrases "film image" in his indictments requires the same conclusion as that reached in Porter.[7] Appellant is mistaken. The conviction in Porter was reversed because his possession of computer-stored images was not against the law at the time the images were discovered in 1996.[8] The legislature changed the law, and appellant's possession of computer-stored images of child pornography was against the law in 2004. The State's use of the older "film image" language in the indictments does not mean that appellant's guilt or innocence is determined under the pre-1997 version of the statute, which also used that language. See, e.g., Davis v. State, 268 S.W.3d 683, 697 n. 3 (Tex.App.-Fort Worth 2008, pet. ref'd); Haynes v. State, 254 S.W.3d 466, 468 n. 1 (Tex.App.-Houston [1st Dist.] 2007), aff'd 273 S.W.3d 183 (Tex.Crim.App. 2008) (penal code provision(s) in effect at the time a person commits the offense governs the case).[9]
Issues One and Two Legal Sufficiency of Evidence
With that discussion as background, we turn to appellant's issues. Appellant's first two issues are couched in terms of the legal sufficiency of the evidence supporting his guilt. He contends the evidence was legally insufficient because no evidence showed he possessed a "film image" as the indictments alleged.
We begin our analysis by noting appellant plead guilty to each offense for which he was charged. A guilty plea is more far-reaching than a confession admitting that a defendant performed certain deeds. Ex parte Williams, 703 S.W.2d 674, 682 (Tex.Crim.App.1986). The entry of a valid plea of guilty has the effect of admitting all material facts alleged in the formal criminal charge. Id. A plea of guilty waives all non-jurisdictional defenses including contentions as to the insufficiency of the evidence. Id.
Challenges to the legal sufficiency of the evidence supporting an underlying conviction generally are not cognizable on an application for a writ of habeas corpus. See, e.g., Ex parte Santana, 227 S.W.3d 700, 705 (Tex.Crim.App.2007); Ex parte Perales, 215 S.W.3d 418, 419 (Tex.Crim. App.2007); Ex parte Grigsby, 137 S.W.3d 673, 674 (Tex.Crim.App.2004); State ex rel. Abbott v. Young, 265 S.W.3d 697, 706 (Tex.App.-Austin 2008, no pet.). There are exceptions to the general rule. See, e.g., Perales, 215 S.W.3d at 420 (agreeing with habeas court's recommendation for habeas relief, despite guilty plea, where later appellate court construction of penal *680 statute precluded guilt); Ex parte Sparks, 206 S.W.3d 680, 683 (Tex.Crim. App.2006) (when convicted applicant claims he is actually innocent, and proves it, he will be relieved from the restraint of conviction though he may have pleaded guilty and confessed); State ex rel. Abbott, 265 S.W.3d at 706 (describing distinction between legal sufficiency challenges not cognizable in habeas corpus and "actual innocence" challenges). See also Ex parte Elizondo, 947 S.W.2d 202, 209 (Tex.Crim.App.1996) (newly discovered or newly available evidence demonstrates actual innocence).
Appellant's challenge is not like that addressed in Perales or Sparks. He has not demonstrated the record of his trial was "devoid of evidentiary support for a conviction" like that in Perales, 215 S.W.3d at 420. Nor does appellant claim he is actually innocent of the offense of which he plead guilty, much less has he proven his innocence. Sparks, 206 S.W.3d at 683. The substance of appellant's evidentiary insufficiency claim is that there existed a variance between the allegations of the State's indictment and the evidence. Cf. Gollihar v. State, 46 S.W.3d 243, 257 (Tex. Crim.App.2001). The general rule applies here. Appellant's claims of the legal insufficiency of the evidence are not cognizable in this habeas corpus proceeding, and the trial court did not abuse its discretion by denying appellant habeas corpus relief based on them.
Issue Three Defects in Indictments
By statute in Texas, if the defendant in a criminal prosecution does not object to a defect, error, or irregularity of form or substance in the indictment or information before the date on which the trial on the merits commences, he waives and forfeits the right to object to the defect, error, or irregularity and may not raise the objection on appeal or in any other post-conviction proceeding. Tex. Code Crim. Proc. Ann. art. 1.14 (Vernon 2005). The statute serves the purpose of ensuring that indictment defects may be objected to and repaired pretrial but would not invalidate an otherwise valid conviction if not raised before trial. Teal v. State, 230 S.W.3d 172, 177 (Tex.Crim.App.2007).
A contention, however, that an indictment did not meet our state constitution's definition of an indictment by alleging that a person committed an offense, and thus did not vest the district court with jurisdiction, may be raised for the first time post-trial. Teal, 230 S.W.3d at 179, citing Cook v. State, 902 S.W.2d 471 (Tex.Crim.App.1995). By his third issue, appellant attempts to raise such a contention. He recognizes his objection to the indictments against him were not raised before his trial. Relying here again on the analysis in Porter, 996 S.W.2d at 320, appellant argues that by listing "elements that are impossible to be stored on a computer [that is, films and photographs]," the indictments did not allege the commission of an offense.[10] Appellant's argument ignores both the provisions of the Penal Code provision under which he was indicted and case law applying the constitutional requirements of an indictment.
Penal Code § 43.26 states, in pertinent part:
(a) A person commits an offense if: (1) the person knowingly or intentionally possesses visual material that visually depicts a child younger than 18 years of age at the time the image of the child was made who is engaging in sexual *681 conduct; and (2) the person knows that the material depicts the child as described by Subdivision (1).
(b) In this section:
* * *
(3) "Visual material" means: (A) any film, photograph, videotape, negative, or slide or any photographic reproduction that contains or incorporates in any manner any film, photograph, videotape, negative, or slide; or (B) any disk, diskette, or other physical medium that allows an image to be displayed on a computer or other video screen and any image transmitted to a computer or other video screen by telephone line, cable, satellite transmission, or other method. Tex. Penal Code Ann. § 43.26 (Vernon 2003).
To evaluate whether it meets the constitutional definition of an indictment, we look at the indictment as a whole. Teal, 230 S.W.3d at 180. If the allegations in it are clear enough that one can identify the offense alleged, the indictment is sufficient to confer subject matter jurisdiction. Id.[11] Appellant's indictments identified the offense with which he was being charged as "possession of child pornography." They then stated "P.C. § 43.26." The indictments alleged appellant possessed "material containing a film image, to-wit: a photograph located on a computer" and specified the file path in which the photograph was located. The indictments further alleged appellant's possession was accompanied by the required culpable mental states, tracking the language of § 43.26.
The Court of Criminal Appeals in Duron v. State, 956 S.W.2d 547 (Tex.Crim.App. 1997), said a written instrument meets the constitutional definition of an indictment if it "accuses someone of a crime with enough clarity and specificity to identify the penal statute under which the State intends to prosecute, even if the instrument is otherwise defective." Id. at 550-51. The court there further made clear that an instrument that adequately charges the commission of an offense does not fail as an indictment simply because it also includes "factual allegations that arguably evidence [the defendant's] innocence." Id. at 551. The indictments here clearly set forth the penal statute under which appellant was being prosecuted, and appellant does not contend otherwise. His contention that the charging instruments were something less than indictments because of their use of the phrase "film image" is meritless. Appellant was required to bring his objections to the indictments to the attention of the trial court before trial, and may not now assert them. Accordingly, the trial court did not abuse its discretion by denying appellant habeas corpus relief because of asserted defects in the indictments. Appellant's issue three is overruled.
Issue Four Ineffective Assistance of Counsel
In appellant's last issue, he contends he was deprived of his constitutional right to the effective assistance of counsel. In support of his position, he points to his retained counsel's "failure to notice the deficiencies in the indictments" and his failure to find applicable case law, leading to appellant's "mistaken" guilty plea in each case.
Like his other issues, appellant's ineffective assistance of counsel claim is founded on the Porter case, 996 S.W.2d 317. He argues that, had his counsel properly performed research, "he would have discovered *682 the Porter case sitting right on top of the pile. Incompetence can be the only answer." We disagree, and overrule the issue.
A successful claim that one's trial counsel provided ineffective assistance requires a demonstration by a preponderance of the evidence (1) that counsel's representation fell below an objective standard of reasonableness and (2) there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984); Bone v. State, 77 S.W.3d 828, 833 (Tex.Crim.App.2002); Hernandez v. State, 726 S.W.2d 53, 57 (Tex.Crim.App.1986). See also Hurley v. State, 606 S.W.2d 887 (Tex.Crim.App. 1980); Reese v. State, 905 S.W.2d 631, 635 (Tex.App.-Texarkana 1995, pet. ref'd), citing Ex parte Gallegos, 511 S.W.2d 510 (Tex.Crim.App.1974) (effectiveness of counsel, whether retained or appointed, is judged by a single standard). Both Strickland prongs must be firmly founded in the record. Thompson v. State, 9 S.W.3d 808, 813 (Tex.Crim.App.1999).
Moreover, the reviewing court's assessment of trial counsel's performance must be highly deferential; the court should indulge a strong presumption that counsel's conduct fell within a wide range of reasonable representation. Strickland, 466 U.S. at 689, 104 S. Ct. 2052; Tong v. State, 25 S.W.3d 707, 712 (Tex.Crim.App. 2000). The reviewing court must also be careful not to second-guess through hindsight the strategy of counsel at trial; the mere fact that another attorney might have pursued a different course will not support a finding of ineffectiveness. Blott v. State, 588 S.W.2d 588, 592 (Tex.Crim. App.1979); Ex parte Simpson, 260 S.W.3d 172, 175-76 (Tex.App.-Texarkana 2008, pet. ref'd).
The record before us simply does not support appellant's contentions. First, the factual premise of his contention, that his trial counsel was not aware of the Porter opinion, is not founded in the record. Beyond appellant's speculation, we have no information concerning counsel's awareness vel non of that case. Moreover, as we have noted, the Porter opinion does not carry the importance here appellant ascribes to it. Its application would not have guaranteed appellant an acquittal, as he insists.[12]
Further, the law is clear that in determining whether counsel's assistance is effective, the court must look at counsel's representation of the defendant as a whole, and not merely at isolated errors. Ex parte Kunkle, 852 S.W.2d 499, 505 (Tex.Crim.App.1993); Cannon v. State, 668 S.W.2d 401, 403 (Tex.Crim.App.1984). In that regard, we must notice that appellant does not contend he was innocent of the charges of violation of Penal Code § 43.26, and counsel's representation resulted in a deferred adjudication of his guilt with community supervision. On this record, we find the trial court committed no abuse of discretion by failing to grant appellant relief on his claim of violation of his Sixth Amendment right to the effective assistance of counsel.
Having overruled each of appellant's issues, we affirm the trial court's denial of appellant's habeas application.
NOTES
[1] Tex.Code Crim. Proc. Ann. art. 11.072 (Vernon 2003). See generally Ex parte Villanueva, 252 S.W.3d 391, 395-98 (Tex.Crim.App.2008) (describing effect and operation of art. 11.072).
[2] See Tex. Penal Code Ann. § 43.26 (Vernon 2003). This is a third degree felony punishable by imprisonment for any term of not more than ten years or less than two years and a fine not to exceed $10,000. Tex. Penal Code Ann. § 12.34 (Vernon 2003).
[3] Appellant's last name was spelled "Jessup" in the orders from which he appealed.
[4] Under article 11.072, § 3(a), "[a]n application may not be filed under this article if the applicant could obtain the requested relief by means of an appeal under Article 44.2 and Rule 25.2, Texas Rules of Appellate Procedure." Tex.Code Crim. Proc. Ann. art. 11.072, § 3(a) (Vernon 2003). His application under article 11.072 was permitted because Rule 25.2 barred an appeal of the trial court's order. Tex.R.App. P. 25.2; State v. Webb, 244 S.W.3d 543, 547 (Tex.App.-Houston [1st Dist.] 2007, no pet.).
[5] See Tex.Code Crim. Proc. Ann. art. 11.072, § 7(a) (Vernon 2005).
[6] In September 1997, § 43.26 was amended to substitute the phrase "visual material" for "material containing a film image." Tex. Gen. Laws, Acts 1997, 75th Leg., ch. 933.
[7] The State acknowledges that the indictments utilized language from the earlier version of the statute, and that the indictment language was not a "model of clarity."
[8] The Austin court expressly noted that the legislature's amendment of the child pornography statute some eleven months after Porter's computer was searched could not relate back to support his prosecution. Porter, 996 S.W.2d at 321.
[9] Section 2 of Acts 1997, 75th Leg., ch. 933 provides:
(a) The change in law made by this Act applies only to an offense committed on or after the effective date [Sept. 1, 1997] of this Act. For purposes of this section, an offense is committed before the effective date of this Act if any element of the offense occurs before the effective date.
(b) An offense committed before the effective date of this Act is covered by the law in effect when the offense was committed, and the former law is continued in effect for that purpose.
[10] Appellant's brief further states, "The bottom line is that a person cannot be charged with the commission of a crime that is impossible to commit! (i.e. storing films and photographs on a computer)."
[11] The court in Teal restated the test as, "Can the [courts] and the defendant identify what penal code provision is alleged and is that penal code provision one that vests jurisdiction in the trial court?" Id. at 180.
[12] Indeed, had counsel brought the Porter opinion to the attention of the State and the trial court, it is difficult to see the action would have brought about any change in appellant's prosecution, beyond the possible modification of the indictments. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1581015/ | 147 N.W.2d 55 (1966)
AMERICAN SECURITY BENEVOLENT ASSOCIATION, INC., Dale Armstrong, Gerald Timmer, Wallace Hopkins and Richard Pirkl, Plaintiffs,
v.
The DISTRICT COURT OF BLACK HAWK COUNTY, Iowa, Honorable Peter Van Metre, Presiding Judge, Defendants.
No. 52279.
Supreme Court of Iowa.
December 13, 1966.
*57 John B. Reilly, Cedar Rapids, and Upton Kepford, Waterloo, for plaintiffs.
Lawrence F. Scalise, Atty. Gen., Richard Thornton, Asst. Atty. Gen., and Dan Johnston, Sp. Asst. Atty. Gen., for defendants.
MASON, Justice.
Plaintiffs Dale Armstrong, Gerald Timmer, Wallace Hopkins and Richard Pirkl were granted review by certiorari on four orders of the district court of Black Hawk County, Peter Van Metre, judge, each sentencing a named plaintiff to pay a $500 fine and serve six months in the Black Hawk County jail as punishment for contempt committed by willfully violating a temporary injunction issued by Blair C. Wood, judge of the Tenth Judicial District.
On November 5, 1965, the attorney general of Iowa filed two petitions in the district court of Black Hawk County against these individual plaintiffs and others of the corporation's agents and salesmen. The actions differed only in that defendant corporation in one was American Security Benevolent Association, Inc. and in the other Iowa State Security Association, Inc. They were instituted pursuant to chapter 438, Acts of the Sixty-first General Assembly, now section 713.24, Code, 1966, sought the appointment of a receiver for each corporation and a temporary and permanent injunction restraining those named as defendants.
Iowa State Security Association, Inc. and American Security Benevolent Association, Inc. are corporations not for pecuniary profit, chartered under chapter 504, Code, 1966. Iowa State Security, organized in January 1965, engages in sale of contracts to collect donations payable to named beneficiaries in the event of death of a member.
Organized in October 1965 American Security sells separate contracts both for death benefits and disability benefits in the event a member becomes hospitalized.
The activities of the officers, agents and salesmen of American Security are involved in the present proceedings. At the time here pertinent the plaintiffs Dale Armstrong, Gerald Timmer and Wallace Hopkins were officers of this corporation, Richard Pirkl a sales representative. The plaintiff-officers were also sales representatives of the corporation.
I. American Security is not a fraternal beneficiary association organized under chapter 512, nor a domestic insurance company as set forth in chapter 506, nor is it qualified to contract to sell life, health or accident insurance in Iowa as authorized in chapters 508, 512 and 515, Code, 1966. The contracts offered are not in the nature of insurance contracts as contemplated in those chapters or chapter 514A.
Under the operations conducted by American Security through its officers, agents and salesmen, it seeks to develop groups with 2500 members. However, size of the groups in process of formation did not exceed 400 in November 1965. The disability benefits are limited to $2000. The burial benefits are $1000 and $500 depending on the age of the member. The corporation does not guarantee nor assume any obligation for payment of benefits. Its responsibility is assessing other members of the group. It merely acts as a clearing house for collection and distribution of an assessment. Donations are required of members to pay the benefits to a member in the event of death, illness or accidental injury and are not guaranteed in any specific amount but are limited to the size of the group and wholly dependent upon *58 the members who voluntarily respond to the call for donations. If the donations received are less than the expenses of disability or less than the amount payable on a burial contract, the member receives the lesser amount.
The corporation's plan or contract is distinguished from insurance on the ground it does not agree to pay a sum of money upon the happening of a particular event, here death or disability, but promises only to transmit to the claimant such sums as may be received from assessments levied upon members of claimant's group.
To remain eligible for benefits under the contract members are required to remit to the corporation the assessment in the event of sickness and/or accidental injury or death of a member of their association. The member pays an initial membership fee and a yearly renewal fee in addition to such assessments. If he fails to pay the assessment his membership is cancelled.
II. November 22 the attorney general filed a petition for temporary injunction against defendants named in the two actions. The injunction was issued that day and restrained defendants from falsely and fraudulently representing themselves to others as insurance agents for defendant corporation. Among other provisions the temporary injunction restrained each defendant named in the action "from omitting the material fact that in order to remain eligible for benefits * * * members will be required to remit to defendant corporations * * * money * * * upon the event of sickness and/or accident, injury, or death of a member of their association. Further * * * from omitting the material fact that payments to a member upon the event of death or illness or accidental injury are not guaranteed to a specific amount, but are wholly dependent upon the voluntary contributions of other members."
Defendants were further enjoined from fraudulently representing the contracts as policies of insurance, from the use and employment of deception, fraud, false pretenses, false promises, misrepresentation and from the concealment, suppression and omission of material facts until further order of court.
On January 12, 1966, the State filed an application for a rule to show cause why plaintiffs should not be punished for contempt in violating the injunction on December 30, 1965, by falsely and fraudulently misrepresenting the provisions of contracts of membership offered to Jessie Greathouse, a 78-year-old Cedar Rapids lady. That day defendant judge ordered the rule returnable January 26. Hearing was held January 28 and February 10 before defendant judge.
On May 17 Judge Van Metre decreed that Pirkl had willfully violated the temporary injunction and was guilty of willful contempt. Timmer, Armstrong and Hopkins were found guilty of contempt as participants in the preparation of the entire scheme as corporate officers responsible for Pirkl's supervision and as co-conspirators with Timmer and Pirkl in a calculated scheme of fraud and false pretenses. Accordingly, they also were found guilty of willful violation of the injunction and liable for punishment therefor.
The decree directed plaintiffs to appear May 31 for sentencing when the fines and commitments to jail were entered. No order was entered against American Security and it is not a plaintiff here.
In the meantime, hearing on the two consolidated petitions was commenced December 15 before Judge Wood. April 28 findings of fact, conclusions of law and decree upholding the validity of the temporary injunction and granting a permanent injunction as prayed was filed.
An appeal from Judge Wood's decree is now pending in this court.
III. Our concern here is the alleged violation of the temporary injunction of November 22.
*59 The evidence is without dispute that a membership in the association was sold to Mrs. Jessie Greathouse December 30, 1965, by Richard Pirkl. This sale is the entire basis for the citation for contempt.
Plaintiffs contend the evidence is insufficient to sustain the trial court's judgment of guilty of contempt (1) as to Richard Pirkl, and (2) as to plaintiffs, Armstrong, Hopkins and Timmer.
Defendant in support of the judgment of conviction contends Pirkl in making the sale omitted the material fact that payment to Mrs. Greathouse in the event of death, illness or accidental injury was not guaranteed to a specific amount or the face amount of her membership contract, but was wholly dependent upon the voluntary contributions of other members; that this was a suppression and misrepresentation of the contingent benefit feature of the contract, and the acts were specifically enjoined by the November 22 order. The State asserts it was this fraud on which Judge Van Metre based his finding of contempt.
Defendant urges, in support of the judgment of guilty as against the other plaintiffs, their exercising a supervisory role over Pirkl's activities, Timmer's actual participation in the fraudulent transaction with Pirkl in the Greathouse sale and sharing of the profits from the transaction by Armstrong, Hopkins and Timmer, and that all were co-conspirators in a scheme of false pretenses.
IV. Contempt proceedings are commonly treated as criminal in nature even when they arise in civil actions. While proof of the acts constituting the contempt need not be beyond a reasonable doubt, clear and satisfactory proof is required. Huston v. Huston, 255 Iowa 543, 549, 122 N.W.2d 892, 896, and citations; Brody v. District Court, 250 Iowa 1217, 1221, 98 N. W.2d 726, 729, and citations.
"We have held in several certiorari actions questioning a judgment of contempt that we will review the evidence for the purpose of determining whether proof of the contempt is clear and satisfactory. The cause is not triable de novo here but the judgment does not have the full force and effect of a jury verdict. While we give weight to the trial court's findings we are not bound by them." Huston v. Huston. supra.
It is for this court to say, having due regard for the findings below, whether the contempt has been clearly and satisfactorily shown.
To determine that question we review the evidence submitted at the citation hearing.
V. Besides Ray Spray, an employee of Blue Cross and Blue Shield of Iowa who described the nature and effect of various contracts negotiated by his company, and Mrs. Greathouse, the State called as its witnesses in the contempt action the four plaintiffs.
Dale Armstrong testified the money collected by agents from persons who purchased membership contracts in American Security was divided, the salesmen receiving one half as commission and the corporation the remaining half to help defray expenses of rent and other costs plus salaries of officers. The association received its share of the money collected by Pirkl from the December 30 sale and paid some of the bills such as the answering service from these proceeds. He had discussed with the corporation's employees and agents the methods, supervised by its officers, to be used in selling the contracts, and the officers had from time to time instructed Pirkl how to sell contracts. He personally had given Pirkl definite explanation on these matters. When the company was active he would see Pirkl every week.
Timmer, although a corporation officer on December 30, testified he was no longer serving in that capacity at the time of hearing. While an officer he engaged in selling membership contracts. Pirkl was an employee of the association during this period and Timmer discussed methods of *60 selling contracts with Pirkl two or three times a week. The methods used by Pirkl were supervised by the association and he was accountable to the officers. Timmer had been in Pirkl's presence on a few occasions when Pirkl sold memberships. These sales were made according to the rules and regulations established by the corporation's officers.
Timmer testified he remembered hearing there was a complaint on the Greathouse sale and at his suggestion Pirkl went to see Mrs. Greathouse the same day. He admitted hearing complaints from some of the witnesses at the permanent injunction trial that the contracts had been represented to them as insurance contracts. The only change made in method of operation since those complaints was to try to make sure the people contacted understood the contract was not insurance and this was the only thing stressed to a few men who were working. At the time of the hearing all selling operations had stopped due to a directive from the company mailed to the agents and representatives the Thursday before the contempt hearing.
In his defense Timmer testified he was not present when Pirkl sold the plan to Mrs. Greathouse and was not aware Pirkl was trying to make the sale. He had not solicited the assistance of Pirkl to sell any contract to Mrs. Greathouse.
Wallace Hopkins, another officer of the corporation who had engaged in selling memberships from time to time, testified his duties included the supervision of the activities of the salesmen, employees and agents of the corporation and they were accountable to the officers.
Richard Pirkl testified as to his association with American Security, a contract sale on December 30, receiving a check for the initial membership dues from the customer, his cashing the check that day and after deducting his commission, remitting the balance to the corporation. When the State's counsel attempted to question Pirkl further, he claimed his privilege against self-incrimination which the court sustained.
Later, testifying in his own behalf, Pirkl related his talk of December 30 with Mrs. Greathouse about joining American Security. She signed an application and gave him a check for $155 as the initial fee. Mrs. Greathouse's signed application discloses that the initial membership dues as well as the yearly renewal dues are the corporation's property. When asked what he discussed with Mrs. Greathouse on that occasion, he answered, "I must have told her about, I don't know how many times, that it was not insurance, it was not connected with any insurance company. I told her about the donations, I told her about the waiting periods, and I told her the money she got would be dependent upon what the other members donated, that there were 500 extra people in each group."
Later the same day Mrs. Greathouse made the complaint referred to in Timmer's testimony. Pirkl went to see her around 6 p. m. and after some conversation refunded her money. William Smith, a neighbor, was present when Pirkl arrived the second time. Smith put the refunded money in Mrs. Greathouse's purse and returned it to her bedroom. At this time she knew about the injunction but, according to Pirkl, decided she would still like to be a member. After some urging by Smith, Mrs. Greathouse directed him to get the money from her purse, gave it back to Pirkl and signed a statement saying the entire proceedings had been explained to her.
Later Pirkl accompanied by Timmer made another trip to see Mrs. Greathouse. This was the occasion when Timmer described her as being ill and they did not then discuss the application or her certificate.
On January 14 after receiving a telephone call at his office from Mrs. Greathouse, Pirkl returned to her home. This was his fourth trip and on this occasion she signed exhibit 4 indicating "she is happy with her membership and will keep the plan. She knows about the donations and the waiting *61 periods. She also knows that it is not an insurance company but a benevolent association."
When asked on cross-examination to explain about the donations Pirkl answered, "Well, if you were a member in the association and somebody in your group would get sick, then you would be called upon to donate up to a $1." Pirkl claims to have so explained the matter to Mrs. Greathouse.
Pirkl was also asked if he had compared the plan with any other hospitalization plan and answered:
"A. All I said was that it wasn't insurance, it wasn't associated with any other insurance company. I asked her if she had ever heard of Blue Cross and Blue Shield, and she said she had, I asked her if that was insurance, and she said, yes, it was. I said, no, it's an association also.
"Q. Is that all you said about Blue Cross and Blue Shield? A. I said, our plan was similar to Blue Cross and Blue Shield, the only difference was that there were donations on our plan.
"Q. You told her that was the only difference between Blue Cross and Blue Shield, that she would be required to make donations? A. And pay for it, yes, pay her annual dues."
Pirkl said he did not know how many people were in Mrs. Greathouse's group at the time of the sale.
William Smith, called by the defense, testified Mrs. Greathouse called him to come to her home to discuss some insurance she had purchased. After he was at the Greathouse home for a short time, Pirkl appeared. We understand this was the 6 p. m. meeting on December 30. Smith described placing the refunded money in Mrs. Greathouse's purse and returning it to the bedroom. He said Pirkl explained everything to Mrs. Greathouse and that he, Smith, told her it was not insurance of any kind, "it's a group, like if you get sick each member has to pay so much in on it. She said, well, it doesn't sound too bad. She said, I believe I will take it yet, and she told me to go get her purse again." Smith got the money for her and she returned it to Pirkl. He described Mrs. Greathouse as a person capable of handling her own affairs and property and not subject to any physical or legal disability he knew of.
Mrs. Greathouse testified by deposition taken February 2, 1966, at her home in Cedar Rapids. When asked if there was a maximum amount the plan would pay in case of hospitalization, she testified Pirkl said "it would pay everything, * * * the full amount." The plan would cost her $155 the first year and $60 a year thereafter. She signed a check made out by Pirkl payable to him in the amount of $155 and handed it to him. Later she attempted to stop payment of it. She told about Pirkl coming to her home the second time on December 30 and her telling him she wanted her money back. When Pirkl came back again he wondered "if anybody had been around."
Under further questioning she said:
"Q. Now, Mrs. Greathouse, the way Mr. Pirkl explained this planI will give you an example; say that you were in the hospital and you had a bill of $800, how much of this $800 would be covered by that plan? A. Well, the way he explained it to me, it all would cover itbe covered.
"Q. And if you had a bill of $1,500, how much of that would be covered? A. All be taken care of.
"Q. Now, Mrs. Greathouse, did you sign anything else on December 30, other than your check? A. I don't think I did.
"Q. To the best of your knowledge you did not? A. No.
"Q. Mrs. Greathouse, would you have purchased this hospitalization plan had you known it was a benevolent association? A. Well, I don't think I would, because I didn't know much about them, see.
"Q. And Mr. Pirkl didn't explainA. No.
*62 "Q. the difference to you? A. I just considered it was all just like insurance."
When Mrs. Greathouse was asked if Pirkl explained anything about assessments, she answered, "He said each member would give a dollar" when another member died. Pirkl did not tell her the plan was insurance but she referred to it as insurance during their discussions. She contends it was Smith's urging that caused her to change her mind and give the money back to Pirkl during his second call on December 30. When asked, "What if there was not, at the time you were sick, enough members in the association to pay you for example $800, how much would you receive, did he say?" she replied, "He didn't say."
Mrs. Greathouse also contended Pirkl did not tell her how many times she would be called upon for a donation or assessment but did say a donation would be required if they died.
Mrs. Greathouse's deposition was filed before the hearing was resumed February 10, when petitioners each testified in defense.
In addition to her age of 78, Mrs. Greathouse had been confined to a wheelchair for six months prior to the taking of her deposition and had been in ill health for approximately three years. We agree with the statement in the trial court's ruling "a careful reading of the transcript of her testimony indicates clearly that she had no understanding of the important material facts which defendants were duty bound to convey to her by virtue of the provisions of the injunction."
VI. The requirement of clear and satisfactory evidence means more than a preponderance but less than proof beyond a reasonable doubt. Andreano v. Utterback, 202 Iowa 570, 571, 210 N.W. 780, and citations. When the evidence is such that the mind readily reaches a satisfactory conclusion as to the existence or nonexistence of a fact in dispute, then the evidence is, of necessity, clear and satisfactory. Good Milking Machine Co. v. Galloway, 168 Iowa 550, 558, 150 N.W. 710, 712, cited with approval in Costello v. Stokely Grain Co., 193 Iowa 203, 205, 186 N.W. 842, 843, and Continental Sheep Co. v. Woodhouse, 71 Wyo. 194, 256 P.2d 97, 99.
In comparing the American Security certificate with Blue Cross and Blue Shield Pirkl failed to explain to Mrs. Greathouse that the contract she was purchasing required donations of $1 every time an assessment was made in order to remain eligible for benefits under her contract. If a member failed to pay the assessment his membership was cancelled. Plaintiffs were specifically restrained from concealing, suppressing and omitting such material fact as this by the temporary injunction. Pirkl stated at one point that there were 500 extra members in each group. Another time he didn't know how many members there were in Mrs. Greathouse's group at the time of sale. Judge Wood found the size of the groups in process of formation did not exceed 400. With donations limited to $1 from each member of her group, the sufficiency of contract benefits to pay all the hospital bills which might amount to $800 or $1500 certainly requires some explanation but Pirkl failed to give any. She was definitely under the impression that regardless of the amount of the hospital bill it would all be taken care of. Pirkl failed to deny this assertion made by Mrs. Greathouse in her deposition.
His testimony on cross-examination concerning the comparison with Blue Cross and Blue Shield, set out supra, would support a finding of deception practiced on Mrs. Greathouse.
When further asked on cross-examination to explain about the donations, he answered:
"A. Well, if you were a member in the association and somebody in your group would get sick, then you could be called upon to donate up to a dollar.
*63 "Q. Now is that the way you explained it to Mrs. Greathouse? A. Yes."
The foregoing plus his efforts to have Mrs. Greathouse sign written statements prepared by him on three of the four occasions he visited her satisfy us there is clear and satisfactory evidence Pirkl willfully violated several provisions of the temporary injunction and is guilty of contempt.
VII. The trial court reached the conclusion Armstrong, Timmer and Hopkins were also guilty of contempt by imputing guilt to Timmer because of his supervisory role with respect to Pirkl's activity and on a finding "* * * in the transaction with Mrs. Greathouse, when some complaint arose Timmer accompanied Pirkl on a second visit to Mrs. Greathouse in which a generous gesture of refund was made to this elderly woman and then the `plan' was promptly resold to her by Pirkl and Timmer acting together. * * * Neither, in the second transaction, in any way, complied with the provisions of the temporary injunction * * *."
Such finding is without support as to Timmer. While a refund incident occurred the evening of December 30, there is no evidence Timmer was present. In fact, Mrs. Greathouse's account of the December 30 evening visit as well as Smith's testimony make it affirmatively appear Timmer was not present. As stated, Timmer's accompaniment of Pirkl to Mrs. Greathouse's home was at a later date when she was ill and the application and certificate were not discussed.
Neither Armstrong nor Hopkins directly participated in the transaction in the sense that either had any contact with Mrs. Greathouse. In addition to their supervisory role the determination of their guilt is based upon their sharing in the sale proceeds and a finding they were coconspirators in a calculated scheme of fraud and false pretense.
The court described the Greathouse sale as not a legitimate plan, program or contract of insurance or of some other nature which was in any way designed to provide some measure of protection from hospitalization or other expenses, but as "* * * nothing but a calculated program of cheat and deception which these * * * [plaintiffs] conceived and put into effect and under which they victimized an elderly and infirm woman in direct violation of a valid order of this court."
The mere knowledge, acquiescence or approval of the act, without cooperation or agreement to cooperate, is not enough to constitute one a party to a conspiracy. There must be an intentional participation in the transaction with a view to the furtherance of the common design and purpose. 15 C.J.S. Conspiracy § 2; Burton v. Maupin (Mo., Kansas City C.A.), 281 S.W. 83, 89, quoting 12 C.J. 544. Speculation, relationship or association and companionship do not establish a conspiracy. 3 Underhill's Criminal Evidence, Fifth Ed., § 856.
To establish a conspiracy requires some evidence; suspicion of guilt is of course not sufficient. The evidence of conspiracy as to the Greathouse sale is not sufficient to sustain the trial court's order on this theory.
The court's determination of guilt is thus narrowed to a finding based on their supervisory capacity of Pirkl and their sharing in the sale proceeds. We are unable to find sufficient evidence of the character and weight required by our holding in Division IV, supra, to sustain the trial court's finding Armstrong, Timmer and Hopkins are guilty of contempt.
As to Pirkl the order is sustained and the writ annulled. As to the other individual plaintiffs the order is reversed and the writ sustained.
*64 Taxable costs of printing plaintiffs' brief and argument are limited to $1.50 per printed page. Costs are taxed to Pirkl.
Affirmed in part, reversed in part.
GARFIELD, C. J., and MOORE, STUART and RAWLINGS, JJ., concur.
BECKER, LARSON and SNELL, JJ., dissent.
THORNTON, J., not sitting.
BECKER, Justice.
I dissent as to defendants Timmer, Armstrong and Hopkins.
The basis of disagreement is contained in the following findings of the trial court with which I agree.
"Defendants Timmer, Armstrong, and Hopkins were officers of the corporation and exercised, according to their own testimony, a supervisory role with respect to Defendant Pirkl's activities. Indeed, in the transaction with Mrs. Greathouse, when some complaint arose defendant Timmer accompanied Defendant Pirkl on a second visit to Mrs. Greathouse in which a generous gesture of refund was made to this elderly woman and then the `plan' was promptly resold to her by defendants Pirkl and Timmer acting together. All that has been said before about the original sale applies equally to this one. Neither of the defendants in the second transaction in any way complied with the provisions of the temporary injunction which have been specifically quoted above, and the total effect of such failure to comply with those provisions amounted to misrepresentation, concealment, and omission of material facts in further violation of the provisions of the temporary injunction. * * *
"Defendants Armstrong and Hopkins are equally guilty of contempt as participants in the preparation of the entire scheme, as corporate officers responsible for the supervision of defendant Pirkl, and, most importantly, as co-conspirators with defendants Timmer and Pirkl in a calculated scheme of fraud and false pretense."
The record clearly shows participation in the profits from Pirkl's venture. As to Timmer it shows participation in the venture. It shows knowledge that plaintiffs' agents were still selling this plan after the initial injunction but it is wholly silent on any effective effort to instruct the agents of the corporation as to their duties under the injunction. "So, corporate officers are punishable for contempt where they have knowledge or notice of a writ or order directed to the corporation and they are responsible for the corporation's violation thereof, as where they fail to take action within their power to secure compliance by the corporation, or where they, by their acts or conduct, prevent the corporation from complying." 17 C.J.S. Contempt § 34, page 95.
This is the crux of the matter. There was adequate circumstantial evidence for a finding of contempt in the absence of explanation by the participants. Though they all testified, no explanation was offered. I would affirm as to all plaintiffs and annul the writ.
LARSON and SNELL, JJ., join in this dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1579136/ | 671 N.W.2d 497 (2003)
In re the DETENTION OF Anthony GARRETT.
State of Iowa, Appellee,
v.
Anthony Garrett, Appellant.
No. 02-1180.
Supreme Court of Iowa.
November 13, 2003.
*498 Mark C. Smith, First Assistant Public Defender, and Gregory Bal, Assistant Public Defender, for appellant.
Thomas J. Miller, Attorney General, Linda J. Hines and Denise Timmins, Assistant Attorneys General, and Thomas J. Ferguson, County Attorney, for appellee.
CADY, Justice.
In this appeal, we encounter two questions arising from proceedings commenced to determine whether the respondent is a sexually violent predator. Based on principles and decisions from our other cases in this area, we determine that both the jury verdict and district court order finding the respondent is a sexually violent predator and confining him for treatment should be affirmed.
I. Background Facts and Proceedings.
Anthony Garrett has been convicted in the past of three counts of third-degree sexual abuse (in 1997), two counts of indecent contact with a child (1993), one count of lascivious acts with a child (1989), one count of indecent exposure (1989), and one count of second-degree sexual abuse (1984). See Iowa Code § 229A.2(8) (2001) (defining "sexually violent offense" for purposes of Iowa's Sexually Violent Predator Act (SVPA)). One doctor opined that Garrett suffered from two mental abnormalities, pedophilia (sexually attracted to males, nonexclusive type) and antisocial personality disorder. See id. § 229A.2(4) (defining "mental abnormality"). The doctor further opined that Garrett was likely to engage in future acts of sexual violence if not confined to a secure facility for treatment and that he had serious difficulty controlling his behavior. See id. § 229A.2(9) (defining "sexually violent predator"). Each of these facts led the State to file a petition alleging Garrett was a sexually violent predator subject to confinement for treatment. See id. § 229A.4.
After probable cause was found to temporarily confine Garrett pending a trial on whether he was a sexually violent predator, Garrett filed a request for a pre-trial evaluation of his competency to stand trial. *499 See id. § 229A.5. This application asserted that Garrett had a statutory and constitutional right to be competent throughout any proceedings pertaining to the allegation that he was a sexually violent predator. The application was premised on additional medical evidence that Garrett was functioning in the mentally retarded range and suffered from schizophrenia. One assessment of Garrett indicated that he could not fully comprehend the commitment process, the phraseology "beyond a reasonable doubt," his right to be represented by counsel, and if represented, the role his counsel would play.
The State resisted Garrett's application for a pre-trial competency evaluation, contending he had no statutory or constitutional right to be competent during the SVPA proceedings. After a hearing on the matter, the district court denied the application. The case proceeded to trial, where a jury found beyond a reasonable doubt that Garrett was a sexually violent predator subject to confinement for treatment. See id. § 229A.7(3). A subsequent district court order committed Garrett for treatment. See id.
Garrett appeals from the jury verdict and district court order and raises two issues. He first alleges that he had a constitutional due process right to be competent throughout the proceedings related to his sexually violent predator status and that this right was violated by the district court's denial of his application for a competency evaluation.[1] He also argues that his due process rights were violated by the operation of the SVPA because the statute does not require a jury to determine an alleged predator has serious difficulty controlling his behavior. We take up both of these issues in turn.
II. Standard of Review.
Both of Garrett's claims focus on constitutional due process guarantees. Our review is de novo. In re Detention of Garren, 620 N.W.2d 275, 278 (Iowa 2000).
III. Constitutional Right of Competency.
In In re Detention of Cubbage, 671 N.W.2d 442, 445-48 (Iowa 2003), also decided today, we considered and rejected the respondent's contention that he had a constitutional right to be competent through the course of the proceedings implemented pursuant to the SVPA to determine whether he is a sexually violent predator. There, the respondent invoked the same fundamental rights that Garrett also believes are jeopardized by operation of the SVPA in the absence of an evaluation of his competency. See id. at 446.
Cubbage claimed that he held the fundamental right "to be free from bodily restraint and the [fundamental] right, as a mentally ill person, to treatment in an appropriate setting." Id. However, we noted "that these two claimed fundamental rights merely under[lay] Cubbage's broader claim that he ha[d] a right to be competent during the trial to determine his sexually violent predator status." Id. Thus, because "[t]his overarching alleged right of competency [was] directly related to the assessment of whether Cubbage is a sexually violent predator[,] the process that [was] at the core of [his] appeal," we focused on that claim "in considering Cubbage's claim that he [held] a fundamental *500 right related to his competency." Id. After examining "both our prior case precedents and those of the United States Supreme Court," we determined that the alleged right to be competent during the SVPA proceedings was not fundamental. Id. at 447. For this reason, we applied rational basis review and confirmed that the SVPA withstands that level of constitutional scrutiny. See id. at 448 (citing Garren, 620 N.W.2d at 285).
As noted, Garrett raises the same constitutional due process claims as were raised in Cubbage. Our analysis in that case is applicable to Garrett's claims. Thus, we conclude that Garrett did not suffer an infringement of his due process rights based on the district court's decision to deny his application for a pre-trial evaluation of his competency to stand trial.
IV. Lack of Control Determination.
Garrett also argues that the SVPA violates his due process rights because it does not require a finding that an alleged sexually violent predator has "serious difficulty in controlling behavior." Kansas v. Crane, 534 U.S. 407, 413, 122 S.Ct. 867, 870, 151 L.Ed.2d 856, 862 (2002); see also Kansas v. Hendricks, 521 U.S. 346, 357-58, 117 S.Ct. 2072, 2080, 138 L.Ed.2d 501, 512-13 (1997). In In re Detention of Barnes, we considered the very same issue Garrett raises and determined the SVPA definition of "mental abnormality" must be defined as including and requiring "a showing of a serious difficulty in controlling behavior" to ensure the SVPA's constitutionality. 658 N.W.2d 98, 101 (Iowa 2003). To this end, we suggested that future SVPA proceedings use a jury instruction that embodies the lack of control requirement:
As used in this instruction, "mental abnormality" means a congenital or acquired condition affecting the emotional or volitional capacity that predisposes the person to commit sexually violent offenses in a degree that causes the individual serious difficulty in controlling his behavior.
Id. (quoting Thomas v. Missouri, 74 S.W.3d 789, 792 (Mo.2002)). Ultimately, the jury instructions used in Barnes did not allow for a clear determination that Barnes had a "serious difficulty in controlling behavior," and were thus constitutionally infirm. Id.
Garrett's case went before the jury in July 2002, after the Supreme Court defined and clarified the "serious difficulty in controlling behavior" due process requirement, but before our decision in Barnes. See Crane, 534 U.S. at 413, 122 S.Ct. at 870, 151 L.Ed.2d at 862 (2002); Hendricks, 521 U.S. at 357-58, 117 S.Ct. at 2080, 138 L.Ed.2d at 512-13 (1997); Barnes, 658 N.W.2d at 101 (2003). Nevertheless, one of the questions posed to the jury on the special verdict form was:
Has the state proved beyond a reasonable doubt that the mental abnormality causes the respondent to have serious difficulty in controlling his sexually dangerous behavior?
The jury answered, "Yes" to this question.
Although this special verdict form question does not track precisely the jury instruction on "mental abnormality" that we suggested in Barnes, we believe that the question provoked a thoughtful consideration by the jury of whether Garrett has "serious difficulty in controlling behavior." 658 N.W.2d at 101; accord Crane, 534 U.S. at 413, 122 S.Ct. at 870, 151 L.Ed.2d at 862. Unlike the instruction in Barnes, which reflected only the SVPA's precise language, the question in this case went beyond the statutory language to encapsulate the due process requirement that had been recognized by the Court and which we would later recognize in Barnes. Moreover, the jury specifically found beyond *501 a reasonable doubt that Garrett has "serious difficulty in controlling [his] behavior." Barnes, 658 N.W.2d at 101; accord Crane, 534 U.S. at 413, 122 S.Ct. at 870, 151 L.Ed.2d at 862. Although we continue to stand behind the jury instruction we suggested in Barnes for further SVPA proceedings, we believe the special verdict form in this case ensured that Garrett was accorded due process.
V. Conclusion.
We affirm the finding of the jury that Garrett is a sexually violent predator and also affirm the order of the district court confining Garrett for treatment.
AFFIRMED.
All justices concur except WIGGINS, J., who takes no part.
NOTES
[1] Garrett does not renew on appeal his argument that he also held a statutory right to be competent throughout the Sexually Violent Predator Act proceedings based on Iowa Code section 812.3 (2001). See In re Detention of Cubbage, 671 N.W.2d 442, 444-45 (Iowa 2003) (also decided today, rejecting the same claim). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1579139/ | 671 N.W.2d 139 (2003)
258 Mich. App. 350
Patricia A. TOKAR, Plaintiff-Appellee,
v.
Estate of Thomas TOKAR, Defendant-Appellant.
Docket No. 238946.
Court of Appeals of Michigan.
Submitted August 7, 2003, at Detroit.
Decided September 4, 2003, at 9:00 a.m.
Released for Publication October 29, 2003.
*141 Beadle, Burket, Sweet & Savage, P.L.C. (by Thomas L. Beadle), Troy, for the plaintiff.
Williams, Williams, Ruby & Plunkett, P.C. (by James P. Cunningham), Birmingham, for the defendant.
Before: JANSEN, P.J., and NEFF and KIRSTEN FRANK KELLY, JJ.
*140 KIRSTEN FRANK KELLY, J.
Defendant, Stephen C. Albery, personal representative of the estate of Thomas Tokar, deceased, appeals as of right the trial court's order denying a motion brought by decedent's attorney to confirm an arbitration award.[1] The trial court concluded it lost jurisdiction when decedent died after the arbitration award was filed, but before the judgment of divorce was entered. We affirm.
I. Basic Facts
Plaintiff Patricia A. Tokar and decedent married in 1971. After plaintiff filed for divorce in 1998, the parties agreed to submit disputed property issues to arbitration. In relevant part, the "Stipulated Order for Arbitration" provided:
2.... For purposes of arbitration, the Arbitrator shall have all powers ordinarily conferrable by MCLA 600.5001 et seq. [sic] and as though she were sitting as a Circuit Court Judge in the County of Oakland....
*142 3. The award of the Arbitrator shall be confirmed as a judgement [sic] of this court pursuant to statute and shall be the Judgment of the Court in this cause.
* * *
7. The parties further agree and stipulate ... that such a proceeding is binding upon both parties and that the decision of the Arbitrator shall be final and have the same effect as if issued by the Circuit Judge assigned to this case.
After the arbitrator filed the "Findings of Fact Conclusions of Law and Award," but before the trial court entered a judgment of divorce, decedent died. Despite the death of his client, decedent's attorney filed a motion for confirmation of the arbitration award and entry of a judgment of divorce. The trial court denied the motion on the basis of the general rule that a court does not have jurisdiction to render a judgment of divorce after the death of a party.
II. Analysis
Defendant argues that the trial court erred in denying the motion to confirm the arbitration award for lack of jurisdiction. We disagree.
We review de novo a trial court's decision to enforce, vacate, or modify a statutory arbitration award. Gordon Sel-Way, Inc. v. Spence Bros., Inc., 438 Mich. 488, 496-497, 475 N.W.2d 704 (1991). We also review de novo jurisdictional issues. Oberlies v. Searchmont Resort, Inc., 246 Mich.App. 424, 426, 633 N.W.2d 408 (2001).
A. Jurisdiction
The trial court did not err in denying the motion because the arbitration award, standing alone, did not operate to divorce the parties and, once decedent died, the trial court lacked jurisdiction to enter the divorce judgment. The most vital component of any divorce judgment is the formal dissolution of the marriage between the parties. A judgment of divorce cannot be entered unless there is evidence and a corresponding finding by the trial court "that there has been a breakdown in the marriage relationship to the extent that the objects of matrimony have been destroyed and there remains no reasonable likelihood that the marriage can be preserved." M.C.L. § 552.6(3). Only the trial court can find that the statutory grounds for divorce have been met. An arbitration agreement "does not purport to make of the arbitrator a judge `acting under the color of right as a duly appointed judge.'" Dick v. Dick, 210 Mich.App. 576, 580, 534 N.W.2d 185 (1995), quoting Brockman v. Brockman, 113 Mich.App. 233, 238, 317 N.W.2d 327 (1982). Because the trial court retains ultimate control over a divorce action, an arbitration award, standing alone, does not have full force and effect unless and until the trial court enters a judgment of divorce based on that award.
The trial court's supremacy in all arbitrated actions is clearly established by the statutes and court rule governing arbitration. A stipulated agreement to arbitrate is subject to M.C.L. § 600.5001 et seq.; Dick, supra at 588, 534 N.W.2d 185.[2] Under M.C.L. § 600.5025, the trial courts "have jurisdiction to enforce the agreement and to render judgment on the award." The trial court's enforcement and review of arbitration agreements and awards are governed by MCR 3.602. According to MCR 3.602(I):
An arbitration award filed with the clerk of the court designated in the *143 agreement or statute within one year after the award was rendered may be confirmed by the court, unless it is vacated, corrected, or modified, or a decision is postponed, as provided in this rule.
Further, MCR 3.602(L) provides:
The court shall render judgment giving effect to the award as corrected confirmed, or modified. The judgment has the same force and effect, and may be enforced in the same manner, as other judgments.
These rules clarify the relationship between the trial court and the arbitration process. Unless the trial court vacates an arbitration award, it must enter a judgment on the award as corrected, confirmed, or modified. But equally clear is the fact that an arbitration award depends on the trial court to give it effect. The arbitration award is not effective until the trial court enters judgment on it. In a divorce case, when the parties agree to arbitrate issues of property distribution, spousal support, or child custody,[3] the trial court's judgment must incorporate an unvacated award, as corrected, confirmed, or modified, but only the trial court can adjudge the parties divorced.
Applying this reasoning to the present case, we conclude that the trial court properly denied the motion to confirm the arbitration award and enter a judgment of divorce. The arbitration award did not operate to divorce the parties and cannot substitute for a judgment of divorce entered by the trial court. When decedent's attorney brought the motion to confirm the arbitration award and enter a divorce judgment, the trial court no longer had jurisdiction to render a judgment of divorce because decedent had died. A court must have jurisdiction over both the parties to an award before an order confirming the award can be entered. "A court is without jurisdiction to render a judgment of divorce after the death of one of the parties. `There must be living parties, or there can be no relationship to be divorced.'" Tiedman v. Tiedman, 400 Mich. 571, 576, 255 N.W.2d 632 (1977), quoting Wilson v. Wilson, 73 Mich. 620, 621, 41 N.W. 817 (1889).
B. Tiedman Exceptions
Relying on Tiedman, supra, defendant argues that two exceptions to this jurisdictional rule apply: (1) after the arbitration award was filed, only the "ministerial act" of entering a divorce judgment remained, and (2) decedent acted in reliance on the award. We disagree.
First, the trial court's entry of the judgment of divorce would not have been merely ministerial. Id. at 577, 255 N.W.2d 632. At the time of the motion to confirm the arbitration award and enter a divorce judgment, the trial court had not yet made findings regarding the statutory grounds for divorce. Further, according to letters exchanged by the parties, the arbitration award failed to resolve the division of household furnishings and the parties were still negotiating spousal support. The letters also indicated that the parties might return before the arbitrator to clarify ambiguities in the award. Moreover, before the judgment of divorce was entered, the parties had the option to reconcile or stipulate to an agreement entirely different from the arbitration award.
Second, defendant has not shown substantial reliance on the arbitration award. Id. at 571, 255 N.W.2d 632. Defendant argues that decedent's payoff of *144 the mortgage on the marital home to prevent foreclosure constituted reliance. But the "Order After Arbitration Award" on which defendant relies, states:
Defendant Thomas P. Tokar shall, from his own assets anticipated to be awarded upon a judgment for divorce, shall [sic] cause to immediately pay off the underlying mortgage on the former marital home.... [Emphasis added.]
Because this order explicitly anticipates the filing of a judgment of divorce to finalize the action, it does not support defendant's argument that decedent relied on the arbitration award as a final judgment. "[T]he amount of reliance required should be substantial. Meaningful proof of conduct indicating the parties themselves in good faith believed they were divorced is required." Ensman v. Ensman, 86 Mich. App. 91, 96, 272 N.W.2d 176 (1978). After reviewing the record, we conclude that defendant failed to demonstrate the required reliance.
Affirmed.
NOTES
[1] Although we address the issues raised in defendant's brief on appeal, we note that the motion at issue and this appeal, at a basic level, are faulty. First, decedent's attorney was without authority to act on behalf of decedent or defendant when he filed the motion because the motion was filed after decedent's death, but before the probate court issued letters of authority. Henritzy v. Gen. Electric Co., 182 Mich.App. 1, 7-8, 451 N.W.2d 558 (1990); see also MCR 2.202(A)(1)(b). Although the probate court issued the letters of authority before the trial court dismissed the action, there was no motion for substitution in the trial court. Thus, while decedent was the only defendant in the trial court, the personal representative of his estate is the only defendant on appeal. Despite our belief that this appeal and the motion filed in the lower court are procedurally faulty, we address the issues raised on appeal to conserve judicial resources because upon remand, the personal representative of the estate could be substituted for decedent and the motion brought before the trial court again. Our conclusion, regardless of whether the correct procedure was followed, would be the same.
[2] Since March 28, 2001, domestic relations arbitrations have been subject to the domestic relations arbitration act, M.C.L. § 600.5070 et seq.
[3] Dick, supra at 582-588, 534 N.W.2d 185; Krist v. Krist, 246 Mich.App. 59, 631 N.W.2d 53 (2001). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578767/ | 12 So. 3d 172 (2007)
DONNA PRICKETT HOLLOWAY
v.
ROBERT DALE HOLLOWAY.
No. 2060269.
Court of Civil Appeals of Alabama.
April 20, 2007.
Decision of the Alabama Court of Civil Appeal Without Published Opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578774/ | 12 So. 3d 220 (2009)
BIGELOW
v.
STATE.
No. SC09-944.
Supreme Court of Florida.
June 4, 2009.
Decision without published opinion Appeal dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578801/ | 281 S.W.3d 602 (2009)
VETERANS LAND BOARD of the State of Texas et al, Appellants,
v.
Betty Yvon LESLEY et al, Appellees.
No. 11-07-00034-CV.
Court of Appeals of Texas, Eastland.
January 22, 2009.
Rehearing Overruled March 19, 2009.
*607 Priscilla M. Hubenak, Asst. Office of Atty. Gen., Austin, for Appellants Veterans Land Board.
Michael J. Murray, Sharon Callaway, Crofts & Callaway, Brian C. Hamilton, Matthew D. Bradley, Pipkin, Oliver & Bradley, L.L.P., San Antonio, for Appellants Bluegreen Southwest One.
Darrell Haynes, Stephen E. Haynes, Haynes Law Firm, P.C., Brownwood, Byron L. Woolley, Simpson, Woolley & McConachie, L.L.P., D. Prichard Bevis, James P. McGowen, McGowen & Shaw, P.L.L.C., Steven R. Shaver, Friedman & Feiger, L.L.P., David C. McCue, Mary T. Sullivan, McCue-Pauley & Associates, P.C., Christopher A. Payne, Karen Keltz, Riddle & Williams, P.C., Dallas, Robert J. Glasgow, Glasgow, Isham & Glasgow, P.C., Stephenville, Lawrence L. Fleishman, Browning & Fleishman, P.C., Ennis, Katherine Woodruff, Law Office of Katherine Woodruff, Houston, Amy M. McLin, Law Office of Amy M. McLin, P.C., San Antonio, for Appellants Landowner.
Harold L. Hensley, Jr., Hinkle, Hensley, Shanor, Marton, L.L.P., Chris Aycock, Charles L. Tighe, Susan R. Richardson, David W. Lauritzen, Robert C. Bledsoe, Cotton, Bledsoe, Tighe & Dawson, Midland, for appellees.
Panel consists of WRIGHT, C.J., *608 McCALL, J., and BOYD, S.J.[*]
OPINION
TERRY McCALL, Justice.
Appellees own non-executive mineral interests in lands underlying the Mountain Lakes Development, a residential subdivision in Erath County, Texas. They brought this suit against the developer of the subdivision, the property owners' association for the development, and the lot owners in the subdivision. Appellees sought declaratory judgment on a number of issues, and they also alleged various claims for affirmative relief against appellants. This case involves two primary issues: (1) who owned the executive rights and (2) did the owner or owners of the executive rights breach a duty to the non-executives. On these issues, the trial court granted summary judgment in favor of appellees on their claims that the developer owned the executive rights, that it owed appellees a duty to lease the minerals, and that it breached its duty to lease. In this appeal, appellants challenge the trial court's order granting and denying summary judgment and order denying plea to the jurisdiction. We reverse the judgment of the trial court.
The Parties
Appellants are (1) Bluegreen Southwest One, L.P. (Bluegreen), the developer of the Mountain Lakes Development; (2) approximately 460 lot owners in the Mountain Lakes Development (Landowner Appellants); and (3) the Veterans Land Board of the State of Texas (VLB). The VLB purchased lots in the development and then sold them to veterans as part of a program that was designed to assist veterans in obtaining property with low interest loans. Appellees sued the VLB as a lot owner defendant.
Appellees are (1) Betty Yvon Lesley and her husband, Kenneth Lesley; (2) Kenneth Lesley and Perry Elliott, Independent Executors of the Estate of Bobby John Foster, Deceased;[1] (3) Richard H. Coffey, Sr.; (4) Singin' Hills Minerals, Ltd.; and (5) JPMorgan Chase Bank, N.A., as trustee of eighteen trusts. Some of the claims in this case are common to all appellees. In addition to these common claims, the Lesley Appellees (groups (1) and (2) above) brought claims for reformation of deeds and for breach of contract. We will refer to "appellees" when addressing the common claims. We will refer to the "Lesley Appellees" when addressing claims that are unique to them.
Introduction
The Mountain Lakes Development contains about 4,100 acres of land. The development is located on land that was, at one time, owned by Wyatt C. Hedrick and his wife, Mildred Sterling Hedrick. The Hedricks owned the surface estate and the mineral estate in the subject property. On November 6, 1952, the Hedricks executed a deed to H.S. Foster. Under the deed, "[the Hedricks] granted, sold and conveyed to [H.S. Foster] a full interest in the surface estate and an undivided one-half (½) interest in the oil, gas and other minerals, except that [H.S. Foster] shall have full, complete and sole right to execute oil, gas and mineral leases covering all the oil, gas and other minerals in the following described land."
H.S. Foster had two children, Betty Yvon Lesley and Bobby John Foster. In *609 1966, Betty Yvon Lesley and her husband, Kenneth Lesley, acquired from H.S. Foster the surface estate and one-half of the mineral estate in 174.35 acres of the subject property. When H.S. Foster died, Betty Yvon Lesley and Bobby John Foster inherited the entire surface estate and one-half mineral interest in 3,923.58 acres of the subject property.
In 1998, Bobby John Foster, Betty Yvon Lesley, and Kenneth Lesley sold the surface estate of the subject property to Bluff Dale Development Corporation for about $2,000,000. Bluff Dale intended to develop the property as a residential subdivision or to sell it to another residential developer. On February 17, 1998, Bobby John Foster and Betty Yvon Lesley, joined by her husband Kenneth Lesley, executed a deed to Bluff Dale covering 3,923.58 acres of the subject property. On September 30, 1998, Betty Yvon Lesley and Kenneth Lesley executed a deed to Bluff Dale covering an additional 174.35 acres of the subject property. Both deeds provided:
Grantors will be reserving unto themselves, their heirs, and assigns, one-fourth (1/4) of the oil, gas, sulphur and other minerals to which Grantors are now entitled to in all of the lands covered by this conveyance. It is understood and agreed, however, that Grantee, his heirs, successors and assigns, shall have full rights to execute all future oil, gas, sulphur and other mineral leases for such bonuses, such delay rentals and for such terms as Buyers may think proper, but Grantors shall not be required to execute any such leases, but shall be entitled to receive one-fourth (1/4) of all bonuses and delay rentals, whether the same be paid in cash, by overriding royalties, production payments or in any other manner.
By deeds dated September 25, 1998, and December 30, 1998, Bluff Dale conveyed its interests in the subject property to Properties of the Southwest, L.P., subject to "[a]ny prior reservations or conveyance[s] of oil, gas and other minerals, restrictions, covenants, conditions, rights-of-way and easements of record." On March 15, 1999, Properties of the Southwest changed its name to Bluegreen.
Bluegreen developed the property as the Mountain Lakes Development in a series of five sections. In connection with developing each section, Bluegreen filed and recorded declarations of covenants, conditions, and restrictions. The declarations contained the following use restriction, among others:
Section 3.12 Mineral Development. No commercial oil drilling, oil development operations, oil refining, quarrying or mining operation of any kind shall be permitted. No derrick or other structures designed for the use of boring for oil or natural gas shall be erected, maintained or permitted upon any Tract.
Section 9.02 of the declarations provided that "[t]his Declaration may be amended or changed, in whole or in part, at any time by the written agreement or signed ballot of two-thirds (2/3rds) of the Owners (including the Developer) entitled to vote."
Bluegreen sold home sites to about 1,700 purchasers. Although Bluegreen did not use identical deeds in connection with all the sales, one type of deed that Bluegreen commonly used provided as follows:
Reservation from conveyance: None.
Exceptions to Conveyance and Warranty:
1. Any and all restrictions, covenants, and easements, if any, relating to the hereinabove described property, but only to the extent they are still in effect, shown of record in Erath County, Texas, and to all zoning laws, regulations or ordinances of municipal and other governmental *610 authorities, if any, but only to the extent they are still in effect, relating to the hereinabove described property.
2. Undivided one-half of all oil, gas and other minerals of every character in and under the herein described property reserved by Wyatt Hedrick, et ux, in instrument recorded in Volume 339, Page 172, Deed Records, Erath County, Texas.
3. Undivided one-fourth of all oil, gas and other minerals of every character in and under the herein described property reserved by Bobby John Foster, et al in instrument recorded in Volume 948, Page 639, Deed Records, Erath County, Texas.
Proceedings in Trial Court
On October 12, 2005, appellees sued Bluff Dale, Bluegreen, the Property Owners' Association of Mountain Lakes Ranch (POA), and about 1,700 individual lot owners. In their petition, appellees alleged, among other things, (1) that they owned undivided mineral interests in the subject property; (2) that, as a result of the transactions described above, Bluegreen had acquired the executive rights and had later transferred "all the executive rights to the lot owners of all minerals underlying each of said lots"; (3) that the defendants as their mineral co-tenants and as owners of the executive rights owed a duty of utmost good faith to them as non-executive mineral interest owners; and (4) that "[s]uch duty [was] fiduciary in nature and include[d] the duty to lease all of the minerals for exploration and development of oil and gas." Appellees alleged that all defendants had breached this fiduciary duty and, specifically, that Bluegreen and the POA had breached this duty by creating the restriction that prohibited mineral development. Appellees also alleged claims for breach of contract and sought a declaratory judgment on a number of issues, including declarations as to their rights as non-executive mineral interest owners and as to the defendants' duties as owners of the surface, the executive rights, and the remaining minerals.
In an amended pleading filed in October 2006, appellees changed their position as to who owned the executive rights. They no longer alleged that Bluegreen had transferred the executive rights to the lot owners. Instead, they alleged that, because Bluegreen had listed the restrictive covenants as an exception "to the conveyance" in its deeds to the lot owners and because the restrictions prohibited mineral development, Bluegreen had not effectively transferred the executive rights to the lot owners. In their live pleadings, appellees sought declarations, among others, concerning (1) ownership of mineral interests, (2) ownership of the executive rights, (3) breach of duty owed by the owner of the executive rights, and (4) applicability of the covenants and subdivision plats to the mineral estate. Appellees alleged breach of fiduciary duty claims and breach of contract claims against the defendants. Appellees also alleged tortious interference claims and intentional invasion or interference with property rights claims against Bluegreen. The Lesley Appellees alleged an additional breach of contract claim. They also sought to reform the mineral reservation clauses in their deeds to Bluff Dale on the ground of mutual mistake.
Many of the parties filed traditional and no-evidence motions for summary judgment. The appellate record contains twenty-six motions for summary judgment, including supplemental motions, a clerk's record, eleven supplemental clerk's records, and eight reporter's records. The VLB filed a plea to the jurisdiction based on sovereign immunity. On November *611 7 and 8, 2006, and on January 16 and 17, 2007, the trial court heard the motions for summary judgment and the plea to the jurisdiction. On January 17, 2007, the trial court entered its order granting and denying summary judgment and order denying plea to the jurisdiction. In the order, the trial court granted (1) appellees' November 3, 2006 request for summary judgment and December 26, 2006 supplemental motion for partial summary judgment asserting that Bluegreen owned the executive rights; (2) appellees' July 18, 2006 motion for partial summary judgment, October 10, 2006 supplemental motion for partial summary judgment, and December 26, 2006 second supplemental motion for summary judgment asserting that the restrictive covenants were not enforceable;[2] (3) appellees' December 26, 2006 motion for partial summary judgment against Bluegreen asserting that it breached its duty to lease and breached its contract; and (4) the Lesley Appellees' December 20, 2006 motion for partial summary judgment on the deed reformation claims asserted in their second supplemental original petition and on the POA's and Bluegreen's counterclaims for declaratory judgment relating to the deed reformation claims.
In the order, the trial court denied Bluegreen's October 23, 2006 traditional motion for summary judgment on appellees' tortious interference claims and no-evidence motion for summary judgment on appellees' breach of contract, breach of fiduciary duty, and tortious interference claims. The trial court granted the POA's July 26, 2006 no-evidence motion for summary judgment and October 24, 2006 motion for partial summary judgment on appellees' breach of contract and breach of fiduciary duty claims to the extent that the trial court declared that the POA was not liable to appellees for breach of any duty associated with ownership of the executive rights because the POA did not own, and had not owned, the executive rights. Otherwise, the trial court denied these motions. The trial court also denied the POA's December 21, 2006 supplemental traditional and no-evidence motions for summary judgment. The trial court granted the landowner defendants' October 20, 2006 traditional and no-evidence motions for summary judgment on appellees' damages claims to the extent that the trial court declared that the landowner defendants were not liable to appellees for breach of any duty associated with ownership of the executive rights because the landowner defendants did not own, and had not owned, the executive rights. Otherwise, the trial court denied the landowner defendants' motions. The trial court also denied the SWM clients' (some of the lot owner defendants) December 26, 2006 motion for summary judgment, the landowner defendants' December 26, 2006 motion for summary judgment, and Bluegreen's December 28, 2006 motion for summary on the Lesley Appellees' deed reformation claims. The trial court granted other lot owner defendants' motions for summary judgment to the extent that the trial court declared that they were not liable to appellees for breach of any duty associated with ownership of the executive rights because the lot owner defendants did not own, and had not owned, the executive rights. Otherwise, the trial court denied the other lot owner defendants' motions for summary judgment. The trial court denied the VLB's plea to the jurisdiction.
*612 The trial court also ordered that any motions that were not expressly granted in the order were denied and that all defendants were permanently enjoined from attempting to enforce the declarations of covenants. In the order, the trial court stated that the order did not dispose of the following claims: (1) any remaining claims by appellees for damages against Bluegreen; (2) any remaining claims by the POA and any lot owner defendants against Bluegreen; and (3) any counterclaims against plaintiffs. The trial court entered an order severing the claims disposed of in its order granting and denying summary judgment and order denying plea to the jurisdiction from the remainder of the claims in the suit. This appeal involves the claims that were disposed of in the trial court's order granting and denying summary judgment and order denying plea to the jurisdiction.
The Trial Court's Declaratory Judgment Ownership of Leasing Rights.
The trial court determined that Bluegreen owned the executive rights. The trial court made the following declaration in Section IV:
The Court DECLARES that the Bluff Dale to Bluegreen Deeds conveyed to Bluegreen the Leasing Rights. Subsequent to its acceptance of the Leasing Rights under the Bluff Dale to Bluegreen Deeds, Bluegreen did not effectively convey, or assign, all, or any portion of, the Leasing Rights to any Lot Owner Defendant, to the POA, or to any other third party. Therefore, Bluegreen is, and remains, the owner of the Leasing Rights it acquired under the Bluff Dale to Bluegreen Deeds. Accordingly, Bluegreen is the sole and exclusive owner of the Leasing Rights.
Breach of Executive Duty Owed by Owner of Leasing Rights.
The trial court determined that Bluegreen, as the owner of the executive rights, breached the duty it owed to appellees, as non-executive mineral owners. The trial court made the following declarations in Section V:
The Court DECLARES that the Owner of the Leasing Rights owes to the non-executive mineral owners the same degree of diligence and discretion in exercising the rights and powers granted under Leasing Rights as would be expected of the average landowner who because of self-interest is normally willing to take affirmative steps to seek or to cooperate with prospective lessees (hereinafter the "Duty to Lease").
The Court DECLARES that because neither the Lot Owner Defendants nor the POA own, or have owned, the Leasing Rights, no Lot Owner Defendant or the POA has breached the Duty to Lease owed to the Plaintiffs.
The Court DECLARES that Bluegreen, as owner of the Leasing Rights, breached the Duty to Lease by: entering into a Deed of Trust burdening the Leasing Rights; creating and recording the Declarations of Covenants and the Plats; failing to provide notice of the filing of the Declarations of Covenants as is required under the Lesley/Foster to Bluff Dale Deed and the Lesley to Bluff Dale Deed; and failing to lease the Plaintiffs' minerals pertaining to the Subject Land when there was opportunity to do so.
The Court DECLARES that Bluegreen breached the contractual requirement of the Lesley/Foster to Bluff Dale Deed and the Lesley to Bluff Dale Deed by failing to give the requisite notice of the filing of the Declarations of Covenants.
*613 Applicability of the Declarations of Covenants and Plats Upon the Mineral Estate.
The trial court determined that the declarations of covenants and plats were unenforceable. The trial court made the following declarations in Section VI:
The Court DECLARES that the Declarations of Covenants and Plats expressly purport to prohibit and restrict the exploration for, development, production and marketing of oil, gas and other minerals which may be located in, on, or under the Subject Land.
The Court DECLARES that neither the Declarations of Covenants, nor the Plats, are enforceable, and cannot be used, to prohibit or restrict in any way, the exploration for, development of, production of, and/or marketing of oil, gas and/or other minerals which may be located in, on, or under the Subject Land.
The Court DECLARES that neither the Declarations of Covenants, nor the Plats, are enforceable, and cannot be used, to prohibit or restrict in any way, the execution of a lease or leases covering the oil, gas, or other minerals which may be located in, on, or under the Subject Land.
The Court DECLARES that neither the Declarations of Covenants, nor the Plats, are enforceable, and cannot be used, to prohibit or restrict in any way, the Plaintiffs' rights as mineral co-tenants to self-exploration or self-development of Plaintiffs' mineral interests in the Subject Land.
The Court DECLARES that Plaintiffs' minerals in, on, or under the Subject Land are not bound, burdened, or encumbered by any covenants entered post-severance of the Plaintiffs' minerals from the surface estate.
The Court DECLARES that the Plaintiffs' minerals in, on, or under the Subject Land were severed from the surface estate on November 5, 1952 (pursuant to the Hedrick to Foster Deed), on February 17, 1998 (pursuant to the Lesley/Foster to Bluff Dale Deed), and September 30, 1998 (pursuant to the Lesley to Bluff Dale Deed).
The Court DECLARES that the remaining one-fourth mineral interest not owned by the Plaintiffs pertaining to the Subject Land was severed from the surface estate because of the partitioning of the surface estate by virtue of the recording of the Declarations of Covenants and the recording of the Plats.
Ownership of Mineral Interests.
The trial court's declarations related to the Lesley Appellees' claims for reformation of the February 17, 1998 deed from Bobby John Foster and Betty Yvon Lesley to Bluff Dale and the September 30, 1998 deed from Betty Yvon Lesley and Kenneth Lesley to Bluff Dale. In Section II, the trial court declared, in relevant part, as follows: (1) that the parties to the deeds intended for the Lesley Appellees to reserve an undivided one-fourth mineral interest, without leasing rights, in the subject lands; (2) that scrivener's errors in the deeds by the Lesley Appellees's attorney resulted in a mutual mistake regarding the mineral interest to be reserved; (3) that, as a result of the scrivener's errors, the deeds contained "an ambiguity that could be interpreted as reserving one-eighth of the oil, gas and other minerals"; (4) that the deeds should be, and were, reformed to reserve a one-fourth mineral interest; (5) that reformation of the deeds would not affect the reasonable expectations of subsequent purchasers of the property who took with notice of the ambiguities in the deeds and who did not bargain to receive more than a one-fourth mineral interest; (6) that reformation of the deeds resulted in such subsequent purchasers *614 receiving the mineral interest that they bargained to receive when they purchased their lots; and (7) that each lot owner defendant was conveyed a one-fourth mineral interest, without executive rights, in their respective lots.
Issues on Appeal
The Landowner Appellants present six issues for review. In their first five issues, they contend that the trial court erred in granting summary judgment to appellees and in denying summary judgment to them for the following reasons: (1) that the owner of the executive rights does not have an affirmative duty to lease the minerals; (2) that appellees failed to present evidence showing that they breached the alleged duty to lease; (3) that appellees do not have a right to self-develop the minerals; (4) that Bluegreen did not retain the executive rights and that the trial court's conclusion that Bluegreen retained the executive rights was irreconcilable and void because it was based on a finding that the restrictive covenants were both valid and invalid; and (5) that a deed may not be reformed under the doctrine of mutual mistake when subsequent purchasers have acquired the property without knowledge of the mutual mistake. In their sixth issue, the Landowner Appellants contend that, if this court determines that a duty to lease exists or that appellees have a right to self-develop the minerals, we should extend the accommodation doctrine to protect against condemnation of the surface estate.
Bluegreen presents six issues for review. In its first issue, Bluegreen contends that the trial court erred in rendering summary judgment declaring that the owner of the executive rights owes a fiduciary duty to lease. In its second issue, Bluegreen contends that the trial court erred in rendering summary judgment to appellees that Bluegreen breached a duty to lease appellees' minerals. In its third and fourth issues, Bluegreen contends that the trial court erred in rendering summary judgment to the Lesley Appellees (1) on their claim that Bluegreen breached the contractual notice requirements in their deeds to Bluff Dale and (2) on their reformation claims. In its fifth issue, Bluegreen contends that the trial court erred in failing to render summary judgment to it with respect to the issues raised in Issues Nos. 1 through 4 above. In its sixth issue, Bluegreen contends that, if it owns the executive rights, the trial court erred in denying its motion for summary judgment on appellees' tortious interference claims.
The VLB presents one issue for review. In its issue, the VLB contends that the trial court erred in denying its plea to the jurisdiction based on sovereign immunity.
Summary Judgment Standards of Review
We review the trial court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). The parties filed traditional and no-evidence motions for summary judgment. A trial court must grant a traditional motion for summary judgment if the moving party establishes that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. TEX.R.CIV. P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.1991). In order for a defendant to be entitled to summary judgment, it must either disprove an element of each cause of action or establish an affirmative defense as a matter of law. Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex.1997); Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997). Once the movant establishes *615 a right to summary judgment, the nonmovant must come forward with evidence or law that precludes summary judgment. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979). When reviewing a traditional summary judgment, the appellate court considers all the evidence and takes as true evidence favorable to the nonmovant. Am. Tobacco Co., 951 S.W.2d at 425; Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). The appellate court "must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented" and may not ignore "undisputed evidence in the record that cannot be disregarded." Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755, 757 (Tex.2007).
When a no-evidence motion for summary judgment is filed, the burden shifts to the nonmoving party to present evidence raising an issue of material fact as to the elements specified in the motion. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.2006). A trial court must grant a proper no-evidence motion for summary judgment unless the nonmovant produces more than a scintilla of probative evidence to raise a genuine issue of material fact on the challenged elements of the claim. TEX.R. CIV. P. 166a(i); Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004); Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 506 (Tex.2002). We review a no-evidence summary judgment under the same standard as a directed verdict. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex.2003). We review the evidence in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. Tamez, 206 S.W.3d at 582; City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005).
Competing motions for summary judgment were filed on some of the issues. When competing motions are filed and one is granted and the other is denied, the reviewing court must review the summary judgment evidence presented by both sides and determine all questions presented. Comm'rs Court of Titus County v. Agan, 940 S.W.2d 77, 81 (Tex.1997). The reviewing court should render such judgment as the trial court should have rendered. Id.
Ownership of the Executive Rights
As part of Bluegreen's second issue, it asserts that the trial court erred in concluding that it was the sole owner of the executive rights. As part of the Landowner Appellants' fourth issue, they assert that the trial court erred in concluding that Bluegreen reserved the executive rights in its deeds to the lot owners. A mineral estate consists of five attributes: (1) the right to develop (the right of ingress and egress); (2) the right to lease (the executive right); (3) the right to receive bonus payments; (4) the right to receive delay rentals; and (5) the right to receive royalty payments. French v. Chevron U.S.A., Inc., 896 S.W.2d 795, 797 (Tex.1995); Altman v. Blake, 712 S.W.2d 117, 118 (Tex.1986); Reagan v. Marathon Oil Co., 50 S.W.3d 70, 82 (Tex.App.-Waco 2001, no pet.); Bank One, Tex., Nat'l Ass'n v. Alexander, 910 S.W.2d 530, 532 (Tex. App.-Austin 1995, writ denied). Each attribute is an independent property right, may be severed into a separate interest, and may be separately conveyed or reserved by the owner. French v. Chevron U.S.A., Inc., 871 S.W.2d 276, 277-78 (Tex. App.-El Paso 1994), aff'd, 896 S.W.2d 795 (Tex.1995); Extraction Res., Inc. v. Freeman, 555 S.W.2d 156, 158-59 (Tex.Civ. App.-El Paso 1977, writ ref'd n.r.e.). *616 When an owner conveys a mineral estate, all attributes are impliedly transferred as well unless they are specifically reserved to the grantor. French, 871 S.W.2d at 278; Prairie Producing Co. v. Schlachter, 786 S.W.2d 409, 412 (Tex.App.-Texarkana 1990, writ denied). Thus, when a mineral interest is conveyed, the executive right incident to that interest passes to the grantee unless specifically reserved. Day & Co. v. Texland Petroleum, Inc., 786 S.W.2d 667, 669 n. 1 (Tex.1990); Schlittler v. Smith, 128 Tex. 628, 101 S.W.2d 543, 544 (1937).
In this case, the Hedricks conveyed the executive rights to H.S. Foster in the 1952 deed. That deed specifically provided that "[H.S. Foster] shall have full, complete and sole right to execute oil, gas and mineral leases covering all the oil, gas and other minerals in the following described land." In 1966, Betty Yvon Lesley and her husband, Kenneth Lesley, acquired from H.S. Foster the surface estate and one-half of the mineral estate in 174.35 acres of the subject property. When H.S. Foster died, Betty Yvon Lesley and Bobby John Foster inherited the surface estate and one-half mineral interest in 3,923.58 acres of the subject property. In the 1998 deeds from (1) Betty Yvon Lesley and Bobby John Foster to Bluff Dale and (2) Betty Yvon Lesley and Kenneth Lesley to Bluff Dale, the Lesleys and Foster conveyed the executive rights to Bluff Dale. Specifically, the deeds provided that "[Bluff Dale] shall have full rights to execute all future oil, gas, sulphur, and other mineral leases." The parties do not dispute that the Lesleys and Foster conveyed the executive rights to Bluff Dale, that Bluff Dale conveyed the executive rights to Properties of the Southwest, that Properties of the Southwest later changed its name to Bluegreen, and that, therefore, Bluegreen became the owner of the executive rights.
Bluegreen's deeds to the lot owners typically provided that there were no reservations from conveyance. The deeds also typically provided that "all restrictions, covenants, and easements" were exceptions to the conveyance and warranty. One such restriction was the prohibition against mineral development set forth in Section 3.12 of the declarations of covenants, uses, and restrictions. Section 3.12 provided that "[n]o commercial oil drilling, oil development operations, oil refining, quarrying or mining operation of any kind shall be permitted." Appellees state in one of their appellate briefs that, "[w]hile none of the Bluegreen deeds make any specific mention of the right of ingress and egress for development of the minerals or the right to execute a lease, by stripping the grantee of any right to drill, quarry, or mine, by definition, the grantee is without the ability to convey those rights to a subsequent lessee." Appellees assert that, because Section 3.12 prohibited the lot owners from leasing the minerals, the deeds expressed an intent on the part of Bluegreen to reserve the executive rights. Therefore, appellees contend that Bluegreen retained the executive rights. The trial court declared that Bluegreen had not effectively conveyed the executive rights to the lot owners, to the POA, or to any other party.
As acknowledged by appellees, Bluegreen's deeds to the lot owners did not specifically mention the right to execute a lease. Bluegreen did not specifically reserve the executive rights in its deeds to the lot owners. In essence, appellees assert that Bluegreen impliedly reserved the executive rights by including the restriction against mineral development in the deeds. However, a grantor may not reserve the executive rights by implication. Because Bluegreen did not specifically reserve the executive rights in its deeds to *617 the lot owners, the executive rights passed to the lot owners. Day & Co., 786 S.W.2d at 669 n. 1.[3]
The trial court erred in granting summary judgment declaring that Bluegreen did not effectively convey the executive rights to the lot owners or any of its other grantees.[4] We sustain the Landowner Appellants' fourth issue and Bluegreen's second issue to the extent the Landowner Appellants and Bluegreen complain that the trial court erred in concluding that Bluegreen reserved the executive rights.[5] We reverse Section IV of the trial court's order. Because neither the Landowner Appellants nor Bluegreen moved for summary judgment that Bluegreen conveyed the executive rights to the lot owners, we do not render judgment declaring that Bluegreen conveyed the executive rights to the lot owners. Instead, we remand the ownership of the executive rights issue to the trial court for further proceedings consistent with this opinion.
Duty of Executive Rights Owner to Non-Executive Mineral Owners
In its declarations, the trial court defined the duty owed by the executive to the non-executive mineral owners as follows:
[T]he Owner of the Leasing Rights owes to the non-executive mineral owners the same degree of diligence and discretion in exercising the rights and powers granted under Leasing Rights as would be expected of the average landowner who because of self-interest is normally willing to take affirmative steps to seek or to cooperate with prospective lessees (hereinafter the "Duty to Lease").[6]
The trial court's declaration is identical in material respects to a jury instruction that was given in Manges v. Guerra, 673 S.W.2d 180, 183 (Tex.1984). In Manges, *618 neither party objected to the instruction, and the Texas Supreme Court did not approve the instruction as properly defining the duty owed by the owner of the executive right. 673 S.W.2d at 183.
In Manges, the executive engaged in acts of self-dealing, including leasing the minerals to himself on terms that were unfair to the non-executive mineral owners. Id. at 184. The executive also executed a deed of trust covering "all of the oil, gas and other mineral interests ... including ... executive rights and powers." Id. at 182. The Manges court recognized that an executive owes the non-executive mineral owners the duty of utmost good faith and that the duty is fiduciary in nature. Id. at 183. The fiduciary duty arises from the relationship of the parties and not from the terms of a contract. Id. The court explained that "[the] duty requires the holder of the executive right ... to acquire for the non-executive every benefit that he exacts for himself." Id. The court held that the executive had breached his fiduciary duty in making the lease to himself, in agreeing to accept a nominal bonus as a term of the lease, and "in dealing with the entire mineral interest so that he received benefits that the non-executives did not receive." Id. at 184.
In In re Bass, 113 S.W.3d 735 (Tex.2003) (orig.proceeding), the supreme court explained its holding in, and distinguished, Manges:
Manges involved a dispute between mineral estate co-tenants. Manges purchased one-half of the mineral estate and executive leasing rights from the Guerra family with the Guerras retaining the other 50% ownership interest in the mineral estate. The Guerras sued Manges for self-dealing in leasing a portion of the estate to himself at unfair terms. We stated that "[a] fiduciary duty arises from the relationship of the parties ... [t]hat duty requires the holder of the executive right, Manges in this case, to acquire for the non-executive every benefit that he exacts for himself." Accordingly, we held that Manges breached his fiduciary duty to the Guerras by making a lease to himself under numerous unfair terms.
....
What differentiates this case from Manges, however, is that no evidence of self-dealing exists here. Bass has not leased his land to himself or anyone else. Bass has yet to exercise his rights as the executive. Because Bass has not acquired any benefits for himself, through executing a lease, no duty has been breached. Thus, the present facts are distinguishable from Manges.
113 S.W.3d at 744-45 (citation omitted).
The court's analysis in Bass establishes that no breach of fiduciary duty can occur until the executive exercises the executive rights. Under Manges and Bass, a breach of fiduciary duty occurs if (1) the executive exercises the executive rights, (2) the executive acquires benefits from the minerals for himself by exercising the executive rights, and (3) the executive fails to acquire every benefit for the non-executive mineral owners that he acquired for himself. Bass, 113 S.W.3d at 744-45. The owner of the executive rights does not have an affirmative duty to lease the minerals.[7]See Hlavinka v. Hancock, 116 S.W.3d 412, 420 (Tex.App.-Corpus Christi 2003, pet. denied) ("[A]ppellees misconstrue Manges in seeking to impose a fiduciary duty to lease upon the executive *619 interest owner."). The trial court erred in defining the duty owed by the executive to the non-executive mineral owners. We sustain Bluegreen's first issue.
The trial court also declared that Bluegreen, as the executive rights owner, breached the "Duty to Lease" in four respects: (1) by entering into a deed of trust burdening the executive rights; (2) by creating and recording the declarations of covenants and the plats for the subdivision; (3) by failing to provide notice of the filing of the declarations of covenants as is required under the Lesley Appellees' deeds to Bluff Dale; and (4) by failing to lease appellees' minerals when there was opportunity to do so. In Manges, the executive's deed of trust covered all mineral interests, including the executive right. Manges, 673 S.W.2d at 182. Appellees contend that Bluegreen executed two similar deeds of trust.[8] However, the deeds of trust that Bluegreen executed did not purport to cover any mineral interests. Even if Bluegreen's deeds of trust had covered the executive rights, we would find, under the reasoning in Bass, that Bluegreen did not exercise the executive rights to obtain benefits from the minerals by executing the deeds of trust. In contrast, this court in Comanche Land & Cattle Co. v. Adams, 688 S.W.2d 914, 915-16 (Tex.App.-Eastland 1985, no writ), cited by appellees, found that the holder of the executive rights had obtained a benefit from the minerals that the non-executive royalty owners had not. Bluegreen did not exercise the executive rights by creating and recording the declarations of covenants and the plats for the subdivision. Rather, the declarations, which included the restriction against mineral development, showed that Bluegreen would not be exercising the executive rights. Similarly, Bluegreen did not exercise the executive rights by failing to provide notice of the filing of the declarations of covenants to the Lesley Appellees. We have held that the owner of the executive rights does not have a duty to lease the minerals. Therefore, Bluegreen did not breach a duty by failing to lease appellees' minerals.
The Landowner Appellants moved for a no-evidence summary judgment on the ground that they did not breach the alleged fiduciary duty to lease appellees' minerals. There is no evidence in the record that the Landowner Appellants exercised the executive rights.[9] Because the record lacks such evidence, the trial court erred in denying summary judgment to the Landowner Appellants on appellees' breach of fiduciary duty claims.
We note that the facts in this case are nothing like the facts in Manges. This case involves an arms-length transaction between the Lesley Appellees and Bluff Dale. Bluff Dale wanted to obtain property for the purpose of developing a residential subdivision or selling it to another residential developer. Bluff Dale bought about 4,100 acres of land from the Lesley Appellees for that purpose; Bluff Dale did not buy the land for the purpose of mineral development. The Lesley Appellees certainly knew that a residential developer would not want drilling or other similar activities to take place on the surface area in the subdivision. With that knowledge, *620 the Lesley Appellees sold the property to Bluff Dale for about $2,000,000. The Lesley Appellees could have negotiated to retain the executive rights. They could have refused to sell the property if Bluff Dale did not agree to let them retain the executive rights. Instead, the Lesley Appellees willingly conveyed the executive rights to Bluff Dale. Bluegreen, which later obtained the executive rights, developed the property as a residential subdivision. Bluegreen created the declarations of covenants, conditions, and restrictions for the purpose of maintaining the integrity of the subdivision. Based on the facts in this case, even if the declarations or the agreement to comply with them could be construed as an exercise of the executive rights, Bluegreen, the POA, and the lot owners did not breach a fiduciary duty to appellees.[10]
Because Bluegreen, as the executive rights owner, did not breach a fiduciary duty to appellees, the trial court erred in granting summary judgment to appellees on their breach of fiduciary claims against Bluegreen, and we reverse Section V of the trial court's order. For the same reason, the trial court erred in denying summary judgment to Bluegreen on appellees' breach of fiduciary duty claims. We sustain Bluegreen's second issue, and we also sustain its fifth issue to the extent it asserts that the trial court erred in denying summary judgment to it on appellees' breach of fiduciary duty claims. The trial court also erred in denying summary judgment to the Landowner Appellants on appellees' breach of fiduciary duty claims. Therefore, we sustain the Landowner Appellants' second issue. We render judgment that appellees take nothing on their breach of fiduciary duty claims against Bluegreen and the Landowner Appellants.
Right to Develop
Appellees contend that, as non-executive mineral owners, they have a common-law right to self-develop their minerals. The trial court declared that the declarations of covenants were unenforceable and could not be used to prohibit "the [appellees'] rights as mineral co-tenants to self-exploration or self-development of [their] mineral interests in the Subject Land." As set forth above, the right to develop is one of the five attributes of the mineral estate. French, 896 S.W.2d at 797. "[T]he right to develop is a correlative right and passes with the executive rights." Id. at 797 n. 1; see also Day & Co., 786 S.W.2d at 669 n. 1; Reagan v. Marathon Oil Co., 50 S.W.3d 70, 82 n. 11 (Tex.App.-Waco 2001, no pet.); Alexander, 910 S.W.2d at 532-33. When the Lesley Appellees conveyed the executive rights to Bluff Dale, the right to develop passed with the executive rights to Bluff Dale. Therefore, appellees did not retain a right to develop their minerals.[11] The trial court erred in declaring that appellees had the right to self-develop the land.[12] We *621 sustain the Landowner Appellants' third issue. Because appellees do not have the right to self-develop their minerals, we must reverse Section VI of the trial court's order.[13]
Lesley Appellees' Breach of Contract Claims Against Bluegreen
The 1998 deeds from Bobby John Foster and Betty Yvon Lesley to Bluff Dale and Betty Yvon Lesley and Kenneth Lesley to Bluff Dale contained the following notice provision:
Copies of any instruments dealing with the leasing of the mineral rights on the property above described shall either be furnished to Grantors direct or furnished to the depository bank designated by them for transmission to them, including, but not necessarily limited to, oil and gas leases, agreements for payment of bonuses, delay rentals, overriding royalties, production payments or other matters affecting the minerals or royalty interests.
The Lesley Appellees alleged that Bluegreen breached the notice provisions in the deeds by failing to provide them with notice of the filing of the declarations of covenants. The trial court granted summary judgment to the Lesley Appellees on their claim. The trial court declared that "Bluegreen breached the contractual requirement of the Lesley/Foster to Bluff Dale Deed and the Lesley to Bluff Dale Deed by failing to give the requisite notice of the filing of the Declarations of Covenants."
Bluegreen was not a party to the Lesley Appellees' deeds to Bluff Dale. Bluegreen asserts that it has no contractual liability to the Lesley Appellees because (1) privity of contract did not exist between it and the Lesley Appellees and (2) the notice provisions in the deeds were personal covenants that did not run with the land. In Texas, covenants that run with the land bind the heirs and assigns of the covenanting parties, while personal covenants do not. Montfort v. Trek Res., Inc., 198 S.W.3d 344, 355 (Tex.App.-Eastland 2006, no pet.); Tarrant Appraisal Dist. v. Colonial Country Club, 767 S.W.2d 230, 235 (Tex.App.-Fort Worth 1989, writ denied). A covenant runs with the land if (1) it touches and concerns the land, (2) it relates to a thing in existence or specifically binds the parties or their assigns, (3) it is intended by the original parties to run with the land, and (4) the successor to the burden has notice. Inwood N. Homeowners' Ass'n v. Harris, 736 S.W.2d 632, 635 (Tex.1987); Montfort, 198 S.W.3d at 355. Therefore, Bluegreen could be liable to the Lesley Appellees for breach of contract only if the notice provisions in the Lesley Appellees' deeds to Bluff Dale run with the land.
Covenants that run with the land generally burden or restrict the use of the land. Montfort, 198 S.W.3d at 354-56 (Grantor agreed to furnish fresh water from the land to the house and to the grantee for the purpose of watering the grantee's livestock.); Voice of Cornerstone Church Corp. v. Pizza Prop. Partners, 160 S.W.3d 657, 666 (Tex.App.-Austin 2005, no pet.) (A restrictive covenant providing that property would be used only for commercial and light industrial purposes "burdened the property itself."); Rolling Lands Invs., L.C. v. Nw. Airport Mgmt., L.P., 111 S.W.3d 187, 200 (Tex.App.-Texarkana *622 2003, pet. denied) (A restriction concerning fueling rights touched and concerned the land because it limited the use to which the land could be put.). Bluff Dale's covenants in the deeds to provide copies of instruments dealing with leasing of mineral rights were mere notice requirements. The covenants did not burden or restrict Bluff Dale's exercise of the executive rights in any fashion. As such, the contractual notice requirements did not run with the land and did not bind Bluegreen.[14]
The trial court erred in granting summary judgment to the Lesley Appellees on their breach of contract claims against Bluegreen and in denying summary judgment to Bluegreen on those claims. We sustain Bluegreen's third issue and Bluegreen's fifth issue to the extent that Bluegreen asserts the trial court erred in denying its motion for summary judgment on the Lesley Appellees' breach of contract claims, and we render judgment that the Lesley Appellees take nothing on their breach of contract claims against Bluegreen.
Appellees' Tortious Interference Claims Against Bluegreen
Appellees alleged various tortious interference claims against Bluegreen. Bluegreen moved for traditional and no-evidence summary judgments on those claims, and the trial court denied the motions. The trial court's summary judgment order in this cause did not dispose of the tortious interference claims, and those claims are not part of this severed cause. Instead, the tortious interference claims remained in the original cause. Because appellees' tortious interference claims are not part of this cause, we will not address Bluegreen's sixth issue or Bluegreen's contention that the trial court erred in denying its traditional and no-evidence motions for summary judgment on appellees' tortious interference claims.
Lesley Appellees' Deed Reformation Claims
The Lesley Appellees' reformation claims involve the February 17, 1998 deed from Bobby John Foster and Betty Yvon Lesley to Bluff Dale and the September 30, 1998 deed from Betty Yvon Lesley and Kenneth Lesley to Bluff Dale. Before their conveyances to Bluff Dale, the Lesley Appellees owned the entire surface estate and a one-half mineral interest in the subject property. The Lesley Appellees' deeds to Bluff Dale contained identical mineral reservation clauses: "Grantors will be reserving unto themselves, their heirs and assigns, one-fourth (1/4) of the oil, gas, sulphur and other minerals to which Grantors are now entitled to in all of the lands covered by this conveyance."
The Lesley Appellees asserted that, under their deeds to Bluff Dale, they reserved a one-fourth mineral interest and conveyed a one-fourth mineral interest to Bluff Dale. In July 2006, Bluegreen and the POA filed counterclaims for declaratory judgment in which they alleged that the Lesley Appellees reserved a one-eighth mineral interest and conveyed a three-eighths mineral interest to Bluff Dale. In August 2006, the Lesley Appellees filed their second supplemental petition in which they sought reformation of the mineral reservation clauses in their deeds to Bluff Dale on the ground of mutual mistake.
*623 To support a claim for reformation, the Lesley Appellees alleged that they intended to reserve a one-fourth mineral interest in their deeds to Bluff Dale but that, "by reason of a scrivener's error and/or a mutual mistake," their deeds to Bluff Dale "may not have accurately reflected the quantum of mineral interest that [they] intended to reserve." They further alleged that, if any question existed as to the amount of the mineral interest that they reserved in the deeds, the question had resulted from "a mutual mistake between the Lesley Plaintiffs and their grantee." The Lesley Appellees requested the trial court to reform the mineral reservations in the deeds to read as follows: "Grantors will be reserving unto themselves, their heirs and assigns, one-half of the oil, gas, sulphur and other minerals to which Grantors are now entitled to in all of the lands covered by this conveyance." The Lesley Appellees filed a motion for summary judgment on their reformation claims and on the claims asserted by Bluegreen and the POA in their counterclaims for declaratory judgment. Bluegreen and various lot owners filed motions for summary judgment in which they sought a declaration that the Lesley Appellees reserved a one-eighth mineral interest in their deeds to Bluff Dale. The trial court granted the Lesley Appellees' motion and denied the other motions. The trial court declared that the mineral reservation clauses in the deeds were ambiguous and reformed the deeds on the ground of mutual mistake.
The underlying objective of reformation is to correct a mutual mistake made in preparing a written instrument so that the instrument truly reflects the original agreement of the parties. Cherokee Water Co. v. Forderhause, 741 S.W.2d 377, 379 (Tex.1987). Reformation requires proof of two elements: (1) an original agreement and (2) a mutual mistake, made after the original agreement, in reducing the original agreement to writing. Id. If a mistake has been made by a scrivener or typist, an instrument may be reformed and modified by a court to reflect the true agreement of the parties if the mistake was a mutual mistake. Henderson v. Henderson, 694 S.W.2d 31, 34 (Tex.App.-Corpus Christi 1985, writ ref'd n.r.e.); Louviere v. Power, 389 S.W.2d 333, 335 (Tex.Civ.App.-Waco 1965, writ ref'd n.r.e.). Bluegreen argues that the trial court erred in reforming the deeds because they were unambiguous. However, the fact that a written instrument is couched in unambiguous language, that the parties knew what words were used and were aware of their ordinary meaning, or that they were negligent in failing to discover the mistake before signing the instrument will not preclude relief by reformation. Marcuz v. Marcuz, 857 S.W.2d 623, 627 (Tex.App.-Houston [1st Dist.] 1993, no writ); Brinker v. Wobaco Trust Ltd., 610 S.W.2d 160, 164 (Tex.Civ.App.-Texarkana 1980, writ ref'd n.r.e.).
The Lesley Appellees executed the deeds to Bluff Dale in 1998. They filed their reformation claim in this cause on August 10, 2006. The four-year statute of limitations governs a suit for reformation of a deed. Brown v. Havard, 593 S.W.2d 939, 943 (Tex.1980); Cullins v. Foster, 171 S.W.3d 521, 531 (Tex.App.-Houston [14th Dist.] 2005, pet. denied). The Lesley Appellees acknowledged in their motion for summary judgment that their suit for reformation was timely filed only if the statute of limitations was tolled for an appropriate period of time. Bluegreen and the POA asserted in their responses to the Lesley Appellees' motion that the statute of limitations barred the Lesley Appellees' reformation claims.
*624 Texas courts apply the discovery rule to reformation claims based on mutual mistake. Under the discovery rule, the statute of limitations does not begin to run until the party seeking reformation knew or, in the exercise of reasonable diligence, should have known of the mistake in the deed. Brown, 593 S.W.2d at 944; Cullins, 171 S.W.3d at 531; Broyles v. Lawrence, 632 S.W.2d 184, 187-88 (Tex.App.-Austin 1982, no writ).
The Lesley Appellees presented an affidavit of Betty Yvon Lesley in support of their motion for summary judgment. In the affidavit, Betty Yvon Lesley stated that, after closing the transactions with Bluegreen in 1998, she and her husband, Kenneth Lesley, believed that they had reserved a one-fourth mineral interest in the deeds. She also stated that she and Kenneth were informed by their attorneys in June 2006 "that an adverse claim to 1/8th of our minerals would be forthcoming." The Lesley Appellees assert that they did not have notice of the mutual mistake in the deeds until they learned about the adverse claim in June 2006 and that, therefore, the discovery rule tolled the statute of limitations until that time.
In Brown, the Texas Supreme Court considered the ambiguous nature of the language used in a mineral reservation clause in a deed in determining whether the party seeking reformation in the exercise of reasonable diligence should have known of the mistake in the deed. Brown, 593 S.W.2d at 944. The court explained that the mistake was not "so plainly evident as to charge [the grantee] with the legal effect of the words used." Id. Therefore, the court concluded that the grantee could not be charged as a matter of law with knowledge of the mistake. Id.
In this case, the trial court found that the Lesley Appellees' deeds to Bluff Dale contained ambiguous mineral reservation clauses that could be interpreted as reserving one-eighth mineral interests. Whether a deed is ambiguous is a question of law for the court, which we review de novo. Johnson v. Conner, 260 S.W.3d 575, 579 (Tex.App.-Tyler 2008, no pet.); Gore Oil Co. v. Roosth, 158 S.W.3d 596, 599 (Tex.App.-Eastland 2005, no pet.). A court's primary goal when construing a deed is to ascertain the true intention of the parties as expressed in the "four corners" of the instrument. Luckel v. White, 819 S.W.2d 459, 461 (Tex.1991). If a written instrument, such as a deed, is worded in such a way that a court may properly give it a certain or definite legal meaning or interpretation, it is not ambiguous. R & P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 519 (Tex.1980); Gore Oil Co., 158 S.W.3d at 599. However, if a written instrument remains reasonably susceptible to more than one meaning after the rules of interpretation have been applied, then the instrument is ambiguous. R & P Enters., 596 S.W.2d at 519; Gore Oil Co., 158 S.W.3d at 599.
Before the Lesley Appellees executed the deeds to Bluff Dale, they owned a one-half mineral interest in the subject property. Thus, they were "entitled to" one-half of the minerals. In their deeds to Bluff Dale, they "reserv[ed] unto themselves, their heirs, and assigns, one-fourth (1/4) of the oil, gas, sulphur and other minerals to which Grantors are now entitled to in all of the lands covered by this conveyance." Under the clear language in the deeds, the Lesley Appellees reserved one-fourth of their one-half mineral interest. Therefore, the Lesley Appellees reserved a one-eighth mineral interest. Because the deeds can be given a definite legal meaning and are not reasonably susceptible to more than one meaning, they are unambiguous. R & P Enters., 596 S.W.2d at 519.
*625 The Lesley Appellees knew that they owned a one-half mineral interest before their conveyances to Bluff Dale. By reading the clear language in their deeds to Bluff Dale, they would have known that they were reserving one-fourth of their one-half mineral interest. Based on the reasoning in Brown, the mistakes, if any, in the Bluff Dale deeds were "so plainly evident as to charge [the Lesley Appellees] with the legal effect of the words used." See Brown, 593 S.W.2d at 944. As a matter of law, the Lesley Appellees in the exercise of reasonable diligence should have known of the mistakes in the deeds when they executed the deeds. Their reformation claims are barred by the four-year statute of limitations.
The trial court erred in granting summary judgment to the Lesley Appellees on their reformation claims. We sustain Bluegreen's fourth issue. Based on our ruling that limitations barred the Lesley Appellees' reformation claims, we need not address (1) whether the Lesley Appellees met their summary judgment burden of establishing the elements of their reformation claims or (2) the matters raised by the Landowner Appellants in their fifth issue. We reverse the trial court's judgment on the Lesley Appellees' reformation claims, including Section II of the trial court's order. Because Bluegreen and the Landowner Appellants did not affirmatively move for summary judgment on the statute of limitations issue, we do not render judgment in their favor on the Lesley Appellees' reformation claims. Instead, we remand the Lesley Appellees' reformation claims to the trial court for further proceedings consistent with this opinion.
VLB's Sovereign Immunity
Appellees named the VLB as a lot owner defendant in their pleadings. The VLB filed a plea to the jurisdiction based on sovereign immunity. The trial court denied the VLB's plea to the jurisdiction. In its sole appellate issue, the VLB contends that the trial court erred in denying its plea to the jurisdiction.
A plea to the jurisdiction challenges the trial court's authority to determine the subject matter of a specific cause of action. Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638-39 (Tex.1999). Sovereign immunity from suit defeats a trial court's subject-matter jurisdiction. Id. Whether a trial court has subject-matter jurisdiction is a question of law subject to de novo review. Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002). Accordingly, we review a trial court's order denying a jurisdictional plea based on sovereign immunity de novo. Id.
The VLB is a state agency. Sovereign immunity, unless waived, protects the State and various divisions of state government, such as agencies, from lawsuits for damages. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n. 3 (Tex.2003); Gen. Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 594 (Tex.2001). Immunity from suit bars a suit against the State unless the legislature expressly consents to the suit by statute or resolution granting express legislative permission. Little-Tex, 39 S.W.3d at 594. Legislative consent to sue the State must be expressed in "clear and unambiguous language." IT-Davy, 74 S.W.3d at 854.
Certain types of declaratory judgment actions do not implicate the State's sovereign immunity. IT-Davy, 74 S.W.3d at 855. In such actions, a party need not obtain consent to sue the State. For example, "[p]rivate parties may seek declaratory relief against state officials who allegedly act without legal or statutory authority." Id. Such suits do not constitute "suits against the State" because *626 suits to compel state officers to act within their official capacity do not attempt to subject the State to liability. Id. In this case, appellees did not seek declaratory relief against any official of the VLB. Appellees only sued the VLB. In addition, a party may bring a declaratory judgment action against the State seeking a declaration as to the party's rights and status under a statute or an ordinance. IT-Davy, 74 S.W.3d at 859-60; Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex.1994). In this case, appellees did not seek a declaration as to their rights and status under any statute or ordinance.
A private party cannot circumvent the State's sovereign immunity from suit by characterizing a suit for money damages, such as a contract dispute, as a declaratory judgment claim. City of Houston v. Williams, 216 S.W.3d 827, 828-29 (Tex.2007); IT-Davy, 74 S.W.3d at 856. Therefore, a suit for monetary damages against a sovereign is not transformed into a viable suit by a request for a declaratory judgment. Williams, 216 S.W.3d at 829.
In their appellate brief, appellees assert that, in their declaratory judgment action, they "asked for construction of the parties' respective rights under a deed in their chain of title." The Texas Declaratory Judgments Act authorizes a person interested under a deed to have determined any question of construction arising under the deed and to obtain a declaration of rights, status, or other legal relations thereunder. TEX. CIV. PRAC. & REM.CODE ANN. § 37.004(a) (Vernon 2008); City of Anson v. Harper, 216 S.W.3d 384, 394 (Tex.App.-Eastland 2006, no pet.). In their brief, appellees focus on two aspects of their claims for declaratory relief: (1) their request for a declaration as to the holder of the executive rights and (2) their request that the covenants prohibiting mineral development were unenforceable. Appellees assert that these requests did not implicate sovereign immunity and that they "have not sought liability or monetary damages from the VLB."
A review of appellees' pleadings shows that they sought to recover money damages from the VLB, whether or not the VLB owned the executive rights. Appellees initially alleged that the VLB and the other lot owners owned the executive rights in the minerals underlying their lots. Later, appellees amended their pleadings and alleged that Bluegreen had retained the executive rights. In their live pleading, appellees alleged that "Defendants Bluegreen, the POA, or the Lot Owners ... may be owners of executive rights to lease the minerals underlying the Development." Appellees further alleged that "[s]uch ownership rights shall be determined by the Court." Appellees alleged breach of contract and breach of fiduciary duty claims against "[t]he Defendants holding the executive rights as such holders shall be determined by the Court." They also alleged that "all Defendants, whether owners of the executive leasing rights or not, have aided and abetted the Defendants holding executive rights in breaching their duties by accepting deeds purporting to incorporate mineral development restrictions and by their own continued adherence to the Non-Development Covenants" and that, by engaging in such conduct, the defendants had breached contractual obligations to them. Appellees sought to recover damages from defendants for the alleged breaches of fiduciary duty and contract. Sovereign immunity bars appellees' claims for money damages against the VLB; therefore, the trial court erred in denying the VLB's plea to the jurisdiction with respect to these claims.
Appellees sought a declaratory judgment that Bluegreen owned the executive rights. In their brief, appellees acknowledge *627 that their request for declaratory relief involved title to the executive rights. However, they assert that, because they did not seek to obtain title to the executive rights in a trespass to try title action, their request for declaratory judgment did not implicate sovereign immunity. In ruling on appellees' request, the trial court had to determine whether Bluegreen retained the executive rights or conveyed the executive rights to the lot owners.
A declaratory judgment action may be brought "when the sole issue concerning title to real property is the determination of the proper boundary line between adjoining properties." TEX. CIV. PRAC. & REM.CODE ANN. § 37.004(c) (Vernon 2008). This case does not involve a boundary dispute. Instead, this case involves rival claims to the executive rights. A trespass to try title action, and not a declaratory judgment action, is the proper method of adjudicating rival claims to the executive rights. See Martin v. Amerman, 133 S.W.3d 262, 267 (Tex.2004); Ely v. Briley, 959 S.W.2d 723, 727 (Tex.App.-Austin 1998, no pet.) (A trespass to try title action is the exclusive remedy by which to resolve competing claims to property.); Bell v. State Dep't of Highways and Pub. Transp., 945 S.W.2d 292, 294 (Tex.App.-Houston [1st Dist.] 1997, writ denied), abrogated by Harris County v. Sykes, 136 S.W.3d 635 (Tex.2004). In a trespass to try title action, the prevailing party's remedy is title to, and possession of, the real property interest at issue in the suit. Porretto v. Patterson, 251 S.W.3d 701, 708 (Tex.App.-Houston [1st Dist.] 2007, no pet.).
Although appellees did not assert a trespass to try title claim, their request for declaratory relief was similar to a trespass to try title claim. Appellees requested the trial court to determine competing claims to ownership of the property: appellees' claim that Bluegreen had retained the executive rights versus the lot owners' claim that Bluegreen had conveyed the executive rights to them. By making their claim for declaratory relief, appellees squarely placed the VLB's title to the executive rights in issue. Appellees sought a determination against the VLB on that issue. A trespass to try title action against the State requires legislative consent. State v. Lain, 162 Tex. 549, 349 S.W.2d 579, 582 (1961) ("When in this state the sovereign is made a party defendant to a suit for land, without legislative consent, its plea to the jurisdiction of the court based on sovereign immunity should be sustained."); Porretto, 251 S.W.3d at 707-08; State v. Beeson, 232 S.W.3d 265, 271 n. 5 (Tex.App.-Eastland 2007, pet. abated). We find that, by placing title to the executive rights in issue, appellees' request for declaratory relief implicated the VLB's sovereign immunity. Therefore, based on the reasoning in Lain and its progeny, sovereign immunity bars appellees' claim for declaratory relief on the ownership of the executive rights' issue.
Appellees assert that their request for a declaratory judgment that the covenants prohibiting mineral development were unenforceable did not implicate sovereign immunity. Appellees also requested declarations that the covenants could not be used (1) to prohibit mineral leases covering the subject property or (2) to prohibit appellees' rights of self-exploration and self-development of their mineral interests on the subject property. By requesting these declarations, appellees sought to affect the use of the VLB's surface estate. Appellees assert that, as owners of the dominant mineral estate, they have the right to "make reasonable use of the entirety of the surface of the Mountain Lakes Development" to extract their minerals.
*628 While a mineral interest owner has no possessory interest in the surface estate, the surface is burdened in the mineral interest owner's or his lessee's favor with certain necessarily implied easements of ingress and egress and for the use of such portions of the surface for drilling, storing, pumping, and transporting as are incidental to the full enjoyment of the mineral interest owner's or his lessee's exclusive privilege to drill for, produce, and market the oil and gas. Mobil Pipe Line Co. v. Smith, 860 S.W.2d 157, 159 (Tex. App.-El Paso 1993, writ dism'd w.o.j.); see also Sun Oil Co. v. Whitaker, 483 S.W.2d 808, 810-11 (Tex.1972). Appellees' requests for declaratory relief sought to burden the VLB's property with these implied easements. In Beeson, landowners filed a declaratory judgment action against the State in which they sought to establish an easement on the State's property. Beeson, 232 S.W.3d at 270-71. We held that the landowners' easement claims implicated sovereign immunity and that, therefore, sovereign immunity barred their suit. Id. at 271-72. Likewise, in this case, sovereign immunity bars appellees' claims for declaratory relief concerning the covenants against mineral development as they relate to the VLB's property.
The Lesley Appellees asserted their deed reformation claims against the VLB. The Lesley Appellees alleged that they intended to reserve a one-fourth mineral interest, and they sought to reform the deeds on the ground of mutual mistake. We have held that the Lesley Appellees unambiguously reserved a one-eighth mineral interest in their deeds to Bluff Dale. Thus, by their mutual mistake claim, the Lesley Appellees effectively sought to increase their one-eighth mineral interest to a one-fourth mineral interest and to decrease the VLB's three-eighths mineral interest to a one-fourth mineral interest. As such, the Lesley Appellees attempted to adjudicate the State's title to its mineral interest. Therefore, the Lesley Appellees' deed reformation claims against the State are barred by sovereign immunity. Lain, 349 S.W.2d at 582.
Appellees contend that the VLB waived sovereign immunity by seeking affirmative relief. In Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371, 373 (Tex. 2006), the City of Dallas sued a private party for negligence. In Reata, the supreme court held that, when a governmental entity asserts affirmative claims for monetary relief, the entity leaves "its sphere of immunity" and that, therefore, the adverse party may assert, as an offset, claims germane to, connected with, and properly defensive to those asserted by the governmental entity. 197 S.W.3d at 376-77. In such a situation, the trial court acquires subject-matter jurisdiction over the adverse party's claims to the extent they offset the sovereign's claims. Id. at 377.
The VLB did not assert an affirmative claim for monetary damages in this case. In its original answer, the VLB prayed for recovery of "its attorney fees and costs of court; and for such other and further relief to which [it] may be justly entitled." In an amended answer, the VLB abandoned its request for attorneys' fees. Appellees assert that the VLB's request for attorneys' fees, costs, and such other and further relief for which it may be justly entitled constituted a waiver of sovereign immunity. The VLB sought to recover its attorneys' fees and costs in response to appellees' claims against it. The VLB's defensive claims for attorneys' fees and costs did not constitute affirmative claims for monetary relief under Reata. Lamesa Indep. Sch. Dist. v. Booe, 251 S.W.3d 831, 833 (Tex.App.-Eastland 2008, no pet.) ("[T]he court's opinion in Reata *629 cannot be construed to encompass LISD's request for attorney's fees as an affirmative claim for relief."); Bexar Metro. Water Dist. v. Educ. & Econ. Dev. Joint Venture, 220 S.W.3d 25, 32 (Tex.App.-San Antonio 2006, pet. dism'd) (Governmental entity's general pleadings for judgment and costs were not "the types of affirmative claims for monetary relief contemplated in Reata."). The VLB did not waive its immunity by its conduct in this case.
For the above reasons, sovereign immunity bars appellees' claims against the VLB. The trial court erred in denying the VLB's plea to the jurisdiction. We sustain the VLB's issue.
This Court's Ruling
We reverse the judgment of the trial court in its entirety. We render judgment that appellees take nothing on their breach of fiduciary duty claims against Bluegreen and the Landowner Appellants and on their breach of contract claims against Bluegreen.[15] We dismiss appellees' claims against the VLB for lack of jurisdiction. We remand the remainder of the claims to the trial court for further proceedings consistent with this opinion.
NOTES
[*] John T. Boyd, Retired Chief Justice, Court of Appeals, 7th District of Texas at Amarillo sitting by assignment.
[1] Bobby John Foster died on September 27, 2005.
[2] Thus, although appellees now contend that Bluegreen in effect kept the executive rights because Bluegreen had imposed the restrictive covenants, appellees also sought to have the restrictive covenants declared unenforceable.
[3] By accepting the restrictive covenants, the lot owners agreed not to allow mineral development on their tracts unless two-thirds of the owners agreed to change the restriction.
[4] The record does not demonstrate whether Bluegreen currently owns any lots in the Mountain Lakes Development. Bluegreen may own the executive rights with respect to lots, if any, that it owns. Appellees alleged that "[b]y deed dated January 16, 2006 ... Bluegreen purported to specifically convey all executive leasing rights it owned in Mountain Lakes to the Property Owners Association."
[5] Appellees contend that the Landowner Appellants did not preserve for appeal the issue of ownership of the executive rights and that the trial court's judgment must be affirmed as to lot owners who do not appeal. The Landowner Appellants preserved the issue for review by raising it in their response to appellees' motion for summary judgment on the ownership of the executive rights. The respective rights of Bluegreen, the POA, the Landowner Appellants, and the lot owners who did not appeal as to the ownership of the executive rights are interwoven. The executive rights issue is the same for all of these parties: Bluegreen either conveyed the executive rights or did not convey them. Therefore, we reverse the trial court's declaration that Bluegreen owned the executive rights as to all parties. Turner, Collie & Braden, Inc. v. Brookhollow, Inc., 642 S.W.2d 160, 166 (Tex. 1982) (A reversal as to an appealing party justifies a reversal as to nonappealing parties "where the respective rights of the appealing and nonappealing parties are so interwoven or dependent on each other as to require a reversal of the entire judgment."); Belz v. Belz, 667 S.W.2d 240, 244 (Tex.App.-Dallas 1984, writ ref'd n.r.e.) ("The applicable standard is that reversal is required when the rights of appealing and nonappealing parties are so interwoven or dependent on each other as to require reversal of the whole judgment when a part thereof is reversed.").
[6] The issue of the duty owed by the owner of the executive rights to non-executive mineral owners does not appear to be a proper subject matter of relief under the Uniform Declaratory Judgments Act. TEX. CIV. PRAC. & REM.CODE ANN. § 37.004(a) (Vernon 2008).
[7] In addition to addressing the fiduciary duty issue, the Bass court considered whether an implied covenant to develop the mineral estate existed. Bass, 113 S.W.3d at 743. The court refused to imply a covenant to develop. Id. at 744.
[8] Properties of the Southwest executed the deeds of trust before changing its name to Bluegreen. Because Properties of the Southwest and Bluegreen were the same entity, we treat Bluegreen as having executed the deeds of trust.
[9] Likewise, there is no evidence that any other lot owner or the POA exercised the executive rights.
[10] As stated earlier, we do not construe such declarations or complying with them as an exercise of the executive rights.
[11] Appellees rely on Cone v. Fagadau Energy Corp., 68 S.W.3d 147 (Tex.App.-Eastland 2001, pet. denied), in arguing that, as mineral co-tenants, they have a right to develop their minerals. Appellees have correctly stated the common-law rule; however, the Lesley Appellees relinquished the right to self-develop the minerals when they conveyed the executive rights to Bluegreen.
[12] Had the Lesley Appellees retained the executive rights and the correlative right to develop, the restriction against mineral development would not prohibit them from exercising the rights. Prop. Owners of Leisure Land, Inc. v. Woolf & Magee, Inc., 786 S.W.2d 757, 760 (Tex.App.-Tyler 1990, no writ) ("The mineral owner, having the dominant estate, cannot be limited by subdivision restrictions imposed by surface owners after the estate is severed.").
[13] Based on our rulings on the Landowner Appellants' first and third issues, we need not address their sixth issue (accommodation doctrine issue).
[14] For the same reason, the contractual notice requirements did not bind Bluegreen's grantees.
[15] In this opinion, we have sustained, in part, Bluegreen's fifth issue with respect to appellees' breach of fiduciary duty claims and breach of contract claims. For the reasons stated above, we overrule the remainder of Bluegreen's fifth issue. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578824/ | 281 S.W.3d 575 (2008)
The UNIVERSITY OF TEXAS AT EL PASO, Appellant,
v.
Alfredo HERRERA, Appellee.
No. 08-06-00271-CV.
Court of Appeals of Texas, El Paso.
November 25, 2008.
*577 Sean D. Jordan, Office of the Attorney General, Austin, TX, for Appellant.
John P. Mobbs, El Paso, TX, for Appellee.
Before CHEW, C.J., McCLURE, and CARR, JJ.
*578 OPINION
ANN CRAWFORD McCLURE, Justice.
This is an interlocutory appeal from the trial court's denial of a plea to the jurisdiction filed by the University of Texas as El Paso ("UTEP"). At issue is the self-care provision of the Family and Medical Leave Act. For the reasons that follow, we affirm.
FACTUAL SUMMARY
Alfredo Herrera was employed by UTEP as a heating, ventilation, and air-conditioning technician from 2002 to 2006. In March 2005, Herrera suffered an on-the-job injury to his elbow and was on medical leave until he returned to work on January 4, 2006. Less than a week later, Herrera re-injured his elbow at work. On January 27, 2007, Herrera's employment was terminated for failure to cooperate with his supervisor, refusal to follow instructions, failure to adhere to established rules and regulations, and disorderly and disruptive conduct. Herrera brought an employment discrimination suit against UTEP complaining he was terminated in retaliation for taking leave under the self-care leave provision of the Family and Medical Leave Act.[1] UTEP filed a plea to the jurisdiction alleging Herrera's retaliation claim is barred by sovereign immunity. The trial court denied the plea to the jurisdiction and UTEP filed notice of appeal.
SOVEREIGN IMMUNITY
UTEP raises three issues challenging the trial court's denial of its plea to the jurisdiction. It argues that the State did not voluntarily waive its sovereign immunity either in the Texas Constitution or by statute, and the UTEP Handbook of Operating Procedures cannot waive the State's sovereign immunity. Further, UTEP asserts that Congress did not validly abrogate state sovereign immunity from suit under the FMLA's self-care provision, and therefore, the trial court erred by denying the plea to the jurisdiction.
Standard of Review
When a lawsuit is barred by sovereign immunity, the trial court lacks subject matter jurisdiction, and dismissal with prejudice is proper. City of Austin v. L.S. Ranch, Ltd., 970 S.W.2d 750, 752 (Tex. App.-Austin 1998, no pet.). A plea to the jurisdiction is a dilatory plea by which a party contests the trial court's authority to determine the subject matter of the cause of action. City of Saginaw v. Carter, 996 S.W.2d 1, 2 (Tex.App.-Fort Worth 1999, pet. dism'd w.o.j.); State v. Benavides, 772 S.W.2d 271, 273 (Tex.App.-Corpus Christi 1989, writ denied). The plaintiff has the burden to allege facts affirmatively demonstrating that the trial court has subject matter jurisdiction. Texas Association of Business v. Texas Air Control Board, 852 S.W.2d 440, 446 (Tex.1993); City of Saginaw, 996 S.W.2d at 2. Subject matter jurisdiction is a legal question which we review de novo. City of Saginaw, 996 S.W.2d at 2; Texas Department of Health v. Doe, 994 S.W.2d 890, 892 (Tex.App.-Austin 1999, pet. dism'd). We consider the allegations in the petition and accept them as true. See City of Saginaw, 996 S.W.2d at 2-3. The plaintiff's jurisdictional pleadings are to be construed liberally in the plaintiff's favor and we look to the pleader's intent. See Texas Association of Business, 852 S.W.2d at 446. When deciding a plea to the jurisdiction, a court is not *579 required to look solely to the pleadings, but may consider evidence and must do so when necessary to resolve the jurisdictional issues raised. Bland Independent School District v. Blue, 34 S.W.3d 547, 555 (Tex.2000); see County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex.2002).
Family and Medical Leave Act
The FMLA authorizes qualified employees to take up to 12-weeks of unpaid leave from their jobs during any 12-month period for one or more of the following reasons:
(A) Because of the birth of a son or daughter of the employee and in order to care for such son or daughter.
(B) Because of the placement of a son or daughter with the employee for adoption or foster care.
(C) In order to care for the spouse, or a son, daughter, or parent, of the employee, if such spouse, son, daughter, or parent has a serious health condition.
(D) Because of a serious health condition that makes the employee unable to perform the functions of the position of such employee.
(E) Because of any qualifying exigency (as the Secretary shall, by regulation, determine) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation.
29 U.S.C.A. § 2612(a)(1) (West 1999). Subsection (C) is often referred to as the family-care provision while Subsection (D) is referred to as the self-care provision. The FMLA makes it unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under the FMLA. 29 U.S.C.A. § 2615(a)(1). It is unlawful for any employer to discharge or otherwise discriminate against any individual opposing any practice made unlawful by the FMLA. 29 U.S.C.A. § 2615(a)(2). It also is unlawful for any employer to discharge or in any other manner discriminate against any individual because the individual has filed any charge, or has instituted or caused to be instituted any proceeding, under or related to the FMLA. 29 U.S.C.A. § 2615(b).
Sovereign Immunity
The Eleventh Amendment to the U.S. Constitution provides:
The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
U.S. CONST.AMEND. XI. The Eleventh Amendment does not create or grant immunity but rather recognizes that states as separate sovereigns can limit, with few exceptions, their susceptibility to suit. Hoff v. Nueces County, 153 S.W.3d 45, 48 (Tex.2004), citing Alden v. Maine, 527 U.S. 706, 728-29, 119 S. Ct. 2240, 144 L. Ed. 2d 636 (1999). Federal courts have no jurisdiction over federal or state law claims against a state or state agency unless Eleventh Amendment immunity has been expressly waived by the state or abrogated by Congress pursuant to proper constitutional authority. Hoff, 153 S.W.3d at 48. Further, Eleventh Amendment immunity protects nonconsenting states from being sued in their own courts for federal law claims. Id.
Abrogation of Sovereign Immunity by Congress
Congress may abrogate the States' sovereign immunity if it manifests *580 its intention to abrogate in the language of the statute and if it acts pursuant to a valid exercise of its power under Section 5 of the Fourteenth Amendment. Nevada Department of Human Resources v. Hibbs, 538 U.S. 721, 726, 123 S. Ct. 1972, 1976, 155 L. Ed. 2d 953 (2003). The FMLA enables employees to seek damages against any employer, including a public agency, in any federal or state court of competent jurisdiction. 29 U.S.C.A. § 2617(a)(2). The FMLA defines public agency to include both the government of a state or political subdivision and any agency of a state or a political subdivision of a state. 29 U.S.C.A. § 203(x)(West Supp.2008); 29 U.S.C.A. § 2611(4)(A)(iii). Based on this language in the statute, the Supreme Court found in Hibbs that Congress made unmistakably clear its intention to abrogate the States' sovereign immunity. Hibbs, 538 U.S. at 726, 123 S.Ct. at 1977.
In addressing whether Congress acted within its constitutional authority when it sought to abrogate the State's immunity for purposes of the FMLA's family-leave provision found in § 2612(a)(1)(C), the Supreme Court noted that two provisions of the Fourteenth Amendment are relevant to the inquiry: Section 5 grants Congress the power to enforce the substantive guarantees of § 1, which includes equal protection of the laws, by enacting appropriate legislation. Hibbs, 538 U.S. at 726-27, 123 S.Ct. at 1977. Congress may, in the exercise of its § 5 power, do more than simply proscribe unconstitutional conduct. Id., 538 U.S. at 727, 123 S.Ct. at 1977. Its § 5 power to enforce the substantive guarantees of § 1 of the Fourteenth Amendment includes the authority to both remedy and deter violation of guaranteed rights by prohibiting a somewhat broader swath of conduct, including that which is not itself forbidden. Id. In other words, Congress may enact prophylactic legislation that proscribes facially constitutional conduct, in order to prevent and deter unconstitutional conduct. Id., 538 U.S. at 727-28, 123 S.Ct. at 1977. Section 5 legislation reaching beyond the scope of § 1's actual guarantees must be an appropriate remedy for identified constitutional violations, not an attempt to substantively redefine the State's legal obligations. Hibbs, 538 U.S. at 728, 123 S.Ct. at 1977. The legislation must exhibit congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end. Id., 538 U.S. at 728, 123 S.Ct. at 1977-78.
UTEP asserts that in recent years the Supreme Court has used the proportionality and congruence test to invalidate several congressional attempts to exercise its § 5 power. We understand UTEP to argue that it is extremely difficult for Congress to successfully abrogate state sovereign immunity. In support of this argument, it cites City of Boerne v. Flores, 521 U.S. 507, 117 S. Ct. 2157, 138 L. Ed. 2d 624 (1997), Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627, 119 S. Ct. 2199, 144 L. Ed. 2d 575 (1999), Kimel v. Florida Board of Regents, 528 U.S. 62, 120 S. Ct. 631, 145 L. Ed. 2d 522 (2000), and Board of Trustees of University of Alabama v. Garrett, 531 U.S. 356, 121 S. Ct. 955, 148 L. Ed. 2d 866 (2001). Unlike the instant case, none of these cases involved a gender-based classification or other classification subject to a heightened level of scrutiny. This distinction is significant because it impacts our review.
The FMLA aims to protect the right to be free from gender-based discrimination in the workplace. Hibbs, 538 U.S. at 728, 123 S.Ct. at 1978. State gender *581 discrimination triggers a heightened level of scrutiny. Id., 538 U.S. at 728 and 736, 123 S.Ct. at 1978 and 1982. To survive such heightened scrutiny, the gender-based classification must serve important governmental objectives and the discriminatory means employed must be substantially related to the achievement of those objectives. Id. Because the standard for demonstrating the constitutionality of a gender-based classification is more difficult to meet than the rational basis test, it is easier for Congress to show a pattern of state constitutional violations. Id., 538 U.S. at 736, 123 S.Ct. at 1982.
In Hibbs, the Supreme Court examined whether Congress had evidence of a pattern of constitutional violations on the part of the States with regard to gender-based discrimination in the workplace. Id., 538 U.S. at 729, 123 S.Ct. at 1978. It found that Congress had before it evidence that, despite the passage of Title VII of the Civil Rights Act of 1964[2], gender discrimination did not cease and women still faced pervasive discrimination in the job market. Id., 538 U.S. at 729-30, 123 S.Ct. at 1978-79. Further, there was evidence that States continued to rely on invalid gender stereotypes in the employment context, specifically in the administration of leave benefits. Id., 538 U.S. at 730, 123 S.Ct. at 1979. These stereotypes included beliefs that women's family duties trumped those of the workplace, caring for family members is women's work, and men do not have the same domestic responsibilities as women. Id., 538 U.S. at 731 n. 5, 123 S.Ct. at 1979 n. 5. The impact of these stereotypes on leave administration by employers forced women to continue to assume the role of primarily family caregiver and fostered stereotypical views about women's commitment to work and their value as employees. Id., 538 U.S. at 736, 123 S.Ct. at 1982. This in turn led to subtle discrimination against women in the workplace. Id. Thus, the Supreme Court found that the States' record of unconstitutional participation in, and fostering of, gender-based discrimination in the administration of leave benefits is weighty enough to justify the enactment of prophylactic § 5 legislation. Id., 538 U.S. at 735, 123 S.Ct. at 1981. Since Hibbs was decided, four federal courts of appeals have found Congress did not validly abrogate immunity for claims based on the self-care provision. Nelson v. University of Texas at Dallas, 535 F.3d 318, 321 (5th Cir.2008); Toeller v. Wisconsin Department of Corrections, 461 F.3d 871, 879 (7th Cir.2006); Touvell v. Ohio Department of Mental Retardation and Developmental Disabilities, 422 F.3d 392, 405 (6th Cir.2005); Brockman v. Wyoming Department of Family Services, 342 F.3d 1159, 1165 (10th Cir.2003).[3] Relying on the holdings in these cases, UTEP contends that when Congress enacted the FMLA, it had no evidence before it that employers engaged in a pattern of discrimination in providing leave for personal medical conditions, and without such findings, the self-care-leave provision of the FMLA is an invalid abrogation of state sovereign immunity. We disagree with this argument for two reasons.
First, we are not persuaded that in order to uphold the self-care provision it is necessary to have a congressional record replete with evidence showing a pattern of *582 gender-based discrimination specifically related to leave for personal medical conditions. The Supreme Court has already found in Hibbs that Congress had evidence before it in 1993 that nearly thirty years after the passage of Title VII, women still face pervasive discrimination in the job market and the States continued to rely on invalid gender stereotypes in the administration of leave benefits. Hibbs, 538 U.S. at 729-30, 123 S.Ct. at 1978-79. These invalid gender stereotypes include a belief that a woman's job is secondary to her role in the home. See id., 538 U.S. at 729, 123 S.Ct. at 1978. The self-care provision is directed at that stereotype, but it is also directed at a related invalid stereotype: that women of child-bearing age take more leave than other employees. In light of Hibbs, the only question is whether the self-care provision exhibits congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end. We conclude that it does.
Second, even if it can be said that Congress is required to compile a legislative record showing the existence of past and current gender-based discrimination to justify the enactment of the self-care provision of the FMLA, we conclude that the legislative history of the FMLA and the congressional record provides sufficient evidence and relevant congressional findings. We consider first the historical context in which the FMLA was enacted and its legislative history. Title VII of the Civil Rights Act of 1964 was intended to remedy discrimination in the workplace based on gender, among other things. Kazmier v. Widmann, 225 F.3d 519, 546 (5th Cir. 2000)(J. Dennis, dissenting opinion). In 1976, the Supreme Court held that Title VII did not protect against discrimination based on pregnancy under the theory that it is not discrimination based on sex, but rather it is discrimination among women based on a medical condition. General Electric Company v. Gilbert, 429 U.S. 125, 97 S. Ct. 401, 50 L. Ed. 2d 343 (1976). In response, Congress enacted the Pregnancy Discrimination Act and effectively overruled Gilbert by amending Title VII's definition of discrimination on the basis of sex to include discrimination on the basis of pregnancy, childbirth, or related medical conditions. 42 U.S.C.A. § 2000e(k)(West 2003); Kazmier, 225 F.3d at 546, citing Newport News Shipbuilding and Dry Dock Company v. E.E.O.C., 462 U.S. 669, 676, 103 S. Ct. 2622, 77 L. Ed. 2d 89 (1983)(recognizing that the Pregnancy Discrimination Act overturned Gilbert and rejected the test of discrimination employed in that case). Nevertheless, the Pregnancy Discrimination Act did not affirmatively grant pregnant workers leave time or the right to return to their job but only required an employer to provide these benefits if the employer provided them to other temporarily disabled workers. Kazmier, 225 F.3d at 546.
In 1985, Congress began considering the issue of family and medical leave. Id. at 547, citing The Family and Medical Leave Act of 1993: A Survey of the Act's History, Purposes, Provisions and Social Ramifications, 44 DRAKE L.REV. 51 (1995). Representative Pat Schroeder introduced the Parental and Disability Leave Act of 1985 (PDLA) in the House of Representatives. Kazmier, 225 F.3d at 547. It provided for eighteen weeks of unpaid leave for both mothers and fathers of newborn or adopted children and twenty-six weeks of unpaid leave for non-work related disabilities. Id. The PDLA was not considered by the House but it was resubmitted in 1986 by Representative William Clay and renamed the Parental and Medical Leave Act of 1986 (PMLA). Two subcommittees *583 and a full committee[4] conducted hearings to determine the extent of discrimination in the workplace against men and in favor of women in the workplace with regard to taking leave to care for sick family members. Id. The PMLA was not considered by the full House. Id.
In 1989, Representative Clay reintroduced the Family and Medical Leave Act in the House of Representatives. Kazmier, 225 F.3d at 547. It passed both the House and the Senate, but President Bush vetoed it in 1990. Id. In 1991, Senator Christopher Dodd introduced the Family and Medical Leave Act of 1991, which was identical to the bill vetoed by President Bush in 1990. Id. Congress amended the bill to change the amount of mandatory leave per year to twelve weeks. Id. The Act was passed by both the Senate and the House, but President Bush vetoed it in September of 1992. Id.
In 1993, Representative William Ford introduced the Family and Medical Leave Act to the House. Kazmier, 225 F.3d at 547. The Act's leave provisions were substantially similar to those of the amended 1991 version of the FMLA. Id. In considering enactment of the 1993 FMLA. the House of Representatives considered both new evidence of gender-based discrimination with regard to the administration of leave benefits, but it also reviewed the testimony given at hearings with respect to the "substantially similar" bills previously considered. Kazmier, 225 F.3d at 547, citing H.R.Rep. No. 103-8(1). For example, the House Report indicates that the 1993 FMLA had its roots in the 1985 proposed legislation and it made multiple references to the committee hearings held in 1986 in connection with the 1986 PMLA. Id. at 547-48, citing H.R.Rep. No. 103-8(I). Accordingly, in determining whether Congress had before it adequate evidence of gender-based discrimination when it enacted the self-care provision, we will not restrict our review to the 1993 legislative record but will also consider the evidence before Congress during these earlier hearings.
Before the adoption of the Pregnancy Discrimination Act of 1978, there was no federally required parity in the allowance for maternity and sick leave. Laro v. New Hampshire, 259 F.3d 1, 20 (5th Cir. 2001)(J. Lipez, dissenting opinion). The unavailability of maternity leave favored male employees over those female employees who wanted to bear children. Id. This circumstance prevented many women from entering the workforce or advancing if they found their way into the workplace. Id. To rectify this inequity, the Pregnancy Discrimination Act required employers who provided sick leave for other conditions to offer the same level of benefits for maternity leave. Id.; 42 U.S.C.A. § 2000e(k). But the Pregnancy Discrimination Act did not address the gender-based stereotype that women of child-bearing age would take more leave than other employees. Id. In fact, the PDA had an unintended negative impact on women's opportunities in the workplace because "employers might find it cost-effective to discriminate against married women of child-bearing age, since these women would end up costing a firm more than they contribute to its worth." Id. at 20, quoting S.Rep. No. 102-68, at 73 (1991)(testimony of economist Deborah Walker).
It was in this context that Congress found it necessary to enact the FMLA and include the self-care provision. Laro, 259 *584 F.3d at 21. Congress found that employment standards which apply to one gender only have serious potential for encouraging employers to discriminate against employees and applicants for employment who are of that gender. 29 U.S.C.A. § 2601(a)(6). Significantly, Congress did not limit this finding to the family care provision. The stated purposes of the FMLA are to minimize the potential for employment discrimination on the basis of sex by ensuring generally that leave is available for eligible medical reasons (including maternity-related disability) and for compelling family reasons, on a gender-neutral basis and to promote the goal of equal employment opportunity for women and men. 29 U.S.C.A. §§ 2601(b)(4) & (5). Congress also had evidence before it that, even where state laws and policies were not facially discriminatory, they were applied in discriminatory ways. Hibbs, 538 U.S. at 732, 123 S.Ct. at 1980. For example, Congress heard testimony that the lack of uniform parental and medical leave policies in the work place has created an environment where sex discrimination is rampant. Id.; The Parental and Medical Leave Act of 1987, Hearings Before the Subcommittee of the Senate Committee on Labor and Human Resources, Part 2, 100th Cong. 536 (1987)(comments of Peggy Montes, Mayor's Commission on Women's Affairs, City of Chicago).
The self-care provision was not tacked onto the FMLA as some kind of benefit entitlement completely unrelated to the goal of promoting equal employment opportunity for women and men. Preceding enactment of the FMLA, the Senate Committee on Labor and Human Resources reported:
Another significant benefit of the temporary medical leave provided by this legislation is the form of protection it offers women workers who bear children. Because the bill treats all employees who are temporarily unable to work due to serious health conditions in the same fashion, it does not create the risk of discrimination against pregnant women posed by legislation which provides job protection only for pregnancy-related disability. Legislation solely protecting pregnant women gives employers an economic incentive to discriminate against women in hiring policies; legislation helping all workers equally does not have this effect.
S.Rep. No. 102-68, at 35 (1991). The House Committee on Education and Labor made a similar finding:
The FMLA addresses the basic leave needs of all employees. It covers not only women of childbearing age, but all employees, young and old, male and female, who suffer from a serious health condition, or who have a family member with such a condition. A law providing special protection to women or any defined group, in addition to be inequitable, runs the risk of causing discriminatory treatment. [This legislation], by addressing the needs of all workers, avoids such a risk.
H.R.Rep. No. 103-8, pt. 1, at 29 (1993).
Thus, Congress intentionally included the self-care provision in the FMLA to counter the stereotype that women take more advantage of leave policies than men and to provide women with protection from gender discrimination in the workplace which would have resulted from legislation providing special protection only for pregnant women. We conclude that Congress had before it sufficient evidence of gender-based discrimination in the administration of leave benefits to warrant the enactment of prophylactic § 5 legislation. See Hibbs, 538 U.S. at 735, 123 S.Ct. at 1981.
*585 Further, we conclude that Congress's chosen remedy, the self-care leave provision, is congruent and proportional to the targeted violation. See Hibbs, 538 U.S. at 735, 123 S.Ct. at 1981. The failure of Title VII and the Pregnancy Discrimination Act to address the problem justifies prophylactic measures in response. Id. By creating an across-the-board, routine employment benefit for all eligible employees, Congress sought to ensure that pregnancy-related sick leave would no longer be stigmatized as an inordinate drain on the workplace caused by female employees, and that employers could not evade leave obligations simply by hiring men. Id. By setting a minimum standard of self-care leave for all eligible employees, irrespective of gender, the FMLA attacks the formerly state-sanctioned stereotype that women of child-bearing age are absent more than other employees, thereby reducing employers' incentives to engage in discrimination by basing hiring and promotion decisions on stereotypes. See Hibbs, 538 U.S. at 737, 123 S.Ct. at 1983. For these reasons, we conclude that § 2612(a)(1)(D) is congruent and proportional to its remedial object, and can be understood as responsive to, or designed to prevent, unconstitutional behavior. We therefore decline to follow the reasoning in Nelson v. University of Texas at Dallas, Toeller v. Wisconsin Department of Corrections, Touvell v. Ohio Department of Mental Retardation and Developmental Disabilities, and Brockman v. Wyoming Department of Family Services. Because the trial court did not err by denying UTEP's plea to the jurisdiction on this ground, we overrule Issue One. Having found that UTEP's sovereign immunity has been validly abrogated by the enactment of FMLA, it is unnecessary to address the remaining arguments raised by UTEP. The judgment of the trial court is affirmed.
CARR J., dissenting.
KENNETH R. CARR, Justice, dissenting.
I respectfully disagree with the majority's holding.
In Seminole Tribe v. Florida, 517 U.S. 44, 116 S. Ct. 1114, 134 L. Ed. 2d 252 (1996), the Supreme Court articulated a two-part test for determining whether an act of Congress abrogates the states' Eleventh Amendment immunity. The test asks (1) whether Congress has unequivocally declared an intent to abrogate a state's immunity and (2) whether Congress has acted pursuant to a valid exercise of power.[1] 517 U.S. at 55, 116 S.Ct. at 1123.
Under the second prong of Seminole, in order to provide remedial or preventative protections under section 5 of the Fourteenth Amendment, Congress must act in order to protect or remedy one of the stated purposes of the Fourteenth Amendment that is linked to a pattern of constitutional violations.
While the line between measures that remedy or prevent unconstitutional actions and measures that make a substantive change in the governing law is not easy to discern, and Congress must have wide latitude in determining where it lies, the distinction exists and must be observed. There must be a congruence and proportionality between the injury to be prevented or remedied and the *586 means adopted to that end. Lacking such a connection, legislation may become substantive in operation and effect. History and our case law support drawing the distinction, one apparent from the text of the Amendment.
City of Boerne v. Flores, 521 U.S. 507, 519-20, 117 S. Ct. 2157, 2164, 138 L. Ed. 2d 624, 74 Fair Empl. Prac. Cas. (BNA) 62 (1997) (limiting congressional abrogation to the Fourteenth Amendment). Specifically, Congress must establish a pattern of constitutional violations, as it relates to its remedial statute, when utilizing section 5 powers. Florida Prepaid Postsecondary Educ. Expense Bd. v. College Sav. Bank, 527 U.S. 627, 640, 119 S. Ct. 2199, 2207, 144 L. Ed. 2d 575 (1999).
The majority's view today cannot be reconciled with the specific findings of Congress or the plain meaning of the self-care leave provision of FMLA. My issue with the majority is two-fold. First, the self-care provision of FMLA is distinguishable from the family-care provision in scope and purpose.[2] Second, prevention of gender discrimination in the workplace is treated by the majority as the primary purpose of the self-care provisions, a purpose which is not supported by Congress's findings or the historical record leading to the passage and enactment of FMLA.
As a preliminary matter, to seek relief under the self-care provision of FMLA, one must have "a serious health condition that makes the employee unable to perform the functions of the position of such employee." 29 U.S.C. § 2612(a)(1)(D). A "serious health condition" which is gender specific, as defined by the Department of Labor, includes "any period of incapacity due to pregnancy, or for prenatal care." 29 C.F.R. § 825.114(a)(2)(ii). Simply being pregnant, as opposed to suffering complications from pregnancy, is not a serious health condition and does not trigger FMLA protections. Aubuchon v. Knauf Fiberglass, GmbH, 359 F.3d 950, 952 (7th Cir.2004); Cruz v. Publix Super Mkts., Inc., 428 F.3d 1379, 1383 (11th Cir.2005). Generally, a "serious health condition" is defined as "an illness, injury, impairment, or physical or mental condition that involves... (A) inpatient care in a hospital, hospice, or residential medical care facility; or (B) continuing treatment by a health care provider." 29 U.S.C. § 2611(11). When looking at the totality of those who are affected by serious or chronic illness in the United States, pregnancy-related complications make up only a small fraction of that total.
There is no evidence or authority to support the majority's contention that the self-care provision of FMLA was designed to protect women from employment discrimination allegedly arising from pregnancy-related illnessesmuch less, from employment discrimination practiced by states, related to pregnancy-related illnesses. The majority also do not cite to any authority substantiating a stereotype that female state employees of child-bearing age take more leave than other state employees.
*587 Congress set forth Findings, which, in its opinion, warranted passage of the Act, at 29 U.S.C. § 2601. The Finding which is most relevant to this case states that "due to the nature of the roles of men and women in our society, the primary responsibility for family caretaking often falls on women, and such responsibility affects the working lives of women more than it affects the working lives of men...." Id. at § 2601(a)(5) (emphasis added). Based on this Finding, the U.S. Supreme Court has understandably approved congressional application of FMLA to the states for family leave purposes.[3]
Conversely, the Finding most relevant to the self-care leave provisions makes no distinction between the sexes. See id. at § 2601(a)(4), which states merely that "there is inadequate job security for employees who have serious health conditions that prevent them from working for temporary periods"; this Finding makes no distinction between male and female employees. Without legislative history connecting any self-care finding to a pattern of sex discrimination, we must give the self-care provision of FMLA its plain meaning, which is to allow any eligible employee with a serious medical condition the opportunity to take up to twelve weeks' unpaid medical leave without fear of losing his or her job.
The Senate Committee Report in support of the bill which became FMLA likewise recognizes the distinction between leave for family care and leave for self-care purposes. After discussing family care issues, the Report continues:
In addition to the family leave purposes described above, [FMLA] provides for unpaid job protected leave and the continuation of any existing health insurance coverage during an employee's serious illness. The fundamental rationale for such a policy is that it is unfair for an employee to be terminated when he or she is struck with a serious illness and is not capable of working.
SEN. REP. No. 103-3, at 11 (1993), reprinted in 1993 U.S.C.C.A.N. 1, 13 (emphases supplied). Unlike family care duties, which were found stereotypically to fall far more frequently upon female employees, the Committee recognized that both males and females suffer serious health conditions in substantially equal proportions.
In recognizing the distinction between the stereotype regarding women's role as primary-care givers and the gender-neutral need to care for one's own serious health conditions, Congress had before it the following finding:
Recent studies provided to the [House Education and Labor] Committee indicate that men and women are out on medical leave approximately equally. Men workers experience an average of 4.9 days of work loss due to illness or injury per year, while women workers experience 5.1 days per year. The evidence also suggests that the incidence of serious medical conditions that would be covered by medical leave under the bill is virtually the same for men and women. Employers will find that women and men will take medical leave with equal frequency.
H.R.REP. No. 101-28(I), at 15 (1989) (quoted by the Sixth Circuit in Touvell v. Ohio Dep't of Mental Retardation & Developmental Disabilities, 422 F.3d 392 (6th Cir. 2005), cert. denied, 546 U.S. 1173, 126 S. Ct. 1339, 164 L. Ed. 2d 54 (2006)).
In rejecting UTEP's Eleventh Amendment defense, the majority reject a plethora of cases, almost all of which have found *588 that individuals' efforts to sue a state (or state agency) under the self-care provisions of FMLA are barred and that Congress did not successfully abrogate the states' Eleventh Amendment immunity.
To understand the status of the case law in this regard, we need to begin with the Ninth Circuit's decision in Hibbs v. Department of Human Resources, 273 F.3d 844 (9th Cir.2001). In that case, Hibbs sought and obtained FMLA leave from his state job to care for his ailing wife. When he did not return from this leave pursuant to the Department's instructions, he was disciplined. He filed suit under, inter alia, FMLA, but the district court granted the state's motion for summary judgment. The Ninth Circuit reversed and remanded for trial. In doing so, however, it emphasized that the state's constitutional argument might well have been stronger under a self-care claim, and it stated: "We do not mean here to state any view with regard to the personal disability provision of the FMLA." 273 F.3d at 868 n. 29.
The Supreme Court granted certiorari and affirmed, sub nom. Nevada Dep't of Human Resources v. Hibbs, 538 U.S. 721, 123 S. Ct. 1972, 155 L. Ed. 2d 953 (2003). In doing so, however, the Court made it clear that it was addressing only leave for family care. See, e.g., id. at 725, 123 S.Ct. at 1976 ("We hold that employees of the State of Nevada may recover money damages in the event of the State's failure to comply with the family-care provision of the Act.") (emphasis supplied); see also id. at 737, 123 S.Ct. at 1982 ("We believe that Congress' chosen remedy, the family-care leave provision of the FMLA, is `congruent and proportional to the targeted violation' [citation omitted].") (emphasis supplied).
I am hard-pressed to think how the Court might more explicitly have stated its intention to limit its holding solely to the family-care provision of the Act.
Since the Supreme Court's decision in Hibbs, numerous courts have followed its holding. To date, six federal courts of appeals have explicitly followed the Court's lead in finding that the states have Eleventh Amendment immunity from employee suits under the self-care portion of the Act:
Fifth Circuit: Nelson v. University of Tex. at Dallas, 535 F.3d 318 (5th Cir. 2008).
Prior to Hibbs, the Fifth Circuit had held, in Kazmier v. Widmann, 225 F.3d 519, 526-27 (5th Cir.2000), that states had Eleventh Amendment immunity to suits under both subparagraphs (C) [family-care leave] and (D) [self-care].
In Nelson, the court held: "[W]e agree with the rationale of the Sixth, Seventh, and Tenth Circuits that the Supreme Court's ruling in Hibbs applies only to subsection C. Therefore, this court's decision in Kazmier still remains the law of this circuit with respect to subsection D." 535 F.3d at 321.
Sixth Circuit: Touvell v. Ohio Dep't of Mental Retardation & Developmental Disabilities, 422 F.3d 392 (6th Cir. 2005), cert. denied, 546 U.S. 1173, 126 S. Ct. 1339, 164 L. Ed. 2d 54 (2006).
The court agreed that "Hibbs does not apply to the self-care provision...." 422 F.3d at 400.
The Sixth Circuit discussed and expressly rejected the Fourth Circuit's opinion in Montgomery:[4] "The Fourth Circuit gave no explanation for this statement, ... and we do not consider it persuasive." 422 F.3d at 400 n. 2.
Seventh Circuit: Toeller v. Wisconsin Dep't of Corrections, 461 F.3d 871 (7th Cir.2006).
*589 In holding that the plaintiff's claim was barred by the Eleventh Amendment, the court stated: "We note ... that the Supreme Court was careful throughout Hibbs to state that it was deciding a case about the family-leave part of the FMLA; one would be hard-pressed to find anything in that opinion hinting that the ruling extended to all of § 2612(a)." 461 F.3d at 879.
Tenth Circuit: Brockman v. Wyoming Dep't of Family Servs., 342 F.3d 1159 (10th Cir.2003), cert. denied, 540 U.S. 1219, 124 S. Ct. 1509, 158 L. Ed. 2d 155 (2004).
The court held that the "self-care provision in subsection (D) is not implicated by" Hibbs and that the "legislative history [of FMLA] does not ... identify as the basis for subsection (D) a link between these two motivations and any pattern of discriminatory stereotyping on the part of the states as employers." 342 F.3d at 1164.
Eleventh Circuit: Batchelor v. South Fla. Water Mgmt. Dist., 242 Fed.Appx. 652 (11th Cir.2007).
In Garrett v. University of Ala. at Birmingham Bd. of Trs., 193 F.3d 1214, 1219 (11th Cir.1999), rev'd in part on other grounds, 531 U.S. 356, 121 S. Ct. 955, 148 L. Ed. 2d 866 (2001), which preceded Hibbs, the Eleventh Circuit had held that the state had Eleventh Amendment immunity in a self-care case under FMLA.
In Batchelor, the court held that "Garrett ... remains the law of this Circuit" regarding the self-care provision of FMLA. 242 Fed.Appx. at 653.
In three other circuits, the courts held, prior to Hibbs, that states enjoy Eleventh Amendment immunity from suits arising under the self-care provisions of FLMA. In these circuits, the courts have not been called upon to reconsider their holdings in light of Hibbs, but there is no reason to believe that they would now reach a different conclusion:
First Circuit: Laro v. New Hampshire, 259 F.3d 1 (1st Cir.2001).
This case involved solely a claim arising under the self-care provisions of the Act. In a thorough analysis of the issue, the First Circuit found a lack of congruence between the desire to eliminate sex discrimination and the self-care remedy which was sufficient to waive the state's Eleventh Amendment immunity. 259 F.3d at 16-17.
In Hibbs v. Department of Human Resources, the Ninth Circuit noted, with substantial approval, the distinction Laro drew between the constitutionality of applying to the states the family-care and self-care provisions of the Act. See 273 F.3d at 855.
Second Circuit: Hale v. Mann, 219 F.3d 61 (2d Cir.2000).
The court held that application of the self-care provisions of FMLA to a state agency violates the state's Eleventh Amendment immunity. 219 F.3d at 69.
Third Circuit: Chittister v. Department of Cmty. & Econ. Dev., 226 F.3d 223 (3d Cir.2000) (Alito, J.).
In another self-care case, then-Judge Alito held that application of the Act to an employee of a state agency resulted in a lack of congruence and proportionality between the injury to be remedied and the means adopted to that end. In reviewing Congress's Findings, Judge Alito noted:
Notably absent is any finding concerning the existence, much less the prevalence, in public employment of personal sick leave practices that amounted to intentional gender discrimination in violation of the Equal Protection Clause. For example, *590 Congress did not find that public employers refused to permit as much sick leave as the FMLA mandates with the intent of disadvantaging employees of one gender.
226 F.3d at 228-29.
While the Third Circuit itself has not reconsidered Judge Alito's opinion, four district judges within its jurisdiction have unanimously agreed that Chittister survives Hibbs:
Savage v. New Jersey, No. 05-2047, 2007 WL 642916 (D.N.J. Feb. 23, 2007).
"The explicit and narrow holding in Hibbs, has not overturned the holding in Chittister that the self-care provision cannot be enforced against the States.... Chittister remains the law of this circuit...." Id. at *5.
Wampler v. Pennsylvania Dep't of Labor & Indus., 508 F. Supp. 2d 416 (M.D.Pa.2007)
The court cited with approval the foregoing holding in Savage. Id. at 420-21.
Haybarger v. Lawrence County Adult Probation & Parole, No. 06-862, 2007 WL 789657 (W.D.Pa. March 14, 2007) (Lancaster, J.).
The court held that Hibbs "was limited to the `family-care' provision and does not affect the reasoning of Chittister with regards to the `self-care' provision of the FMLA." Id. at *3 n. 1.
Walker v. Department of Military & Veterans Affairs, No. 2:08CV267, 2008 WL 2433091 (W.D.Pa. June 12, 2008)(Cercone, J.).
The court held that "the Hibbs decision was limited to the `family-care' provision and ... the Third Circuit's holding regarding the `self-care' provision of the FMLA remained unaffected." Id. at *2.
Similarly, while the Ninth Circuit has not again faced the issue, one district court within its jurisdiction has found Eleventh Amendment immunity in a self-care case:
Wennihan v. AHCCCS, 515 F. Supp. 2d 1040 (D.Ariz.2005).
In a self-care case, the court distinguished Hibbs and concluded that its family-care holding was not applicable. Instead, the court followed the Tenth Circuit decision in Brockman, and held that the plaintiff's suit against an agency of the State of Arizona was barred by the Eleventh Amendment. Id. at 1046.
Finally, although this is apparently a case of first impression in the state courts of Texas, at least three other states' courts have joined the federal chorus in finding that self-care cases are barred by the Eleventh Amendment:
Louisiana: Matthews v. Military Dep't ex rel. La., 970 So. 2d 1089 (La. App. 1 Cir.2007), writ denied, 976 So.2d 177(La.), cert. denied, ___ U.S. ___, 129 S. Ct. 82, 172 L. Ed. 2d 29 (2008).
In a self-care case, the Louisiana Court of Appeal also followed Brockman and found that Congress had not lawfully abrogated the state's Eleventh Amendment immunity. 970 So.2d at 1090.
Maryland: Lizzi v. Washington Metro. Area Transit Auth., 384 Md. 199, 862 A.2d 1017 (2004), cert. denied, 545 U.S. 1116, 125 S. Ct. 2919, 162 L. Ed. 2d 297 (2005).
In a self-care case, the Court of Appeals of Maryland followed Brockman, holding that Hibbs "does not have any effect" on the personal-leave provision of FMLA. Id. at 211-12, 862 A.2d at 1024-25 (emphasis in original). In doing so, the state court expressly rejected the Fourth Circuit's Montgomery decision.
Utah: Nicholas v. Attorney Gen., 168 P.3d 809 (Utah 2007).
*591 Upholding the state's Eleventh Amendment immunity, the court followed the Sixth Circuit's opinion in Touvell.
In summary, the federal courts of appeals for nine circuits (the First, Second, Third, Fifth, Sixth, Seventh, Eighth, Tenth, and Eleventh Circuits),[5] a federal district court in one of the two circuits (the Ninth and the District of Columbia) which have not been presented with a controlling case, and the highest courts of three states (Louisiana, Maryland, and Utah) have concluded that Congress could not constitutionally abrogate the states' Eleventh Amendment immunity in regard to the self-care provisions of FMLA.
Despite the existence of a conflict in the circuits (albeit a 9-1 split), the United States Supreme Court has been given four opportunities to announce a contrary conclusion, and it has denied a writ of certiorari all four times. See Touvell, Brockman, Matthews, and Lizzi.
I am aware of two cases which have reached a contrary conclusion, neither of which, in my opinion, is well-reasoned and neither of which actually addresses the issue presented to our Court:
Fourth Circuit: Montgomery v. Maryland, 72 Fed.Appx. 17 (4th Cir.2003) (per curiam) (unpublished).
Just two months after Hibbs was decided, the Fourth Circuit summarily cited it for the proposition that "Congress effectively abrogated the states' Eleventh Amendment immunity against causes of action based on the FMLA." Id. at 19. In so holding, the court did not notice, let alone discuss, any distinction between the family-care and self-care provisions of the Act.[6]
The court's cursory treatment of Hibbs may well be attributable to the fact that assertion quoted above is pure dictum, since the court then dismissed the lawsuit for failure to state a claim upon which relief can be granted. Id. at 20.
Hamilton v. Niagara Frontier Transp. Auth., Nos. 00-CV-300SR, 00-CV-8635R, 2007 WL 2241794 (W.D.N.Y. July 31, 2007) (Schroeder, Mag. J.).
In Hamilton also, the Magistrate Judge stated summarily that, in Hibbs, the Supreme Court "held that the FMLA is a valid abrogation of state immunity." Id. at *13. The district court's opinion did not recognize, let alone discuss, any distinction between the family-care and self-care provisions.
The court likewise did not reference, even in passing, the Second Circuit's contrary decision in Hale.
Thus, the only two cases which have found a state's Eleventh Amendment immunity to have been abrogated by the self-care provisions of FMLA did so in opinions which overlooked the distinction, so carefully and repeatedly noted by the Supreme Court itself (see, e.g., 538 U.S. at 737, 123 *592 S.Ct. at 1982[7]), between family-care and self-care leaves.
The majority opinion flies in the face of a mountain of contrary and persuasive legal authority. I therefore respectfully dissent from its holding that Hibbs abrogated Texas' Eleventh Amendment immunity from Herrera's FMLA claim arising from a self-care leave.
The majority deem it unnecessary to consider Herrera's alternative contentions that Texas has voluntarily waived its sovereign immunity by State law or by provisions in the UTEP handbook. In view of the majority's holding, I do not deem it necessary to discuss them in any detail. It will suffice to say that I believe Herrera's contention that UTEP waived the State's immunity by provisions in its Handbook to be without merit. See Wells v. Texas A & M Univ. Sys., No. 06-04-00001-CV, 2004 WL 2114438 (Tex.App.-Texarkana Sept. 24, 2004, pet. denied), cert. denied, 546 U.S. 814, 126 S. Ct. 338, 163 L. Ed. 2d 50 (2005).
NOTES
[1] Herrera's suit also includes an allegation that he was terminated for exercising his First Amendment right to complain about being required to work unsafely and use unsafe equipment. This appeal pertains only to the FMLA claim.
[2] 42 U.S.C.A. § 2000e et seq.
[3] In an unpublished opinion, the Fourth Circuit summarily held, based on Hibbs, that Congress validly abrogated the States' immunity for FMLA claims based on the self-care provision. Montgomery v. Maryland, 72 Fed. Appx. 17, 19 (4th Cir.2003)(unpublished). Prior to Hibbs, the Fourth Circuit had reached the opposite conclusion in Lizzi v. Alexander, 255 F.3d 128, 135-36 (4th Cir. 2001).
[4] The Subcommittee on Compensation and Employee Benefits and the Committee on Post Office and Civil Service conducted joint hearings on the PMLA, as did the Subcommittee on Labor Management Standards. Kazmier, 225 F.3d at 547.
[1] In enacting the Family and Medical Leave Act (FMLA), 29 U.S.C. §§ 2601 et seq., Congress clearly satisfied the first prong of the Seminole test: "An action to recover ... damages... may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction...." 29 U.S.C. § 2617(a)(2) (emphasis supplied).
[2] In relevant part, the two provisions read as follows:
(1) Entitlement to leave
[A]n eligible employee shall be entitled to a total of 12 workweeks of leave during any 12-month period for one or more of the following:
(C) In order to care for the spouse, or a son, daughter, or parent, of the employee, if such spouse, son, daughter, or parent has a serious health condition.
(D) Because of a serious health condition that makes the employee unable to perform the functions of the position of such employee.
29 U.S.C. § 2612(a)(1)(C), (D).
[3] See Nevada Dep't of Human Resources v. Hibbs, 538 U.S. 721, 123 S. Ct. 1972, 155 L. Ed. 2d 953 (2003) (hereinafter, "Hibbs"), discussed in greater detail below.
[4] Fully cited and more thoroughly analyzed below.
[5] I have not sought to discuss the numerous federal district courts cases in which the court has simply followed and applied the law of that circuit. I have also not discussed at least three district court cases which arose within the Fifth Circuit after Hibbs, but prior to the Nelson decision. See Bryant v. Mississippi State Univ., 329 F. Supp. 2d 818, 821-22 n. 2, 825 (N.D.Miss.2004); Solley v. Big Spring State Hosp., No. Civ.A. 1:03-CV-094-C, 2004 WL 1553423 (N.D.Tex. July 12, 2004); Jordan v. Texas Dep't of Aging & Disabilities Servs., No. 9:05CV161, 2006 WL 1804619 (E.D.Tex. June 28, 2006).
[6] See Bryant, 329 F.Supp.2d at 821-22 n. 2. where the court rejected the holding in Montgomery: "With no analysis of the issue, the Fourth Circuit reached a conclusion opposite of the one this Court reaches today.... In the absence of more consideration, this Court is unpersuaded by such a general conclusion."
[7] "We believe that Congress' chosen remedy, the family-care leave provision of the FMLA, is `congruent and proportional to the targeted violation,' ..." (emphasis supplied). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578861/ | 12 So. 3d 783 (2009)
AXA EQUITABLE LIFE INSURANCE COMPANY, Appellant,
v.
Marco GELPI and Ming Liu, Appellees.
No. 3D08-2800.
District Court of Appeal of Florida, Third District.
May 6, 2009.
Epstein Becker & Green and Richard D. Tuschman and Kevin E. Vance, Miami, for appellant.
Damian & Valori and Melanie E. Damian and Mary Claire Espenkotter and Ken Marina, Miami, for appellees.
Before GERSTEN, C.J., and COPE and SUAREZ, JJ.
SUAREZ, J.
AXA Equitable Life Insurance Company ("AXA") appeals a final summary judgment entered in favor of Appellees, Marco Gelpi and Ming Liu, in a *784 breach of contract action brought by AXA in Miami-Dade County. We reverse. We find that, pursuant to the unambiguous terms of the Separation Agreements in question, Appellees released AXA from any and all suits arising out of their employment, which includes suits that could have been brought in foreign jurisdictions. Appellees, therefore, breached the Separation Agreements by filing suit in Brazil.
Prior to their employment with AXA, Appellees were employed by MONY Life Insurance Company in Brazil. In 2004, MONY merged with AXA, becoming a wholly owned subsidiary and affiliate of AXA. After the merger, Appellees moved to Miami and continued working for MONY, as an affiliate of AXA. AXA closed the MONY Miami office and terminated the Appellees. AXA, including its affiliate MONY, entered into identical Confidential Separation Agreements and General Releases with each of the Appellees. Pursuant to the terms of the Agreements, AXA agreed to pay each Appellee eighty thousand dollars in severance pay and twenty thousand dollars in attorney's fees in exchange for a general release concerning Appellees' rights of action against AXA following termination.[1] Under the Separation Agreements, AXA (which was the party being released) was defined to include "its current and former parents, subsidiaries and affiliates, including MONY Life *785 Insurance Company and its subsidiaries and affiliates."
After entering into the Separation Agreements, the Appellees, who were Brazilian citizens, moved back to Brazil and filed a lawsuit in Brazil against MONY alleging violations of Brazilian law which allegedly arose out of the Appellees' employment in Brazil and in Miami-Dade County with MONY and AXA. AXA brought the present breach of contract action against the Appellees in Miami-Dade County claiming the Appellees breached the Separation Agreements by filing the Brazilian suit. AXA and the Appellees each filed motions for summary judgment on the issue of whether the plain language of the Agreements demonstrated intent to release Appellees' claims in the Brazilian lawsuit. The trial court found the Agreements' language to be ambiguous, did not find a breach of contract, and granted final summary judgment in favor of the Appellees.
We disagree, reverse the trial court's order and remand with instructions to enter summary judgment in favor of AXA.
We review the interpretation of the Agreements as a question of law under the de novo standard of review. See Muniz v. Crystal Lake Project, LLC, 947 So. 2d 464 (Fla. 3d DCA 2006). We reject the Appellees' contention that the release serves only to release AXA from domestic suits and not suits brought in foreign countries. The Appellees argue that, in paragraph 2(a) of the Agreement, the language of the release, "including but not limited to," followed by an enumeration of certain causes of action, limits the scope of the General Release to only those enumerated suits and causes of action. Appellees argue paragraph 3 includes the same limiting language. We reject this interpretation. Paragraphs 2 and 3 specifically release and discharge AXA from any and all suits, actions, causes of action, damages and claims in law or equity which Appellees ever had or will have regarding any matter of Appellees' employment. The language of the release, "including but not limited to," does not limit the General Release to those causes of action specifically listed. The release clearly shows AXA is released from any and all causes of action arising out of their employment and that the release includes, but is not limited to, just those enumerated causes of action. See State Farm Mut. Auto. Ins. Co. v. Lynch, 661 So. 2d 1227 (Fla. 3d DCA 1995) (holding that the language in a release "and includes ..." does not limit the release to only those damages listed). We find that the clear and unambiguous terms of the Agreements, given their plain meaning, constitute a general release. See, e.g., Patco Transp., Inc. v. Estupinan, 917 So. 2d 922, 923 (Fla. 1st DCA 2005) (finding that release language requiring employee to release employer from "any and all past, present or future claims, demands, obligations, actions, causes of action, rights, damages, costs, losses of services, expenses and compensation of any nature whatsoever, whether based on a tort, contract or other theory of recovery" was broad enough to encompass workers' compensation claim); Bd. of Trs. of Fla. Atl. Univ. v. Bowman, 853 So. 2d 507, 509 (Fla. 4th DCA 2003) (finding that language in the general release requiring plaintiff to release defendant from all claims which had accrued, or could have accrued, as of the date of the proposal for settlement, was consistent with a general release and was clear and unambiguous); Hold v. Manzini, 736 So. 2d 138, 141 (Fla. 3d DCA 1999) (finding that release language stating, "[W]hich said first party ever had, now has, or which any personal representative, successor, heir or assign of said first party, hereafter can, shall or may *786 have against said second party, for, upon or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the day of these presents" was clear and unambiguous in that it required the plaintiff to release the defendant for all claims which had accrued as of the date of its execution).
Pursuant to the general and full releases they executed, the Appellees are barred from bringing any claim or action arising out of their employment against AXA in any forum. We find that the Appellees breached their Agreements by bringing suit in Brazil against AXA. Therefore, the trial court erred in granting the motion for summary judgment in favor of Appellees and should have granted AXA's motion for summary judgment on the breach of contract claim. We reverse and remand with directions to enter final summary judgment, as a matter of law, in favor of AXA.
Reversed and remanded with directions.
NOTES
[1] a. In consideration of the payment described above, and for other good and valuable consideration, Employee hereby releases and forever discharges, and by this instrument releases and forever discharges, AXA Equitable from all debts, obligations, promises, covenants, agreements, contracts, endorsements, bonds, controversies, suits, actions, causes of action, judgments, damages, expenses, claims or demands, in law or in equity, which Employee ever had, now has, or which may arise in the future, regarding any matter arising on or before the date of Employee's execution of this Agreement, including but not limited to all claims (whether known or unknown) regarding Employee's employment with or termination of employment from AXA Equitable, any contract (express or implied), any claim for equitable relief or recovery of punitive, compensatory, or other damages, or monies, attorneys' fees, any tort, and all claims for alleged discrimination based upon age, race, color, sex, sexual orientation, marital status, religion, national origin, handicap, disability, or retaliation, including any claim, asserted or unasserted, which could arise under Title VII of the Civil Rights Act of 1964; the Equal Pay Act of 1983; the Age Discrimination in Employment Act of 1967; the Americans With Disabilities Act of 1990; the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Employee Retirement Income Security Act of 1974; the Family and Medical Leave Act of 1993; the Civil Rights Act of 1991; the Worker Adjustment and Retraining Notification Act of 1988; the Sarbanes-Oxley Act; the Florida Civil Human Rights Act of 1992; the Florida AIDS Act Equal Pay Law; the Florida Whistleblower Protection Act; the Florida Wage Discrimination Law; the Florida Sickle Cell Trait Discrimination Law; the Florida Genetic Testing in Employment Law; the Florida Smoking Rights Law; the New York State Human Rights Law; the New York City Human Rights Law; and any other federal, state or local laws, rules or regulations, whether equal employment opportunity laws, rules or regulations or otherwise, or any right under any AXA Equitable retirement, welfare, or AXA Financial stock plans
. . . .
3. [P]ursuant to and as a part of Employee's release and discharge of AXA Equitable, as set forth herein, Employee agrees, not inconsistent with EEOC Enforcement Guidance on Non-Waivable Employee Rights Under EEOC-Enforced-Statutes dated April 11, 1997, and to the fullest extent permitted by law, not to sue or file a charge, complaint, grievance or demand for arbitration against AXA Equitable in any forum or assist or otherwise participate willingly or voluntarily in any claim, arbitration, suit, action, investigation or other proceeding of any kind which relates to any matter that involves AXA Equitable, and that occurred up to and including the date of Employee's execution of this Agreement. ... | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578857/ | 281 S.W.3d 893 (2009)
CAMDEN COUNTY PUBLIC WATER SUPPLY DISTRICT #4, et al., Respondents,
v.
VILLAGE OF SUNRISE BEACH, City of Lake Ozark, et al., Appellants.
Nos. SD 28984, SD 28969.
Missouri Court of Appeals, Southern District, Division One.
April 1, 2009.
*894 Gregory D. Williams, Sunrise Beach, for Appellants.
Larry R. Marshall, Columbia, for Respondents.
ROBERT S. BARNEY, Judge.
Appellants Village of Sunrise Beach, Missouri ("Sunrise Beach"), and City of Lake Ozark, Missouri ("Lake Ozark") (collectively "Appellants"), appeal from the trial court's "Judgment and Order" entered in favor of Respondents Camden County Water Supply District # 4 ("the Water District"), the Water District's Board of Directors, and various landowners (collectively "Respondents") granting Respondents' request to annex certain property into the boundaries of the Water District's service area.[1] Appellants assert three points relied on.
*895 Viewing the record in the light most favorable to the judgment, Hemsath v. City of O'Fallon, 261 S.W.3d 1, 3 (Mo.App. 2008), the Respondents filed their petition in this matter on January 10, 2007, in which they requested pursuant to section 247.030.3, RSMo Cum.Supp.2002, to annex certain territory into the boundaries of the Water District.[2] The petition asserted "[t]he proposed annexation is necessary to provide the area with various public health and safety benefits such as the installations of fire hydrants."[3] Attached to the petition was a legal description of Respondents' proposed Water District boundary changes.
Thereafter, on February 13, 2007, Respondents filed their "Amended Petition to Annex Territory to [the Water District]." The Amended Petition set out that there had been a problem with the original legal descriptions and boundary designations set out in the petition and corrected those problems. In all other aspects, Respondents stood by the allegations and requests contained in the original petition.
On March 1, 2007, "Exceptions to Annexation Petition" were filed by Sunrise *896 Beach.[4] It argued the annexation of the property at issue would "materially alter and affect the ability of Sunrise Beach to complete its ongoing annexation process..." in that under Missouri law a municipality must "have the ability to furnish normal municipal services to an annexed area within a reasonable period of time..." and "the provision of water and/or sewer utility services by a public water district could materially hinder, impair, or prevent Sunrise Beach from providing said municipal services. ..." Further, Sunrise Beach maintained the annexation would violate "applicable Federal Law [which] prohibits or limits the annexation of territory into a municipality which is within a public water district which has obligations outstanding for which it has received federal financial assistance." Additionally, Sunrise Beach asserted the boundary lines for the proposed subdistricts were gerrymandered "to effectively deprive the residents of the proposed annexation area of representation on the board of directors of the [Water District]" and the board of directors for the Water District
are related parties to and have an existing or prospective interest in the existing water and sewer utility supplier within the proposed annexation area, Lake Region Water and Sewer Company [("Lake Region")], such that any proposed acquisition of the assets of said company by the [Water] District would not be an arms-length transaction.
Accordingly, Sunrise Beach opposed the annexation petition.
Lake Ozark then filed its "Motion to Dismiss and Exceptions to Proposed Annexation" on March 6, 2007. In its motion, Lake Ozark asserted Respondents' petition should be dismissed for failing to state a cause of action in that it failed to meet certain procedural requirements set out in section 247.030, RSMo Cum.Supp.2002. Lake Ozark also argued it took exception to the proposed annexation in that such annexation was "not in the best interests of the majority of landowners affected;" it "would adversely affect the interests of [Lake Ozark] to serve its landowners within the proposed annexed district;" and "the reasons for [Respondents'] proposed annexation have already been met and would not be further served by annexation." As such, it opposed the annexation petition.
On April 9, 2007, Respondents' second amended petition was filed. This second amended petition addressed the procedural deficiencies pointed out in Lake Ozark's motion to dismiss, but otherwise raised the same issues set out in the original petition. Respondents then filed a motion to dismiss the exceptions filed by Sunrise Beach; objections to the exceptions filed by Sunrise *897 Beach; and objections to the exceptions filed by Lake Ozark.
At a pre-trial hearing on April 13, 2007, the trial court took all of the pending motions under advisement. On July 10, 2007, the trial court overruled Respondents' motion to dismiss the exceptions filed by Sunrise Beach.
A trial in this matter was held on August 31, 2007; September 4, 2007; and September 17, 2007. As best we discern the record, at the time of trial no water or sewer services were being provided by either Sunrise Beach or Lake Ozark to the proposed annexation area nor had they installed any fire hydrants in the proposed annexation area.
In its Judgment entered on September 27, 2007, the trial court found that "[n]otice of this hearing has been given as required by state statute and that all jurisdictional requirements have been met;" that Respondents' petition for annexation was sustained as being "in the public interest;" that "the subdistricts identified in..." the petition "are in the public interest" and are adopted; that "since the publication of notice of the within hearing no member of the public has come forth to oppose the petition for annexation filed herein except for one witness presented as a witness for ... Sunrise Beach." Accordingly, the trial court granted Respondents' annexation request and taxed them with costs associated with the matter. This appeal followed.[5]
Review of this court-tried case is governed by Rule 84.13(d). We must affirm the judgment of the circuit court unless it is unsupported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). "We view the evidence and all reasonable inferences therefrom in the light most favorable to the judgment disregarding all contrary evidence and inferences." Hemsath, 261 S.W.3d at 3. "The credibility of the witnesses and the weight to be given to their testimony are matters for the trial court, which is free to believe none, part, or all of the testimony."[6]Id.
In their first point of trial court error, Appellants maintain the trial court erred in "entering judgment to grant extension of the [Water] District's boundaries because it was not in the public interest or reasonable and necessary" due to "substantial conflicts of interest contrary to the public interest."[7]
*898 At trial, Appellants presented evidence relating to various relationships between individual board members and interested parties of the Water District and directors and employees of Lake Region, the privately owned, water company that actually supplies water to the proposed annexation area.[8] For example, there was evidence introduced at trial that Robert Schwermann ("Mr. Schwermann"), the co-owner and president of Lake Region and several other water companies, was also an advisor to the Water District in financial and other matters. Further, there was evidence that Mr. Schwermann's son was secretary of the Water District and was also involved in the management of Lake Region and other companies owned by his father. Also, there was testimony that Roger Sallee, the president of the Water District's Board of Directors, was a former business partner of Mr. Schwermann, was the holder of a promissory note secured by Mr. Schwermann, and was a tenant of Mr. Schwermann. Likewise, there was evidence that John Summers ("Mr. Summers"), the Water District's General Manager, was also a manager at Lake Region and was employed by an entity with ties to Mr. Schwermann.
In addition to the interpersonal relationships set out above, there was also evidence relating to "water availability fees," which are apparently fees paid by landowners on occupied property as well as empty lots to Lake Region "for water availability charges." These fees were paid to an entity associated with Lake Region as part of the landowners' typical monthly fees. There was no evidence as to what these fees were used for once they were collected.
Appellants contend the foregoing relationships illustrated "too many ... potential conflicts to accurately track" such that the trial court "was unreasonable in expanding the territory of the [Water District] in which more property owners and their money would become entangled in the web. Further, Appellants assert there are direct personal financial motivations ever present which would constitute ongoing conflicts of interest." Appellants rely on State ex inf. Gavin v. Gill, 688 S.W.2d 370 (Mo. banc 1985), as support for this argument. In Gill, the appellant was "a firefighter employed by the City of Poplar Bluff" when "he was elected a district director of Butler County Fire Protection District." Id. at 371. The prosecuting attorney of Butler County ousted the appellant from his fire district position in a quo warranto action based on a statute in effect at the time which prohibited a person who was employed by a city from also holding the office of fire protection district director. Id. at 371-72. This action was then upheld on appeal under the notion that "[p]ublic bodies have an important interest in securing the absolute loyalty of their employees. Different governmental units frequently interrelate. The Legislature well might conclude that an employee of one governmental unit should not be eligible to serve as a member of the governing board of another." Id. at 372 (internal citations omitted). As such it found under the statute that "there is no less *899 restrictive alternative. In the appellant's situation the possibility of conflict is clear. He might be reluctant to approve as director a contract or agreement which would affect his duties as firefighter." Id. at 372.
Appellants also rely on Jackson County., 365 S.W.2d at 553. In Jackson County, a water district filed suit against the Highway Commission because the Highway Commission directed the water district to relocate a number of water and sewer lines and to bear the majority of the cost and expense of the relocation. Id. at 554-55. The water district's petition was dismissed by the trial court and the water district appealed with the "position that it was entitled to a fair hearing before the Highway Commission and a determination of the question whether the relocation costs should be imposed upon the [w]ater [d]istrict...." Id. at 555. The appellate court held that although water districts are "political subdivision[s]" "[t]he use of a state highway by a utility for proprietary purposes, whether it be publicly or privately owned, must give way to a proper governmental use of the right of way by the Highway Commission." Id. at 557. Accordingly, the appellate court upheld the trial court's ruling. Id. at 559.
This Court fails to see how Gill and Jackson County are instructive in the present matter. Gill involved a conflict of interest which fell under a statute specifically barring the relationship in that case, and while Jackson County found that "public" water districts are "political subdivisions," it is this Court's view that these holdings have little persuasive weight bearing on the issues raised in this appeal. Appellants have failed to show at trial, and now fail to provide this Court with, any probative evidence or pertinent citation of authority as to how the trial court's grant of annexation was contrary to the public interest. The fact that some of the governing members of the Water District have relationships with owners and employees of Lake Region, a private water company, does not per se make the trial court's grant of the annexation petition against the public interest. Appellants have not proven their first point of trial court error. Point One is denied.
In their second point relied on, Appellants assert the trial court erred in "entering its judgment approving the boundaries of the subdistricts as requested because they reflected gerrymandering in that the boundaries were drawn around the persons appointed to serve on the board."
Section 247.060.1, RSMo Cum.Supp. 2005, sets out that public water districts are managed by an elected board of directors, who "shall be composed of five members, each of whom shall be a voter of the district and shall have resided in said district one whole year immediately prior to his election." This section also allows for the appointment of board members in non-election years:
[t]he remaining members of the board shall appoint a qualified person to fill any vacancy on the board. If no qualified person who lives in the subdistrict for which there is a vacancy is willing to serve on the board, the board may appoint an otherwise qualified person, who lives in the district but not in the subdistrict in which the vacancy exists to fill such vacancy.
§ 247.060.1, RSMo Cum.Supp.2005. Further, in determining the boundary lines of a public water district following annexation of additional territory, water districts and trial courts are required to "redivide each district into five subdistricts, fixing their boundary lines so that each of the five subdistricts have approximately the same *900 area." § 247.030.2, RSMo Cum.Supp. (2002).
In the present matter, David Krehbiel ("Mr. Krehbiel"), an engineer, testified that he drafted the proposed boundary changes for the subdistricts within the Water District. He stated the new boundary lines
[e]ncase[] approximate[ly] some of the boundaries of the existing district, but by statute we had to divide this into five approximately equal areas. ... And then we rearranged the districts in such a manner that the present board members would continue on as the board members until such a time as an election took place. And it's been our experience in the other districts we've worked with that this allows for a smooth transition until such time as the next election.
Mr. Krehbiel testified his only consideration in drawing the boundary lines was the fact that section 247.030, RSMo Cum. Supp. (2002), requires the subdistricts be of "approximate equal areas. There's nothing in the statutes with regard to ... where to draw the lines or the shape other than approximate equal areas." He stated that in setting the boundaries he was aware of the approximate location of the homes of each of the board of directors and he arranged the boundaries so "[t]here is a separate director from the current Board of Directors in each of the subdistricts."
Mr. Summers also testified about the subdistrict boundaries being specifically drawn around the location of the serving board members. He related that it was his "understanding that when the [Water District] was formed the group found five people who were willing to serve as directors and the subdistrict boundaries were essentially drawn around those five directors." He stated that the reason there is a "narrow area" in a few of the subdistricts was because "[t]here were three people very close to each other who were willing to serve" and the subdistricts had to be drawn to accommodate the fact that only one board member could live in each subdistrict.
Nevertheless, based on the foregoing testimony, Appellants assert the subdistrict boundaries were the result of "illegal gerrymandering to draw subdistrict lines to benefit the continuation of individuals directors. ..." The term "gerrymander" has been "defined as `a name given to the process of dividing a state or other territory into the authorized civil or political divisions, but with such a geographical arrangement as to accomplish an ulterior or unlawful purpose.'" City of Centralia, 879 S.W.2d at 730 n. 2 (quoting BLACK'S LAW DICTIONARY 618 (5th ed.1979)).
Even assuming arguendo that the concept of gerrymandering can be applied to subdistricts within a Chapter 247 public water district, which we do not hold, the instant subdistricts would had to have been drawn "`to accomplish an ulterior or unlawful purpose.'" Id. Here, evidence of the latter is missing. Mr. Krehbiel and Mr. Summers testified that under the statutes governing annexations and subdistrict boundaries the boundary lines for the five subdistricts contain approximately the same area with each subdistrict containing the residence of one of the elected board of directors. It is clear that under section 247.060.1, RSMo Cum.Supp.2005, each board member serves for a three-year-term and then there is to be an election of a new board member from the voters within the subdistrict. There is nothing in the record which leads this Court to believe the boundary lines were drawn in order to unlawfully and clandestinely benefit the board members who were serving at the time of the annexation. The trial court was free to believe the testimony of Mr. *901 Krehbiel and Mr. Summers over that offered by Appellants. Hemsath, 261 S.W.3d at 3. There is no error in the trial court's approval of the subdistrict boundaries. Point Two is denied.
In their third point relied on, Appellants maintain the trial court "was without subject matter jurisdiction and erred in entering judgment to grant extension of the [Water District's] boundaries over the exceptions and opposition of [Sunrise Beach]. ..." Specifically, they maintain Sunrise Beach "had priority for annexation of the area pursuant to the `prior jurisdiction doctrine' in that [Sunrise Beach] had taken the first valid step to annexation by enacting an ordinance for annexation."
The doctrine of "prior jurisdiction" in annexation proceedings has long been recognized in Missouri. City of St. Joseph v. Village of Country Club, 163 S.W.3d 905, 907 (Mo. banc 2005). Under the doctrine, "as between two municipalities competing for the same territory, the one undertaking the first `valid step' toward annexation has priority."[9]Id. (quoting State ex inf. Taylor ex rel., Kansas City v. North Kansas City, 360 Mo. 374, 228 S.W.2d 762, 779 (1950)).
In City of St. Joseph, 163 S.W.3d at 907, our Supreme Court quoted Mayor, Councilmen and Citizens of City of Liberty v. Dealers Transport Co., 343 S.W.2d 40, 42 (Mo. banc 1961), for the proposition that "`[t]he prior jurisdiction doctrine resulted from the sound recognition that there cannot be two municipal corporations with co-extensive powers of government extending over the same area.'" The prior jurisdiction doctrine is used to determine annexation priority not only among competing municipalities, but also among competing school districts where each claims jurisdiction over the same territory. Id. That having been said, we fail to see how the doctrine of prior jurisdiction pertains in this instance in view of the fact that the Water District is neither a municipality nor a school district. The Water District's powers are not co-extensive with those of a municipality. All of its powers and limitations relate solely to providing water related services within the confines of its territory as delineated in Chapter 247. Public Water Supply Dist. No. 16 v. City of Buckner, 951 S.W.2d 743, 745 (Mo. App.1997).
Further, public water supply districts are not shielded from incursion by a municipality. The "legislature did not intend that both [a municipality] and a [public] water district distribute water in the same area at the same time" and it is "obvious that the legislature intended that initially and ultimately the one of the two to be excluded from supplying water within the corporate limits of a [municipality]... is the [public] district." Mathison v. Pub. Water Supply Dist. No. 2 of Jackson County, 401 S.W.2d 424, 431 (Mo.1966). "Otherwise, the legislature would not have... provided a method ([section] 247.170, [Cum.Supp.2003,]) whereby [a municipality] could, as it grew, acquire the assets of a [public water] district lying within an area annexed by the [municipality], without the consent or agreement of the [public water] district."[10]Id.
*902 Even if the doctrine of prior jurisdiction were applicable to the present matter, the Supreme Court of Missouri's opinion in City of Liberty, 343 S.W.2d at 43, teaches that "annexation proceedings once commenced must be conducted and completed within a time that is reasonable in view of all of the circumstances."
At trial, Sunrise Beach presented evidence that in 1998 it adopted "a resolution []affirming its intent to annex an area including the area that's at issue" and this "resolution of intent" was reaffirmed by Sunrise Beach on January 9, 2006. Since that time Sunrise Beach has passed three separate ordinances and "accepted [three] voluntary annexation petitions" relating to areas covered by the 1998 and 2006 "resolution of intent," but there had been no further attempt to annex the area at issue. As best we discern the record, Sunrise Beach has taken but few steps toward annexing the territory at issue and was not supplying water related services to the territory now annexed into the Water District. Only the Water District, within the confines of its authority, has completed the proper steps for annexation of territory in this matter. See § 247.030, RSMo Cum. Supp.2002. Point Three is denied.
The judgment of the trial court is affirmed.
BATES, J. and SCOTT, P.J., concur.
NOTES
[1] Respondents' "Second Amended Petition to Annex Territory ..." named the Board of Directors as Ronald Massie, Gayle Repetto, Harrell Dryden, Roger Sallee and Randy Thompson. The petition named the following individuals as "Voter/Landowner Petitioners:" Judith Nelson, Curtis Morgan, Donald Brohm, Robert Whitten, Nancy Cason, M.R. Becker, James D. Caven, and Karl Koster. As best we discern from the record, the Water District was formed under the provisions of Chapter 247. Section 247.020 provides that "districts to be formed under sections 247.010 to 247.220 shall be known as public water supply districts of the counties in which districts are located, and shall be political corporations of the state of Missouri." Such a district is "incorporated by decree of the circuit court under the procedure prescribed in [section] 247.040, [RSMo Cum.Supp.2002,] for the purposes set forth in [section] 247.010. [Generally speaking], [i]ts express powers are prescribed by [sections] 247.050 and 247.080." Jackson Cty. Public Water Supply Dist. No. 1 v. State Hwy. Comm'n, 365 S.W.2d 553, 557 (Mo.1963).
All statutory references are to RSMo 2000 unless otherwise stated.
[2] Section 247.030.3, RSMo Cum.Supp.2002, sets out that:
The boundaries of any [public water supply] district may be extended or enlarged from time to time upon the filing, with the clerk of the circuit court having jurisdiction, of a petition by either:
(1) The board of directors of the district and five or more voters or landowners within the territory proposed to be annexed by the district; or
(2) The board of directors of the district and a majority of the landowners within the territory proposed to be annexed to the district.
If the petition is filed by the board of directors of the district and five or more voters or landowners within the territory proposed to be annexed by the district, the same proceedings shall be followed as are provided in section 247.040 for the filing of a petition for the organization of the district, except that no election shall be held. Upon entry of a final order declaring the court's decree of annexation to be final and conclusive, the court shall modify or rearrange the boundary lines of the subdistricts as may be necessary or advisable. If the petition is filed by the board of directors of the district and a majority of the landowners within the territory proposed to be annexed, the publication of notice shall not be required, provided notice is posted in three public places within the territory proposed to be annexed at least seven days before the date of the hearing and provided that there is sworn testimony by at least five landowners in the territory proposed to be annexed, or a majority of the landowners if the total landowners in the area are fewer than ten. If the court finds that the annexation of such territory would be in the public interest, the court shall enter its order granting such annexation. Upon the entry of such order, the court shall modify or rearrange the boundary lines of the subdistricts as may be necessary or advisable. The costs incurred in the enlargement or extension of the district shall be taxed to the district, if the district be enlarged or extended, otherwise against the petitioners; provided, however, that no costs shall be taxed to the directors of the district.
[3] At trial there was evidence that there had recently been three serious house fires in the proposed annexation area and the availability of fire hydrants would have helped in fighting those fires.
[4] Also, in the course of these proceedings a "Motion to Intervene" was filed by Ned K. Goss D/B/A/ Total Environmental Service's Incorporated ("Total Environmental") which alleged that as "a business that tests, maintains, inspects and sells supplies for private sewage treatment facilities ..." it would be financially damaged and suffer interference with its business relationships if the annexation was approved. The motion to intervene was granted; however, on the day of trial the trial court noted in its docket entry that Total Environmental's counsel "announce[d] that the intervenors have settled their dispute and the matter can be taken up without their participation in the trial." Accordingly, Total Environmental does not appear in this appeal.
Further, "Exceptions to Annexation Petition" were filed by "the Shawnee Bend Landowners," who resided within the area proposed to be annexed by the Water District, and who asserted the annexation of their property into the Water District would "materially alter and affect" them in that they had a right "to protect their interest in the availability and affordability of water and sewer utility services." The exceptions filed by the Shawnee Bend Landowners were withdrawn prior to trial. They also do not appear in this appeal.
[5] We note that Sunrise Beach and Lake Ozark filed separate appeals in this matter; however, these matters were consolidated for purposes of appeal and they filed a single appellate brief between them.
[6] We also observe that in their brief Appellants maintain that the standard of review in annexation cases is further guided by certain factors set out in City of Centralia v. Norden, 879 S.W.2d 724, 727 (Mo.App. 1994); however, City of Centralia and the cases cited therein are municipal annexation cases dealing with land annexation by municipalities to increase their population and land boundaries. See § 71.015. The present case is a Water District annexation case governed by section 247.030, RSMo Cum.Supp. (2002), which specifically provides the trial court's role is simply to determine whether "the annexation of such territory would be in the public interest...." We do not find the cases cited by Appellants on this issue to be binding on the issues raised herein.
[7] We note Appellants' points relied on violate Rule 84.04(d) which mandates that a point relied on must "identify the trial court ruling or action that the appellant challenges;" "state concisely the legal reasons for the appellant's claim of reversible error;" and "explain in summary fashion why, in the context of the case, those legal reasons support the claim of reversible error." "This Court has the discretion to dismiss an appeal for failure to comply with Rule 84.04 or to review the appeal on the merits where we are nonetheless able to ascertain the issues." Sharpe v. Sharpe, 243 S.W.3d 414, 417-18 (Mo.App. 2007). In that we can understand Appellants' points relied on despite their deficiency, we shall address them in this opinion.
All rule references are to Missouri Court Rules (2008).
[8] Appellants set out in their brief that Lake Region "already provides water and sewer services to a part of the ..." proposed annexation area and that "its tariffs are subject to the authority of the Missouri Public Service Commission." Respondents do not dispute these assertions.
[9] In City of St. Joseph, the Supreme Court of Missouri held that pursuant to section 71.015 "the first `valid step' toward involuntary annexation for the purpose of the prior jurisdiction rule is the municipality's proposal of an ordinance as required by section 71.015.1(2)." Id. at 909.
[10] As stated in Chance v. Pub. Water Supply District No. 16, 41 S.W.3d 523, 525 (Mo.App. 2001):
[T]he General Assembly created two means for a municipality to detach property from a [public] water district. Section 247.160 establishes that, after a municipality annexes territory within a water district, the district can contract with the municipality to continue serving the annexed area or to sell or lease any or all of its operations within the district. If the municipality and district cannot agree, [section] 247.170 [RSMo Cum.Supp.2003] allows a municipality, at least 90 days after it annexes an area, to petition for the question of detachment to be submitted to voters in a special election within the entire district. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578855/ | 671 N.W.2d 40 (2003)
COUNTY OF WAYNE, plaintiff-Appellee,
v.
Edward HATHCOCK, Defendant-Appellant.
County of Wayne, Plaintiff-Appellee,
v.
Aaron T. Speck and Donald E. Speck, Defendants-Appellants.
County of Wayne, Plaintiff-Appellee,
v.
Aubins Service, Inc., and David R. York, Trustee of the David R. York Revocable Living Trust, Defendants-Appellants.
County of Wayne, Plaintiff-Appellee,
v.
Jeffrey J. Komisar, Defendant-Appellant.
County of Wayne, Plaintiff-Appellee,
v.
Robert Ward and Lela Ward, Defendants-Appellants, and
Henry Y. Cooley, Defendant.
County of Wayne, Plaintiff-Appellee,
v.
Mrs. James Grizzle and Michelle A. Baldwin, Defendants-Appellants, and
Rami Fakhoury, Defendant.
County of Wayne, Plaintiff-Appellee,
v.
Stephanie A. Komisar, Defendant-Appellant.
County of Wayne, Plaintiff-Appellee,
v.
Thomas L. Goff, Norma Goff, Mark A. Barker, Jr., and Kathleen A. Barker, Defendants-Appellants.
County of Wayne, Plaintiff-Appellee,
v.
Vincent Finazzo, Defendant-Appellant, and
Aubrey L. Gregory and Dulcina Gregory, Defendants.
Nos. 124070-124078, COA Nos. 239438, 239563, 240184, 240187, 240189, 240190 and 240193-240195.
Supreme Court of Michigan.
November 17, 2003.
On order of the Court, the application for leave to appeal the April 24, 2003 judgment of the Court of Appeals is considered, and it is GRANTED. The parties are directed to included among the issues to be briefed (1) whether plaintiff has the authority, pursuant to M.C.L. § 213.23 or otherwise, to take defendants' properties; (2) whether the proposed takings, which are at least partly intended to result in later transfers to private entities, are for a "public purpose," pursuant to Poletown Neighborhood Council v. Detroit, 410 Mich. 616, 304 N.W.2d 455 (1981); and (3) whether the "public purpose" test set forth in Poletown, supra, is consistent with Const. 1963, art. 10, § 2 and, if not, whether this test should be overruled. Further, the parties should discuss whether a decision overruling Poletown, supra, should apply retroactively or prospectively only, taking into consideration the reasoning in Pohutski v. City of Allen Park, 465 Mich. 675, 641 N.W.2d 219 (2002).
Persons or groups interested in the determination of the questions presented in *41 this case may move the Court for permission to file briefs amicus curiae.
MICHAEL F. CAVANAGH, J., states as follows:
I agree that leave should be granted in this matter but would not specify the roadmap to an inevitable destination. While there is no obstacle to this Court's discarding precedent (see my dissenting statement to the resubmission order in Robinson v. City of Detroit, 461 Mich. 1201-1204, 597 N.W.2d 837 [1999]), I would not direct the parties to show cause why yet another precedent should fall.
MARILYN J. KELLY, J., would grant leave to appeal without direction to the parties as to the issues to be addressed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578890/ | 671 N.W.2d 417 (2003)
Charles HARRIOTT and James Harriott, Appellants,
v.
Carlton O. TRONVOLD, Individually and as Trustee of the Carlton O. Tronvold Trust, dated 9/29/92, Appellees.
No. 01-1547.
Supreme Court of Iowa.
November 13, 2003.
*418 Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellants.
Thomas D. Wolle of Moyer & Bergman, P.L.C., Cedar Rapids, for appellees.
LAVORATO, Chief Justice.
In this declaratory judgment action involving three shareholders of a closed corporation, two of the shareholders sued the third. The petition alleged breach of an oral contract to contribute to the corporation to cover cash shortfalls, breach of an oral contract to sell the assets of the corporation, and interference with contractual relations with the corporation.
The district court granted the defendants' motion for directed verdict on the first claim because the court determined there was insufficient evidence of the alleged contract. As to the second claim, the court concluded the evidence did not support the existence of a contract because there was no meeting of the minds. Finally, the court concluded the claim for interference with contractual relations was subject to an arbitration clause in a shareholders' agreement.
The plaintiffs appealed, we transferred the case to the court of appeals, and that court affirmed. We granted the plaintiffs' application for further review.
On our review, we affirm the decision of the court of appeals and the judgment of the district court regarding the claims for breach of contract to sell the assets of the corporation and interference with contractual relations. We vacate the court of appeals decision and reverse the judgment of the district court on the claim for breach of contract to contribute to the corporation to cover cash shortfalls. We remand the case for further proceedings consistent with this opinion.
I. Scope of Review.
We recently summarized the rules governing our review of rulings granting motions for directed verdict:
Our review of rulings granting motions for directed verdict is for correction of errors at law. In our review, "we view the evidence in the same light as the district court to determine whether the evidence generated a jury question." We therefore view the evidence in the light most favorable to the party opposing the motion.... If reasonable minds could differ on an issue of fact, the issue is for the jury.
In ruling on such motions, the district court must decide whether the nonmoving party has presented substantial evidence on each element of the claim. "Evidence is substantial if a jury could *419 reasonably infer a fact from the evidence." A directed verdict is appropriate if the evidence is not substantial.
Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 391 (Iowa 2001) (citations omitted).
II. Facts.
Viewing the evidence in the light most favorable to the plaintiffs, we think there was substantial evidence from which the jury could have found the following facts. On June 15, 1994, Carlton O. Tronvold, trustee of the Carlton O. Tronvold trust, filed articles of incorporation for Hitters, Inc. Tronvold transferred land near Cedar Rapids to the corporation in return for 1000 shares of stock. A sports complex was to be built on the land.
On July 15 Tronvold gifted 200 shares to Charles Harriott and 200 shares to James Harriott. Charles and James are brothers who had previously convinced Tronvold of the need for the sports complex. Following the transfer of the shares, Tronvold owned sixty percent of the issued stock and the two brothers each owned twenty percent. The three shareholders were named directors of the corporation, James was elected president, Tronvold was elected vice-president, and Charles was elected secretary/treasurer. Charles was hired to manage the facility.
At the same time of these events, the three shareholders executed a buy-sell agreement. In addition to the buy-sell provisions, the agreement included an arbitration clause that was to apply in "any dispute [that might] arise between one or more of the parties hereto, with respect to his or their rights, obligations, duties, or requirements under and by virtue of this agreement except as to the valuation of stock...."
On July 18 the corporation borrowed $384,000 from Farmers State Bank for construction of the sports complex, which was to include softball diamonds, volleyball courts, and a concession building. In January 1995 the bank loan was increased to $484,000 to cover increased costs of the project.
In May 1995 the park opened for business. The corporation lost money the first year and for the following three years. In 1995, 1996, and 1997, the three shareholders contributed cash to the corporation in proportion to their ownership interests. Tronvold told the Harriotts that each shareholder would be responsible for contributing to the cash shortfall in proportion to his stock ownership and a failure to do so would work a forfeiture of the defaulting shareholder's interest in the corporation. The Harriotts agreed and contributed each time their share of the shortfall. Tronvold contributed the first three years but refused to do so for at least one year thereafter. The cash contributions were booked as equity, but no new shares were issued.
By the end of 1998, Tronvold's patience was wearing thin. At a shareholders' meeting, Tronvold insisted that the corporation hire a new manager and failing this, he would not contribute any more money. At about the same time, Tronvold met with the corporation's loan officer, James Mollenhauer. Tronvold told Mollenhauer that he was not willing to put any more money into the project unless the two brothers agreed to replace Charles with a new manager. Tronvold advised the loan officer that there was not enough cash to make the December payment in full and that his plan was to force the issue by letting the loan go into default. At the same time, Tronvold assured Mollenhauer that he would never let the bank take any losses on the loan.
At a January 1999 shareholders' meeting, Tronvold voted to remove Charles from the board and elected Vince Arioso in *420 his place. At the meeting, Tronvold put forward a proposal to sell the park to the City of Cedar Rapids or Kirkwood Community College. At the directors' meeting following the shareholders' meeting, Tronvold again expressed an unwillingness to contribute cash to the corporation. Although Charles was removed as a director, he remained as manager of the facility.
In February 1999 after the loan went into default, the Harriotts made an $8998.88 payment to cure the default. Although the park was losing money, the Harriotts decided to continue on, reasoning that they would minimize the loss they would otherwise experience if the park sat idle for the summer.
Things came to a head in the spring of 1999. At a special meeting of the board of directors on April 7, Arioso made a proposal to let the mortgage go in default, allow Tronvold to repurchase the property for the mortgage balance, and have the corporation file bankruptcy.
Later in the same meeting at which the parties' attorneys were present, Charles asked Tronvold if he were offered $500,000 would he sell? Tronvold replied that the City of Cedar Rapids and Kirkwood Community College declined to buy the park because neither had the money. Tronvold then said, "I think the park is worth more than $500,000, but to end this b ... s ..., yes, I would sell."
At this point, Tronvold's attorney called a time-out. The parties met separately with their respective attorneys after which Tronvold's attorney approached the Harriotts and their attorney and announced that Tronvold would not sell the ballpark. At trial, James testified that it was his understanding that the $500,000 for the ballpark included the debts and assets. James believed that no financing would be needed because he and Charles would just continue to make the mortgage payments and have Tronvold removed from the loan. Following this meeting, the Harriotts continued to make the mortgage payments.
The Harriotts continued to operate the park in 2000. In October of that year, the parties met to discuss the treatment of cash contributions. Although Tronvold conceded that prior contributions had been treated as capital, he and Arioso voted to treat all contributions, including past contributions, as debt. The two then voted to terminate Charles' employment.
In early 2001 the parties again defaulted on the loan, at which point the Harriotts and Tronvold made payments to cure the default. The Harriotts continued to operate the ballpark over Tronvold's objections.
III. Proceedings.
In November 1999 the Harriotts filed a declaratory judgment action naming Carlton O. Tronvold individually and as trustee of the Carlton O. Tronvold Trust (collectively Tronvold) and Hitters, Inc. as defendants. In an amended petition, the Harriotts alleged a count for declaratory relief, seeking a declaration of rights determining their rights as between themselves and Tronvold, and seeking specifically one of the following: (a) Tronvold should lose his equity position because he had failed to contribute to the cash shortfalls of the corporation; (b) The contribution by the Harriotts should be considered contributions resulting in the issuance of equity; or (c) The contribution of funds and services should be considered loans with appropriate judgments entered in favor of the Harriotts.
The petition also alleged a count for breach of contract for Tronvold's failure to sell to the Harriotts the assets of the corporation for the sum of $500,000. Finally, the petition alleged a count for interference *421 with contractual relations because of Tronvold's interference with the Harriotts' contractual relations with the corporation.
The trial commenced in September 2001. Before trial, the parties stipulated that the corporation would agree to be bound by the court's determination about the classification of the corporate contributions, that is, whether the contributions would be classified as equity or debt. The parties proceeded to try the case to the jury, but the case never reached the jury because the district court granted Tronvold's motion for directed verdict on all of the Harriotts' claims.
Following the Harriotts' appeal, we transferred the case to the court of appeals, which affirmed. That court found that the evidence of the alleged oral contract to contribute to the corporation to make up for cash shortfalls was barred by Iowa Code section 622.32(2) (1999). That provision requires a writing in circumstances where one person promises to answer for the debt of another.
As to the breach of contract claim for the sale of the corporate assets, the court of appeals concluded that there was no meeting of the minds regarding an offer and acceptance.
Finally, as to the interference with contractual relations, the court of appeals determined that claim was waived. It was waived, the court held, because the Harriotts argued on appeal that Tronvold manifested bad faith rather than challenging the district court's finding that the arbitration clause in the shareholders' agreement barred the claim.
We granted the Harriotts' application for further review. We conclude the court of appeals correctly determined the claims for breach of the alleged contract for the sale of the corporate assets and interference with contractual relations. We therefore give those claims no further consideration.
IV. Issues.
In his motion for directed verdict, Tronvold argued, as he does here, that for two reasons the Statute of Frauds barred evidence of the alleged oral contract to contribute to the corporation to cover cash shortfalls. First, the alleged contract was in actuality a contract to pay the debts of another. Second, the alleged contract was not capable of being performed within one year.
Tronvold objected during trial on the basis that the Statute of Frauds barred evidence of the alleged contract. The district court overruled the objection and allowed such evidence. Nevertheless, the court determined there was insufficient evidence to submit the claim to the jury and granted Tronvold's motion for directed verdict.
The court of appeals on the other hand determined that evidence of the alleged contract was barred by the Statute of Frauds.
We first consider the Statute of Frauds issue and then the sufficiency of the evidence issue.
V. Statute of Frauds.
A. The law generally. Iowa's Statute of Frauds states in relevant part:
Except when otherwise specially provided, no evidence of the following enumerated contracts is competent, unless it be in writing and signed by the party charged or by the party's authorized agent:
....
2. Those wherein one person promises to answer for the debt, default, or miscarriage of another, including promises *422 by executors to pay the debt of the decedent from their own estate.
....
4. Those that are not to be performed within one year from the making thereof.
Iowa Code § 622.32.
This statute does not render the oral promises mentioned invalid. Rather, the statute merely renders incompetent oral proof of such promises. For this reason, the statute is a rule of evidence and not of substantive law. The statute provides a defense, and the party asserting it must therefore raise it by answer or by objection to evidence at trial. Sun Valley Iowa Lake Ass'n v. Anderson, 551 N.W.2d 621, 630 (Iowa 1996).
B. Oral promise to answer for the debt of another. As mentioned, Iowa Code section 622.32(2) bars evidence of an oral contract under which "one person promises to answer for the debt, default, or miscarriage of another." Iowa Code § 622.32(2). As one treatise has noted, "the Statute of Frauds has been confined to promises made to the creditor." 9 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 22:3, at 233 (4th ed.1999).
The Restatement of Contracts similarly provides that
[a] contract is not within the Statute of Frauds as a contract to answer for the duty of another unless the promisee is an obligee of the other's duty, the promisor is a surety for the other, and the promisee knows or has reason to know of the suretyship relation.
Restatement (Second) of Contracts § 112, at 292 (1981).
The Restatement explains the purposes underlying the Statute of Frauds:
In general the primary purpose of the Statute of Frauds is assumed to be evidentiary. In the case of suretyship contracts, however, the Statute also serves the cautionary function of guarding the promisor against ill-considered action. The suretyship provision is not limited to important or complex contracts, but is limited to suretyship and to promises made to an obligee of the principal obligation. Such promises serve a useful purpose, and the requirement of consideration is commonly met by the same promise or performance which is consideration for the principal obligation. But the motivation of the surety is often essentially gratuitous, his obligation depends on a contingency which may seem remote at the time of contracting, and natural formalities which often attend an extension of credit are likely not to provide reliable evidence of the existence and terms of the surety's undertaking. Hence the requirement of a writing. Reliance of the kinds usual in suretyship situationsextension of credit or forbearance to pursue the principal obligordoes not render the requirement inapplicable.
Id. cmt. a.
According to the Restatement of Contracts,
The word "duty" is used here as a substitute for the words "debt, default or miscarriages" used in the English statute to describe the principal obligation. Those words and corresponding words in the American statutes include all kinds of duties recognized by law, whether or not contractual and whether already incurred or to be incurred in the future. The person owing the duty is called the principal debtor or obligor. The duty may be conditional, voidable or unenforceable; but if there is no duty at all, the Statute does not apply.
Id. cmt. b (emphasis added).
As the Harriotts contend, this is not a suit by a creditor on a promise to the *423 creditor. Rather, this is a suit by shareholders of a corporation against another shareholder based on an alleged promise to contribute to the corporation to cover cash shortfalls. What is missing here is a promise by the Harriotts and Tronvold to a specific creditor of the corporation to pay a debt the corporation owes to the creditor. The alleged promise here is therefore not within the scope of section 622.32(2).
That brings us to Tronvold's alternative Statute of Frauds ground.
C. Promises not to be performed within one year. As also mentioned, section 622.32(4) bars evidence of oral contracts "that are not to be performed within one year from the making thereof." Iowa Code § 622.32(4). As we said in Garland v. Branstad,
In deciding whether a particular oral contract is governed by [section 622.32(4)], the question is not whether performance must actually be completed within a year but whether it would be possible to perform the contract within that time frame. Put another way, "[c]ontracts of uncertain duration are simply excluded; the provision covers only those contracts whose performance cannot possibly be completed within a year."
648 N.W.2d 65, 71 (Iowa 2002) (quoting Restatement (Second) of Contracts § 130 cmt. a, at 328 (1981)). We therefore agree with the Harriotts that section 622.32(4) is narrowly applied to contracts that are not capable under any circumstances of being performed in one year. So the fact that an oral contract is performed over a period of time in excess of one year does not bar evidence of such a contract.
Here the alleged contract to contribute to the corporation to cover cash shortfalls was clearly one of uncertain duration. As the Harriotts point out, any contract that requires or contemplates future payments would not be performable within one year if those payments are in fact made. But the "impossibility" requirement necessarily recognizes such performance might occur in less than a year. For example, the parties could have sold the ballpark or done a number of things to prevent performance within one year.
We therefore conclude that neither provision of the Statute of Frauds barred evidence of the alleged contract to contribute to the corporation to cover cash shortfalls. The court of appeals erred in concluding otherwise.
VI. Sufficiency of the Evidence.
Because of the conclusion we reach as to the Statute of Frauds issue, we conclude the district court correctly allowed evidence of the alleged oral contract. However, the district court erred in concluding there was insufficient evidence to submit this issue to the jury. More specifically, there was sufficient evidence to submit to the jury the question whether Tronvold breached a contract with the Harriotts that if a shareholder failed to contribute to the cash shortfalls, in proportion to his ownership interest, his interest in the corporation would be forfeited.
Testimony from both brothers supports our conclusion that there was sufficient evidence to submit this issue to the jury. Charles testified as follows:
Q. And what did Mr. Tronvold tell you was the situation in terms of having to put additional money in?
....
A. In the original time and throughout the whole course of this, at the beginning, Carlhe secured the bank loan for us. It wentHe was not going to carry us anymore, that this park needed capital or needed cash. It was all coming down to where I had put my *424 twenty percent up, Jim had to put his twenty percent up, and Carl had to put his sixty percent up. He wasAs he stated, "I'm not going to have a problem putting my money up." He told us plenty of times, "You guys are going to be the ones having a problem. You have to make sure you can do this. That was the agreement."
Q. What did he tell you would happen if you didn't put up your share?
....
A. If you don't put your money up, you are going to get out.
Q. Did you and your brother agree to that?
A. Yes.
Q. Now, in connection with that, did Mr. Tronvold ever tell you that he had been involved in other businesses that had similar arrangements?
A. Yes, he did.
Q. Tell us what he told you about the other business ventures.
A. It seemed around the time when we started putting the money in, the first call for having to put money into the corporation, he brought up a situation in Minnesota. I mean, he was involved in a land deal up there, and it was a three-partner situation again, and they allIf there was money to be put in, they all had to put it in, or they would lose their capital or lose their stock, however you want to put it. And finally two of the partners ran out of money, and he took over a hundred percent control of the land. It seemed like he used it as a scare tactic to us, so we always put our money into the deal.
Q. Did you always put your money into the deal?
A. Yes, we did.
James testified substantially the same as Charles. The record reflects that the two brothers always contributed to cover the cash shortfalls pursuant to the alleged contract. Tronvold, on the other hand, refused to contribute to cover the cash shortfalls for at least one year.
VII. Disposition.
In sum, we conclude the court of appeals correctly decided the claims for breach of contract to sell the assets of the corporation and interference with contractual relations. We therefore affirm the court of appeals decision and the judgment of the district court on these claims.
We further conclude the Statute of Frauds did not bar evidence of the alleged oral contract to contribute to the corporation to cover cash shortfalls. We therefore vacate the court of appeals decision to the contrary. Although the district court correctly allowed evidence of the alleged oral contract, it nevertheless erred in concluding there was insufficient evidence to submit this issue to the jury. We therefore reverse the district court's ruling on this claim and remand the case for further proceedings consistent with this opinion.
DECISION OF COURT OF APPEALS AFFIRMED IN PART, VACATED IN PART; DISTRICT COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND CASE REMANDED.
All justices concur except WIGGINS, J., who takes no part. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1578911/ | 267 Wis.2d 429 (2003)
2003 WI App 210
671 N.W.2d 388
James M. GIBSON, Plaintiff-Respondent,
v.
OVERNITE TRANSPORTATION COMPANY, Defendant-Appellant.[]
No. 02-3158.
Court of Appeals of Wisconsin.
Submitted on briefs August 5, 2003.
Decided September 23, 2003.
*432 On behalf of the defendant-appellant, the cause was submitted on the briefs of Craig A. Kubiak of Godrey & Kahn, S.C., Appleton.
On behalf of the plaintiff-respondent, the cause was submitted on the brief of Carey J. Reed of Law Office of Carey J. Reed, Appleton.
Before Cane, C.J., Hoover, P.J., and Peterson, J.
¶ 1. PETERSON, J.
Overnite Transportation Company appeals a judgment for money damages based upon a jury verdict finding defamation based on negative comments a manager made about former employee James Gibson. Overnite was ordered to pay a total of $283,000 in compensatory and punitive damages. Overnite argues: (1) The defamation action is preempted by *433 the National Labor Relations Act; (2) Gibson did not prove the requisite malice to show Overnite abused its conditional privilege as an employer to make statements about a former employee; (3) the punitive damages are excessive; and (4) the trial court erred by not requiring the jury to find that the damages were caused by the defamation. We disagree with all four arguments and affirm the judgment and order.
BACKGROUND
¶ 2. Overnite is a nationwide trucking company. Gibson worked for Overnite out of the Kaukauna terminal, a nonunion facility. Gibson began working for Overnite in May 1999, first on the dock and eventually as a truck driver. In October 1999, the Teamsters went on strike and established a picket line at Overnite's Milwaukee terminal, a union facility. Due to the strike, the Milwaukee terminal was essentially shut down. Overnite therefore ran some of the Milwaukee freight through Kaukauna. Because Gibson had previously worked in Milwaukee and was familiar with the area, he was temporarily assigned to pick up freight at the Milwaukee facility. When he was there, Teamster supporters harassed him.
¶ 3. Gibson decided to resign from Overnite. Gibson told Tim Behling, the terminal manager in Kaukauna, that he had to quit immediately to help his ailing grandfather's company. In fact, Gibson went to work for another trucking company, USF Holland, the next day. Gibson testified at trial that he lied because he was afraid Behling would retaliate against him for quitting to avoid confrontations with the Teamsters in Milwaukee and for going to work for a union company.
¶ 4. Gibson started at USF Holland as a probationary employee. In January 2000, USF Holland hired *434 Robert Arden and Associates to check Gibson's background. An Arden representative called Behling for an employment reference. The report Arden generated indicated that Behling made the following comments regarding Gibson: "He was way below average. He needed to improve his work ethic and attitude." "He was late most of [the] time and he missed anywhere from two to three days a week." "He had a real problem with authority." "He has a very negative attitude." "He's everybody[']s best friend so he thinks. He did get along with some people, but most saw through him." "His paperwork was fair. It needed help like you wouldn't believe." Behling also indicated that Gibson's trustworthiness was "borderline," and that he would "never" rehire Gibson. Overnite was the only one of Gibson's former employers to give a negative report to Arden. Based on the report, USF Holland terminated Gibson's employment.
¶ 5. Gibson commenced this action against both Overnite and Behling, asserting blacklisting and common law defamation. Gibson later dismissed the black-listing claim as well as claims against Behling. A jury trial was held. Gibson testified that he was embarrassed, humiliated and that his reputation was harmed by Behling's statements. He stated that people in the trucking industry were aware of the information in Arden's report. Gibson commented that, due to Behling's negative comments, he was unable to find another job for a year and a half after he left USF Holland. He also testified about the loss of income he suffered as a result.
¶ 6. The jury found that Behling's statements were defamatory and made with express, but not actual, malice. It awarded Gibson $33,000 in compensatory damages and $250,000 in punitive damages. Overnite *435 filed motions after the verdict arguing, among other things: (1) Gibson's claim was preempted by the National Labor Relations Act because Behling's statements were part of a "labor dispute;" (2) actual malice, not express malice, was required to overcome Overnite's conditional privilege as an employer; (3) the punitive damages were excessive; and (4) the jury should have been required to find that Behling's statement caused the damages to Gibson. The court rejected Overnite's motions and entered judgment on the jury's verdict. Overnite appeals.
DISCUSSION
A. National Labor Relations Act
[1]
¶ 7. Overnite first claims that Gibson's defamation action is preempted by the National Labor Relations Act. Overnite argues that even though Gibson characterized the claim as defamation, it actually amounts to blacklisting, which is arguably an unfair labor practice under § 8 of the Act. Because state law claims are preempted when they arguably are subject to § 8, Overnite maintains that the National Labor Relations Board has exclusive jurisdiction over the action.[1]
¶ 8. However, Overnite did not argue during motions after the verdict that blacklisting was the basis of the preemption. Instead, it argued that the statements were made in the context of a labor dispute and the action should be preempted on that basis. Overnite *436 noted that Gibson testified that he lied to Behling about his reason for leaving because Gibson believed Behling was anti-union. Gibson also stated he was afraid he would be punished for leaving Overnite to work for a union company. This, Overnite claimed, showed that Behling's statements were made in the context of a labor dispute. The trial court determined, however, that Behling's statements did not take place in the context of a labor dispute and therefore the claim was not preempted by the Act.
[2, 3]
¶ 9. Generally, we will not consider on appeal arguments not made to the trial court. Hopper v. Madison, 79 Wis. 2d 120, 137, 256 N.W.2d 139 (1977). Although new arguments may be permitted on an issue that was properly raised in the trial court, see State v. Holland Plastics, Co., 111 Wis. 2d 497, 505-06, 331 N.W.2d 320 (1983), "we will not . . . blindside trial courts with reversals based on theories which did not originate in their forum." State v. Rogers, 196 Wis. 2d 817, 827, 539 N.W.2d 897 (Ct. App. 1995).
¶ 10. There was a three-day jury trial in this case involving many resources, as well as motions after the verdict. Overnite had ample opportunity to make an argument regarding blacklisting, but did not do so. We have reviewed the record, and nowhere do we find any argument by Overnite that the action should be preempted because Behling's statements amounted to blacklisting. In its motions after the verdict, Overnite framed the issue as whether there was a labor dispute, and the trial court ruled on that issue only. Blacklisting is a different issue altogether. Under these circumstances, we will not overturn the verdict based on an argument that the trial court was never given an opportunity to address.
*437 B. Employer's Conditional Privilege Under WIS. STAT. § 895.487
[4]
¶ 11. An employer has a conditional privilege under WIS. STAT. § 895.487 to make statements about a former employee. Overnite argues that, to abuse the privilege, statements must be made with actual malice, that is, with knowledge of falsity or with reckless disregard for the truth. Torgerson v. Journal/Sentinel, Inc., 210 Wis. 2d 524, 528, 563 N.W.2d 472 (1997). Express malice, however, requires only a showing of ill will, bad intent, envy, spite, hatred, revenge, or other bad motives against the person defamed. Polzin v. Helmbrecht, 54 Wis. 2d 578, 587-88, 196 N.W.2d 685 (1972). Because the jury found express malice, and not actual malice, Overnite contends it cannot be held liable.
[5-7]
¶ 12. The interpretation of a statute and its application to a set of facts are questions of law we review independently. Reyes v. Greatway Ins. Co., 227 Wis. 2d 357, 364-65, 597 N.W.2d 687 (1999). "The purpose of statutory interpretation is to discern the intent of the legislature," and we look to the plain language of the statute to determine intent. Id. at 365. Only if the statutory language renders legislative intent ambiguous do we resort to judicial construction. Id.
¶ 13. WISCONSIN STAT. § 895.487(2)[2] states:
An employer who, on the request of an employee or a prospective employer of the employee, provides a reference to that prospective employer is presumed to be *438 acting in good faith and, unless lack of good faith is shown by clear and convincing evidence, is immune from all civil liability that may result from providing that reference. The presumption of good faith under this subsection may be rebutted only upon a showing by clear and convincing evidence that the employer knowingly provided false information in the reference, that the employer made the reference maliciously or that the employer made the reference in violation of s. 111.322. (Emphasis added.)
The statute is silent as to whether actual or express malice is required.
¶ 14. Both Overnite and Gibson point to a memo from the Wisconsin Legislative Reference Bureau to the sponsor of the bill that became Wis. STAT. § 895.487. At the time the statute was enacted, the common law simply required express malice to rebut the conditional privilege. See Calero v. Del Chem. Corp., 68 Wis. 2d 487, 507, 228 N.W.2d 737 (1975) ("The proper test to apply to determine whether the nonconstitutional conditional privilege was abused is a question of express malice. This is what is termed `common law malice,' by the United States Supreme Court." (Citation omitted.)). The Legislative Reference Bureau encouraged the legislature to specifically require express malice in the statute as well in order to clarify the standard. However, the legislature made no change.
¶ 15. Overnite interprets the legislature's failure to make the suggested change to mean it intended the standard to be actual malice. Gibson's interpretation is that the legislature intended to retain the common law standard of express malice. We agree with Gibson.
[8, 9]
¶ 16. WISCONSIN STAT. § 895.487(2) provides three ways in which the presumption of good faith may be *439 rebutted: (1) "the employer knowingly provided false information in the reference," (2) "the employer made the reference maliciously," or (3) "the employer made the reference in violation of s. 111.322." The first option could arguably require actual malice because it requires that the employer act "knowingly." However, there remain two other options. The second option simply requires malice. The legislature was alerted to the ambiguity of the word "maliciously" but did not make any change. Common law prevails in Wisconsin until changed by statute. Aaby v. Citizens Nat'l Bank, 197 Wis. 56, 57, 221 N.W. 417 (1928). To abrogate the common law, the intent of the legislature must be clearly expressed, either in specific language or in a manner that leaves no reasonable doubt of the legislature's purpose. Sullivan v. School Dist. No. 1 Tomah, 179 Wis. 502, 506, 191 N.W. 1020 (1923). We therefore conclude that the legislature intended to keep the same standard of malice as existed in the common law-express malice.
¶ 17. Our conclusion is further supported by the jury instructions. See State v. Olson, 175 Wis. 2d 628, 642 n.10, 498 N.W.2d 661 (1993) ("[W]hile jury instructions are not precedential, they are of persuasive authority."). Like Wis. STAT. § 895.487(2), Wis JICIVIL 2507 lists ways in which the jury can find that an employer abused its privilege to make statements about former employees. First, the jury may find that the defendant made the statements knowing that they were false or in reckless disregard as to the truth or falsity of them. This is actual malice. However, the jury may also find defamation where the defendant made statements solely from spite or ill will. This is express malice, which is what the jury found here. Actual malice is not required.
*440 C. Punitive Damages
[10-12]
¶ 18. Next, Overnite contends that the punitive damages are excessive. Punitive damages may properly be imposed to further a state's legitimate interest in punishing unlawful conduct and deterring its repetition. BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568 (1996). In Wisconsin, the award of punitive damages is within the discretion of the jury, and "We are reluctant to set aside an award merely because it is large or we would have awarded less." Jacque v. Steenberg Homes, Inc., 209 Wis. 2d 605, 626, 563 N.W.2d 154 (1997).
[13]
¶ 19. Although we review an award of damages independently, the Due Process Clause of the Fourteenth Amendment imposes substantive limits on the size of a punitive damages award. Management Computer Servs. v. Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158, 193, 557 N.W.2d 67 (1996).
[14]
¶ 20. In determining whether a punitive damage award is excessive, we consider, from the following factors, those most relevant to the case: (1) the grievousness of the acts; (2) the degree of malicious intent; (3) whether the award bears a reasonable relationship to the award of compensatory damages; (4) the potential damage that might have been caused by the acts; (5) the ratio of the award to civil or criminal penalties that could be imposed for comparable misconduct; and (6) the wealth of the wrongdoer. Id. at 194.
¶ 21. Here, the relevant factors are the first, second, third, and sixth. The first two factors are the grievousness of the acts and the degree of malicious intent. Over the course of three days, the jury heard *441 evidence regarding the statements Behling allegedly made as well as testimony that contradicts Behling's statements. For example, Arden's report noted that Behling commented that Gibson's paperwork "needed help like you wouldn't believe." However, Gibson's employment file for Overnite showed no incidents of Gibson ever being reprimanded for poor paperwork. Behling also commented that Gibson was a below average employee. However, none of Gibson's previous employers had any negative comments about Gibson's performance.
¶ 22. Gibson's manager at USF Holland testified that Gibson would not have been fired absent Behling's reference. After leaving USF Holland, Gibson interviewed with some companies but was unable to secure a job for a year and a half. Behling gave employment references to many of the places Gibson interviewed but was not hired. From this and other evidence, the jury concluded that Behling's actions were grievous and constituted express malice toward Gibson.
¶ 23. The next factor is whether the award bears a reasonable relationship to the compensatory damages award. Our supreme court's recent decision in Trinity Ev. Church v. Tower Ins. Co., 2003 WI 46, 261 Wis. 2d 333, 661 N.W.2d 789, is instructive. There, the court approved punitive damages seven times greater than the compensatory damages. See id., ¶ 69. The punitive damages here are approximately eight times greater than the compensatory damages ($250,000 and $33,000, respectively). We do not consider this to be significantly greater than the award upheld in Trinity.[3]
*442 [15]
¶ 24. As a final factor, we consider Overnite's wealth. Wealth of the wrongdoer is an appropriate factor in determining the amount of punitive damages to award. Fahrenberg v. Tengel, 96 Wis. 2d 211, 234, 291 N.W.2d 516 (1980). The parties stipulated that Overnite's wealth amounted to $315,013,578. The jury was properly instructed that it should award an amount in punitive damages that would serve to punish Overnite for its conduct and deter it from acting similarly in the future. The jury awarded $250,000. This amount is not shocking given the evidence and Overnite's wealth. In light of our discussion of the relevant factors, we conclude the punitive damages are not excessive.
D. Causation
¶ 25. Finally, Overnite argues that the court erroneously failed to require the jury to find that Behling's statements caused Gibson's damages. However, Overnite cites to nothing in the record to indicate that it objected to the court's instructions. Furthermore, the court did instruct the jury that the damages award must reflect "the amount of actual financial loss suffered by Mr. Gibson as caused by the defamatory statements." (Emphasis added.) Additionally, the court instructed: "Before you may find that Mr. Gibson suffered losses as a result of the defamatory employer *443 reference, you must be satisfied that the defamatory statements are a substantial factor in producing that loss." (Emphasis added.) Consequently, the record shows the jury was instructed that it had to find that the damages were caused by the defamation.
By the Court.Judgment and order affirmed.
NOTES
[] Petition to review dismissed 1-29-04.
[1] When an activity is arguably subject to § 8 of the National Labor Relations Act, state and federal courts must defer to the National Labor Relations Board in order to avoid the danger of state interference with national policies. See San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 245 (1959).
[2] All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.
[3] Though not cited by the parties, we acknowledge the United States Supreme Court's decision in State Farm Mut. Auto Ins. Co. v. Campbell, 123 S.Ct. 1513 (2003). There, the Court determined that an award of $1 million in compensatory damages and $145 million in punitive damages violated due process. Id. at 1519. However, in Campbell, the compensatory damages for emotional distress already contained a punitive element, rendering an additional punitive award unnecessary. Id. at 1516-1517. Here, $22,000 of the $33,000 awarded for compensatory damages was for financial damages. As a result, the compensatory damage award had little, if any, punitive element. | 01-03-2023 | 10-30-2013 |
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